The market is up 54. The SFE Futures suggested a 10 point gain this morning. The reason for today’s rise is RIO announcing a $US15.2bn rights issue and an iron ore joint venture with BHP Billiton. BHP and RIO are responsible for 49 of those 54 points. BHP up 8% to 3792c, RIO up 11% to 7425c.
Our market is closed on Monday — Queen’s Birthday holiday.
The Dow Jones closed up 75 — closed on its high. Dow up 76 at best down 41 at worst. S&P 500 up 1.15%. NASDAQ up 1.32%. Gold up $16.70, Oil up 4% and metals all had a positive session in London.
MAIN STORY TODAY: Chinalco deal off — BHP deal on. RIO has announced an iron ore JV with BHP. BHP will pay RIO $5.8bn for an equity interest and the business will then be owned 50:50. It also means they have bigger bargaining power when it comes to setting prices. Early comments suggest there will be $10bn worth of synergies. Rio also announced a $US15.2bn rights issue. It will not pay an interim dividend and expects to pay a final dividend if the trading environment improves. The cash will be used to reduce debt to $US23.2bn. Analysts’ expect the JV to get the green light from regulators.
In other news…
- Energy Developments (ENE) has received an unsolicited, conditional and incomplete bid from private equity. Its biggest shareholder, Infratil, might sell its stake to the company to give it a 19.9% shareholding. The board will review the offer and consult other major shareholders.
- Neptune Marina (NMS) announces an earnings and revenue upgrade, a share purchase plan and that it has raised $40m to fund future growth.
- Fortescue Metals (FMG) announces it has sealed a deal with BC Iron, putting it on track to become the Pilbara’s next iron ore producer. Some brokers suggest FMG will be re-rated based on the RIO/BHP JV. FMG breaking out — up 21% to 340c.
- BlueScope Steel (BSL) completes its $614.6m retail component of its equity raising. Its underwriter Credit Suisse has taken up a 59m share shortfall under the raising.
- AGL Energy (AGK) has refinanced $800m of its 2009 and 2010 debt obligations via new facilities maturing June 2012.
- Aspen Group (APZ) has provided a market update.
- Carbon Energy (CNX) has successfully completed a $32m capital raising.
- Karoon Gas Australia (KAR) in a trading halt this morning pending a capital raising.
- A stock called Enerji Ltd (ERJ) that is up 325% today.
- Citi note in their research this morning that the All Ords in US$ terms has risen over 64% in 60 days, the biggest three-month rally in over 50 years.
- GSJB Were has placed Equinox (EQN) on their Conviction List as a Buy idea saying copper is their preferred base metal and that earnings upside risk remains.
The Dow Futures suggest a 3 point rise on Wall Street tonight.
MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.
For a free 21 day obligation free trial of the MARCUS TODAY newsletter (and no we won’t ask for a credit card number) please START A FREE TRIAL — you will receive two daily emails about the stockmarket, our MORNING EMAIL with all the stuff you need to know ahead of the trading day ahead and a DAILY EMAIL with all the midday events, news, comments and Ideas from Marcus and his Team.
You will also be given a password to the MARCUS TODAY website including access to all the emails as well as Educational, Entertaining and Researched Articles from Marcus and his Team and an archive where you can catch up on a whole week or month in just a few minutes. Or Browse at length. We are sure you will enjoy and profit from what we offer.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.