The market is up a healthy 48. A little under the 58 point rise the Futures predicted this morning. We were up 70 at one stage. It seems we did most of our dash yesterday by putting on just over 100 points. The G20 meeting has done the trick. Resources flying, except gold. Banks also doing their bit. Healthcare stocks going backwards.
The Dow was up 216. Up 314 at best. Up all session. Dropped off highs in the last hour. Four week rally extends. Dow up 19% since early March. Up 6% in the last three sessions. Dow above 8000 for the first time in two months. All 10 sectors up. Financials up 2.9% in-line with the broader market. G-20 agrees on tighter global regulation principles for financials. Commits $1 trillion to the IMF. FASB relax market-to-market accounting rules. Consumer discretionary and industrial stocks outperform — both up over 5%. Healthcare stocks did the worst. February factory orders up more-than-expected. Initial jobless claims worse-than-expected. European markets had a big rally. BHP and RIO both up in ADR form overnight — 8.32% and 6.32% respectively. Strong rally in the metals. Gold down. Bonds down. A$ up.
G20 does the trick — The G20 haven’t really done anything, all that’s going on at the moment is a change of sentiment which allows us to view whatever happens as good news. Even the previously ineffective G20 have become a catalyst for fun.
- Beach Petroleum (BPT) has confirmed that the Tipton West coal seam gas project in QLD has been sold to Arrow Energy for approximately $400mn. Arrow already owns 42% of Tipton West and will pay Beach A$260 million cash and $70m in Arrow shares upfront.
- Bradken (BKN) up 20% — they have had a price query asking why the price was up yesterday and they have nothing to say.
- DUET Group (DUE) said it raised $217 million from the institutional component of an equity raising to help it reduce its gearing and fund growth. They will seek to raise another A$47 million through a retail offer.
- Abacus Property Group (ABP) received approval to expand its Ashfield Mall.
- Axa Asia Pacific (AXA) distributes prospectus for offer of new shares.
- IBA Health Group (IBA) wins a $1.4m deal for a hospital contract.
- Service Stream (SSM) wins the AMI rollout contracts with Jemena and UED.
- Bank of Queensland (BOQ) kicks off the bank reporting season on Thursday. RBS Equities expects cash NPAT of $82.7m (up 26.7% on last year), cash EPS of 49c (up 5%) and a dividend of 34c. BOQ remains their preferred pick among regional banks.
- UBS reiterate BUY rating on Seek (SEK) after SEK confirmed their FY09 EBITDA guidance yesterday, and keep 425c price target.
- Ten Network (TEN) announced its profit result yesterday — 1H09 EBITDA of $118.9m down 27% on last year. Broker reactions this morning: RBS Equities keep Sell with 80c target price — Says TEN expects to be in compliance with covenants when it comes under pressure in August. Citi say Sell with 46c target price — Says TEN’s warning that it is unlikely to pay further dividends this financial year was in line with their expectations. Credit Suisse keep Underperform with 75c target price. GSJB Were maintain Sell and cut target price to 55c from 60c. UBS Warburg has a Sell and cut target price to 75c from 85c.
- If we can convincingly break 3706 today then the next stop is 3817 then the more ambitious target of 4340. It will be interesting to see if we can hold a 26 point rise today.
- Next stop 9088 which gives plenty of upside from here but it has to be said that there is a lot of “noise” between here and there.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
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