Australian Stock Market Report – Midday 4/19/2012

MIDDAY REPORT
(12.30pm AEST)

The local share market is showing encouraging signs of growth at lunchtime in the East, despite falls on US and European markets overnight. European investors bailed out after bad loans surged in Spain overnight, while US markets eased due to disappointing results from IBM and Intel. After a shaky start, the Australian market is growing legs, with the All Ordinaries Index (XAO) up 13.8pts or 0.3pct to 4441 at 12.30pm AEST.

Fortescue Metals Group (FMG) appears to have been hit harder than its rivals, with March quarter results showing a big slump in exports but a steep rise in costs. FMG today reported a 15pct drop in amount of iron ore mined, processed and shipped, mainly due to cyclones in the Pilbara which temporarily shut its ports on the West Australian coast. However FMG expects costs to come down in the June quarter, its share price up 1.4pct to $6.01.

Energy producer Santos (STO) has reported a 50pct jump in first quarter revenue, compared to a year earlier, thanks to new projects in Western Australia, Indonesia and Vietnam. STO has also maintained its annual production guidance, sending its share price firmer by 0.9pct to $14.12.

Elsewhere today, global property developer Stockland Group (SGP) has announced it will trim executive bonuses after a review of its remuneration policies. Managing director Matthew Quinn will not receive a pay rise in fiscal 2013 while his short term bonus potential has been cut from 200pct to 125pct. Senior executive bonuses have been scaled back by the same amount, however there will be change to long term incentives. SGP shares are up 1pct to $3.04.

The Australian dollar is buying US103.66c, £0.6465 and €78.99c.

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