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AWB Limited (AWB) downgraded its forecast profit before tax and significant items for the full year ending 30 September 2010 from previous guidance of $115 million to $140 million to a range of $85 million to $110 million. The agribusiness attributed the decrease to the expected reduction in annualised profit before tax of $7 million to $10 million due to the sale of the Landmark Financial Services loan and deposit books.

AWB said with the exception of its Australian grain marketing business, all key operating businesses were trading broadly in line with expectations.

The company forecast a profit before tax and significant items within the range of $25 million and $35 million for the half year ending 31 March 2010.

Managing director, Gordon Davis, said that increases in global wheat stocks, lower transactional margins and reduced price volatility within the Australian and international grain markets have impacted the profitability of the grain marketing business.

“We expect that the domestic grain marketing result will be weighted towards the second half of the financial year but for the full year it is still likely to be significantly lower than the prior comparative period,” Mr Davis said.

“The company anticipates the domestic pooling and logistic businesses should provide a stronger result than the prior year comparative despite an increase in grain warehoused or stored on farm.

”In addition, the Logistics businesses, in particular Rail and Melbourne Port Terminal, have benefited from an increase in volumes resulting from the improved crop size on the east coast of Australia compared to the prior year.”

Mr Davis said AWB Geneva is performing well and that Landmark is now experiencing a significant increase in the level of activity, after a subdued first quarter, due to improved seasonal conditions.

Mr Davis said that the performance of the Australian grain marketing business was below expectations at this stage, however added that all other businesses were performing well.

AWB said it is in a better position with the effective closure of five out of six legal actions against the company and with a more conservative balance sheet structure.

At the close of trade Tuesday, AWB shares were trading at $1.055.

David Jones Limited (DJS) reported a post-tax profit for the six months to 31 January 2009 of $100.5 million, up 10.2% from the previous corresponding figure. Just one year out from the GFC the department store said the result was the highest first half profit since the company listed on the ASX 15 years ago.

Looking ahead, CEO Mark McInnes said the company was expecting 5% – 10% PAT growth guidance for 2H10 and FY10, although the company remains cautious about cycling the Government Stimulus in 4Q10.

“In addition, we reaffirm our PAT guidance for FY11 of 5% – 10% PAT growth. We note that to achieve the top end of this guidance the retail recovery will have to be in full swing, something Access Economics does not forecast until 2012,” Mr McInnes said.

Turning to the previous six months, Mr McInnes said the result came despite heavy discounting in the Christmas quarter last year.

“Despite a very competitive environment in 1H10, with heavy promotional activity by retailers, we are pleased to report that our GP Margin hit an all-time high of 40.0% and our EBIT Margin was 13.5%, up 90 bp when compared to 1H09,” Mr McInnes said.

Mr McInnes said that cost control measures had also contributed to the strong bottom line result.

”These initiatives include putting the Company’s advertising agency, energy, lift and escalator maintenance, media buying and catalogue printing and delivery contracts out to tender.”

The department store said total revenue climbed 2.3% to $1.086 billion.

The board declared an interim dividend of 12c per share, a record first half dividend for the company.

”The increase in David Jones’ 1H10 interim dividend reflects the strength of the Company’s Balance Sheet, its strong Cashflows, low debt levels, as well as its ability to fully fund its future Capex program,” the company concluded.

At the close Tuesday, David Jones shares were trading at $5.07.

Macmahon Holdings Limited (MAH) announced last night that it had been awarded a three-year contract valued at over $190 million by Syntech Resources to develop and operate the new Cameby Downs coal mine in the Surat Basin in Queensland. The company said the contract would see it undertake all mining activities for Stage 1 of the project, including planning, mine development, waste stripping, coal mining, coal preparation and train loading.

Macmahon CEO, Nick Bowen, said that the award was an excellent addition to the Mining Business’s growing portfolio of work.

“This award not only builds on our expertise in coal mining, it is also the first contract where we will operate and maintain the Coal Handling and Preparation Plant,” Mr Bowen said.

“This contract win allows us to further develop our expertise in this area and provide customers with a full suite of services.”

The company said production would commence in July 2010 with the first coal train load expected in October 2010.

