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RBS – Round Up – 080110

Avoca Resources Limited (AVO) said it produced 50,952 ounces from its Trident underground gold mine in the Higginsville Gold Project in Western Australia during the December quarter. The company said cash operating costs for the mine production during the quarter was $458 per ounce, while revenue for the 52,615 ounces sold was $1,208 per ounce. Avoca said production for the first half of FY10 is 101,536 ounces, and in line with its 190,000+ production estimate for the year.

Rocklands Richfield Limited (RCI) confirmed it is continuing dialogue with Jindal in relation to the Indian company’s takeover proposal. The company said, in its response to an ASX price query, it was not aware of the rationale behind Jindal’s decision to reduce its voting power in RCI to 13.6%. RCI said it has not received any notice or communication from Jindal withdrawing its interest. RCI shares dropped from an opening price of 44.5c each to close at 37.5c on Thursday.

Wall Street was boosted by gains among financials and positive retail sales figures Thursday. However, the market remained relatively cautious ahead of Friday’s jobs report. 

In economic news, new unemployment claims increased from 433,000 the previous week to a better than expected 434,000 last week. The Labor Department also revealed continuing claims decreased from 4,981,000 to 4,802,000 in the same period. 

The Dow Jones added 33.18 points, or 0.31%, to 10,606.86, the S&P's 500 put on 4.55 points, or 0.40%, to 1,141.69 and the NASDAQ shed 1.04 points, or 0.05%, to 2,300.05.

Heavyweight financials Wells Fargo, Bank of America and JPMorgan gained 3.6%, 3.3% and 2% respectively.

Conglomerate General Electric rallied 5.2%, while aircraft manufacturer Boeing put on 4.1%.

The tech sector struggled, dragging the NASDAQ lower. Microsoft, IBM and Apple were within 1% below the gain line.

Search engines Google and Yahoo! lost 2.3% and 2.7%.

Amazon.com lost 1.7% as concerns of increasing competition grow louder. The company is trading at a higher valuation than both Apple and Google.

Retailers were boosted by a 2.9% rise in December sales. Sears surged 11.6%, while Target and Macy’s added 1.2% and 2.3%.

Target said sales increased a better than anticipated 1.8% during the month and said fourth quarter earnings should be at the higher end of analysts' forecasts.

Hershey slid 1% after Cadbury held talks with the confectionary company with the aim of pushing for a rival offer to that of Kraft Foods.

Kraft shares closed 0.2% lower.

A stronger greenback saw commodity prices weaken. Aluminium producer Alcoa shed 2.1%.

NYMEX light crude oil for February delivery fell US52c to settle at US$82.66 a barrel.

The major energy players were within 0.5% below the gain line.

COMEX gold for February delivery lost US$2.80 to settle at US$1,133.70 an ounce.

European Markets

European markets finished close to the gain line as falls among telco’s and miners were countered by strength among banking stocks. Consumer confidence in the region increased for a ninth month in December according to the European Commission.

The UK benchmark FTSE 100 shed 3.32 points, or 0.06% to 5,526.72. The French CAC40 added 7.13 points, or 0.18% to 4,024.80, while the German DAX weakened 14.97 points, or 0.25% to 6,019.36.

Financials were stronger. Lloyds, Commerzbank and Barclays gained 4.3%, 4.1% and 2.8% respectively.

Societe Generale and BNP Paribas advanced 2.8% and 1.8%, while Royal Bank of Scotland dropped 2.2%.

Telco’s dragged as Citigroup downgraded the sector. Vodafone, Deutsche Telekom and France Telecom lost 2.6%, 1.9% and 1.3% respectively.

Metro fell 4% due to an unexpected drop in German retail sales during November.

J Sainsbury put on 3.2% after the grocer posted better than expected third-quarter sales over the holiday period.

German auto-parts maker Continental surged 12.8% after a syndicate of banks agreed to underwrite the sale of new shares.

Miners lost ground with sector heavyweight BHP Billiton down 0.4%, while Aussie peer Rio Tinto added 0.1%.

Cadbury weakened 1.5% after falling below Kraft Foods’ offer price. Reports have surfaced that Ferrero has started discussions with Hershey in relation to a bid for Cadbury.

Japanese Markets

Japan’s Nikkei lost ground for the first time in four sessions. Japan Airlines led the slide, while exporters struggled with a strengthening yen.

