Australian Stock Market Report

MIDDAY REPORT
(1.10pm AEST)

After a strong session here at home yesterday that pushed the All Ordinaries to a 3 and a half month high, markets in Europe moved higher overnight. As the trading day moved on money moved into mining stocks and commodity prices on comments from Chinese officials that more economic stimulus could eventuate in the next month or two. US markets fell away from the open of trade as investors took profits, especially in the tech sector, and the index closed below 4 year highs.

This morning the Australian market was expected to open lower even with the added advantage of higher commodity prices overnight. The All Ordinaries index (XAO) opened down around 10 points.
Today has been one of the busiest days of the August Australian corporate reporting season with key numbers from major miners, energy and health care providers. Early in the day weaker than expected trade numbers from Japan hit the screens and this was just one more reason our market was held back.

But lunch we saw the market increase its losses, with the All Ordinaries Index (XAO) down 14 points to 4,396 by lunch time.

Financial stocks were mixed our large banks all off over 0.5% while insurers and property firms moved higher. Westpac Banking Corporation (WBC) fell by 0.68pct to $24.70. The Commonwealth Bank of Australia (CBA) gave back 1.15% to $55.14.The National Australia Bank (NAB) only lost 0.5% to $25.22 while the ANZ (ANZ) off 0.46% to $24.83.
Suncorp Group (SUN) today reported its Full Year 2012 numbers. Suncorp's Net Profit lifted by nearly 60% to $724Million, helped by strong gains in its general insurance, lending and life units over the year. Special Div announced. Suncorp's insurance business is getting back on track after the record disaster payouts of 2011. Suncorp also announced a special dividend to shareholders today and its share price rallied 2.72% to $9.06. Insurance Australia Group Limited (IAG) lifted 1.32% to $3.84 and QBE also higher up 1% to $3.85.

The worst performing sectors in early trade were the energy and materials sectors.

S&P/ASX 200 Materials sector lost over 0.3%. Overnight base metals moved higher on the London metals exchange (LME) in light trade but the spot iron ore price continued to slide now at a new 2 and half year low. Index leader BHP Billiton (BHP) has seen its share price falling by 0.5pct to $33.12, ahead of the release of its first half results later today. BHP's rival in the iron ore space Rio Tinto (RIO) lost 0.6% to $54.08 with junior iron ore miner, Fortescue Metals Group (FMG) flat in early trade.

Our largest listed gold producer, Newcrest Mining Limited (NCM) held up ok in early trade adding 1.9%, by lunchtime, to $25.89. The US dollar gold price lifted again overnight, to close at the highest level since June, and now the US gold price is worth US$1,641 an ounce.

S&P/ASX 200 Energy sector lower this morning, off 1.5%, the fact the US$ oil price moving back above US$96.50 a barrel overnight did not help. Woodside Petroleum Limited (WPL) Energy firm Woodside off over 2.9% to $34.95 after its Half Year numbers were released to the market. The numbers were solid but the concern was about its cost and, well flagged, disappointing drilling results. Oil Search Limited's (OSH) moved higher up 1.4% while Santos Limited (STO) saw its shares fall 3.15% to $11.68, but Santos did go ex- dividend today accounting for $0.15 of its $0.38 cent fall.

Port & Rail firm, Asciano (AIO) reported its Full Year 2012 profit today. The result was in-line with the market expectations. AIO posted a 19.4% lift in Profit to $240.8Million. Asciano's coal and rail units did better than the market had expected, but the shares today have been hit by the company's lack of clear guidance for the 2013 financial year.

In the medical sector today, CSL limited (CSL), the blood and plasma maker and distributor reported its full year 2012 results. CSL showed its Full Year 2012 Profit increased by 15.9% to $983Million. CSL saw strong demand for its goods and sales lifted by 12%. CSL said that it expects market condition to stay the same for the rest of the FY 13 financial year and expects to see its Net Profit lift 12%.
CSL shares have lifted 1.75% to $42.05. Yesterday, international medical diagnostics company Sonic Healthcare Limited (SHL) reported a record profit the last year but its shares today fell 2.7% after investors voiced concerns over a fall in its US revenue. Today Sonic's share price has fallen another 0.4% in early trade.

Elsewhere, Arrium Limited (ARI), formerly OneSteel Limited, reported its FY12 results, with underlying NPAT down 17% to $195 million, just above the unaudited numbers ARI released back in July, of $191 million yesterday and its shares rose an impressive 11.7%. But the share price has given back most of yesterday's gains off 8.29% to $0.83 a share today. Atlas Iron Limited (AGO) off 2.45% while BlueScope Steel Limited (BSL) up 1.37% to $0.37.

Building products maker Boral Limited (BLD) has increased its full year profit by 5.3pct to $176.6M. However the result included $75M worth of significant items, and excluding those items net profit after tax came in at $101.2 million, at the lower end of Boral´s own guidance given back in June, due to a property sale falling through. Total revenue rose 6.4% to $5 billion. Chief Executive Ross Batstone said price gains, together with improved volumes in the United States, helped to offset volume declines across most businesses in Australia. Earnings The company said it plans to continue to reduce borrowings through operating cost savings, selling non-core assets and maintaining tight management of expenses. Boral's share price fell 0.6% to $3.48. in the same sector Fletcher Building Limited (FBU) fell 5.24% while James Hardie Industries Se (JHX) moved higher.

Coca-Cola Amatil (CCL) released its first half 2012 numbers today. The company said its profit was stronger helped by better sales in Australian and Indonesia delivering a Net Profit of $247.2Million, up 61%.Trading lifted in the half and its sales volume was up 3.1%, Earning were also higher up 4.9%. this result was expected by the market especially after its poor result over last summer due to the poor weather hitting sales. CCL's share price lifted 1.4% in early trade.

Global packaging business Amcor (AMC) shares lost another 3.4% to $7.40, after falling 0.8% yesterday.

Telstra Corporation Limited (TLS) yesterday announced it plans to close two call centres as customers move to the internet for self-serve options, and its share price rose 1.4% on the back of this yesterday. Today the shares added another 0.5% to $3.77 and Telecom Corporation of New Zealand Limited's (TEL) share price fell 1.15%.

AGL Energy (AGK), an Australian integrated energy company which owns, operates and develops renewable energy assets, has posted a sharp decline in Full Year profit. Net profit for the 12 months to June 30, 2012 came in at $114.9M, down 79.4% on FY2011´s number. The result was impacted by AGL´s purchase of Australia´s third largest coal fired power station. The acquisition of the Loy Yang power station in Victoria resulted in $174M worth of costs. Underlying profit, stripping out one-off items including the Loy Yang purchase, rose by almost 12% to $482M. That healthy rise was also helped by the addition of 180,000 new customers, and a 32.5% increase in its NSW customer base. Shareholders will receive a final, fully franked dividend of 32c per share, to be paid on all shares, including the new shares issued at a discount in June 2012. AGL has not issued specific guidance for the 2013 Financial Year, but expects good growth in its merchant business due to the Loy Yang acquisition. However soft demand for electricity could offset some of that growth. This morning the AGK's share price lost 0.73% to $15.63 and Duet Group (DUE) off 0.98%.

The Australian dollar gained ground in morning trade to US104.43c but fell against the euro to €83.77c.

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