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Territory Resources Limited (TTY) reported a $13.7 million NPAT for the six-month ended 31 December 2009, compared to a loss of $33.3 million in the previous corresponding period. The turnaround for the iron ore producer followed a 25% increase in sales revenue to $82m on lump and fines sales of 1.2Mt to Chinese customers. The company said the result reflected improved prices, the success of the company focusing on increased production and reduced costs at its Northern Territory iron ore operations, together with a reversal of a prior impairment and gains on foreign exchange transactions. Territory Resources said the bottom line profit translated to earnings per share of 5.17 cents, compared to a loss of 12.6c a year earlier.

FerrAus Limited (FRS) said recent drilling results have lifted the company’s total resources at the Pilbara Project by 66% to 276.9 million tonnes. The company said high-grade resource was up 15% from 166.6 Mt to 191.3 Mt, while medium grade resource was now reported as 85.6 Mt. FerrAus said it is targeting more than 300 million tonnes of iron ore resource by the end of 2010.  

Aquila Resources Limited (AQA) said its subsidiary Aquila Coal Pty Ltd has commenced proceedings in the Supreme Court of Queensland against Vale’s subsidiary Bowen Central Coal Pty Ltd (“BCC”) seeking damages. Aquila said this followed from the default notice issued to BCC by Aquila Coal in relation to the infrastructure arrangements for the Eagle Downs Hard Coking Coal Project.

Focus Minerals Limited (FML) announced an interim net profit of $4.9 million for the six months to December 31, 2009. The gold miner said the result, which was underpinned by the sale of 21,202 ounces at an average price received of $1,085 per ounce, includes a 346% increase in EBITDA from the corresponding period. Focus said production is on track to reach 80,000oz this calendar year with the refurbished Three Mile Hill processing facility now fully operational. The company said it is targeting production of +100,000oz from 2011 onwards.  

WestSide Corporation Limited (WCL) said would join with Mitsui E&P Australia Pty Ltd (MEPAU) to acquire the Dawson Seamgas coal seam gas (“CSG”) assets in Queensland’s Bowen Basin from existing owners Anglo American and Mitsui Moura Investment Pty Ltd. The company said under the new joint venture arrangement, it would be the operator and own 51% of the Dawson Seamgas fields. Westside said it had agreed to pay $26.8 million for Anglo’s interest in PL94 and the ML gas rights and planned to raise capital via a combination of placements, entitlement offer and other facilities to finance the acquisition and fund development costs to increase production. The company said the Dawson Seamgas fields have certified Proved (1P) gas reserves of 60 petajoules (PJ), 186 PJ of Proved and Probable (2P) reserves and 334 PJ of Proved, Probable and Possible (3P) reserves.

Pancontinental Oil & Gas NL (PCL) said it has acquired additional interests from Carnarvon Petroleum Limited (CVN) in permits EP 424 and EP110 onshore and offshore in the Carnarvon Basin. Carnarvon previously stated it had elected to withdraw from the exploration permits, as the magnitude of any expected reward was no longer considered material to the company’s operations. Pancontinental said it has taken up its pro-rata share of Carnarvon’s interests as a result of the withdrawal and would increase its working interests from 25% to 38.462% in each permit.

Wesfarmers Limited (WES) said it is to raise about EUR500 million following the successful pricing of an inaugural issue of bonds under its Euro Medium Term Note programme. The company said the issue consists of notes with a tenor of five years and four months at a margin of 135 bps over the EURO five year mid swap rate, maturing in July 2015.

Wesfarmers said the proceeds are intended to be applied to the repayment of existing shorter term borrowings, which may result in bringing forward interest rate hedge close out costs of approximately $30 to $40 million into FY10.

The company said the notes would rank equally with its existing senior debt facilities and are expected to be rated BBB+ by Standard & Poor's and Baa1 by Moody's.

