Stocks Jump As Optimism Returns

June 30, 2009 - 10:09AM

Source: www.businessday.com.au

The Australian share market has opened stronger following a positive lead from Wall Street where investor sentiment improved ahead of the release of key economic data.

In early trade, the benchmark S&P/ASX200 was up 65 points, or 1.7 per cent, at 3951.9, while the broader All Ordinaries had gained 59.3 points, or 1.5 per cent, to 3942 points.

Shaw Stockbroking senior dealer Jamie Spiteri said the positive lead from overseas was being pushed along by a number of factors, including accelerated activity on the final day of the financial year.

Good news from DJs
Upmarket retailer David Jones signalled the economic downturn may be waning after recent strong sales prompted it to boost its profit guidance.
"David Jones coming out with some positive guidance is giving a good uplift right across that retail sector,'' Mr Spiteri said.
David Jones shares rose sharply within minutes of the open, marking the biggest gain in two months. It as up 44 cents, or 11 per cent, at $4.57.

Among the major miners, BHP Billiton was up 58 cents to $34.48 and rival Rio Tinto had gained $1.78 to $52.05.

The major banks also were stronger.
Commonwealth Bank was up 73 cents to $39.64, ANZ had gained 21 cents to $16.42, National Australia Bank rose 32 cents to $22.69 and Westpac lifted 32 cents to $20.10.

Wesfarmers was up 49 cents to $22.47, Woolworths had gained 35 cents to $26.03, Harvey Norman lifted 21 cents to $3.25 and JB Hi-Fi rose 33 cents to $15.39.

Oil price lifts energy stocks
"Strong oil prices have seen an uplift in stocks like Woodside, Santos, and Oil Search, as well,'' Mr Spiteri said.
Woodside was up $1.23 at $43.76, Santos had put on 28 cents to $14.68 and Oil Search had gained 16 cents to $5.47.

Also making news, junior iron ore explorer Iron Ore Holdings has increased the mineral resource estimate for its Iron Valley iron ore project in Western Australia by 50 per cent.
Its shares gained 4 cents, or 4.76 per cent, to 88 cents.

Air conditioning and refrigeration company Hastie Group has won two contracts in the United Kingdom worth 19 million pounds ($38.8 million). Hastie shares rose 0.5 cents to $1.285.

The spot price of gold in Sydney was $US939.15 per fine ounce, up $US1.05 on Monday's close of $US938.10.
Among the gold miners, Newcrest was up 30 cents to $30.25 and Lihir Gold was up one cent to $2.94.

The top-traded stock by volume was Environmental Clean Technologies Ltd, with 13.75 million shares worth $1.03 million.
Its shares were flat at 7.4 cents.

Overall turnover was 369.22 million shares worth $653.3 million, with 453 stocks up, 239 down and 343 unchanged.

Wall Street shares jumped overnight as investor sentiment turned upbeat that consumer confidence and employment figures out later this week would show signs of recovery from the prolonged recession.
The Dow Jones Industrial Average gained 90.99 points, or 1.1 per cent, to end at 8529.38. The Standard & Poor's 500 Index was up 8.33 points, or 0.9 per cent, at 927.23. The Nasdaq Composite Index was up 5.84 points, or 0.3 per cent, at 1844.06.

"US stocks rebounded strongly as the much higher oil price boosted energy stocks," wrote St George Bank chief economist Besa Deda. "Financials were also a key driver of the market on growing expectations that the US recession is improving." Economic news
In economic news due out today, the Reserve Bank of Australia releases financial aggregates data for May.
The Housing Industry Association releases new home sales data for May.

In company news, Macquarie Communications Infrastructure Group holds a security holder meeting for a vote on the Canada Pension Plan Investment Board's proposal to take control of the company.

Allied Brands and Iatia hold extraordinary general meetings, while Eneabba Gas and Prairie Downs Metals hold general meetings.

The Mining North Queensland conference concludes, while Ethical Investor hosts its second annual Green Marketing Forum.Yesterday, the Australian share market closed slightly lower, after directionless trade ahead of the financial year end.

