Australian Equities News and Views

Re: Australian Equities Pre Open Roundup

Now nobody panick!....................

Re: Australian Equities Pre Open Roundup

MR. said:

Now nobody panick!....................

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So everyone panicks............ 8% up in 2 days...

Re: Australian Equities Pre Open Roundup

DJ MARKET TALK: Australian Equities Roundup12/02/2008 09:04AM AEST

0807 [Dow Jones] AUD/USD set to consolidate post-RBA gains in Asia today, unlikely to climb much higher as further hikes now priced in, bigger picture remains global risk appetite, says Macquarie Group strategist Joanne Masters. Notes AUD/USD gains overnight capped by further negative credit news, with little data to provide direction. Says key is strength of JPY, and whether investors pour into it after Tokyo holiday yesterday. Expects AUD/USD selling at 0.9060, buying at 0.9010. Pair now 0.9037. (EGC)

0812 [Dow Jones] AUD/USD gains overnight capped on another round of negative credit headlines, and direction in Asia session will be steered by equities performance, says Bank of New Zealand strategist Danica Hampton. Notes credit news means equities likely softer, leaving AUD/USD trading in tight range; AUD/USD selling expected at 0.9050, buying at 0.8950. Pair now 0.9047. (EGC)

0815 [Dow Jones] UBS says despite forecasts of a slowdown in consumer spending, it still expects David Jones (DJS.AU) to grow, as it has in the past, in a slower sales environment. "Key drivers will be 'high-value' store refurbishments, new store roll-out, the release of the general purpose credit card, further cost-out plans and a gross margin enhancement plan driven by more favorable terms with suppliers," analyst says. Maintains at Buy; price target A$5.00 vs last trade A$4.00. (SVM)

0839 [Dow Jones] STOCK CALL: ABN AMRO ups Amcor (AMC.AU) to hold from sell. AMC growth remains under threat from cost pressures, ABN says in client note. Forecasts AMC will report 1H net profit of A$175 million, down 5% from a year ago. Cuts this FY EPS forecast by 1.8% to 45 cents to reflect ongoing raw material cost pressure compressing 2H margins and slower growth in its US Sunclipse unit, adverse exchange rates and the disposal of European PET and the Australian steel can units. Raises next FY and FY10 estimates by 4.1% to 50.7 cents and by 5% to 55.1 cents to reflect A$350 million share buyback, which ends 2H. Keeps A$6.90 target. Last trade A$6.60. (ABH)

0840 [Dow Jones] Goldman Sachs JBWere raises FY forecast for Ansell (ANN.AU) to US EPS of 61.4 cents vs management's upgraded guidance of 58-62 cents. "While we are very comfortable in underlying operations (particularly FY08 guidance where we have moved to the top end of the range), the broader macro uncertainty into FY09, and a lack of compelling valuation support (our A$12.79 price target implies a total return of 9.7%) prevent us from adopting a more positive view," analyst says. Maintains Hold. Last trade A$11.90.(SVM)

0842 [Dow Jones] STOCK CALL: UBS tips Boral (BLD.AU) will post 1H profit of A$143 million, EBIT of A$248 million and interim dividend of 17 cents. UBS expects strong results for Australian construction materials (with EBIT up 11% from a year ago) and quarry end use (with EBIT being pushed forward into the first half), housing products to be flat from last FY 1H and the US to be down significantly, with EBIT down 75% from FY07, it says in client note. "We expect the US to continue to weaken in the second half. We continue to believe that Hanson's US brick business and Carter Holt Harvey's timber business still represent potential investment opportunities for Boral." Keeps Buy. A$9.00 target. Last trade A$5.59. (ABH)

0846 [Dow Jones] Goldman Sachs JBWere downgrades targets for Australia's benchmark S&P/ASX 200 index, "in light of the RBA's more hawkish stance." Cuts end-June target to 6,100 points from 6,500, and trims end-December target to 6,350 from 6,800. Also cuts 2009 expectations, expects benchmark index to be at 6,400 points by end June, 2009, and 6,600 by end Dec. 2009. "The key risk to these forecasts remains the earnings outlook in light of the more hawkish stance the RBA has adopted," analyst says. "We continue to recommend a defensive bias in portfolios with our preferred sectors being: consumer staples, telecoms, healthcare, utilities," analyst says. Benchmark index last at 5,537.6 points. (LMF)

0848 [Dow Jones] STOCK CALL: Merrill Lynch forecasts Leighton (LEI.AU) to report 1H net profit of A$253 million, up 33% from a year earlier, "implying accelerating growth in 2Q08" and an interim dividend of 60 cents. "Key drivers of the result will be higher sales and margins partially offset by one-off costs associated with the A$870 million acquisition of 45% of Al Habtoor Engineering," ML says in client note. "LEI could well raise its FY guidance at the interim result, as it did in the previous two years." Keeps forecast of 44% earnings growth versus LEI's guidance of more than 30%. Keeps Buy, A$71 target. Last trade A$49.45. (ABH)

0850 [Dow Jones] JB Hi-Fi (JBH.AU) forecasts FY net profit to rise as much as 49% to A$57 million-A$60 million vs analysts consensus average of A$57 million. Forecasts provides room for upgrades, but some analysts may remain cautious given expectations for further interest rate rises to damp consumer spending. JBH's 1H net profit up 60% at A$41.9 million, exceeding JPMorgan's expectations of A$38.8 million and Credit Suisse at A$39.2 million. "Sales in January and February to date have continued the strong momentum of the first half of the year," CEO Richard Uechtritz says. Last trade A$12.64 - well shy of record high A$17.00 hit in December. (SVM)

0854 [Dow Jones] STOCK CALL: Several broker upgrades this morning could help support United Group (UGL.AU) shares. Citi upgrades UGL to Hold from Sell on back of "severe" recent share price underperformance, although cuts target to A$12 from A$14.55 after weaker-than-expected 1H result. Analyst cuts EPS forecasts by 7% for FY08 and 3% for both FY09 and FY10. Still, says UGL's valuation now reflects lower growth assumptions. UBS upgrades to Buy from Neutral, with revised A$15.50 12-month price target, down from A$17.00 previously, also points to near 50% slump in UGL share price in last 10 weeks. ABN AMRO also sees value, upgrades UGL to Buy from Hold, but slashes target to A$13.20 from A$21.05. "An oversold share price, a 50%+ order book upgrade and a strong start for the major UNICCO property services acquisition have prompted us to upgrade our call to Buy," analyst says. UGL last at A$10.89. (LMF)

Re: Australian Equities Pre Open Roundup

Crikey Kennas , what in the mystic pizza are you doing in Darfur ?

Re: Australian Equities Pre Open Roundup

ithatheekret said:

Crikey Kennas , what in the mystic pizza are you doing in Darfur ?

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LOL. Didn't go. Should have. Although, I wouldn't have met my wife in Honduras....

Re: Australian Equities Pre Open Roundup

kennas said:

LOL. Didn't go. Should have. Although, I wouldn't have met my wife in Honduras....

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Should have .......... Good idea meeting your wife .

Strewth mate I assumed the only high speed traffic over there were bullets , nah stay with wife and avoid volcanoes , muggers and earthquakes . Much easier to get insurance that way ...............

Re: Australian Equities Pre Open Roundup

0713 [Dow Jones] Auckland City Council appears to have snubbed Canada Pension Plan Investment Board's partial takeover plan for Auckland Airport (AIA.NZ); NZ Herald newspaper says in unsourced report council, which has 12.8% stake in AIA, confirmed it won't sell its shares to CPP; while news won't come as big surprise, such a move raises hurdle for CPP as it aims to get 40% of airport company. CPP offer closes March 13; AIA shares, which closed NZ$2.95 yesterday, could come under some pressure though downside may be limited as investors have already reduced M&A premium built into stock. (TIF)

0828 [Dow Jones] STOCK CALL: UBS downgrades Lion Nathan (LNN.AU) to Neutral from Buy, says 1Q trading update reassured, but valuation is full. Notes update implied a 1.5% upgrade to underlying earnings. "LNN remains a low risk, domestic defensive with a robust balance sheet and therefore favored in current market conditions," analyst says. However, since early November the stock has outperformed the All Ords by 22% and now trades at a 15% PE premium to market-based brokers' FY08 forecasts. Price target A$10.06 vs last trade A$9.40.(SVM)

0840 [Dow Jones] Merrill Lynch downgrades its net profit estimates for Aristocrat Leisure (ALL.AU) for 2008-10, by 12%, 9% and 5% respectively. Expects Aristocrat's "other international" division will struggle in 2007 with less casino openings anticipated in Macau. Now sees between 800 and 1200 slots will be added to Macau in 2008 vs around 8,000 in 2007. Also says U.S. will struggle in 1H08, with video replacement cycle to remain soft. Maintains Neutral. Last trade A$9.43. (SVM)

0841 [Dow Jones] STOCK CALL: UBS cuts Commonwealth Bank (CBA.AU) target to A$47.00 from A$60, keeps Neutral rating after group's disappointing 1H result earlier this week; says bank is its least preferred in sector. Says group's bad and doubtful debts a concern, notes company didn't provide much clarity on its position. Says CBA's earnings outlook particularly sensitive to single name risks, such as Centro (CNP.AU) and Allco Finance (AFG.AU). CBA closed Thursday at A$47.05. (LMF)