Wesfarmers said the notes are denominated in Euro and the proceeds have been fully swapped to Australian Dollars at an all up swapped margin of approximately 228 bps over the three-month bank bill rate.

The company said the notes would be listed on the Singapore Exchange and would not be offered for sale in Australia.

Wesfarmers’ finance director, Terry Bowen, said the company was very pleased with the result of the issue, which was heavily over-subscribed.

“This further diversifies the group’s funding sources and reflects continued strong support for Wesfarmers from debt investors,” Mr Bowen said.

The company expects completion of the issue of the notes on 10 March 2010.

As at 1026 AEDT, Wesfarmers shares were down 7c to $32.50.

Gloucester Coal Limited (GCL) said the Independent Directors of Gloucester confirmed their recommendation that Gloucester shareholders accept Macarthur Coal Limited’s (MCC) takeover offer in the absence of a superior proposal. On 22 December 2009 Macarthur offered to buy all the shares in Gloucester with a choice of either 0.84 Macarthur shares for every one Gloucester share or $8.00 cash for every one Gloucester share.

At the close of trade yesterday, Gloucester shares were trading at $9.33 each.

Gloucester said it lodged its Target’s Statement with ASIC today in relation to the offer in response to the Macarthur Bidder’s Statement received on 26 February 2010.

The company said Deloitte Corporate Finance Pty Limited, who prepared the Independent Expert's Report, concluded that the offer is fair and reasonable to Gloucester shareholders, the estimated fair market value of a share in Gloucester is in the range of $7.75 to $8.75 on a control basis and the valuation range for a share in the merged entity has been estimated in the range of $8.90 to $10.80 based on a sum of the parts method.

Deloitte also concluded that based on the share market trading activity in Macarthur since the announcement of the offer, the assessed value of a share in the merged entity is in the range of $10.00 to $11.00.

”Having regard to the value of a share in the merged entity derived using a sum of the parts valuation and the recent share market trading activity in shares in Macarthur, the IndependentExpert has estimated the value of a share in the merged entity has been estimated in the range of $9.50 to $11.00,” the statement said.

“The value of the Scrip Alternative has been estimated to be in the range of $8.00 to $9.25 per Gloucester share.”

Gloucester said that based on qualitative and quantitative analysis of the Middlemount Transaction and having regard to the limitations set out in the Independent Expert’s Report nothing has come to the attention of the Independent Expert to cause the Independent Expert to believe that the Middlemount Transaction would constitute a receipt by Noble of a collateral benefit.

At the close of trade Wednesday, Macarthur Coal shares were trading at $11.30.

Directors' Interest Notices
03 March 2010

Symbol	Shareholder	+/-	Prior	Now
AAD	George Venardos		13,502	38,502
AJP	Fergus Allan McDonald		300,000	400,000
MRE	John Morrison		-	50,000
OZL	Charles Lenegan		-	135,000
OZL	Paul J. Dowd		30,000	57,000
PME	Peter Terence Kempen		89,647	129,647

 

Substantial Shareholder Changes 
03 March 2010

Symbol	Shareholder	+/-	Prior	Now
AOE	National Australia Bank		5.415	-
CGG	Central Mining Co. for Invest.		19.85	-
CGG	Abdul Hadi Al Qahtani & Otrs.		-	12.30
CSR	BlackRock Invest. Mgt (Aust.)		5.24	-
DOW	Capital Group Companies, Inc.		6.55	5.25
HSP	National Australia Bank		5.879	-
KMD	AMP Capital Investors (NZ)		-	5.08
MQA	Morgan Stanley Co. Inc.		6.37	-
MCW	Macquarie Group Limited		14.45	7.60
MOF	Macquarie Group Limited		16.45	9.64
SEK	FMR LLC & FIL		10.65	11.65
TEL	National Australia Bank		-	5.768

Wall Street finished flat at the end of a day that saw the broader indices move either side of the gain line throughout. Better than expected economic data did little to provide comfort for investors as concern mounted following President Obama’s call for a final vote on health care.

