The market is up 13 outperforming the 13 point fall predicted by the SFE Futures this morning.
The Dow was down 88. All 3 indices down. BHP down 0.85%. RIO up 2.75% in the US. Metals mixed. Oil up. Gold down. Bonds down. A$ up. Weak economic data out of the US. January durable goods down more-than-expected. Initial jobless claims up more than expected. January new home sales lower than expected. The US’s deficit could reach $1.75 trillion according to the 2010 budget. Obama announces another $750bn for bank bailouts. Financials up 2% (were up 7% at one point). Healthcare lags – down 5.1%. UK Banks strong as RBS jump on “not as bad as expected” results and announce a restructure including the ring-fencing of A$528bn worth of toxic assets (!).
OZ Minerals (OZL) has managed to get an extension of its debt to March 31st allowing China Minmetals to pursue its 82.5c cash bid. They have also had a rather irrelevant set of results… loss of $2.5bn after writedowns. Just the Wayne Swan approval to go. “82.5c or bust”. Price up 6c to 62c.
The ANZ dividend cut yesterday was taken well. ANZ jumped 4.4% yesterday as concerns about a large capital raising disappeared. Broker’s research positive this morning. The market seems to have quickly come to terms with the prospect that the banks will cut dividends. One broker says they will all cut their dividends now but that it is in the price.
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The gold price has hit $1,000 twice and backed off. Gold stocks going up today despite the gold price fall overnight. Gold down $23.60 to $942.60. Some traders thinking the run is over in the short term.
EQUINOX was up 22% in Canada last night — enough to kick off a discussion about whether copper has bottomed and how Equinox was the preferred exposure. EQN up 31c to 181c.
- Telstra down 3.5% early as brokers cut their price targets after yesterday’s result and lowered earnings guidance.
- GPT Group (GPT) down 8% on posting a FY NPAT loss of $3.25bn – revenue was down 75%.
- Coal stocks strong after Felix Resources has good results.
- Gloucester Coal up 27% on commodity trader Noble Group (N21.SG) announcing a takeover bid for GCL valuing the coal miner at $396 million.
- Woolworths Ltd (WOW) reported first-half net profit of $983.3 million, up 10.3% from $891.3 million a year ago. Below analysts expectations for about $1bn in profit. Sales up 8.8%. 48c dividend declared. 3Q sales trending about the same as the 1H at the moment. Reiterated upbeat forecast guiding NPAT for 11-14% growth.
- Crown (CWN) posted an expected 1H NPAT of $145.5m. Normalised NPAT at $141.4m. 1H loss due to a $547.5 writedown. Says trading in the 2H continues to be solid.
- Downer EDI (DOW) posted 1H NPAT up 4% to $85.4m with interim dividend of 13c. No material change to FY09 guidance. Maintains a solid order book.
- Harvey Norman (HVN) posted a 1H NPAT of $99.3m with an interim dividend of 5c. Said balance sheet and cash flows remain strong but trading conditions remain challenging.
- Fairfax Media Ltd (FXJ) capital raising – FXJ has announced it will raise $684m through a deeply discounted entitlement offer to assist in paying down debt. The raising will take the form of a 3-for-5 non-renounceable entitlement at 75c per share – at a near 20% discount. Earlier this week the board stressed they saw no need for a capital raising but had received support for the idea from institutional shareholders.
- Corporate Express Australia (CXP) posted a 9.7% fall in NPAT for the FY, down to $61.4m from $68m a year ago. Revenue unchanged at $1.2bn YoY. Declared a final dividend of 13c. Will announce a new CEO in 2 weeks.
- PaperlinX Ltd (PPX) posted a 1H NPAT loss of $560.9m, compared to the $35.3m profit last year. Revenue in the six months was $3.78m. Dividend cut to zero due to the writedown of $567.5m associated with the Nippon Steel buyout of its Australian Paper unit.
- Babcock and Brown Infrastructure (BBI) posted a 1H NPAT loss of $245.8m – no dividend. UK and European outlook uncertain. Underlying EBITDA up 5%.
- Mount Gibson iron (MGX) posts 1H NPAT at $13.3m with no interim dividend. FX loo of $54.8m. Announced 200 job cuts.
- PrimeAg Australia (PAG) posted 1H NPAT of $215,000 and forecasts stronger 2H earnings – no interim dividend.
- The Australian Wheat Board (AWB) says it has no current plans to raise equity. AWB up 9%.
- January’s private sector credit growth was stronger than expected – up 0.6% from a fall of 0.2% in December. Increases the chance of the RBA slowing its cutting cycle – looks like stimulus packages and budget measures are starting to bite.
The Dow Jones futures suggest a 15 point rise on Wall Street tonight.
RBA Meeting next Tuesday. Consensus is still for a 50bp interest rate cut although some brokers think they won’t cut rates at all and that interest rates have already bottomed.
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