The market is up 27 — was up 51 earlier — underperforming the 70 point rise predicted by the SFE Futures this morning.
The Dow was up 236. Up all session — up 264 at best. 6-session losing streak broken with broad-based gains. Best session in a month. Financials rebound 14.8% as Bernanke suggests economic recovery could start this year and after assuring the market that the banks wouldn’t be nationalised. Better-than-expected round of earnings announcements. US Home price index and consumer confidence plummet to record lows. BHP and RIO up 7.7% and 6% in the US . Metals up. Oil up 3.2%. Gold down $25.50. Bonds up, A$ up.
OZ Minerals (OZL) completely fell over this morning. Down 13c to 46c down 21.4% before rebounding to be down 8c at 51c. The fall was apparently because the stock was removed from some margin lender’s lists of approved stocks. The collapse has prompted a comment from OZ Minerals that:
Discussions (with their bankers) are very positive, they are ongoing, they are not complete yet… They won’t be concluded, I wouldn’t think, until Friday and they may not be concluded until quite late on Friday given that several of the banks in the syndicate are not based in Australia.
FORTESCUE DEAL — FMG have done the 26th Chinese deal with an Australian mining company in two years — it is somewhat disappointing for shareholders in the short term with the Chinese taking an equity stake at a 12.4% discount to the market price. FMG has also asked for suspension of its shares whilst it considers other capital raising initiatives. A $500m institutional placement is also now anticipated. FMG recently doubled on talk of a bid.
Main details: Hunan Valin to take a 16.5% stake in a deal worth $1.2bn. FMG selling 225m shares to Hunan Valin for A$558m…equivalent to a disappointing 248c per share compared to the share price at 283c….a 12.4% discount. Hunan Valin are also going to buy 275m shares in FMG from shareholder Harbinger Capital Partners (who will retain 7%). Hunan Valin to get a board seat and FMG has signed a Co-operation Agreement or offtake agreement with Valin and Hunan Valin Xiangtan Iron and Steel Co.
- Financials up 0.5% following the 14.8% rise in the banks in the US overnight on the back of positive comments from Bernanke reassurance that the banks won’t be nationalized. All our banks up 1-2% early on.
- Resources up 0.9% – BHP and RIO up 1.4% and 0.5% following significant jumps in the miners overnight in the US and a rise in metal prices.
- Industrials up 2.0% – APN News and Media (APN) posted a FY NPAT loss of $24m. Final dividend will be 12c. Guides FY09 underlying NPAT to be $120m – in-line with consensus. Balance sheet in good shape. Doesn’t expect further jobs cuts. Expects a slow 1H09, picking up in the 2H.
- Property up 3.2% after recent heavy falls – Westfield up 3.5%.
- AGL Energy (AGK) posted 1H NPAT of $1.65bn up from a $22.9m net loss the year before on $1.53bn in asset sales. Misses guidance. Underlying profit was up 5.3% – below the consensus expectation. The rise was driven by a strong performance from its merchant energy and wholesale electricity businesses. AGL maintained its full year underlying earnings guidance for a net profit of $370 million-$400 million. Interim dividend of 26 – unchanged from last year.
- WorleyParsons Ltd (WOR) posted 1H NPAT up 29.3% to $197.5m from $152.7m a year ago. Revenue up to $3.15bn – up 39.2% on-year. CEO said the result was strong. Expects “good growth” for the FY. Interim dividend of 38c in-line with last year.
- Seven Network Ltd (SEV) posted 1H NPAT down 84% on-year to $20m from $126ma year ago. Down on impairments on assets including writing down the value of its stake in the Seven Media Group. Limited guidance. Management has pulled back on disclosure.
- Pacific Brands (PBG) down posting earnings in-line with analyst’s expectations, excluding the previously flagged writedown. PBG wrote down $206.4m for the carrying value for a number of assets. NPAT was a loss of $150m down from a gain of $57.2m a year ago.
- Goodman Group (GMG) down 18% at midday having posted a FY NPAT loss of $465.9m due to property and investment devaluations. NPAT a year ago was $284.9m. Revenue was down 95% from $611.2m. Expects 1H09 operating earnings per security to fall to 11.1c from 17.5c a year earlier on more property valuation losses and impairment charges for investments in ING Industrial Fund (IIF) and on foreign exchange derivatives.
- Goodman Fielder (GFF) posted 1H NPAT down 21.9% on-year at $73.9m. Well below analysts’ expectations. Revenue up 12%. Dividend of 4.5c down from 6c a year ago.
- Macquarie Airports (MAP) posted FY NPAT up 82.7% to $2.07bn from $1.11bn in 2007 due to the sale of its stakes in Brussels and Copenhagen Airports. Paid distribution of 14c – up from 13c a year ago. Revenue from continuing operations up 40.1%.
- Macarthur Coal (MCC) posted 1H NPAT up to $106.9m from $13.5m a year ago on higher pulverised coal prices and higher tonnage. No interim dividend.
- Seek Ltd (SEK) posted 1H NPAT down 9% on-year due to losses on investments in associates. Profit down to $32.5m from $35.6m despite a 9% gain in revenue. Interim dividend of 4.5c down from 8.7c a year ago.
- Australia’s ABB Grain (ABB) purchased Zealand stock feed manufacturer NRM for A$31.7m. AGM revealed FY NPAT expected in the $63m-$73m range. Forecast reflects tough operating conditions.
- Centro Retail Trust (CER) down on posting 1H NPAT loss of $2.06bn. Revenue down 21% to $80.3m.
- APA Group (APA) posted 1H NPAT down 50% to $18m.
- 4Q wage pressure came in high – labour cost index up +1.2% from the 3Q vrs the expected +0.9%. Falling wages lag slowing demand – so was somewhat expected.
- Construction activity was firm at +1.7% for the quarter.
- 3Q building work done was steady for the Q.
- A$ up on the economic data.
The Dow Jones futures suggest an 11 point rise on Wall Street tonight.
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