Macmahon said at full production in Stage 1, the mine would produce 1.4 million tonnes each year of thermal coal for export via Port of Brisbane, while stage 2 production is targeted at shipping in excess of 10 million tonnes via Port of Gladstone.

At the close of trade Tuesday, Macmahon shares were trading at 74c.

Tuesday’s decision by the Federal Reserve to keep interest rates in the US near zero was expected, however was still warmly received by investors. The confirmation that interest rates would remain at historic lows for an “extended period” saw the S&P 500 close at 18-month highs, while the Dow has posted gains for six straight sessions.

In economic news, new home construction fell 5.9% to an annual rate of 575,000 in February, from a revised 622,000 during January. The consensus estimate was for a fall to 570,000. 

The Dow Jones rose 43.83 points, or 0.41%, to 10,685.98, the S&P 500 gained 8.95 points, or 0.78%, to 1,159.46 and the NASDAQ picked up 15.80 points, or 0.67%, to 2,378.01.

Citigroup rallied 3.3% through the $4 per share barrier, while Bank of America and Goldman Sachs dipped 1.1% and 1% respectively.

Among tech stocks, Intel spiked 3.6% after unveiling a new, faster processor.

For the sectors other major players it was an unremarkable day. Microsoft and Apple tacked on 0.3%.

Google climbed 0.4%, while rival Yahoo! dipped 0.6%.

The only original Dow component General Electric surged 4% after saying it would post bigger profits and pay bigger dividends in 2010.

New building permits fell less than expected and coupled with new home construction, two of America’s major home builders, KB Home and Pulte Home saw gains. Their shares rose 2.3% and 2.8% respectively.

Elsewhere Harley Davidson spiked 7% on reports it could be the target of a leveraged buyout.

NYMEX light crude for April delivery rose US$1.90 to settle at US$81.70 a barrel.

The oil sector’s largest stock, Exxon Mobil, was 0.3% above the line. 

COMEX gold rose US$17.10 per ounce to settle at $US1,122.50.

European Markets

European stocks rallied Tuesday as the rating agency Standard & Poor’s confirmed it would not downgrade Greece’s credit rating. Energy and resource stocks were stronger as oil and base metal prices tracked higher.

The benchmark UK FTSE 100 added 26.58, or 0.48% to 5,620.43. The French CAC40 advanced 48.04, or 1.23% to 3,938.95, while the German DAX climbed 67.43, or 1.14% to 5,970.99.

UK banking giant Barclays rallied 2.5%, while RBS and HSBC tacked on 1.3% and 0.4% respectively.

BNP Paribas and Credit Suisse were 2.3% and 2.7% stronger.

Heading into Easter, Swiss chocolatier Lindt rallied 3.6% after forecasting around 10% growth from next year.

British Airways spiked 4.5%, after reaching an agreement with the unions to reduce a pension deficit. The rise brought year-to-date changes to nearly 32%.

French and German automakers Renault and Peugeot both climbed 2.3% on reports the two car companies would create a partnership to cut costs.

Aussie mining peers, BHP Billiton and Rio Tinto climbed 0.9% and 1.2%.

Among oil plays, BP put on 0.5%. Royal Dutch Shell gained 1.3%, while French refiner Total added 0.6%.

Japanese Markets

Profit taking saw Japan’s Nikkei lose ground for the first time in four sessions. Investors were hesitant to take positions ahead of monetary policy decisions by the US Federal Reserve and the Bank of Japan later in the week.

The Nikkei 225 fell 30.27, or 0.28% to 10,721.71.

Canon lost 1.3% after reaching a seven-week high the previous day, while Pioneer dropped 2.5% as the yen strengthened against the greenback and euro.

Sony slid 0.7%.

Automakers Honda and Nissan shed 1.5% and 1.6%, while Toyota bucked the trend, adding 1.3%.

Sony Financial Holdings spiked 14% after the insurance and banking unit said it would increase its bond holdings to reduce risk.

Trading companies Mitsui & Co. and Itochu Corp weakened 1.2% and 2.1% after a fall in commodities prices.

Oil explorer Inpex Corp shed 1.2%.

Takashimaya Co. slid 2.4% after a broker downgrade on the department store operator’s stock.

Hong Kong Markets

The Hang Seng fell for a third straight session yesterday. In fluctuating, directionless trade, banks were mixed, while oil stocks lost ground.

