Australian Stock Market Report

MIDDAY REPORT
(1.10pm AEST)

After a restless session on overseas markets the Aussie market opened higher this morning.

The All Ordinaries Index (XAO) lifted at the start of trade, helped by gains in mining and banking stocks, up 24 points. But by lunch the market had reacted to the weaker than expected read on Chinese manufacturing and lost momentum with the All Ordinaries Index only holding on to a 1 point gain.

Today the S&P/ASX 200 Materials sector is in focus after BHP Billiton (BHP) Full year 2012 profit slide that was reported to the market later yesterday. BHP reported a Net profit loss of US$15.4Billion which was a 35% slide over the year. BHP and its rival Rio Tinto (RIO) both lost ground on the London exchange, but today the miners are helping the market move higher. BHP added 1.2% early in the session but by lunch was only up 0.4% to $33.28 while Rio lifted by 0.09%. Junior iron ore miner, Fortescue Metals Group (FMG) today reported its 2012 full Year numbers to the market. Fortescue listed a 53% rise in Full Year net profit from ordinary activities to US$1.02Billion, Fortescue said its cost did increase slightly over the year but it did report record iron ore production and sales and expected to sell 100% of its ore in 2013. Fortescue shares have lifted 1.4% straight after the release. But as the Chinese data crosses the screens the shares moved into the red and lost 0.7% to $4.13 by lunch. Sims Metal Management Limited (SGM) lifted 4.24%, to $9.58, today after reporting a $515Million loss for the Full year 2012, the company said it was aggressively lowering its prices reducing inventories and looking at new growth opportunities especially in China.

Mount Gibson (MGX) reported its Full Year 2012 Profit today, off 28% to $172.5Million. The company said the conditions were tough throughout the year due to the fall in iron ore price. MGX shares off 9.47%.

Our largest listed gold producer, Newcrest Mining Limited (NCM) added 2.7%, by lunchtime, to $26.55 helped by another strong lift in the US dollar gold price overnight. Gold is now holding at US US$1,663 an ounce after adding another US$ 22 an ounce in morning trade.

Rail and haulage operator QR National (QRN) reported it Full Year 2012 profit. QRN's revenue was up 10% and its underlying Earnings Before income Tax (EBIT) lifted by 52% to $584Million. The firm announced an on market buy-back today that will buy up to 10% of all current shares. QR national expects to see a small lift in coal volumes in 2013 but did not give any exact financial guidance to the market today. QRN's share price lifted early in the day and by lunch was up 1.87% to $3.53. Yesterday, Port & Rail firm, Asciano (AIO) reported its Full Year 2012 profit today its shares have lifted another 2%.

The four major banks were mixed, with Commonwealth Bank (CBA) down 0.5%, while National Australia Bank (NAB) lifted 0.2% to $25.31. Both Westpac (WBC) and ANZ Banking Group (ANZ) were just a few cents. Queensland based financial services company, Suncorp (SUN), lifted 2.25% while AMP (AMP) lost another 0.89% to $4.47.

Insurance Australia Group (IAG), the parent company of several insurance brands including NRMA and the UK´s Equity Red Star, has posted a 17% fall in annual profit to $207M. The result was impacted by a $297M write-down in the value of the company´s UK business. However cash earnings for the group were strong, up 17.5% to $583M in the 12 months to June 30 2012. IAG´s insurance margin, a measure of the profit it makes on premiums, also remains solid, up 26.1% to $823M. IAG expects its insurance margin to increase to between 11-13% in FY2013, assuming the company´s net losses from natural disaster claims do not exceed its budgeted allowance of $640M. ''We expect the momentum evident in FY12 will continue in FY13,´´ CEO Mike Wilkins said. Mr Wilkins also said efforts are underway to turnaround the under-performing UK business, which is close to breaking even. Shareholders will receive a fully-franked final dividend of 12c per share, up from last year´s payment of 7c. IAG shares today have lifted on the result up 3.13% to $3.96.

Qantas (QAN) reported its Full Year 2012 numbers this morning. Qantas posted an Underlying Profit before Tax of $95Million with a Statutory Loss after Tax of $244Million. The company said it had been hit by higher fuel cost and tough competition especially in the international space. Qantas said its fuel bill hit a new record high for $645Million over the year and it also announced it was cancelling its order of 35 B787-9s. QAN shares gained in early trade to be 3.85% higher at $1.21.

Private hospital group Ramsay Health Care (RHC) has posted a 14.5% rise in annual core net profit, the company´s preferred measure of earnings. Core NPAT for the 12 months to June 30 2012 came in at $252.6M, while reported NPAT - which strips out non-core items - rose by 23% on the year to $244.1M. The result was above expectations, with RHC also pleasing shareholders with an increased dividend and flagging stronger earnings in FY2013. Managing Director Christopher Rex said the ageing population is continuing to drive increased demand for health care, with the group expected to lift its core net profit and earnings per share by 10-12% in FY2013. RHC is also positive about opportunities to expand further overseas. RHC will pay a fully-franked final dividend of 34.5c per share, up from 29.5c in FY2011. Total dividend payments rose 15.4% on the year to 60c per share. RHC shares rose by 23% from June 30 2011 to June 30 2012, but are under-performing the overall market in early trade today. RHC shares fell in early trade to 24.01 off 2.12%

David Jones (DJS) has reported its fourth quarter 2012 sales today the company saw a fall of 1.3% in sales over the period (slightly ahead of expectations in the market). DJS has reaffirmed its expects its Full Year guidance will be down about 35-40% on FY2011´s numbers due to challenging retail condition. DJS share price fell 4.26% in early trade. Myer Holdings Limited (MYR) off 1.5%.

Telstra Corporation Limited (TLS) shares added another 0.13% to $3.72.5 and Telecom Corporation of New Zealand Limited's (TEL) share price fell 0.7%.

AGL Energy (AGK), the energy company´s share price lost 1.72% to $15.42 and Duet Group (DUE) unchanged in early trade.

The Australian dollar gained ground in morning trade but has given back ground now at US105.12c and against the euro to €83.83c.

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