Our market has followed Wall Street’s lead from Friday and is down 128 or 3.4%, double the 64 point fall the SFE Futures suggested this morning. The banks are getting it in the neck — Financials down 4.6% overall; Resources down 4.8% led by the big boys (BHP and RIO) and Property Trusts down 3%. 67 stocks have hit a fresh yearly low — ANZ Bank, Boral, Commonwealth Bank, Flight Centre, OZ Minerals, Perpetual and Westpac Bank to name a few.

The Dow Jones closed down 337 — it was breaking even with 30 minutes to go in the session but then capitulated. Up 88 at best. Terrible retail figures reinforced the weak economic outlook and the G20 meeting failed to inspire any confidence. They agreed “in-principle” to jointly fight off any more economic calamities, to create fresh rounds of stimulus packages (non-binding) and revive the global economy. The NASDAQ lost 5% and the S&P 500 fell 4.17%. All metals down except Copper (up 4%), Oil down 2% and Gold up 5.3%.

Lion Nathan (LNN) has made a cash and share takeover offer for Coca-Cola Amatil (CCL) valuing the company at $7.66bn. Offer involves $4.54bn in cash and 346m shares representing 1035c a share, a 25% premium to Friday’s closing price on 825c. CCL is reviewing the offer and believes there are a “number of material deficiencies”, particularly the pricing multiple. LNN is in a trading halt.

Making the news…

  • Macquarie Group (MQG) down 10% ahead of its 1H result tomorrow. JP Morgan says the result is likely to be OK “looking in the rear view mirror…But looking through the windscreen it looks like a financial war zone.”
  • GSJB Were expects a NPAT of $570m, down 34% and an interim dividend of 138c, down 5c. They maintain their HOLD recommendation and 3028c target price — over 40% above the current share price.
  • BHP Billiton (BHP) has heard requests from iron ore customers to defer up to 5% of its 2008 iron ore which could result in the deferral of around 6m metric tons of ore worth around US$600m.
  • Babcock & Brown (BNB) and Babcock & Brown Wind Partners (BBW) announce they have sold its Enersis portfolio of wind farms in Portugal for around $2.23bn, including the value of debt.
  • James Hardie (JHX) announced a 26% fall (excluding asbestos-related costs and tax adjustments) in 2Q operating earnings to $US36m. 1H profit came in at $154.9m.
  • Leighton Holdings’ (LEI) Al Habtoor-Murray & Roberts JV has won a $1.28bn contract to be the new Zayed University campus in Abu Dhabi, in the United Arab Emirates.
  • Alumina (AWC) has provided an Investor Update — says it will continue to generate strong operating cash flow and that long term outlook for Aluminium demand remain robust.
  • CSR Ltd (CSR) in a trading halt — it plans to raise $125m through institutional share placement and up to $357m through an entitlement offer at 1-for-4 at 140c a share, or 22% discount to its last trading price of 180c.
  • Goodman Group (GMG) struggling after announcing a profit warning — it cut its FY09 distribution forecast by 29%.
  • Boral (BLD) reiterated their guidance — it expects net profit for the year to be around $200m.
  • Iluka (ILU) announced it has received a key approval from the South Australian government for its Jacinth-Ambrosia mineral sands project.
  • Energy Australia (ERA) — Defines Ranger 3 targets containing 30,000-40,000 tons of uranium oxide.
  • News Corp’s (NWS) Rupert Murdoch says the company is “as well positioned” as it could be to weather a prolonged economic downturn.
  • The Federal Court has approved Westpac’s takeover of St. George Bank.

Broker Stuff today…

  • On the day that Lion Nathan bids for Coca-Cola….JP Morgan publishes research on Coca-Cola factoring an economic recession and downgrade their target price by 4% with an UNDERWEIGHT recommendation saying they prefer Lion Nathan. CCL have confirmed a cash and shares merger proposal from LNN valuing them at 1035c.

Other Stuff…

  • Short selling returns to the Australian financial markets on Wednesday for non-financial stocks with new disclosure rules. Thought likely to improve liquidity and ease volatility.
  • Macquarie Equities says the coking coal market is set to move in surplus on the back of output cuts and steelmakers demanding less.
  • Australian retail sales increased by lower-than-expected 0.1% in the 3Q compared to the 0.5% rise economists had predicted.
  • The Dow Futures suggested an 80 point fall on Wall Street tonight.  

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