The Hang Seng fell 56.17, or 0.27% to 21,022.93.

Among the banks, Bank of China and the index’s largest stock, HSBC were both 0.3% below the line, while ICBC was 0.5% stronger.

Sun Hung Kai Properties, the world’s largest developer by market value, retreated 1.4%.

Car maker BYD put on 8% after the Warren Buffett backed company beat quarterly earnings expectations and gave a bullish view of the broader Chinese market.

Rival automaker Geely Automobiles fell 1.2%.

China Shineway Pharmaceuticals spiked 11.5% after Goldman Sachs upgraded the stock to ‘buy’.

Off-shore oil producer, Cnooc lost 0.6%, while Petrochina was down 1%

Local shares finished 0.3% above the gain line, with the banks and heavyweight miners getting little traction in the market. Most sectors showed a broad mix of gainers and losers, with Telstra performing strongly on a delay in the government vote to split up the telco.

At the end of the day, the All Ords had added 9.7 to 4,809.1, while the ASX/200 gained 13.1 to 4,797.2. Over 2.3 billion shares worth around $5 billion had changed hands.

Miners resisted a weakening in metals prices in London as the Materials and Resources sector advanced 0.3%.

Base metals prices lowered as concerns tightening of Chinese monetary policy would hamper China's metals consumption.

Rio rose 12c to $75.50 after saying, in its 2009 Annual Report, it expects economy wide inventory rebuilding in the OECD to provide a short-term boost to activity.

Media reports surfaced today suggesting Rio is in talks with Aluminum Corp. of China about jointly developing the US$12 billion Simandou iron ore project in Guinea.

BHP Billiton rose 18c to $42.75.

Lihir outpaced a rise in the price of gold, with a 9c, or 3% gain to $3.06. Newcrest lost 17c, or 0.5% to $33.52.

Junior miner CBH Resources gained 8.8% after announcing it had received a takeover proposal from its major shareholder Toho Zinc to rival that offered by Nyrstar NV last week.

Steelmakers Bluescope and Onesteel put on 2.2% each to $2.82 and $3.69 respectively.

The Energy sector dipped 0.5% after crude futures almost reached two week lows due to caution regarding the economic outlook.

Heavyweight Woodside lost 23c to $44.76, while Origin shed 0.8% to $16.32.

Arrow Energy edged 2c lower to $5.23 as speculation mounts that the company will reject Royal Dutch Shell and PetroChina’s joint takeover offer as early as today. However, Arrow did say today it was still in “active” discussion with the joint bidders.

Meanwhile, Liquefied Natural Gas announced that it has extended and modified its previously announced Heads of Agreement for the sale of the Fisherman's Landing project to Arrow Energy, as the company possibly looks for alternate partners.

LNG shares were 2.9% higher at 52.5c.

Uranium miner Paladin gained 12c to $3.80 as it remains favoured by Citigroup for long-term upside in the uranium market.

A 0.3% rise from the Bank and Financials reflected an uneventful day’s trade within the sector.

Of the big four, Westpac was the best performer, up 28c, or 1.1% to $26.91.

NAB retreated 8c to $26.75, while insurer IAG put on 3c, or 0.8% to $3.99. 

Strength among the mid-caps saw the Property Trust sector finish 0.5% higher.

Westfield was down 1c to $11.87, while Mirvac gained 2.7% to $1.50.

The Industrials sector was helped 0.4% higher by the performance of three stocks.

UGL rallied 4.2% to $15.02 after Goldman Sachs JBWere upgraded its forecast on the stock to “buy”. The broker said UGL is set to benefit from higher than expected economic growth and capex spend.

Brambles and Toll both added 1.7% to $7.33 and $7.12 respectively.

The sector’s largest stock, Leighton retreated 59c, or 1.5% to $38.37.

Consumer Staples was down 0.1%. Wesfarmers lost 15c to $31.55, while Woolworths was 7c dearer at $28.28.

Grain handlers Graincorp, Viterra and AWB rose 0.8%, 2.4% and 2.4% respectively.

Losses from a few of the sub-sector majors dragged the Consumer Discretionary sector 0.4% below the line.

Retailer Billabong shed 2.2% to $10.30 and gamer Aristocrat fell 2.5% to $4.30.