The Nikkei 225 lost 49.79, or 0.46% to be at 10,681.66.

Japan Airline slumped 9.5% on reports it will post a loss in the vicinity of US$13.3 billion and set to file for bankruptcy.

Automakers Toyota and Honda dipped 1.3% and 1.6%, while Canon shed 2.5% after Credit Suisse downgraded its rating and target price on the electronics heavyweight.

Medical equipment maker Terumo slid 2.8%, also on a broker downgrade.

Sumitomo Mitsui Financial Group rallied 4.3% after the bank announced plans to raise to sell as much as US$9.6 billion in shares.

Hong Kong Markets

The Hang Seng lost ground Thursday as negative data flowing out of the mainland rattled investors. Strengthening currencies against the greenback took the shine off exporters, while banks in China mooted a tightening in credit available.

The Hang Seng fell 147.22, or 0.66% to 22,269.45.

Around the banks, Bank of China lost 1.6%. ICBC shed 1.2% and Bank of Communications slumped 3.5%.

Heavyweight HSBC lost 0.4%.

Clothes maker Li & Fung added 1.4%, while shoemaker added 0.4%.

Among resource stocks, Chinalco dipped 0.6%.

Substantial Shareholder Changes 
07 January 10

All movements are percentage changes.

The Australian market lost ground Thursday as falls among financial and consumer staple stocks outweighed gains among the the resources. Better than expected monthly retail figures fuelled speculation of further interest rate increases in the near future. 

In economic news, according the Australian Bureau of Statistics reported a 1.4% climb in retail sales during November. It was the largest increase since March and well ahead of the 0.3% rise expected.

The better than expected retail sales figures saw the value of the Aussie dollar increase against major currencies including to a new 25-year high against the British pound.

In a separate report, the ABS said Australia’s trade deficit narrowed from a revised $2.08 billion in October to $1.7 billion in November. Forecasts were for a deficit of $1.8 billion, with the smaller deficit attributed to China’s demand for resources.

At the end of the day, the All Ords lost 16.3 to 4,930.5, while the ASX/200 shed 22.0 to 4,899.4. About 2.1 billion shares worth around $4.1 billion had changed hands.

Among the mining stocks, BHP Billiton edged 5c lower to $43.77. Smaller rival Rio Tinto did a little better, adding 42c, or 0.5% to $79.00.

The Materials and Resources sector tacked on 0.3%. After a strong rally in morning trade Fortescue closed 3c, or 0.6% lower at $5.17 on the back of profit taking. Australia’s third-largest iron ore producer put on 13% yesterday and had added 23% this week alone by midday today.

The cash price of iron ore delivered to China climbed to its highest level in over 12 months, more than doubling since a March 2009 low as purchases meet the demand that has followed stimulus measures.

Most of the mid-cap stocks in the sector had made modest ground by the close. Alumina rose 1.8% to be trading at $1.96 as the price of base metals surged overnight.
 
Sims Metal Management rallied 3.2% to $24.48, while junior explorer Kagara spiked 9.9% to $1.22.

OZ Minerals closed 3c dearer at $1.275.

The Energy sector advanced 0.6% as the price of crude extended its rally to a tenth straight session.

Woodside Petroleum shrugged off reports Chinese giant PetroChina had opted out of a $45 billion deal to buy LNG following continuing delays in the Browse project off Australia’s western coast. Its shares climbed 50c, or 1% to $48.90.

Whitehaven Coal lost 10c, or 1.8% to $5.34, giving back some of its recent strong gains.

WorleyParsons rallied 3.8% to $30.05, while Origin put on 39c, or 2.3% to $17.55, outweighing modest losses from Oil Search and Santos.

The big four banks lost between 0.8% and 2.4%, with ANZ was the worst performer, down 54c to $22.12.

The broader Banks and Financials sector shed 1.1%.

Insurers were mainly lower with Suncorp-Metway outperforming, adding 12c to $8.72.

QBE and AMP fell 45c and 15c to $24.50 and $6.49.

The Property Trusts sector was 0.2% higher, on the back of a 11c, or 0.9% gain to $12.64 by sector heavyweight Westfield.

The Industrials sector was mixed, though edged 0.2% higher. Brambles and Toll added 14c to $7.02 and 4c to $8.94 respectively.

CSR rallied 2.9% to $1.925.

