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Cape Lambert Resources Limited (CFE) shares climbed Friday morning after the company said its has entered into an agreement with Hong Kong company China Sci-Tech Holdings Limited (“CST”), for the sale of its 100% interest in the Lady Annie Project in Queensland for $135 million. The Australian iron ore explorer said CST is proposing to fund the acquisition from existing cash reserves and liquid assets.

Cape Lambert said in addition to the total consideration, CST would reimburse Cape Lambert agreed care and maintenance expenditure incurred at Lady Annie for up to $3 million and also receive approximately $13 million of cash back from the release of environmental and other bonds related to Lady Annie.

The company said the sale is expected to complete on or before 31 May 2010, at which point executive chairman, Tony Sage said the company would be in a position to finalise its plans regarding a partially franked dividend payment.

“It is our intention to return between $0.08 and $0.10 per share to shareholders once the sale completes and the $130 million in cash is received,” Mr Sage said.  

Upon completion of the sale, Cape Lambert said its cash and receivables position would be about $300 million, not including the mark-to-market value of its listed securities of approximately $70 million.

“In the end we felt a trade sale was the best outcome for shareholders and stakeholders given capital markets remain choppy, and may continue to do so for the medium run,” Mr Sage added.

"China Sci-Tech has a very clear focus and complimentary financial capacity to return Lady Annie to production in the short term and we believe this is in the best interests of the various stakeholders associated with the project.”

The company said completion of the transaction remains subject to a number regulatory approvals.

AS at 1050 AEDT, Cape Lambert shares were up 6c to 50.5c.

Cape Lambert Resources Limited (CFE) shares climbed Friday morning after the company said its has entered into an agreement with Hong Kong company China Sci-Tech Holdings Limited (“CST”), for the sale of its 100% interest in the Lady Annie Project in Queensland for $135 million. The Australian iron ore explorer said CST is proposing to fund the acquisition from existing cash reserves and liquid assets.

Cape Lambert said in addition to the total consideration, CST would reimburse Cape Lambert agreed care and maintenance expenditure incurred at Lady Annie for up to $3 million and also receive approximately $13 million of cash back from the release of environmental and other bonds related to Lady Annie.

The company said the sale is expected to complete on or before 31 May 2010, at which point executive chairman, Tony Sage said the company would be in a position to finalise its plans regarding a partially franked dividend payment.

“It is our intention to return between $0.08 and $0.10 per share to shareholders once the sale completes and the $130 million in cash is received,” Mr Sage said.  

Upon completion of the sale, Cape Lambert said its cash and receivables position would be about $300 million, not including the mark-to-market value of its listed securities of approximately $70 million.

“In the end we felt a trade sale was the best outcome for shareholders and stakeholders given capital markets remain choppy, and may continue to do so for the medium run,” Mr Sage added.

"China Sci-Tech has a very clear focus and complimentary financial capacity to return Lady Annie to production in the short term and we believe this is in the best interests of the various stakeholders associated with the project.”

The company said completion of the transaction remains subject to a number regulatory approvals.

AS at 1050 AEDT, Cape Lambert shares were up 6c to 50.5c.

RBS – Round Up – 120310

CBH Resources Limited (CBH) shares were placed in trading halt this morning after the company said it had received a takeover proposal from an undisclosed party. The company requested the trading halt to enable it to consider its response to the proposal. CBH expects an announcement to end the halt would be made prior to the commencement of trade next Tuesday.

Bass Metals Limited (BSM) posted a net loss for the six months to 31 December 2009 of $815,806, compared to a profit of $4.5 million a year earlier. The company said the fall from profit to loss was a result of holding costs associated with the Hellyer Mill and non-cash write-off of exploration expenditure. Bass Metals said its Que River base metals mine delivered an interim operating profit of $3.1 million. The company said its cash position at the end of December 2009 was $16.7 million following actual cash flow receipts of $9.6m and successful equity raisings.

Wall Street recovered at the end of a choppy session Thursday as investors weighed mixed economic data and news that China’s inflation had spiked in February. Banks led gains as the S&P 500 hit its highest level in 17 months, while the NASDAQ rose for the sixth consecutive day. 

In economic news, the January trade gap narrowed from a revised reading of US$39.9 billion to US$37.3 billion. Expectations were for it to widen to US$41 billion.

In employment news, the Labor Department reported new unemployment claims dropped from a revised 468,000 the previous week to a higher than expected 462,000 last week. Continuing claims increased 37,000 to a higher than forecast 4,558,000.