0842 [Dow Jones] STOCK CALL: Citi raises Leighton (LEI.AU) recommendation to Buy from Hold and target price to A$57.40 from A$49.30 after LEI posted 1H core net profit of A$237 million, or 4% ahead of Citi's forecast and upgraded full-year guidance to "at least 30%" from previous "30%". "While this was viewed as falling "short" of market expectations of 35% growth, the long-term outlook commentary remains bullish across all segments," Citi says in a client note. "We are confident LEI is well-positioned to weather tightening credit markets and the impact of a potential US recession." Also boosts EPS forecasts for this and next FY by 4.7% to A$2.19 and by 7.9% A$2.60 to reflect increased confidence in the outlook for LEI's key markets. Last trade A$49.00. (ABH)

0843 [Dow Jones] STOCK CALL: ABN AMRO cuts Leighton (LEI.AU) to Hold from Buy and target to A$45.00 from A$51.10 after Leighton posted 1H earnings of A$250.3 million, below ABN's forecast of A$255 million. "We saw no major issues as to quality, and group EBIT margins showed significant year-on-year improvement," ABN says. "The result also reflected a four-month contribution from the Al Habtoor joint venture, which looks to be tracking ahead of acquisition budget estimates. Whilst we remain comfortable that the size, composition and diversity of the Leighton works portfolio will mitigate some business risk, our longstanding Buy thesis has been premised on consensus expectations lagging the earnings trajectory of the company and significant upgrade surprise." Latest trade A$49.00. (ABH)

0905 [kennas] STOCK CALL: kennas initiates coverage on Leighton (LEI) with a 'could be a buy, hold, or sell,' depending on the weather. Recommends punters get a third opinion before committing their Super.

0906 [Dow Jones] STOCK CALL: Goldman Sachs JBWere says ASX (ASX.AU) 1H result just ahead of consensus, no major surprises. Analysts say the "problem" is that its PE ratio is still sitting at around 20-21X. "This multiple is not by any means unreasonable from a longer term perspective," analyst says. "But, in the near term, it is likely to leave the stock vulnerable to emerging pressures (real and perceived)." Maintains at Hold. Adds the opportunity to chip away at the stock comes in the weeks when the broader market "falls out of bed" - because most traders significantly over-estimate its EPS leverage to a falling market and the stock tends to be over-sold. Price target A$48.00 vs last trade A$45.13.(SVM)

0907 [Dow Jones] WA News (WAN.AU) shares likely to come under pressure after weaker-than-expected 1H result and lower-than-anticipated interim dividend. Company says net profit fell 21% to A$44.3 million, result impacted by accelerated depreciation of Herdsman printing press equipment. Normalized profit comes in at A$59.7 million, below A$64.3 million forecast by JPMorgan analysts. Dividend of 21 cents a share also well below JPMorgan and ABN AMRO's expectation for 31 cents and UBS's 30 cent prediction. Lack of specific FY guidance could also disappoint. Company has now finished writedown of presses, which could be good news. WAN shares last traded at A$11.20. (LMF)

0910 [Dow Jones] STOCK CALL: UBS lowers its target price for Paladin Energy (PDN.AU) to A$7.50 from A$9.05 after trimming earnings forecasts. Says earnings cut on a later start date for the Kayelekera project, higher costs and lower uranium price forecasts. Cuts FY08 profit forecast by 182%, FY09 by 67% and FY10 by 13%; 1H loss of US$25.8 million was worse than UBS' forecast for a loss of US$2 million. Maintains Buy rating. Paladin last traded at A$6.00. (APW)

0913 [Dow Jones] STOCK CALL: ABN AMRO says ASX (ASX.AU) has delivered a strong 1H result, but cyclical growth likely to hamper growth. "Despite the high levels of volumes that have gone through the market so far in FY08, we remain reasonably cautious given the uncertain economic outlook internationally, which is weighing on the domestic market, which in turn weighs on the dollar value of turnover," analyst says. "Overall we remain relatively cautious, with a Hold recommendation and the lowered price target of A$48.15 from A$53.90." Last trade A$45.13. (SVM)

Re: Australian Equities Pre Open Roundup

is this a test to see if we are paying attention Kennas?

0905 [kennas] STOCK CALL: kennas initiates coverage on Leighton (LEI) with a 'could be a buy, hold, or sell,' depending on the weather. Recommends punters get a third opinion before committing their Super.

Re: Australian Equities Pre Open Roundup

TheAbyss said:

is this a test to see if we are paying attention Kennas?

0905 [kennas] STOCK CALL: kennas initiates coverage on Leighton (LEI) with a 'could be a buy, hold, or sell,' depending on the weather. Recommends punters get a third opinion before committing their Super.

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I thought it was amuzing that Citi and ABN were adjusting their recommendations in the opposite direction to each other.

Re: Australian Equities Pre Open Roundup

0745 [Dow Jones] NZ shares to "have a day in the red," pulled down by poor sentiment offshore and local recession worries, says Forsyth Barr institutional broker David Price. Expects volumes to remain low as local players cautious amid rising fuel prices, high interest rates and offshore investors to continue to be focused on their home markets. Fletcher Building (FBU.NZ) and Fisher & Paykel Appliances (FPA.NZ) could give back some of yesterday's gains. The NZX-50 Index closed 0.1% down at 3,425.44 yesterday.(RSH)

0912 [Dow Jones] STOCK CALL: ABN AMRO raises SP AusNet (SPN.AU) to Buy from Hold after SPN guidance upgrade. "While the new numbers appear only modestly ahead of the market, we continue to like the Alinta-related optionality that SPN offers and the stock remains our top pure regulated pick." Has A$1.38/share target price, vs stock last A$1.25. But adds on a 12-month view, sees significantly more absolute upside in "the more bombed out stories" like Babcock & Brown Power (BBP.AU), APA Group (APA.AU), Babcock & Brown Infrastructure (BBI.AU). (RBT)

1226 [Dow Jones] S&P/ASX 200 offshore leads mostly bearish, with SPI futures down 38 points at 5419.0 after moderate falls on Wall Street. Oracle down 8.6% after hours on weaker-than-expected sales. DJIA down 0.9% at 12422.86, S&P 500 down 0.9%, Nasdaq down 0.7%. February durable goods fell 1.7% vs 0.8% consensus. February new home sales fell 1.8% to 590,000. Financials hurt by Paulson's comment that U.S. Govt should increase investment bank regulation, plus Oppenheimer's move to cut 1Q profit forecasts for major U.S. banks by average 84%. Citigroup fell 5.9%, JPMorgan fell 4.2%, Bank of America fell 2.8%. WSJ report of likely collapse of US$19.5 billion private equity buyout of Clear Channel saw that stock down 17.3%. U.S. 10-year bond yield down 2 bps at 3.51%. AUD/USD up 26 points at 0.9200. Nymex crude up US$4.68 at US$105.90 on lower-than-expected U.S. inventory. LME copper up 1.3%, zinc down 0.2%, aluminum up 1.3%, nickel up 0.9%. BHP (BHP.AU) ADR's at A$35.41. Index last 5381.4. (DWR)

0933 [Dow Jones] UBS maintains David Jones (DJS.AU) at Buy after 1H result. Analyst says on a 12-month view, any share price weakness over the coming months is a buying opportunity. "Specific cost out projects, gross margins largely underwritten by suppliers and a floor under credit card growth provides a relatively high degree of earnings visibility," analyst says. "We feel the stock can trade at a premium to the market despite the slowing retail environment." Price target A$5.00 vs last trade A$3.71. (SVM)

0934 [Dow Jones] WALL STREET: Stocks fell as heightened concerns over potential write-downs in financial sector, rising oil prices hurt; consumer stocks lost ground on news Feb new-home sales at lowest mark in 13 years, orders for durable goods unexpectedly dropped 1.7% in Feb. "These data points are rear view mirror, as we go through a grinding period, I'm less concerned about data being an issue and more focused on what the earnings numbers and guidance look like out of the financials," said Scott Billeadeau, portfolio manager for Fifth Third Asset Management. JP Morgan fell 4.2%, Citigroup down 5.9% after an Oppenheimer analyst cut 1Q earnings estimates on U.S. banks by an average 84%. Deutsche Bank lost 1.1% on bearish FY comments. Clear Channel ended down 17.3% on reports company's buyout by private-equity firms Bain Capital, Thomas H. Lee Partners may collapse. Airline stocks mostly fell with Continental down 8.9%, American Airlines parent AMR declined 11% after canceling 300 flights to re-inspect bundled wires on MD-80 aircraft. Dow down 0.9%, Nasdaq down 0.7%, Philly semicons down 1.4%. (RSH)

0940 [Dow Jones] STOCK CALL: Credit Suisse upgrades CSR (CSR.AU) to Neutral from Underperform, raises target to A3.60 from A$3.10. "CSR should perform relatively well versus its building peers in CY08," analyst says. "This is largely due to it having the least building exposure, particularly in the form of US housing." Cuts FY08 and FY09 earnings forecasts by around 2%, but raises FY10-FY12 estimates by around 6%. Says while another tough year is likely, in the longer term, sugar and aluminum commodity markets are looking more favorable. CSR last at A$3.34. (LMF)