In employment news, ADP reported that the private sector cut 20,000 jobs from their payrolls in February, which was in line with expectations and also the smallest number in two years.

In a separate report Challenger, Gray & Christmas said job cuts declined from 71,482 in January to 42,090 in February. This was the smallest reported job cuts since July 2006.

The Senate also voted to extend the deadline for unemployed Americans to apply for benefits.

Meanwhile, the Institute for Supply Management's services sector index rose from 50.5 in January to its highest point in over two years at 53 in February. Forecasts were for a rise to 51.

The Dow Jones lost 9.22 points, or 0.09%, to 10,396.76, the S&P's 500 added 0.48 points, or 0.04%, to 1,118.79 and the NASDAQ slid 0.11 points, or almost 0.01%, to 2,280.68.

Major financials were mainly lower. Bank of America and JPMorgan dipped 0.5% and 0.2%, while Wells Fargo bucked the trend adding 1.2%.

Obama’s call for Congress to pass health-care legislation sent healthcare stocks lower.

Pfizer dropped 1.6% after Medivation said its experimental Alzheimer's disease treatment Dimebon, which was in development with Pfizer, failed to produce the results they were hoping for in a late-stage study. Medivation shares sank 67.5%.  

Wholesale retailers Costco and BJ’s Wholesale shed 1.1% and 5.1% after posting weaker than expected results.

Novell surged 28% after hedge fund Elliott Associates made an unsolicited all-cash offer forthe business software maker.  

NYMEX light crude oil for April delivery rose US$1.19 to settle at US$80.87 a barrel.

Chevron and Exxon Mobil lost 0.3% and 0.1%.

COMEX gold for May delivery rose US$1 to US$1,139 per ounce.

European Markets

European stocks rose for a fourth day after Greece announced US$6.6 billion in additional debt relief and a rise in metals prices sent miners higher. Banks led gains after Standard Chartered released its results for 2009.

The UK benchmark FTSE 100 gained 49.15, or 0.90% to 5,533.21, while the French CAC40 added 30.60, or 0.80% to 3,842.52. The German DAX rose 41.32, or 0.72% to 5,817.88.

Standard Chartered climbed 5.3% after a 13% rise in annual profit met expectations. UK peers Lloyds and Barclays put on 2.7% and 2.5%.

Elsewhere, Societe Generale and Deutsche Bank gained 2% and 1.8%.

Legal & General jumped 5.1%, while Aviva added 2.9% ahead of the release of full-year results on Thursday.

Miners Anglo American, Antofagasta and Xstrata were between 3.7% and 4% higher.

Aussie peers Rio Tinto and BHP Billiton added 2.5% and 1.5%.

Gains among the energy majors were not as robust. BP, BG Group, Royal Dutch Shell and Total were all within 0.7% above the gain line.

Commodity prices were boosted by a weakening greenback.

Adidas dropped 4.1% after the sporting-goods maker reported a 64% fall in fourth quarter profit. Rival lost 2.4%.

Staffing company Adecco advanced 4% as it expects continued improved conditions.

Japanese Markets

Japan’s Nikkei also rose for a fourth consecutive session on optimism surrounding a bailout of debt ridden Greece. However, gains were limited as a strengthening yen placed pressure on exporters. 

The Nikkei 225 added 31.30, or 0.31% to 10,253.14.

A rise in metals prices saw commodities traders Mitsubishi Corp and Mitsui & Co put on 2.1% and 2.6%.

A broker upgrade sent shares in Sumitomo Metal Mining 2.5% higher.

Steelmakers Nippon Steel and JFE Holdings added 1.8% each.

Toyota gained 3.2% after reporting higher than expected sales in the US during February.

Mazda and Nissan shed 2.2% and 0.4% as the yen climbed to more than a two-month high against the greenback.

Panasonic fell 1.5%.

Jtekt Corp slumped 4.1% as a result of General Motors recalling 1.3 million vehicles with the company’s power-steering motors.

