Australian Stock Market Report – Midday 6/4/13

MIDDAY REPORT

(12.15pm AEST)

After a negative start to the session's trade, the Australian share market is slightly firmer at lunchtime in the East.

The Reserve Bank of Australia hands down its June interest rate decision this afternoon, however most in the market, including CommSec, are expecting rates to remain on hold. Money markets are only pricing in a 16% chance rates will be cut this afternoon.

Troubled surf-wear retailer Billabong (BBG) has resumed trade for the first time in a month. BBG shares plummeted by 57% on open to 19c after the company issued yet another profit downgrade and confirmed takeover talks with two parties had now ended. BBG says it is continuing talks with Sycamore Partners and Altamont Capital about certain assets, but neither group has offered a formal bid. BBG also expects FY earnings before one-off financial items to be between $67-74M, down from previous estimates of $74-81M. At lunchtime, BBG shares are down 43% to 26c.

Hearing implant maker Cochlear (COH) has rebounded from yesterday's sharp sell-off, following several broker upgrades. COH yesterday issued a profit warning due to slowing sales growth in the second half, sending its shares to their lowest level since October 2011. In early trade, COH is firmer by 5.5% to $55.80.

Elsewhere iron ore players are performing well following a rise in the iron ore price overnight. Iron ore rose to $111.90 a dry tonne, with Fortescue Metals Group (FMG) firmer by 5.7% to $3.44.

In economic data today, Australia's current account deficit narrowed to $8.51B in the March quarter, versus expectations of a deficit of $9B. Australia recorded a deficit of $14.8B in the December quarter.

So far on the market, 709 million shares have changed hands, worth $1.74 billion. 372 are up, 347 are down and 274 are unchanged.

CommSec will have full coverage of the RBA rate decision on our YouTube site this afternoon - www.youtube.com/CommSecTV

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