The Dow Jones gained 44.51 points, or 0.42%, to 10,611.84, the S&P's 500 added 4.63 points, or 0.40%, to 1,150.24 and the NASDAQ put on 9.51 points, or 0.40%, to 2,368.46.

Citigroup climbed 5.6% after reportedly saying it could return to making US$20 billion a year by 2012.

Goldman Sachs and Wells Fargo advanced 0.9% and 0.6%.

Home improvement retailers Home Depot and Lowe’s gained 1.3% and 1.2% ahead of the release of two US consumer reports on Friday.

Specialty retailer Best Buy added 1.3%. 

Dow components Walt Disney, IBM and Merck rosebetween 1.4% and 1.6%.

Devon Energy gained 0.5% after BP said it would pay the company US$7 billion for exploration rights in Brazil, the Gulf of Mexico and the Caspian Sea.

The major energy plays were flat as NYMEX light crude oil for April delivery rose US2c to US$82.11 a barrel.

COMEX gold for April delivery rose US$1 to settle at US$1,108.20 per ounce.

European Markets

European stocks fell off its seven-week high on concerns Chinese inflation data would force interest rate hikes and therefore monetary tightening. Miners and banks took the most points off the indices, while automakers were stronger.

The benchmark UK FTSE 100 lost 23.31, or 0.41% to 5,617.26. The French CAC40 shed 14.60, or 0.37% to 3,928.95. The German DAX dipped 8.09, or 0.14% to 5,928.63.

HSBC and Barclays were the weakest of the major UK banks, down 1.6% and 1.2% respectively. Lloyds outperformed, rallying 2.3%.

Societe Generale and BNP Paribas lost 1.8% and 1% in France, while Germany’s largest bank Deutsche Bank added 0.3%.

The data out of China weighed on miners. The world’s largest miner BHP Billiton dropped 2.1% as Rio Tinto and Xstrata fell 1.6% each.

Anglo American slid 1.2%, while gas and oil producer BG Group shed 1%.

Volkswagen climbed 7.7% after the automaker summarised plans to use a convertible bond together with a share sale to help fund a number of acquisitions. This comforted investor fears that it would inundate the market with new stock.

BMW gained 1.3% after beating full-year profit expectations. Porsche rallied 4.9%.

Japanese Markets

Japan’s Nikkei rose to its highest close in seven weeks as speculation of an increase to earnings for iron ore related stocks due to increased prices. Exporters gained ground on a weaker yen data showing US wholesale inventories surprisingly declined in January and sales hit their highest level in over a year.

The Nikkei 225 advanced 101.03, or 0.96% to 10,664.95.

Mitsui & Co put on 2.7% on reports Vale – in which the Mitsui & Co holds a 15% stake in major shareholder Itochu Corp – is looking to raise iron-ore prices by more than 90%. Itochu shares rose 2.2%. 

Iron ore prices are increased if demand is strong.

Japan’s largest operator of iron-ore ships Mitsui O.S.K. Lines added 1.3%, while rival Kawasaki Kisen Kaisha gained 1.4%.

Steelmakers Nippon Steel and JFE Holdings shed 1.2% and 1%. 

Sony and Canon put on 1.9% and 0.9%, while Japan’s largest electronics retailer Yamada Denki climbed 4%.

Nissan rose 1.4%.

Hong Kong Markets

The Hong Kong market made modest ground Thursday, its fifth straight day of gains. The market trimmed gains as China’s inflation hit 2.7%, a 16 month high, raising fears the government would wind back stimulus measures.

The Hang Seng edged 19.91 points higher, or 0.09% to 21,228.20.

In a wrap of the banks, Bank of China was 1.5% down, while ICBC gave up 1.4%.

HSBC bucked the trend, climbing 0.3%.

The retailers were stronger as data released by the Chinese government showed retail sales had increased by 17.9% in the first two months of the year over the previous corresponding period.

Beijing department store, Parkson Retail Group rose 3.6%.

Meanwhile European focused Esprit, put on 1.8%.

Li & Fung, which makes clothes for Wal-Mart and Australia’s Pacific Brands climbed 1.7%.

The automakers were stronger, with Warren Buffett backed BYD and Geely Automobile rising 2.3% and 2.5% respectively.

Elsewhere the property stocks were weaker.

Guangzhou R&F Properties, China Overseas Land & Investment and China Resources Land gave up 2.6%, 1.4% and 1.3% respectively.

The Australian sharemarket finished lower Thursday as losses from a few of the heavyweight miners and financials eventually outweighed strong gains seen among other blue chips. The broader indices only moved as much as 20 points from the gain line the entire session. 