Fast Retailing rallied 4.7% after the clothing retailer reported a 1.8% rise in February sales at stores open at least a year in Japan.

Hong Kong Markets

The Hang Seng, for the second straight day, was the only major global indices to lose ground Wednesday. A fall in property stocks, which were a source of strength last week, led the decline on fears the government would increase regulation in the industry.

The Hang Seng lost 29.32, or 0.14% to 20,876.79.

Bank of China rose 0.3%, helped by HSBC which put on 1.1%. ICBC, the country’s largest lender, gained 0.7%.

Heavyweight mobile carrier, China Mobile retreated 2.4%, while China Unicom was 1.81.8% weaker.

State controlled Sino Land slumped 2.9%, while Henderson Land shed 2.1%.

The rather descriptively named, China High Speed Transmission Equipment Group Co, put on 8.7% yesterday. Also Shanghai Electric Group Co, added 7%. Both stocks gained on speculation the Chinese would seek to limit carbon emissions, sending alternative energy stocks higher.

Among oil plays, Cnooc rose 0.3% and PetroChina gained 0.7%.

The Australian sharemarket closed 0.7% higher Wednesday on the back of a strong lead from global markets and a rise in metal prices. As a result resource and industrial stocks led gains, while property trusts and some of the smaller sectors lagged.

In economic news, according the Australian Bureau of Statistics, our GDP grew 0.9% in the December quarter 2009, after growing 0.3% in the September quarter.

“Growth in the expenditure measure of GDP was driven by a 3.5% increase in private investment, a 10.2% increase in public investment and a 0.7% increase in household expenditure,” the ABS said.

”Offsetting these increases was a fall in net exports.”

At the bell, the All Ords was up 33.9 to 4,743.8, while the ASX/200 gained 33.8 to 4,735.7. Over 2.4 billion shares worth around $5.4 billion had changed hands.

The mid-cap commodity players were muscular, with MacArthur Coal, Incitec Pivot and Lihir Gold all rising between 3.8% and 4.9%.

Fortescue and Sims Metal rose 3.2% and 3.7% to $4.85 and $20.50, while Mount Gibson Iron surged 6.2% to $1.715.

They were assisted by gains of $1.85, or 2.6% to $73.87 by Rio Tinto and 58c to $41.67 for BHP Billiton.

Steel maker Bluescope extended gains into a fourth day, adding 8c to $2.66.

Mirabela Nickel was 4.6% stronger after the price of nickel jumped 3.7% higher in London overnight.

The Materials and Resources sector gained 1.8%.

NAB was the best performer of the big banks, up 60c, or 2.3% to $26.20 as it became the last of the big four lenders to pass on a 25 basis point lift to interest rates following the Reserve Bank’s decision yesterday.

Westpac, which this morning also matched the RBA’s 25 basis interest rate hike, added 26c to $26.99.

The Banks and Financials was 0.3% up.

Among the insurers, QBE and IAG slipped 72c and 10c to $20.38 and $3.99 after both went ex-div today.

Suncorp-Metway put on 1.3% to $8.51. 
 
The Property Trusts sector was down 0.9%, led by a 21c, or 1.7% fall to $12.05 from Westfield.

The Energy sector was 0.2% above the line, with only modest gains to both Woodside and Origin.

Oil Search slumped 11c, or 2.1% to $5.25. The PNG LNG Project – of which Oil Search and Santos are part of – awarded vessel contracts to Mitsui OSK Lines.

Santos shares added 1c to $13.41. 

Aquila Resources climbed 52c, or 5.3% to $10.34.

The Consumer Discretionary was 1.3% stronger.

Retailers David Jones, Harvey Norman and JB Hi-Fi added between 1.8% and 2.1%, while Billabong bucked the trend by losing 1.7% to $10.10.
 
Elsewhere, Fairfax put on 5.5c, or 3.4% to $1.695, while Seven rallied 4% to $7.84.

