The market is down 37. The SFE Futures were down 15 this morning.
The Dow closed down 15 points, while the Nasdaq was down 0.4%. European markets closed lower. Moves by Chinese leaders to trim their growth target for the globe’s number-two economy to 7.5% caused some disquiet. Gold was down $12.40 to $1709.80 and Metals were down on the LME. Material stocks underperformed, while Consumer staples and Utilities were higher.
The Aussie fell to 106.68¢ from 107.08¢ last night. Some doubts about whether the Greek bailout will achieve the necessary 75% agreement of private bond holders by the Thursday deadline — with the EU to discuss it on Friday. We are waiting for the RBA today — they are unlikely to cut rates … none of the criteria for cutting rates has changed in the last month. The ANZ interest rate decision is on Friday … they are also likely to take the opportunity to fly under the radar.
Main points — bit thin on the news front:
- Kagara Mining (KZL) delivered a 1st half loss of $49.8m below an expected loss of $2.6m including $30m of impairments. Earnings down after a decline in both zinc and copper prices, upward FX pressures and higher costs. Production guidance was downgraded. KZL finalised the sale of nickel assets to Western Areas NL (WSA) for $68m. KZL still in suspension after failing to deliver its half yearly report according to listing rules.
- Gloucester Coal (GCL) recommends shareholders vote in favour of the merger with Chinese Yancoal Australia. The deal has been adjusted to include a reduction in the amount of debt Yancoal was expected to bring and reduced cash being paid to GCL shareholders from $3.20 to $3.15. The deal is pending approval from the Foreign Investment Review Board, both company shareholders and various other Chinese regulatory bodies. GCL is up 0.4% to 849c.
- Canadian miner Teck Resources has seemingly increased its stake in Fortescue Metals Group (FMG) to almost 3% (see AFR). FMG has a tightly held share register with the top 20 accounting for almost 85% of the company. Chairman Andrew Forrest holds 31%, making the company takeover proof. FMG is down 0.7% to 561c.
- Echo Entertainment (EGP) is seeking legal advice in an attempt to prevent another secret share raid by Crown (CWN). No takeover offer from CWN has been made. CWN used equity derivatives to buy EGP shares where takeover rules relating to the disclosure of stakes acquired via these instruments are vague. EGP is down 0.5% to 427 & CWN is down 0.6% to 834c. EGP is already trading at a 25% premium to CWN making it a bet on a bid now rather than an “investment”.
- ANZ is the first Aussie bank to win a full licence to offer yuan nominated products and services to Chinese citizens. Previously ANZ China could only deal in yuan products to foreign non-Chinese nationals. ANZ is up 0.36% to 2228c.
- Ludowici (LWD) has more than tripled this year as a bidding war erupted. Denmark’s FLSmidth and Scotlands Weir Group are trying to win control. Weir Group has made an offer of $10 which was then followed by FLSmidth’s $11 a share. The Take Over’s Panel will decide whether to review a decision to allow FLSmidth to proceed with its offer. LWD is up 0.18% to 1108¢.
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