0947 [Dow Jones] Goldman Sachs JBWere keeps David Jones (DJS.AU) at hold despite strong 1H. "In the short term, we expect the news flow regarding the consumer spending cycle to be poor (possible further interest rate rise, slowing ABS retail sales etc)," analyst says. "This is likely to weigh on DJS share price." Price target A$4.29 vs last trade A$3.71. (SVM)

0950 [Dow Jones] COMMODITY SUMMARY: Metal prices rally overnight, gold punching above resistance tracking euro strength against the U.S. dollar, market participants say further currency weakness could see gold go higher in the coming sessions. But the same people warn precious metals in the short term are still vulnerable to further profit-taking as book squaring is seen before month, quarter end. Near-term upside potential is returning to the market, says Standard Bank analyst Manqoba Madinane; signals that credit market crunch persists, to support near-term investment demand for precious metals. Spot gold unchanged vs NY close at $954.00/oz, silver at $18,44, up 3 cents, platinum at $1,997.50, down $2.50, palladium at $452.50, down $2.50. LME metals continue rebound, LME copper inventory falls, higher energy prices, lower USD support market. Gains come despite bearish U.S. data for durable goods, post fall. But traders said the weak U.S. dollar was attracting fund investors back. "With respect to the short term outlook in metals, we still are not sure that last week's commodity correction has fully run its course despite the recent blips higher," says MF Global analyst Edward Meir. LME three-month copper last at $8,225/ton, up $25 vs PM kerb after $105 rally overnight, aluminum at $2,950, up $6, lead at $2,784, down $15, zinc at $2,345, up $20, nickel at $29,800, up $25, tin at $20,350, up $50. Nymex crude futures rally $4.68 to $105.90/bbl. (EFB)

1000 [kennas] Unfortunately, has to fly to the Galapagos Islands this weekend and go on a 4 day cruise around the islands on a luxury boat, for free. Aaaaah, the hassles of been married to the travel industry.

1001 [Dow Jones] Spot gold steady, rally overnight on increased risk aversion, "sobering" speech by Treasury's Paulson offering no solution to housing, credit crisis, says HSBC analyst James Steel. Bearish U.S. durable good data, sinking new home sales increase prospect of another Fed rate cut, boosting precious metals price, says Steel. Commodity prices, notably oil and food, continue to soar, providing yet more support for gold; Paulson warns number of U.S. households with negative equity to rise, further correction in housing necessary, remarks could mean there's probably no imminent solution to credit, housing crisis, signals higher goldd prices, says Steel. Oil sharply higher as U.S. petroleum inventories fall, among other factors. Spot gold at $954.30/oz, up 30 cents vs NY close. (EFB)

1004 [Dow Jones] S&P/ASX 200 should fall 40-50 points today, according to traders. Unwinding of recent outperformance could see yesterday's low of 5322.30 tested. Oracle's 8.6% after hours fall on weaker-than-expected sales will also generate fear of another down night on Wall Street. Steep falls in U.S. financials should see major banks decline about 1%-3%, while Macquarie (MQG.AU) could fall 3%-5%. Resources should outperform after commmodity prices mostly rallied overnight. However, except for oil, which rose 4.5%, commodity price gains weren't overly large and oil stocks rose strongly yesterday in advance of oil price surge. A$556 million bid for Programmed Maintainence Services (PRG.AU) by Spotless Group (SPT.AU) isn't big enough to have significant positive impact on sentiment. Some traders calling bottom on Wall Street and Australian shares, mainly because of recent Fed action. But negative reaction to weak U.S. data suggests markets remain vulnerable. Index last 5381.4. (DWR)

Re: Australian Equities Pre Open Roundup

0728 [Dow Jones] STOCK CALL: Citigroup lowers 12-month target on Hallenstein Glasson (HLG.NZ) to NZ$3.95 from NZ$4.60, reduces FY08 net profit estimate by 4% to NZ$19.9 million, FY09 by 12% to NZ$20.6 million, "to reflect increasingly challenging environment in both New Zealand and Australia." Retains Hold rating as HLG is "best of class operator in New Zealand retailing" though now high risk as opposed to medium risk as "deteriorating retail environments in both markets suggest further downside risk to earnings." Stock closed at NZ$3.60 yesterday. (RSH)

0738 [Dow Jones] NZ shares likely to open in negative territory, weighed down by "rocky night" on Wall Street, says Forsyth Barr broker Suzanne Kinnaird. Expects Fisher & Paykel Appliances (FPA.NZ) to stay under continued pressure after yesterday's news that company opted not to sell finance business, though expects FPA to revisit sale possibility when current credit climate stabilizes. Telecom (TEL.NZ), Fletcher Building (FBU.NZ) could lose more ground on prevailing weak sentiment. Says 4Q GDP data could boost sentiment if outcome stronger than market views. NZX-50 closed down 0.6% at 3405.55 points yesterday. (RSH)

0829 [Dow Jones] Centro's (CNP.AU) financiers have given the troubled company a six month extension to repay A$4.2 billion of debt, the Sydney Morning Herald reports without citing sources. CNP not immediately available to confirm or deny the report, but if true it should give a boost to CNP shares, which last traded at 24.5c, after slumping from more than A$5.90 in Dec. (MCE)

0900 [Dow Jones] STOCK CALL: ABN AMRO downgrades Ten (TEN.AU) to Sell from Hold, cuts target to A$2.00 from A$2.75 after group's weaker-than-expected 1H result. "We estimate that TV EBITDA fell around 4% in 2Q, which is disappointing given the good first quarter," analyst says. Cuts FY08 profit forecast by 9% and FY09 forecast by 29%, analyst now factoring in an advertising downturn in FY09. "Ten is positive on current trading, but visibility past May is limited," analyst says. Ten shares closed yesterday at A$2.20, down 2 cents. (LMF)

0903 [Dow Jones] Failure of AUD/USD overnight to sustain 0.9200 does not bode well for the Australian currency. The past three-to-four-day short squeeze from its pre-Easter falls appears to have ended with the prospect of a return to the 0.8960 lows to follow soon, says Suncorp strategist Peter Pontikis. Expects a close nearer 0.9150 as part of a broader move to return to push pair down to fair value zone of 0.8500 to 0.9000. AUD/USD weakness should be well aligned with like moves in all major currency crosses to the USD. AUD/USD now 0.9190. (JEG)

0906 [Dow Jones] STOCK CALL: ABN AMRO cuts Babcock & Brown (BNB.AU) to Hold from Buy. Says increase in debt facility announced yesterday should give some financial flexibility "but we have reservations around the equity raising." Adds A$220 million was raised near 12-month lows, does little to improve BNB's gearing, is 4-5% EPS dilutive in 2009. "Asset divestments over the next few months seem likely to raise far more than A$220 million, so the timing of the raising suggests the capital may be used for short-term funding requirements rather than to boost balance sheet flexibility." Cuts share price target to A$15 from A$20 vs stock last at A$14.21. (RBT)

0908 [Dow Jones] WALL STREET: Stocks fell as disappointing revenue for Oracle, concerns that Google may be in similar situation dragged techs, while financials like Lehman exacerbated market declines; "the next hurdle for investors is the pre-announcements on earnings season. You heard from Oracle today and I don't know if that's a prelude to what we're going to see," said Steven DeSanctis at Merrill Lynch. Oracle fell 7.2% after reporting growth below Wall Street expectations; Google off 3.1% on concerns it may fall short of Street's 1Q revenue targets. Lehman off 8.9% as credit concerns and potential write-downs worries continued. Clear Channel Communications +10%; said it was granted temporary restraining order against syndicate of Wall Street banks, stopping them for time being from taking any actions that would hurt company's buyout deal with private-equity firms. eBay +4.3 after Piper Jaffray said the electronic-commerce company's 1Q listings were tracking ahead of Piper estimates. ConAgra Foods rose +7.1% after the packaged-food giant said it will sell commodity trading and merchandising group for $2.1 billion. Dow ended off 1%%, Nasdaq 1.9%, Philly semicons down 1.5%. Accenture +4% after-hours; 2Q net income +37%, boosted in part by weaker USD.(RSH)

0909 [Dow Jones] S&P/ASX 200 offshore leads mostly bearish, with SPI futures down 41 points at 5384 after technology-led selloff on Wall Street after disappointing 3Q from Oracle and weak monthly traffic numbers from Google. DJIA down 1% at 12302.46, S&P 500 down 1.2%, Nasdaq down 1.9%. AUD/USD down 11 points at 0.9189. Nymex crude up US$1.68 at US$107.58 and Comex gold just marginally lower at US$948.80. Better day for resources sector likely with strong gains across LME base metals, copper up 4%, zinc +3.2%, aluminum up 2.9%, nickel up 5.4%. BHP (BHP.AU) ADRs at A$35.41 vs A$35.76 locally, but were up 1.6% in London, where Rio Tinto (RIO.AU) also rose 2.1%. Index last 5371.6. (DWR)