According to the Australian Bureau of Statistics, Australia's unemployment rate rose to an expected seasonally adjusted 5.3% in February, from a revised 5.2% in January. The number of employed rose 400 in absolute terms.

At the bell, the All Ords had lost 4.3 to 4,825.5, while the ASX/200 dipped 5.8 to 4,814.2. Over 2.3 billion shares worth around $4.6 billion had changed hands.

The Materials and Resources sector slid 0.2%, reflecting market heavyweight BHP Billiton, which weakened 23c to $43.01.

Rio Tinto edged 6c higher to $75.41.

Fortescue rallied 10c, or 2.1% to $4.92 and Atlas Iron jumped 15c, or 6.5% to $2.46.

Explosives and chemicals company Orica climbed 56c, or 2.2% to $25.87, the day after saying it would take a $192 million hit on a tax ruling.

Incitec Pivot put on 8c, or 2.3% to $3.59.

The Energy sector edged 0.3% lower as Woodside slipped 22c to $45.27.

Oil Search, Santos and Origin were all less than 0.7% below the gain line.

Uranium specialist Extract Resources shed 22c, or 3% to $7.11, extending losses from yesterday, while Caltex gained 28c, or 2.6% to $11.14.

The big four banks were mixed, with ANZ and CBA edging higher and NAB a similar amount the other side of the line.

Westpac shed 33c, or 1.2% to $27.00.

The Banks and Financials sector weakened 0.3%.

It was more positive for Macquarie, which rose 35c, or 0.7% to $49.40.

The insurers were out of favour with investors. QBE lost 35c, or 1.6% to $21.06.

Property Trusts finished 0.4% lower in a relatively uneventful day for the sector.

Lend Lease outperformed with a 3.7% gain to $8.66.

Among Industrial stocks Leighton was 65c, or 1.7% stronger at $39.65. The infrastructure builder said its subsidiary, Leighton Asia, had secured a $463 million Hong Kong rail contract.

Macmahon Holdings said it would partner with Leighton on around $115 million worth of work on the same contract. Its shares were up 4%.

The sector was 0.6% lower.

It was a mix across the rest of the sector. Brambles was down 0.8%, while Downer EDI and Seek gave up 2.5% and 2.6% to $7.68 and $7.41 respectively.

Transpacific Industries slumped 4% to $1.325 and CSR gained 3.5c to $1.70 on several broker upgrades.

The Consumer Discretionary sector rose 0.2%. Myer shares fell 3c to $3.44 after the department store said profit was up 38% to $115 million. The group however offered a cautious outlook.

Oroton Group was a standout with an 8.8% jump, after saying its first half profit was 24% stronger.

Elsewhere in the sector, gamer Tatts put on 2.5% to $2.47.

In the Consumer Staples field, Wesfarmers and Woolworths were 6c and 16c stronger, with the sector tacking on 0.2%. The stocks closed at $32.29 and $28.36 respectively.

Grain handler Viterra rallied over 3.6% after reporting solid first quarter earnings.

Telstra extended recent gains with a 2.7% rise to $3.07, while the broader Telecommunications sector gained 2.4%.

Around the region, the Nikkei 225 added 51.7 to 10,615.6, while the NZSE50 edged 2.7 lower 3,223.5. The Straits Times Index lost 3.7 to 2,858.6. The Hang Seng fell 74.1 to 21,134.2.

Spot gold was trading at US$1,107.95 per ounce, while the Aussie was buying US$0.9145. 

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Leighton sub secures $463m rail contract
Leighton said its subsidiary, Leighton Asia, had been awarded a $463m contract to construct the Tse Uk Tsuen to Shek Yam section of the Guangzhou – Shenzhen – Hong Kong Express Rail Link. The work is for tunnels and ventilation buildings and is expected to begin immediately, with completion slated for 2015.

By the finish, Leighton shares were up 65c to $39.65.

Meanwhile, Macmahon Holdings said that it had entered an agreement with Leighton Asia for some of the work. The company said the estimated value of the work is $115 million.

At the end of the day, Macmahon shares were up 3c to 78c.

Myer posts 38% hike in profit
Myer said its profit for the six months to 23 January 2010 jumped 38% to $115m, not including the costs of its recent IPO. The result came on the back of a more modest 2% rise in sales to $1.797 billion.

At the finish, Myer shares were down 3c to $3.44.

Cooper Energy expects flooding to impact operations
Cooper Energy said flooding in the Cooper Basin is expected to have some impact on its operations in South Australia due to roads being cut-off and oil fields being isolated. The company said over 80% of its production is delivered to market by the PEL92 flow-line and this production is continuing.

By the end of the day, Cooper Energy shares were down 1.5c to 49.5c.

