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Origin Energy Limited (ORG) said it had successfully synchronised to the grid the first turbine of its 630 megawatt (MW) Darling Downs combined cycle power station. The company said the first of three 120 MW gas turbines was synchronised yesterday as part of a commissioning phase which will extend over coming months.

Origin said the station is the centrepiece of an investment of more than $1 billion by Origin in providing cleaner natural gas-fired electricity.

The company said the milestone follows completion of the 205 kilometre domestic gas pipeline linking the power station to Australia Pacific LNG’s (a 50:50 joint venture between Origin and ConocoPhillips) coal seam gas fields in the Surat Basin.

Origin executive general manager for Major Development Projects, Andrew Stock, said the station would be one of the country’s cleanest baseload power stations with three gas turbines and a steam turbine, and would emit less than half of the greenhouse gas and use less than 3% of the water used by a typical water-cooled coal-fired power station.

“The gas turbines will be fired up one at a time during the coming weeks before the steam turbine comes on line early next year, with the power station on schedule to be fully commissioned in the June quarter of 2010,” Mr Stock said.

The company expects capacity of the Darling Downs Power Station to reach 2800MW by the end of 2010.

As at 1100 AEDT, Origin shares were up 21c to $16.04.

Goodman Fielder Limited (GFF) said it has entered into an agreement to sell its Commercial division edible fats and oils operations to Cargill for $240 million. The company said the sale price of the business, which processes edible fats and oils and supplies food manufacturers and wholesalers in Australia and New Zealand, was a significant premium to the carrying value of the business.

Goodman Fielder’s managing director, Peter Margin, said the business did not fit with the company’s strategic focus as a consequence of its decision earlier in the year to focus on its consumer brand portfolio.

The company said the sale agreement includes a 10-year supply agreement whereby Cargill would supply refined fats and oils products to Goodman Fielder in multiple formats for Goodman Fielder’s Home Ingredients brands and businesses.

Goodman Fielder said the asset sale includes the Commercial business’s four fats and oils refining facilities, while the company would retain title to the land at the Brisbane facility, subject to an extended lease back to Cargill.

Goodman Fielder’s New Zealand flour milling operations are not part of the sale and the company said it would also retain ownership of the part of its food service operations that does not relate to fats and oils.

“The sale of these assets will allow the company to focus on our core business which is the manufacturing and marketing of everyday branded consumer foods,” Mr Margin said.

As at 1022 AEDT, Goodman Fielder shares were up 2c to $1.63.

Ten Network Holdings Limited’s (TEN) chairman, Nick Falloon, said at its AGM that it was seeing improvements in the Australian advertising market and was benefiting from a stronger 2009 ratings performance in negotiations with advertising groups for next year.

"Network Ten has substantially completed its negotiations for 2010 with the major buying groups,” Mr Falloon said.

”These negotiations, coupled with our strong ratings performance in 2009, support our ongoing goal of achieving a 30 per cent share of revenue,"

The network's primary channel, TEN, was the only network to achieve share and audience gains in total people in the 2009 television ratings survey, the company added.

Mr Falloon said that despite the upturn in the economy there would still be a strong focus on cost controls.

"On a normalised basis, we expect the increase in television costs (ex selling) in 2010 to be in line with CPI,” Mr Falloon added.

The board said it had not decided on a dividend policy for the half-year to 31 December 2009. 

At the open Thursday, Ten shares were $1.54.

UGL Limited (UGL) announced the appointment of Robert Bonaccorso as its new Chief Financial Officer, effective immediately. The company also said it expects to maintain its previously stated earnings guidance for FY2010 with earnings significantly weighted to the second half of the year.

UGL managing director and CEO, Richard Leupen, said the company had noted a significant increase in activity within the resources sector, the infrastructure sector and a positive turnaround in the trading outlook in the USA property services sector.

As a result, UGL said it has a more positive outlook for the business returning to growth in 2011 and beyond.

The company said the appointment of the now former Group General Manager Finance, Mr Bonaccorso, was a result of an agreed separation between the UGL and Phil Mirams.

Prior to the last three years with UGL, Mr Bonaccorso held the position of Finance Director for Chubb Security Australia and before that headed up Planning and Analysis for the Mayne Nickless Express Group, which is now part of Toll Holdings.

At the close of trade yesterday, UGL shares were trading at $12.69.

