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Dragon Energy Limited (DLE) announced the acquisition of three iron ore projects from Polaris Metals N.L. (POL). Dragon said the projects comprise seven tenements totalling 596 kilometres squared and have potential to host large scale hematite and magnetite iron ore deposits. The company said the acquisition terms include aggregate cash payment of $450,000, 100% acquisition of both Ashburton and Milly Milly projects, 75% of iron ore rights and 100% other mineral rights for the Lee Steere project. Dragon said it would sole fund the first $1 million of iron ore exploration expenditure on Lee Steere, while Polaris retains a royalty right of $1.00 per tonne of iron ore mined, capped at $10 million aggregate for all three projects.

Incitec Pivot Limited (IPL) became the latest company to shun the Australian debt market, choosing to place US$800 million in unsecured notes into the US 144A bond market. The funds raised from the notes, issued with a coupon of 6% over 10 years, would be used to repay the remaining  $352 million balance of the Company’s Working Capital Facility entered into in March 2009. The remainder would be used to pay back a portion of Incitec Pivot’s $1.68 billion Syndicated Facility entered into in September 2008.

Mining Projects Group (MPJ) said it has entered into a binding heads of agreement to acquire a 90% stake in Raptor Minerals (Pty) Limited for $1.89 million. MPJ said it considers Raptor’s granted prospecting rights located in South Africa have potential to host significant gold, uranium and molybdenum mineralisation. The company added that Raptor has a 70-74% interest in five prospecting rights, with three prospecting rights to be granted by the Departments of Minerals and Energy South Africa shortly. The acquisition remains the subject to relevant regulatory and shareholder approvals.

WorleyParsons Limited (WOR) said it has been awarded an engineering, procurement and construction management services contract for Spectra Energy’s Fort Nelson North Processing Facility Project located in Canada. The company said the project involves the design and construction of facilities, including a new natural gas plant, to process raw shale gas from the Horn River Basin area of northeast British Columbia. WorleyParsons said new natural gas plant would have the capacity to process 250 million cubic feet per day of inlet gas.

RBS – Round Up – 041209

The PNG LNG Project, which includes Santos Limited (STO) and Oil Search Limited (OSH), have finalised a binding agreement with Sinopec subsidiary Unipec Asia Co for the long-term sale and purchase of liquefied natural gas totaling approximately two million tonnes per annum. In a statement released this morning it said under the agreement, the PNG LNG Project would supply LNG to Sinopec for a period of 20 years.

Vice president, LNG, ExxonMobil Gas & Power Marketing Company, Ron Billings, said the LNG the group has committed would supply an LNG terminal that Sinopec is going to build in Qingdao, Shandong Province.

”Phase I capacity of the terminal is 3 million tons per annum,” Mr Billings said.

“With the developments of the market, we will expand the facilities to receive 5-6 million tons per year in a Phase II stage.”

Santos and Oil Search hold 17.7% and 34% interests in the project respectively.

At the close of trade yesterday, Oil Search shares were trading at $6.00, while Santos shares were trading at $15.15.

ConnectEast Group (CEU) earned $553,434 each day in November 2009 on its EastLink tollway, up 25.8% from November 2008, though down 0.3% from October. The toll for November was 5.2% higher than a year ago, with traffic up 19.4%, contributing to the rise. The number of trips each day on the Melbourne tollroad was more than 177,000.

Lend Lease Corporation limited (LLC) said it reviews a range of asset acquisition opportunities from time to time, which currently includes a potential acquisition of the ING Retail Property Funds. The company made the statement in response to speculation in today’s Australian Financial Review regarding the potential acquisition of the fund. Lend Lease said its involvement in the competitive process for the acquisition of the ING Retail Property Fund may or may not lead to a transaction.

Challenger Financial Services Group Limited (CGF) has been added to the S&P/ASX 100 index, replacing Viterra Inc (VTA). S&P Indices also announced several additions and removals to the S&P/ASX 200. The additions were Whitehaven Coal Limited (WHC), Kagara Limited (KZL), Mermaid Marine Australia Limited (MRM), Ardent Leisure Group (AAD), Carsales.Com Limited (CRZ) and Biota Holdings Limited (BTA). They replace Corporate Express Australia Limited (CXP), Nexus Energy Limited (NXS), Molopo Energy Limited (MPO), Astro Japan Property Group (AJA), AJ Lucas Group Limited (AJL) and Eircom Holdings Limited (ERC).

