Australian Stock Market Report – Midday 1/15/2013

MID-SESSION REPORT
(12pm AEDT)

The Australian sharemarket is off to a positive start for the second consecutive session, with the All Ordinaries Index (XAO) up 0.2 per cent or 8.1 pts to 4753.8. Global markets overnight ended mostly higher, with the Dow up 0.14 per cent, while shares in Germany and France also improved modestly.

Surfwear retailer, Billabong (BBG) received a new offer which matches last month's $526 million bid from another consortium. The group consists of VF Corp, which is an American apparel company in addition to Altamont Capital Partners; a private equity firm. This opens up the potential for a bidding war for the retailer. Its shares are currently up 12.72 per cent or 10.75 cents to 95 cents after kicking off trade an hour later than usual, at 11am (AEDT). BBG shares slumped by 41 per cent in 2012, fell by 78 per cent in 2011 and 25 per cent in 2010.

The miners are mixed, with BHP Billiton (BHP) and gold miner Newcrest Mining (NCM) helping to keep the sector positive. BHP is up just 0.08 per cent or 3 cents to $36.59 while NCM is 2.28 per cent or 49 cents higher to $22.43. Iron ore miner Fortescue Metals (FMG) is down 1.37 per cent or 6.5 cents to $4.67 while Rio Tinto (RIO) is slipping by 0.68 per cent or 45 cents to $65.54.

Three of the four major banks are currently higher, with Commonwealth Bank of Australia (CBA) up 0.63 per cent or 39 cents to $62.02 and is leading the charge higher. National Australia Bank (NAB) is 0.29 per cent or 8 cents stronger to $25.81 while ANZ Banking Group (ANZ) is up 0.16 per cent or 4 cents to $25.25.

No major economic news is scheduled for release in Australia or the region today. A barrage of indicators were issued yesterday however, with inflation remaining under control, job ads falling for the tenth straight month and the number of home loans issued slipping by 0.5 per cent in November (worse than expected). On a positive note, Australia is still remaining popular as a tourist destination despite the strength of our dollar. New Zealand is our biggest tourism market, with over 98,000 visitors in November 2012. There were 56,000 tourist arrivals from China over the same month and close to 50,000 from the U.K.

Looking ahead to European trade, German final CPI (inflation) numbers will be out at 6pm, the French government balance is out at 6.45pm (AEDT) and the Eurozone's trade balance is due for release at 9pm (AEDT).

In the U.K, the latest inflation reading will be released in addition to the Bank of England's inflation letter. This gives some insight into the future of the central bank's monetary policy action.

In the U.S, retail sales and producer price data will be out for the month of December.

Plenty of companies in North America will be issuing profit numbers this week, including eBay, Goldman Sachs, JP Morgan Chase, BNY Mellon, American Express, Bank of America, Citigroup, Intel, General Electric and State Street. It will be quiet tonight, however the earnings season intensifies tomorrow onwards.

Following the start of daylight savings in October, major markets in the region will be trading between the hours mentioned below until April 2013.

The Hong Kong sharemarket trades in two sessions each day and will now open for trade between 12.30pm (AEDT) and 3pm (AEDT) while the second session is between 4pm (AEDT) and 7pm (AEDT).

Out of Japan, the first session will be between 11am (AEDT) and 1pm (AEDT) while the second session is between 2.30pm (AEDT) and 5pm (AEDT).

The Singapore exchange will be open for trade between 12pm and 3.30pm (AEDT) for the first session and then between 5pm and 8pm (AEDT) for the second.

U.S futures are currently pointing to a slightly stronger start to trade tonight. The U.S market trades between 1.30am (AEDT) and 8am (AEDT).

So far in trade at lunch, 629 million shares have been traded worth just $1.15 billion. 403 shares are up, 362 are lower and 291 are currently unchanged.

The Australian dollar (AUD) is stronger and buys US105.6 cents, €78.9 cents and £65.6 pence.

The AUD is the world's fifth most traded currency behind the U.S dollar, the Euro, Japanese Yen and British Pound. The AUD accounts for around 7 pct of all foreign exchange trades.

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