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CSR Limited (CSR) said, last night, its preferred option continues to be to progress the demerger proposal of its Sugar and Renewable business. The conglomerate said it has considered the expression of interest from Bright Food Group including its offer to hold discussions to develop a proposal to acquire CSR’s Sugar and Renewable Energy business.

CSR said its board is of the opinion that the demerger is in the best interests of shareholders.

Earlier in the evening, the company advised that it continues to progress discussions with ASIC relating to the disclosure of asbestos liabilities in the scheme booklet for the proposed demerger.

CSR and ASIC have agreed that a short extension of time to complete the discussions is sensible and as a result, the first court hearing in the Federal Court which was scheduled for 15

January would be further adjourned and is expected to take place next week.

The company is targeting implementation of the demerger by the end of March 2010.

As at 1042AEDT, CSR shares were up .05c to $1.985.

Regional Express Holdings Limited (REX) said its subsidiary Pel-Air has reached an agreement with the Victorian State Government for the provision of Fixed Wing Patient Transport Services. In July the company announced that Pel-Air was selected as the conditional preferred tenderer. Australia’s largest independent regional airline said the 10-year contract would commence in mid-2011 and entails the supply of fixed-wing air transport to Ambulance Victoria for medical evacuation of patients to and from regional areas.

Recent rainfall has affected the operations of two Aussie gas explorers in Queensland and Northern New South Wales. Bow Energy Limited (BOW) and Eastern Star Gas Limited (ESG) have both been faced with delays to their operations as they wait for flood waters to recede.

Bow Energy said that its 2010 exploration program would finally commence next week with the first of 52 wells planned.

Bow’s reserves targets for the end of 2010 are 2,750PJ of 3P and 450 PJ of 2P increasing from the current 1447 PJ of 3P and 55 PJ of 2P, the company said.

Meanwhile, Eastern Star Gas said that its drilling program in the Narrabri and Moree area of New South Wales wouldn’t recommence until towards the end of January as dirt roads have been impassable.

At the close Thursday, Bow Energy shares were trading at $1.415, while Eastern Star Gas shares were 91.5c.

ThinkSmart Limited (TSM) has signed a wholesale funding agreement with Secure Trust Bank in the UK. The international computer and office equipment financing company said the three-and-a-half year agreement positioned Secure Smart as ThinkSmart’s primary business-to-business funder to their UK operations.

ThinkSmart has exclusivity on business-to-business rental finance with PC World until 2013.

ThinkSmart executive chairman and CEO, Ned Montarello, said the agreement comes at a time when the company sees significant opportunities in the UK market. 

“We are excited by the broader opportunities that this new partnership will offer us to capture market.” Mr Montarello said.

The company said PC World is owned by DSG International, the UK’s largest consumer electronics retailer.

“We are confident of growing our product offering to small-and-medium-sized businesses in the UK as well as launching our product to the consumer segment of the market,” Mr Montarello said.

“Our agreement with Secure Trust Bank to fund Business-to-Business contracts will help facilitate our growth plans.”

Mr Montarello said the agreement reflects ThinkSmart’s focus of expanding the company’s market share during 2010 through existing retail relationships and growing funding relationships.

At the close of trade Thursday, ThinkSmart shares were trading at 93c.

Macarthur Coal Limited (MCC) said that coal sales in the six months to 31 December 2009 had outstripped guidance the miner had offered as recently as 18 November. As a result, the company said it had revised its profit guidance for the six months to December 2009 to be in the range of $37 million to $42 million, ahead of the $30 million to $38 million previously flagged.

Macarthur Coal said the revenue had sold 2.8 million tonnes in the six months, ahead of the expected 2.4 million – 2.7 million tonnes.

“It is pleasing to see the strong recovery in sales and that we are now back to full production,” CEO Nicole Hollows said.

The buoyant sales volumes, with the December quarter being the second highest in the company’s history, were attributable to good weather and a reduction in vessel queues at the Dalrymple Bay Coal Terminal.

The company however said it was expecting a more muted second half to the year as it is starting with lower volumes and has foreshadowed more challenging weather conditions.

By the end of the year the company said it anticipated selling between 4.8 million tonnes and 5 million tonnes.

It wasn’t all good news from the coal producer, with Ms Hollows saying that it was facing delays securing water and rail requirements for the Middlemount coal project.

Middlemount Coal is progressing development of its own rail loop and water supply pipeline which are expected to be completed in the December half 2011.” 