Leighton Holdings Limited (LEI) said its owned carrier Nextgen Networks has been announced as the successful tenderer for the Federal Government’s $250 million Regional Backbone Blackspots Program. The company said the program would put in place key infrastructure for the rollout of the National Broadband Network. The aim of the program is to reduce the cost of broadband services into regional areas. Leighton said it is in an advanced stage of project readiness and well positioned to commence construction activities shortly.

Wall Street lost ground Thursday ahead of the release of the November jobs report on Friday. New unemployment claims dropped from 466,000 the previous week to 457,000 last week, or its lowest level in 15 months. Forecasts were for a rise to 480,000.  

Meanwhile on Thursday, Ben Bernanke faced the Senate Banking Committee in a confirmation hearing for a further four-year term as Federal Chairman.

Bernanke is expected to be re-confirmed, however he faced heavy criticism and arguments were made in relation to the banks powers being reduced.

In consumer news, overall retail sales increased 0.5% in November according to reports, well down on an expected 2.1% rise. 

The Dow Jones shed 86.53 points, or 0.83%, to 10,366.15, the S&P 500 weakened 9.32 points, or 0.84%, to 1,099.92 and the NASDAQ lost 11.89 points, or 0.54%, to 2,173.14. 

Financials closed lower. Wells Fargo dropped 3.5%, while Goldman Sachs, JPMorgan and Citigroup were between 1.2% and 1.4% below the line.

Bank of America added 0.7% after announcing it would repay US$45 billion in TARP payments to the US government.

Principal Financial Group sank 13.3% after warning of a weaker than expected outlook.

Comcast jumped 6.5% after the cable operator agreed to acquire a 51% stake in NBC Universal from General Electric in a deal that creates a new entertainment company worth $37.25 billion. GE shares dipped 0.4%.

Retailers Nordstrom and Limited Brands gained 0.7% and 2.1% after reporting increased sales of 2.2% and 3% in November respectively.

However, a 17% drop in same-store sales versus a year earlier saw Abercrombie & Fitch shares slump 9.3%.  

Energy stocks tracked the price of crude lower. Exxon Mobil, Chevron and ConocoPhillips lost 1.1%, 1% and 1.3% respectively.

NYMEX light crude oil for January delivery fell US14c to settle at US$76.46 a barrel.

COMEX gold for February delivery rose US$5.30 to settle at a new record of US$1,218.30 an ounce.

European Markets

Data showing a contraction in the US service sector saw European shares close mainly lower. Resource stocks tracked metals prices lower.

The UK benchmark FTSE 100 lost 14.39 points, or 0.27% to 5,313.00. The French CAC40 added 3.19 points, or 0.08% to 3,799.11, while the German DAX shed 11.33 points, or 0.20% to 5,770.35.

Xstrata led the miners lower with a fall of 3.8%, while Rio Tinto weakened 3.3%.

Anglo American and Antofagasta fell 2.6% and 1.6% as BHP Billiton slid 0.5%.

Banks rallied on the back of Bank of America’s announcement. Royal Bank of Scotland, Lloyds and Barclays put on 4.7%, 4.4% and 2.4% respectively.

Commerzbank and Societe Generale added 1.5% each, while BNP Paribas bucked the trend to be 0.6% lower.

AXA gained 1.1% as speculation surfaced the insurer could launch a takeover bid for Irish Life & Permanent.

Peugeot lost 2.7% after the automaker revealed the possibility of buying a stake in Mitsubishi Motors. Renault and Volkswagen advanced 1.5% and 1.3%.

Siemens dropped 5.2% after the German industrial conglomerate took a large fourth quarter writedown on its JV with Nokia and warned of lower operating profits in 2010.

Japanese Markets

The Nikkei added its biggest one-day gain in seven months, hitting five-week highs. Mitsubishi led the way with a 13% rally on news Peugeot Citreon might buy a stake in the automaker, while exporters joined the party on a weakening yen.

The Nikkei 225 surged 368.73, or 3.84% to 9,977.67.