Metcash Limited (MTS) said it had agreed to take a 50.1% stake in hardware chain Mitre 10 for around $55 million, as Australia’s number three supermarket chain seeks to compete against Bunnings and Woolworths' new hardware venture.

The company said the sum was an estimate based on earnings predictions for the current financial year, and the final figure wouldn’t be known until the books have been finalised after June 30 next year.

Metcash said it also retained the right to pick up the remaining 49.9% stake for a sum based on 2012 and 2013 earnings multiples.

Andrew Reitzer, CEO of Metcash, said he was delighted by the move.

“We can become the ‘champion of the independent hardware retailer’ and help them lift their revenue and profit through Metcash’s strong brand management, logistics and merchandising skills developed over many years,” Mr Reitzer said.

At the close Wednesday, Metcash shares were trading at $4.40.

RBS – Round Up – 101209

Directors' Interest Notices
09 December 09

Symbol

Shareholder

+/-

Prior

Now

* No Directors' Interest Notices for the 9th of December 09.

The Dow closed higher after spending the majority of the day below the line. Tech stocks made the largest gains, while commodity prices continued to fall despite a weakening greenback.

Treasury Secretary Timothy Geithner said the Federal bailout plan would be extended until 3 October 2010. Meanwhile, he said the TARP would be scaled back and refocused with an aim of preventing foreclosures and making loans to small businesses.

In economic news, wholesale inventories increased 0.3% in October, well ahead of the forecast decline of 0.5%. Wholesale inventories dropped 0.8% in September.

The Dow Jones added 51.08 points, or 0.50%, to 10,337.05, the S&P 500 edged 4.01 points higher, or 0.37%, to 1,095.95 and the NASDAQ put on 10.74 points, or 0.49%, to 2,183.73. 

In active talks Citigroup fell 1.3% as it plans to raise equity to pay back TARP funds.

Bank of America edged 0.1% lower a day after announcing it had paid back the US$45 billion in government bail out money in full.

Goldman Sachs gained 2.8%.

3M and Sprint Nextel rallied 3.3% and 5.6% after Citigroup analysts advised buying the stocks.

Pfizer gained 2.7% after a positive note by Credit Suisse boosted the stock. 

Tech heavyweights Apple and IBM put on 4% and 1.3% as larger rival Microsoft added 0.5%.

Hewlett-Packard added 2.1%.

Research in Motion shares jumped 4.9% as investors bet the wireless company’s shares will surge over 30% in the next five weeks due to improving sales, particularly in China.

Energy stocks were mixed after crude futures were impacted by willingness to exit the market ahead of the release of weekly US oil and fuel inventory data. Forecasts are for a 600,000-barrel increase in oil inventories.

Exxon Mobil slid 0.2%, while Chevron and ConocoPhillips gained 0.4% and 0.6%.

NYMEX light crude oil for January delivery fell US$1.95 to settle at US$70.67 a barrel.

COMEX gold for February delivery fell US$22.50 to settle at US$1,120.90 an ounce.

Newmont Mining and Barrick Gold recovered some of their recent losses, closing 2.8% and 1.9% in the black.

European Markets

Financials dragged European markets lower after Standard and Poor’s downgraded its outlook on Spain. Resource stocks were mainly lower as commodity prices weakened.

The UK benchmark FTSE 100 lost 19.24 points, or 0.37% to 5,203.89. The French CAC40 shed 27.91 points, or 0.74% to 3,757.39, while the German DAX fell 40.74 points, or 0.72% to 5,647.84.

Yesterday, Fitch Ratings cut Greek debt on concerns over its public finances. The Greek banking index has fallen 5.8% so far this week and about 38% since mid-October.

Barclays, Commerzbank and Deutsche Bank dropped 3.3%, 2.3% and 1.7% respectively.

On the other side of the line Lloyds and Standard Chartered put on 1.7% each.

Insurers AXA and Prudential weakened 4% and 2%.

The major miners were mixed. Anglo American, Antofagasta and BHP Billiton lost between 0.2% and 0.4%.

Rio Tinto and Xstrata added 1.7% and 1.9%.

In the energy sector, BG Group and BP slid 1% and 0.8%, while Royal Dutch Shell rose 0.3%.

Volkswagen advanced 0.7% on reports it will purchase a 19.9% stake in Suzuki Motor. Peugeot, Renault and Daimler fell 2.4%, 1.9% and 1.4% respectively.