0923 [Dow Jones] Though RBA confident that Australia's banks highly profitable, with minor exposure to U.S. housing sector, it's calling on federal government to beef up regulatory environment against possible bank failures. Council of Financial Regulators, chaired by RBA, wants government to set up facility that'd bail out depositors with an early repayment of up to A$20,000 if a bank collapses - enough to cover entire deposits of 80% of depositors. Also wants boost to Australian Prudential Regulatory Authority's powers to deal with distressed financial institutions. Council's recommendations based on "possible lessons" from recent troubles at U.K.-based lender Northern Rock, which ended with U.K. government nationalizing the bank, exposed shortcomings of U.K.'s financial regulator, FSA.
(RAP)

0926 [Dow Jones] STOCK CALL: UBS upgrades Alumina (AWC.AU) to Buy from Neutral, raises target to A$6.70 from A$6.10 after increasing aluminum price forecasts, resulting in pretty significant increases to earnings forecasts for group. UBS raises price deck for aluminum and now expects US$1.45/lb in 2008, up from US$1.24/lb previously; US$1.60 in 2009, up from previous forecast of US$1.30/lb; US$2.00 in 2010, up from US$1.40/lb previously. Raises AWC FY08 profit forecast by 41%, FY09 by 75% and FY10 by 91%. "The changes see our earnings forecasts at the high end of the consensus range," analyst says. AWC last at A$5.46. (LMF)

Re: Australian Equities Pre Open Roundup

0756 [Dow Jones] AUD/USD rallies on fall in USD following Fed's Bernanke comments on possibility of recession but expected to hold limited range over next two days, says ANZ senior interest rate strategist Sally Auld; expects pair to find cap at 0.9200 but notes strong buying on dips by exporters expected to keep well supported above 0.9000. Markets likely to hold in this range until RBA Stevens testimony and U.S. nonfarm payrolls data tomorrow. Commodities also giving AUD/USD strength. Shift by RBA to softer tone in recent months reducing momentum for AUD against most crosses in medium-term. "Whereas the bond market is supported by a buy on dips, I think the Aussie is a sell on the rallies," Auld says. Notes AUD/USD unlikely to stage another run for 0.95 any time soon. Pair last 0.9133.(SRH)

0822 [Dow Jones] WALL STREET: Stocks fell after several economically sensitive stocks dipped on Fed Chairman Ben Bernanke's 1st public mention that U.S. recession is possible; still, many observers noted Bernanke's comments served only to acknowledge what investors already believed was true. "He's not saying anything really new, but that things are working out in terms of bailing out the financial institutions and the risk of default for any of these major financials is seen as basically zero," said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund. Financials ended lower after ticking up at start of Bernanke's comments; Bank of America lost 1.4%. Merck down 3.2% as continues to hurt from fallout over call for curtailment of cholesterol drugs Vytorin and Zetia. Exxon Mobil gained 1.7% on rise in crude oil futures, but airline stocks declined rapidly on expected subsequent jump in fuel prices, with Continental Airlines losing 5.4%, American Airlines parent AMR Corp. down 2.6%. In late trade, Research In Motion +5% after solidly higher 4Q profit. Dow down 0.4%, Nasdaq off 0.06%, Philly semicons +0.8%. (SHN)

0832 [Dow Jones] COMMODITY SUMMARY: Spot gold moves back above $900/oz level as speculative buying returns, and on slip in USD, bounce in crude oil. Testimony on the economy from Fed's Bernanke was probably constructive, traders say. Fed chief says economy could contract in 1H; USD slips, with the market expecting more interest rate cuts. Spot gold at $903.50/oz, down 50 cents vs NY close after near-$20 rally overnight; silver at $17.30, up 9 cents; platinum at $1,949.50, down $13.50; palladium at $439.50, down 50 cents. LME metals mixed overnight, signs of slowing global growth, some consolidation expected before 2Q demand ramps up to full speed, analysts and traders say. LME copper charges to strong close above $8,500/ton, shorts forced to cover, raising prospects the metal could eclipse its record $8,820 high from last month in near term. LME 3-month copper last at $8,550, up $1 after $204 rally in London trading; aluminum at $2,944, up $12, down $27 overnight; lead at $2,880, up $12; zinc at $2,358, up $4; nickel at $28,600, up $300 after $1,000 overnight drop; tin unchanged at $20,100. Nymex crude futures settle up $3.85 at $104.83/bbl. (EFB)

0835 [Dow Jones]Centro Properties (CNP.AU) has reportedly received six bids, with the interest understood to be around buying up Centro shares at a maximum of 90 cents a share. Without citing its sources, The Australian Financial Review reports the bids value the company at a fraction of the price its lenders had hoped to achieve. While the price is big premium to Centro's close yesterday at 29.5 cents, its well shy of the A$5.70 the stock was worth in December and unlikely to spark a rally. Potential investors include Blackstone, the Citadel Investment Group, Lighthouse Partners and Macquarie Group (MQG.AU), the newspaper says. Comment from Centro wasn't immediately available.(SVM)

0841 [Dow Jones] Spot gold lifts back up above $900/oz level, but further U.S. economic data still due before weekend, and depending on what the numbers reveal, bulls may attempt a push back to higher levels, says Kitco analyst Jon Nadler. But adds sentiment has taken a beating across the board in commodities, further deleveraging could still hit prices. Gold sees some mild bargain-hunting overnight from physical buyers but Indian buyers remain cautious, awaiting still lower values before shopping for the upcoming April/May wedding period. "The specter of deleveraging still looms large above the markets despite calls for the commodity supercycle to continue indefinitely," says Nadler. Fall toward $850/oz previous all-time high still possible. Gold at $903.50, down 50 cents vs NY close, up nearly $20 overnight. (EFB)

0846 [Dow Jones] Sentiment in base metals cautious, market players continue to act carefully amid improved global market sentiment, says Standard Bank. Improved sentiment comes on back of a marked easing in risk aversion in financial markets since beginning of the week, prompting fund money flowing out of commodities. But despite this fund rotation between different asset classes, base metals remain well supported. U.S. ADP jobs survey saw unexpected rise of 8,000 jobs, advancing general feeling in financial markets that the worst of the credit market writedowns by major banks might have passed. "It remains to be seen how long this optimism can last," says Standard. Fed's Bernanke acknowledges that a U.S. recession is likely as construction is slumping, job creation in general is slowing and consumer spending is on a decline. Next major data release is Friday's U.S. non-farm payroll data. LME copper well supported on news of a possible strike by contract workers at Chile's Codelco, world's number one producer. LME three-month copper at $8,550/ton, up $1 vs PM kerb. (EFB)

0851 [Dow Jones] Resistance for AUD/USD around 0.9180 in Asian trade with support around 0.9020 today, National Australia Bank Senior Currency Strategist John Kyriakopoulos says. Notes, however, while risk appetite has improved from five-year low in mid-March, is yet to break convincingly higher. Continued pricing for 25 basis point RBA cut before year end still providing headwinds for AUD. "Some recovery in the greenback may be evident in the near-term if news on the U.S. economy continues to beat expectations." AUD/USD last 0.9142. (SRH)

0908 [Dow Jones] S&P/ASX 200 offshore leads mixed, with SFE 200 futures up 21 points at 5584 as commodity price gains offset modest falls on Wall Street. DJIA down 0.4% at 12608.92, S&P 500 down 0.2%, Nasdaq down 0.1%. Fed's Bernanke says U.S. recession possible; Feb U.S. factory orders fell 1.3% vs expected 0.8% drop. 10-year bond yield up 2.8 bps at 3.57%. AUD/USD up 70 points at 0.9140. Nymex crude up US$3.85 at US$104.83 after U.S. Energy Dept reported higher than expected gasoline demand. Spot gold up US$20 at US$903.50. LME copper up 2.4%, zinc up 1.9%, aluminum down 0.9%, nickel down 3.4%. London-listed BHP Billiton up 2.2%, Rio Tinto up 2.4%. BHP ADRs at A$37.11 equivalent vs A$36.75 locally. S&P/ASX 200 last 5502.9. (DWR)

0909 [Dow Jones] STOCK CALL: Credit Suisse cuts Bank of Queensland (BOQ.AU) to Underperform from Outperform after recent share price strength. Analyst notes BOQ shares have gained 25.7% since March 17, benchmark S&P/ASX 200 up 8.2% in same time. Keeps A$17.00 target on stock, BOQ last at A$17.08. (LMF)

0917 [Dow Jones] ABN AMRO keeps Buy rating on Telstra (TLS.AU) after Australian government scraps A$958 million regional broadband funding contract with rival SingTel (Z74.SG); analyst says only TLS can deliver a single national broadband network. "To make the national broadband network work and achieve the government's targets as far as possible requires all traffic and all customers on a single network, at least in regional areas. To do this, we think it needs to work with Telstra. Any alternative - finding a way to migrate up to 4 million broadband customers and possibly 9.5 million PSTN customers onto a rival network - looks too risky," analyst says. But reckons the network won't be sorted out until late 2008. Targets TLS at A$5.38, stock last at A$4.50. (LMF)