Oroton 1H profit up 24%
OrotonGroup reported a net profit of $15.4m for the six months ended 23 January 2010, an increase of 24% on the previous corresponding period. However, the company said it was expecting challenging conditions in the second half.

At the close, Oroton shares were up 55c to $6.83.

Pharmaxis completes Phase II study
Pharmaxis announced the successful completion of a Phase IIa dose profiling study with its new anti-inflammatory agent ASM8 in patients with allergic asthma. The company said the study met the pre-defined primary efficacy and safety endpoints and ASM8 was found to be safe at all doses tested and particularly effective at an inhaled dose of 8mg once per day.

By the end of the day, Pharmaxis shares were up 7c to $2.59.

Bendigo and Adelaide Bank Limited (BEN) received an upgrade on its credit rating outlook from Fitch Ratings services. The company said the upgrade takes its corporate rating from BBB+ with a stable outlook, to BBB+ with a positive outlook. The change is also the first outlook upgrade by Fitch Ratings for any Australian bank since the beginning of the Global Financial Crisis.

Local shares paced modest rises in international markets, climbing 0.4% by lunch in quiet trade. Many investors were holding back till the 11:30 jobs announcement, while most sectors gained on the trading that was done, with Telstra and Fortescue the standout perfomers.

According to the Australian Bureau of Statistics, Australia's unemployment rate rose to an expected seasonally adjusted 5.3% in February, from a revised 5.2% in January. The number of employed rose 400 in absolute terms.

At noon, the All Ords had added 6.7 to 4,836.5, while the ASX/200 added 5.0 to 4,825.0. Over 1.1 billion shares worth around $1.9 billion had changed hands.

The Materials and Resources sector was flat, reflecting its major stock, BHP Billiton, which was flat through lunch.

Rio Tinto put on 69c, or 0.9% to $76.04.

Fortescue rallied 15c, or 3.1% to $4.97. Atlas Iron rallied 11c, or 4.8% to $2.42.

In the chemicals sector, Orica climbed 41c, or 1.6% to $25.72, the day after saying it would take a $192 million hit on a tax ruling.

Incitec Pivot put on 12c, or 3.4% to $3.63.

The Energy sector edged 0.2% higher, with Woodside, the largest stock in the sector also one of the best performers. Its shares were up 43c to $45.92 at lunch.

Oil Search, Santos and Origin were within 0.5% either side of the gain line.

Uranium specialist Extract Resources shed 20c, or 2.7%, extending losses from yesterday, while Paladin gained 5c to $3.74.

The big four banks were mixed, with ANZ, CBA and NAB all up between 0.2% and 0.6% respectively.

Westpac shed 20c, or 0.7% to $27.13.

The Banks and Financials sector was flat at lunch.

It was more positive for Macquarie, which rose 41c, or 0.8% to $49.46.

The insurers were out of favour with investors. QBE, IAG and Suncorp-Metway all shed between 1% and 1.2%.

The Property Trust sector was flat at lunch, stopping the rot following yesterday’s 2.2% slide.

Lend Lease outperformed with a 3.2% gain to $8.62.

Among Industrial stocks Leighton was 72c, or 1.8% stronger at $39.72. The infrastructure builder said its subsidiary, Leighton Asia, had secured a $463 million Hong Kong rail contract.

Macmahon Holdings said it would partner with Leighton on around $115 million worth of work on the same contract. Its shares were up 4.7%.

The sector was 0.2% lower.

It was a mix across the rest of the sector. Brambles was down 0.8%, while Downder EDI and UGL both gave up 1.9% to $7.73 and $14.40 respectively.

CSR gained 3c to $1.695 on several broker upgrades.

Among the aeronautical stocks, Qantas slipped 3c to $2.81, despite yesterday’s report that passenger number were up nearly 7% from a year ago.

Virgin Blue extended gains with a 1.3% rise, while Auckland International Airport slumped 4.3%.

The Consumer Discretionary sector rose 0.1%. Myer shares were little changed after the department store said profit was up 38% to $115 million. The group however offered a cautious outlook.

Oroton Group was a standout with a 9.9% jump, after saying its profit was 24% stronger.

The rest of the retailers offered little information, and were thinly traded, while Tatts was 2.4% higher in the gaming sub-sector.

In the Consumer Staples field, Wesfarmers and Woolworths was 0.5% and 0.6% stronger, with the sector tacking on 0.4%.

Grain handler Viterra rallied over 4% after reporting solid first quarter earnings.

