Australian Stock Market Report – Midday 8/16/2012

LUNCHTIME REPORT
(1pm AEST)

Local stocks are trading higher at lunchtime, following a mixed lead from overseas market and commodity prices. The European markets closed lower on growth concerns and rumours percolating around the markets that Spain is preparing to ask for an official bailout. The US markets were again mixed after stronger than expected US economic data have raised more doubts that the Federal Reserve will hold off from easing at its next policy meeting.

At lunchtime in the East, the All Ordinaries Index (XAO) had lifted by 26 22 points or 0.62pct to 4,337 points. As strong profit numbers and a lift in banking and energy stocks pushed prices higher.

The S&P/ASX 200 Financials sector was higher this morning, up 0.9%. Of the big 4 banks: Commonwealth Bank of Australia (CBA) added 1.09% to $56.66 and Australia and New Zealand Banking Group Limited (ANZ) added 0.76% ahead of its 3rd Quarter trading update due out tomorrow.

AMP Limited (AMP) released its first half Profit today listing a 10% lift in profit to $383 Million. AMP's result was boosted by added revenue and improved synergies from its acquisition of AXA Asia Pacific´s Australian and New Zealand units. AMP is paying out a $0.125c a share dividend for the first-half, which is at the lower end of the companies expected range. AMP shares up over 4.57% in early trade to $4.35.

ASX Limited (ASX) the company that runs our exchange reported its Full Year Net Profit today. Its profit fell 3.7% to $339.2 Million, with Revenue off 1.2%. The ASX capital expenditure cost met guidance $39.1 Million. CEO Elmer Funke Kupper said a drop in revenue and earnings in the second half of the year more than offset higher earnings in the first half. Lower trading from both retail & institutional investors and a lower risk appetite hit the ASX's underlying earnings, off 8.6%. ASX share price fell 1% $31.10.

The S&P/ASX 200 Materials sector gave back a little ground as market heavy weights: BHP Billiton Limited (BHP) and Rio Tinto Limited (RIO) lost ground, while Iron ore producer, Fortescue Metals (FMG) gained over 1.4% to $4.13. Our largest listed gold producer, Newcrest Mining Limited (NCM) started off weaker and slowly made back ground as the morning session went on, to finish up 0.23% by lunchtime, to $24.43. The US dollar gold price gained ground overnight, now at US$1,608 an ounce.

S&P/ASX 200 Energy sector was higher up 0.72%, helped by the US$ oil price moving back above US$94 a barrel overnight. The US dollar oil price is now holding at US$94.08 a barrel. Oil Search Limited (OSH) added 1.5% and Santos Limited (STO) up 1.07%. Woodside Petroleum Limited (WPL) gained 1% in early trade to $34.65 and Origin Energy Limited (ORG) slightly lower to $12.47.

Brambles (BXB) released its Full Year results today. Brambles Net Profit (NP) lifted 21% to US$576.3Million, the headline result was strong and growth is expected to continue despite weakness in major economies and brambles is continuing to invest in new developments for its pallet and pool businesses. But the market is concerned about the firms weaker than expected guidance for the 2013 Full Year and the fact the firm is still trying to find a buyer for Recall. Brambles share price has fallen 2.8% to $6.24.

InvoCare Limited (IVC), funeral homes, cemeteries and crematorium owner across Australia and Singapore, reported its Half Year 2012 report today. Total Sales were up 24.5% to $174.8Million, IVC had a Strong year helped by its Bledisloe acquisition & strong returns from its Singapore unit. Operating Costs continued to grow as business itself bloomed up 25.5% to $135.5Million. Higher margins from its Bledisloe business will help in the future and comparable funeral sales up 4.2% to $106.7Million. IVC share price was up 1.48% to $8.57. Pathology provider, Primary Healthcare (PRY) after is strong Full-Year profit yesterday gave back some of the9.8% rise yesterday off 2.3% to $3.38.

Wesfarmers Limited (WES) just after the market opened released its full year net profit. The profit was up 11% delivered a great result and its Coles supermarket numbers and margins were much higher than the market had expected. The company's cash flow is very solid and investors seem happy with the larger than expected final dividend ($0.95c) and strong outlook. WES share price lifted 4.2% to $33.85, rivals in the grocery spaces Woolworths Limited (WOW) up 1.13% to $28.60 and Metcash Limited (MTS) up 0.73% to $3.45.

Casino operator Echo Entertainment, which split from Tabcorp Holdings (TAH) have both seen their share prices falling today with Echo off 2.7% and Tabcorp falling 4.38% to $2.84. Telstra Corporation Limited (TSL) up 0.52% to $3.89 ahead of going ex-dividend early next week. AGL Energy Limited (AGK) higher up 0.2% to $15.30.

The Australian dollar is weaker across the board and at 1pm AEST is worth US104.92c and €85.39c.

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