Among the banks, a relatively subdued sector of the market, Mitsubishi UFJ put on 2.3%, while Sumitomo Mitsui Financial Group rallied 2.8%.

Japan’s number three bank Mizuho closed 1.2% higher.

Among other automakers, Honda added more than 4%. Larger rival Toyota climbed 5.6%.

Meanwhile, for consumer stocks Canon jumped 5.4%, while Sony was up 6% as the yen weakened.

Sharp put on more than 4% following an upgrade to the stock from UBS.

Japan Tobacco was the third biggest gainer on news the Japanese government would raise taxes less than expected on the drug.

Hong Kong Markets

Hong Kong stocks rose for the fourth consecutive day as market sentiment continued to improve globally. Banks and property stocks led the rally.

The Hang Seng put on 264.30, or 1.19% to 22,553.87.

ICBC gained 1.2% on reports the bank is in talks to buy a 20% stake in Taiwan's Cathay Financial. The news spurred reports of further acquisitions in the sector.

Bank of China and China Construction Bank rose 2% and 0.8%.

Shimao Property and R&F Properties jumped 6.2% and 5.3%, while China Overseas Land put on 2.9%. Expected stronger earnings boosted the sector.

Henderson Land climbed 6% after the company said it expected to sell a large amount of property next year.

Zhaojin Mining and Sino Gold gained 1.3% and 0.8% as the price of gold reached record highs. The former also said it would bid for Zhaoyuan Canzhuang Gold mine. 

Origin Energy Limited (ORG) said that it would pay US$50 million to further the development of five explorations blocks across Laos, Thailand and Vietnam as a part of a farm-in agreement with UK oil and gas explorer Salamander Energy.

Origin said it could up the investment by a further US$40 million if exploration is successful to be spread over the current financial year and FY11.

In return, Origin added, Salamander Energy would have the right to acquire an interest in one of its exploration blocks in the region.

The company said the drilling of wells would begin early in the new-year in four of the five blocks with an operators estimate of oil in excess of 400 mboe.

Origin’s managing director, Grant King, said it would increase Origin’s exposure to supplying gas to the rapidly growing region.

“We are pleased to engage with Salamander, a company that has extensive experience operating in south-east Asia, and look forward to working with the company to develop opportunities in this region of growing energy demand,” Mr King said.

At the close Thursday, Origin shares were trading at $15.96.

Origin Energy Limited (ORG) said that it would pay US$50 million to further the development of five explorations blocks across Laos, Thailand and Vietnam as a part of a farm-in agreement with UK oil and gas explorer Salamander Energy.

Origin said it could up the investment by a further US$40 million if exploration is successful to be spread over the current financial year and FY11.

In return, Origin added, Salamander Energy would have the right to acquire an interest in one of its exploration blocks in the region.

The company said the drilling of wells would begin early in the new-year in four of the five blocks with an operators estimate of oil in excess of 400 mboe.

Origin’s managing director, Grant King, said it would increase Origin’s exposure to supplying gas to the rapidly growing region.

“We are pleased to engage with Salamander, a company that has extensive experience operating in south-east Asia, and look forward to working with the company to develop opportunities in this region of growing energy demand,” Mr King said.

At the close Thursday, Origin shares were trading at $15.96.

The Aussie market closed higher Thursday on the back of strong gains among commodity and discretionary stocks. The banks were flat as news filtered out that their US peer, Bank of America, would repay US$45 billion in TARP payments to the US government.

In economic news, according to the Australian Bureau of Statistics retail trade rose a seasonally adjusted 0.3% in October to $19.75 billion. The increase was in line with forecasts after a 0.2% decrease in September.

Meanwhile, new motor vehicle sales climbed 19.9% in the 12 months to the end of November. The rise in the Federal Chamber of Automotive Industries’ data was attributed to businesses taking advantage of government tax incentives to buy light commercial and sports utility vehicles.

At the end of the day, the All Ords added 12.6 to 4,789.3, while the ASX/200 gained 12.2 to 4,774.6. About 2.4 billion shares worth around $5 billion had changed hands. 

It was a mixed day for the big four banks, with Westpac adding 19c or 0.8% to $24.46 to be the best performing stock. The bank was forecast by some analysts to earn an extra $230 million due to its decision to increase interest rates by 45 basis points.

