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Re: Australian Equities Pre Open Roundup

0650 [Dow Jones] COMMODITIES ROUNDUP: Crude higher in 4th straight record high on temporary closure of Mexican oil production, weaker USD; December Nymex up $1.67 at $93.53/bbl, Brent on ICE up $1.63 to $90.32. "The feeding frenzy is immense; any bearish news is being totally ignored, while bullish news is magnified 10-fold," said Nauman Barakat of Macquarie Futures USA. "This is probably going to continue until Wednesday," when U.S. Energy Department inventory statistics, Fed rate call due. Gold futures neared $800 on weaker USD, stronger crude but pared gains on profit-taking as dollar came off lows; December gold up $5.10 to $792.60/oz on Comex, up $4.60 to $792.30 on CBOT. "Just some people taking a little money off the table ahead of the Fed," said Frank Lesh of Future Path Trading. "You get up here in the stratosphere, you're not going to be able to make as big of gains as we have been." December silver up 15 cents to $14.43 on Comex, up 14.8 cents to $14.436 on CBOT; January platinum down $3.60 to $1,465.50, December palladium off 55 cents to $375.20. LME base metals mostly lower on inventory rises after significant rally on weaker USD; tin bucked trend on strong speculative interest. "Prices still could work lower from here given the steep slowdown seen in housing sales and the explosive growth in inventories," said MF Global analyst Edward Meir. Copper down $15 to $7845, lead down $7 to $3648, zinc up $9 to $2904, aluminum down $12 to $2525, nickel off $250 to $31550, tin up $350 to $16800. (BRD)

0820 [Dow Jones] Australia's ruling Liberal-National coalition claws back some ground in latest Newspoll published in the Australian newspaper, though main opposition Labor Party would still win office if election held now; Labor's lead on 2-party preferred basis narrows from 16 bps in last week's survey to just 8 bps at 54% vs 46%. Coalition plays down significance of poll, with Finance Minister Minchin saying many voters don't make up mind until final week of campaign. Much could happen between now and election, due Nov. 24, including likely RBA rate hike next week, which, if it occurs, will damage coalition's economic management credentials. (RAP)

0832 [Dow Jones] BHP Billiton (BHP.AU) unlikely to succeed this year in its push for iron ore freight equalization, says Merrill Lynch. Says miner's drive to win higher prices to recognize higher shipping cost of Brazilian iron ore may also be unlikely to occur in next 2-3 years. Says BHP to sell excess tons of production into spot market, where prices are substantially higher than benchmark. BHP tells analysts on a visit to its Pilbara operations that its Rapid Growth Five and Quantum 1 & 2 expansions, which aim to take capacity to 300 million tons a year, will cost more than US$15 billion. ML maintains Neutral rating on BHP, which last traded at A$47.30. (APW)

0851 [Dow Jones] STOCK CALL: ABN AMRO cuts Perserverance (PSV.AU) to Hold from Buy after Northgate Minerals bid, sees limited potential for another bidder to emerge given conditions attatched to the bid and the acceptance of the Perserverance board. Also sees limited potential for broad-based shareholder support for any capital raising required to refinance company at a price comparable to the current offer. Targets stock at 20 cents; PSV last at 19 cents. (LMF)

0900 [Dow Jones] STOCK CALL: UBS ups Woolworths (WOW.AU) to Buy from Neutral, raises target to A$37.50 from A$34.80 after tour of new store format, which is "potentially the biggest in-store change in the last decade and could widen the gap" to Coles (CGJ.AU). Key differences with new format include 50% space allocation to fresh, vs 30% previously, new store livery and increased retail space. "We believe the additional space allocation could lift fresh sales by 20% with no negative impact on packaged grocery. In our view this format could drive an 8 percentage point increase in the group's fresh market share," analyst says. WOW last at A$33.01. (LMF)

0902 [Dow Jones] Lihir Gold (LGL.AU) downgrades FY production outlook to 750,000 oz in wake of recent strike. Lihir had previously given guidance for 800,000-830,000 oz for the year, and earlier this month CEO Arthur Hood said this would now be close to 800,000 oz. Downgrade to 750,000 oz will disappoint some in the market, but negative impact on stock at market open likely to be balanced by a gold price that continues to climb closer to US$800/oz. (APW) Damn it!!

0807 [Dow Jones] STOCK CALL: ABN AMRO raises Boral (BLD.AU) to Hold from Sell, cuts target price to A$6.20 from A$6.45. BLD said at annual meeting it expects FY08 profit down 15% from FY07 on U.S. housing weakness, high AUD; cuts FY08, FY09, FY10 profit estimates by 12% to A$255.6 million, 14% to A$301.3 million, 7.4% to A$397.6 million. "In spite of the downgrade we now believe much of the downside risk we identified with BLD will be getting priced in around current share price levels," ABN says in note. Stock last A$6.77. (ABH)

0908 [Dow Jones] S&P/ASX 200 offshore leads mostly bullish, with overnight SPI futures up 18 points at 6840.0 after further gains in Wall Street and commodity prices. DJIA up 0.5% at 13870.3, S&P 500 up 0.4%, Nasdaq up 0.5% before expected Fed easing Wednesday. CBOE VIX up 0.3 point at 19.87. U.S. 10-year bond yield down 1.4 bps at 4.38%. AUD/USD at 0.9230. Nymex crude up US$1.67 at US$93.53. Comex gold up $5.10 at US$792.60. LME copper down 0.3%, zinc up 0.2%, aluminum down 0.5%, nickel down 0.6%. BHP ADRs at A$47.30 vs A$47.30 locally. Index last 6792.1. (DWR)

0908 [Dow Jones] STOCK CALL: Credit Suisse expects St George Bank (SGB.AU) to book FY cash profit of A$1.163 billion, up from A$1.026 billion a year ago, in line with market forecasts. However, analyst notes forecast of 85 cent final dividend at low end of expectations. Says key issues to watch for include capital pressures, back office efficiency program and rate of growth. Keeps Neutral rating on stock ahead of result with A$37.00 target. SGB last at A$36.35. (LMF)

0813 [Dow Jones] STOCK CALL: UBS downgrades Jubilee Mines (JBM.AU) to sell from buy in wake of the A$23-a-share Xstrata (XTA.LN) offer. Ups target price to A$24 from A$20 reflecting 20% probability of a higher offer emerging. UBS says a counter offer is not out of the question, but would have 50% acceptance condition given the sale of management's 17.5% stake to Xstrata. "We believe Jubilee concentrate is highly sought after and no doubt all the majors would be interested," UBS says. Jubilee last traded at A$23.82. (APW)
 

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Re: Australian Equities Pre Open Roundup

0710 [Dow Jones] COMMODITIES ROUNDUP: Crude slumped, breaking 4-session rally as traders locked in gains, positioned for key inventory data plus Fed rate decision. December Nymex down $3.15 at $90.38/bbl, Brent on ICE down $2.88 to $87.44. Analysts cited market feeling prices rose too high too fast to be sustained above $93; "The market was very rich at $93, and a break below $90 could lead us lower" as many big traders bet there are sell orders to stop losses set just below $90, said Tony Rosado of IAG Energy Brokers. Goldman Sachs advised investors in note to speculators to take profits. Gold futures lower on uncertainty ahead of Fed rate decision, crude falls, stronger USD, profit-taking; December gold down $4.80 to $787.80/oz on Comex, down $4.50 to $787.90 on CBOT; pared some losses later in session as supportive sentiment re-emerged from "generally bullish bias" that Fed will probably ease rates 25 bps, said Stephen Platt of Archer Financial Services. December silver down 10.2 cents to $14.328 on Comex, down 10.7 cents to $14.33 on CBOT, "a laggard in the whole metals complex", said John Person of NationalFutures.com. Nymex January platinum off $24.60 to $1,440.90, December palladium down $3.40 to $371.80. Inventory rises again weighed on LME base metals; tin remains strongest metal, hovering just below August's record high $17,050/ton on stronger-than-expected Chinese September imports data; provisional Indonesia October export figures due next week also expected lower, said Peter Kettle of ITRI. Copper down $85 to $7760, lead down $65 to $3583, zinc off $64 to $2840, aluminum down $4 to $2521, nickel down $50 to $31500, tin off $150 to $16650. (BRD)

0804 [Dow Jones] EUR remains well-bid vs USD early in Wellington after tapping yet another all-time high of 1.4442 late in New York trade; pair likely to continue rising after tonight's FOMC meeting, says Meg Browne, FX strategist at Brown Brothers Harriman in New York; "We've still got credit market problems. Athough things have improved from the last meeting, the Fed isn't likely to abandon its easing bias and the trend is still for a weaker dollar." Says housing market has deteriorated more than expected, while consumer, business confidence also worse than expected; Fed statement likely to emphasize these downside risks to economy, which will keep dollar on sellers' radar. While euro may sell off ahead of Fed rate decision, up-trend for single currency intact given markets looking for ECB to tighten while U.S. rates expected to go lower over short term. EUR/USD last 1.4436. (SHN)

0805 [Dow Jones] AUD/USD holds around 0.9200 with Fed meeting outcome in focus. WSJ report in last 24 hours that Fed is no sure thing to cut has created uncertainty about result. No Fed cut would likely see a rebound in USD so some heightened downside risk for AUD/USD exists for remainder of week. John Kyriakopoulos, currency strategist at NAB, says support around 0.9150, while overnight high of 0.9220 is initial resistance. Local data ahead likely to affirm view RBA will hike rates in November with prospect for a second hike in December or 1Q. AUD/USD now 0.9198. (JEG)

0830 [Dow Jones] STOCK CALL: Credit Suisse upgrades Aristocrat Leisure (ALL.AU) to Outperform from Neutral on back of recent share price underperformance. Keeps 12-month target at A$12.60; ALL last traded at A$10.32. (LMF)

0837 [Dow Jones] WALL STREET: Stocks closed lower as investors remained anxious ahead of the Fed meeting tonight; "everyone was on Fed watch today; there was some anxiousness," said Phil Marber, head of trading at Cantor Fitzgerald. "And when people are nervous they sell stocks; they don't buy them." Merrill Lynch lost 2.8% after the investment bank said Chairman and CEO Stan O'Neal was leaving, making him the highest-profile executive to fall in the wake of mortgage-related losses on Wall Street. Qwest Communications International lost 14% to hit lowest level in nearly 18 months on lack of clarity about outlook, shelving of a dividend plan. Procter & Gamble fell 4% despite 14% rise in 1Q profit as company's 2Q projections appeared to disappoint expectations. U.S. Steel fell 7% after posting a 36% drop in 3Q profit as costs associated with an acquisition hurt results; among gainers, Saks rose 8.3% after Icelandic investment firm Baugur Group HF indicated it would like to explore prospect of acquiring the luxury retailer. Google +2.3% on a WSJ report it plans to soon unveil a proposal to bring Google-powered phones to the market. Dow closed down 0.6%, Nasdaq off 0.7%, Philly semicons +1.5%. (SHN)

0838 [Dow Jones] AUD/USD continues to lose ground on a cross basis from its heady levels at the start of the week and continues to drain on its AUD/USD cross prospects as well, says Peter Pontikis, currency strategist at Suncorp. Profit-taking begun two days ago will likely continue into today and at least until FOMC statement tonight. Hard to see pair holding any gains above 0.9200. expect a close nearer to 0.9150. Major support at 0.9070 likely to be tested ahead of RBA meeting next Tuesday. AUD/USD now 0.9186. (JEG)

0842 [Dow Jones] STOCK CALL: Credit Suisse cuts Transfield Services (TSE.AU) to Neutral from Outperform because of recent relative share price movements. "Since Oct. 16, TSE's share price has risen 19%, while the S&P/ASX 200 has risen 0.9%," CS says. "We believe that, short term, TSE now represents fair value." Keeps A$16.00 price target. "TSE's near-term growth prospects remain positive. Earnings growth of 20%+ should not be dismissed, in our view." Australian and NZ units well placed and Canada offers greatest growth potential with an expected A$1 billion revenue target over five years from Flint joint venture, which could more than double in next 2-3 years, CS says. Last trade A$15.90. (ABH)

0845 [Dow Jones] STOCK CALL: Credit Suisse cuts Boart Longyear (BLY.AU) to Neutral from Outperform after BLY outperformed market by around 12% in past month. "We still remain long-term positive proponents of BLY and its opportunity to take fixed-cost savings out whilst executing a global drilling services roll-up strategy," CS says. Keeps A$2.75 target price. Last trade A$2.60. (ABH)

0849 [Dow Jones] STOCK CALL: UBS cuts Perpetual (PPT.AU) to Neutral after PPT said expects 10% 1H earnings growth; was below expectations, implies flat to negative growth on last FY2H. Cuts EPS forecasts by 5% for this FY08, 2% for FY09, FY10. "We have been concerned about PPT's lack of operating leverage and mixed fund flows for some time. We like the strong cash generation and consistent track record. However, given today's cautious outlook, we doubt the market's willingness to ascribe a premium to a business with optionality for diversification but limited evidence of traction for growth at this stage." Cuts price target to A$77.40 from A$86.00, vs stock last at A$73.76. (RBT)

0911 [Dow Jones] S&P/ASX 200 offshore leads bearish, with SPI futures down 27 points at 6774.0 after overnight falls on Wall Street and in commodity prices. DJIA down 0.6% at 13792.47, Nasdaq near flat, S&P 500 down 0.7% after October consumer confidence fell. Proctor & Gamble fell 4.0% on weak results. CBOE VIC up 1.2 points at 21.07. U.S. 10-year bond yield down 0.2 point at 4.38%. AUD/USD near flat at 0.9191. Nymex crude down US$3.15 at US$90.38. Comex gold down US$4.80 at US$787.80. LME copper down 1.1%, zinc down 2.1%, aluminum down 0.1%, nickel down 0.3%. BHP ADRs at A$45.82 vs A$46.88 locally. Index last 6750.2. (DWR)

0955 [kennas] has found a nice wine bar in Cuzco to work out of tonight.
 