Shares Back Above 4000

Shares back above 4000
June 10, 2009 - 12:19PM
Australian shares have passed the 4000 mark as resources stocks gain on rising commodity prices, including gold, oil and copper.

In noon trade, the benchmark S&P/ASX200 index was up 1.8 per cent, or 69 points, at 4003.9 while the broader All Ordinaries index was up 1.7 per cent, or 64.8 points, at 3998.4.

After leading the falls yesterday, the materials sub-index posted the biggest gains today, up 2.8 per cent. Energy was up 2.6 per cent and financials added 1.4 per cent.

The Australian dollar was trading at 80.37 US cents, up from yesterday's close of 79.31 US cents. It was also buying 78.28 yen, 57.15 euro cents, 49.28 pence and $NZ1.278.

"When you've got base metals up strongly overnight, an oil price rally and some reasonably good economic data today, there are plenty of reasons to jump in,'' CMC Markets commentator David Taylor said.
"The market is still vulnerable to downside risk but at the moment, when there are reasons to buy, people do.
"It's very good to see commodities coming back to the forefront today, especially with a weak US lead overnight.
"Big banks and the miners are leading the charge.''

Commodities prices rose overnight, with the Reuters-Jefferies index of commodities increasing 6.5 points, or 2.5 per cent, to 262.38 points.

BHP Billiton was up $1.20, or 3.3 per cent, at $37.70, while Rio Tinto added $2.12, or 3 per cent, to $72.73.

Fortescue Metals Group was up 25 cents, or 8 per cent, at $3.36 and OZ Minerals gained 1.5 cents, or 1.6 per cent, to 92.5 cents. BlueScope Steel was up 7 cents, or 2.8 per cent, at $2.57.

Among the banks, Westpac added 32 cents, or 1.6 per cent, to $19.67 and the Commonwealth Bank was up 57 cents, or 1.5 per cent, at $37.56.

NAB was up 33 cents, or 1.5 per cent, at $22.03 and ANZ was up 27 cents, or 1.6 per cent, at $16.68.

Investment bank Macquarie Group was up 86 cents, or 2.3 per cent, at $37.70.

Mr Taylor said the crude oil price hit a seven month high of $US70.01 per barrel overnight on the back of increased confidence in the market and a lower US dollar.

Nymex crude oil futures were up 81 US cents at $US70.82 a barrel in recent trade.

Among oil stocks, Woodside added 74 cents, or 1.8 per cent, to $42.91, Oil Search gained 27 cents, or 4.8 per cent, to $5.89 and Santos added 44 cents, or 2.9 per cent, to $15.50.

Spot gold was recently trading at $US958.30 an ounce, up $US1.72.

Gold stocks were mixed, with Newcrest up 47 cents, or 1.5 per cent, at $32.12, Newmont down 14 cents, or 2.4 per cent, at $5.60 and Lihir had gaining 4 cents, or 1.3 per cent, to $3.05.

The telecoms sub-index was up 1.6 per cent. Telstra added 6 cents, or 1.8 per cent, to $3.30 and SingTel, which owns Optus, was down 2 cents, or 0.8 per cent, at $2.55.

Making news, Hutchison and Vodafone have completed the merger of their Australian mobile communications businesses. Hutchison shares were steady at 11.5 cents.

Cashed-strapped copper and zinc miner Kagara has announced a capital raising of up to $262 million, while a Chinese company will take a 19.9 per cent stake in the miner.

Kagara has been in a trading halt since May 29 and last traded at $1.185.

In other news, Drillsearch Energy's hostile bid for 3D Oil has failed, the target says.
Drillsearch shares were up 0.1 cents, or 3.5 per cent, at 3 cents, while 3D Oil fell 2 cents, or 16.7 per cent, to 10 cents.

Among the retailers, Wesfarmers was up 10 cents, or 0.4 per cent, at $22.37 and Woolworths added 31 cents, or 1.2 per cent, to $26.50.

JB Hi Fi was up 90 cents, or 6.3 per cent, at $15.07 after announcing that it plans to open 60 new shops.

