Australian Stock Market Report

MIDDAY REPORT
(1.10pm AEST)

After another low trading and low news day the European and US, markets closed slightly weaker. Investors were still concerned about key economic news and announcements later in the week. As European investors wait on the outcome of the Euro leaders meetings in Greece and the US investors await on key housing data and Chinese economic news. Yesterday Chinese market hit a new 52 week low and the Aussie market lost nearly 2points to 4,391 points.

Today the Australian share market opened only slightly higher up 2points, with the All Ordinaries Index (XAO) up 30 points to 4,421 by lunch time.
Once again a number of key companies going ex-dividend today, this has taken money out of the markets and reduced the value (and point status) of the market, and a mixed read on the company reporting front and concerns about lower iron ore prices holding the market back early on but now we have seen good gains coming back into the market.

The best performing sectors in early trade were the energy and the Industrials.
S&P/ASX 200 Materials sector added just over 0.25%. Overnight base metals lost ground on the London metals exchange (LME) in light trade and the spot iron ore price continued to slide now at a 2 and half year low. BHP Billiton (BHP) rose 0.6% or 22 cents to $33.25, ahead of its first half numbers that are due for release on Wednesday. BHP's rival in the iron ore space Rio Tinto (RIO) gained 0.26% to $54.64 and junior iron ore miner, Fortescue Metals Group (FMG) gave back another 0.85% to $4.07. Meanwhile, Bluescope Steel (BSL) came out with a $1.04Billion loss for the 2012 financial year yesterday, this morning Bluescope shares have fallen another 1.9% to $0.3875.

Today, Arrium Limited (ARI, formerly OneSteel Limited) is an integrated miner, manufacturer and distributer, reported its Full Year 2012 results. Underlying NPAT off 17% to $195 Million just below the unaudited numbers Arrium released to the market back in July. Arrium's profit fell 75% to $58Million, as expected over the last 6 months the company has been rebuilding/reinventing itself into a mining producer and moving away from being a distributer or ore as the business was struggling to make a profit in a tough market. The cost of the company's restructure and large write-downs to its distribution business hurt this year's numbers. The turnaround story is on track and Arrium's Mining division is expected to boost sales by the December quarter. Arrium's Australian steel division is still being impacted by weak demand and the higher Australian dollar, but the firm is controlling its costs. Ari share price has rallied in early trade up 11.7% to $0.905c.

Our largest listed gold producer, Newcrest Mining Limited (NCM) held up ok in early trade adding 0.7%, by lunchtime, to $25.20. The US dollar gold price lifted overnight, to close at the highest level since June, and now the US gold price is worth US$1,625an ounce.

The financial sector ended a touch higher, with the S&P/ASX 200 Financials index gaining by just 0.03%. Westpac Banking Corporation (WBC) was the weakest of the big four in early trade, after falling 0.8% to $24.76. National Australia Bank (NAB) rose by 1.5 to $25.29. ANZ Banking Group (ANZ) added another 0.5% to $23.50 while Commonwealth Bank (CBA) slightly higher up 0.05%.

S&P/ASX 200 Energy sector was the best performing sector yesterday morning, up 0.5%, helped by the US$ oil price moving back above US$96 a barrel in early Asian trade. Oil Search Limited (OSH) lost 0.6% in early trade, after reporting its Full year results this morning. After the companies expenses increased due to natural gas higher exploration charges in Papua New Guinea (PNG). Oil Search said that the part sale of some of its PNG gas assets in going well, with talk in advanced stages with some interested parties. Santos Limited (STO) saw its shares lift by 2.7% to $12.16 while Woodside Petroleum Limited (WPL) gained 2.4% in early trade.

On the reporting front, global packaging company, Amcor Limited (AMC) reported its Full year 2012 results today. Amcor reported a Report FY12 Net Profit after Tax (NPAT) of $635Million & dividend better than expected. Operational results in-line & cash flow was strong but the shares were hit early after the company's guidance for the FY 2013 year came in below market expectations Amcor off 1.8%

Mirvac Group (MGR) realised its Full Year 2012 numbers today, Mirvac's total revenue was off 7% to $1,751.9Million. Its Operating profit was up 2%, better than guidance and the firm also reduced its gearing and saw residential lot settlements come in ahead of target at 1,807, Mirvac shares down 1.8%.

Sonic Health (SHL)recorded a record Full Year 2012 Profit today, up 7.3% to $316Million but the result in-line with market expectations. Sonic told the market it was winning market share and its margins were also higher over the last year. This was a good result even with the added pressure of stagnant-to- low US growth and cost pressures in its Australian pathology unit. The market was looking for a little more from Sonics expected 2013 growth numbers and the shares off 1.37%

Elsewhere, in the media sector, Consolidated Media Holdings Limited (CMJ) in focus after it posted a $97.9Million profit, up 2.4% from the previous year´s $94.8 Million. Consolidated Media said it expects News Corp.´s (NWS) $1.97 Billion takeover bid to be completed by the end of this calendar year if given shareholder and court approval. CMJ up 0.29% and News Corp share price came off 1.15% to $22.28. Telstra Corporation Limited (TLS) climbed higher up 1.89% to $3.76 on the news that Foxtel and Channel 9 had been awarded the extension of its Broadcast rights of NRL for the next 5year starting in 2013.

The Australian dollar gained ground in morning trade to US104.81c and €84.82c.

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