Sean K

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Re: Australian Equities Pre Open Roundup

0716 [Dow Jones] COMMODITIES ROUNDUP: Crude futures sprinted to fresh record high, boosted by rosy U.S. jobs data plus outage at Petroplus' U.K. Coryton refinery after fire; December Nymex up $2.44 to $95.93/bbl, Brent on ICE up $2.36 to $92.21. "The big news (in Europe) has been the outages at the Petroplus refineries in the U.K. and Germany," said Rick Mueller at Energy Security Analysis Inc. in the Netherlands. "That's certainly going to support prices as we start heading into colder weather." Comex gold futures set new contract high on weaker dollar, higher crude; traders began pricing in inflation on U.S. jobs data, recent Fed rate cut plus 3Q GDP. December gold settled up $14.80 to $808.50/oz on Comex, after hitting $810.70, surpassing previous high of $808 set in May 2006; up $15.80 to $809.40 on CBOT. "They're starting to price in some inflation," said Bart Melek at BMO Capital Markets. Higher oil prices also supported gold, he said. Combined with lower interest rates "it certainly harkens us back to a time when inflation is again possible." December silver up 27.4 cents to $14.599 on Comex, up 40.8 cents to $14.733 on CBOT; Nymex January platinum up $11.90 to $1,462.70, December palladium up $1.50 to $377.40, all on stronger crude, gold plus weaker USD. LME base metals slightly stronger; copper continued to decline, market sentiment remains fragile on concerns over economic outlook. Traders, analysts said risk-averse herd mentality could drive metals lower; inventory builds weigh, especially for copper. Copper down $70 to $7435, lead up $140 to $3710, zinc up $33 to $2768, aluminum up $82 to $2622, nickel down $295 to $32150, tin unchanged at $16500. (BRD)

0722 [Dow Jones] WALL STREET: Stocks ended slightly higher Friday with a hard fought gain, as Merrill Lynch set off initial selling but Google marked its fourth record close of the week; the market bounced around because "investors are nervous that banks are in more trouble than anyone knows," said Tom O'Brien, chief executive at TFNN, a financial advisory firm. "The feeling is that another shoe may drop, and that's going to keep trading volatile." Merrill Lynch fell 7.9% as The Wall Street Journal reported it may have tried to delay taking losses by using off-balance-sheet transactions with hedge funds; however, the brokerage's shares rose 1.2% in after hours trading as it reiterated an earlier statement saying it hadn't engaged in any inappropriate transactions. Citigroup dropped 2% as Deutsche Bank cut its earnings estimates for Citigroup to reflect problems in the market for collateralized debt obligations; the drop followed a 6.9% fall on Thursday after downgrades by two analysts due to credit concerns. Google rose 1.1% as the Internet giant and social-networking site MySpace said they are teaming up for OpenSocial, a tool for building social applications across the web. Casino operator Las Vegas Sands lost 6.8% as it swung to a 3Q loss, blaming higher opening expenses and operating costs and a string of luck by gamblers. XM Satellite Radio Holdings was up 5.4% and Sirius Satellite Radio gained 5.1% after the broadcasters said an independent advisory service recommended shareholders approve the companies' merger; Ford Motor advanced 5.3% as negotiators for the auto maker and the United Auto Workers moved closer to a tentative agreement; Western Digital added 11% as the hard-disk-drive maker's 1Q earnings fell but still beat Wall Street's estimates. Dow closed up 0.2%, Nasdaq up 0.6%, Philly Semicons down 1.2%. (SRO)

0803 [Dow Jones] Volatile equity markets dampen risk appetite as jitters surround major financials, capping AUD/USD gains, says RBC Capital, but expected RBA rate hike this week may boost. Notes spike might be limited as market already priced hike in. Focus will be on accompanying statement, hints on inflation outlook. AUD/USD last 0.9224, having touched 0.9343 last week. (EGC)

0833 [Dow Jones] AUD/USD slips in early trade as Asian session reacts to weekend news of further credit crunch impact on U.S. financial stocks, with risk appetite softening on fears there may be further writedowns at Citigroup. "No surprise" pair is weakening in reaction, says ABN AMRO strategist Gregg Gibbs, but adds expected RBA rate hike and strong gold prices should add support. AUD/USD now 0.9209 from 0.9236 early in session. (EGC)

0837 [Dow Jones] Nufarm (NUF.AU) close to accepting a buyout proposal from ChemChina, AFR reports. Without naming its sources, paper says an announcement could be made as early as today, with Nufarm managing director and shareholder Doug Rathbone offered an ongoing role. ChemChina and Blackstone are putting together a revised offer that could approach US$4 billion, people close to process told Dow Jones Friday. AFR tips potential counterbidders including Israel's Makhteshim-Agan (MAIN.TV) and buyout firm Permira. Nufarm wasn't immediately available for comment. (SVM)

0838 [Dow Jones] STOCK CALL: Goldman Sachs JBWere downgrades Kingsgate Consolidated (KCN.AU) to Hold from Buy after Thailand increased its gold royalty rates. "There is no doubt that this change is a material negative for earnings and the share price reaction clearly reflects this," analyst says. "In our view, this action by the Thai government increases the risks surrounding the timing (and indeed the granting) for the mining lease extension." Price target A$5.50 vs last trade A$5.06. (SVM)

0838 [Dow Jones] Merrill Lynch maintains Neutral on Tattersall's (TTS.AU) after downgrading its net profit estimates for FY08-FY10 by 2%-4%. Analyst says downgrades to forecasts for wagering due to Equine Influenza are partially offset by strength in Victorian gaming business. Last trade A$4.15. (SVM)

0848 [Dow Jones] Odds of an RBA rate hike Nov. 7 very high with even PM Howard conceding the kind of inflationary pressures that would prompt further monetary policy tightening currently exist in Australian economy - despite fact that any hike would damage his ruling Liberal-National coalition's chances of reelection Nov. 24; "I don't like interest rates going up, but we have to ask ourselves, in the environment in which we now live... some inflationary pressure is unavoidable if you have a strong economy, you have high world oil prices and you have a drought, some inflation in the system is inevitable," Howard tells ABC television, adding: "yes, there may be upward pressure on interest rates, for the reasons I've outlined." Another RBA rate hike could be last straw for coalition, which was reelected 2004 on pledge to keep rates low; party has for some time been trailing main opposition Labor party in voter polls. (RAP)

0850 [Dow Jones] Merrill Lynch says it's difficult for Babcock & Brown Power (BBP.AU) to justify paying A$1,200/customer for AlintaAGL given it can't access the sort of retail scale benefits that were available to AGL (AGK.AU)/Origin in Queensland. "Even by applying full debt funding to this acquisition, our BBP price objective has fallen to A$3.40 (from A$3.75)," analyst says. Maintains at Buy. Last trade A$3.23.(SVM)

0859 [Dow Jones] Australia's main opposition Labor Party on track for decisive victory in federal election Nov. 24; Galaxy poll in News Ltd. papers shows Labor leads ruling Liberal-National coalition by 54% to 46% on 2-party preferred basis, unchanged on poll taken mid-October. If repeated on election day, center-left Labor would win office in landslide. Still, with monetary policy likely to dominate week 4 of campaign - as most economists tip RBA will hike rates Nov. 7 to tame accelerating inflation pressures - PM Howard may take some heart from fact that voters won't blame current government if official interest rates do go up. Around 49% of electorate doesn't believe PM misled them on interest rates in 2004 election campaign, when government reelected on pledge to keep rates low. But 42% of voters believe he did. RBA has hiked rates 5 times since 2004, last time in August, and holds tightening bias. (RAP)

0930 [kennas] is recovering from a weekend with a Shaman in the jungle outside of Cuzco.
 
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Re: Australian Equities Pre Open Roundup

Casino operator Las Vegas Sands lost 6.8% as it swung to a 3Q loss, blaming higher opening expenses and operating costs and a string of luck by gamblers.

:D now now ... who just came from vegas???
 

Sean K

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Re: Australian Equities Pre Open Roundup

0803 [Dow Jones] AUD/USD retreats sharply after surging overnight to test fresh 23-year high of 0.9400; pair last 0.9292. John Kyriakopoulos, currency strategist at NAB, says fall likely linked to profit-taking after AUD followed EUR sharply higher late Wednesday, weakness in stock markets overnight likely fueling additional selling. Support at 0.9350. Employment data at 0030 GMT next major hurdle. (JEG)

0821 [Dow Jones] Goldman Sachs JBWere includes Coles (CGJ.AU) acquisition into its forecast for Wesfarmers (WES.AU) following yesterday's shareholder vote. Notes with a turnaround in Coles expected to take 3-5 years, the transaction is earnings dilutive initially, with broker's FY08 and FY09 EPS forecasts reducing by 7.4% (6-month contribution) and 3% respectively. "We believe there remains significant scope to improve the performance of Coles," analyst says. "Nevertheless, we are cognizant of the difficulties involved and the considerable head start that key competitor Woolworths has in terms of costs and market share." Keeps WES at Hold; price target A$45.68 vs last trade A$42.91.(SVM)

0823 [Dow Jones] Australian October employment set to show a 20,000 rise on month with unemployment set to remain at 33-year low of 4.2%. Data due at 0030 GMT. Strength in employment growth has underpinned RBA's concern about potential wages breakout. Further gains in October would throw spotlight on risk of December rate hike. RBA hiked yesterday to 6.75% from 6.50%, leaving door open to further tap on policy brakes. NAB debt strategist Peter Jolly says risks are for a 30,000 rise in jobs, with unemployment falling to 4.1%. (JEG)

0830 [Dow Jones] RBA expected to deliver 25bp rate hike to 6.75%, then point way to likelihood of at least one more hike next year. Dow Jones survey of 16 economists shows consensus that cash rate target at 7.00% by March. 2 major banks tipping 7.25% by mid-2008. RBA's statements today, Monday expected to forecast underlying price pressures to exceed 2-3% target for next 6 months. Inflation at "elevated level" in October, more than 1 rate hike likely needed to hose down price pressures, says Joshua Williamson at TD Securities; "The current pace of inflation makes an interest rate hike...almost certain," he says; "Inflation is also more broadly based than was the case earlier this year. (JEG)

0840 [Dow Jones] Goldman Sachs JBWere says AGL's (AGK.AU) joint venture with Arrow (AOE.AU) to buy gas merchant and pipeline business of Enertrade from Queensland government is a minor positive from both a strategic and an earnings perspective. But key news flow in the short term will be any outlook comments provided at AGL's AGM today including clarity on earnings post its recent guidance downgrade, analyst says. Maintains Hold; price target A$13.00 vs last trade A$12.89. (SVM)

0845 [Dow Jones] Merrill Lynch cuts CSR (CSR.AU) earnings estimates for this FY by 6.8% to A$173.1 million from A$185.8 million to reflect lower sugar volume assumptions, higher milling costs and production issues at the Tomago aluminum smelter. Keeps at Neutral. "The short-term earnings outlook in both sugar and building products remains challenging, which we are balancing against the clear medium- to longer-term attractions of the glass business, a potential upward permanent shift in global sugar prices and a recovery in Australian east coast housing." Last trade A$3.26. (ABH)

0846 [Dow Jones] Japan's Kirin (2503.TO) has made a formal A$2.6 billion-plus offer to buy 100% of dairy and juice producer National Foods from Philippines' San Miguel (SMCB.PH), AFR reports. Without naming its sources, paper says Kirin's move is in contrast to speculation several months ago it may only be interested in a 49% stake. San Miguel President Ramon Ang told reporters earlier this week that the board is scheduled to discuss the sale at its meeting today. AFR also notes talk possibility National Foods could be merged with Dairy Farmers. Lion Nathan (LNN.AU), 46% owned by Kirin, is also tipped as possible beneficiary from shakeup and could snare San Miguel's coveted premium brewer J Boag & Son. Comment from National Foods wasn't immediately available.(SVM)

0919 [Dow Jones] S&P/ASX 200 offshore leads bearish, with overnight futures down 138 points at 6549.0 as stocks and commodity prices plunged. DJIA down 2.6% at 13300.02, Nasdaq down 2.7%, S&P 500 down 2.9% on credit crisis, USD weakness on Chinese comments about diversifying reserves, and record oil prices. Washington Mutual fell 17.3% after flagging continued loan defaults. GM fell 5.1% on 3Q loss due to accounting change. AIG fell 6.7% before 3Q results. Amex fell 5.5%, Citigroup fell 4.8%, Morgan Stanley fell 6.1%. CBOE VIX up 5.1 points at 26.49. U.S. 10-year bond yield at 4.33% vs 4.37%. AUD/USD at 0.9275 vs 0.9330. Spot gold up US$5.60 at US$830.1 after hitting US$845.40. Nymex crude down 33 cents at US$96.37 after hitting US$98.62 record high. LME copper down 2.2%, zinc down 2.1%, aluminum down 0.8%, nickel down 0.3%. BHP ADRs at A$43.31 vs A$44.86 locally. Index last 6692.4. (DWR)

0920 [Dow Jones] Shares in Dyno Nobel (DXL.AU) may rise on news its 30%-owned associate FabChem China (I54.SG) EPS rose 15.8% in the Sept. 30 half-year. DXL says FabChem's EBITDA margins will improve further after it obtained an export license and FabChem's two brownfield site expansions come on line in 2008, tripling its detonator production and boosting explosives production by 60%. DXL bought its FabChem stake in January for US$31.8 million to gain access to the fast-growing Chinese market. DXL is seeking to reenter markets after its former owners sold its businesses outside of North America and Australia to rival Orica (ORI.AU). DXL last trade A$2.40, ORI A$29.65. (ABH)