Ten Network lost 2.1% to $1.825, while rival Seven’s shares gained 3c to $8.00 following the release this afternoon of the scheme booklets related to its proposed merger with WesTrac.

Newscorp bucked the trend, adding 15c, or 0.8% to $18.16.  

Telstra rose 7c, or 2.3% to $3.11. The Telecommunications giant announced the completion of a 10-year benchmark €1 billion Eurobond issue today. The company said issue proceeds would be used mainly for retiring shorter-term bank debt and for general working capital purposes.

Telecom dropped 1.5% to $1.685 after saying the New Zealand government’s rural broadband plans that were originally set out in September 2009 would adversely impact the company’s EBITDA guidance for the next three financial years by up to $56 million if they are enacted.

The sector gained 2%.

The Healthcare sector gained 0.7%. CSL edged 0.6% higher to $35.96, while Primary and Sonic Healthcare put on 0.7% and 1.4%.

Meanwhile, Acrux rallied 2.1% after saying it had sold the rights to commercialise its testosterone replacement drug AXIRON to Eli Lilly for potentially up to US$335 million.

Around the region, the Nikkei 225 lost 15.7 to 10,736.3, while the NZSE50 fell 23.4 to 3,207.8. The Straits Times Index gained 5.3 to 2,879.7. The Hang Seng shed 92.4 to 20,986.7.

Spot gold was trading at US$1,112.34 per ounce, while the Aussie was buying US$0.915.

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Rio forecasts short-term increase in activity
Rio Tinto expects economy wide inventory rebuilding in the OECD to provide a short-term boost to activity. The mining giant’s comments followed the IMF’s predictions of global growth of almost 4% and Chinese GDP growth of between 9% and 10%.

At the close, Rio shares were up 12c to $75.50.

Acrux inks licensing deal with Eli Lilly
Aussie pharmaceutical company, Acrux said it had entered an agreement with US giant Eli Lilly to commercialise its male testosterone replacement drug, AXIRON. Under the terms of the deal, Acrux said it was in line to receive up to US$335 million in milestone payments, plus royalties on worldwide sales.

At the end of the day, Acrux shares were up 5c to $2.43.

CBH receives revised Toho proposal
CBH Resources said it received a revised proposal from its major shareholder, Toho Zinc Co., Ltd after the close of trade Monday that rivals that put forward by Nyrstar NV on Monday. The company said under the revised Toho proposal, Toho would make a proportional takeover offer to all CBH shareholders (excluding Toho) for CBH ordinary shares at 25c per share, so that Toho would have a relevant interest in not more than 49.9% of total issued shares of CBH.

At the bell, CBH shares were up 1.5c to to 18.5c.

LNG and Arrow redraw agreement
The board of Liquefied Natural Gas said that it has extended and modified its previously announced Heads of Agreement for the sale of the Fisherman's Landing project to Arrow Energy. LNG said the redrawn agreement came at the request of Arrow Energy, while the takeover offer and other uncertainties around ownership of the company play out.

At the finish, Arrow shares were down 2c to $5.23 per share, while LNG shares were trading up 1.5c to 52.5c.

Telstra completes 1bn euro bond issue
Telstra Corporation announced the completion of a 10-year benchmark €1 billion Eurobond issue, with a 4.25% annual coupon and a maturity of 23 March 2020. The company said the bond was about six times oversubscribed with an order book comprising almost 300 individual orders from a wide range of high quality fixed income investors, including fund managers, insurance companies and banks.

At the end of the session, Telstra shares were trading up 7c to $3.11.

One year on from the bear market lows of the global financial crisis, after a corner turned on 10 March 2009 when Citigroup CEO Vikram Pandit said the US bank was on track to post a profit in the March 2009 quarter, most companies locally have posted strong gains.

Of course, some recoveries have been stronger than others.

Telstra shareholders have continued to see their investment erode, while other sectors and stocks rallied. The telco hit an all-time low of $2.88 earlier this month.

Not even at the depths of the GFC did investors have so little faith in the company, with Telstra’s GFC closing low of $2.96 coming on 19 March 2009.

By 10 March 2010, Telstra shares closed at $2.99, a mere 1% gain in a year.