Among property stocks, Lend Lease, which faces legal action in the US over alleged over-billing, was down 1 cent at $7.45. Westfield was up 4 cents at $11.46 and Stockland added 1 cent to $3.21.

Airline Qantas was flat at $2.19 and Virgin Blue was down half a cent at 30.5 cents.

The top-traded stock by volume was mining services provider Boart Longyear, with 58.11 million shares worth $12.5 million changing hands. Its shares inched 1 cent, or 5 per cent, higher to 21 cents.

What you need to know:- Major US indices were mixed overnight. The Nasdaq rose, but the Dow fell slightly- The Australian dollar has skipped back over the 80-US-cent mark and was this morning buying 80.18 US cents- The price of crude oil rose for the first time in the past three sessions overnight- The price of gold rose as the greenback lost ground in offshore trade
Agencies with Chris Zappone, BusinessDay

Rio's Rise

Rio Scraps Chinalco Deal for $15.2 Billion Offering

June 5 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, will raise as much as $15.2 billion in a share sale after scrapping an investment from its largest shareholder Aluminum Corp. of China.

Investors will be offered 21 new shares for every 40 they hold at 1,400 pence each, 49 percent below yesterday’s close in London, the company said today in a statement. BHP Billiton Ltd. also agreed to pay Rio $5.8 billion to form an Australian iron ore joint venture.
Today’s deals allow Rio to reduce $38.9 billion in debt without selling stakes in its largest mines to Chinalco, as the state-owned company is known, which investors said favored the Chinese company and drew criticism from Australian politicians. Rio shares jumped to the highest in almost seven months.

“The Chinalco deal was wrong in a strategic sense,” said Prasad Patkar, who helps manage close to $1 billion at Platypus Asset Management in Sydney. “The market was right in marking the management and board down for trying to jam it down shareholders’ throats. But you have to give Rio’s new chairman Jan Du Plessis due credit for listening and pursuing alternatives.”
Rio rose as much as 13 percent in Sydney for their biggest gain since November 2007. They traded at A$73.63 at 12:12 p.m. Sydney time on the Australian stock exchange. BHP rose 9.3 percent, the biggest gain since it abandoned a hostile bid for Rio partly because of concern over its debt levels.

US Stocks Rise On Confidence Data

Source: www.businessday.com.au

May 27, 2009 - 6:48AM

US stocks climbed more than 2 per cent overnight as data showing the biggest monthly jump in consumer confidence in six years lifted hopes of an economic rebound, and a brokerage upgrade of Apple Inc drove sharp gains on the Nasdaq.

Apple's shares closed almost 7 per cent higher after Morgan Stanley said the iPhone will drive strong earnings growth over the next two years and raised its price target on the stock.

The rise on the US market points to a positive day for the Australian share market, which has been trading without a lead from its single biggest influence - Wall Street - for the past two trading sessions. This morning, the SPI futures index was up 64 points at 3841.

The Australian dollar's upward trajectory continued overnight, with the currency buying 78.6 US cents from yesterday's notional close of 77.65 US cents and the Reuters Jefferies index of commodity prices had risen 0.55% to 245.44 in offshore trade.

An index of US consumer confidence surged in May, strongly topping expectations as it registered the biggest monthly jump since April 2003, according to the Conference Board, an industry group.

Consumer discretionary shares were among the top gainers on the Dow and S&P 500, with McDonald's Corp up 3.1 per cent, retailer Macy's Inc up 5.9 per cent and the S&P consumer discretionary index up 3.8 per cent.

"Today the market is celebrating the return of some sign of consumer confidence," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "It was so strong, even the dismal housing numbers couldn't" bring the market down.

The news influenced the broad market, but consumer discretionary, restaurants and even Apple shares received the biggest boost, he said. "It's all the same script," Kenny said.

Other data on Tuesday showed prices of single-family homes fell in March from a year earlier. The pace of decline, however, slowed for a second consecutive month.

