Morning Market Report, Apr 24, 2007

The market is all over the place. It is now down 13 having been down 30 before the CPI number at 11.30am and up 8 immediately after the number. Falling again now. The SFE Futures suggested an 8 point rise in the market this morning. The CPI number was up 0.1% in the 1Q07, below the 0.6% rise expected. The weak number points to lower interest rates and the A$ has fallen over a quarter of a percent on the back of the news. The A$ is now 82.76c versus 83.30c before the release.

The Dow Jones was down 42.5 – It moved in 67 point range and closed down in a session dominated by mergers and acquisitions. There were over $130bn worth of deals announced overnight worldwide, the biggest being British bank Barclays announcing it would acquire ABN Amro for $91.16bn. On top of that British drug maker AstraZeneca (down 4%) said it would buy US drug maker MedImmune (up 18%) for $15.6bn. Texas Instruments reported disappointing earnings numbers and the oil price closed above $65 a barrel putting pressure on the inflation concerns. The NASDAQ closed lower after a 0.8% fall in Microsoft and Verizon. The sub-prime mortgage market remained in focus on rising home loan defaults and suggestions that regulators will increase measures to curb the growth in that end of the market.

BHP announced their 3Q Production Numbers this morning. BHP up 14c to 3014c. As usual it is long on fact and numbers and short on opinion. Numbers were mainly in line with expectations and better than RIO’s numbers last week which caused the price to fall initially (although it quickly recovered). RIO up 26c to 8422c. Metals mostly up overnight, both Copper and Aluminium up 0.7%, Nickel up 1.4% and Zinc 1.3%. Zinifex up 19c to 1564c. Oil price up $1.77 to $65.33 on the back of escalating violence in Nigeria threatening to disrupt supply and US gasoline inventories being at their lowest level since October 2005. Woodside down 8c to 3925c. Gold down $1.60. Newcrest up 15c to 2395c.

Centennial Coal (CEY) clobbered this morning on its quarterly production numbers and a downgrade to its profit outlook from $45-55m to $30-40m. Price down 23c to 297c (down 7%).
The Sydney Morning Herald has reported this morning that the Seven Network (SEV) has sold its shares in Fairfax Media (FXJ). SEV up 3c to 1133c and FXJ down 2c to 510c.
Bendigo Bank have rejected the bid from Bank of Queensland this morning saying it undervalues them. BEN down 5% or 90c to 1710c. BOQ down 25c to 1860c. The talk is that BOQ bid for them as a spoiling tactic against a potential bid for themselves after a strong rally in their own share price kicked off bid rumours. Citigroup says it’s “Time to Sell” BOQ.
IWL Ltd (IWL) unchanged at 472c after selling their entire stake in E*Trade (just less than 5%) after E*Trade yesterday agreed (again) to the upped bid from ANZ at 430c (up from 405c). There had been talk of IWL counter-bidding (was never likely) or blocking the bid. It is further confirmation that it is “game over” for E*Trade.
Centro Retail Trust (CER) unchanged at 167c after announcing it had completed a $1bn capital raising to partly fund its joint bid with Centro Properties Group (CNP) for New Plan Excel Realty Trust. It also said it raised $368m from the retail portion of an entitlement offer at 172c a share.
SP Telemedia (SOT) up 3.5c to 101.5c after it said late yesterday it received a non-binding proposal from Publishing and Broadcasting’s (PBL) joint venture PBL Media to buy its media assets, including Newcastle-based NBN Television. PBL down 4c to 2011c.
Santos (STO) is down 16c to 1099c this morning on the back of their quarterly production numbers.
UBS have a REDUCE recommendation on Alumina this morning.
According to a report on Bloomberg, KKR and General Electric have offered $1bn to buy RAMS Mortgage Corp. Apparently Westpac, Macquarie Bank and Carlyle Group have also made bids of it.