Australian Stock Market Report – Midday 11/27/2012

MID-SESSION REPORT
(11.50am AEDT)

Despite a flat start, local stocks are rallying at lunchtime in the East on reports Eurozone Finance Ministers have agreed to a voluntary buyback of Greek debt. Sources familiar with the situation say it would involve private equity investors taking a haircut, to receive 35c for every Euro of Greek bonds they hold.

At lunchtime in the East the All Ordinaries Index (XAO) is firmer by 32.5pts or 0.7pct to 4476.

Adding to the positive sentiment is encouraging news from two of our listed companies today.

Firstly, the blood products and vaccine maker CSL Limited (CSL) has announced a 20pct rise in expected full year profit, thanks to strong performance at its US subsidiary CSL-Behring and royalties from the cervical cancer vaccine Gardasil. CSL had previously forecast its FY13 profit would be up 12pct. CSL shares are up 7.4pct in early trade to $50.22 on expectations analysts will update their forecasts on the company based on the profit upgrade.

Elsewhere, gaming company Tatts Group (TTS) has secured the right to operate South Australia´s lottery and Keno services for the next 40 years in a deal worth $427 million. TTS shares have risen by 2.3pct in early trade to $2.895.

Among the banks, the ANZ Bank (ANZ) is up 1pct to $23.80, while in the materials sector, Rio Tinto (RIO) is firmer by 1.8pct to $58.21.

Retailer Harvey Norman (HVN) is scheduled to hold its Annual General Meeting today where it's no doubt shareholders will want to understand why the company has underperformed its peers in first quarter sales. Earlier this month HVN announced a 20pct drop in 1Q sales, compared to a more than 1pct rise in retail spending in the September quarter and gains in 1Q sales from David Jones (DJS) and Myer Limited (MYR). DJS shares are up 0.8pct at lunchtime to $2.44, MYR is down 0.7pct, while HVN shares are weaker by 0.8pct to $1.83.

The Australian dollar has risen on the expectation the Greek debt deal will be approved and is nudging US105c. It's also worth £0.6539 and €80.66c.

[Kick off your trading day with our newsletter]