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Sonic Healthcare Limited (SHL) said that it had priced US$250 million of notes to 13 investors in the United States. Sonic said the funds would be used to repay existing bank debt and extend Sonic’s debt maturity profit. Under the arrangement there were two tranches, with one at seven years, at a fixed coupon of 5.23%. Another US$155 million was for 10 years, at a fixed coupon of 5.73%.

pSivida Corp. (PVA) reported a consolidated net loss of US$1.6 million for the quarter ended September 30, 2009, compared to a consolidated net loss of $471,000 for the quarter ended September 30, 2008. The drug delivery company said the recent result included a $1.5 million non-cash expense for the change in fair value of derivatives associated with the company’s outstanding warrants denominated in Australian dollars, compared to a $1.3 million impairment a year earlier. pSivida said revenues totaled $3.4 million for the September 2009 quarter compared to revenues of $2.8 million the previous corresponding period.

The Warehouse Group Limited (WHS) reported a 1% drop in sales to $362.9 million for the quarter ended 1 November 2009 versus the previous corresponding period. The New Zealand based group said first quarter sales, adjusted for discontinued activities, were up 1.1% to $317.7 million with same store sales up 0.5%.

After adjusting for the discontinued fresh produce, frozen food and liquor operations, sales were up by 1.2%.

CEO, Ian Morrice, said it was the third consecutive quarter of same store sales growth.

”Although August was a solid trading month, September and October were below expectations highlighting a slow start to the sales of seasonal categories,” Mr Morrice said.

The company said Warehouse Stationery’s first quarter sales were up 2.2% to $45.2 million with same store sales up 3.8% on the corresponding period last year.

”In the high ticket categories impacted most during the downturn, the first quarter saw positive sales growth in technology and business machines but the market for office furniture remained below last year,” Mr Morrice said.

He added that retail demand remains unpredictable despite improving consumer confidence, which was illustrated by Thursday’s retail sales statistics.

“Also evident was the extent to which many specialist retailers who were particularly hard hit in the same quarter last year are seeing increased sales off this low base at the present time,” Mr Morrice said.

As at 1020 AEDT, Warehouse Group shares were unchanged at $3.30.

Toro Energy Limited (TOE) said it had acquired two exploration licenses from Liberty Resources Limited (LBY). The uranium project is in the Wiluna region of Western Australia, with the payment to be made via the placement of 5 million Toro shares valued at 20c each, valuing the exploration licenses at $1 million.

Galaxy Resources Limited (GXY) announced that it has received Environmental Approval by the Jiangsu Province Environmental Bureau for its Jiangsu Lithium Carbonate Plant. The emerging lithium producer said the progress with project approvals for the plant means that the company is on track to achieve first production of lithium carbonate in Q4 2010. Galaxy said Safety and the Energy applications are now being assessed.

Kentor Gold Limited (KGL) said it has moved a step closer to developing the Andash Gold-Copper Project after the shareholders of Aurum Mining plc approved the sale of the project at a General Meeting yesterday. Kentor said approval clears the way for Kentor to complete the US$15 million acquisition of Aurum’s 80% interest in the project on 22 December 2009. The acquisition cost includes the purchase of a construction and mining fleet that has already been assembled and transported to the Kyrgyz Republic. The company said it could now proceed to the financing and development of this company making project that would move Kentor to the status of mid-tier gold producer within two years.

China Steel Australia Limited (CNH) reported an unaudited $810,000 loss for the September quarter. The company said a major factor in the result was the conversion of its nickel pig iron plant near the city of Linyi in China’s Shandong Province to produce merchant pig iron MPI, with production at the converted plant only starting in August following delays. China Steel secured three MPI supply contracts with a Chinese steelmaker during the quarter.

Centrex Metals Limited (CXM) announced the signing of a five-year Hematite Ore Sales Agreement plus one-year extension option with Shenyang Orient Iron & Steel (Group) Co., Ltd covering the sale of 1 million tonnes per annum of Wilgerup hematite product. Centrex said 100% of Wilgerup annual production is now covered by long-term sales agreements. The company said the agreement finalises the hematite supply details that were the basis for Shenyang’s initial investment in Centrex in September 2006.

Wall Street ended a six-day rally as a strengthening US dollar placed pressure on the market. Energy and financial stocks struggled as investors locked in profits.

In economic news, 502,000 initial jobs claims were filed last week, the lowest level in 10 months.

Meanwhile, accorrding to the Treasury Department the federal deficit reached $176.4 billion in October.  

