Australian Stock Market Report – AFternoon 3/26/14

EVENING REPORT
(5pm AEDT)

The Australian share market rose convincingly today, helped out by strong gains from our mining players and a positive offshore lead. The All Ordinaries Index (XAO) closed off the highs of the day, but managed to rise 36.2 points or 0.7 per cent by close to 5387.2.

In late afternoon trade, the Federal Government announced it would be selling off the health insurer Medibank Private in an initial public offering (IPO). The specific timing and pricing of the IPO is yet to be revealed, but it's expected to occur within the 2014/15 financial year. The Government announced there is no reason for it to own or operate a private health fund.

In other news today, the Australian Competition and Consumer Commission (ACCC) gave the green light to Insurance Australia Group (IAG) to purchase Wesfarmer's (WES) insurance division in a $1.85 billion deal. The ACCC said the deal would not substantially weaken competition in the insurance market. The deal still requires approval from Federal Treasurer Joe Hockey, APRA and several New Zealand regulators. IAG rose by 1.1 per cent to $5.50 today while WES fell 0.4 per cent to $41.69.

Westfield Group (WDC) has secured $22 billion in funding for its plans to split its Australian and New Zealand operations from its international shopping centres. The Trans-Tasman operations will merge with Westfield Retail Trust (WRT) to create a new company Scentre Group while the international business will be renamed Westfield Corporation. WDC shares were down 0.3 per cent to $10.20 today while WRT fell 1.3 per cent to $3.01.

Sigma Pharmaceuticals (SIP) announced plans to buy wholesaler and distributor Central Healthcare for $24.5 million. Central Healthcare provides pharmaceuticals to hospitals and pharmacies in Victoria, New South Wales, Queensland and the ACT. SIP shares rose 3.3 per cent to 63c today.

In economic news, the Reserve Bank Governor has delivered a speech titled "The Economic Outlook" at the annual Credit Suisse Asian Investment Conference in Hong Kong. The Governor has provided the clearest message yet that policymakers are paying close attention to the rise in house prices and the need to ensure that borrowings remain within acceptable levels.

The Australian dollar rose on Governor Stevens' comments and was nudging US92c in afternoon trade.

2.1 billion shares changed hands today, worth $5.6 billion. 454 were up, 483 were down and 341 were unchanged.

Ahead tonight, durable goods orders are released in the US.