The market has started the week positively – up 69 –– The SFE Futures suggested a 42 point gain in the market this morning.
WALL ST UP 96 – Wall St. moved in a 242 point range and staged a 225 point reversal towards the end of the session to finish higher on speculation that a bailout plan for Ambac Financial Group could be announced this week. Ambac closed up 16% after CNBC said a plan to save the company’s AAA credit rating – potentially involving up to eight banks – could be announced tonight or tomorrow. Financials reversed earlier losses and closed stronger on the back of the report. In other news, Merrill Lynch cut its recommendation on Freddie Mac (down 4%) and Fannie Mae (down 1%) to “sell” from “neutral” saying there is more pain to come for both companies and Federal Reserve Bank of Dallas President said the US will most likely experience slow economic growth rather than a slump. The three major indices had a reasonable week; the Dow Jones index put on 0.27%, the S&P 500 closed up 0.23% but the NASDAQ fell 0.79%. The ASX 200 was down 0.83%. Both the S&P 500 and the Dow Jones are down for 2008, the S&P has lost 7.8% and the Dow needs to gain another 6.7% to break even for the year.
- BlueScope Steel (BSL) – AHEAD OF CONSENSUS – BSL announced a 1H NPAT of $115.9m, down 70% from last year. Operating profit (before one-offs) came in at $305m down 21% and about 5% above the $287m analysts had expected. Dividend 22c. Expect improved earnings in 2008. BSL up 66c to 1206c.
- Zinifex – TOP END – H1 NPAT at top end of $1.27-1.32bn consensus range up 74% to $1.31bn after $960.6m profit on sale of Nyrstar. Have upped bid for Allegiance Mining and achieved board approval. Similar comments on zinc price as before – market moving into surplus in 2008.
- Zinifex and Allegiance Mining have agreed a new 100c offer worth $852m. The majority of the AGM directors now recommend the bid (one director hasn’t had time to look at it. Allegiance has to close its data room. Price is final and closes on 7 March. Lion Selection Group with 4.9% agrees to accept the offer. Suggestions that Zinifex is over-paying. AGM up 3c to 110c.
- Dyno Nobel (DXL) – GOOD – FY profit was down 49% to $US42.7m from $US83.3m thanks to the costs involved in cancelling its Moranbah ammonium nitrate plant project. Clean profit up 20% to $101.9m. 1H Sales up 10.9% to $US1.57bn. Recent contract wins. Strong US fertilizer market. DXL up 12c to 231c.
- Allco Finance Group (AFG) – AFG is down 50% this morning having come out of its trading halt with its results announcement. H1 NPAT of $83.9m down 10% compares with forecasts of $110m. No dividend. Planning to sell non core assets to pay down debt. Here is the main presentation. Main point perhaps is that they anticipate a successful resolution in discussions with banks to restructure all senior debt positions. AFG down 181c or 59% to 124c.
- Iress Market Technology (IRE) announced a 5% increase in FY profit to $25.5m, 3% below what Were’s had expected. Revenue up 44% to $134m up from $93m last year. IRE up 9c to 642c.
- Arrow Energy (AOE) announced 1H net profit of $14.2m, down 2.1% from last year. Expects FY EBITDA to be between $55m and $60m. AOE down 8c to 241c.
- Transfield Services (TSE) – GOOD – 1H net profit up 90% to record $41.2m, well ahead of the $35m analysts forecasts. TSE up 165c or 17% to 1115c.
- Ramsay Healthcare (RHC) OK – 7% fall in 1H net profit to $50.9m.CEO to retire effective 1 July 2008. Confirms full year guidance. RHC up 31c to 1071c.
- According to The Sunday Telegraph, Rio Tinto has appointed Credit Suisse to find a buyer for its non-core assets as part of its $15bn sell-off program that will allow it to concentrate on its $38bn takeover of Alcan undertaken last year. RIO up 40c to 13600c.
- Spotless Group (SPT) – NO DOWNGRADE – SPT announced 1H net profit of $13m, down 60% on the back of lower sales. EBIT down 8.8%. On track to meet full year EBIT forecasts. SPT up 24c to 388c.
- Challenger Financial Services Group (CGF) NO DISASTERS – CFG said profit the first half of the year fell to $95.7m from $129.9m. Declared a dividend of 5c. CGF up 4c to 267c.
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- Suncorp-Metway (SUN) has announced the total estimated costs from the storms in northern QLD will exceed $100m. Exactly in line with broker expectations. SUN up 10c to 1503c.
- Leighton Holding’s boss Wal King has told the AFR the Middle East and Asia will be at the centre of its expansion plans in the medium term. LEI up 70c to 4580c.
- West Australian Newspapers (WAN) announced that Kerry Stokes, Executive Chairman on Seven Network (SEV) plans to request an extraordinary general meeting of shareholders to consider resolutions to remove existing directors from the board of WAN. WAN up 6c to 1081c.
- Lots of blue chips going ex-dividend today: BHP (31.93c), Alumina (12c), Bendigo Bank (28c), Boral (17c), Cochlear (70c), Perpetual (189c), Seek (8.7C) and Woodside (55c).
In the MARCUS TODAY newsletter today we have an updated Results Diary and the regular look at the research post results the day before.