Telstra wasn’t alone in the telco sector, with Telecom NZ the only company in the ASX/100 to actually be lower on 10 March 2010 than at their GFC low.

In early March 2009, Telecom NZ shares were trading at $1.75, against $1.72 last week.

Among ASX/100 listed telco’s the average gain from GFC lows has been just 4%, with Singtel posting a 12% return.

It’s a different story for the Material and Resource stocks, which make up 18 members of the ASX/100 – or 19 if you include Eldorado Gold Corporation, which first listed last December.

The average gain there has been nearly 120%!

Australia’s third-largest iron ore producer, Fortescue, is the sector’s outstanding performer with its shares rising from GFC closing lows in mid-November 2008 of $1.29 to $4.82 last week, a rise of 274% (although its shares have been as high as $5.57 in the last year, a 332% hike).

That said, Fortescue is still only just under one-third of its way back to its pre-GFC high of $13.15 in June 2008.

Another notable gainer is Aquarius Platinum, whose shares have risen 216%. The South African based miner's shares hit a low $2.03 on 28 October 2008, but have since risen to $6.42 by 10 March 2010.

It wasn't all big gains in the sector. Agrichem company Nufarm’s shares have only returned 11% from GFC lows, a far cry from rival Incitec Pivot – its shares are up 101%.

Looking at the numbers for the Materials and Resources sector, the 120% average rise in share price is still only 38% of the way back to their average peak prices seen on 23 November 2007.

Meanwhile, if you invested in the Property Trusts sector you should have done even better with prices there, on average, rising 140% for ASX/100 listed companies.

Goodman Group shares have surged 340% to 61.5c, while the sector’s largest play, Westfield, has seen its shares rise 35% to $12.07

Interestingly there, prices have only recovered 20% of the way back to their June 2007 highs (on average).

Another point to note about Property Trusts is that their peak in June 2007 was earlier than for most sectors, while their emergence from lows in March 2009 proved Property Trusts to one of the slowest recoverers.

Elsewhere the Industrials sector average share price has risen, on average, 138% from GFC lows, led by rail and ports operator Asciano whose share have surged 423% from 35.5c per share to $1.86 last week.

Qantas shares have doubled to $2.84 from exactly a year previously.

Seek and Transfield shares were up 236% and 261% respectively.

Looking at the Banks and Financials sector, the average return for ASX/100 listed stocks was 102%.

Among the big banks, Macquarie led the way higher from closing lows of $15.75 (although intra-day lows touched $15.00) to just under $50 last Wednesday – a rise of 211%.

CBA rallied 131%, ANZ 101% and Westpac 87% from GFC lows a year ago, while NAB has risen 67%.

However, in a further breakdown of their recovery, CBA shares are now around 87% recovered to their 2007 highs, while NAB is just 37% of the way back from a low of $16.03 to their November 2007 all-time high of $44.84.

However, it’s the second-tier Challanger Financial Group which outperformed them all, surging just over 300% from their GFC low on 13 March 2009.

Among the underperformers, IAG shares have risen from $3.06 to $4.00 – or around 30%.

Consumer Staples shares were among the poorest sectors to invest, with the average gain there for ASX/100 listed companies coming in at just under 50%.

Wesfarmers easily outperformed, with its shares rising in value from $14.54 on 12 December 2008 to $32.23 last week – a rise of 121%.

The second highest gainer in the sector was Coca-Cola Amatil which saw its share price gain 62% to $11.17.

Wesfarmers rival, Woolworths, gained a modest 22% from July 2008 lows, with their price last week of $28.20 representing a 42% recovery to pre-GFC highs. Wesfarmers shares are around 63% of their way back.

Metcash, by comparison, has seen its shares rise just 10% from GFC lows, however are only 22% recovered back to their April 2007 peak of $5.40.

In other sectors, for the 14 Consumer Discretionary stocks on the ASX/100 the average return has been 87%.

The best performer has been JB Hi-Fi, whose shares are up 176%, followed by David Jones, which has risen 141% from 4 March 2009 lows of $2.09 to $5.07 last week.

It’s the gamers who have lagged noticeably for the sector, with Tabcorp and Tatts both returning around 11%, while Aristocrat returned 37%.

As would be expected with persistent unemployment in the US and interest rates rising here, Consumer Discretionary stocks have been some of the slowest to recover, with the average share price only 32% of the way back to their peaks pre-GFC.

