The market is up 63. The SFE Futures suggested 43 point rise this morning. Most sectors up. Resources up 2.2% with BHP and RIO up 2.0% and 1.5%. Property stocks up 2% and Financials up 1.6% — Banks all up ahead of the NAB and ANZ interim results this week. Copper, nickel and zinc companies up on the higher metal prices Friday.

Dow up 119. Up all session — 170 at best. Material stocks did the best — up 4.4%. Financials up 2.5% — the government acknowledged that the capital levels of many of the banks are above the levels they consider well capitalized. American Express beat result expectations. Microsoft’s earnings in-line. Ford’s quarterly loss not as bad as expected. BHP and RIO both up in ADR form Friday — 1.80% and 1.93% respectively. Oil price up. Gold up. A$/US$ dropping this morning on swine-flu scare.

WA and ACT have the day off for ANZAC Day … rest of us missed out. May quiet the market a bit.

SWINE FLU — With over 80 dead in Mexico and the US declaring a public health emergency after 20 cases in five states show up in the US the “Bird flu” paranoia is building in the market and despite rises on Friday the US markets are expected to get belted tonight. DOW JONES FUTURES ARE DOWN 106. The World Health Organization, an agency of the United Nations, declared the outbreak a “public health emergency of international concern” yesterday. The ABC had a reporter in Mexico City this morning and no-one is on the streets and those that are have face masks on. There are cases in Canada, Brazil, Europe, NZ and some reports say Australia. The sectors hit hardest in this sort of event are travel companies first, holidays and leisure, then the rest of the economy follows (Russia has cancelled imports of Mexican meat).

  • Lion Nathan (LNN) accept the takeover offer by its biggest shareholder Kirin at $11.50 cash per share, plus a special payment of another 72 cents per share. Includes interim dividend of 22 cents a share — taking the total to $12.22 per share.
  • Macmahon Holdings (MAH) down 45% out of a treading halt with a profit warning — drops FY forecast to the $15-$20m range. Monthly revenues have been down 30-40% over the last six months. Note demand continues to deteriorate. Will cut another 360 jobs.
  • AGL Energy (AGK) reaffirmed its earnings guidance for FY09. Expects underlying NPAT to be in the range $370-$400m — EBITDA expected in the $775-$820m range. Dividend payout ratio reaffirmed at 60%.
  • Alesco Corp (ALS) sells their Biolab division to US Thermo Fisher for $175 million. Note they have net debt of $170m after booking proceeds from the sale and are reviewing overall banking arrangements to reduce interest rate hedges. Will pay a dividend but amount is to be determined.
  • Commonwealth Bank (CBA) note funds under administration in its investment platform business fell only 0.2% in the 3Q $164 billion. FirstChoice and Avanteos platforms and new wholesale customer mandates witnessed strong inflows – net positive inflows were $1.3 billion in the March Q.
  • Challenger Financial Services (CGF) announce assets under management fell 5.5% in the March quarter to $35.6bn. Funds under management fell to $15.5bn due to softer markets.
  • Crown (CWN) complete their previously announced $320m acquisition of their interest in privately held gaming company Cannery Casino Resorts after receiving regulatory approvals.
  • Biota Holdings (BTA), maker of Relenza flu vaccine, up 63% on news of swine flu. Qantas (QAN) down 3% on fears about travel.

Other…

  • RBS cut Telstra (TLS) price target to 412c from 439c and keep BUY — they are concerned about TLS’s new CEO conceding too much value to the government in working on a way forward on the FTTP NBN.
  • Goldman Sachs JB Were said Lion Nathan’s (LNN) 1H result bodes well for Foster’s (FGL) beer earnings which comprise 60% of EBIT — wine sales likely to be poor.
  • Citi upgrades Tatts Group (TTS) to a BUY saying they have an attractive strategic position in relation to NSW wagering licenses.
  • NAB and ANZ interim results this week — they both had trading updates in the last month so we’re not expecting any surprises.
  • Advance Q1 GDP numbers in the US on Wednesday — expecting a fall of 4.7% in the 1Q compared to -6.3% in the 4Q 2008.

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