Tatts Group jumped 7c, or 3% to $2.37, retrieving some of yesterday's heavy losses.

The Consumer Staples sector was 0.3% above the gain line. Wesfarmers added 47c, or 1.5% to $32.57 as Woolworths countered, shedding 19c, or 0.7% to $27.57.

Goodman Fielder dropped 6c, or 3.8% to $1.51 as it went ex-div.

The Industrials sector gained 1.5% following a positive day for air transport related stocks.

Virgin Blue soared 4.5c, or 7% to 68.5c, while MAp Group rose 4.4% to $3.32. Qantas finished 0.4% in the red.

Brambles gained 26c, or 3.7% to $7.37 and Seek jumped 4.5% gain to $7.47. 

Elsewhere, Telstra came off historic lows, edging 1c higher to $2.94. The broader Telecommunications sector rose 0.4%.

Around the region, the Nikkei 225 added 15.5 to 10,237.3, while the NZSE50 rose 15.3 to 3,198.5. The Straits Times Index shed 2.4 to 2,769.8. The Hang Seng had gained 5.9 to 20,192.0.

Spot gold was trading at US$1,134.60 per ounce, while the Aussie was buying US$0.9052.

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Coffey makes a further two acquisitions
Coffey International announced the acquisition of Global Justice Systems and Libra Advisory Group Limited for a total of $8.32m. The company said both have been funded from existing cash reserves and have earn-outs based on performance over the next two years.

At the end of the day, Coffey shares were up 1.5c to $1.865.

Ausenco awarded $9.6m EPCM contract
Ausenco said it has been awarded a $9.6m Engineering, Procurement and Construction Management (EPCM) contract for the magnetite extraction plant at Xstrata Copper’s Ernest Henry Mining (“EHM”) operation located in north west Queensland. The diversified engineering services and project management group said the plant forms part of Xstrata’s $589 million development of the underground mine and magnetite processing operation.

By the close, Ausenco shares were up 5c to $3.96.

Latest ABS figures show that GDP, in seasonally adjusted volume terms, grew 0.9% in the December quarter 2009. This is an increase on the 0.3% growth reported for the September quarter.

Growth in the expenditure measure of GDP was driven by a 3.5% increase in private investment, a 10.2% increase in public investment and a 0.7% increase in household expenditure.

Offsetting these increases was a fall in net exports. The fall in net exports was due to a 7.7% increase in imports, though mitigated by a 1.7% increase in imports.

The industries that provided the main contribution to growth in the production measure of GDP in the December quarter were manufacturing with a 5.1% increase in seasonally adjusted volume terms and wholesale trade with a 3.6% increase in seasonally adjusted volume terms.   

Aussie shares edged gained 0.8% by lunch on renewed optimism over the strength of the economic recovery as concerns about Greece’s debt burden abated. Most of the base metal prices rose between 1% and 2% overnight, helping the materials and resources sector outperform the market.

In economic news, according the Australian Bureau of Statistics, our GDP grew 0.9% in the December quarter 2009, after growing 0.3% in the September quarter.

“Growth in the expenditure measure of GDP was driven by a 3.5% increase in private investment, a 10.2% increase in public investment and a 0.7% increase in household expenditure,” the ABS said.

”Offsetting these increases was a fall in net exports.”

At noon, the All Ords was up 35.7 to 4,745.6, while the ASX/200 edged 36.0 higher to 4,737.9. Over 1.1 billion shares worth around $2.3 billion had changed hands.

The mid-cap commodity players were muscular, with Fortescue, Sims Group, Mount Gibson and Lihir Gold all rising between 3.5% and 5%.

They were assisted by gains of $1.35, or 1.9% to $73.37 by Rio Tinto and 66c to $41.75 for BHP Billiton.

Steel maker Bluescope extended gains into a fourth day, adding 7c to $2.65.

Mirabela Nickel was 5% stronger.

The Materials and Resources sector gained 1.8%.

