The market is up 45. A good result considering the SFE Futures were up 18 and Wall St. was closed.

US Markets were closed overnight for the Labor Day Holiday. European markets were stronger and metals had a good session on the LME. The Aussie dollar continued to rally to 85.55c from 85.21c yesterday morning.

Making the news today…

  • Atlas Iron (AGO) acquires Warwick Resources (WRK). AGO is offering 1 AGO share for every 3 WRK shares on issue valuing WRK at $65.4m. The WRK board has unanimously recommended investors vote in favour of the deal. AGO up 3.2%, WRK up 20%.
  • Macmahon Holdings (MAH) up 6.5% on talk of a takeover offer from Leighton Holdings (LEI). Their Memorandum of Understanding expires on November 2 and speculation is building. LEI down 1.4%.
  • The A$ hit 85.55c overnight on talk that the RBA will be the first Central Bank to increase interest rates as early as next month. Talk of the A$ hitting 90c next month and Parity next year as the US retain a low interest rate environment for the foreseeable future and we raise rates to more “normal” levels (thought to mean around 6%).
  • Article in The Australian pointing out that RIO is running its WA Pilbara operations at record production rates and could beat full year production guidance. RIO up 1.72%.
  • Talk that the Indian engineering giant Larsen and Toubro is looking to buy $2bn worth of stakes in Australian coal mines in an attempt to shore up coal supplies ahead of the Indian Government increase in power capacity in 2012.
  • AGL Energy (AGK) has won the contract to be the renewable energy supplier for South Australia’s new 100 gigalitres per annum desalination plant. AGK unchanged at 1355c.
  • China’s CGNPC Uranium Resources plans to acquire up to 70% of Energy Metals (EME) It is offering 102c a share compared to its last closing price of 86c. China Uranium has also agreed to underwrite an $11.7m 1-for-9 rights issue at 90c a share. The FIRB needs to approve the deal.
  • Ferraus (FRS) went into a trading halt yesterday saying it was due to announce a significant strategic agreement with a large scale Chinese state-owned enterprise. The stock is out of the trading halt this morning and is up 16% after announcing a 12% placement to China Railways Materials.
  • According to the Sydney Morning Herald, ConnectEast (CEU) is facing legal action by Leighton Holdings subsidiary Thiess John Holland LEI claims it was misled over traffic forecasts. CEU down 8.1%.
  • Suncorp-Metway (SUN) put on 3.7% yesterday, hitting a 9 month high, after the NAB confirmed it now has a 7.0% stake, a lot of it bought on market. Its holding is mainly through funds management division MLC Investments and National Nominees. The NAB are playing down the move in the press this morning saying it was simply an investment decision by their funds management arm.

Broker stuff…

  • GSJB Were says Buy Lihir Gold (LGL) with a 380c target price after its analyst day.
  • UBS cut Sigma Pharmaceuticals (SIP) to Neutral from Sell but lifts its target price to 109c from 104c.
  • GSJB Were says Buy Mitchell Communication (MCU) after its recent bolt on acquisitions. They have a 110c target price, 31.8% above the current share price.
  • Macquarie Equities expects Oil Search (OSH) to Outperform with a 850c target price after it announced a discovery at the Shakal-1 well in Kurdistan, Iraq.

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

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