Morning Market Report, May 23, 2007

The market is up 34. The SFE Futures suggested an 18 point fall in the market this morning.

The Dow Jones was down 2.9 – It moved in a narrow 58 point range and closed slightly lower for the second consecutive session in what was another quiet session on Wall St ahead of new economic data. In takeover activity, MGM Mirage closed up 27% after billionaire investor Kirk Kerkorian said he would like to buy the Bellagio Hotel & Casino from them, Crescent Real Estate Equities was also snapped up for $2.78bn by Morgan Stanley. There has been $93.5bn worth of acquisitions announced this week. Energy stocks closed lower thanks to the oil price taking a breather and the NASDAQ closed at a 6-year high, 0.4% higher.

Resources mixed today, BHP up 8cc up 3145c and RIO up 213c to 9473c. Metals all down overnight, Nickel down 4.7%, Zinc down 2.2% and Aluminium down 0.5%. Copper down 2%. Zinifex down 5c to 1755c. Oil price down $1.34 to $64.91 despite news of a partial oil production shutdown in Alaska. Woodside up 17c to 4460c. Gold down $3.90. Newcrest up 12c to 2246c.

The big news today is the impressive debut of Platinum Asset Management (PTM). It listed at 500c and is now up 354c or 70% to 855c. It raised $700m in the IPO that was open only to retail investors. The stock touched a high of 880c valuing the company at $4.9bn. The $700m worth of stock they sold went to retail investors. Notice Perpetual Trustees up 98c to 8356c on the positive sentiment generated.

Wotif.com (WTF) up 16c to 510c after announcing they expected NPAT for the full year to be no less than $25m assuming that current trading conditions are maintained to the end of the financial year. The stock is up 150% since listing in June last year. Their MD and CEO Graeme Wood owns 51m shares in the company, another one of those founders that are “rich but not retired”. Must love the business, not the money.
Australian Wheat Board (AWB) recovering from being down 4% to being up 7c to 340c after announcing a 72% fall in 1H NPAT to $11.8m due to the drought and the loss of its wheat export monopoly in December.
Aristocrat (ALL) up 9c to 1450c, Citibank research says this morning that it represents excellent value. The stock is down 10% since hitting a high of 1750c earlier this year. They recently had a profits warning and the buyers are creeping back. Half their profit troubles are because of currency which never has a long term impact. ALL have a share buy-back in progress at the moment.
Lend Lease (LLC) is up 2.7% after it announced the completion of their $700m equity raising for their Asian Retail Investment Fund. LLC up 40c to 2030c.
CSL Ltd (CSL) down 164c to 9450c on the back of media coverage regarding five Melbourne schoolgirls reporting a bad reaction to Gardasil (cervical cancer vaccine). Some suggestions that the reaction was caused by the girls suffering symptoms of anxiety after being vaccinated and not symptoms directly linked to Gardasil.
ABC Learning (ABS) up 4c to 757c today after a few brokers upped their target price on the stock on the back of improved trading conditions at its US centres.
Marengo Mining (MGO) up 9c or 25% to 44c after announcing a major increase in resources at its Yandera project in Papua New Guinea.
APN News and Media (APN) up 15c to 595c. They vote on the 620c bid from Independent News and Media on Friday. INM are saying they think the vote will sneak through despite some fund managers being publicly opposed to the deal.
ERA (uranium miner 68% owned by RIO) is down 3% today on suggestions they will see delays in the development of the Jabiluka Mine in the NT because of Aboriginal land rights issues.
China have taken a $3bn stake in the $7.75bn listing of the Blackstone Private Equity group in the US.
AXA Asia Pacific (AXA) are up 4.2% or 32c to 795c on the back of a Merrill Lynch recommendation putting it on their Asia Pacific Focus 1 list.
Kagara Zinc (KZL) up 31c or 4.4% to 705c on the back of some drilling results.
Equinox Minerals (EQN — Copper project in Zambia with some uranium) is up 6% or 19c to 337c on the back of a Goldman Sachs JB Were BUY recommendation this morning.
UBS follows Goldman Sachs JB Were by upgrading Qantas to a BUY. The stock is up 7c to 539c confirming it is now seeing fundamental rather than speculative support. They have a 590c valuation and talk about the possibility of a $2bn capital management initiative.