The market is unchanged at midday – The SFE Futures predicted a 2 point rise this morning with Wall St closed overnight and European markets down about 1%. Industrials down 0.5% – Brambles down 10% after having its price target and recommendation cut by a number of brokers this morning after announcing 1H financial results yesterday.
The US market was closed last night for Presidential Day. World markets down as Japan’s 4Q GDP contracted at the fasted pace in 35 years – dobarwn 3.3% from the previous quarter. Japan’s economic decline has now outpaced the US and Europe – The AGE reports Japan has gone into depression. G-7 ministers offer up little detail about how to counter the economic crisis. Barack Obama to sign the $787bn stimulus package and outline steps to curb the foreclosure crisis over the next few days. Europe down – FTSE down 1.3%. DAX down 1.1%. CAC-40 1.2%. Asia down – Nikkei down 0.38%. Hang Seng down 0.7%. European Financial stocks down – Lloyds Banking down 8% on fears surrounding nationalization.
We have had a massive swathe of results out this morning:
Main results movers include: Monadelphous up 8.5%, United Group up 7.8%, Onesteel up 3.2%, GWA International up 2.6%. Fosters up 2.5%.
Fallers include: ASX down 6.7%. Amcor down 5.3%. AXA Asia Pacific down 5.6%. Mirvac down 2.6%.
Main Story: Oz Minerals opened at 71c this morning (up from 55c) after China Minmetals bid 82.5c p/s cash in a $4bn deal to buyout the company and pay out debt – now trading at 69c up 14c. The rather unimpressive price is presumably a reflection of the unlikelihood of another bid, the fact you won’t get your money until June and the chances that the government will have to something to say about the Chinese gaining 100% ownership of an Australian listed company. The acceptance of the bid by the OZL board is a clear sign the OZL board were having trouble meeting debt repayments.
- RBA Board minutes have been published. They continue to tell us the economy has had a significant monetary and fiscal stimulus but it may take time to work. Some brokers have read this as meaning rates have already bottomed and will not be cut again at the next meeting on March 3rd. Others still expect a 50bp cut.
- Property stocks down 0.2% – CFX up on results. Mirvac down on results.
- Resources mixed – BHP down 0.8% and RIO up 0.7%.
- Most the small miners up despite lower metals prices overnight.
- Banks not moved much despite falls in the UK, German and Irish bank sector overnight.
- Monadelphous – MND – Results ahead of expectations. Strong cash flow. Dividend in line. NPAT up 15%. Made $36.8m versus consensus of $35m. Reiterated earnings guidance.
- OneSteel – OST – Underlying NPAT of $215m up 130% a bit better than consensus of around $212m. Guidance for NPAT to be between $325m-$375m for FY09, “comfortable” with consensus around the middle that range. They acquired Smorgon Steel during the year hence the large rise in profit and earnings. Revenue up 28%.
- United Group – UGL – Results in line. Strong cash flow. Order book at $8.3bn…a record. Dividend of 29c higher than the 24c expected. Revenue up 48%. Guidance maintained – lower end of 10-20% growth range and comfortable with consensus.
- Fosters Group (FGL) posted 1H earnings in-line with NPAT at $411.3m slightly above consensus. Revenue up 1.6% to $2.5bn.
- Amcor Ltd (AMC) posted 1H NPAT was down 30% to $108.5m on writedowns.
- Mirvac Group (MGR) posted 1H net loss of $645.7m, down from a net profit of $388.4m a year ago. Result impacted by property revaluations.
- ASX Limited (ASX) posted 1H NPAT down 8.2% to $171.9m on-year. Operating revenue down 9% on-year. Interim dividend of 90.4c down from last year’s 98.5c.
- Arrow Energy (AOE) noted in their briefing that BG have increased their takeover offer for Pure Energy (PES) to 800c cash valuing PES at $995m – all cash and unconditional. PES up 88c to 836c. AOE last offered 716c (cash and shares) trumping BG’s bid at 640c.
- CFS Retail Property Trust (CFX) posted a 1H NPAT loss of $225.7m from a profit of $389.9m a year ago – weighed down by property and derivatives revaluations.
- Futuris Corp (FCL) said it will sell its 19.9% stake in beef cattle company Australian Agricultural Co (AAC) for $89.8m at $1.70 each. Price down 2.2%.
- AXA Asia Pacific (AXA) posted in-line results – operating earnings up 2% to $555.6m as flagged last month. Copped a $278.7m loss in the FY08 due to falls in the value of equity markets and bonds.
- Macquarie Airports (MAP) post Copenhagen FY EBITDA down 9.2% on-year.
- GWA International (GWT) posted 1H NPAT up 1.3% to $26.6m, helped by strong cost cutting to reduce impact of lower sales.
- PaperlinX up 33.5c to 66c (up 103%) on the announcement yesterday that they are selling $600m of assets to Japan’s Nippon Paper, dropping their gearing to 20% and allowing them to satisfy bank lending covenants.
- The Dow Jones futures suggest a 60 point fall on Wall Street tonight coming out of the long weekend.
- Wesfarmers kept at OUTPEROFRM and BUY by Macquarie Group and Citi with price target’s of 3147c and 2480c – both their strong cash flows and both expect the Coles turnaround to continuing gaining momentum. Merrill Lynch keeps NEUTRAL with 1750c price target.
- Bendigo and Adelaide Bank kept at BUY by Merrill Lynch but cut price target to 1100c. Said underlying earnings was disappointing. Macquarie Group downgrade to UNDERPERFORM and cut price target to 900c – said margins were compressed more than expected with impairments and provisions rising. Citi keep HOLD with 1000c target – question the low Tier 1 capital ratio and relaxed view about trading conditions.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
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