0928 [Dow Jones] News Corp (NWS.AU) 1Q net income falls 13% after year-earlier investment gains including from sale of shares in Sky Brasil, Phoenix, set high bar. Reports US$732 million net income, or 23 cents/share, down from US$843 million a year earlier. But revenue rose 19% to US$7.07 billion, and result is ahead of analysts' expectation of 22 cents/share earnings on US$6.5 billion revenue. Signals it's on track for full year, says it's "comfortable" with its expectation to increase operating income for FY08 by "low teens" percentage. But since NWS is highly market-sensitive stock, likely to be caught up in market fall today after U.S. stocks plunged overnight. (RBT)
 

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Re: Australian Equities Pre Open Roundup

0634 [Dow Jones] News overnight that BHP Billiton (BHP) has approached rival miner Rio Tinto (RIO) likely to dominate trading interest in Australia, flow through to NZ today, says Auckland-based trader at major brokerage. BHP Billiton last night ended months of speculation by confirming it had approached Rio Tinto in deal said to be worth more than $100 billion. "That's a massive deal no doubt, you are bound to see people tack on to this M&A story over the next several weeks," says trader; adds while Rio Tinto has rejected the offer, "it makes the prospect of a sweetened bid likely, and this will keep speculators pushing the stock price up." Says while Wall Street slump likely to keep equities markets under pressure, M&A set to pace activity. Rio Tinto shares raced up 22% in London overnight after closing up 1.1% at A$113.40 on ASX yesterday pre-bid confirmation. (SHN)

0735 [Dow Jones] COMMODITIES ROUNDUP: Crude futures down as deepening worries about U.S. economy undercut price support from oil-supply disruptions; December Nymex down 91 cents at $95.46/bbl, Brent on ICE down 42 cents at $92.82. "I think the market is still bullish and wants to go higher, but there are considerable headwinds out there in worries about the U.S. economy and growth in the economy," said John Kilduff of MF Global. "This affects energy demand growth." Gold futures up on speculative buying due to inflation fears, weaker USD but pared gains later in session; December gold closed up $4 to $837.50/oz on Comex, up $3.80 to $837.20 on CBOT; December silver up 19 cents to $15.515 on Comex, up 23.8 cents to $15.539 on CBOT. Gold rose despite lower U.S. equities as traders bought it as safe-haven play, said Zachary Oxman of Wisdom Financial; added rotation out of stocks into gold "is the move that will define 2008". January platinum up $11.30 to $1,473.60, December palladium up 85 cents to $377.50. Copper led LME lower as players kept unwinding positions amid USD weakness, high crude, concerns broader credit-market contagion denting 4Q demand; copper slumped to 2-month low of $7,185/ton. Overall negative equity-market sentiment added to selling, BaseMetals.com analyst Will Adams said; added still thinks "global consumption is stronger than people are giving it credit for". Copper ended down $110 to $7200, lead down $115 to $3470, zinc up $10 to $2770, aluminum up $6 to $2629, nickel up $550 to $32750, tin down $150 to $16775. (BRD)

0758 [Dow Jones] AUD/USD looking strong as Asia session gets underway. Gains on Wall Street have pushed pair up from 0.9229 to 0.9287 now. Richard Grace, chief currency strategist at CBA, says comments by Fed chief Bernanke overnight show central bank in two minds as market turmoil and inflation risks compete for its attention. Grace says data will show the way for Fed, but as yet there's no clear case for further U.S. rate cut. Local traders also watching reports BHP Billiton was rejected in a bid for Rio Tinto. Grace says takeover would create a mining behemoth but it's doubtful if any transaction would impact AUD/USD directly. Support now in place for AUD/USD, with U.S./Australia 2-year bond spread now gaping at 325 basis points. Test of 0.9300 likely. (JEG)

0808 [Dow Jones]Goldman Sachs JBWere says David Jones (DJS.AU) 1Q sales growth of 9.7% was in line with its forecast, with like-for-like sales growth slightly above its estimate. Retains Hold recommendation. "We expect David Jones' EPS growth to remain in the low double-digits," analyst says. "In our view, this will result in a p/e which trades at a small discount to the Large Industrials ex-banks." Price target A$5.14 vs last trade A$4.80. (SVM)

0825 [Dow Jones]Goldman Sachs JBWere says Lion Nathan's (LNN.AU) A$325 million acquisition of J. Boag is strategically sound, low risk but at a full price. "Whilst the Boag's acquisition is a strategic positive, full price means financial upside is long-dated," analyst says. Adds potential for capital management over next 2-3 years minimal, with EBITA interest cover steady at less than 5X. Maintains Hold ahead of FY results Nov. 21. Price target A$9.90 vs last trade A$8.99. (SVM)

0826 [Dow Jones] STOCK CALL: Goldman Sachs JBWere upgrades Platinum Australia (PLA.AU) to Buy from Hold after it was granted New Order Mining Rights, or NOMR, for the Smokey Hills Platinum Project in South Africa. "The granting of the NOMR significantly lowers the company risk and thus we have upgraded our target price to A$3.00 (was A$2.25)," analyst says. Last trade A$2.55.(SVM)

0838 [Dow Jones] Merrill Lynch says AGL (AGK.AU) reaffirming FY08 guidance yesterday is positive but broker maintains its forecast at the lower end of management guidance to account for risks around a tight summer for power prices, customer churn issues. "AGL's medium-term outlook remains unclear," analyst says. Expects outcome of AGL's review will see it step away from its 15% medium-term EPS growth target and adopt a more realistic 5-10% target going forward. Maintains Neutral. Last trade A$12.97. (SVM)

0845 [Dow Jones] Merrill Lynch says Lion Nathan (LNN.AU) is paying a big price for J Boag, but the price isn't as big when you dig deeper. "Foster's currently distributes Boag's products in mainland Australia, and we believe that Boag's probably pays around A$5 million to A$6 million in distribution fees to Foster's - which will be eliminated after June 2008," analyst says. "In addition, we would expect the owner of Boag to be more incentivised to grow the Boag brand - as opposed to a competitor." Notes, consequently, LNN's EBIT for Boag will probably increase relatively quickly to around A$25 million and LNN has probably paid an EBIT multiple closer to 13x. Maintains Neutral. Last trade A$8.99. (SVM)

0847 [Dow Jones] AUD/USD got a kick higher in early Asia trading as Wall St rebounded off earlier low to close largely flat. Greg Gibbs, senior currency strategist at ABN AMRO, says getting a fix on near-term direction hard with a lot of factors washing through market and impacting sentiment. But overall, AUD/USD has held up well to a week full of fresh subprime concerns, with healthy yield spreads increasingly generating demand for pair. Gibbs expects range of 0.9220 to 0.9330 now 0.9271. Watch on BHP Billiton's (BHP.AU) bid for Rio Tinto (RIO.AU), but no immediate currency implications with bid rejected and no certainty a successful bid would wash through the AUD. (JEG)

0849 [Dow Jones] Merrill Lynch says Lion Nathan (LNN.AU) is paying a big price for J. Boag, but the price isn't as big when you dig deeper. "Foster's currently distributes Boag's products in mainland Australia, and we believe that Boag's probably pays around A$5 million to A$6 million in distribution fees to Foster's - which will be eliminated after June 2008," analyst says. "In addition, we would expect the owner of Boag's to be more incentivized to grow the Boag's brand - as opposed to a competitor." Notes, consequently, Lion's EBIT for Boag's will probably increase relatively quickly to around A$25 million and Lion has probably paid an EBIT multiple closer to 13X. Maintains at Neutral. Last trade A$8.99. (SVM)

[0914] kennas can not believe he's just watched 20 mins of 'Girls of the Playboy Mansion'. :eek:
 
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Re: Australian Equities Pre Open Roundup

"[0914] kennas can not believe he's just watched 20 mins of 'Girls of the Playboy Mansion'." LOL
 

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Re: Australian Equities Pre Open Roundup

0656 [Dow Jones] AUD/USD slips to 3-week low of 0.9030 in Wellington trade after tumbling offshore on renewed credit jitters, fears of further bad news in financial sector from U.S. subprime crisis; last 0.9043 vs 0.9290 late Friday in Sydney, with liquidation of yen-funded carry trades weighing; AUD/JPY suffers big loss, hits 3.5 week low of 99.93, last 99.98 vs 104.73 late Friday. Bank of NZ FX strategist says today's RBA quarterly policy statement will be main focus, but thinks AUD will stay pressured lower unless there's positive surprise from statement or Wednesday's 3Q wages report. (SHN)

0713 [Dow Jones] WALL STREET: Stocks tumbled Friday on escalating worries about U.S. economy; "I think escalating fear is behind the selling streak," said James Paulsen, chief investment strategist at Wells Capital Management; "there is a sort of universal opinion the U.S. economy is weakening and the Federal Reserve is on the sidelines and by the time it acts it will be too late." Mortgage-buying giant Fannie Mae fell 1.6%, to 49 after reporting additional unrealized loss of $955 million in the value of private-label securities backed by subprime and Alt-A mortgages through end of 3Q. Auction house Sotheby's fell 8.6% on 3Q net loss, extending prior day's 28% plunge when works by masters such as Van Gogh, Picasso and Monet went unsold at key auction. Walt Disney fell 2.6% as 4Q revenue undershot expectations. Technology stocks also fell, sustaining previous day's rout after Cisco Systems' disappointing revenue outlook. Cisco fell 3.5%, IBM off 5.5%. General Motors lost 5.6% as selling interest continue following company's biggest quarterly loss earlier in week. Merck rose 2.1% after drug maker agreed to pay about $4.85 billion to settle a large portion of the claims over injuries allegedly linked to its Vioxx painkiller. Dow closed down 1.7%, down 4.1% for week - 3rd biggest weekly decline this year. Nasdaq off 2.5%, Philly semicons flat. (SHN)

0744 [Dow Jones] COMMODITIES ROUNDUP: Crude slightly higher in low volume on expectations options trading might inspire run at $100/bbl early this week, offsetting concerns about U.S. economic growth; December Nymex up 86 cents at $96.32, Brent on ICE up 39 cents at $93.18. Options on December crude futures expire Tuesday with high open interest in $100 call options; "A lot of the market focus is centering on these $100 crude options", if prices move closer to $100, options trading could provide added lift, said Andy Lebow of MF Global. Gold futures down slightly on stronger performance by USD, weaker equities; traders booked profits in atmosphere of general economic uncertainty. December gold down $2.80 to $834.70/oz on Comex, down $2.30 to $834.90 on CBOT; December silver up 3 cents to $15.545 on Comex, up 2.9 cents to $15.549 on CBOT; December palladium off $1.25 to $376.25; January platinum down $47.60 to $1,426. "Precious metals were generally weaker today, as the U.S. dollar made modest gains against the euro and carry trades were unwound," BNP Paribas said in note. "We suspect the gold - and hence silver - price is set for further losses in the short term." LME base metals mixed as credit-market concerns pressured LME copper below key support while nickel rose; broader financial markets expected to sway direction this week; "Credit markets still aren't functioning properly and lenders have tightened lending standards. The reality is starting to sink in that it wasn't just a one- or two-month wonder, it's a much more deep-seated problem, and that's why you've seen prices come off," said BNP Paribas analyst David Thurtell. Copper down $175 to $7025, lead down $70 to $3540, zinc off $50 to $2720, aluminum down $21 to $2608, nickel up $1050 to $33800, tin up $175 to $16950. (BRD)

0810 [Dow Jones] AUD/USD falls to lowest since Oct. 25 on US "risk flare" after Wachovia Corp. is latest to announce writedowns, Grange Securities chief economist Stephen Roberts says. Pair hits low of 0.9036 in early Asian trade. Weak Wall Street lead pushes USD/JPY to 18-month low, weighs on high-yielding currencies. Roberts expects "pretty bumpy" AUD/USD range of 0.9030-0.9100. Traders to take cues from RBA's quarterly statement on monetary policy, due 0030 GMT. "Relatively hawkish" statement expected to support pair. AUD/USD last at 0.9070 from 0.9110 in late New York Friday.(SRH)

0829 [Dow Jones] Shares in Primary Health Care (PRY.AU) may fall after 15.5 million new shares sold to institutional investors at A$11.90 each, 3.2% discount to the stock's last traded price of A$12.29, to raise A$184.5 million to fund expansion; last week it offered A$4.10/share in cash for stock in rival Symbion Health (SYB.AU) it doesn't already own. PRY has 20% stake in SYB, which has previously rejected offers by PRY, agreed to A$2.76 billion cash-and-shares proposal from Healthscope (HSP.AU), private equity partners. (ABH)

0852 [Dow Jones] STOCK CALL: Merrill Lynch says National Australia Bank's (NAB.AU) plan to keep cost growth below inflation out to 2010 is "challenging" given current trends, but gives bank benefit of doubt and bumps up FY09 EPS forecast by 2%. "Despite this we don't find value in the stock and retain some caution on revenues and bad debts," analyst says, keeps Neutral rating on NAB. Analyst's large bank pecking order is St George (SGB.AU), Westpac (WBC.AU), ANZ (ANZ.AU), Commonwealth Bank (CBA.AU) then NAB. (LMF)

0854 [Dow Jones] Orica (ORI.AU) may rise after posting record FY net profit of A$497.8 million, up 31% from a year earlier, and ahead of analysts' expectations of A$481.3 million. ORI, which has been benefiting from rising demand for mining explosives to meet China's growing needs for base metals and energy, expects earnings this FY before one-time items, to be higher because of an additional contributions from recent acquisitions and continuing demand for explosives. Last trade A$29.45. (ABH)

0857 [Dow Jones] ABN AMRO raises National Australia Bank (NAB.AU) target to A$47.17 from A$44.00, keeps at Buy after FY result, which came in ahead of expectations. Says while the outperformance "was not A1 quality", key positive from result was the surprise rollout of expense growth within inflation for an additional two years. NAB now ABN AMRO's second bank pick behind Westpac (WBC.AU). "We consider NAB a leverage play on expenses together with exposure to a robust business-lending environment." (LMF)

