Australian Stock Market Report – Afternoon 8/29/2012

AFTERNOON REPOT
(5pm AEST)

Local stocks eased slightly today, with investors still opting to shy away from risk ahead of this weekend's Jackson Hole symposium, where central bankers from around the globe will meet to discuss the ongoing European debt crisis. The All Ordinaries Index, which gained 0.3pct yesterday, eased by 5.5pts today to 4381.5.

Mining stocks were the biggest drag on the bourse. Fortescue Metals Group (FMG) fell 6.4pct to $3.65 as spot iron ore prices fell below US$95 a metric tonne. BHP Billiton (BHP) lost 1pct to $32.76 while Rio Tinto (RIO) was weaker by 2.3pct to $50.54.

Reporting season is starting to die down but a couple of companies reported today. Project management firm Transfield Services (TSE) reported a full year net profit of $84.8 million, in line with guidance, however the company has been downgrading its guidance all year. TSE also announced CEO Peter Goode will leave the company at the end of September with no firm replacement announced, although former Iluka director Graeme Hunt will fill in on an acting CEO basis. TSE shares today lost 6.6pct to $1.915.

Southern Cross Austereo (SXL) saw its profit rise by 48pct to $95 million, boosted by the merger of Southern Cross Media and the Austereo network last year. The company's revenue was also higher despite tough advertising conditions, with SXL saying it is well positioned to deal with a difficult advertising market in FY2012/13. SXL announced a final fully franked dividend of five cents per share, its share price rose by 1.2pct today to $1.245.

Engineering firm WorleyParsons (WOR) improved its underlying profit despite the impact of uncertain economic conditions and the high Aussie dollar. WOR saw its underlying profit rise by 16pct to $346 million, but said global economic conditions remain challenging. WOR shares today rose 0.5pct to $26.32.

Construction work fell by 0.2pct in the June quarter. Commercial building work done fell by 1.2pct in the June quarter with residential work down 2.4pct while engineering work rose by 0.9pct. The majority of residential work to be done (54pct) is apartments, as opposed to free-standing houses. The drop in residential construction will reduce economic growth in the June quarter by around 0.1 percentage point.

The Aussie dollar remains subdued and at 5pm AEST was buying US103.71c, €82.65 and £0.6559.

On the market overall, a total of 1.8 billion shares were traded, worth $4.1 billion. 412 were up, 521 were down and 354 were unchanged.

At 5.15pm the SFE 200 Futures contract was at 4345, down 7pts.

Ahead tonight, revised economic growth (GDP) figures are issued in the US.

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