Australian Stock Market Report - Midday 2/12/2012

LUNCHTIME REPORT
(12.15pm AEDT)

The local share market is trading flat in the early session, as investors respond to the passing of a new austerity plan by the Greek parliament. Opponents to the plan have rioted in Athens over the weekend, however the vote, which paves the way for a new bailout package for the stricken Eurozone country, is expected to bring some stability to European markets. The All Ordinaries Index (XAO) is up 5.5pts or 0.1pct to 4328.1.

Discount retailer JB Hi-Fi (JBH) has today reported a 9.4pct fall in first half profit for the six months to December 31, 2011; in what it has described as the most challenging period for retailers in many years. Net profit came in at $79.6 million, slightly above market expectations. Revenue increased to $1.77 billion, however comparable same-store sales were down 5.5pct in January and 3.9pct for the first six weeks of calendar 2012, a performance which does not bode well for the struggling retail sector. Investors however have responded positively to JB Hi-Fi´s 1H result, as the retailer had issued a profit downgrade in the lead-up to Christmas, yet still managed to increase the interim dividend by 1c per share. JB Hi-Fi´s outlook also remains positive, with early indications that February sales have been quite healthy. At lunchtime in the East, JBH shares are up 2.4pct to $12.29.

Also reporting today, industrial firm Leighton Holdings (LEI). The company has delivered a 57pct increase in 1H profit to $340 million, up from $217 million in the previous corresponding period. Leighton also says it's well positioned for 2012. However, Leighton has also reported a possible breach of law to the Australian Federal Police, in relation to work carried out by its company in Iraq. LEI shares are down 3.6pct to $23 in early trade.

Housing finance figures released today show the number of home loans approved in December rose 2.3pct to 48,453, above expectations. Total housing finance by value rose 3.8pct in December, seasonally adjusted, to $21.262 billion.

The Australian dollar is buying US106.99c, £0.6785 and €80.91c.

Juliette Saly, CommSec Market Analyst

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