0902 [Dow Jones] STOCK CALL: Merrill Lynch lowers Brambles (BXB.AU) 12-month target price to A$13.21 from A$14.50, cutting EPS forecasts for FY08 and FY09 after lifting AUD assumptions to reflect spot rates around 92 U.S. cents. Retains Buy with BXB last A$12.30 and says "investors are getting a free option" on either a takeover bid, which "remains a real chance" from either Toll (TOL.AU) or Asciano (AIO.AU) despite AIO denial it's currently considering, or turnaround in European CHEP business. (WEL)

0909 [Dow Jones] National Australia Bank (NAB.AU) appears to be in a sweet spot in terms of both revenue and costs, says Goldman Sachs JBWere. "The positive jaws between revenue and costs will see NAB exceed peer earnings growth in FY08 and FY09 by 3.0% and 1.5% respectively," analyst says. Says quality of FY07 result was high, bumps up forward earnings estimate. "Our forecasts now have NAB delivering EPS growth of 13.5% in FY08, 11.1% in FY09 and 9.1% in FY10," analyst says. Keeps Buy rating on NAB with A$47.27 target. NAB last at A$43.40. (LMF)
 

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0758 [Dow Jones] COMMODITIES ROUNDUP: Crude futures fell to 1-week low as traders locked in gains on stronger USD, concerns slowing U.S. growth could hit energy demand; fall damped speculation that $100 call options may draw prices to that level before December contract expires today. December Nymex down $1.70 to $94.62/bbl, Brent on ICE off $1.48 to $91.70. "This market is maybe setting itself to turn over", start heading lower, said Eric Wittenauer of A.G. Edwards. "The options, and the realization we can't hit $100 before expiration, weighed on prices, as did U.S. and global economic worries and a strong day for the dollar." Precious metals fell as lower crude, higher USD sparker profit-taking across complex; December gold down $27.00 to $807.70 on Comex, down $26.80 to $807.80 on CBOT; December silver down 78.3 cents to $14.762 on Comex, down 78.2 cents to $14.771 on CBOT; January platinum off $35.20 to $1,390.80, December palladium down $4 to $372.25. "The market has really come a long way; it's time to take some profits," said Frank Lesh of Future Path Trading. "There weren't any buyers at the $840s. At these levels up here you have to expect this kind of volatility and these kinds of moves." LME copper continued falling as risk aversion weighed on base metals; if investors continue to trade broader macro outlook through copper market, further falls likely across metals, analysts, traders said. "The clear message from the respective price action of the base metals complex is that copper continues to be the main economic bellwether ... and the fact is that many investors continue to trade their broader macro outlook through the copper market," said JP Morgan analyst Michael Jansen. Copper down $75 to $6950, lead down $76 to $3464, zinc off $89 to $2631, aluminum down $38 to $2570, nickel off $200 to $33600, tin down $50 to $16900. (BRD)

0802 [Dow Jones] AUD/USD expected to remain under pressure following some further Wall Street deterioration, says TD Securities chief economist Josh Williamson says; pair has hit 3-week low of 0.8787. Expect range of 0.8750-0.8950. Risk aversion likely to remain key theme in Asian trade, with Australian equities likely to fall, weighing on pair. Williamson says commodity, oil prices also down on signs of "reduced demand from China". Notes most AUD/USD losses have been Asian investors pulling out of carry-trade positions. (SRH)

0849 [Dow Jones] AUD/USD is on its way to fair value point of 0.8500, likely to get there in "matter of days" as risk appetite diminishes, says Suncorp treasury analyst Peter Pontikis. Expect range of 0.8720-0.8810 in Asian trade. Notes "overwhelming pressure" is for September, October gains in the EUR, AUD, other carry trades to continue to be wound back. Pontikis says "better support" for AUD/USD found below 0.84-0.85, "not here". Pair last at 0.8790. (SRH)

0907 [Dow Jones] STOCK CALL: ANZ (ANZ.AU) upgraded to Buy from Hold by Goldman Sachs JBWere, arguing its 16% discount to peers, the largest since October 1999 and above historical 7% average, is "overplayed," with little risk of earnings downside, despite uncertainties on the recovery of its institutional business and the form of its new Asian strategy. Tweaks EPS forecasts for each of next 3 years higher by less than 1%, with A$31.86 12-month target price vs ANZ last A$27.40. (WEL)

0916 [Dow Jones] S&P/ASX 200 offshore leads bearish, with overnight futures down 38 points at 6446.0 amid further slide in Wall Street and commodity prices. DJIA down 0.4% at 12987.55, S&P 500 down 1.0%, Nasdaq down 1.7%; 4th straight fall on Wall Street amid credit crisis fallout with E-Trade flagging writedowns Friday. Countrywide said its credit rating may fall to junk. Times reported HSBC may be next with writedowns. CBOE VIX up 2.6 points at 31.09. Nymex crude down US$1.70 at US$94.62. Spot gold down US$28.30 at US$803.20. AUD/USD at 0.8787 vs 0.9107. LME copper down 1.1%, zinc down 3.3%, aluminum down 1.5%, nickel down 0.1%. London-listed BHP down 1.3%, Rio Tinto up 0.5%. BHP ADRs at A$40.40 vs A$41.70 locally. Index last 6455.3. (DWR)

0919 [Dow Jones] STOCK CALL: Goldman Sachs JBWere raises FY08 earnings forecast for Computershare (CPU.AU) by 12% following yesterday's guidance upgrade. Notes based on its upgraded estimates, the stock is trading on an FY08 PE of 18x. "This is undemanding relative to the broader market and at the low end of the company's historical range," analyst says. "Given where we are in the cycle, we are not advocating a top of range PE. However, we still believe there is room for upside from current levels and would continue to buy the stock into the early A$10s." Maintains Buy. Raises target price to A$11.00 from A$10.60 vs last trade A$9.80. (SVM)

0926 [Dow Jones] Macquarie Group (MQG.AU) net profit rises 45% to record A$1.06 billion in 6 months ended Sept. 30, up from A$730 million in 1H06. Result is ahead of MQG's own guidance in September that profit would rise 40% to A$1.02 billion. Also beats analysts' forecasts - median was A$1.03 billion, according to Dow Jones survey of 7 analysts, within tight A$1.02 billion-A$1.04 billion range. But MQG has reputation for under promising, over delivering, shares rallied yesterday on expectation of strong result, so some of good news could be factored in. And A$1.45/share 1H dividend is below median market forecast of A$1.64. Despite some analysts expecting MQG would hold off on giving specific guidance until later in year, CEO Allan Moss says expects 2H result to be at least in line with prior year's 2H result of A$733 million, but down on very strong 1H. (RBT)

0929 [Dow Jones] Goldman Sachs JBWere says Flight Centre's acquisition of Liberty Travel in U.S. is into a market that's mature, highly competitive and facing a tough economic outlook. "By Flight Centre's own admission, Liberty has experienced flat revenues and declining margins in its retail operation in recent years," analyst says. "But Flight Centre achieves scale in U.S. retail/wholesale segments (Flight Centre's operation a perennial loss-maker), can leverage Liberty's retail shops into SME segment and lift margins by implementing its IT and retail systems." Maintains at Hold. Sees upside risk to earnings this FY given robust demand conditions but notes medium-term growth increasingly driven by M&A/capex rather than operating leverage/cost reductions. (SVM)

0930 [Dow Jones] STOCK CALL: JPMorgan upgrades Lion Nathan (LNN.AU) to Overweight from Neutral due to improved valuation, an accelerating earnings growth profile from FY09, and defensive qualities of the business. "However, we also note that the stock is likely to remain weak in the near term due to the outlook for another year of low-single-digit earnings growth in FY08 due to commodity costs and dilution from the Boags acquisition, and the potential for an increasing perception of risk in the stock on the back of increased rhetoric from Coca-Cola Amatil (CCL.AU) on its intentions in the beer market at its upcoming trading update." Price target A$10.20 vs last trade A$8.83. "We would view share price weakness over the next few months as a good buying opportunity."(SVM
 

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Re: Australian Equities Pre Open Roundup

0738 [Dow Jones] AUD/USD pulls back losses in overnight New York session, buoyed by positive equities across Europe, U.S. AUD may get further support from 3Q wages index due 0030 GMT; market expecting wage gains of 1.0%, but anything above, on back of strong NAB business survey, means pressure will be on RBA for December rate hike. AUD/USD now 0.8947, from overnight low of 0.8888. (EGC)

0740 [Dow Jones] COMMODITIES ROUNDUP: Crude futures sharply down on IEA's forecast of slower-than-expected world oil demand growth, expiration of options, startling traders who expected push towards $100/bbl. December Nymex down $3.45 to $91.17, Brent on ICE down $3.13 to $88.85. "Not only is the market not approaching $100, it's being exacerbated by the fact that the December crude options are expiring today," said Peter Donovan of Vantage Trading. Nymex gold, silver futures lower amid big fall in crude; platinum, palladium boosted by bullish forecast for platinum from Johnson Mathey; December gold down $8.70 at $799.00, December silver down 15.2 cents at $14.61; January platinum up $20.00 at $1,417.00, December palladium up $1.25 at $373.50. "A lot of today's weakness (in gold, silver) is profit-taking, and not a lot has changed in the market fundamentally," said Frank Lesh at Future Path Trading. LME base metals consolidated, lower prices attracted buyers; complex fragile, direction depends on equities; "Uncertainty continues to cloud sentiment and quiet physical markets are offering little in the way of support," Barclays Capital said; added aside from zinc, LME stocks increased across board, many deliveries to Europe, U.S. reflecting lower physical premiums, lackluster buying. Copper down $25 to $6925, lead up $18 to $3483, zinc up $4 to $2635, aluminum up $7 to $2577, nickel down $200 to $33400.0-33500, tin unchanged at $16900. (BRD)

0808 [Dow Jones] AUD set for positive Asian session, helped by a rebound in stocks overnight boosting risk sentiment, says CBA strategist Richard Grace. Notes perception AUD had fallen too far, losing around 6.0% in past week, but fundamentals now driving AUD in all crosses. "I suspect the Aussie will continue to trend higher." Notes 3Q wages data due 0130 GMT "could certainly give the Aussie a boost". Expects AUD/USD resistance at 0.8990, support at 0.8930; pair now at 0.8972 from overnight low 0.8881. (EGC)

0810 [Dow Jones] AUD picks up against USD, JPY, but fragile investor confidence means cautious times are ahead, say strategists at nabCapital. Note comments on JPY appreciation by Japanese PM helping lift AUD, but says another slide in global equities will trigger further carry trade liquidation. In Asian session, views AUD/USD bounce toward 0.8970 as selling opportunity, with initial support at 0.8880. Says 3Q wage index due 0130 GMT will have to be a "screamer" to prompt RBA December rate hike; market expects 1.0%. (EGC)

0828 [Dow Jones] Australian PM Howard still under fire for spending promises that some say would reduce budget surplus in future years below ruling coalition's goal of 1% of GDP. Howard tells ABC radio he's "absolutely certain" surplus won't fall below that; says in past three years surpluses have been above forecast, although he's not banking on that continuing in order to satisfy goal. Coalition likely happy for focus to be on economic management, for which voters rate coalition more able than opposition Labor Party. But still no sign that voters are returning to coalition, which remains a long way behind Labor in opinion polls and set for big defeat on Nov. 24. (ILM)

1004 [Dow Jones] Shares in Incitec Pivot (IPL.AU) are poised to rise after IPL reported net profit for last FY increased to $A205.3 million, from A$46.7 million a year earlier. IPL beat analysts' mean estimate of A$198.3 million. IPL's earnings have been boosted by record global ammonium nitrate prices because of shortages and rising demand as well as a restructure its business and its A$165 million Southern Cross Fertilisers acquisition. IPL expects continued strength in fertilizer prices, but anticipates difficult trading conditions for domestic sales and continued strength in the Australian dollar, says chief Julian Segal. Last trade A$87.00. (ABH)

0905 [Dow Jones] Focus for AUD/USD gains switches to domestic data, with all eyes on 3Q wages due 0030 GMT, says RBC senior currency strategist Sue Trinh. Note while market expects 1.0% gain, a 1.1% reading would be enough to jolt the RBA, stoking the December rate hike debate, and lifting AUD. RBC expects AUD/USD to climb to 0.9200 by year-end, 0.9600 in 1Q 2008. Pair now 0.8954. (EGC)

0907 [Dow Jones] Credit Suisse says its confidence in Newcrest (NCM.AU) management to deliver on its Telfer promises is growing. Investor confidence in Telfer mine has in the past been undermined by a series of downgrades and disappointments. On a site visit to the mine, CS analysts say management is confident it can now deliver. "We are increasingly comfortable that management are now in control of Telfer and the production and costs should be more predictable and stable," CS says. Maintains Neutral rating with A$28 target price. Newcrest last traded at A$32.81. (APW)

0913 [Dow Jones] S&P/ASX 200 offshore leads bullish, with overnight futures up 104 points at 6625.0 as Wall Street surged. DJIA up 2.5% at 13307.09, S&P 500 up 2.9%, Nasdaq up 3.5%. First up day in five days after Goldman Sachs said doesn't expect big hit from subprime, Wal-Mart 3Q profit beat consensus and tipped strong 4Q, and crude oil prices plunged. August pending home sales edged up to 85.7 as expected. CBOE VIX down 7 points at 24.10. Nymex crude down US$3.45 at US$91.17. Comex gold down US$8.70 at US$799.00. U.S. 10-year bond yield up 4.4 bps at 4.27%. AUD/USD at 0.8973 vs 0.8787. LME base metals about flat. London-listed BHP down 1.0%, Rio Tinto down 4.7%. BHP ADRs at A$41.92 vs A$41.80 locally. Index last 6515.2. (DWR)