ANZ was the best performer of the big banks, up 39c, or 1.5% to $25.99. Westpac, which this morning matched the RBA’s 25 basis interest rate hike, added 19c to $26.92.

The Banks and Financials was 0.3% up.

Among the insurers, QBE slipped 74c, or 3.5% to $20.36 after giving up rights to a 66c dividend today.

Bourse operator ASX gained 53c to $35.99.

The Property Trusts sector was flat.

The Energy sector was 0.3% above the line, with only modest gains to both Woodside and Origin.

Oil Search slumped 10c, or 1.9% to $5.26.

Aquila Resources was 33c, or 3.4% higher at $10.15, while oilfield-engineering firm WorleyParsons advanced 1% to $24.70.

The Consumer Discretionary was 1.2% stronger, with retailers gaining ground. David Jones and Harvey Norman added 1.9% and 1.8% to $4.91 and $3.88 respectively.

Billabong bucked the trend, drifting 1.4% lower.

Elsewhere, Fairfax put on 5.5c, or 3.4% to $1.695, however the media group has hovered around this level for a number of months now.

Tatts Group jumped 10c, or 4.3% to $2.40, retrieving some of yesterday's heavy losses.

The Consumer Staples sector was 0.9% above the line. Wesfarmers added 60c, or 1.9% to $32.70.

Most other stocks in the sector were trading close to the gain line, with the exception of Goodman Fielder which retreated 4.5c, or 2.9% to $1.525 as it went ex-div.

The Industrials sector gained 1.2%. Seek outperformed with a 5% gain to $7.51. 

Airliners and airport stocks performed well. Virgin Blue climbed 2.5c or 3.9% to 66.5c.

MAP Group and Auckland International Airport rose 2.2% and 2% respectively, while Qantas edged 0.7% into the black.

Brambles gained 15c, or 2.1% to $7.26.

Elsewhere, Telstra continued to trade around historic lows, easing 1c, or 0.3% to $2.92. The broader Telecommunications sector dipped 0.2%.

Around the region, the Nikkei 225 retreated 19.8 to 10,202.0, while the NZSE50 rose 18.3 to 3,201.5. The Straits Times Index advanced 4.4 to 2,776.6.

Spot gold was trading at US$1,133.65 per ounce, while the Aussie was buying US$0.9043.

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Coffey makes a further two acquisitions
Coffey International announced the acquisition of Global Justice Systems and Libra Advisory Group Limited for a total of $8.32m. The company said both have been funded from existing cash reserves and have earn-outs based on performance over the next two years.

At midday, Coffey shares were up 4c to $1.89.

Ausenco awarded $9.6m EPCM contract
Ausenco said it has been awarded a $9.6m Engineering, Procurement and Construction Management (EPCM) contract for the magnetite extraction plant at Xstrata Copper’s Ernest Henry Mining (“EHM”) operation located in north west Queensland. The diversified engineering services and project management group said the plant forms part of Xstrata’s $589 million development of the underground mine and magnetite processing operation.

At lunch, Ausenco shares were up 6c to $3.97.

The Reserve Bank of Australia’s decision to increase interest rates was just one of several economic announcements yesterday.

The Australian Bureau of Statistics reported a 1.2% rise in retail sales in January, seasonally adjusted, against a 0.9% decline the month before.

Department Store sales rose the most, up 7.2%, followed by clothing and footwear sales which jumped 2.9%.

Myer shares climbed 1.2% yesterday, while David Jones also edged higher.

New South Wales was the second worst performing state, with only 0.4% growth, ahead of Tasmania. South Australia led the way with a 3.7% climb.

Elsewhere, the ABS said that dwelling units approved fell 7% in January.

Approvals for non-house dwellings slumped 29.1%, while private home approvals rose 0.3%.

Meanwhile, the value of total building approvals fell 24.6% in January with the value of both residential (-6.2%) and non-residential building approvals (-41.9%) falling.