The sector, on average, hit its peak on 25 March 2007, only emerging from lows in late February 2009.

Elsewhere, the Energy sector has returned an average of 98% from mid-November 2008 lows to last week across the sector’s 11 stocks.

The best performer has been Arrow Energy, however that company’s shares have been influenced by the recent US$3.3 billion takeover offer from PetroChina and Royal Dutch Shell.

WorleyParsons and Centennial Coal have returned 133% and 146%.

If you had invested in Santos your returns would have been the lowest in the ASX/100 Energy sector, with that company’s share price rising just 44% to $13.90 last week from lows of $9.63 on 17 October 2008. Uranium specialist ERA has posted 85% gains, however is still only 47% of the way back to pre-GFC highs.

Interestingly the Energy sector hit its pre-GFC highs later (April 2008) than other sectors and GFC lows earlier than most other sectors (October 2008).

Of course, the ASX/100 isn’t always the best place to look for the best returns.

Pacific Brands hit closing lows of 13c on 5 March 2009, before hitting highs of $1.52 on 19 October 2009 – a 1,070% return.

Otherwise Bradken may have been your preference – its shares have spiked from 97c on 9 March 2009 to $7.30 today, for a lazy 652% gain.

CBH Resources Limited (CBH) said it received a revised proposal from its major shareholder, Toho Zinc Co., Ltd after the close of trade Monday that rivals that put forward by Nyrstar NV on Monday. The company said under the revised Toho proposal, Toho would make a proportional takeover offer to all CBH shareholders (excluding Toho) for CBH ordinary shares at 25c per share, so that Toho would have a relevant interest in not more than 49.9% of total issued shares of CBH.

CBH said the revised proposal involved transactions relating to the Rasp Project, which was endorsed by the board of the company on 21 January 2010 and which was to be put to CBH shareholders at a general meeting on 30 March 2010.

The company said under the revised Toho proposal, the proposed placement of 50 million CBH shares to Toho at 20c per share would not proceed.

“The other aspects of the original Toho proposal would be retained,” the company said.

CBH added that the proportional takeover offer would be subject to a precondition that shareholders have approved the Rasp Transactions.

Toho stated that at present it would not support the revised Nyrstar proposal, either as a shareholder or noteholder.

“As a result, Toho Zinc believes that Nyrstar’s revised proposal in its present form would fail and that it therefore does not represent a genuine or realistic alternative to the Rasp Transactions,” Toho said.

CBH said a committee of directors independent of Toho is currently assessing the merits of both revised proposals and a recommendation would be made to shareholders as soon as practicable.

CBH shares remain halted at 17c.

Aussie shares edged higher by midday Tuesday after a mixed lead from global markets and economic data overnight. Sectors moved either side of the gain line, with telecommunications being the standout performer. 

At noon, the All Ords had added 4.9 to 4,804.3, while the ASX/200 gained 7.4 to 4,791.5. Over 1 billion shares worth around $1.7 billion had changed hands.

Miners resisted a weakening in metals prices in London as the Materials and Resources sector advanced 0.2%.

Metals prices lowered as concerns tightening of Chinese monetary policy would hamper China's metals consumption.

Rio added 9c to $75.47 after saying, in its 2009 Annual Report, it expects economy wide inventory rebuilding in the OECD to provide a short-term boost to activity.

Media reports surfaced today suggesting Rio is in talks with Aluminum Corp. of China about jointly developing the US$12 billion Simandou iron ore project in Guinea.

BHP Billiton rose 9c to $42.66.

Lihir tracked the price of gold higher, with a 7c, or 2.4% gain to $3.04.

Junior miner CBH Resources was in trading halt as it announced it had received a takeover proposal to rival that offered by Nyrstar NV last week.

Steelmakers Bluescope and Onesteel put on 1.4% and 1.7% to $2.80 and $3.67 respectively.

The Energy sector dipped 0.8% after crude futures almost reached two week lows due to caution regarding the economic outlook.

Heavyweight Woodside lost 22c to $44.77, while Origin shed 1.5% to $16.21.

Arrow Energy edged 2c higher to $5.27 as speculation mounts that the company will reject Royal Dutch Shell and PetroChina’s joint takeover offer as early as today. However, Arrow did say today it was still in “active” discussion with the joint bidders.

