Australian Stock Market Report – Midday August 11, 2014

Buyers return to the fray

 Sellers regained control of the Australian share market for the first time in more than a week on Monday following a recovery for US markets at the weekend. US share markets rebounded sharply after Russia said it had concluded military exercises near the Ukrainian border. The Dow Jones index rose by 185 points or 1.1% with the S&P 500 index up by 1.2% . The ASX 200 started the session with a gain of 38 points and buyers were content for the index to maintain levels of that order for most of the morning session.

 Treasury Wine Estates (TWE) was one of the talking points in early trade. It has emerged that the winemaker has two private-equity takeover bids on the table. Last week KKR and Rhone Capital increased an earlier $4.70 a share cash offer to $5.20. TWE announced that it had subsequently received another cash offer at $5.20 from private equity group TPG. The competing bidder will conduct due diligence in addition to KKR and Rhone Capital doing the same. A short time ago TWE shares were at $5.24 up 11cents of 2.2 per cent

 Resource stocks were well supported across the board, although iron-ore producer BC Iron (BCI) was weaker after the group announced the purchase of Iron Ore Holdings (IOH) in a transaction valuing the explorer at around $251 million. BCI is offering 0.44 of its own shares and $0.10 in cash for each share in Iron Ore Holdings. Based on BC Iron's closing price on Friday, that values Iron Ore Holdings shares at $1.56 each. A short time ago IOH shares were at $1.38, a gain of 43 cents or 46 per cent.

 Lenders were amongst the best performers early in the session. Bendigo & Adelaide Bank (BEN) reported full year cash earnings that were well ahead of expectations. Higher costs and an increase in bad debt charges were more than balanced by the improved revenue growth and final dividend which was also ahead of expectations. BEN's net profit rose by 5.7% to 372.3 million in the year to June compared to $352.3 million a year earlier. Cash earnings, which remove one off items and costs, rose almost 10 per cent to $382.3 million compared with the consensus estimate of $378.7 million. New loan approvals rose 16% in the last year to take loans under management to $53.98 billion, 4.4% higher than a year earlier. The group said it would pay a final dividend of $0.33 a share, taking the full year payout to $0.64.

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Subscribe to get this delivered to your inbox dailyBuyers return to the fray

 Sellers regained control of the Australian share market for the first time in more than a week on Monday following a recovery for US markets at the weekend. US share markets rebounded sharply after Russia said it had concluded military exercises near the Ukrainian border. The Dow Jones index rose by 185 points or 1.1% with the S&P 500 index up by 1.2% . The ASX 200 started the session with a gain of 38 points and buyers were content for the index to maintain levels of that order for most of the morning session.

 Treasury Wine Estates (TWE) was one of the talking points in early trade. It has emerged that the winemaker has two private-equity takeover bids on the table. Last week KKR and Rhone Capital increased an earlier $4.70 a share cash offer to $5.20. TWE announced that it had subsequently received another cash offer at $5.20 from private equity group TPG. The competing bidder will conduct due diligence in addition to KKR and Rhone Capital doing the same. A short time ago TWE shares were at $5.24 up 11cents of 2.2 per cent

 Resource stocks were well supported across the board, although iron-ore producer BC Iron (BCI) was weaker after the group announced the purchase of Iron Ore Holdings (IOH) in a transaction valuing the explorer at around $251 million. BCI is offering 0.44 of its own shares and $0.10 in cash for each share in Iron Ore Holdings. Based on BC Iron's closing price on Friday, that values Iron Ore Holdings shares at $1.56 each. A short time ago IOH shares were at $1.38, a gain of 43 cents or 46 per cent.

 Lenders were amongst the best performers early in the session. Bendigo & Adelaide Bank (BEN) reported full year cash earnings that were well ahead of expectations. Higher costs and an increase in bad debt charges were more than balanced by the improved revenue growth and final dividend which was also ahead of expectations. BEN's net profit rose by 5.7% to 372.3 million in the year to June compared to $352.3 million a year earlier. Cash earnings, which remove one off items and costs, rose almost 10 per cent to $382.3 million compared with the consensus estimate of $378.7 million. New loan approvals rose 16% in the last year to take loans under management to $53.98 billion, 4.4% higher than a year earlier. The group said it would pay a final dividend of $0.33 a share, taking the full year payout to $0.64.

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