0914 [Dow Jones] ABN AMRO says given rapidly rising commodity costs, an approaching AGM and a falling share price, it is prime time for Goodman Fielder (GFF.AU) to downgrade. But analyst says risk of a 5%-plus downgrade is limited, suggesting strong buying opportunity. "We believe the extent of the fall in GFF's share price in the past month is unwarranted," analyst says. "While we concur trading conditions have intensified, our analysis of what the present share price is anticipating with respect to FY08 suggests the market is factoring in a 13-15% downgrade to net profit after tax." Adds such a downgrade is unlikely and expects management will guide flat to modest growth in its AGM trading outlook update on Nov. 22. Maintains at Buy. Trims price target to A$2.60 from A$2.70 vs last trade A$2.01.(SVM)
 

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0705 [Dow Jones] COMMODITIES ROUNDUP: Crude reversed previous session's options-related slide on expectations for colder-than-normal weather in U.S. northeast, plus traders bet on 4th consecutive fall in U.S. stockpiles; data due today. December Nymex up $2.92 to $94.09/bbl, Brent on ICE up $2.53 to $91.36. "Yesterday's sell-off was clearly driven by options expiration, and, apart from the IEA revisions, nothing has really changed" to alleviate perceived tightness, said Addison Armstrong at TFS Energy Futures; expects slowing demand to eventually push prices back down to $70, but not in near term. Gold futures up on stronger crude, weaker USD: December gold up $15.70 to $814.70/oz on Comex, up $15.30 to $814.30 on CBOT. Andrew Montano at Scotia Mocatta said gains come after liquidation earlier in week as participants got more risk averse; Bill O'Neill at LOGIC Advisors said market was due to correct; "It makes the market healthier and continues the long-term uptrend." December silver followed gold higher, up 45.5 cents to $15.065 on Comex, up 44.4 cents to $15.052 on CBOT. January platinum up $33.80 to $1,446.10, December palladium up 30 cents to $373.80. LME copper rallied after strong earthquake rocked northern Chile; market continues to watch for disruptions to local miners; alongside stronger equities, pushed rest of LME higher, tin rising to record high $17,575/ton on momentum, technical buying. Copper up $205 to $7,130, lead up $52 to $3,535, zinc up $25 to $2,660, aluminum up $32 to $2,609, nickel bucked trend, down $300 to $33,100, tin up $650 to $17,550. Investor sentiment towards base metals generally uncertain, said Barclays Capital; added direction dictated by equity movements. (BRD)

0727 [Dow Jones] AUD/USD starts Asia day weak following last-minute retreat on Wall Street. USD strength on back of firm strong U.S. retail sales and benign PPI data overnight also putting cap on AUD for now. Richard Grace, chief currency strategist at CBA, says Wall Street still seems to be driving sentiment. No major Australian data scheduled, so quiet session likely in Asia. Grace expects support at 0.8950. Now 0.8968. (JEG)

0742 [Dow Jones] Kevin Rudd, leader of Australia's main opposition Labor Party, sticking to line that his center-left party heeding warnings from RBA on impact of public spending on inflation; tells ABC radio A$2.3 billion in new spending pledges unveiled at yesterday's campaign launch in Brisbane focused on easing infrastructure bottlenecks, addressing skills crisis, rather than fueling domestic demand. But Rudd swats away question on how previously announced plans for over A$30 billion in income tax cuts over next three years can avoid stoking already overheated economy, potentially pushing up interest rates further. Instead, claims economic high ground over ruling Liberal-National coalition, which promised new spending costing around A$9 billion Monday. Still, most economists think mounting spending tally from both sides of politics ahead of Nov. 24 federal election will play a role in likely 1Q08 rate hike. (RAP)

0757 [Dow Jones] Credit Suisse reaffirms Overweight stance on Australian banking sector, has a positive view on banks due to their defensive appeal in an environment of slowing economic growth. "We see banks as offering at least fair value within a domestic market context, with consensus EPS growth that is competitive with the non-bank market," analyst says. Says ANZ (ANZ.AU) is its top sector pick, reckons stock has been oversold on Asia acquisition concerns. National Australia Bank (NAB.AU) second pick, followed by Westpac (WBC.AU), St. George (SGB.AU) and Commonwealth Bank (CBA.AU). (LMF)

0758 [Dow Jones] STOCK CALL: Cabcharge (CAB.AU) upgraded to Overweight by JPMorgan. Analyst says it's modestly upgrading FY08 and FY09 earnings forecasts following a recent catch-up with management and release of July-September 2007 JV results. "We believe the recent fare hike in NSW will combine with stronger-than-expected payment momentum in bank-issued cards and Cabcharge accounts to produce upside to our prior earnings forecasts," analyst says. Price target A$11.60 vs last trade A$10.24. (SVM)

0759 [Dow Jones] UBS says it has a 5.09% stake in Rio Tinto (RIO.AU) held for various custodians, signaling investors are taking positions in the hope of a higher offer than current BHP Billiton (BHP.AU) all-shares bid. "Funds can see there is a game on and it is by no means over yet," Stock Resource mining analyst Steve Bartrop says. UBS stake bought between August and November. (APW)

0800 [Dow Jones] AUD/USD fair value model shows AUD/USD as cheap below 0.8950 and expensive above 0.9300. The point estimate of "fair value" of 0.9120 would rise to 0.9230 if risk appetite returned to its level of Oct. 31, when the Fed cut rates, says NAB strategist John Kyriakopoulos. Asian equities will be the guide to investor risk appetite and carry trade demand on the day. The maturity of A$650 uridashi bonds could damp upside potential for AUD/USD, especially coupled with late Wall Street weakness. Expects support at 0.8940. Any gains to struggle ahead of 0.9000. Now 0.8955. (JEG)

0809 [Dow Jones] STOCK CALL: ABN AMRO reckons further capital raisings could be on cards for St. George (SGB.AU) after company announced share placement yesterday. Person familiar with situation told Dow Jones Newswires company placed 21.9 million shares at A$35 each via bookbuild overnight; unconfirmed by company. ABN AMRO notes in SGB estimates additional capital raised via share placement provides buffer to risk-weighted asset growth of around A$8.5 billion. "However, this represents only 13.5% growth," analyst says. "Given the current cost of securitization is less attractive versus the rates achieved prior to the credit crunch, we believe SGB may require additional capital prior to the end of FY08, potentially resulting in further dilution." Keeps Neutral rating on SGB, says with stock trading at premium to peers, plus further capital raisings likely, "we continue to rank the bank as our least preferred bank in the sector". Targets stock at A$37.60; closed yesterday at A$38.20. (LMF)
 

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0805 [Dow Jones] AUD/USD is "passed its best", showing early signs of long decline with recent falls in U.S. equities heralding further slowdown in global growth, says Grange Securities chief economist Stephen Roberts. Pair retreats well back from 0.9000 after Goldman Sachs downgraded Citigroup to Sell on estimates of greater writedowns, triggering further pullback in risk appetite. Roberts expects pair in 0.8820-0.8865 range in Asian trade. AUD/USD likely to fall below 0.8000 by end of 2008. Notes commodity prices starting to decline with "economic growth outlook just starting to fade." Pair last at 0.8840.(SRH)

0822 [Dow Jones] COMMODITIES ROUNDUP: Crude futures higher in quiet trade, supported by colder-than-normal temperatures in U.S. northeast plus OPEC-inspired uncertainty about USD; January Nymex up 80 cents to $94.64/bbl, Brent on ICE up 66 cents to $92.28/bbl. "A lot of the strength seems to be coming from the colder weather, and the OPEC (heads of state) meeting at the weekend" is also helping, said Phil Flynn at Alaron Trading Corp. Gold futures down as equities slumped, USD provided little guidance, traders booked profits; December gold down $9 to $778/oz on Comex, down $8.30 to $778.70 on CBOT. Trader said gold will likely fall $20 or $30 before Thanksgiving holiday; said trading-floor sentiment "not looking good", with light trading, fund-selling pressuring gold from near-steady levels earlier. Silver futures also lower on profit-taking; December silver down 35 cents to $14.16 on Comex, off 33.4 cents to $14.185 on CBOT; January platinum up $3.90 to $1,457.10, December palladium down $4.55 to $361.30. Lead plummeted close to $3,000/ton on technical weakness, long liquidation; zinc similarly slipped before recovering; "For the time being, metals seem to be on the defensive, as increasing stocks and concern about weakening demand seem to be trumping just about anything else, including the weaker dollar," said MF Global analyst Ed Meir. "In such an environment, rallies will continue to be prove vulnerable, especially given that we have no macro news of import this week." Copper down $50 to $6,790, lead off $70 to $3,040, zinc down $170 to $2355, aluminum down $41 to $2,509, nickel off $1,050 to $30,200, tin down $600 to $16,750. (BRD)

0823 [Dow Jones] Goldman Sachs JBWere says Computershare's (CPU.AU) planned acquisition of German corporate actions bank VEM makes a lot of sense from strategic perspective and looks likely to be accretive. Lifts price target 2.7% to A$11.30 on back of deal. "This reflects the likelihood of healthy EPS accretion if it succeeds, offset by the fact that completion is not yet certain and our impression that the target's risk profile is somewhat higher than CPU's," analyst says. Maintains at Buy. Last trade A$10.33. (SVM)

0824 [Dow Jones] Expected weakness in Asian equities today likely to keep AUD/USD, AUD/JPY on back foot, says National Australia Bank senior currency strategist John Kyriakopoulos. NAB "fair value" range at 0.8860-0.9215, with near-term resistance at 0.9000, then 0.9070. Equities market participants anticipating FOMC minutes for clues on December Fed funds decision. Notes "equities may not like the message from the Fed" with risk appetite likely to remain under pressure, potentially weighing on AUD. Break through 0.8750 would push AUD/USD to 0.8500. Pair last at 0.8837.(SRH)

0832 [Dow Jones] Asian steel makers voicing concerns over BHP (BHP.AU) takeover of Rio Tinto (RIO.AU) as BHP's CEO Kloppers arrives in Seoul to promote deal. Kloppers spoke to Japanese customers Monday, but buyers remain unconvinced; also met Japan Iron and Steel Federation Chairman Hajime Bada, who still believes deal would promote further dominance of supply from a few large players. After Seoul, Kloppers visits Shanghai Wednesday, Beijing Thursday before returning to Australia for annual meeting next week. (APW)

0834 [Dow Jones] STOCK CALL: Credit Suisse cuts United Group (UGL.AU) to Neutral from Outperform on recent relative share-price movements; "Since Nov. 7, UGL's share price has fallen 3.6% while the S&P/ASX200 has fallen 2.3%," CS says in client note. "Credit Suisse's current 12-month total projected return for UGL of 10.6% implies a projected excess rate of return relative to the market of -4.1%." Keeps A$22.00 12-month price target; stock last A$20.82. (ABH)

0835 [Dow Jones] Australia's main opposition Labor Party maintains election-winning lead in latest Newspoll issued today; Labor has 54% support on 2-party preferred basis, after preferences from minor parties, ruling Liberal-National coalition has 46%. Suggests coalition gained little ground from A$9 billion in new spending promises unveiled at campaign launch in Brisbane last week, which dwarfed Labor's A$2.3 billion in launch promises. Still, whoever wins election Nov. 24, election promises will be important for RBA policy, with central bank last week warning public spending a key factor contributing to domestic demand pressures; analysts put total cost of election promises unveiled by both sides during the 6-week campaign at up to A$65 billion for the coalition and over A$50 billion for Labor. (RAP)

0838 [Dow Jones]Goldman Sachs JBWere trims forecasts for Goodman Fielder (GFF.AU) following yesterday's earnings downgrade. Cuts EPS estimates by 8% in FY08, 3% in FY09, 2% in FY10. Highlights GFF's challenge in price realization; private-label retail prices in many of GFF's key divisions falling - notwithstanding record commodity costs. Maintains Hold, target price A$2.20. Stock last A$1.98. (SVM)

0843 [Dow Jones] Citi maintains Sell rating on Woodside (WPL.AU) despite announcement of Browse gas deal with Taiwan's CPC. Says preliminary agreement will help underwrite a final investment decision on Browse but doesn't change its view on the stock. Says Woodside could need as much as A$26 billion to fund capex on its LNG projects to 2013/14 and this could test its balance sheet. "LNG is a growth industry and LNG prices have risen strongly in recent times but the massive initial capital costs, compounded by cost inflation, continue to constrain the internal rates of return of offshore LNG projects," Citi says. Says production forecasts remain a concern. Target price set at A$46.20; Woodside last traded at A$48.50. (APW)

0844 [Dow Jones]Merrill Lynch says Computershare's (CPU.AU) plan to buy German corporate actions bank VEM appears to be a departure from CPU's traditional hunting ground. "However, the key attraction lies in VEM's access to Clearstream - the system used for dividend and other financial distributions in Germany," analyst says. "This provides CPU with a stronger platform for its German operations and further bolsters its already impressive global credentials." But notes price paid is full given soft corporate action outlook. Maintains Neutral; last trade A$10.33. (SVM)
 

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0822 [Dow Jones] Clear result in Australian election puts focus back on the economy, say strategists at nabCapital. Notes clear mandate for Labor; says briefing for new Treasurer Wayne Swan would likely have focused on threat from inflation. Says 2008 budget unlikely to be as "voter friendly" as in the past; Treasury likely briefing Swan fiscal policy needs to pull in inflationary pressure. Clear election result and U.S. Thanksgiving sales initially pushed AUD/USD off lows, but slipping back; now 0.8813 from high 0.8844. (EGC)