The Dow Jones shed 93.79 points, or 0.91%, to 10,197.47, the S&P 500 lost 11.27 points, or 1.03%, to 1,087.24 and the NASDAQ fell 17.88 points, or 0.83%, to 2,149.02.

Energy stocks tracked the price of crude lower. Exxon Mobil and Chevron shed 1.4% each, while ConocoPhillips lost 1.8%.

Bank of America, Citigroup and JPMorgan fell between 2.3% and 2.4%.

Morgan Stanley and Wells Fargo weakened 2.2% and 2%.

Hewlett-Packard lost 0.6% despite agreeing to buy 3Com for US$2.7 billion. 3Com shares surged 31.1%.

IBM and Apple slid 0.7% and 0.6%, while Microsoft and Oracle advanced 0.8% and 0.6%.

Chipmaker Intel shed 0.8% after agreeing to pay rival Advanced Micro Devices US$1.25 billion to settle a dispute. Advanced Micro Devices shares surged 21.8%.

Wal-Mart put on 0.5% after beating third-quarter EPS estimates and increasing full-year earnings guidance. However, the retailer reported third-quarter revenue that fell short of expectations and said fourth quarter EPS would fall short of consensus estimates.

Target dropped 2.4%.

General Electric slid 0.5% as it offloaded its security unit to United Technologies in a deal worth US$1.82 billion. United Technologies shares weakened 0.4%.

Machinery maker and Dow component Caterpillar fell 2.5%.

NYMEX light crude oil for December delivery lost US$2.34 to settle at US$76.94 a barrel.

COMEX gold for December delivery fell US$8 to settle at US$1,106.50 an ounce.

European Markets

European markets closed close to the gain line. Telco’s rallied on the back of positive earnings results, while merger news boosted airliners.

The UK benchmark FTSE 100 added 9.75, or 0.19% to 5,276.50. The French CAC40 shed 6.32 points, or 0.17% to 3,808.07, while the German DAX slid 4.39, or 0.08% to 5,663.96.

BT Group rose 3.7% after increasing its full-year earnings outlook. Rival UK telco Vodafone put on 1.3%, while Deutsche Telekom added 0.7%.

British Airways climbed 7.5% as board discussions made it clearer that a merger with Spain's Iberia was increasingly likely.

Air France-KLM advanced 3.4%.

French banks Société Generale and BNP Paribas fell 1.6% and 1.2%, while insurer AXA weakened 1%.

Commerzbank and Deutsche Bank dipped 1.6% and 0.8% as Royal Bank Of Scotland Group lost 3%.

On the other side of the line, Standard Chartered and HSBC gained 2% and 0.9%.

A fall in commodity prices sent resource stocks lower. Aussie peers BHP Billiton and Rio Tinto shed 0.9% and 0.6%, while Antofagasta lost 1%.

Anglo American and Xstrata bucked trend with gains of 1.4% and 1.2%.

Energy majors BG Group, BP and Royal Dutch Shell lost between 0.8% and 1%, while Total dipped 0.5%.

Peugeot rose 0.4% after the automaker upgraded its full-year outlook. Renault put on 2.4%, while Volkswagen dropped 5.1%.

Japanese Markets

On the busiest day for the Nikkei this month, the index sank to five-week lows as more than 80% of stocks retreated. Negative corporate earnings reports outweighed government commitments to keep interest rates low in the battle for investor sentiment.

The Nikkei 225 shed 67.19, or 0.68% to 9,804.49.

The volatile stock Aiful, which lends money to small businesses, slumped 6.5%.

Carmakers were stronger following an upgrade to select stocks by Goldman Sachs.

Fuji Heavy Industries, which makes Subaru cars, rallied 4.4%, while Honda climbed 1.8%.

Toyota rose 2.6%. Mazda bucked the trend, losing 1.9%.

Ebara, an industrial pumpmaker, slumped 9.4%.

Nippon Yusen K.K. tumbled 4% after announcing plans to issue more shares, diluting the stock. Fellow shipper Kawasaki Kisen K.K. slumped 6.1%.

Hong Kong Markets

Hong Kong stocks weakened 1% as the country’s premier warned that the global economics recovery would not be easy. Banks and property stocks led the slid. 

The Hang Seng fell 229.64, or 1.01% to 22,397.57.

HSBC fell 1.1% after reaching a 13-month high. ICBC and China Construction Bank lost 1.6% and 1.1%.

Bank of China shed 2.3%.

Bank of East Asia gained 2.1% to a 16-month high with anticipation of a takeover by the Malaysian conglomerate Guoco Group.