0720 [Dow Jones] OVERNIGHT SUMMARY: Nymex crude ended $1/bbl lower after a volatile trading day, with prices led by US gasoline and the dollar. May crude settled $1 lower at $103.83, after trading as high as $106.44 then weakening toward settlement. It was recently trading at $104.28. ICE Brent crude fell $1.23 to $105.52. Talk of a slowing global economy also weighed and all eyes will be on US jobs data today. US gasoline fell 4.93 cents, or 1.8%, to $2.7243/gal and heating oil ended down 2.82 cents, or 1%, at $2.9228. For more information, keyword search OIL FUTURES or Top Energy (MCE)

0845 [Dow Jones] Consolidated Media (CMJ.AU) shares likely to jump on open on speculation Lachlan Murdoch's bid for group is back on track. Shares rallied yesterday on heavy volumes amid hopes of a revived deal. A report in The Australian newspaper says Murdoch close to signing deal with Providence Equity Partners to replace SFO Partners, who pulled out of his A$3.3 billion privatization plan for CMJ at last minute. Report says Murdoch could get Providence to sign as soon as next week; if so, would likely go back to CMJ board to ask to do more due diligence, but not alter original proposal to offer A$4.06 cash per CMJ share plus 0.1116 Seek (SEK.AU) shares. Spokespeople for Murdoch or Providence not immediately available for comment. Providence has shown solid interest in Australian media previously; firm reportedly was one of losing bidders when James Packer sold majority of PBL's media assets to CVC; U.S.-based firm also backed Independent News & Media's failed tilt to takeover APN News & Media. (LMF)

0850 [Dow Jones] Newcrest Mining (NCM.AU) could raise between A$320 million and A$350 million from the sale of its Cracow gold mine, Credit Suisse says. Says the consideration is likely to be cash and that Newcrest will not proceed with a sale unless it is value-accretive. Says Newcrest needs to manage a disproportionate growth in its copper earnings relative to gold earnings in the future. "An acquisition by NCM of Lihir Gold (LGL.AU) would rebalance NCM's copper to gold inventory and largely alleviate NCM's medium-term copper production growth dilution issue," CS says. Maintains Outperform rating with A$45 target price. (APW)

0900 [Dow Jones] AUD/USD unlikely to be driven too much by RBA Stevens' statements to parliamentarians today, though February retail sales data could provide some catalyst for selling, says Macquarie Bank FX associate director Jo Masters. Results significantly below +0.3% on-month consensus forecast for retail sales could push AUD/USD down to support level of 0.9092, with resistance likely at 0.9190. "If you get a weaker-than-expected number, it will cement people's views that the RBA is done or on hold for the moment." Ahead of payrolls data in U.S. likely to stay in recent ranges. AUD/USD last 0.9162. (SRH)

0911 [Dow Jones] Newcrest Mining (NCM.AU) is close to naming Beadell Resources (BDR.AU) as the top bidder for its Cracow gold mine with a bid close to A$200 million, Australian Financial Review reports. Beadell is a junior gold explorer with a market cap of A$16.7 million, but the newspaper says company plans to raise equity to fund the purchase through Merrill Lynch and Morgan Stanley. Lion Selection (LST.AU), which has 30% stake in Cracow, has right to match any bids and is keen to secure control of the mine. Beadell and Newcrest not immediately available for comment. (APW)

0913 [Dow Jones] S&P/ASX 200 offshore leads slightly positive, with SFE 200 futures up 14 points at 5679.0 after slight gains on Wall Street and flat night on commodity prices. DJIA up 0.2% at 12626.03, S&P 500 up 0.1%, Nasdaq up 0.1%. Consumer discretionary stocks fell after U.S. jobless claims hit 407,000, highest since 2005. Best Buy down 3.2%. ISM March services sector index rose to 49.6 vs 48.7 consensus. Merrill Lynch CEO repeated last month's comment that Merrill didn't need to raise fresh capital. Merrill rose 1.2%. Alcoa rose 5.8% amid strength in miners. 10-year bond yield down one basis point at 3.58%. Constellation Brands rose 5.3% after beating 4Q consensus profit forecasts. AUD/USD up 22 points at 0.9164. Nymex crude down US$1.00 at US$103.83. Spot gold near flat at US$903.00. LME copper near flat, zinc down 1.4%, aluminum down 0.8%, nickel up 2.1%. London listed BHP (BLT.L) up 2.1%. Rio (RTP.L) up 1.5%. BHP ADR's at A$38.49 vs A$38.09 locally. Index last 5608.9. (DWR)

0919 [Dow Jones] WALL STREET: Stocks end higher after report that Merrill Lynch CEO John Thain doesn't think bank needs to raise fresh capital. "We have plenty of capital going forward, and we don't need to come back into the equity market," Thain told Japan's Nikkei newspaper; Merrill Lynch +1.2%. Rising commodity prices also helped offset weak jobless data but market waiting for U.S. nonfarm payrolls report Friday EDT. "Even with the news this morning, people are waiting to see nonfarms - that's the most important," said Bill Strazzullo, chief market strategist for Bell Curve Trading. Aluminum giant Alcoa +5.8%, Amazon down 3.1% after Piper Jaffray reduced estimates on Internet retailer to reflect expected "sluggish" online spending for US consumers. Cisco Systems shed 2.9% with UBS downgrading stock to neutral from buy on concerns about softening demand. Research In Motion +5.9% after BlackBerry maker said 4Q profit, revenue more than doubled. Schering-Plough +11% after pharmaceutical company launched cost-cutting plan. Spirits and wine company Constellation Brands +5.3% on 4Q profit beat analysts' forecasts. Dow +0.2%, Nasdaq +0.1%, Philly semicons +2.5%. (RSH)

0923 [Dow Jones] COMMODITY SUMMARY: LME mixed overnight, all eyes on tonight's U.S. jobs data for further signs of U.S. recession. LME copper peaks at $8,629/ton on short covering, before retreating, less than $200 from March record high. Given deteriorating picture for U.S. demand, markets will be closely watching payrolls data tonight, say traders. Rise in both LME and weekly Shanghai Futures Exchange copper stocks subdue upside momentum. LME 3-month copper last at $8,527.50, down $22.50 on PM kerb; aluminum at $2,910, up $2; lead at $2,943, down $7; zinc unchanged at $2,320; nickel up $160 at $29,060; tin down $5 at $20,200. Spot gold recovers from early weakness, trades above $900/oz level as USD gives up some initial strength. Platinum firm, safe-haven buying along with gold; fears of political instability that could affect supplies in platinum producer Zimbabwe, worries that electrical shortages could persist for some time in key producer South Africa. Spot gold trades at $905.00, up $1.70 vs NY close; silver at $17.36, up 3 cents; platinum at $1,984, down $2; palladium at $435.50, down $3.50. Nymex crude futures down $1 overnight at $103.83/bbl. (EFB)

0940 [Dow Jones] LME erratic, cautious trading continues amid renewed optimism that worst of the credit crisis is over. Cautious trading activity also prevalent in other commodities as well before payroll data; markets seem to overreact to any news, especially economic data out of the U.S., says Standard Bank. ISM non-manufacturing composite index edges higher from 49.3% in February to 49.6% in March. But March figure still indicates probable contraction in non-manufacturing sector, says Standard Bank. Non-manufacturing constitutes, by far, the largest part of U.S. GDP, but market reacts positively after very bad readings of December, January; LME copper reacts positively to ISM data. LME 3-month copper at $8,527.50/ton, down $22.50 vs PM kerb.(EFB)

0943 [Dow Jones] RBA Stevens' opening statements are balanced, confirming previous comments by central bank that suggest RBA now likely on hold, says Lehman Brother Chief Economist Stephen Roberts. AUD/USD slightly weaker, 3-year bond futures climb 3 bps to 93.80 after statement but since retraced gains; AUD/USD down 15 pips at 0.9140. (SRH)

0813 [Dow Jones] WALL STREET: Stocks were mixed Friday as consumer stocks and large financials sold off after employment data reignited recession fears; energy and materials stocks continued to surge, with commodities such as gold, silver and copper, all trading higher as USD weakened. For March, nonfarm payrolls fell by 80,000, the biggest decline in 5 years, while the unemployment rate jumped to 5.1%. "They're really not good numbers, but they suggest we're more comfortable with our forecast for a 50-basis-point rate cut from the Fed," said Drew Matus, senior economist at Lehman Brothers, who now thinks there's a "good chance" Q1 GDP will be negative. Car maker General Motors shed 4.7% as the Chapter 11 case of supplier Delphi took a sour turn, with a lead investor looking to pull out of an equity investment agreement. Financial stocks traded lower on the recession fears with Bank of America down 2.4%. Technology stocks were among the better performers; solar wafers maker LDK Solar gained 15% fueled by increasingly optimistic estimates for solar demand; First Solar was up 10.5% and SunPower added 10.2%. Gap dropped 3.6% after Credit Suisse cut its rating on the retailer to neutral from outperform. Bucking the trend among financials, UBS rose 3.6% as a former president of the bank pushed for change that could result in a breakup of the firm. Dow closed down 0.1%, Nasdaq +0.3, Philly semicons down 0.4%. (RSH)

