Australian Stock Market Report – Midday 2/18/2013

MID-SESSION REPORT
(12.30pm AEDT)

The Australian sharemarket is improving by 0.6 per cent or 31.4 pts to 5086, adding to five straight weeks of gains. Global markets were mixed on Friday night, however U.S equities (shares) edged higher by a modest 0.1 per cent. Global investors could remain a little cautious today to overcommit due to the President's Day public holiday in North America. U.S shares will be closed on Monday however will return to trade normally on Tuesday.

Almost all sectors are higher at lunch, with the defensive utilities and telecommunication industries the exceptions. A number of Australia's biggest companies have going ex-dividend today, which has held their stocks back. The country's biggest telco and sixth largest business, Telstra (TLS) is down 1.62 per cent or 8 cents to $4.55 while Commonwealth Bank of Australia (CBA) is down 1.21 per cent or 80 cents to $66.23 and is the country's second biggest company. Both companies have gone ex-dividend today. This essentially means that if you purchased shares in either CBA or TLS today, you would not receive their next dividend payments, scheduled to be paid over the next few months.

This is week three of the profit reporting season and will be the busiest of this earnings period. Global packaging company, Amcor (AMC) delivered a $322M Underlying Profit in 1H12 (July to December 2012). This was largely in-line with market expectations. AMC manufactures a variety of products and has a presence in each continent. It makes rigid containers to carry drinks, water, juices and sauces. Its Flexibles division (the world´s largest of its kind) includes packaging for meat, fish and bread. AMC announced a $0.195 a share interim dividend, which will be paid to eligible shareholders on 27 March 2013. The strength of the Australian dollar had an adverse impact on its bottom line, costing the company around $20 million in after tax profit. The closure of its Queensland cartonboard plant cost AMC $83.7M. Our currency has risen to US103c from just US63.7c on 18 Feb 2009. Investors reacted well to the today´s report, with both profit and dividends on the improve. Its shares are 14% higher so far this calendar year. AMC is improving for the 5th straight year and has jumped by 113% in just 4 years.

Bluescope Steel (BSL) is 14 per cent higher after recording a modest $10 million underlying profit after a $136 million loss from a year earlier.

Specialty Fashion (SFH) is up 6.84 per cent or 6.5 cents to $1.01 after announcing a $17.97 million profit. Revenue jumped by 1.3 per cent and was helped by online sales. It confirmed the tough trading environment in 2012. It owns brands such as Millers, Katies, Crossroads, City Chic and has over 900 stores.

On the economic front, the latest Australia Bureau of Statistics (ABS) report on new cars sales has been issued. Car sales fell by more than 2 per cent in January however rose by a similar margin in December. Over the past year over 1.1 million new motor vehicles were sold, which is a good sign of confidence, car affordability, low interest rates and relative job security.

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, 1.1 billion shares have been traded worth just $5.45 billion. 495 shares are up, 379 are lower and 339 are currently unchanged.

The Australian dollar (AUD) buys US102.9 cents, €77.1 cents and £66.4 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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