Asciano and Qantas lost 1% and 1.7% respectively, while Macquarie Airports dropped 2.2% to $3.07.

The Consumer Staples sector weakened 1% following widespread losses.

Wesfarmers shed 50c to $30.70, while Woolworths slid 6c to $27.85.

The Consumer Discretionary sector rose 0.1% following a strong lead from retailers.

Harvey Norman climbed 14c, or 3.7% to $3.95, while David Jones added 4c to $5.13.

Media company Newscorp advanced 16c to $17.96 as gamer Crown fell 25c, or 3.1% to $7.74.
 
Telstra retreated 6c, or 1.8% to $3.32, while the broader Telecommunications sector fell 1.8%.
 
Around the region, the Nikkei 225 fell 70.5 to 10,661.0, while the Straits Times Index lost 11.9 to 2,918.6. The Hang Seng shed 46.6 to 22,370.1. Meanwhile, the NZSE50 advanced 13.2 to 3,284.8.

Spot gold was trading at US$1,132.80 per ounce, and the Aussie was buying US$0.9223.  

On the first day for Egoli in 2010 the Aussie share market was flat at lunch, reflecting a flat lead-in from Wall Street. In light trade, as investors enjoy their summer holiday, gains from the miners and energy stocks were countered by declines in the finance sector.

At midday, the All Ords rose 4.3 to 4,951.1, while the ASX/200 lost 0.4 to 4,921.0. About 940 million shares worth around $1.5 billion had changed hands.

Among the mining stocks, BHP Billiton added just 18c to yesterday’s close of $43.82. Smaller rival Rio Tinto did a little better, climbing 71c, or 0.9% to $79.29.

The Materials and Resources sector tacked on 1%. The stand out performer for the sector, for a second day, was Fortescue, adding another 26c, or 5% to $5.46. Australia’s third-largest iron ore producer put on 13% yesterday. The stock has added 23% this week.

Much of the mid-cap stocks in the sector made modest ground Thursday morning. Alumina surged 3.6% to sit just below $2 as the price of base metals surged overnight.

Steel producers Onesteel and Bluescope put on 3.2% and 1.6% to $3.58 and $3.26 respectively.

Junior explorer Kagara spiked 7.2% to $1.19 by lunch.

The Energy sector climbed 0.9% as the price of crude extended its rally to a tenth straight session.

Woodside Petroleum shrugged off reports Chinese giant PetroChina had opted out of a $45 billion deal to buy LNG following continuing delays in the Browse project off Australia’s western coast. Its shares climbed 62c, or 1.3% to $49.02.

Whitehaven Coal lost 7c, or 1.3% to $5.37, giving back some of its recent strong gains.

WorleyParsons added 2.9% to $29.80, while Origin rallied 30c, or 1.7% to $17.46, outweighing modest losses from Oil Search and Santos.

The big four banks lost between 1% and 2% each.

The broader Banks and Financials sector shed 0.7%.

Insurers also lost ground with the exception of Suncorp-Metway, which added 5c to $8.65.

The Property Trusts sector was 0.7% higher, on the back of a 7c, or 0.6% gain to $12.60 by sector heavyweight Westfield.

The Industrials sector was mixed, though edged 0.1% higher. Brambles and Toll added 16c to $7.04 and 11c to $9.01 respectively.

Asciano and Qantas lost 1% and 2% respectively. CSR rallied 2.4% to $1.915.

The Consumer Staples sector weakened 0.7%, with most stocks in the sector contributing to the decline.

Wesfarmers shed 13c to $31.07, while Woolworths slid 24c to $27.67.

The Consumer Discretionary sector climbed 0.6%, helped higher by the retailers.

Harvey Norman put on 12c to $3.93, while David Jones climbed 13c, or 2.6% to $5.22.

Rival Myer added 3c to $3.65, though continues to languish, down 11% from the price investors initially paid for the stock in November.        

Telstra retreated 5c, or 1.5% to $3.33, while the broader Telecommunications sector fell 1.4%.

The Healthcare sector rose 0.2%.

Around the region, the Nikkei 225 added 12.0 to 10,743.4, while the Straits Times Index gained 14.5 to 2,945.0.

Meanwhile, the NZSE50 advanced 10.3 to 3,281.9. Spot gold was trading at US$1,136.60 per ounce, and the Aussie was buying US$0.9249.