The Dow Jones industrial average rose 196.17 points, or 2.37 per cent, to finish at 8473.49. The Standard & Poor's 500 Index was up 23.33 points, or 2.63 per cent, at 910.33. The Nasdaq Composite Index was up 58.42 points, or 3.45 per cent, at 1750.43.

Consumer spending accounts for roughly two-thirds of the US economy. The US confidence data followed similarly rosy consumer reports in Germany and France.

The data also seemed to outweigh geopolitical concerns over North Korea's latest nuclear and missile tests, which pressured stocks at the open.

The market's gains came after four straight days of losses that marked the Dow's longest losing streak since the five days ended March 3. Worries about a possible cut to the United States' credit rating on Friday had pressured stocks.

On the Nasdaq, Apple shares gained 6.8 per cent to close at $US130.78. On the New York Stock Exchange, McDonald's shares were up 3.1 per cent at $US58.84 and Macy's shares were up 5.9 per cent at $US11.85.

Homebuilder DR Horton's shares rose 5.1 per cent to $US9.47.

Trading was active on the New York Stock Exchange, with about 1.37 billion shares changing hands, below last year's estimated daily average of 1.49 billion, while on Nasdaq, about 2.09 billion shares traded, below last year's daily average of 2.28 billion.

Advancing stocks outnumbered declining ones on the NYSE by 5 to 1 while advancers beat decliners on the Nasdaq by about 7 to 2.
Reuters

Financials back on the menu

Australian Regulator Ends Ban on Short Selling Financial Stocks


May 25 (Bloomberg) -- The Australian Securities and Investments Commission lifted its eight-month ban on short selling financial stocks.

The ban, which was due to expire at the end of the week, will be lifted from 10 a.m. today, the regulator said in an e- mailed statement. “ASIC has reviewed market conditions and considers that the balance between market efficiency and potential systemic concern has now moved in favor of the ban being lifted,” it said in the statement. “ASIC will not hesitate to reimpose the ban immediately and without consultation if it considers market conditions warrant such action.”

The ban was introduced in September as part of global efforts to curb volatility after the collapse of U.S. investment bank Lehman Brothers Holdings Inc. Similar steps were taken worldwide, including in the U.S. and U.K., after credit markets froze and stocks worldwide tumbled.
Australia permanently outlawed so-called naked short selling, with a few exemptions, in November, while lifting the ban on covered short sales for most non-financial companies. The ban on short selling financial stocks was extended in January and then again in March.

In a short sale, traders borrow shares from a broker that they then sell. If the price drops, they buy back the stock, return it to their broker and pocket the difference. In a naked short sale, traders don’t borrow the shares.

Trade Talk 15th May - WPL

AUSTRALIA'S largest oil and gas producer, Woodside Petroleum (WPL)
Although Managing director Don Voelte has said in calendar 2009 "the lower oil price inevitably means revenue, and therefore profit, will be lower than that achieved in 2008", it must not be forgotten the extraordinary effort achieved by this company last year. Woodside's net 2008 profit of $1.79 billion was 73.4 per cent higher than 2007
The company's core strategy seems to be to focus on production within the markets current strengths “Woodside will continue to focus on liquefied natural gas production because demand is expected to increase in line with global focus on using cleaner fuels”.
Couple this extra production in LNG, with the likelihood that a rebound in worldwide markets should drag up oil’s price. This produces great potential for price movement in WPL.
Technically, the stock has gained around 40% from its lows in February. With a slight resistance at around the $40 mark, there were very little problems pushing through this mark. Also if we take into account a nice positive signal from our recent conductor point, there is also a sign of a recent bounce off a significant retracement level

Today, the stock has hit our buy criteria, with a positive Market Conductor on a daily chart. Protection will be placed below recent low at 42.29.

Pending Trades

WES – Wesfarmers – watching for a break of short term resistance to re-enter the uptrend

CTX – Caltex - break of short term trend today. With likelihood of higher oil prices, the stock has a high probability of resuming its uptrend. Will observe for continued strength today for entry.

Bumper result for GrainCorp

Source: www.businessday.com.au

Philip Hopkinsay 13, 2009 - 2:45PM

GrainCorp says its half-year profit is likely to be $32 million, up to 40% higher than estimates.