0828 [Dow Jones] Key driver for AUD this week is message from U.S. Fed speakers on chances of another Fed Funds cut, says nabCapital strategist John Kyriakopoulos. Notes worsening risk sentiment on back on volatile credit markets; says any recovery in risk appetite would provide "much welcome relief" to AUD. Says launch of US$4.5 billion in Japanese global investment trusts this week will weigh on JPY, but risks from U.S. housing and credit markets continuing. AUD/USD now 0.8817, from high of 0.8845. (EGC)

0838 [Dow Jones] Australian Labor Party's victory at weekend election likely to be talk of market this morning, focus could be on Telstra (TLS.AU) given Labor's differing policy on broadband. Prime Minister elect Kevin Rudd has promised to spend around A$5 billion in a national fiber broadband network, which will be subject to an open access regime. Telstra unlikely to be any less vocal in its push for regulations it wants with a Labor government than it was under the Coalition. Coalition government had been calling for tenders to build a privately owned network, but Australian newspaper says panel to consider issue will be immediately disbanded. Labor expects to begin its own tender process soon, which it expects will take six months, although there are some doubts in market over that. (LMF)

0855 [Dow Jones] Next step for Australia's PM-elect Kevin Rudd, after winning decisive election victory for his center-left Labor party Saturday, is to name cabinet, possibly later this week after party caucus Thursday. Though Rudd has already confirmed Wayne Swan as Treasurer, Julia Gillard as deputy PM and likely Employment Minister, all other jobs are up for grabs. Local media suggest Lindsay Tanner in line for Finance Minister role. Rudd promising to continue conservative economic policies of ousted 11-year-old Liberal-National coalition government, but investors will be looking for any areas of difference as new ministers look to put their own stamp on various portfolios. (RAP)

0909 [Dow Jones] Goldman Sachs JBWere says electronic gaming machine revenue rose 6.8% in October, according to the Lastest Victorian data. "While this data point is positive, we maintain hold recommendations on both Tattersall's (TTS.AU) and Tabcorp (TAH.AU)," analyst says. "In our view, while value is beginning to emerge for TAH in an uncertain market, it remains a 2-year turnaround story." Adds for TTS, it continues to question whether its premium rating is sustainable over the longer term. (SVM)

0913 [Dow Jones] S&P/ASX 200 offshore leads bullish, with overnight futures up 86 points at 6440.0 after solid bounce on Wall Street. DJIA up 1.4.% at 12980.88, S&P 500 up 1.7%. Retailers surged on hopes of strong post-Thanksgiving retail sales. E*Trade rose 25% on sale hopes. Financials also rose, with Citigroup up 3.2%, and Fannie Mae up 10% after CEO increased stake. AUD/USD up 52 points at 0.8820. Comex gold up US$26.10 at US$824.70. Nymex crude up 89 cents at US$98.18. LME copper up 2.2%, lead up 3.5%, zinc up 2.6%, aluminum near flat, nickel up 1.0%. BHP ADRs at A$41.28 vs A$40.27 locally. Index last 6330.2. (DWR)

0919 [Dow Jones] STOCK CALL: UBS raises Dyno Nobel (DXL.AU) price target to A$2.50 from A$2.20 in anticipation of a bid from Incitec Pivot (IPL.AU). UBS expects DXL to update the market on its Moranbah plant within the next two weeks. "This is likely to be a catalyst for action by IPL, which we estimate can afford to pay A$2.50," UBS says in a client note. UBS also raises its Moranbah cost estimate to A$750 million, up from A$680 million, and cuts its EPS forecasts for this FY and next FY by 2%-3%. "The new forecasts still see healthy 11% annual average growth in AUD EPS, and remain highly sensitive to currency and DXL's guidance on cost cutting," UBS says. Keeps Neutral. Last trade A$2.36. (ABH)

0920 [Dow Jones] STOCK CALL: ABN AMRO upgrades Spotless (SPT.AU) to Hold from Sell given likely increased investor interest in a potential turnaround story. "Recent board-driven change has progressed, with the company reaffirming its cost savings target and committing to an improved financial performance," analyst says. Price target raised to A$4.24 from A$3.75 vs last trade A$4.29. (SVM)

0925 [Dow Jones] AUD/USD retracing early gains, slipping back as market had taken very short positions, says Westpac strategist Jonathan Cavenagh. AUD/USD earlier picked up on positive U.S Thanksgiving sales, clear result in Australian election. Says AUD/USD has tested resistance for today's session. AUD/USD now 0.8790 from 0.8845 early on. (EGC)

0925 [Dow Jones] UBS upgrades STW Communications (SGN.AU) to Neutral from Sell on back of recent share price weakness, notes stock has lost 13% since end of July. Keeps 12-month target on stock at A$2.65, shares last at A$2.41. (LMF)
 

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0743 [Dow Jones] AUD/USD hit hard overnight as weaker Wall Street drives investors away from high-yield currencies; risk appetite dwindling. Continued weakness in USD not helping, says ICAP chief economist Matt Johnson; "FX is once again trading in the 'carry unwind pattern'." AUD/USD now 0.8718 from overnight high 0.8815. (EGC)

0808 [Dow Jones] COMMODITIES ROUNDUP: Crude futures down slightly as traders balanced possibility of OPEC output hike next week against forecasts of cold weather; January Nymex down 48 cents at $97.70/bbl, Brent on ICE down 51 cents at $95.25 after hitting record intraday high of $96.65. "There's a lot of OPEC chatter in the market," said Tom Bentz of BNP Paribas Commodity Futures. "I'm not sure it's going to be enough to make that much of a difference." Gold, silver futures higher but pared most overnight gains on profit-taking, options-related activity plus pullback in crude; December gold up $1.80 to $826.50/oz on Comex, up $4.50 to $826.70 on CBOT; December silver up 9.5 cents to $14.83 on Comex, up 11.7 cents to $14.84 on CBOT. "We made new lows on the dollar on Friday and there has been little if any bounce," Future Path Trading's Frank Lesh said. "That continues as an influence in the base metals and the precious metals." January platinum down $11.90 to $1,468.60/oz, March palladium off $2.25 to $364.25. LME lead, zinc rebounded on talk of possible changes to China's export duties; analysts, traders said sentiment likely to remain fragile given ongoing credit concerns; "We're probably going to continue to see this level of choppy trade for the next few months as long as these worries in the credit markets and concerns of a slowing U.S. housing sector remain," said Barclays Capital analyst Sudakshina Unnikrishnan. Lead up $80 to $3000, zinc up $114 to $2388, copper up $40 to $6750, aluminum up $17 to $2510, nickel down $250 to $28850, tin down $75 to $16600. (BRD)

0809 [Dow Jones] AUD/USD slides below 0.8700 level, weighed down by weak end on Wall Street as U.S. equities are sold off. Fears surrounding ongoing impact of credit crunch, Goldman Sachs downgrade of HSBC send U.S. stocks lower, dragging down AUD/USD. CBA strategist Richard Grace says AUD/USD should recover some ground in Asian session, sees key support level at 0.8650. Pair now 0.8685 from high 0.8813 overnight. (EGC)

0838 [Dow Jones] AUD rally of recent days is "over", with the focus on AUD/USD 0.8655 lows of recent weeks, says Suncorp strategist Peter Pontikis. Says both short- and longer-term pressures remain on AUD/USD to return to "better-value levels" of 0.8500 in next 1-2 weeks. AUD/USD now 0.8710. (EGC)

0858 [Dow Jones] STOCK CALL: Credit Suisse upgrades Macquarie Airports (MAP.AU) to outperform from neutral on the back of recent share price weakness. Analyst notes stock has lost 9.1% since Oct. 18 vs 4.4% fall for the benchmark S&P/ASX 200 index. Keeps 12 month target on stock at A$4.83, MAP last at A$4.22 (LMF)

0859 [Dow Jones] Rio Tinto (RIO.AU) likely to ease to around A$135 after falling 1.6% to 5,232 pence in London overnight, as its investor briefing, outlining defense strategy to BHP Billiton (BHP.AU) takeover bid, fails to continue momentum that saw it add 7.5% locally yesterday. Rio pours water on prospects of entertaining rival Chinese bid, with CEO Tom Albanese saying while it's being contacted by potential suitors, "we're not necessarily engaging," instead outlining Rio's plans to triple iron ore output, raise ordinary dividends 30% this year and sell off up to US$15 billion in assets to pay down debt. Suggests final dividend of at least A$1.15/share likely in March. (WEL)

0900 [Dow Jones] STOCK CALL: Australian Labor Party's win in weekend's election will "bring with it one of the most radical changes to the telecommunications industry seen since the era of telegraph," Citi analyst says. "While positive for Australia, the risk to Telstra's dominance across fixed telephony and broadband has increased markedly." Adds near-term earnings risk minimal and any new regime won't impact TLS earnings until FY11 at the earliest, although sentiment risk is likely to increase. Keeps hold rating on TLS with A$5.00 target. Stock last A$4.70. (LMF)

0911 [Dow Jones] S&P/ASX 200 offshore leads bearish, with overnight futures down 116 points at 6374.0. DJIA down 1.8% at 12743.44, S&P 500 down 2.3%. Citigroup said it's looking to cut costs and HSBC said it planned to bail out two of its funds, costing US$45 billion. NY Fed said it planned more repos before year-end, after injecting US$8 billion Wednesday. Citigroup fell 3.2%, Lehman Bros fell 5.6%. Home builders plunged. CBOE VIX up 3.3 points at 28.91. U.S. 10-year bond yield 3.85% vs 4.00%. AUD/USD down 102 points at 0.8706. Comex gold up US$1.80 at US$826.50. Nymex crude down 48 cents at US$97.70. LME copper up 2.2%, lead up 2.7%, zinc up 5.0%, aluminum up 0.7%, nickel up 0.9%. BHP down 1.7% in London, Rio Tinto down 1.6%. BHP ADRs at A$40.76 vs A$42.11 locally. Index last 6471.4. (DWR)

0913 [Dow Jones] Goldman Sachs JBWere raises earnings forecast for Wesfarmers (WES.AU) coal division, based on a significant upgrade to the broker's coal price assumptions. "While the enhanced coal price outlook is a positive for WES, our target price and recommendation remains unchanged pending the comments at the WES operational briefing day being held (today)," analyst says. "In particular, we will be looking for further visibility regarding the Coles turnaround, along with any developments from the feasibility studies into the possible expansion of coal operations at Bengalla and Curragh." Maintains Hold; price target A$45.68 vs last trade A$45.52. (SVM)

0924 [Dow Jones] JPMorgan downgrades net profit forecasts for Aristocrat (ALL.AU) by 2.7%, 10.4% and 16.4% in 2007, 2008 and 2009, after a further review of ALL's North America and international markets. "However we retain our overweight recommendation as we believe the stock has been oversold relative to valuation," analyst says. "We continue to believe that the current market dynamics are largely a timing issue which will recover in the medium term leaving ALL well positioned to benefit from the global growth in gaming." Price target A$12.80 vs last trade A$10.41.(SVM)
 

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0806 [Dow Jones] AUD/USD settles into 0.8760 top 0.8860 range for now with rising risk appetite putting a floor under pair through the second half of the week. But Westpac's FX strategy team says outlook for pair looks cloudy after Wall Street has just had its best two days in four years. Despite this, pair has been unable to break up to around 0.8900. Bounce in metals prices this week can also be described as less than inspiring. With RBA on the sidelines rallies may be fragile. Westpac expects a move back to 0.8650/0.8700. Now 0.8821. (JEG)

0839 [Dow Jones] STOCK CALL: UBS downgrades National Australia Bank (NAB.AU) to Neutral from Buy, cuts target to A$42 from A$48.50 after bank agrees to buy U.S. regional lender Great Western for US$798 million. Analyst says acquisition raises a number of concerns, including whether deal is strategically relevant and on price. "NAB has a track record of consistently underperforming overseas, especially in the US. Remember HomeSide?" Says investors now likely to build an offshore acquisition discount into NAB's share price, similar to ANZ (ANZ.AU). "This is likely to be the first of several acquisitions in NAB's expansion strategy," analyst says. "Hedge fund short interests in NAB may rise if the US economy stalls. Unfortunately, this overrides the good work being done in its key market, Australia." NAB last at A$39.08. (LMF)

0845 [Dow Jones] STOCK CALL: ABN AMRO cuts National Australia Bank (NAB.AU) target to A$44.54 from A$47.17 after bank announces deal to buy Great Western Bank in U.S. for US$798 million. "We believe that in the short term the risks outweigh the rewards for NAB's foray into U.S. agribanking," ABN says. "While the transaction is small, sentiment is likely to cap some of the fundamental upside." Still, keeps Buy rating on stock. NAB last A$39.08. (LMF)

0846 [Dow Jones] Spot gold lower on NY close after pulling back overnight on stronger dollar, oil softening but stays within recent range. Gold trades below $800/oz; oil at $91.05/bbl, up 43 cents on the day but off intraday high of $95.17. Dollar trades at $1.4740 against euro. The $800-$810/oz area could become ceiling for time being given absence of large influx of investment money, says analyst Jon Nadler at Kitco. Gold to meander around ongoing resistance in $800 area as speculation on another rate cut plays out until the Fed meeting on Dec. 11. Adds several more closes below $800 level could signal lower prices, pointing to initial support at $770. Spot gold is down $2.85 vs NY close at $792.35. (EFB)

0847 [Dow Jones] STOCK CALL: ABN AMRO upgrades Perpetual (PPT.AU) to Buy from Hold on share price weakness; says although substantial increase in write-downs from Exact Market Cash Fund is disappointing, most of this should flow back into future years' earnings so has little impact on broker's valuation. Has A$79.50 price target; stock last A$67.40. (RBT)

