Distribution of company announcements to the professional platforms, finance portals and syndication of important corporate news to a wide variety of news aggregators and financial news systems.
Sydney, Sep 8, 2008 (ABN Newswire) - The market is going gangbusters, great start to the week – up 192 – on the back of the US governments decision over the weekend to step in and rescue Fannie Mae and Freddie Mac in the US. Everything is up: Financials up 5.6% with the banks very strong - ANZ up 9.7% and NAB up 7.8%. Banks are well up across Asia. The coal seam gas story is in the news again (Origin Energy up 13.8% after a deal with ConocoPhillips) sending the Energy sector up 7.8%. Resources should be down on a fall in metal prices, the A$ and the oil price but they are up with the market and a fall in the US$ post bail out and a rise in the gold price since Friday. The Dow Futures are suggesting a 246 point rise on Wall Street tonight….it seems the main point is the removal of the uncertainty over Fannie Mae and Freddie Mac.
Dow up 33. Up 57 at best. Down 150 at worst. The market closed prior to the Fannie Mae and Freddie Mac bail out by the US Government (great formula….Privatise the profits…..Socialise the losses) – Otherwise…Highest level of foreclosures growth in 30 years - unemployment hit a 5 year high in August reaching 6.1% up from July's 5.7% - Oil price hit a 5 month low of $106.47 - Indices managed a rise despite the sharply higher August unemployment numbers. Commodities down, resource stocks down, energy stocks down, tech sector underperformed, and US dollar up 0.5% (Australia's Achilles heel). Financials outperformed – up 3.2%.
Both BHP and RIO relatively unchanged in ADR form on Friday.
Metals all down on Friday – Copper down 4.64%, Zinc down 3.52% and Nickel down 3.18%. Aluminium down 1.10%.
Oil price down $1.52 to $106.47 – there is talk that OPEC oil ministers are now considering cutting output to lift the price that is down 30% from its high set in July. Storms continue to build across the Atlantic.
Gold down 50c to $798.80
US Bonds down with the 10 year yield at 3.64%
RBA Governor Glenn Stevenshas addressed the Federal House of Representatives standing committee on economics. The main message was that he expects inflation to remain above the target rate and another 6 months until we see inflation clearly easing. Despite that the general take was that we will see further interest rate cuts by the RBA before the year is out. Reasonably positive therefore.
Making the news today…
Origin Energy (ORG) has struck a $9.6bn deal to sell half of its coal-seam-methane assets to US's Conoco Phillips, its preferred CSG LNG JV developer. ORG also planning a $1.275bn share buyback and to pay an additional dividend of 25c. They are under offer from BG Group who have bid 1550c. BG Group are awaiting an ACCC ruling on September 10th. ORG up a massive 13.5% to 1782c.
Coal Seam Gas supplier Queensland Gasup 26% on the back of Origin's announcement. The whole coal seam gas sector has come back to life….last week we had the QGC bid for Sunshine Gas.
Uranium stocks upon the Liberal gains in the WA election overnight. Result of the election not yet known. TOE, PDN, UTO, ENR all well up on the news.
Westpac Bank has sweetened its bid for St. George (SBG) this morning – offer still stands at 1.31 WBC shares for each SGB share but SGB shareholders will now receive a final dividend of 125c per SGB share, a 28c increase to the offer. SGB management has unanimously backed the deal meaning the only issue now is regulatory approval. A $100m break fee has been put in place. Banks flying today – WBC up 5% and SGB up 4.8%.
GSJB Were says it is a good trading idea to switch from Commonwealth Bank of Australia into the National Bank of Australia stating the NAB's woes have been overplayed. NAB up 7% and CBA up 5.2% to 4373. The NAB is their preferred option is the sector. ABN AMRO on the other hand say say SELL the NAB and cut their target price by 20% to 2172c from 2722c.
Rio Tinto's chairman Paul Skinner has gone on the front foot saying its "momentum and growth prospects are superior to those of BHP Billiton out to 2015" and reiterated the company's rejection of BHP's hostile takeover offer. Both BHP and RIO up 1.8%, RIO continues to trade $16 a share below BHP's offer.
Lion Nathan (LNN) has secured a syndicated loan facility arranged by Mizuho Corporate Bank to access $340m.
Stocks earning their crust in the US have jumped – the fall in the A$ brings relief to US based businesses when reporting profits in A$ - BlueScope Steel (BSL) up 5.75%, Boral (BLD) up 5.6% and James Hardie (JHX) up 5.91%.
Xstrata has paid $82m and upped its stake in Indophil Resources to around 20% in order to create a blocking stake and stop the $545m takeover from a Stanhill consortium. IRN up 3.27%.
The ACCC will scrutinize and monitor Prime Retirement & Aged Care Property Trust's (PTN) bid for a 40% stake in Babcock & Brown Communities Group (BBC).
Morgan Stanley have cut Incitec Pivot's (IPL) target price to 17000c from 22000c due to lower diammonium phosphate pricing. They maintain their OVERWEIGHT recommendation. IPL up 5.77%.
GSJB Were maintain their BUY recommendation on Fortescue Metals (FMG) and 1227c target price (92% above the current share price) after reviewing its FY08 profit result. The stock is up 9.2% to 697c after having a horror week last week.
Copper price has fallen sharply on the Shanghai Futures market.
Minara down 2% as Merrill Lynch cuts their target price from 300c to 245c. They have an UNDERPERFORM recommendation.
Information provided to you by Marcus Today
Register for a free trial of Marcus Today CLICK HERE
AIR publishes a weekly magazine. Subscriptions are free at http://www.aireview.com.au