Telstra extended recent gains with a 2.3% rise to $3.06, while the broader Telecommunications sector gained 2.4%

Around the region, the Nikkei 225 added 80.2 to 10,644.1, while the NZSE50 edged 2.7 lower 3,223.5. The Straits Times Index gained 9.3 to 2,871.6. 

Spot gold was trading at US$1,109.19 per ounce, while the Aussie was buying US$0.9133.  

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Leighton sub secures $463m rail contract
Leighton said its subsidiary, Leighton Asia, had been awarded a $463m contract to construct the Tse Uk Tsuen to Shek Yam section of the Guangzhou – Shenzhen – Hong Kong Express Rail Link. The work is for tunnels and ventilation buildings and is expected to begin immediately, with completion slated for 2015.

At midday, Leighton shares were up 62c to $39.62.

Meanwhile, Macmahon Holdings Limited (MAH) said that it had entered an agreement with Leighton Asia for some of the work. The company said the estimated value of the work is $115 million.

At lunch, Macmahon shares were up 3.5c to 78.5c.

Myer posts 38% hike in profit
Myer said its profit for the six months to 23 January 2010 jumped 38% to $115m, not including the costs of its recent IPO. The result came on the back of a more modest 2% rise in sales to $1.797 billion.

At noon, Myer shares were up 1c to $3.48.

Cooper Energy expects flooding to impact operations
Cooper Energy said flooding in the Cooper Basin is expected to have some impact on its operations in South Australia due to roads being cut-off and oil fields being isolated. The company said over 80% of its production is delivered to market by the PEL92 flow-line and this production is continuing.

At lunchtime, Cooper Energy shares were down 0.5c to 50.5c.

Oroton 1H profit up 24%
OrotonGroup reported a net profit of $15.4m for the six months ended 23 January 2010, an increase of 24% on the previous corresponding period. However, the company said it was expecting challenging conditions in the second half.

At midday, Oroton shares were up 57c to $6.85.

Pharmaxis completes Phase II study
Pharmaxis announced the successful completion of a Phase IIa dose profiling study with its new anti-inflammatory agent ASM8 in patients with allergic asthma. The company said the study met the pre-defined primary efficacy and safety endpoints and ASM8 was found to be safe at all doses tested and particularly effective at an inhaled dose of 8mg once per day.

At lunch, Pharmaxis shares were up 2c to $2.54.

Cooper Energy Limited (COE) said flooding in the Cooper Basin is expected to have some impact on its operations in South Australia due to roads being cut-off and oil fields being isolated. The company said over 80% of its production is delivered to market by the PEL92 flow-line and this production is continuing.

However, Cooper expects that the non-flowline production would suffer some deferment.

”Deferment of the non-flowline production may cause a 10-15% impact on revenue for the current reporting period but this is expected to be recuperated in subsequent periods,” the company said.

”Seismic operations have been slowed or curtailed due to access problems. This is expected to delay the delivery of prospect maps, which may ultimately delay our proposed drilling programs.”

Cooper also expects all drilling schedules to be rescheduled and reallocated, causing delays, as drilling rigs cannot be moved or accessed due to the road conditions.

Managing director, Michael Scott, said the company was fortunate the company’s flowline in PEL92 is continuing to deliver over 80% of Cooper’s oil to market.

“To preserve the delivery of this oil we are undertaking a number of immediate operational actions to mitigate the effects of the encroaching flooding Cooper Creek,” Mr Scott said.

As at 1145 AEDT, Cooper Energy shares were down 0.5c to 50.5c.

Pharmaxis Limited (PXS) announced the successful completion of a Phase IIa dose profiling study with its new anti-inflammatory agent ASM8 in patients with allergic asthma. The company said the study met the pre-defined primary efficacy and safety endpoints and ASM8 was found to be safe at all doses tested and particularly effective at an inhaled dose of 8mg once per day.

Pharmaxis said compared to saline control, at this dose, bronchoconstriction following allergen challenge was reduced by 32% during the early phase of this response and by 49% during the late phase of this response.

In addition, the company said inflammation as measured by sputum eosinophil count, 7 hours and 24 hours following allergen challenge was reduced by 49% and by 57% respectively.

Pharmaxis said ASM8 was the leading clinical-stage asset in the portfolio of drug candidates it acquired in the recent takeover of the Canadian company, Topigen Pharmaceuticals Inc.

CEO, Dr Alan Robertson, said the company was encouraged by the data demonstrating the potential value of the approach for treating asthma.

“The moderate to severe sector of the asthma market, which is the target of ASM8, represents a significant commercial opportunity, and is under-served by current therapies,” Dr Robertson said.

As at 1121 AEDT, Pharmaxis shares were up 3c to $2.55.