Better-than-expected grain receivals and exports are expected to boost the both the full year and provisional half-year results of the agribusiness group. In a market update, GrainCorp said the half-year profit was now likely to be $32 million, up to 40% higher than the $23-$28 million estimate made at the annual meeting in February.

This will push the full-year profit guidance to $37-$42 million. Managing director Mark Irwin said grain receivals to date were within the market guidance of 9.05 million tonnes.

"We estimate the total receivals will be between 9.2 and 9.4 million tonnes by the end of September,'' he said.

Mr Irwin said the company had handled more than 2.5 million tonnes of grain through its port terminals so far this year.

"Based on forecast shipping demand ... we have increased our export tonnage forecast throughput to more than 4 million tonnes by the end of this financial year,'' he said.

However Mr Irwin was cautious on the grain export forecasts. Exports may be reduced by factors such as the value of the Australian dollar and the size of the northern hemisphere harvest.

"Our export tonnage assumptions are based on forward vessel nominations and bookings, and any significant change to these amy have an impact on the tonnage of exports we handle,'' he said. GrainCorp will release its results next Monday. In afternoon trade, Graincorp's shares were up 45, or 6.5%, at $7.30.

phopkins@theage.com.au
The Age

Economy Outlook showing signs of recovery

May 8 (Bloomberg) -- Australia’s central bank said the nation’s economy will shrink 1.25 percent in the 12 months through June before the lowest interest rates in five decades spur a “gradual” recovery next year.
The bank today revised its gross domestic product forecasts in line with Governor Glenn Stevens’ statement last month that the economy is in a recession. The bank said GDP will contract this year before gaining 0.25 percent in the 12 months through June, 2010, compared with its February prediction of 0.25 percent growth this fiscal year and 1.25 percent a year later.
A record 4.25 percentage points of interest-rate cuts since September and government spending will “provide significant support to domestic demand,” the central bank said in its quarterly monetary policy statement released in Sydney. Signs that a recovery may already be emerging include reports this week showing retail sales jumped in March, the unemployment rate dropped and exports to China have surged 80 percent this year.
“They don’t look keen to cut rates again,” said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney. “If we see a recovery, inflation will rise.”
The bank said today that inflation will slow to 1.5 percent in the 12 months through June, before accelerating to 2.5 percent the following year. Inflation will then cool again to 1.5 percent in the year through June 2011, it said.
‘Less Severe’
The Australian dollar fell to 75.20 U.S. cents at 1 p.m. in Sydney from 75.38 cents just before the statement was released. The two-year government bond yield dropped 2 basis point to 3.53 percent. A basis point is 0.01 percentage point.
Australia’s recession will be “less severe” than in many other countries, helped by lower borrowing costs for home buyers and businesses, the nation’s healthier financial system, a decline in the currency and “the recent recovery in the Chinese economy,” today’s statement said.
The central bank’s view echoes Australia & New Zealand Banking Group Ltd. Chief Executive Officer Mike Smith, who said Australia’s recession won’t be as “deep or protracted” as other developed economies.
“Our region remains the best-performing part of the world economy,” Smith said in a speech in Brisbane yesterday.

Shares Pointed Higher

Source: www.businessday.com.au

May 1, 2009 - 7:16AM

The Australian sharemarket is poised to open slightly higher after mixed trade on Wall Street and strong gains in Europe, although earnings from investment bank Macquarie Group may set the tone.

In recent trading on the Sydney Futures Exchange, the SPI 200 futures index was up 11 points at 3,777. Yesterday, the benchmark S&P/ASX200 share index closed at a high for the year, gaining 85.2 points, or 2.3%, to 3780.5, while the broader All Ordinaries lifted 82.8 points, or 2.3%, to 3744.7.

Resource stocks may gain, with the Reuters/Jefferies CRB index of commodity prices up 0.6% overnight.

The Australian dollar eased back overnight. It was recently buying 72.6 US cents, down from yesterday's local close of 73.36 US cents. It was also changing hands at 49.1 pence, 54.9 euro cents and 71.6 yen.