Taifook Securities climbed 12.9% with speculation China Construction Bank will be the major buyer in the sale of part or all of its 62% stake.

Citic Pacific spiked 9.1% after making an agreement to sell two-thirds of its Australian iron ore to Chinese Steel mills.

Property stocks Henderson Land and Wharf Holdings slipped 2% and 3.7%.

Geely Auto jumped 9.6% after consolidating a fundraising deal with Goldman Sachs.

Glaxy Entertainment dropped 3.4% as continuous changes in design plans for the Cotai Strip project resulted in increased costs.

Directors' Interest Notices
12 November 09

Symbol	Shareholder	+/-	Prior	Now
APA	Michael J. McCormack		126,411	131,411
BHP	Don R. Argus		321,890	337,690
RMD	Peter C. Farrell		719,942	709,942

 

Substantial Shareholder Changes 
12 November 09

Symbol	Shareholder	+/-	Prior	Now
ABC	Commonwealth Bank of Aust.		6.67	5.67
CSR	IOOF Holdings Limited		-	5.44
DJS	Credit Suisse Holdings (Aust.)		5.20	-
FBU	AMP Limited		-	5.00
LGL	FMR LLC & FIL		10.05	8.84

All movements are percentage changes

Australian shares gave up morning gains of 0.6% to drift into negative territory as investors took profits following a rise in unemployment. Gains from the heavyweight miners were countered by declines in most of the other sectors.

In labour data, Australia’s unemployment figure rose to 5.8% in October, up from a rate of 5.7% in September. However there was a net increase in the number of jobs, up 24,500, mostly as part-time positions.

Meanwhile, according to a Melbourne Institute survey consumer inflationary expectations dropped from 3.5% in October to 3.2% in November. Inflationary expectations had remained at 3.5% for the three previous months.

At the close, the All Ords lost 7.7 to 4,758.2, while the ASX/200 9.1 to 4,747.9. About 2.7 billion shares worth around $5.4 billion had changed hands.

All the big four banks closed below the line Thursday, with Westpac the worst performer, down 24c to $26.04.

The Banks and Financials sector shed 0.5%.

Challenger Financial outperformed, adding 8c, or 2.1% to $3.88.

Insurer QBE lost 30c to $25.50, while IAG advanced 7c to $4.01. 

Macquarie put on 45c to $49.47.

Consistent gains across Materials and Resources saw the sector 0.8% higher. Base metals prices rose modestly on the LME last night, with Zinc rising 1% to $2,158 a tonne. 

BHP Billiton added 1.2% to $39.55 and Rio Tinto put on 1.9% to $69.84.

Between them the two companies contributed about 10 points to the market.

Investors continued to favour gold stocks as the price of gold reached new highs in what has been the best run for precious metal in 27 years. Newcrest and Lihir rose 0.7% and 0.9% to $35.58 and $3.44 respectively.

Bluescope was one of the major losers for the day, dropping 14c, or 4.6% to $2.89 after confirming that a strong Aussie dollar would see the steel maker post a small loss in the six months to 31 December.

Rival steel maker Onesteel was flat.

The Energy sector slumped 1.1% due to some weakness among the majors. The price of crude moved higher ahead of the release of US supply data.

Origin gained 1c to $16.40, while Oil Search weakened 6c to $5.90.

Woodside was trading down 90c to $49.06.

WorleyParsons, which was up 1.2% at lunch, slumped heavily in afternoon trade to finish down 67c, or 2.4% to $26.90 as it announced an offer to takeover Evans & Peck Group.

A 6c, or 0.5% loss to $12.53 from Westfield sent the Property Trust sector 0.3% lower. The sector heavyweight reported a 4.2% increase in retail sales in the third quarter to 30 September 2009 compared to the previous corresponding period.

Despite gains among transport stocks the Industrials sector finished 0.1% in the red. Airliner Qantas added 1c, or 0.4% to $2.78, while smaller rival Virgin Blue was flat at 51.5c despite a strong showing in the morning.

CSR gained 6.5c to $1.89 and Downer EDI fell 14c to $8.96.

Ausenco added 27c, or 6.3% to $4.54 after featuring heavily in broker reports this morning. The company received both a price target upgrade and a downgrade.

Leighton lost 38c, or 1% to $37.74 despite announcing at lunch time it had been awarded part of a $900 million contract to build a 2.1 kilometre jetty for the Gorgon LNG project.

Consumer Discretionary lost 0.3% after a mixed day. Surfwear retailer Billabong was the standout, climbing 1.8% to $10.74.

