Morning Market Report, Oct 15, 2007

The market is down 1, it was 51 at one stage. The SFE Futures suggested a 32 point rise in the market this morning.

The Dow Jones was up 77 on Friday – It moved in a narrow 88 point range and finished the week in a positive mood on the back of takeover activity and better-than-expected economic numbers. McDonald’s reported better-than-expected sales and General Motors Corp. announced a boost in sales in Latin America, Africa and Middle East. In takeover activity, BEA Systems closed up 38% to $18.82 after Oracle said it would offer $6.66bn or $17 a share for the company, a 25% premium over Thursday’s closing price of $13.62, Electronic Arts confirmed it would buy BioWare Corp. and Pandemic Studios for around $825m, and the Financial Times website said Kodak is likely to be the taken over. The Commerce Department reported retail sales increase 0.6% in September, double what economists has expected, and the Labor Department said wholesale prices rose 1.1% last month. It was a positive week for all three major indexes, the Dow Jones closed up 0.19%, the S&P 500 increased 0.27% and the NASDAQ gained 0.91%.

Resources outperforming this morning, up 1.1% on average. Both BHP and RIO in record territory, BHP up 74c to 4694c and RIO up 198c to 11365c. Metals mixed on Friday, Zinc up 1.8%, Aluminium up 1.4%, Copper down 0.2% and Nickel down 0.3%. Zinifex down 5c to 1855c. Oil price up 68c to $83.73 and closed in record territory on concerns that supplies won’t meet demand in the 4Q. Woodside up 122c to 5517c. Gold down $2.90. UBS Warburg upped their target price on Newcrest (NCM) to 3100c target 3000c and maintained their NEUTRAL recommendation after upgrading their gold price forecasts by 17% in 2008 and 27% in 2009.

Our market has started the week in a positive mood.

Not good – AGL Energy (AGK) getting hammered– down 15% to 1340c. They have downgraded their FY08 earnings guidance to $330m-$360m from $380m – $400m on the back of squeezed margins, lower oil profits from PNG, higher gas costs and a strong $A.
Publishing & Broadcasting (PBL) also doing it tough – down 114c or 5.5% to 1935c after deferring their meeting to approve the planned demerger of their media and gaming assets. The company has a few tax issues that need to be cleared up. Basically the PBL board wants to determine whether the demerger is in the best interest of shareholders. Their NASDAQ listed JV Melco PBL Entertainment closed 2.5% higher on Friday and is now only 12% below what it listed at late last year.
Talk is that Murchison Metals (MMX) is set to offer Midwest Corporation (MIS) shareholders the higher of the two takeover options previously offered. MMX is likely to offer one new MMX shares for each 1.08 Midwest shares held in order to ease concerns over possible tax liabilities associated with MIS’s planned sale of their 50% owned Sinosteel Corp. project. MMX up 5c to 537c and MIS up 14c to 505c.
Qantas (QAN) down 1c to 595c, they announced positive revenue and passenger numbers. 3.24m passengers were carried in August, up 8.8% from last year and Augusts’ passenger yield was also up 3.2% to 79.7%. QAN also said they have increased their fuel hedging. QAN up 47% in the past year.
Westpac Banking (WBC) are on track for the IPO of their wealth and pensions business, BT Financial Group. The new company will be named BT Investment Management, WBC shareholders will be able to pre-register for a prospectus this week.
Companies going ex dividend today include: AVJ, CSF, NUF, RDF, SAQ, WAM and WIL.