0832 [Dow Jones] Chairman of retail giant Myer Group has reportedly petitioned RBA Governor Glenn Stevens directly about the deteriorating economic conditions saying multiple rate hikes since mid-2007 have divided the country. According to a report in The Australian newspaper, Bill Wavish's letter to RBA's Stevens says rate hikes have "hollowed out" the economy. Official cash rate target now at a 12-year high of 7.25%. Wavish says resources sector booming, but manufacturing and retail sectors now in a slump. RBA now under considerable media attack after four rate hikes since August 2007. Wavish comments follow consecutive monthly falls in retail sales and survey data showing sharp drops in consumer and business confidence. (JEG)

0917 [Dow Jones] S&P/ASX 200 offshore leads neutral/bullish, with SPI futures up 39 points at 5693.0 after flat close on Wall Street and modest gains in commodity prices. DJIA down 0.1% at 12609.42, S&P 500 up 0.1%, Nasdaq up 0.1%. February US jobs fell 80,000 (biggest fall in 5 years) vs 15,000 fall expected. US 10-year bond yield down 11 bps at 3.46%. AUD/USD up 54 points at 0.9220. Nymex crude up US$2.40 at US$106.23. Spot gold up US$10.50 at US$913.70. LME copper up 1.3%, zinc up 1.9%, aluminum up 1.5%, nickel up 0.4%. CBOT wheat up 3.9%. BHP (BHP.AU) ADRs at A$39.71 vs A$38.60 locally. Index last 5619.6. (DWR)

0935 [Dow Jones] COMMODITY SUMMARY: LME metals strong despite a large drop in U.S. jobs figures, gains expected to continue into next week. Third straight sharp drop in U.S. payrolls added weight to Fed's Bernanke's recent warning that the U.S. economy may be in recession, helped cap metals' rally. Despite the jobs report, a third straight daily build in LME stocks; LME copper holds up well, says Base Metals.com analyst William Adams. LME copper likely to eclipse contract high next week, traders say; prices peak Friday at $8,695/ton, just $125 shy of March's all-time contract high. LME 3-month copper PM kerb at $8,665, up $115 on previous kerb, lead up $10 at $2,940, zinc up $45 at $2,365, aluminum up $45 at $2,953, nickel up $105 at $29,200, tin up $45 at $20,150. Spot gold bounces higher as USD falls, but poor U.S. payroll numbers not quite bearish enough to ignite fresh buying in gold, says BNP Paribas. Gold set to move higher again: "Gold is in a bull market," trader says. "Everybody knows there's going to be another rate cut." Gold trading at $915.42/oz, up $1.72, silver at $17.83, up 9 cents, platinum at $2,012, down $6, palladium at $439, down $5. Nymex crude futures up 22 cents at $106.45/oz. (EFB)

0937 [Dow Jones]Goldman Sachs JBWere says the spread paid on Wesfarmers' (WES.AU) U.S. bonds has been more than offset by the upside from higher coal prices. "Furthermore, it is likely that the average rate on the remaining A$3.3 billion of debt to be refinanced by October 2008 will be lower than that achieved on the U.S. bond issue," analyst says. WES paid around 11% on the U.S. bonds, financing around 18% of its total A$4 billion. Maintains Buy. Price target A$47.67 vs last trade A$39.44. (SVM)

0954 [Dow Jones] Spot gold higher after weak U.S. employment data, strong commodity prices; platinum prices firm as supply worries continue to concern market, says HSBC analyst James Steel. Escalating commodity prices are likely to set stage for further precious metals gains, particularly gold, says Steel. Grain futures up as violent protests erupt over rice prices in Philippines. Higher food prices, says Steel, are supporting gold prices, by raising global inflation, increasing social unrest in emerging world. Spot gold at $915.30/oz, up $1.60 vs NY close, platinum at $2,015, down $3. (EFB)

0958 [Dow Jones] Goldman Sachs JBWere raises forecasts for coking coal but trims thermal coal price forecast. Says the coking coal market is structurally undersupplied with ongoing shortages for premium high grade coking coal for the seaborne market. Increases hard coking coal price forecast for 2008/09 by 16% to US$290/metric ton, semi-soft by 20% to US$180/ton and low-vol PCI by 18% to US$200/ton. However, GSJBW trims contract thermal coal price forecast by 8% to US$120/ton; says spot prices have fallen from highs as supply side concerns gradually abate. (APW)

0958 [Dow Jones] Australian building survey joins the recent spate of indicators flagging some slowing in economy, with construction sector contracting in March for the first time in seven months, says AiG-HIA's monthly Performance of Construction Index. Weakening consumer sentiment, rising rates and caution from property developers is impacting, survey found. But likelihood is for PCI to soften further, as rising cost of funds and recent rate hikes will crimp development, says AiG Associate Director, Economics and Research, Tony Pensabene. March PCI slipped 5.5 points to 48.4 points. (EGC)

1004 [Dow Jones] S&P/ASX 200 likely volatile after ANZ said 1H credit provisions will exceed market consensus due to higher collective provision charge. ANZ flags A$975 million total 1H provision for credit impapirment vs A$567 million for FY07. But ANZ says underlying business performing well with revenue growth of 11% vs 1H 2007. Banks likely to spike down in sympathy with ANZ. However, resources and other major stocks may surprise on upside because Wall Street held up despite worse-than-expected jobs data, leaving pressure on short sellers. DJIA looks to be forming bullish flag pattern that could generate temporary push through major resistance at 12767.0. U.S. investment bank results next week will be obstacles. But there's lack of U.S. data this week, so shorters may be squeezed. Resources should offset financials weakness today after BHP Billiton ADRs rose and commodity prices rallied. S&P/ASX 200 early up 0.3% at 5634.4. (DWR)

1007 [Dow Jones] Australia & New Zealand Banking Group (ANZ.AU) likely to be hurt early due to trading update flagging credit provisioning above market expectations. Despite underlying business performing well, global market turmoil to impact credit quality of institutional portfolio, bank says. Increases collective provision to reflect risks "which are yet to crystallize". Total provision for credit impairment in first half likely around A$975 million, up from A$567 million for previous FY. Further details likely during investor call by CEO Mike Smith at 0045 GMT. (ILM)

0824 [Dow Jones] Australian-listed shares of BHP Billiton (BHP.AU) likely to extend surge to new 2008 high above A$42.00 (closed yesterday at A$40.40), after 4.6% increase in London-listed shares on report in Australian newspaper that China is mulling a bid for a stake, larger than 9% stake that state-backed aluminum producer Chinalco took in Rio Tinto (RIO.AU). Local traders likely to echo London traders view that report is vague, with report citing unnamed sources in Beijing and emerging just as Prime Minister Rudd prepares to meet Chinese leaders; paper says Beijing hasn't yet determined which state-owned financial institution or steel mill might take lead role in buying a stake. Still, traders likely won't want to be caught short. BHP ADRs also firmer, +5.2% to A$42.40 equivalent.(WEL)

0833 [Dow Jones] Westpac (WBC.AU) and Commonwealth Bank (CBA.AU) likely to follow ANZ Bank's (ANZ.AU) lead and raise provisioning levels for bad and doubtful debts, UBS says. Raises WBC's bad and doubtful debt charges by A$150 million, says with a newly appointed CEO "we see an opportunity for WBC to follow ANZ's lead." Says CBA appears to be suffering heavily from "bad boys" (debts) so far, and analyst tops up CBA's BDD charges by a further A$120 million for FY08. "With thin BDD cover, we see further earnings risk to CBA into FY09," analyst says. Now expects zero EPS growth for sector in FY08. Also says Friday will be a critical day for banks, as the review period for Allco Finance Group's (AFG.AU) senior bank facilities is due to expire. "At this time the lenders must determine whether they will appoint a receiver to AFG or further extend this facility," analyst says. (LMF)

0837 [Dow Jones] AUD/USD's break above 0.9270 overnight significant as it is the 61.8% Fibonacci retracement of the slide from 0.9471 to 0.8955, says John Kyriakopoulos, head of FX strategy at nabCapital. Better news on commodity prices and higher risk appetite are more than offsetting an accumulation of economic reports pointing to slower domestic economic growth in Australia. Unless traders price more easing by the RBA than currently, a sharp pullback in the AUD will require renewed risk aversion and a slump in commodity prices. NAB's fair value estimate now 0.9610. Now 0.9309 compared with 0.9220 at the start of the week. (JEG)

0852 [Dow Jones] WALL STREET: Stocks fell after 1Q earnings shortfall for Alcoa, Advanced Micro Devices' projection for revenue below market expectations gave rise to fears about economy; financial stocks also hurt on dividend cut and projection of wider-than-expected losses for Washington Mutual, which fell 10.2%; Attention now turning to other earnings reports as investors brace for potentially bad news; "The real focus is going to be on some of the other companies, especially industrial and energy," said Cleve Rueckert, research analyst for Birinyi Associates; "Then we'll really see how much of an impact the subprime and credit crisis had on the broader economy." Alcoa off 0.7% after 1Q profit dropped 54%, AMD fell 4.9% on news it will cut 10% of its work force, plus reducing 1Q revenue forecast below market expectations; Intel also lost 3.1%. Homebuilder Lennar down 8.3%, KB Home down 4.9% after February home-sales data fell shy of expectations Dow off 0.3%, Nasdaq down 0.7%, Philly semicons down 2.8%. (SHN)

