The market is down 25. The SFE futures suggested a 44 point rise in the market this morning. Market was up 19 on the open but has rolled over — most sectors now down. Resources down 1.1% with BHP and RIO down 1.6% and 3.4%. Energy stocks remain up 0.2%. Financials down 0.6% — banks all down. Property stocks up 2.5%.

The Dow was up 164. Up all session — up 178 at best. US Financials up 8.3% with a positive response to the government’s bank stress-test data. Banks making plans to raise the new capital. Energy stocks strong — up 4.2% on the higher oil price. BHP and RIO both up in ADR form Friday — 4.79% and 2.64% respectively. Metals mostly down. Gold down. A$ up.

We had around $5bn worth of capital raisings last week.

Santos (STO) has launched a 2-for-5 accelerated pro-rata non-renounceable entitlement offer at a 27% discount. Offering stock at $12.50/share (last 1709c) to raise up to $3bn. $1.65bn in an institutional placement. An additional $1.35bn in a retail component. STO will use $1.05bn to fund the PNG LNG project and $600m for the redemption of FUELS. Additional funds will be used for other growth projects and to reach the final investment decision on the GLNG QLD project by mid 2010.

  • Pacific Brands (PBG) in a trading halt to raise up to $256m in capital from a $0.60/share retail and institutional offer. Will use to reduce debt and for working capital. Last 77c.
  • Incitec Pivot (IPL) post 1H NPAT of $99.6m, down 41% before items on-year due to lower fertilizer prices. Wouldn’t reiterate previous guidance.
  • Asciano (AIO) note they have incomplete proposals from four bidders over transactions ranging from change of control to recapitalization of the group. Maintains FY09 EBITDA guidance to be above FY08’s.
  • Lion Nathan (LNN) out of their trading halt having signed an implementation agreement with Kirin for a compromised $11.50 cash and 72c dividend per share agreement, subject to an independent expert report and Lion’s non-Kirin shareholders.
  • Elders (ELD) finished selling its stake in beef cattle producer Australian Agricultural Co (AAC) for a gross $84.5m. AAC have had $250m of asset sales fall through to Primary Holdings International Group and are down 11.2%.
  • Leighton Holdings (LEI) note FY09 operating profit pre-items won’t vary more than 15% verses FY08. Down 4.2%.
  • Lend Lease (LLC) issued a profit warning — expect net operating profit to be down 25% from last guidance to $300m. LLC down 3.4%.
  • Boart Longyear’s (BLY) Chairman said no 2H recovery is likely and that BLY won’t meet year-end Net Debt-to-EBITDA ratio. Said 2H demand will be materially below expectations. BLY unchanged at 15c.
  • GPT (GPT) resumes trading after their 26% discounted institutional raising. Stockland (SGP) is being speculated as perhaps offering a friendly merger with GPT. SGP has a 12.7% stake in GPT. GPT up 11.5%.
  • Bunnings Warehouse (BWP) received strong support for its $150m (total), 1-for-3.09, $1.50 /share institutional entitlement offer — the $79m retail component will follow shortly. Price up 6.8%.
  • Sundance Resources (SDL) out of a trading halt with an indicated resource announcement.
  • Babcock and Brown Infrastructure (BBI) is assessing the impact of Corus’ Teeside Decision and the PD Ports sales process.
  • Bluescope Steel (BSL) announced Friday a 1-for-1 non-renounceable entitlement offer for $1.55/share to ordinary shareholders to raise about $1.413m. BSL has raised $797m through the institutional component.


  • According to Access Economics, the Federal Budget will stay in deficit well beyond 2016 unless the Rudd government cuts spending.
  • The CBA has a trading update on Wednesday and CSR has final results on Wednesday.
  • Macquarie Group cut Leighton Holdings (LEI) to UNDERPERFORM with a 2110c price target.

The Dow Futures suggest a 58 point fall on Wall Street.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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