0857 [Dow Jones] S&P/ASX 200, last at 6444.5, likely to stay in the black after US market consolidates biggest 2 day gain in 5 years overnight by edging higher, DJIA up just 0.2% at 13317.09 but fluctuated either side of flat throughout session, while S&P 500 up 0.1% and Nasdaq up 0.2%. Local SPI futures up 22 points to 6499, however pre-weekend jitters unlikely to see extensive gains, despite strong rise in London for BHP (BHP.AU), up 3.1%, and Rio Tinto (RIO.AU), up 4.4%. Comex gold down US$5 or 0.6% at US$795.30, while oil adds 0.4% to US$91.01/bbl. LME copper up 2.5%, zinc adds 0.8%, aluminum off 0.2%, nickel down 4.1%. (WEL)

0858 [Dow Jones] STOCK CALL: Merrill Lynch says National Australia Bank's (NAB.AU) deal to buy Great Western Bank in the US for US$798 million looks like a good opportunity, but disappointed on the price. "While we are not surprised by NAB's decision to acquire in the US agri market, the price appears full and we are somewhat disappointed NAB expects the acquisition to only be EPS neutral by year three," analyst says. Keeps Neutral rating on bank. (LMF)

0907 [Dow Jones] Base metals steady after extending gains overnight on positive cue better-than-expected US 3Q GDP reading of +4.9%, equity markets in positive territory; helps to allay short-term concerns over impact on metal demand due to slower U.S. growth. Short-term direction on metals to remain dominated by U.S. economic news, supply side developments such as strike at Grupo Mexico's Cananea copper mine dragging on, says trader. Longer-term fundamental story for copper still appears intact, forward prices still holding up, indicating firm outlook. LME bellwether 3-month copper contract down $10 vs PM kerb at $6,870/ton. (EFB)

0918 [Dow Jones] WALL STREET: U.S. stocks rose for third day, with DJIA notching its best three-straight-day gain in more than four years; market was seeing carry-over strength from Fed Vice Chairman Donald Kohn's "interest-rate friendly comments on Wednesday," said Eric Barden, president of Barden Capital. "But we're still kind of in a holding pattern, with a tug of war between the Fed cutting interest rates to create liquidity and more write-offs by financial companies, which highlight solvency risks. If we can go through a period without more big write-downs, then investors' confidence should return." MGI Pharma leapt 19%; the biopharmaceutical company is evaluating possible strategic alternatives and has hired Lehman Brothers as financial advisor to assist the process. WellCare Health Plans rose 9.7% as the federal Centers for Medicare and Medicaid Services renewed a contract with the managed-care service provider's WellCare Prescription Insurance unit. E*Trade Financial dropped 8.7%; hedge fund Citadel Investment Group threw the distressed online broker a $2.55 billion lifeline to stabilize the company, but shares turned around as shareholders recognized the deal carries a high cost in terms of dilution. Shares of Sears were off 11.1%. after the retailer offered disappointing results and said that it doesn't anticipate any near-term improvement. In late trading, shares of Dell Inc. fell 8% after the computer-systems company released 3Q earnings slightly below Wall Street estimates, despite higher-than-expected revenue. Dow closed up 0.2%, Nasdaq +0.2%, Philly Semicons down less than 0.1%. (RSH)

0922 [Dow Jones] STOCK CALL: ABN AMRO ups GrainCorp (GNC.AU) target to A$13.76 from A$12.73, keeps Buy. "We continue to believe drought years are when investors should buy quality agricultural stocks," ABN says. "When favorable seasonal conditions return, we estimate GNC should be trading more in line with our revised price target." Says value should also be realized from GNC's restructuring program, likely changes to Australia's wheat marketing; "In our view, there is significant unrealized value held in GNC's storage and handling network, which includes nine ports." GNC last A$9.20. (LMF)
 

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Re: Australian Equities Pre Open Roundup

0756 [Dow Jones] AUD/USD to remain rangebound in day ahead, as stiffening greenback provides some resistance despite rally on Wall Street, says ANZ strategist Tony Morriss. Notes "big moves" on crosses; AUD/GBP higher on weak U.K. housing data, AUD/NZD weaker on RBNZ's hawkish economic outlook. Expects AUD/USD to struggle to hit 0.8750; pair last 0.8699 vs low 0.8666 in New York. (EGC)

0802 [Dow Jones] Shares in SP Telemedia (SOT.AU) may rise after Sydney Morning Herald reports 46% owner Soul Pattinson (SOL.AU) in talks to sell cellphone company; says SOT's board under pressure to sell after failing to reinvent itself after May sale of TV assets, struggling to gain customers. SingTel's (Z74.SP) Optus unit could be interested, stands to lose most if SOT fades further; Australian telco provides Optus with up to A$100 million a year in revenue from sale of cellphone services using Optus's network. SOT closed yesterday flat at 38.5 cents. (ABH)

0807 [Dow Jones] COMMODITIES ROUNDUP: Crude futures fell to fresh 1-month low, shrugging off both OPEC refusal to raise output, big slump in U.S. crude oil stockpiles; traders focussed on growing gasoline, distillate inventories plus potential easing in tensions over Iran's nuclear program, concerns U.S. economic growth may slow; January Nymex down 83 cents to $87.49/bbl, Brent on ICE off $1.04 at $88.49. "The geopolitical landscape has quieted a little, people are concerned about the economy and I think the market has run out of steam for now," said Steve Bellino at MF Global. Gold futures down as bullish economic data supported USD, threw likelihood of further Fed rate cut into question; February gold down $3.90 to $803.70/oz on Comex, down $4.60 to $802.90 on CBOT; but close above $800 may mean gold can "start chipping away at $815, $820," said Sean Bilello of B&C Trading. March silver near steady, down 0.5 cent at $14.46/oz on Comex, down 0.1 cent to $14.473 on CBOT; Nymex January platinum off $4 to $1,468.30, Nymex March palladium up $1.05 to $354.45. LME base metals mostly recovered from losses, buoyed by spillover sentiment from equities, however without more Chinese consumer buying, traders expect metals to drift lower into year end. After few days of relatively sharp selling which brought values close to bottom of trading ranges, "we could see a modest recovery set in, assuming that U.S. macro numbers do not derail things," said Ed Meir of MF Global. Copper down $5 to $6685, lead down $49 to $2835, zinc off $15 to $2410, aluminum down $2 to $2465, nickel up $110 to $25800, tin down $150 to $16450. (BRD)

0815 [Dow Jones] AUD/USD lacking direction in Asian session, with any gains capped around 0.8720, says RBC strategist Sue Trinh. Moves on the major crosses mean AUD "will struggle to maintain rallies." Focus now on rate moves by Bank of England, U.S. Fed. Pair now 0.8696 from low in New York trading 0.8664. (EGC)

0829 [Dow Jones] STOCK CALL: Goldman Sachs JBWere says Mirvac's (MGR.AU) development business, which accounts for about 30% of earnings, would be the attraction for Lend Lease (LLC.AU) in any potential linkup. "We estimate the Mirvac development pipeline to be about A$15.8 billion, split 70/30 between residential and nonresidential development," broker says in client note. With LLC's Delfin unit focused on land subdivision for housing and MGR more focused on the development of high-density apartments, a combination of the two units would make sense, it would also enhance the construction pipeline for LLC's Bovis unit, broker says. "A key risk is that LLC would become a lot more exposed to the New South Wales state residential property market." Keeps LLC at hold, A$19.88 12-month price target. Last trade A$19.74. (ABH)

0836 [Dow Jones] AUD/USD needs to hold above 0.8650, with any dip below "very negative", say nabCapital strategists. NabCapital notes RBA "blinking" and moderating hawkish outlook has lowered yield support for AUD. Expectations for higher rates have slipped, could prompt a sharp decline in AUD. Says all down to credit markets. Expects AUD/USD support at 0.8695 and resistance 0.8856. Pair now 0.8697. (EGC)

0837 [Dow Jones] STOCK CALL: Goldman Sachs JBWere cuts Cola-Coca Amatil (CCL.AU) to Hold from Buy as the stock is now within 2% of broker's A$10.50 price target. Last trade A$10.32. (ABH)

0838 [Dow Jones] STOCK CALL: Goldman Sachs JBWere cuts Flight Centre (FLT.AU) to Sell from Hold after shares outperformed S&P/ASX 200 by 37% in past three months and now trading at 29% premium to GSJBW's A$22.65 valuation. "After losing its way in FY05-06, FLT has improved its revenue model (shift to fee for service, tougher negotiating stance with airlines) and tightened up on cost control," GSJBW says. Expects about 5% upside risk to this FY EPS "given robust demand conditions and FLT's high fixed-cost leverage model... FLT also continues to target a solution that eases regulatory restrictions on its gearing levels, freeing up funds for bolt-on acquisitions from next FY," GSJBW says. Keeps A$24.84 12-month price target. Last trade A$29.15. (ABH)

0850 [Dow Jones] STOCK CALL: Credit Suisse upgrades WA News (WAN.AU) to Neutral from Underperform, notes stock has lost 8.1% since Nov. 21, vs 1.9% gain for benchmark S&P/ASX 200. Keeps A$12.90 12-month target on stock, WAN last traded at A$11.95. (LMF)

0856 [Dow Jones] STOCK CALL: Lend Lease's (LLC.AU) potential acquisition of Mirvac (MGR.AU) would increase LLC's proportion of Australian earnings, particularly in the medium term, as LLC's UK pipeline comes to fruition and alleviate any potential UK housing and construction business headwinds in the near term, UBS says in client note. Values MGR at A$5.73/share, after applying recent takeover multiples paid for Investa Group and Multiplex, calculates A$6.50-$7.00 price "would not be unfair or unreasonable," UBS says. Keeps Neutral, A$5.92 12-month price target. Last trade A$5.90. (ABH)
 

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Re: Australian Equities Pre Open Roundup

0802 [Dow Jones] COMMODITIES ROUNDUP: Crude futures sprang back as USD weakened, traders had second thoughts about depth of selloff earlier in week; OPEC report forecasting stronger economic growth in China may also have fired up market, traders said; January Nymex up $2.74 at $90.23/bbl, Brent on ICE up $1.69 at $90.18. "Clearly, the market is trying to show a little bit of bounce," said Peter Donovan at Vantage Trading. "Whether it's going to work or not remains to be seen." Gold, silver futures higher as market recovered from early weakness on technical bounce, plus turnabouts in currency, energy markets. Gold market could be choppy going forward as both shorts, longs square positions in final trading month of year, trader said, but for now, all eyes on U.S. November payrolls due 1330 GMT, plus USD response. February gold up $3.40 to $807.10/oz on Comex, up $3.80 to $807.10 on CBOT; March silver up 16.5 cents to $14.625 on Comex, up 16.2 cents to $14.627 on CBOT; January platinum up $1.90 to $1,470.20, March palladium down $2.75 to $351.70. LME lead tumbled more than 8%, further losses expected, but U.S. payrolls should determine near-term direction; steady tone in copper stopped bearish sentiment taking hold in rest of complex; copper up $30 at $6725, lead down $145 at $2690, zinc down $16 at $2390, aluminum down $16 at $2448, nickel up $200 at $26000, tin up $150 at $16600. (BRD)

0816 [Dow Jones] AUD/USD sharply higher as U.S. plan to freeze mortgage rates for 5 years lifts risk appetite; John Kyriakopoulos, strategist at nabCapital, says pair around 1 U.S. cent higher, but approach of U.S. payrolls data could cap rally at around 0.8810-20; key support at 0.8650. nabCapital's risk index now at 1-month high, Kyriakopoulos notes Wall Street's solid response to U.S. President Bush's mortgage plan. AUD/USD last 0.8788. (JEG)

0853 [Dow Jones] Australia's economy is forecast to grow by 3.5% in 2008, OECD says in report. It forecast in May GDP of 3.3%. Strong growth likely to see rate hiked from 6.75% to contain inflation within 2%-3% band. Expects CPI to rise to 3.2% in 2008. Unemployment is forecast to remain near current 33-year lows in 2008, averaging 4.4%, but slower growth will increase the ranks of the jobless to 4.8% by 2009. Outlook suggests new Labor government won't have much of an economic honeymoon and will confront rising rates and inflation. (JEG)

0900 [Dow Jones] STOCK CALL: Merrill Lynch initiates Centrebet (CIL.AU) coverage with a Buy recommendation, A$2.25 price target. "In our view double digit earnings growth with a 5.8% dividend yield is attractive," ML says in client note. "We are forecasting adjusted earnings growth of 11%, 12% and 12%" this FY, next FY and FY10, ML says. "These earnings forecasts don't factor in potential growth options for CIL including the launch of CIL product on affiliate websites, the German harness racing initiative (Taberliga) or growth in market size post the initiation of mobile phone betting." Last trade A$1.85. (ABH)

0904 [Dow Jones] STOCK CALL: Sims (SGM.AU) acquisition of an Indian electronics recycler is "strategic move to set up a platform in what is likely to become a substantial growth market for electronics recycling," UBS says in client note. "It is consistent with SGM's proven e-recycling strategy of growth via bolt-on acquisition, and is likely to ensure SGM has an advanced position in the Indian e-recycling market." Keeps Sell, A$24.65 price target. Last trade A$26.38. (ABH)

0920 [Dow Jones] Plans by NSW government to cut maximum slot machine number by about 5% will have little effect on industry or Sydney-based slot maker Aristocrat (ALL.AU) because the actual number of slots operating in NSW is fewer than the current cap. Sydney Morning Herald reported NSW government will announce plans today to lower ceiling to 99,000 slots from 104,000. Fewer than 99,000 slots currently operating in NSW, but it will mean the gambling industry won't have the capacity to increase machine numbers, the newspaper says. ALL last trade A$11.49. (ABH)

