The market is down 44 doing a bit better than the 78 point fall predicted by the SFE Futures this morning post the significant 3% plus falls in the US overnight. Property down the most again — down 3.2% — Goodman Group down 12% early — had its recommendation cut by Macquarie Group yesterday after a recent profit warning. Results tomorrow.

The Dow was down 250 . BHP and RIO down 6% and 5.2% in the US. Oil down 4%. Gold down $7. Metals mixed. Bonds up. Losses across all indexes adding to last week’s 6% falls. S&P finished 2 points above its November intraday lows. Citigroup is in talks with the government about taking up to a 40% stake in the bank although it seems to have come at the suggestion of Citigroup not the government. Government is preparing to give further loans to the car industry to avoid bankruptcies. No major results nor economic figures giving the market direction. Financials were down 3.0%.

Fortescue — Waiting for capital raising details — Some brokers saying the prospect of a capital raising suggests FMG’s funding position is worse than expected and that if they raise $500m it is still probably not enough. Macquarie note that the company would need $731m of capital above internally generated funds to expand to 80mtpa by 2012. They have an UNDERPERFORM recommendation and a base case valuation of 184c and a valuation of 230c on a debt funded expansion to 80mtpa and a 221c valuation on an equity funded expansion to 80mtpa. FMG still in a trading halt at 283c.

Suncorp-Metway results — No surprises  except that Suncorp-Metway’s CEO John Mulcahy will depart on March 2 nd . The CFO will take over until a replacement is found. SUN recently had a profit warning ahead of these results — the NPAT number is in the guidance range. They made $258m down 33% against guidance of $250-270m. Dividend 20c. Price down 5%.

THE ASX 200 is still 79 points off the November low of 3217. We thought we would get there today but with the ASX 200 at 3309 we’re now not so sure — the Dow Jones is well into new low territory at a 12 year low. The S&P 500 still holding the 740 low hit last November.

RESULTS

  • Oil Search Ltd (OSH) posted FY NPAT up 128% to US$313.4m on the back of higher oil price asset sales. Total year dividend of 8c in-line with guidance.
  • Australian Worldwide Exploration Ltd (AWE) posted a 15% rise in 1H NPAT underpinned by higher oil prices – profit at $96.1m for the half compared to $83.8m a year ago. Result well below what the major brokers expected. Revenue was up 27%. Had an impact of $37.4m in one-off items related to the Arc Energy acquisition.
  • Sonic Healthcare Ltd (SHL) posted 1H NPAT up 21% to $136.5m. Sales up to $1.44bn – up 28%. Reiterated guidance of profit growth above 10% for the FY excluding further acquisitions. Interim dividend of 22c up from 20c a year ago.
  • Aristocrat Leisure (ALL) posts FY NPAT of $101.2m – down 59.1% – final dividend to be 10c. Revenue down 3.8% on-year.
  • Macquarie Media (MMG) books 1H net loss of $127.3m down from a profit of $4.2m a year ago. Falls on a $127m writedown of goodwill on American Consolidated Media. The writedown was not entirely unexpected. Revenue was up to $293.8m from $181.4m a year ago and excluding non-cash items was up 55% to $28.2m on-year.
  • Spark Infrastructure Ltd (SKI) posted a large fall in FY profit due to interest rate swaps. Good operational result with strong result in unregulated business. NPAT down 83.4% to $9.45m. Underlying NPAT excluding unrealized investment losses down 7%. Final distribution of 9.26c – in-line with previous guidance.
  • Ausenco (AAX) posts CY08 result below expectations, impacted by a $6.2m bad debt charge.
  • Macquarie Countrywide (MCW) post a solid result given the challenging operating conditions – 1H NPAT loss of $714.1m with an interim distribution of 4c – inline with FY09 guidance. Said the environment is increasing challenging. Balance sheet risk remains a concern. Not in breach of any covenants. Portfolio fundamentals holding up reasonably well.

OTHER

  • Industrials down 2.1% Wesfarmers and Fosters down having gone ex dividend this morning. AMC and ASX also ex dividend.
  • Financials down 1.8% – The CBA is down 2.5% and underperforming the other banks today having announced they’d buy $2.25bn of Wizard Home Loan’s portfolio from GE, less than the $4bn worth previously suggested.
  • United Group (UGL) finalises a $620m airport link alliance.
  • Resources down 1.8% – Energy stocks generally down on the lower oil price – Origin Energy up 0.3% as their 50.4% owned Contact Energy (NZ) posted in-line 1H NPAT down to NZ$25.1m.
  • Gold stocks mixed despite lower gold price – Sino Gold Mining (SGX) posted net loss of $101.4m for the half, compared to the net loss of $24.9 last year. Pretax writedowns were $100.7m due to acquisition and exploration carrying values. St Barbara (SBM) competed its share placement of $75m at 41c/share. Posted 1H NPAT loss of 41.2m. 1H sales at $110.4m.
  • Babcock and Brown Infrastructure (BBI) in a trading halt over uncertainty about the completion of their sale of Powerco.

The Dow Jones futures suggest a 24 point rise on Wall Street tonight.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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