At the close Thursday, Macarthur shares were $11.54 each.

RBS – Round Up – 150110

Wall Street edged higher again, hitting fresh 15-month highs Thursday, as investors turn to Intel’s quarterly earnings report, due out after the bell. Banks made ground despite the Obama administration proposed tax aimed at capping the large bonuses being paid out to investors just one year after government funds to stay afloat.

In economic news, retail sales fell 0.3% in November though the news barely registered with investors.

Employment news was also downbeat, with seasonal workers laid-off after the Christmas shopping rush leading to a larger-than-expected rise in new unemployment claims.

The Dow Jones rose 29.78 points, or 0.28%, to 10,710.55, the S&P 500 picked up 2.78 points, or 0.24%, to 1,148.46 and the NASDAQ gained 8.84 points, or 0.38%, to 2316.74.

Major banking stocks all rose, with Citigroup up just 0.3%. Bank of America and Wells Fargo added 1.2% and 1.4% respectively.

On the investment side of banking, Goldman Sachs and Morgan Stanley gave up 0.3% and 0.2% respectively.

Chipmaker Intel added 2.3% over the day. After the bell the company reported a 1000% profit jump from a year ago to $2.3 billion, smashing analysts predictions with earnings at 40c per share. Meanwhile Microsoft was 2% in the good.

Google added 0.5% as its battle with the Chinese ramps up, while Apple dipped 0.6%.

It was a mixed day for the retailers in response to the December sales figures. Wal-Mart shed 1.5%, while Target gained the same amount.

Macy’s and JC Penney both tacked on 0.4%.

COMEX gold for February delivery rose US$6.20 to settle at US$1,143 an ounce.

NYMEX light crude oil for February delivery fell US26c to settle at US$79.39 a barrel.

Most oil stocks were little changed over the day.

European Markets

European stocks made modest gains Thursday. Muted comments about the pace of the recovery from the European Central Bank president led investors to conclude the stimulus packages won’t be withdrawn in the near future and helped the market, while defensive pharmaceutical stocks also rose.

The UK benchmark FTSE 100 climbed 24.72, or 0.45% 5,498.20, while the French CAC40 put on 14.91, or 0.37% to 4,015.77. The German DAX tacked on 25.74, or 0.43% to 5,988.88.

Barclays and Royal Bank of Scotland climbed 1.6% and 1.1% respectively.

Deutsche Bank was virtually unchanged. Societe Generale rose 0.4%.

It was a good day for the pharmaceutical companies, with GlaxoSmithKline and Swiss giants Novartis and Roche rising 0.6%, 1.2% and 2.2% respectively.

Cadbury tacked on 1.2% after making it clear that a bid from Hershey’s would be more welcome than the currently hostile takeover offer from Kraft.

Rio Tinto added 2.2% as the Aussie miner reported record iron ore sales. BHP Billiton added 1.2%.

Vedanta Resources was 2% dearer, while Xstrata surged 4%.

Among the auto stocks, Peugeot and Renault climbed 2% and 0.2% respectively. Daimler Chrysler was up 2.5%.

Japanese Markets

The Nikkei hit fresh 15-month highs Thursday. The last surge was led by consumer electronics manufacturers on optimism over the US economy, while banks surged. 

The Nikkei 225 added 172.65, or 1.61% to 10,907.68.

The banks were led higher by the country’s third largest, Mizuho, which jumped 5.7% after it said it was considering a rights issue.

Number one bank, Mitsubishi UFJ added 2.1%. Sumitomo Mitsui put on 3.3%.

Panasonic surged 6.1%. Sony put on 2.6%.

Canon rose a more muted 0.3%.

Japan Airlines, which lost 81% of its value on Wednesday alone, swung back to a positive with a 14% jump as speculative investors bet the airline would avoid bankruptcy.

The shippers were muscular again. Mitsui OSK added 7.2%, its biggest gain in 8 months.

Nippon Yusen rallied over 5%, while Kawasaki Kisen surged 7.4% as the Baltic Dry Index rose for the third straight day.

Hong Kong Markets 

Hong Kong stocks ended a volatile days trade lower. Banks led the slide on concerns of lending restrictions.

The Hang Seng lost 31.65, or 0.15% to 21,716.95. 

China Construction Bank and Bank of China shed 1% each, while ICBC fell 1.5%.  

China Merchants Bank dropped 2.9%. HSBC, which makes up one-sixth of the Hang Seng index, put on 0.7%.

