The market is up 39. The SFE Futures suggested a 12 point fall in the market this morning. Strong performance this morning after yesterday’s mixed session. Resources up 1.2% — BHP and RIO up 1.5% and 4.2%. Financials up 0.4%. Property down 0.6%. Industrials down 0.1%.
The Dow was down 82. Up 75 at best. Down 101 at worst. Financial sector concerns continue to drive the direction of the market — down 3.8%. Morgan Stanley announced worse-than-expected results. Technology stocks up — AT&T and Yahoo! beat earnings estimates. Industrials performed the best — up 1.1% – McDonalds beat analyst’s expectations. BHP and RIO mixed in ADR form overnight — BHP down 1.22% and RIO up 5.13%. Metals mostly up overnight. Oil price up 76c. Gold up. A$/US$ down.
Stockland Group (SGP) announced a profit warning, cutting its earnings guidance for FY09 by 69% mainly due to writedowns. It gave guidance of 31.8c per share for FY09 in February — now they expect 10c per share due to writedowns on residential land and apartment values. Its UK division hasn’t helped. It did say it has lifted its market share in the past six months and expects a rush of first home buyers entering the market by June 30, but warns the top end of the market is still soft. The stock is up 4.5% in the past month but down 52.3% in the last year.
- Santos (STO) announced 1Q 2009 production down 3% on the 4Q at 13.2mmboe. Revenue down 17% on the 4Q 2008 to $540m. Guidance remains at 53m-56m boe. In continuing talks with a range of LNG buyers. Maintains cost guidance.
- Newcrest Mining (NCM) announced gold production figures a little below expectations with copper volumes and costs better-than-expected.
- Timbercorp (TIM) have appointed voluntary administrators.
- Lion Nathan (LNN) noted it has received a takeover approach from its major shareholder, Japan’s Kirin Holdings. Goldman Sachs JB Were thinks $11.50 per share would have been a likely starting point for negotiations.
- James Hardie (JHX) notes the AICF says the Asbestos Fund is facing a shortfall.
- Pacific Brand’s (PBG) CFO Stephen Tierney to step down — David Bortolussi will take the CFO role from June.
- Transpacific (TPI) in talks with banks and discussions with potential cornerstone investors continue.
- Austar (AUN) post 1Q EBITDA up 9% on-year at $55m. 1Q revenue up 7% on-year. AUN expect growth in the underlying business in 2009. Goldman Sachs JB Were say it’s a weak top line result.
- CSL Limited (CSL) competitor, GSK posted 1Q09 results overnight — Goldman Sachs JB Were say they don’t consider GSK’s HPV vaccine, Cervarix, a material risk to CSL’s earnings from Gardasil.
- Riversdale Mining (RIV) increased its coal resource by 90% to 4.0bn tonnes. Says the Benga coal project has global significance.
- St Barbara Mines (SBM) announce 3Q revenue averaged $1,375/oz — weaker than some brokers expected with costs worse than anticipated — smashed 18% this morning.
- Centennial Coal (CEY) note coal sales in the March quarter were 4m tonnes. Noted thermal coal prices dropping. Adjusted FY09 earnings down. Down 7% this morning.
- Geodynamics (GDY) commits $5m to geothermal technology.
- Seek (SEK) in a trading halt. It is undertaking a capital raising and acquiring the rest of Think Education Group.
- The International Monetary Fund (IMF) predicted Australia will fall into a recession as deep as the one experienced in 1990-91, expecting our economy to shrink by 1.4% this year — greater than the expected global contraction of 1.3%. They expect unemployment to rise to 6.8% by December and towards 8% by next year.
- ANZ Bank boss Mike Smith has given his support to the proposed $30bn Australia Business Investment Partnership (RuddBank) saying commercial mortgage-backed securities have fallen off a cliff.
- Lots of broker stuff on BHP Billiton this morning after yesterdays 3Q production numbers. They were mainly in line with expectations. Not much of a change to recommendations — Two neutrals, a hold and one buy. One major broker cut their price target.
The Dow Futures suggest a 33 point fall on Wall Street.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
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