Pharmaceuticals lost ground. Merck and GlaxoSmithKline shed 2% and 1%.

Stada Arzneimittel rallied 5.2% on the belief the German drug maker could be worth more and that it could be the target of a takeover soon.

Japanese Markets

Global credit concerns, softening US economic data and a slowing recovery in Japan itself all contributed to a day of heavy selling on the Nikkei. Banks were the major losers, while a stronger yen hurt exporters.

The market shrugged off government efforts to revive the economic recovery. The Japanese government rolled out another stimulus package yesterday, this one valued at US$81 billion to prop up the fragile economic gains made in recent months.

The Nikkei 225 shed 135.75, or 1.34% to 10,004.72. 

The most heavily traded stock for the day was Japan’s number one bank, Mitsubishi UFJ Financial Group, which tumbled 5.2%.  

Mizuho Financial Group gave up 3%. 

Among the autos, Honda and Mitsubishi shed 2.1% and 1.6% respectively. Toyota retreated 1.1%. 

Suzuki Motor Corp bucked the trend, climbing 3.5% after reports Volkswagen would take a 20% stake in the company. 

Consumer electronic giants Sony and Panasonic gave up 2.9% and 1.5% respectively. 

Nippon Oil retreated 2.6% on weakening global oil prices.

Hong Kong Markets

Hong Kong shares lost ground for the fourth consecutive session. Falls within the financial sector led the decline.

The Hang Seng dropped 318.76, or 1.44% to 21,741.76.

HSBC lost 2.6% on renewed concerns regarding its exposure to Dubai World. Standard Chartered shed 4.2% after CLSA Asia-Pacific Markets downgraded its rating on the stock for the second time in two weeks.

ICBC and China Construction Bank slid 1.5% and 1.9%.

Chinese Overseas Land & Investment fell 3.1% following reports that the nation would curb “speculative” home purchases.

Country Garden Holdings sank 4.5%.

Jiangxi Copper dropped 3.8% on falling metals prices.

Texwinca Holdings surged 13% after Deutsche Bank increased its target price on the knitted fabric producer by 29%. Morgan Stanley and JPMorgan also lifted their target prices on the stock.

Australian stocks remained below the line throughout the day, led by falls among commodity stocks. A widening in the nation’s trade deficit fuelled speculation in some circles that the RBA may consider holding off on further interest rate hikes in early 2010.

According to the Australian Bureau of Statistics, Australia’s trade deficit increased from $1.85 billion in September to a revised $2.38 billion in October. The rise was largely attributed to a drop in resource exports.

In other news, the Westpac-Melbourne Institute index of consumer sentiment dropped from 118.3 in November to 113.8 points in December. It was the second successive month of declines.

At the end of the day, the All Ords lost 33.8 to 4,652.6, while the ASX/200 shed 32.7 to 4,637.9. About 2.1 billion shares worth around $4.5 billion had changed hands.

Of the big four banks only NAB finished higher, up 7c to $27.96, while the broader Banks and Financials sector was 0.3% lower.

ANZ shed 42c to $21.51. Australia’s number four bank is considering selling bonds in the US, sources reported.
 
The insurers reversed morning losses to close mainly higher. AXA Asia Pacific put on 11c to $5.85.

The Property Trusts sector outperformed the market, advancing 0.9% on the back of a 25c gain to $12.05 from Westfield.

Goodman Group climbed 2.7% to 57c after announcing the construction of a $340 million warehouse in Hong Kong.

The gold miners continue to retreat as the price of the precious metal declines.

Newcrest Mining lost 58c to $35.17, while smaller rival Lihir Gold shed 8c to $3.28.

The broader Materials and Resources sector retreated 1.3%.

BHP Billiton shed 50c to $40.55. This morning the Big Australian announced the sale of its Ravensthorpe nickel mine in Western Australia to a Canadian miner for US$340 million.

Rio Tinto lost $1.00 to $70.90 and Fortescue dropped 7c to $4.14.

Many of the major stocks in the sector were down over 2%, however concrete manufacturer Adelaide Brighton climbed 2.4% to $2.59.

The Energy sector weakened 1.2%, with heavyweight Woodside down $1.03 to $47.17.

Santos gave up 38c to $14.30. Coal miners were relatively flat, however newcomer Stanmore Coal surged 100% to 40c on its first day on the exchange.