Among the manufacturing stocks, Li & Fung was 0.2% higher. Yue Yuen, the world’s largest contracted shoe maker, rallied 1.2%

Australian shares maintained gains throughout the day to finish 0.6% higher Thursday. Financials were among the better performers, while Rio Tinto, which sold record amounts of iron ore in the December quarter, led miners higher.

In employment news, the Australian Bureau of Statistic reported the unemployment rate declined 0.1% to 5.5% seasonally adjusted in December with the participation rate holding steady at 65.2%. The number of people employed in December increased by 35,200 to 10.906 million, seasonally adjusted. This was driven by a rise in both part-time and full-time employment.

The ABS also reported the number of people unemployed decreased by 10,600 in December to 639,400. However, the adjusted monthly aggregate hours worked series showed a slight fall in December, down 1 million hours to 1.5 billion hours.

At the end of the day, the All Ords was up 29.3 to 4,929.4, while the ASX/200 gained 29.9 to 4,898.0. About 3.2 billion shares worth around $3.8 billion had changed hands.

The big four banks followed a strong lead from their US peers. NAB, Westpac and CBA were between 0.9% and 1.4% higher, while ANZ lagged to be only 0.4% above the line.

The Banks and Financials sector gained 0.8%.

Investment bank Macquarie rallied $1.80, or 3.7% to close above $50 per share for the first time in over two months.

Meanwhile insurer QBE put on 7c to $24.57. IAG lost 7c, or 1.7% to $3.94 in what proved to be a mixed day for the insurers.

The Materials and Resources sector rose 1.2% after base metals prices closed higher on the London Metals Exchange overnight. Nickel was the biggest mover, up 3.2%.

BHP Billiton added about 8 points to the index, gaining 66c, or 1.5% to $43.78.

Meanwhile, Rio Tinto jumped 2.8% to $79.25. Late in the day the miner reported record sales of iron ore, selling 61 million tonnes of iron ore in the December quarter alone – 49% higher than the previous corresponding period.

Copper and gold production were also higher, while uranium, diamonds and aluminium production continued to be soft.

Fortescue rose 17c, or 3.3% to $5.28.

Of the major gold stocks, Lihir was flat, while Newcrest was down 36c at $36.48. The price of the precious metal increased in the US overnight to US$1,138 an ounce.

On the back of a slide in the price of crude below US$80 a barrel the Energy sector retreated 0.3%. Woodside edged 16c lower to $48.42, while Origin Energy gained a modest 4c, or 0.2% to $17.34.

Karoon Gas lost 24.3% of its value in the last hour of the day after reporting “inconclusive” results from Poseidon drilling. Investors read inconclusive as suggesting the rate was not high.

WorleyParsons added to yesterday’s 11% slump by dropping another 1.1% to $25.70. Yesterday, the oil-engineering company downgraded its FY11 profit guidance.

In broker reports this morning, the company’s stock was both downgraded and upgraded and also received several price target cuts. 

Energy Resources Australia rallied 1.5% to $22.60 after UBS upgraded its rating on the stock to “buy” due to recent share price weakness.

Coal and Allied, 75% owned by Rio Tinto, spiked $2.50, or 2.9% to $89.00 after announcing a 7.2% rise in Q4 production from the prior corresponding period.

A 14c, or 0.4% decline to $39.86 from Leighton was countered by gains from mid-cap Industrial stocks, with the sector flat at the close.

Transport and logistics companies Toll and Asciano added 1.3% and 0.3% to $8.91 and $1.905 respectively.

Consumer Staples advanced 0.3% as Woolworths gained 22c, or 0.8% to $28.13.

Wesfarmers lost 8c, or 0.3% to $31.02. The company, which has extensive coal interests declared a force majeure on coking coal shipments from its Curragh mine in Queensland following a stoppage of its overland conveyor.

Consumer Discretionary weakened 0.3% as Newscorp again showed weakness, down 28c, or 1.6% to $17.12 – its fourth consecutive session of declines.

Gamers were flat, while the major retailers were mainly higher. Billabong and JB Hi-Fi rose 25c and 39c to $11.90 and $21.85.

Harvey Norman bucked the trend, losing 1.5% to $3.87.

The Property Trust sector gave up strong gains to lunch to finish just 0.1% lower. Westfield rose 6c, or 0.5% to $12.56.

Telstra added 0.3% as the Telecommunications sector advanced 0.2%.