0857 [Dow Jones] STOCK CALL: Dexus (DXS.AU) cut to Sell from Neutral by UBS, which lowers 12-month price target to A$1.62 from A$1.71 on view the premium it's enjoyed, with 3.4% relative outperformance over the last quarter, on its perception as a defensive property portfolio underwritten by M&A appeal is "at risk, with several misunderstood risks" set to weigh on DXS. Notes its international exposure is underestimated, with 27% of EBIT from U.S. industrial property and its domestic cap rates are under pressure. DXS last A$1.685. (WEL)

0908 [Dow Jones] AUD/USD strength over the last 24 hours mostly linked to rising investor risk appetite, but news that China may move to buy a substantial stake in mining giant BHP Billiton also bolstering sentiment, says Sue Trinh, currency strategist at RBC Capital. According to a report in The Australian newspaper, China is seeking to buy a multibillion dollar stake in BHP. Next topside target for AUD/USD is 0.9400. Now 0.931. (JEG)

0911 [Dow Jones] Chinese plan to buy stake in BHP (BHP.AU), as reported in The Australian newspaper, would make strategic sense for the Chinese, says Southern Cross Equities director Charlie Aitken. "In our view it does make strategic sense for the Chinese to own some part of BHP, but we are still not pro any government owning a stake in BHP," says Aitken. Speculation of Chinese interest in BHP comes before 2008 iron ore price settlement. A Chinese stake in BHP could allow China to save face on conceding to higher iron ore prices. BHP last A$40.40. (DWR)

0912 [Dow Jones] China would have to pay a significant premium for any stake in BHP (BHP.AU), says Charlie Aitken, executive director at Southern Cross Equities. Follows report in the Australian newspaper that China is planning to buy stake in BHP, larger than 9% stake that state-backed aluminum producer Chinalco took in Rio Tinto (RIO.AU). Aitken says China would have to pay bigger premium for any stake in BHP. "I wouldn't sell them a share below A$50.00. They paid a 20% premium for RIO. The stock is obviously worth more than A$50/share to the Chinese so anywhere under A$50.00 is cheap today." Says rumor has been around for some time. BHP ADRs close at A$42.40 vs A$40.40 locally yesterday. (DWR)

0923 [Dow Jones] COMMODITIES SUMMARY: Base metals lower overnight, weighed by USD rebound, and further consolidation may be in order before attempting new highs, say traders. Money markets under stress, trading volumes across base, precious metals fairly light as markets wait for clearer sense of direction; risks to global financial stability have "increased sharply," says IMF, noting potential losses from write-downs of bad debt approaching $1 trillion. Unless an outside factor - like CESCO copper conference underway in Chile - provides some bullish news, base metals could see further pressure, says BaseMetals.com analyst Will Adams. LME 3-month copper at $8,535/ton, down $185, lead off $65 at $2,895, zinc off $64 at $2,350, aluminum off $12 at $2,986, nickel down $175 at 28,850, tin off $50 at $20,400. Spot gold, silver lower overnight, but tick higher in early Asia; crude oil down overnight, too. "Gold and silver don't have any sponsorship right now," says Larry Bilello, MD at B&C Trading; "the dollar feels like it's bottoming a bit. There was no follow-through on yesterday's rally." IMF decision to sell some gold has limited impact, though may have muted recent rally; IMF plans have been afoot for some time, still need approval from U.S. Congress; officials presumably will undertake sales in a manner that won't cause havoc to market. Spot gold at $917.00/oz, +$1.60 vs NY close, silver at $17.73, +6 cents, platinum at $2,017.50, down $10.50, palladium at $449, down $5. Nymex crude futures up 33 cents at $108.83/bbl.(EFB)

0757 [Dow Jones] AUD/USD expected to consolidate around current levels in Asia ahead of G7 meeting this weekend, says Macquarie Bank associate FX director Joanne Masters. AUD/USD sidelined in European, U.S. sessions but well supported. "It's caught by conflicting pressures", with USD recovering against EUR, JPY after upbeat sentiment on Wall Street, Goldman Sachs CEO comments suggesting end for credit woes may be near. However, AUD resilience driven by strong coal contract gains, speculation about mining stocks. "Those sort of things have kept the Aussie on the radar and provided some support when other currencies have weakened against that stronger U.S. dollar." Expects AUD/USD to make move back up to 0.9350-0.9360 "but not through that". Latest 0.9315. (SRH)

0828 [Dow Jones] Shares in Tatts (TTS.AU), Tabcorp (TAH.AU) poised for heavy falls on yesterday's decision to abolish their pokie machine duopoly in Victoria post-2012. But trading likely to be volatile, given the decision was such a surprise and the huge uncertainty now surrounding their future revenue streams. Tatts and Tabcorp both expected to pursue legal action for compensation. Pre-market trades suggest both stocks to fall more than 13%. TTS last trade A$3.66, TAH A$14.37. (SVM)

0840 [Dow Jones] WALL STREET: Stocks up but ended off highs, weighed by some late selling in financial names; DJIA ended +0.4%, Nasdaq +1.3%, Philly semicons +1.8%. "The credit crisis is still very much with us," says one strategist; Fed "action has allowed financials to take more time with this, but it's still a process and not an overnight process." Merrill Lynch, which will report 1Q earnings next week, fell 2.9%; Lehman off 0.7% after liquidating 3 investment funds after stressed markets caused funds' assets to decline in value. Techs helped by jump in chip shares after Banc of America upped sector to overweight; Intel +3.1%, Analog Devices +5.1%. Yahoo +3% after WSJ reported it and Time Warner's AOL are closing in on deal to combine Internet ops, in bid to thwart Microsoft's effort to buy Yahoo. However, Microsoft is recrafting its plan by talking with News Corp. Wal-Mart +1%; it boosted 1Q earnings forecast after reporting 0.7% rise in U.S. same-store sales, excluding fuel. Transport stocks perked up with index +1.4% amid a halt to recent surge in oil price. Millennium Pharma +49% on deal to be bought by Japan's Takeda. Majors mostly quiet after-hours.(RXM)

0853 [Dow Jones] STOCK CALL: Citi cuts Tabcorp (TAH.AU) to Sell from Hold on surprise decision by Victorian Government to move to a venue-owner model of gaming machine licensing. However, analyst says removal of the gaming license eliminates the conflict that precluded Crown (CWN.AU) from bidding for TAH, and the opportunity for further corporate action could keep a floor under TAH. "But, CWN has other large acquisitions underway, and capital market conditions are not conducive to a raising of size, limiting near term potential for a bid," analyst says. Expects TAH will pursue compensation from the Victorian Government for refund of license payment. Price target cut to A$11.17 from A$14.80 vs last trade A$14.37. (SVM)

0854 [Dow Jones] STOCK CALL: UBS cuts Bank of Queensland (BOQ.AU) target to A$15.75 from A$19.50, but keeps Neutral rating, after bank's 1H result. Says result looks reasonable, but outlook remains difficult. "BOQ appears to be bunkering down to ride out the tougher environment," analyst says. Cuts FY09 EPS estimate by 3% given ongoing funding pressures, tips 23 basis points in margin pressure for FY08 and a further 18 bps for FY09, which analyst notes will be partially offset by strong lending growth. BOQ last at A$15.75. (LMF)

0857 [Dow Jones] Citi says Tatts (TTS.AU), Tabcorp (TAH.AU) will likely pursue compensation from the Victorian government for refund of license payments. "The claim by the Victorian government that neither operator is entitled to a refund may be "posturing", in order to appease anti-gambling groups, as to make a refund after being ordered to by a court is politically more saleable than to hand over money willingly and without putting up a fight," analyst says. Maintains TTS at Sell; TAH cut to Sell from Hold. (SVM)

0857 [Dow Jones]Citi says changes in Victorian gaming will impact Woolworths (WOW.AU) as the largest gaming machine operator in that state (44% of hotel machines). "While details are limited, we fail to see benefits to WOW because gaming licences will be costly and taxes favor small hoteliers," analyst says. Based on results in Queensland, estimates licences may cost A$150,000 to A$200,000 each, implying an outlay of A$850-$1,150 million for WOW's ALH business. "WOW will receive more gaming machine revenue given the operator has been cut out of the process," analyst says. "However, WOW will incur costs in buying and operating machines, amortising the licences and interest costs in servicing the debt to acquire the licences." Estimates WOW's pre-tax profit could fall by A$33-$121 million. Maintains WOW at Hold. (SVM)

0904 [Dow Jones] S&P/ASX 200 offshore leads mixed, with SPI futures up 2 points at 5481 amid modest gains on Wall Street and falls in commodity prices. DJIA up 0.4% at 12581.98, S&P 500 up 0.5%, Nasdaq up 1.3%. U.S. 10-year bond yield up 6.4 bps at 3.53%. AUD/USD up 41 points at 0.9324. Nymex crude down 76 cents at US$110.11. Spot gold down US$4.90 at US$928.80. LME copper down 1.0%, zinc down 1.0%, aluminum near flat, nickel up 0.5%. BHP Billiton ADRs at A$41.85 equivalent vs A$42.00 locally. S&P/ASX 200 last 5446.4. (DWR)

