Morning Market Report, Mar 30, 2007

The market is up 33. The SFE Futures suggested a 4 point rise in the market this morning.

The Dow Jones closed up 48.4 – It moved in a relatively large 114 point range and closed up, ending three days of consecutive losses after encouraging economic data showed better-than-expected US GDP growth. The Commerce Department reported GDP growth of 2.5% in the 4Q, higher than the 2.2% expected and although the figure signaled a healthy growing economy, it does suggest interest rates won’t be cut in the near future, something the market already knew. Energy stocks closed higher on the back of the oil price continuing to hit new highs, consumer stocks fell as a result. A Wal Mart manager said in an interview that a higher oil price will hurt its sales numbers. The NASDAQ had a quiet session and closed unchanged.

Resources surging today thanks to a 3% jump in the oil price. BHP up 17c to 2999c and RIO up 59c to 7877c. Metals up overnight, Zinc up 1.5%, Zinifex down 64c to 1587c. Aluminium up 1.3% and Nickel up 1%. Copper up 1.4%. Oil price up $1.99 $66.10 hitting a six-month high on the back of political tensions in the US. Many are increasingly nervous about the West’s response to British sailors being held captive in Iran. Woodside up 35c to 3990c. Gold down $5.30. Newcrest up 29c to 2380c.

The market is storming ahead thanks to the media sector. Helen Coonan surprised the market late yesterday with the announcement of the effective date for the new media ownership laws. Next week — Wednesday 4 April is the big day. The event is no surprise but it is earlier than expected and comes upon us a little quickly. Fairfax Media (FXJ), Publishing & Broadcasting (PBL), Ten Network (TEN) and Seven (SEV) all flying. Credit Suisse has described the change in the laws as a “one in a 20-year chance for media properties to reshape the media landscape”.

The Sydney Morning Herald has reported that Macquarie Bank (MBL) is looking to form a consortium with Pacific Equity Partners and Permira in order to have a crack at Coles Group (CGJ). Harvey Norman (HVN) is also expected to have a look at CGJ’s assets. MBL up 85c to 8285c. CGJ up 20c to 1627c.
Take Two – Flight Centre (FLT) up 24c to 1635c after it received a $1.4bn joint venture offer from Pacific Equity Partners worth around $15 a share. Large shareholders like Lazards rejected the previous $1.6bn offer but might consider selling if FLT remains a public company.
Alinta (ANN) has decided on a bidder. Babcock & Brown (B&B) and Singapore Power International (SPI) will pay $15 a share. Alinta directors recommend shareholders to vote in favour of the proposed scheme of arrangement, “in the absence of a superior proposal”. The deal involves $8.50 in cash per Alinta share, 7.83 B&B Infrastructure Securities, 3.31 B&B Power securities and 1.30 B&B Wind Securities for every 5 Alinta shares. AAN up 20c to 1435c and BNB up 65c to 2705c. This is a big deal for Babcock and its entities….costing them $5.4bn. It is a long way from some of the deals they used to fiddle about with a couple of years ago. Puts them on the map. Short term the feeling is that it doesn’t do much for Babcock….strategically it creates a whole new set of assets for them to leverage off.
Computershare (CPU) up 11c to 1095c after it announced it would acquire the 30% of its Hong Kong business it doesn’t own.
Paladin (PDN) is up 16c to 984c today after a good update on their Langer Heinrich mine.
Macquarie have upgraded the NAB to OUTPERFORM from NEUTRAL today.
It is the last trading day of the quarter.
Zinifex went ex-dividend 70c today and is down 64c.