Overseas markets Wall Street gave up early gains to close mixed after carmaker Chrysler filed for bankruptcy protection.

Chrysler also said it would temporarily halt most of its vehicle production while it completes a deal with Italian carmaker Fiat designed to revive its tattered fortunes.

While not a major surprise to investors, the announcement sent shares down.

The Dow Jones Industrial Average closed down 17.61 points, or 0.2%, to 8,168.12. The Standard & Poor's 500 broad-market index fell 0.83 points, or 0.1%, to 872.81 while the tech-heavy Nasdaq composite gained 5.36 points, or 0.3%, to 1,717.30.

For the month of April, the Dow rose 7.4%, the S&P 500 gained 9.4% and the Nasdaq jumped 12.4%. European markets continued the previous day's strong gains on continued optimism about global economic prospects and better-than-expected corporate results.

In London the FTSE 100 index added 54.12 points, or 1.3%, to close at 4,243.71. Germany's Dax gained 64.89 points, or 1.4%, to reach 4,769.45 points while France's CAC 40 rose 42.91 points, or 1.4%, to 3,159.85.

Local news

Macquarie Group releases its annual results this morning, with investors bracing for the first drop in 16 years. The investment bank's shares are also in a trading halt after the company last night said it was seeking to raise as much as $1.2 billion.

In economic news, the Reserve Bank of Australia releases the index of commodity prices for March.

The Australian Industry Group/PricewaterhouseCoopers Australian Performance of Manufacturing Index (Australian PMI) for April is also released.

Woodside Petroleum and recruitment company Ambition Group hold annual general meetings.

Network Ten chief executive Grant Blackley addresses an American Chamber of Commerce in Australia business briefing in Melbourne.

AAP, with BusinessDay, Reuters

Lihir Posts Record Gold Production

Source: http://business.theage.com.au

April 30, 2009 - 10:18AM

Miner Lihir Gold has posted its "third successive record quarter" of gold production, and says annual production will be in line with previous guidance.

Lihir said it produced 318,000 ounces of gold in the first quarter of fiscal 2009.

The company said its flagship Lihir Island mine in Papua New Guinea maintained earlier production levels while its Bonikro mine in Ivory Coast, in West Africa, increased production by 9%.

Lihir said its cash costs were $US329 per ounce and average realised price was $US876.

The company confirmed earlier production guidance of 1.04 million ounces to 1.2 million ounces for the full year, with total cash costs kept below $US400.

Lihir managing director Arthur Hood maintained Lihir's full year production guidance, including 770,000 - 840,000 oz from Lihir Island, approximately 130,000 - 160,000 oz from Bonikro, and 90,000-100,000 oz from Mt Rawdon, in Queensland.

Ballarat production of up to 50,000 oz would dependent on ''the development of effective mining techniques in the central and southern zones and accessing commercial quantities of ore in the northern zone by the end of this year,'' Mr Hood said.

''The ongoing review at Ballarat will be more clearly defined later in the year.''

Mr Hood said unit costs were forecast to remain below $US400 per ounce for the year with lower industry cost pressures, weaker oil prices and a softer A$ all contributing to lower costs.

''Overall, the company is in very good shape to continue to grow its current asset base and I look forward to reporting further good progress during the year,'' he said.

Lihir said its operating margins increased in the quarter continuing a trend over the past 12 months.

Gold sales totalled 292,000 ounces at an average realised cash price of $876/oz, up from $792/oz in the three months to December, the company said.

Excluding Ballarat, gross cash costs for the quarter were $379/oz, expanding cash margins by 28% to $497/oz. Unit costs for all operations outside Ballarat were ''well below $400/oz'' for the quarter, with group total cash costs of $329/oz, down 7% from $353/oz in the prior quarter.

Lihir said this included $351/oz at Mt Rawdon, $360/oz at Bonikro and ''an exceptional result'' at Lihir Island where costs were down to $303/oz.

The stronger US dollar against the Australian dollar and the PNG Kina also contributed to reduced costs, as did the lower oil price, Lihir said.