0905 [Dow Jones] Bank of Queensland's (BOQ.AU) 1H result provides a mixed read-across for the sector, says Merrill Lynch. Says while BOQ's margin result will create concerns for all banks, analyst notes BOQ has a greater and increasing reliance on the wholesale funding markets compared to peers "and may be suffering from being crowded out as larger and more highly rated banks tap these markets more aggressively." Analyst says offsetting this, the retail & SME asset quality performance is "reassuring for all banks." Keeps Sell rating on BOQ after the result. (LMF)

0912 [Dow Jones] STOCK CALL: ABN AMRO downgrades Tabcorp (TAH.AU) to Sell; price target cut to A$10.77 from A$15.55. "We would expect TAH to maintain its wagering monopoly from 2012, although we believe this will not offset the loss of around 25% in revenue/EBITDA from Victorian gaming and the loss of around A$700 million in licence expiry payments," analyst says. Last trade A$14.37. (SVM)

0740 [Dow Jones] WALL STREET: Stocks rose as financials like JPMorgan Chase clawed back some losses while oil's record price run helped Exxon Mobil even as it damped enthusiasm about an airline merger deal; many midsize banks and financial firms rose as investors took heart from earnings reports, hoping credit problems were not as systemic as feared after Wachovia reported Monday. Larger financials also benefited with insurance giant American International Group up 1.9% and JPMorgan Chase adding 1.5%. Charles Schwab gained 9% after the discount broker reported 1Q earnings growth, helped by new client assets; M&T Bank added 6.3% after the bank posted higher 1Q profit boosted by a gain related to its interest in credit-card Visa's IPO; Northern Trust gained 4.7% after its 1Q profit was also buoyed by the Visa debut. However, State Street fell 9.9% despite posting earnings growth as Fitch Ratings placed the money manager's credit ratings on watch due to subprime mortgage loan concerns. Among oil majors Exxon Mobil rose 1.2% as oil futures closed at yet another record high. However, rising fuel costs weighed on airlines with Delta Air Lines down 13% and Northwest Airlines down 8.4% even after they unveiled a merger deal; Continental Airlines was down 7% and United Airlines parent UAL fell 5.5%. Dow closed up 0.5%, Nasdaq +0.5%, Philly Semicons down 0.2%. (SRO)

0831 [Dow Jones] Citi says QBE (QBE.AU) could raise offer for IAG (IAG.AU) to as much as A$4.50/share and still generate EPS accretion of 10% in FY10, assuming synergies could be raised to A$400 million. Doesn't see significant scope for competing bids, and no obvious candidates. "Commonwealth Bank (CBA.AU), Allianz, Zurich and a Chinese insurer could be on a list of possibilities, but none seems that likely given QBE potentially has higher synergies," analyst says. Raises IAG target to A$4.00 from A$3.60, keeps at Hold. Also says while some time is needed to digest the transaction from QBE's perspective given a potential significant increase in shares on issue, cuts target to A$24.00 from A$28.00, keeps at Hold. IAG last at A$4.19, QBE at A$22.90. (LMF)

0842 [Dow Jones] STOCK CALL: Credit Suisse upgrades David Jones (DJS.AU) to Outperform from Neutral due to recent relative share price movements. "Since March 6, DJS's share price has fallen 15.2% while the S&P/ASX 200 has fallen 0.6%," analyst says. Price target A$4.50 vs last trade A$3.40.(SVM)

0856 [Dow Jones] QBE's (QBE.AU) A$7.4 billion takeover approach to IAG (IAG.AU) likely to be "step one" in what might prove to be a long, drawn out battle, Merrill Lynch says. "Strategically we find it difficult to believe QBE would bring a takeover offer that is masquerading as a nil premium merger that is (in QBE's view) in the best interest of all parties to the table, up the bid with a modestly higher second low-ball offer, make it all public to engage IAG shareholders in the debate and pressure IAG's board and then walk away from the whole thing without lifting the offer on 21 April when the offer folds," analyst says. Still, says QBE may have delivered IAG "the perfect get out of jail free card", notes proposal will underpin IAG shares irrespective of whether QBE pulls out. "The completion of the deal would no doubt see significant, perhaps necessary change forced upon IAG and could result in the businesses capital issues being resolved." Has Buy rating on QBE with A$30 target vs last trade A$22.90, and Neutral rating on IAG. (LMF)

0906 [Dow Jones] Tabcorp (TAH.AU) to begin a cost-cutting program as well as freezing capital spending in its gaming division following the loss of its Victorian gaming machine license after 2012, The Australian Financial Review reports. Without citing its sources, the newspaper says Tatts (TTS.AU) is believed to have also halted capital spending in its gaming division, and is looking to increase the role of its Maxgaming monitoring business. No real surprises, with TTS, TAH expected to cut spending. Near-term focus likely to remain on their chances of recouping compensation. TTS and TAH weren't immediately available to comment. (SVM)

0909 [Dow Jones] ABM AMRO says recent weakness in Amcor's (AMC.AU) share price suggests the stock is approaching good value. AMC's restructuring of the European flexible packaging business will be a key factor behind a sustained recovery of its shares, ABN says in client note. Tuesday's sale of two plants was another important step forward and makes strategic sense as the plants are positioned at the commodity end of the market, ABN says. AMC aims to cut European plant numbers to 27 from 36, which means a further five will be sold or closed over the next 2 years. Keeps Hold, A$6.90 target. Last trade A$6.67. (ABH)

0911 [Dow Jones] S&P/ASX 200 offshore leads mostly bullish, with SPI futures up 71 points at 5519.0 after Wall Street rose amid strength in oil stocks and financials, offset by fall in airlines. DJIA up 0.5% at 12362.47, S&P 500 up 0.5%, Nasdaq up 0.5%. March PPI rose 1.1% vs 0.6% consensus, but core PPI met expectations of 0.2%. Johnson & Johnson fell slightly despite 40% rise in 1Q profit. NY Fed said regional manufacturing expanded slightly. Intel was up 7.9% in after hours trading on forecast higher 2Q profit margins. 1Q profit met expectations. U.S. 10-year bond yield up 6 bps at 3.57%. AUD/USD down 10 points at 0.9258. Nymex crude up US$2.03 at US$113.79, hitting record high of US$114.08 in after hours trading. Spot gold up US$3.50 at US$927.40. LME copper down 1.5%, zinc near flat, aluminum down 1.5%, nickel near flat. BHP (BHP.AU) ADRs at A$43.07 vs A$42.00 locally. Index last 5400.4. (DWR)

0916 [Dow Jones] STOCK CALL: ABN AMRO trims target price for Energy Resources of Australia (ERA.AU) to A$23.74 from A$23.78 as 1Q production disappoints. Says uranium output was 8% below ABN forecasts. "There is now pressure on the mill to perform throughout the remainder of 2008, although we remain positive on Ranger's expansion potential," ABN says. Maintains buy rating but says a further decline in the spot uranium price could lead to share price weakness in the near term. ERA last traded at A$20.08. (APW)

0918 [Dow Jones] COMMODITY SUMMARY: LME copper lower on technical selling, further losses are possible this week; market closely watching USD movements. Business out of China, other parts of Asia still slow for 3rd week in row. "We're not seeing any Far East or Chinese buying," says London-based trader; "Upside remains a stiff hurdle at the moment." Copper consolidating in $8,500-$8,800/ton range, says JP Morgan analyst Michael Jansen. LME tin bucks trend, hits new record high on continued concerns about output from Indonesia, world's largest tin exporter. Government plans to limit mining area available to new exploration and exploitation projects for metals including tin. LME 3-month copper down $130 at $8,420, aluminum down $46 at $2,999, lead down $77 at $2,838, zinc down $5 at $2,300, nickel down $5 at $28,895, tin up $180 at $20,975. Spot gold retreats from overnight highs, stays in range; sign of more consolidation to come considering precious metals unable to benefit more from record highs in crude oil, surge in U.S. PPI data indicating rising inflation. "It (gold) can't get out of its own way," says Tom O'Brien, precious-metals analyst and editor of The Gold Report newsletter; "Gold should have moved big time because of what the crude did and because of the PPI." Spot gold at $926.50/oz, down $2.20 vs NY close, silver at $17.78, down 7 cents, platinum at $1,974, down $2, palladium at $448.50, down $3.50. Nymex crude down 20 cents at $113.59/bbl, after topping record high of $114.08 overnight. (EFB)

0918 [Dow Jones] STOCK CALL: Citi boosts United Group (UGL.AU) to Buy from Hold and target price to A$16.00 from A$12.00 to reflect share price decline. "Despite hiccups, business fundamentals remain strong - UGL shares fell 45% on market weakness, 1H miss, and US recession concern," Citi says in client note. "But key elements of the UGL story remain sound - domestic infrastructure/resources spending remains robust, Unicco is highly defensive, and valuation is finally attractive." UGL trading at 13x forward PER and at parity with S&P/ASX 200, Citi says. "The story has been tainted, but the risk/reward is immensely better than just a few months ago." Last trade A$12.35. (ABH)

Stock Investors May Have Missed the Boat on Australia’s Rally
https://www.bloomberg.com/news/arti...obe-could-cut-8-of-finance-jobs-jpmorgan-says