Around the region, the Nikkei 225 gained 153.3 to 10,888.4, while the Straits Times Index advanced 28.4 to 2,916.8. Meanwhile, the NZSE50 edged 2.1 to 3,278.3. The Hang Seng climbed 142.2 to 21,890.8.

Spot gold was trading at US$1,140.90 per ounce, and the Aussie was buying US$0.9298.

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Rio sets iron ore sales record
Rio Tinto has rebounded from the uncertainty a year ago, selling 61 million tonnes of iron ore for the fourth quarter of 2009. The result was 49% higher than the fourth quarter of 2008, and propelled the Aussie miner to an annual production record of 217 million tonnes, 13% higher than 2008.

At the end of the day, Rio Tinto shares were up $2.03 to $79.15.

Coal & Allied Dec quarter output up 7.2%
Coal & Allied Industries said total coal production for the December quarter was 6.96 million tonnes, up 7.2% on the previous corresponding period. The company said its share of total saleable production was 5.28 million tonnes, or 6% higher than the previous quarter and 11% higher than the pcp.

At the bell, Coal & Allied shares were up $2.50 to $89.00.

St Barbara on track to meet guidance
St Barbara reported that production was steady and in line with expectations over the last quarter. As a result the Aussie gold miner reaffirmed its guidance of achieving production of between 205,000 and 240,000 ounces at a cash operating cost of between $745 and $820 per ounce for the 2010 year.

At the finish, St Barbara shares were trading up 0.5c at 30.5c each.

Fitch cautiously optimistic on Aussie banks
Ratings agency Fitch released its Australian bank sector review saying the big four were emerging from the financial crisis in relatively good shape. However, the agency noted that they still face a number of challenges, with a key one being asset quality.

MOF sells German property for $61.7m
Macquarie Office Trust said it has agreed to terms o sell its Frankfurt property for $61.7 million. The trust said the sale would contribute further to liquidity and, after the repayment of debt, is expected to return about $15 million in cash to the trust.

At the close, MOF shares were unchanged at 31.5c.

Rio Tinto Limited (RIO) has rebounded from the uncertainty a year ago, selling 61 million tonnes of iron ore for the fourth quarter of 2009. The result was 49% higher than the fourth quarter of 2008, and propelled the Aussie miner to an annual production record of 217 million tonnes, 13% higher than 2008.

Rio Tinto reported that 56 million tonnes of iron ore, or 92% of global production, came from the Pilbara region of Western Australia.

Iron ore wasn’t the only metal to record large jumps in the amount mined, with Rio Tinto mining 36% more copper than Q4 2008, while refined copper leapt 15% due predominantly to improved efficiencies Kennecott Utah Copper.

Gold production soared 141% from 2008 levels on the back of higher grades at Kennecott Utah Copper and Grasberg.

Some mines in Rio Tinto’s produced less however. As Egoli reported yesterday Rio Tinto owned Energy Resources Australia produced 30% less uranium oxide.

Meanwhile, thermal coal production was slightly higher, while hard coking coal was down 2% in the December quarter from a year ago.

Diamond production was also down over 33% as the miner slashed production in the face of a slump in demand flowing on from the GFC.

The miner also updated the market on its divestment program, initiated in 2008 in response to burgeoning debt following the purchase of aluminium producer Alcan.

Rio Tinto off-loaded US$7.2 billion in assets during 2009, bringing its total asset sales to US$10.3 billion since February 2008.

At 1536 AEDT, Rio Tinto shares were up $2.10 to $79.22.

Coal & Allied Industries Limited (CNA) said total coal production for the December quarter was 6.96 million tonnes, up 7.2% on the previous corresponding period (“pcp”). The company said its share of total saleable production was 5.28 million tonnes, or 6% higher than the previous quarter and 11% higher than the pcp.

CNA’s total coal sales were 2.8% higher than the September 2009 quarter.

The company said its share of coal production for the quarter increased 11.3% to 5.28 million tonnes versus the pcp, while share of sales was up 11.9% in the same period.

On yearly comparisons, production was up 1.9% to 18.96 million tonnes on CY08, while sales increased 0.6%.

Coal & Allied said it has entered into long term take or pay contracts for port allocation with Port Waratah Coal Services which take effect from 1 January 2010.

The company said similar long term take or pay contracts to secure equivalent rail track access and rail freight are still being negotiated.  

As at 1408 AEDT, Coal & Allied shares were up $1.06 to $87.56.