Gamer Aristocrat gained 3c to $4.55, while on the other side of the line David Jones and APN News & Media weakened 1.2% and 2.5% to $5.80 and $2.32 respectively.

In sector news, Kathmandu said its IPO was priced at $1.70 per share.

Foster’s lost morning gains in the Consumer Staples sector, finishing 0.6% down at $5.54.

AWB jumped 2.9% to $1.225.

Woolworths lost 14c to $28.00. Yesterday the retailer received ACCC approval to enter the retail hardware space.

The sector lost 0.6%

Information Technology rallied 1.3% on the back of a 1.4% gain from Computershare. The sector heavyweight's shares were trading at $11.09.

A 2c rise to $3.28 from Telstra resulted in a 0.4% advance for the Telecommunications sector.

Around the region, the Nikkei 225 shed 71.4 to 9,800.3, while the Straits Times Index lost 10.7 to 2,729.8. Across the Tasman, the NZSE50 added 10.5 to 3,172.1. The Hang Seng fell 111.2 to 22,516.0

Spot gold was trading at US$1,119.04 per ounce, and the Aussie was buying US$0.9334. 

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BlueScope retains 1H loss forecast
BlueScope Steel said it still expects to post a small first half loss as a result of a strengthening local currency, falling steel prices and the carry forward of higher priced inventory from FY09. The company also said it does not expect to declare a dividend when the half year results are finalised.

At the bell, BlueScope shares were down 14c to $2.89.

Leighton consortium awarded $900m contractLeighton Holdings said it, in a consortium with Saipem, has been selected as the preferred proponent to develop the $900m Chevron Gorgon LNG Jetty and Marine Structures project. The company said construction of the jetty is scheduled to commence in October 2010 on Barrow Island, 70 kilometres off the Pilbara coast of Western Australia, and is expected to be completed in 2013.

At the end of the day, Leighton shares were down 38c to $37.74.

Worley to acquire Evans & Peck

WorleyParsons announced an offer to takeover Evans & Peck Group Limited for $87.1 million, or the equivalent value of $30.00 per Evans & Peck share. In a statement released yesterday, WorleyParsons said it has signed an Implementation Agreement with Evans & Peck to make an off-market takeover bid through a wholly owned subsidiary.

At the close, WorleyParsons' shares were down 67c to $26.90.

Slater & Gordon acquires Kenyons
Slater & Gordon said it has acquired Kenyons Lawyers for a combination of cash plus $800,000 in S&G shares. S&G said the Melbourne based firm generates over $5 million in fees per annum, half of which from its motor vehicle injury and workers compensation practices.

At the finish, Slater & Gordon shares were unchanged at $1.70.

Centro hit by US weakness
Centro Retail Group said rental income growth for its Australian property portfolio had grown at 6.4% in the third quarter, building on the annual growth of 5.5% recorded at the end of June 2009. It was a different story in the US however, with rental income there decreasing 2.3% in the third quarter from the previous corresponding period.

At the bell, Centro shares were down 1c to 16.5c.

Westfield growth slows in the 3Q
Westfield Group reported a 4.2% climb in retail sales in the third quarter to 30 September 2009 from the previous corresponding period, as growth slowed from the second quarter, which saw retail sales up 5.1%. Westfield chairman Frank Lowy reaffirmed the group's guidance for CY09, with operating earnings and distributions expected to be in the range of 94 cents to 97 cents per stapled security.

At the end of the day, Westfield shares were trading down 6c to $12.53.

SP AusNet 1H profit growth up 10.5%
SP AusNet said it was on target to meet full year distribution guidance of 8c per share after the company reported underlying NPAT growth of 10.5% in the first half to $135.4 million. The result came on the back of a 12.3% increase in total revenue to $713.7 million, which was attributed to higher transmission and gas revenues under regulated price path and higher unregulated revenues from Select Solutions.

At the close, SP AusNet shares were unchanged at 87c.

BlueScope Steel Limited (BSL) said it still expects to post a small first half loss as a result of a strengthening local currency, falling steel prices and the carry forward of higher priced inventory from FY09. The company also said it does not expect to declare a dividend when the half year results are finalised.

BlueScope said it remains committed to resuming payment of dividends as a high priority once sustainable economic recovery becomes more certain.

The company said market conditions are improving worldwide and steel demand is rising, but cautioned that the transition to recovery after the global financial crisis would be slow.

Managing director and CEO, Paul O’Malley said domestic markets have been recovering over recent months.

