MIDDAY REPORT
(12.30pm AEDT)
It was great to see the Australian share market bouncing back
from yesterday's losses at the open of trade today. Yesterday the
market posted its worst day of 2012.Today, with the All
Ordinaries Index (XAO) slumping by 1.6 pct or 70.2 points to
4257.2.
This morning the All Ord's opened 40 points higher and by
lunch the All Ordinaries Index (XAO) had given back most of its
early gains as investors because a bit more cautious head of
trading tonight in the U.S. ahead of the Presidents Day long
weekend in the States. The index now only up 16 points or 0.4 pct
to 4,139.
Airline stocks are in the spotlight again today with the news
over night that privately owned Air Australia has been placed
into voluntary administration leading to the cancelation on all
flights. Qantas (QAN) CEO Alan Joyce announced that Qantas would
help to get stranded holiday makers home and would match the Air
Australia's ticketed price on any available flights. Qantas
released its half year result yesterday, its numbers beat the
street and the airline has said that around 500 jobs will be
impacted/cut as part of a restructure. QAN shares rose over 6 pct
yesterday and today in early trade Qantas off 1.8 pct to $1.81.
Qantas' rival in the skies Virgin Australia Holdings Limited
(VAH) shares are also lower off 1.4 pct while Regional Express
Holdings Limited (
REX
) up 1.5pct to $1.045 cents.
The retail sector in focus today after Wesfarmers Limited (
WES
) result yesterday and today's half year numbers and capital
restructure information from Pacific Brands Limited (PBG) and
Struggling surfwear retailer, Billabong (
BBG
). Pacific Brands reported net loss after tax of $362.4 million
for the six months till the end of December 2011. Pacific Brands
result was hurt by weak sales, a write-down of the goodwill in
its Underwear business of $388.7 million, and restructuring costs
of $13.4 million. Pac Brands shares started off well but have now
fallen in the red down 1.52 pct to $0.65.
Yesterday, Wesfarmers posted a net profit for the six months
to the end of December 2011 of $1.18 billion yesterday, helped by
its supermarket division and home improvement arm. Today, WES
shares have rallied 0.89pct to $29.85. Wesfarmers rival in the
food and liquor industry Woolworths Limited (WOW) shares also
higher up 0.77 pct to $24.97, while department store owners Myer
Holdings Limited and David Jones Limited also putting runs on the
board, both up over 1.2 pct.
Billabong shares rallied from the open of trade hitting $2.93
up over 50 pct, the highest price since December the 19th 2011,
the day the company shares fell 44 pct when it posted a profit
warning due to lacklustre Christmas sales. Today, Billabong
released its half year result to the end of December 2011 the
result was weaker than the market had expected but the rumours of
a takeover bid from the U.S. based private equity firm TPG were
confirmed. Billabong management have knocked back the offer of
$3.00 a share (totalling $766 million). Billabong management said
the "takeover offer from TPG was never certain to go ahead as it
was subject to due diligence, finance and it not selling down its
ownership in any of its brands." Billabong told the market today
of its plans to raise US$285 million by selling off 48 pct of its
Nixon sports watch brand to improve the debt position. The
retailer BBG shares are now at $2.65 up 48.04 pct.
Base metal prices moved slightly lower overnight on the London
Metals Exchange and the price of gold hardly moved in quiet
trading before closing at US$1,728.40 an ounce. The world's
largest miner, BHP Billiton (
BHP
) up 0.5 pct while RIO Tinto Limited (
RIO
) down 0.06 pct to $67.21 and Fortescue Metals Group (FMG) adding
another 0.5 pct in early trade.
The oil price US$0.51c or 0.5pct to US$102.31 a barrel, energy
stocks higher with the S&P/ASX 200 Energy Index up 0.6 pct by
lunch. The energy sector was hampered by a weaker than expected
result from oil and gas exploration and production company
Santo's (STO) Full year result. Santo's full-year net profit for
the 2011 calendar year rose 51 pct to $753 million and underlying
Net Profit after Tax (NPAT) of $453 million below market
consensus of $497million by around 9 pct. Santos production down
5 pct and sales volumes off 4 % while the prices for the energy
products it produces lifted over the year with oil up 32 pct and
gas up 9 pct helping sales revenues increase by 14 pct to $2,530
million. STO shares off 0.55 pct to $13.48. Woodside Petroleum
Limited shares up 0.5pc to $35.07.
The S&P/ASX 200 Financials Index rallied higher this
morning, by lunch time the index had added 0.35 pct. Over the
last 2 week's we've seen trading updates or half year numbers
from all our leading banks and today it was ANZ Banking Group
(ANZ) turn. ANZ reported cash earnings for the three months till
the end of December 2011 of $1.48 million, and a $1.7 billion
first-quarter profit , the company said the current environment
for banking internationally had become significantly more
challenging . ANZ shares up 1.5 pct to $21.54.Commonwealth Bank
Limited (CBA) up 0.14pct to $49.91, National Australia Bank (NAB)
added 0.6 pct to $22.77 and Westpac Banking Corporation (WBC) off
another 0.3 pct.
Wealth manager, AMP Limited (AMP) posted its full year result
yesterday and its shares fell over 2 pct after the numbers came
in slightly below what the market was expecting, today AMP shares
are off another 0.8 pct in early trade.
The Australian dollar is buying US107.87c, £0.6816 and
€82.12c.
Julian Roadley, CommSec Market Analyst
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