Meanwhile, Liquefied Natural Gas announced that it has extended and modified its previously announced Heads of Agreement for the sale of the Fisherman's Landing project to Arrow Energy, as the company possibly looks for alternate partners.

LNG shares were 9.8% higher at 56c.

Uranium miner Paladin gained 10c to $3.78 as it remains favoured by Citigroup for long-term upside in the uranium market.

A 0.2% rise from the Bank and Financials reflected an uneventful mornings trade within the sector.

Of the big four, Westpac was the best performer, up 22c, or 0.8% to $26.85.

NAB retreated 8c to $26.75.

Insurer IAG put on 7c, or 1.8% to $4.03.

A mixed morning from Property Trust stocks saw the sector 0.1% lower.

Stockland dragged to be down 6c, or 1.5% to $3.90, while Dexus gained 1.3% to 81c.

The Industrials sector was helped 0.4% higher by the performance of three stocks.

UGL rallied 4.7% to $15.09 after Goldman Sachs JBWere upgraded its forecast on the stock to “buy”. The broker said UGL is set to benefit from higher than expected economic growth and capex spend.

Brambles and Toll added 2.1% and 1.4% to $7.36 and $7.10 respectively.

Consumer Staples was flat. Wesfarmers lost 17c to $31.53, while Woolworths was 5c dearer at $28.26.

Losses from a few of the sub-sector majors dragged the Consumer Discretionary sector 0.5% below the line.

Retailer Billabong shed 2% to $10.32 and gamer Aristocrat fell 2.3% to $4.31.

Ten Network lost 2.9% to $1.81, while rival Seven’s shares were halted ahead of the release this afternoon of the scheme booklets related to its proposed merger with WesTrac.

Newscorp bucked the trend, adding 21c, or 1.2% to $18.22.  

Telstra rose 6c, or 2% to $3.10. The Telecommunications giant announced the completion of a 10-year benchmark €1 billion Eurobond issue today. The company said issue proceeds would be used mainly for retiring shorter-term bank debt and for general working capital purposes.

Telecom dropped 1.2% to $1.69 after saying the New Zealand government’s rural broadband plans that were originally set out in September 2009 would adversely impact the company’s EBITDA guidance for the next three financial years by up to $56 million if they are enacted.

The sector gained 1.9%.

Around the region, the Nikkei 225 lost 15.3 to 10,736.7, while the NZSE50 fell 13.1 to 3,218.0. The Straits Times Index gained 5.9 to 2,880.3. 

Spot gold was trading at US$1,109.00 per ounce, while the Aussie was buying US$0.9130.

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Rio forecasts short-term increase in activity
Rio Tinto expects economy wide inventory rebuilding in the OECD to provide a short-term boost to activity. The mining giant’s comments followed the IMF’s predictions of global growth of almost 4% and Chinese GDP growth of between 9% and 10%.

At midday, Rio shares were up 10c to $75.48.

Acrux inks licensing deal with Eli Lilly
Aussie pharmaceutical company, Acrux said it had entered an agreement with US giant Eli Lilly to commercialise its male testosterone replacement drug, AXIRON. Under the terms of the deal, Acrux said it was in line to receive up to US$335 million in milestone payments, plus royalties on worldwide sales.

At noon, Acrux shares were up a modest 4c to $2.42.

LNG and Arrow redraw agreement
The board of Liquefied Natural Gas said that it has extended and modified its previously announced Heads of Agreement for the sale of the Fisherman's Landing project to Arrow Energy. LNG said the redrawn agreement came at the request of Arrow Energy, while the takeover offer and other uncertainties around ownership of the company play out.

Half way through the day, Arrow shares were trading up 3c to $5.28 per share, while LNG shares were trading up 5c to 56c.

Telstra completes 1bn euro bond issue
Telstra Corporation announced the completion of a 10-year benchmark €1 billion Eurobond issue, with a 4.25% annual coupon and a maturity of 23 March 2020. The company said the bond was about six times oversubscribed with an order book comprising almost 300 individual orders from a wide range of high quality fixed income investors, including fund managers, insurance companies and banks.

By midday, Telstra shares were trading up 7c to $3.11.