Australian Stock Market Report – Midday 8/27/2012

MIDDAY REPORT
(12.20pm AEST)

The Australian share market has regained some Friday´s lost ground today. On Friday night we saw the US market rallying higher on expectations the US Federal Reserve members stated they were willing to restimulate the US economy if needed and positive comment out of Asia. The All Ordinaries Index (XAO) opened up 24 points higher, but by lunch had given back a bit of ground, holding on to a 15 point gain at 4,391 points.

The value of the exchange was hit again today by the number of key firms trading ex-dividend taking out cash from the market value of companies and paying it directly to shareholders. Today Woodside Petroleum Limited (WPL) has gone ex- div for just over $0.62 cents a share and ASX Limited (ASX) off $3.39 after going ex -dividend for $0.851cents. As well as Suncorp Group Limited (SUN) off over 3.1% or $0.28 after paying out $0.20 a share to shareholders.

The profit reporting season is now starting to wind down, with a smaller number of businesses announcing earnings today, some of the highlights have been Toll Holdings Limited (TOL) and Billabong (BBG).

Toll Holdings Limited (TOL) transport and logistics firm today reported its Full Year 2012 numbers today. Over the past few years Toll has been expanding its empire in the Asian Pacific region and into Africa. TOL is a major logistics services to the oil and gas, mining, marine and government and defence sectors. Transport group Toll Holdings posted a 76% fall in annual profit due to write-downs on its Japanese and Australia assets. There were no real surprises for the market today in this result because Toll had already updated the market at the end of March 2012. Toll's share price was a little lower in morning trade as the company did not give any guidance for FY13, Toll was off 0.88% to $4.51. Other listed transport firms were higher QR National Limited (QRN) up 0.7% to $3.55 and Asciano Limited (AIO) also higher up 1.34%.

Today the information technology sector was the best performer in early trade up 1.46%, the miners did well adding 0.64%, with gains in base metal and building related stocks. Australia's second largest miner, Rio Tinto (RIO) added over 1% to $52.33 while the larger BHP Billiton (BHP) lifted 0.23% to $33.16. Over the weekend BHP and its smaller Iron Ore rival Fortescue Metals Group Limited announced plans to expand the inner areas of the Port or Port Headland. This is great news for both companies and for the smaller iron ore players in the region. The new plan will help boost capacity, grow jobs in the area and the cost of adding on to the current facility is much less than building a whole new berth. FMG up 0.363% to $4.00 and Atlas Iron Limited (AGO) off 2.42% to $1.61 after reporting a lower than expected Full Year profit.

The energy sector is very volatile today as investors weigh up the resent reporting season results and Woodside going ex-dividend against the pop in the oil price. The US$ oil price has gained over US$1.50 a barrel in early trade to US$ 97.67 a barrel as concerns over US oil supply and transportation of current supply hit the markets. Over the weekend and into morning trade analysts are trying to gauge the impact of Tropical Storm Isaac as it head towards the, US, Florida coastline. Tropical Storm Isaac had shut 24% of oil production and 8.2% of natural gas output from the US Gulf region. Santos Limited (STO) shares were off 0 .5%, Oil Search Limited up 1.36% to $7.44 and Beach Energy Limited (BPT) up 3.69% to $1.26.

Our only listed petroleum refiner, Caltex Australia Limited´s(CTX) shares were off 1.16% to $15.31. The company reported its Half Year profit today up 74% to $197.4Million helped by strong demand and improvements in its refinery units.

The S&P/ASX 200 Financials index moved slightly higher by lunch up 0.1%. The big 4 banks are mixed, with ANZ Banking Group (ANZ) slightly higher up 0.18% to $24.83. National Australia Bank (NAB) adding 0.5% to $25.27, while Commonwealth Bank of Australia (CBA) gave back 0.25% to $54.71. The insurers were mainly higher with QBE Insurance Group Limited (QBE) up 0.68% to $13.24 and Insurance Australia Group Limited (IAG) up 1.48% to $4.11.

On Friday, Australia's largest supermarket chain, Woolworths (WOW) released its Full year numbers. Woolies announced a 15% slide in Net Profit after Tax (NPAT) to $1.82 billion. Its bottom line was impacted by the restructure of its Dick Smith Electronics chain. WOW's share price fell over 2% on Friday but today shares holding up ok, basically flat at $29.00 and rival in the food and drink space, Wesfarmers Limited (WES) up 1.2%. Billabong International Limited (BBG) outdoor and surf wear retailer listed a $275.6 Million loss hit by restructuring costs and low sales. BBG shares fell over 3.3% in early trade to $1.30.

The Australian dollar (AUD) is buying US103.88 cents, €83.07cents and £65.74 pence.

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