CBA shed 59c, or 1.1% to $54.11, while NAB dipped 12c to $28.68 as it matched the RBA by increasing interest rates by 25 basis points.

The Banks and Financials sector was flat.

Macquarie Group put on 99c to $49.09, while the insurers were mixed. Suncorp-Metway gained 30c to $9.18, while losing ground was AXA Asia Pacific, down 6c to $5.82.

The heavyweight miners matched the banks with BHP Billiton 1.3% higher at $42.47. Rio Tinto edged 3c lower to $73.51.

The broader Materials and Resources sector rose 0.9%.

Investors took a breather the gold miners today with Lihir and Newcrest Mining down just 5c and 7c to $3.68 and $39.19 respectively.

Nufarm bounced back from two days of heavy losses to close 34c higher to $10.85. At today’s AGM the company said it was on track to post an increase on last year’s profit, despite slow sales in the first half of the year.

Incitec Pivot rallied 20c, or 6.8% to $3.14.

Macarthur Coal added 43c to $9.77. Yesterday the company said it hoped to double coal production within 5 years.

The Energy sector was up 0.4%. Coal stocks outperformed, however, with Centennial Coal adding 13c to $3.54 and New Hope up 22c to 5.1% to $4.50.

Sector major Woodside lost 44c to $49.36.

Arrow Energy climbed 5.1% to $4.10 as it revealed current activities targeting expansion of the company’s 3P reserves are likely to lead to another upgrade in early 2010.

Consumer Discretionary stocks were 0.1% higher on the back of gains across the board.

Retailer Harvey Norman rose 5c to $4.47, while Pacific Brands added 2.5c, or 2% to $1.265.

Fairfax and Newscorp advanced 1.2% and 1.5% to $1.69 and $15.21 respectively.

Gamers Tabcorp and Crown advanced 1.2% and 1.4%.

Consumer Staples was off 0.4% on a flat day for the majors Woolworths and Wesfarmers.

Coca-Cola Amatil fell 1.8% to $10.97.

A 60c or 1.6% gain from Leighton to $37.45 was offset by a 17c or 2.6% fall from Brambles to $6.47, as the Industrials sector rose 0.1%.

Qantas outperformed among transport stocks, flying 4c higher at $2.79 in what has been a turbulent week for the stock.
 
Telstra, whose share price has risen 10% in the last month, was flat, with the broader Telecommunications sector also flat.

A $2.36, or 3.7% jump to $65.84 from Cochlear was more than offset by a 0.9% fall from heavyweight CSL to $31.48. The Healthcare sector weakened 0.1%.
 
Around the region, the Nikkei 225 added 315.6 to 9,924.5, while the Straits Times Index slid 2.1 to 2,794.2. Meanwhile, the NZSE50 put on 4.5 to 3,153.9. The Hang Seng put on 137.5 to 22,427.0.

Spot gold was trading at US$1,219.27 per ounce, and the Aussie was buying US$0.9285. 

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Nufarm FY10 profit to jump
Nufarm said at today’s AGM that it was expecting improved conditions this year to deliver an increased net profit above last year’s post-tax profit of around $80m. The company said this was despite a soft start to the year to date, which has seen sales down from the previous corresponding period.

At the end of the day, Nufarm shares were up 34c to $10.85.

Retail sales up 0.3%
According to the Australian Bureau of Statistics retail trade rose a seasonally adjusted 0.3% in October to $19.75 billion. The increase was in line with forecasts after a 0.2% decrease in September.

According to the Australian Bureau of Statistics retail trade rose a seasonally adjusted 0.3% in October to $19.75 billion. The increase was in line with forecasts after a 0.2% decrease in September.

The seasonally adjusted estimate increased 0.5% in August.

Meanwhile, in original terms Australian turnover increased 6.6% in October 2009 and 6% compared with October 2008.

Department Stores led the sales growth statistics, increasing 1.9%, while sales in Cafes, Restaurants & Takeaway Food Services and Household Goods Retailing rose 1.1% and 0.1%.

Sales in Clothing, Footwear & Other Personal Accessory Retailing and Food Retailing weakened 0.2% and 0.1%.

