The market is up 25. The SFE Futures suggested an 18 point rise in the market this morning.
The Dow Jones was up 6 overnight – It moved in a narrow 58 point range and finished slightly higher in what was a quiet session on Wall Street ahead of a holiday on Monday and jobs numbers tonight. Financials fell, Bear Stearns announced they would be laying off 310 workers in their mortgage division and that business is slowly recovering after a volatile summer. Merrill Lynch finished lower after one analyst cut their 3Q earnings estimating the credit crisis could erase up to $3bn worth of revenue from their investment banking division. In economic news, the Labor Department said 16,000 more Americans filed for unemployment benefits last week and the Commerce Department announced that orders to US factory orders fell last month by a worse-than-expected 3.3%, the largest fall in 7 months. Economists are optimistic that tomorrow’s Labor Department report will show an improvement from last month’s disappointing numbers. They anticipate that employers added 100,000 workers last month compared to August’s job report that showed a surprising fall in payrolls of 4,000. The NASDAQ closed up 0.2%.
Resources mixed today. BHP up 21c to 4396c and RIO up 129c to 10757c.. recovering from their drubbing yesterday. Metals all down overnight, Zinc 2.8%, Aluminium and Nickel down 2.4% and Copper down 1.2%. Oil price up $1.51 to $81.48 for the first time in 4 sessions as traders speculate that energy supplies will tighten rolling into the Northern hemisphere winter. Woodside up 82c to 5147c. Gold up $8.10. Newcrest up 35c to 2835c.
Our market has followed Wall Streets lead…by not doing a lot.
- The AFR says talks between Zinifex and Oxiana have “stalled” and that both companies are vulnerable to a bid from Teck Cominco or Xstrata if they don’t merge. Zinifex jumped yesterday and is down today. Zinifex’s Nyrstar (smelting assets) IPO has begun with a listing expected early November. Zinifex is expected to receive a net $2.5bn in proceeds from the sale making it a more likely bid target. Apart from sitting there like a big fat Tomato waiting for a bidder their other options are to bid for someone themselves or return the money to shareholders. Either way, zinc price aside, the sale is likely to attract focus and attention to the stock. Citigroup had a BUY/high risk recommendation and an 1850c target price on the stock this week and declared themselves “Zinc Bulls”. UBS Warburg has a BUY and a $20 target price saying “The key catalyst for Zinifex going forward is the potential for an acquisition or a significant capital return”. OXR up 4c to 378c and ZFX down 10c to 1830c.
- Sunland Group (SUN) announced they have sold 33% of their Business Bay project for around $40m to Dubai developer Sheth Estate. Not a bad price at all considering the project was initially acquired for $25m in September last year under a JV with private investors. SUN up 20c to 2069c.
- The Australian has reported this morning that Commander Communications (CDR) is looking at a fire sale to pay back $70m worth of debt. According to the paper, CDR will be selling $150m worth of assets as early as next week. The stock is suspended after failing to lodge FY07 accounts. Shares last traded at 59.5c.
- Straits Resources (SRL) has successfully completed a placement for 28.6 million shares at 470c a share to raise $134.4m. They plan to reduce the Tritton copper hedge book, restructure debt facilities and provide funding for continued expansion and potential acquisitions. SRL up 6c to 495c.
- Silex Systems had a huge day yesterday, it was up 33% on news that it had received non-binding letters of intent from potential customers to their uranium enrichment technology. SLX down 60c or 5.8% to 960c.
- Timbercorp (TIM) up 8c to 161c after falling 13% yesterday on drought concerns.
- Bass Metals (BSM) up 35% on drill results in Tasmania – 9.2% Zinc.
- Companies to go ex dividend today include: GOW, KLM, SOT and REH.
We have an article in the MARCUS TODAY newsletter today looking at Fund Managers fees – there is a culture of bagging fund managers for underperforming the index – but the truth is the index is a statistical calculation, not a business with costs so of course fund managers underperform it on average. We also ask whether the criticism of fund managers isn’t goading people into doing their own investment themselves when some of them really shouldn’t, don’t want to, can’t or fail at it and they would be better off paying a fund manager even if he was charging too much.
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