Morning Market Report, Sep 04, 2007

The market is up 30. The SFE Futures suggested a 9 point fall in the market this morning.

US financial markets were closed overnight due to Labour Day Holiday.

Other markets:

The Shanghai Index put on 2% and closed in record territory – above 5,300 for the first time.
Hong Kong shares down 0.3% on expectations there will be a delay in the program allowing Chinese investors to buy Hong Kong shares.
Chinese market hitting new highs.
Nikkei closed slightly down.
HSBC announced they have bought a majority stake (51.02%) in the Korea Exchange Bank for $6.3bn in cash.
FTSE up 0.2%, DAX put on 0.14% all in low volume.

Labor Day Holiday is a United States federal holiday celebrated on the first Monday of September in honour of the working class. It was first suggested by Peter J. McGuire, founder of the United Brotherhood of Carpenters back in 1882 and is celebrated mainly as a day of rest and for many, marks the symbolic end of summer. The first parades and rallies to honour workers were held in 1872 in Ottawa and Toronto and led to Labor Day becoming an official federal holiday by Act of Congress in 1894.

We have an RBA Meeting today with rates widely expected to remain unchanged. The APEC meeting is on this week – about the only impact on the stockmarket will be that it annoys all the Sydney traders who have to make it through the traffic delays all week. Some are not even bothering rocking up to work knowing today will be quiet thanks to the US holiday. One commentator said yesterday felt like a “public holiday trading day”. Very quiet on the company front – the results season is over and everyone’s done enough research for one month.

Paladin Resources (PDN) announced this morning a net loss of US$37.6m for the year ended June 30, compared with a loss of US$5.6 million last year. Not great but in line with some expectations although the newswires quote that analysts on average had expected a loss of US$22m. Its all a bit irrelevant though, next year they are forecast to be making $85m and $155m after that and their currently infinite PE drops to 25x in 2009. Revenue was up 71% to US$11.2m from US$3.2m last year and no dividend for this year. Despite the result, PDN has a strong balance sheet with around US$183m sitting in cash waiting for opportunities. The main short term driver for Paladin is obviously the uranium price. The report has a lengthy piece about the bright outlook for nuclear power and they make this comment about the recent fall in the uranium price from US$136/lb to below $100 – “Although price volatility is being experienced with the recent downturn this is expected to be a short lived phenomenon as it has little to do with the macro uranium outlook which remains very strong”. PDN up 22% in the past 12 months but down 29% in the last quarter. PDN down 18c today to 615c.
According to Bloomberg, Publishing and Broadcasting’s (PBL) NASDAQ listed joint venture, Melco, will have to pay 0.5% higher interest on their $1.75bn loan. The stock fell 1.5% on Friday in the US and is still a long way off their US$19 listing price – now $13.03 (31.4% below listing price). PBL up 14c to 1814c.
Not good…CSR warned this morning that FY08 EBIT will be affected by sugar milling and higher interest costs from their Pilkington acquisition. They expect overall earnings to fall by 5% next year and say earnings from their sugar division could drop as much as 40%-45%. CSR down 11.6% in the last quarter and has been real struggler. CSR down 16c or 4.8% today to 317c.
Nexus Energy (NXA) down 33c or 19% to 142c on the back of disappointing results from their Fossetmaker-1 well at Echuca Shoals. Not all is lost, they still have their Longtom and Crux projects heading for production.
Engin (ENG) announced they have taken a strategic stake in Unwired (UNW), a wireless broadband internet provider. ENG which is 34% owned by Seven Network (SEV) has a 10.38% stake but say they don’t intend to launch a takeover…just yet. UNW down 5.5c to 35c, ENG up 1c to 15c.
Companies going ex dividend today include APA, EHL, HHL, HME, MAH, PEM and WOR.