”Export demand, particularly from external customers in Asia, and from the Company’s offshore affiliates in Asia and North America is improving,” Mr O’Malley said.

“December half export sales are in line with our expectations, and enquiries for the March quarter remain strong. Subject to this demand continuing, we intend to maintain operation of both Port Kembla Blast Furnaces at 100 per cent into the third quarter FY2010.”

Mr O’Malley added that international prices improved through the first quarter and into the early part of the second quarter, but have recently moderated.

”However, domestic prices will likely reduce in the third quarter in response to the potential for increased import competition due to the strengthening Australian dollar,” he said.

Mr O’Malley said the company intends to take a conservative view of the near term and maintain its strong balance sheet.

“Our main focus, in the short-term, will continue to be on reducing costs and increasing our sales” Mr O’Malley said.

In relation to the Federal Government’s Carbon Pollution Reduction Scheme Mr O’Malley said in its current form it would impose significant costs on the company’s Australian businesses that major international competitors would not face.

”Our competitors are mills in Asia, and many of them are in countries that are unlikely to impose comparable carbon costs on their steel industries in the foreseeable future,” Mr O’Malley said.

“Imposing such costs in Australia, ahead of major competitors will affect the international competitiveness of our Australian operations, making investment in these assets more and more difficult over time – and making it very difficult to invest in environmental abatement projects.”

Mr O’Malley said the company had been working with the Government on this critical issue and some progress has been made.

“We are encouraging the Government to provide incentives for investment in large-scale abatement projects such as the Steelworks Cogeneration Plant at Port Kembla – one of the single biggest carbon reduction initiatives in Australia,” he said.

As at 1524 AEDT, BlueScope shares were down 7c to $2.96.

Polaris Metals NL (POL) said it considers the value provided under the improved Mineral Resources Limited (MIN) offer of one Mineral Resources share and 50c cash for every 10 Polaris shares to be superior to the proposed Lion-Asia Resources offer. Under the proposed Lion-Asia offer, Polaris shareholders would receive $0.70 cash per share. Polaris said its board recommends that shareholders reject the proposed Lion-Asia offer and accept the Improved Mineral Resources offer, in the absence of a superior proposal.

Sipa Resources Limited (SRI) said it has reached an agreement to sell exploration license E20/546 to Sinosteel Midwest Corporation Limited ("SMC") for $450,000 plus a 0.2% “free on board” royalty for any iron ore production from the tenement. Sipa said the agreement is conditional upon SMC obtaining approval pursuant to the Foreign Acquisitions and Takeovers Act 1975 (Cth) as well as SMC board and shareholder approval. The license is adjacent to several properties currently held by SMC in Western Australia.

Black Fire Minerals Limited (BFE) announced the acquisition of the Karibib Lithium Pegmatite Project from Sunrise Minerals Pty Ltd. Black Fire said full and final consideration for the transaction would be 3.5 million shares in Black Fire, with these shares being subject to a voluntary 6-month escrow period. The company said the acquisition would be facilitated via Black Fire purchasing Sunrise’s private Namibian subsidiary, Starting Right Investments Ninety Four (Pty) Ltd. The agreement is conditional upon regulatory approvals to be satisfied within 30 days.

Leighton Holdings Limited (LEI) said it, in a consortium with Saipem, has been selected as the preferred proponent to develop the $900 million Chevron Gorgon LNG Jetty and Marine Structures project. The company said construction of the jetty is scheduled to commence in October 2010 on Barrow Island, 70 kilometres off the Pilbara coast of Western Australia, and is expected to be completed in 2013.

General Manager Western Region, Construction Division of Leighton Contractors, Ray Sputore, said the Saipem Leighton Consortium has proposed an innovative alternative structure design that would enhance local workforce participation and reduce the environmental impact during the construction of the jetty.

Mr Sputore said that concrete structures, known as caissons, would be manufactured at the Australian Marine Complex in Henderson, transported to Barrow Island and lowered onto gravel beds placed at intervals on the sea floor to provide a support structure for the jetty.

“By using these locally manufactured caissons we will avoid the traditional piled construction method, which would have required hundreds of steel piles to be driven into the sea bed – this will reduce both the length of construction and eliminate the noise and vibration associated with driving piles into the sea bed,” he said.

The company also announced that its Asian arm Leighton LLC has been selected by Mongolia Energy Corporation as its international mining contractor for the development of its Khushuut coal mine project in western Mongolia.

As at 1325 AEDT, Leighton shares were up 24c to $38.36.