Looking at the states, the Northern territory witnessed the largest increase in sales, up 1.8%, while Tasmania wasn’t too far behind with a 1.5% rise. The largest fall was seen in Victoria, with sales down 0.9%.

 

Most Aussie shares made modest gains across most sectors helping the S&P/ASX 200 to rise 0.4% by lunch. The banks were flat as news filtered out that their US peer, Bank of America, would repay US$45 billion in TARP payments to the US government.

In economic news, according to the Australian Bureau of Statistics retail trade rose a seasonally adjusted 0.3% in October to $19.75 billion. The increase was in line with forecasts after a 0.2% decrease in September.

At midday, the All Ords added 14.9 to 4,791.6, while the ASX/200 gained 15.6 to 4,778.0. About 1 billion shares worth around $1.9 billion had changed hands. 

The big four banks by lunch had barely troubled the scorer with Westpac adding just 7c or 0.3% to $24.34 to be the best performing stock.

The Banks and Financials sector rose 0.2%.

Macquarie Group rose 98c to $49.08, while the insurers were mixed. Suncorp-Metway rose 27c to $9.15, while losing ground was AXA Asia Pacific, down 10c to $5.78.

The heavyweight miners matched the banks with BHP Billiton just 0.5% higher at $42.12. Rio Tinto eked out a 21c gain to $73.75. The broader Materials and Resources sector rose 0.7%.

On some days a record gold price urges gold stocks to outperform. On other days it doesn’t. Today, investors took a breather on Lihir and Newcrest Mining, which added just 2c and 28c to $3.75 and $39.54 respectively.

Nufarm bounced back from two days of heavy losses to edge 14c higher to $10.65. At today’s  AGM the company said it was on track to post an increase on last year’s profit, despite slow sales in the first half of the year.

Incitec Pivot rallied 15c, or 5.1% to $3.09.

Macarthur Coal added 32c to $9.66. Yesterday the company said it hoped to double coal production within 5 years.

Energy stocks were up 0.4%, though the predominant sentiment was lethargy with most trading close to the gain line. Coal stocks outperformed however with Whitehaven up 15c to $4.45 and New Hope added 19c to 4.4% to $4.47.

Sector major Woodside dipped 23c to $49.57.

Consumer Discretionary stocks were 1.4% higher on the back of gains from the retailers which benefited from the positive retail data, while media stocks also gained.

Harvey Norman rose 7c to $4.49 and Pacific Brands added 3.5c, or 2.8% to $1.275.

Fairfax and Newscorp advanced 1.8% and 2.3% to $1.70 and $15.33 respectively.

Yesterday Seven increased its stake in Jamie Packer’s Consolidated Media to just over 22%, though neither stock particularly interested investors this morning.

Consumer Staples was off 0.3%. Woolworths shed 12c to $27.97, while Wesfarmers was off just 1c at $29.39 per share.

This week the two companies have been trading places for the honour of Australia’s largest food retailer. By market capitalisation, both companies are valued around $34 billion.

A 59c or 1.6% gain from Leighton to $37.44 was offset by an 18c or 2.7% fall from Brambles to $6.46, leading to the Industrials sector being flat at lunch.

Among transport stocks Qantas outperformed, flying 7c higher at $2.82 in what has been a turbulent week for the stock.

Other transport and logistics stocks, including Toll, were effectively unchanged.

Telstra, whose share price has risen 10% in the last month, was flat to lunch, though the broader Telecommunications sector rose 0.2%.

Meanwhile CSL lost 34c, or 1.1% to $31.42, dragging the Healthcare sector 0.3% down.

Around the region, the Nikkei 225 added 199.5 to 9,808.4, while the Straits Times Index gained 3.5 to 2,799.9. Meanwhile, the NZSE50 put on 6.8 to 3,156.2.

Spot gold was trading at US$1224.13 per ounce, and the Aussie was buying US$0.9288. 

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Nufarm FY10 profit to jump
Nufarm said at today’s AGM that it was expecting improved conditions this year to deliver an increased net profit above last year’s post-tax profit of around $80m. The company said this was despite a soft start to the year to date, which has seen sales down from the previous corresponding period.

At noon, Nufarm shares were up 16c to $10.67