Consolidated Media was flat at $3.06, the day after Jamie Packer upped his stake in the company by just over 1% to 45.3%.

Jamie Packer’s other company, Crown, dropped 14c, or 1.8% to $7.79.

The Consumer Discretionary sector slid 0.8%.

Retailer Harvey Norman and media company Fairfax fell 2.6% and 3.6% to $4.12 and $1.60 respectively.
 
The Consumer Staples was off 0.6%, led by a 47c drop to $26.96 from Woolworths, the same level seen on 19 August.

Wesfarmers added 17c to $29.04.

Industrials lost 0.9% with most stocks trading below the gain line.

The Queensland Government announced yesterday that Queensland Rail’s commercial activities would be separated from the public passenger service and form into a new publicly listed company called QR National Limited. The government said it would undertake a float of Queensland Rail’s coal and freight assets and initially retain 25%-40% of QR National, with the remaining percentage of the new business to be offered to market via an IPO.

Alesco slumped 8.7% to $44.49 after forecasting a 29% slump in first half EBITA.

Leighton gave up 84c to $36.02, while Qantas lost 3.7% to $2.58.

Toll bucked the trend, adding 2.1% to $8.25.

The Telecommunications sector joined property trusts as the only sectors in positive territory with another 0.8% gain. Sector major Telstra tacked on 3c to $3.45.

Around the region, the Nikkei 225 lost 130.1 to 10,010.4, while the Straits Times Index shed 4.5 to 2,801.0. Meanwhile, the NZSE50 slid 9.7 to 3,127.6. The Hang Seng dropped 189.1 to 21,871.4.

Spot gold was trading at US$1,133.67 per ounce, and the Aussie was buying US$0.9062.

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Caltex profit in line with 2008
Caltex Australia said it was expecting post-tax profit to be around $180 million to $205 million on a replacement cost of sales operating profit for the year to 31 December 2009. This measures up against $186 million for 2008.

Caltex shares slumped 37c to $8.64 by the close.

Fall in exports sees deficit widen
According to the Australian Bureau of Statistics ("ABS") Australia’s trade deficit increased from $1.85 billion in September to a revised $2.38 billion in October. The rise was largely attributed to a drop in resource exports.

BHP offloads Ravensthorpe for US$340m
BHP Billiton said it had offloaded its Ravensthorpe Nickel Mine to First Quantum Minerals Australia Pty Ltd, a wholly owned subsidiary of Canadian company First Quantum Minerals Ltd for US$340m. BHP said that a result of the sale it would reverse a previously recognised pre-tax impairment charge from 30 June 2009 of around US$630 million, or US$441 million post tax, for the half year ended 31 December 2009.

At the end of the day, BHP shares were down 50c to $40.55

Goodman Group to build $340m warehouse
Goodman Group and Goodman Hong Kong Logistics Fund would build, through their Goodman Interlink Limited joint venture, a $340m, 24 storey warehouse and distribution centre in the hear of Hong Kong’s ports district. Construction is expected to be completed by January 2012 and has been forecast to deliver a yield on cost of 9%, with 50% of the floor space having been pre-leased by two major logistics companies.

By the finish, Goodman shares were up 1.5c to 57c.

Transfield, Worley JV awarded $76m contract
The Transfield Services – WorleyParsons Limited joint venture signed a seven-year contract valued at about $76m to deliver integrated services to Shell Philippines Exploration at its Malampaya gas facility. The companies said the contract includes a three-year extension option. 

At the end of the day, Transfield shares were up 3c to $3.94, while WorleyParsons shares were down 2c to $28.10.

Alesco expects 29% fall in 1H profit
Alesco Corporation forecast a 29% drop in half year EBITA compared to the previous corresponding period based on preliminary unaudited management accounts. The company said it is expecting EBITA to total $30 million at the end of the six-month period.

By the finish, Alesco shares were down 43c to $4.49.

Linc signs Fuel Cell Technology agreement
Linc Energy said it has signed an agreement with UK-based fuel cell technology company AFC Energy and its related company, B9 Coal, giving it the right to test the AFC Fuel Cell Technology on hydrogen produced from underground coal gasification for two years. Linc said it would purchase the first Alpha Fuel Cell System for £200,000 and has an option to invest £2.3 million into AFC Energy stock to extend the exclusivity period in perpetuity.

At the end of the day, Linc Energy shares were up 1.5c to $1.55.