0918 [Dow Jones] WALL STREET: U.S. stocks extended gains for a second day after the White House offered its plan to curb home foreclosures, bolstering financial shares battered for months by the subprime mortgage crisis and related credit crunch. "The main catalyst today was the government providing certain relief for homeowners in the subprime market," said John Twomey, head of trading at Merriman Curhan Ford. "This should be a plus for consumer spending and help avoid costly foreclosures and more inventory on the market." Toll Brothers rose 13% despite the home builder posting its first quarterly loss as a public company; Toll, like other housing stocks, was caught up in optimism over the government's mortgage plan. Retailers delivered November same-store-sales results that were mixed, with Nordstrom gaining 4.9% and Gap up 5.2%; Target dropped 7.6% after saying it expects December sales to be "well short" of its prior view. Rambus rose 7.4% as the memory-technology concern said it was notified by the Securities and Exchange Commission that it had ended its formal investigation into the company's past stock options practices and recommended no action be taken. Tribune rose 7.8%; closing in on its $8.2 billion deal to go private, the media company plans to reduce the amount of debt it will borrow for the transaction by up to $500 million. Dow up 1.3%, Nasdaq up 1.6%, Philly Semicons up 1.7%. (RSH)

0921 [Dow Jones] S&P has announced December quarterly rebalancing of S&P/ASX indexes effective Dec. 21. No surprises according to traders and no market impact expected. Riversdale Mining (RIV.AU) will be added to top 200, while Wesfarmers PPS (WESN.AU) will be cut along with API (API.AU) and Energy Developments (ENE.AU). (DWR)

0922 [kennas] Booked flights and accommodation for his 'Christmas in Cartagena' holiday in Columbia today. Whooohooo!! :)

0933 [Dow Jones] Toronto-listed First Quantum Minerals (FM.T) says overnight it now owns 17.27% in Equinox Minerals (EQN.AU) after adding 7.3% Dec. 5; says might add to stake; Equinox shares rose 20% yesterday on speculation Swiss miner Xstrata (XTA.LN) will acquire its advanced Lumwana copper project; First Quantum's Kansanshi copper-gold mine is 65 kilometers west of Lumwana. Equinox expects to commission 170,000-ton Lumwana mine by June 2008, as sector struggles to bring sizable new mines on stream. (EFB)
 

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Re: Australian Equities Pre Open Roundup

0749 [Dow Jones] AUD/USD dips overnight, giving up gains after hawkish RBA minutes, but set to fall further heading into Christmas, says Suncorp strategist Peter Pontikis. Notes thin volume, tips support for pair around 0.8550, likely to hit 0.8500 at Christmas; says pair risks falling below 0.8500 if breaks key 0.8550 support. Expects 0.8555-0.8650 range today; last 0.8605 vs New York low 0.8556. (EGC)

0823 [Dow Jones] AUD/USD set for 1-cent range in Asian session, following trend of past week, nabCapital strategist John Kyriakopoulos says; notes little in way of data so it's "hard to know what it will trade off." Expects big intraday moves on thin liquidity, gappy trading. AUD/USD to trade in 0.8550-0.8620 range, pair last 0.8607 vs overnight low 0.8557. (EGC)

0828 [Dow Jones] STOCK CALL: Strong share price rises among coal stocks over last month ahead of contract negotiation period has led UBS to downgrade Centennial (CEY.AU) Coal & Allied (CNA.AU) and Gloucester Coal (GCL.AU) to Neutral from Buy. However broker says global production growth is unable to keep pace with demand, particularly from China and India, so tight conditions expected to continue; coal stocks still look cheap on FY10 PE multiples, while key risk to neutral call is higher-than-forecast contract prices. (WEL)

0830 [Dow Jones] COMMODITIES ROUNDUP: Crude futures at 1-week low, closing slightly down in thin, volatile trade as Turkish troop withdrawal from northern Iraq, continued concern over U.S. economy weighed. January Nymex down 14 cents at $90.49/bbl, February, which is front-month contract today, off 97 cents at $90.08, Brent on ICE down $1.17 at $90.12. "I get the feeling we're going to stay in a range between $87 and $94 until the end of the year," said Tom Bentz at BNP Paribas Commodity Futures. Precious metals futures up; platinum hit fresh record highs on supply tightness, gold gained on higher crude, short covering before profit-taking pared gains. Nymex January platinum up $11.70 at $1526.40; analysts said metal supported by expectations of further supply disruptions in already tight market, plus aggressive borrowing by banks, industrial users. February gold up $8.10 to $807.40/oz on Comex, up $8.30 to $807.50 on CBOT; March silver up 18.5 cents to $14.165 on Comex, up 20.4 cents to $14.181 on CBOT; Nymex March palladium up $1.60 to $362.95. Better-than-expected U.S. November housing starts fueled short-covering rally on LME but gains likely short-lived; signs U.S. economy may not be sinking into recession would buttress metals demand going forward but also help USD regain footing, keeping base metals under pressure, said Standard Chartered analyst Daniel Smith. Copper unchanged at $6380, lead up $25 at $2445, zinc up $19 at $2318, aluminum up $3 at $2411, nickel up $250 at $25900, tin down $50 at $16000. (BRD)

0855 [Dow Jones] STOCK CALL: Allco Finance (AFG.AU) cut to Neutral from Buy by UBS, with 12-month target price lowered to A$6.00 from A$9.00 on view that Centro Properties' (CNP.AU) refinancing difficulties has negative market sentiment implications for companies like AFG with its "complex structures, coinvestments and related party transactions." Cites as example AFG managed vehicle Allco Hybrid Investment Trust (AHI.AU) issuing non-recourse hybrids (AHUG.AU) and (AHUGA.AU) to fund purchase of preference shares in unlisted Allco Principal Trust and Alleasing Trust. Says with APT's primary asset being 45.8 million AFG units that have fallen 25% in 4 days to A$5.88, "a simple mark to market on AFG brings into question APT's net tangible assets, while Alleasing Trust was already negative NTA at 30 June 2007." (WEL)

0904 [Dow Jones] STOCK CALL: Credit Suisse upgrades Wattyl (WYL.AU) to Neutral from Underperform, but cuts target to A$2.55 from A$2.70; says still has number of concerns, including continued weak demand environment, subdued pricing growth, rising raw material costs; "For us, underlying market conditions need to improve significantly before WYL can realize a further earnings step change." WYL last A$2.43. (LMF)

0905 [Dow Jones] STOCK CALL: Credit Suisse raises BlueScope (BSL.AU) recommendation to Outperform from Neutral to reflect recent relative share price movements. "Since Nov. 20, BSL's share price has fallen 10.6% while the S&P/ASX200 has fallen 2.9%," CS says in client note. "Credit Suisse's current 12-month total projected return for BSL of 25.5% implies a projected excess rate of return relative to the market of 6.1%." Keeps A$10.50 price target; stock last A$8.90. (ABH)

0910 [Dow Jones] STOCK CALL:Credit Suisse upgrades Lihir Gold (LGL.AU) to outperform from underperform on recent share price movement. Since Nov. 27 Lihir shares have fallen 22.2% while the Australian market has dipped 3%. Lihir last traded at A$3.18. (APW)

0911 [Dow Jones] STOCK CALL: Australian Infrastructure Fund (AIX.AU) upgraded to Buy by Merrill Lynch after 8.3% fall to A$2.86 in last three days puts it on "much more attractive multiples" relative to MAP (MAP.AU). Says operational performance at Perth, Gold Coast and Melbourne airports remains strong, and argues AIX is "very conservatively geared" at 3.3 times interest coverage ratio, with "very limited refinance exposure in the short term" with only A$540 million at Melbourne Airport maturing over next 12 months. (WEL)

0912 [Dow Jones] STOCK CALL: Citi says while ANZ (ANZ.AU) boss Mike Smith has emphasized he expects organic growth to be key driver of targeted strong growth in Asia, group unlikely to hit "aspirational" targets without significant M&A. ANZ said yesterday it wants to double profit over next 5 years, with 20% of earnings to come out of Asia; "By our rough estimates, this will require up to A$10 billion in acquisitions over the period." Says while only time will tell if company will hit longer-term targets, ANZ well-placed in short term to benefit from Basel II, as well as turnaround in institutional arm. Keeps Buy rating on stock with A$31.00 target, ANZ last A$27.24. (LMF)
 

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Re: Australian Equities Pre Open Roundup

Well, it's not pre-open, but the usual tidbits of info to raise the attention and see what the brokers are saying.



DJ MARKET TALK: Australian Equities Roundup24/01/2008 10:21AM AEST

0836 [Dow Jones] STOCK CALL: Credit Suisse upgrades AXA Asia Pacific (AXA.AU) to Neutral from Underperform based on recent share price weakness. Analyst notes stock has shed 19.3% since Jan. 8, vs 11.7% drop for benchmark S&P/ASX 200 index. Keeps A$7.50 12 month target on stock, AXA last at A$5.61. (LMF)

0843 [Dow Jones] Merrill Lynch cuts Oxiana (OXR.AU) earnings on 4Q production results and higher interest payments. Says 4Q result was fair but production from Golden Grove was disappointing. Cuts 2007 net profit forecast 12% on lower production and higher costs. Also cuts 2008 by 4% for 2008 and 6% for 2009 on higher interest payments. With no significant production growth expected until 2009, Merrill Lynch says commodity prices continue to be the major driver for Oxiana, which last traded at A$2.90. (APW)

0851 [Dow Jones] NZ shares rally early, aided by strong Wall Street, now +1.3% at 3662.76 on low volume, set to remain strong today. ABN AMRO Craigs adviser Alexandra Dalzell says "selective buying, especially on blue chips" supporting market. Adds market likely to remain strong through the day, with major stocks getting sentiment boost after Fed's surprise rate cut. Fisher & Paykel Appliances (FPA.NZ) +3.2% at NZ$2.95. Auckland Airport (AIA.NZ) +2.36% at NZ$2.62, SkyCity (SKC.NZ) +0.5% at NZ$4.15, while Telecom (TEL.NZ) +1.5% at NZ$4.05. Dalzell also says low liquidity may exaggerate volatile trade across market. (TIF)

0926 [Dow Jones] COMMODITY SUMMARY: Base metals slide back into negative territory in step with lower equity markets across Europe, late surge in U.S. stocks on oversold readings led by banks too late to boost metals prices. "The focus is on equities," said BaseMetals analyst Will Adams. "Equities are the barometer at the moment." FTSE down 2.3%, other European bourses also sharply lower. Metals' fundamentals still stack up on the back of tight supplies, but much will depend on investor confidence, says Adams. LME 3-month copper falls $150 overnight to close at $6,870/ton at PM kerb, last trades at $8,865, down $5 vs Wednesday PM kerb. LME aluminum at $2,403, down $11, lead at $2,510, up $5, tin at $16,400, down $150, zinc at $2,200, down $10. Spot gold higher, trades at $890.55/oz, up $5.75 vs NY close, late surge in equities offers relief from margin-call related selling in gold, above resistance at $890. Gold should benefit from wider financial turmoil but for now dogged by margin requirements elsewhere. Crude oil futures slump to 3-month low on views of cooling oil demand growth. Nymex March contract down $1.30 at $87.91/bbl on 6.99 a barrel on the New York Mercantile Exchange. (EFB)

0928 [Dow Jones] STOCK CALL: UBS raises Ramsay Health Care (RHC.AU) to Buy from Neutral, cuts price target to A$12.49 from A$13.15. "Market multiple downgrade to price target outstripped by magnitude of fall in share price," UBS says in client note. RHC has a large nominal amount of debt maturing during this FY but it has dealt with the issue, UBS says. Last trade A$10.11. (ABH)

0931 [Dow Jones] STOCK CALL: UBS raises Sonic Healthcare (SHL.AU) to Buy from Neutral, cuts price target to A$16.59 from A$16.94. "Strong Australian and U.S. contribution expected; FX risk to EBIT, but low FX risk to EPS; debt facility allows ongoing offshore acquisitions. SHL does not have a formal foreign exchange hedge policy; but has natural hedges in place. The impact in USD is largely limited to translation - SHL repatriates only limited foreign profits to Australia - accordingly currency fluctuations do not have a material cash impact," broker says in client note. Last trade A$15.05. (ABH)

0933 [Dow Jones] STOCK CALL: UBS lowers target price for Oxiana (OXR.AU) to A$4.15 from A$4.80 after a mixed 4Q production report. Says 4Q figures slightly below expectations; lowers earnings by 13% in 2007. UBS says Oxiana will see strong earnings growth when Prominent Hill comes on line late 2008. Maintains buy rating. Shares last A$2.90. (APW)

0936 [Dow Jones] Mirvac (MGR.AU) may rise on news of its strategic partnership with Dubai-based developer Nakheel (NAK.YY) through a A$300 million placement. The capital raised will cut Mirvac's debt gearing to 30% from 35% at Dec. 31, with only A$138 million of debt maturing in the next 12 months, MGR says. MGR and NAK have had talks to identify opportunities, including participation with Leighton's (LEI.AU) bid for Sydney's Barangaroo, or East Darling Harbour, project, the company says. MGR also reaffirmed its existing earnings and distribution guidance for the year ending June 30. Last trade A$4.84. (ABH)

0938 [Dow Jones] STOCK CALL: UBS trims its forecast for Billabong's (BBG.AU) U.S. sales in 2H08 and FY09 to 5% growth from 15%, in constant currency terms. UBS economists now expecting U.S. recession in 2008 albeit milder than the average of previous recessions given cuts to interest rates and taxes. Maintains Buy. "The share price already incorporates lower expectations for earnings from the Americas, in our view," analyst says. Price target cut to A$16.35 from A$18.80 vs last trade A$11.55.(SVM)

0939 [Dow Jones] STOCK CALL: ABN AMRO upgrades Austbrokers (AUB.AU) to Buy from Hold on the back of recent share price weakness, keeps target at A$4.58. "AUB represents an excellent defensive play within the small-cap diversified financials sector during the current equity market volatility," analyst says. "AUB earns the majority of its earnings through general insurance broking, with less than 1% of revenue exposed to equity markets." AUB last at A$3.97. (LMF)
 
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