egolinews.com

The Australian market closed at two-month highs Friday following a late run from the banks and several other blue chip stocks. Sectors were mixed with most within 0.7% either side of the gain line.

At the bell, the All Ords had edged 12.4 to 4,890.1, while the ASX/200 gained 9.1 to 4,872.2. Over 2.7 billion shares worth around $5.2 billion had changed hands.

Among the big four banks, ANZ was the best performer, up 0.9% to $25.11.

NAB and Westpac advanced 0.6% and 0.5%, while CBA shed 40c to $56.21.

The Banks and Financials sector was 0.2% above the line.

It was a similar story among the insurance stocks. QBE added 20c to $20.96, while IAG and Suncorp-Metway dipped 4c and 9c to $3.94 and $8.44.

Investment bank Macquarie’s shares weakened 24c, or 0.5% to $49.42.

The Property Trusts sector gained 0.7%, with Westfield climbing 10c, or 0.8% to $12.20.

Stockland and Mirvac added 7c and 2c to $4.04 and $1.495 respectively. GPT lost 1c to 56c.

BHP Billiton was little changed, as it was throughout the day, despite its London listed stock losing ground and base metal prices falling overnight. The miner’s shares closed at $43.20.

Rio Tinto dipped 80c, or 1% to $76.19 as the company signed a memorandum of understanding with Chinalco to establish a joint venture covering the development and operation of the Simandou iron ore project in Guinea.

Fortescue lost 5c to $4.85, despite announcing a 300 million tonnes upgrade to reserves at its Solomon Project in the Pilbara.

Onesteel and Sims Metal rallied 2.3% and 1.7% to $3.92 and $20.63. 

Among the chemicals makers, Incitec Pivot was the sector’s major mover, slumping 16c, or 4.3% to $3.54.

The Materials and Resources sector dipped 0.2%.

Energy shares were in favour, with the sector gaining 0.7%.

Woodside climbed 48c, or 1% to $46.73, while Coal and Allied lead the coal stocks higher for the second straight session. Its shares were up $2.97, or 3.4% to $90.80.

Whitehaven and Centennial Coal were 2% and 1.7% higher, while New Hope spiked 3.4% higher to $5.14 per share.

Arrow Energy shares were in a trading halt pending a market update on the takeover offer received from PetroChina and Royal Dutch Shell.

Uranium specialist Extract Resources surged 14.4%.

The Consumer Discretionary sector was also mixed, and finished flat.

Among the retailers David Jones retreated 17c, or 3.3% to $4.92, while Billabong advanced 17c to $10.83.

Flight Centre rose 55c, or 2.7% to $20.93.

A 69c, or 2.2% rise in Wesfarmers' shares to $31.80 helped the Consumer Staples sector to a 0.9% gain.

Second-tier supermarket chain Metcash lost 0.7% to $4.12 after saying it would shut down its Campbell Cash & Carry business.

Woolworths, Coca-Cola and Fosters were all within 0.4% above the gain line.

A series of gains from the larger capped Industrials sectors saw the sector add 0.2%.

Leighton gained 47c, or 1.2% to $39.57 and Brambles put on 6c, or 0.8% to $7.49.

Downer EDI spiked 13c, or 1.7% to $7.60.

MAp Group shed 3c to $3.05. The operator Sydney Airport said passenger numbers had increased 12% in February.

Asciano and Transurban lost 1.6% and 1.5%.

Telstra was flat, while the broader Telecommunications sector slid 0.1%

Around the region, the Nikkei 225 gained 66.2 to 10,810.2, while the NZSE50 added 9.7 to 3,230.4. The Straits Times Index put on 9.8 to 2,923.7. The Hang Seng shed 42.4 to 21,288.3.

Spot gold was trading at US$1,123.80 per ounce, while the Aussie was buying US$0.9218.

---

Rio and Chinalco form Guinea iron ore JV
Rio Tinto and Chinalco have signed a non-binding memorandum of understanding (“MoU”) to establish a joint venture covering the development and operation of the Simandou iron ore project in Guinea. The company said Chinalco would acquire a 47% interest in the new JV by providing US$1.35 billion on an earn-in basis through sole funding of ongoing development work over the next two to three years.

By the final whistle, Rio shares were down 80c to $76.19.

AGL to sell pipeline for $82.6m
AGL Energy said it has entered into an agreement to sell the Berwyndale to Wallumbilla Pipeline for $82.6m to APA Group. The company said it has also entered into a 17 year Gas Transportation Agreement (“GTA”) with APA in relation to the BWP.

At the end of the day, AGL shares were up 12c to $15.09, while APA shares were down 9c to $3.36.

Significant gap between Telstra and NBN
Telstra Corporation said there is currently a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome in regards to the negotiations regarding the future of Telstra’s fixed local access network and associated matters. The company said there are also a range of commercial matters that are yet to be agreed.

By the finish, Telstra shares were unchanged at $3.17.

Ore reserve exceeds Western Areas' expectations
Western Areas announced that the ore reserve for the first stage of the planned underground mine at Spotted Quoll has exceeded the company’s expectations. The company said a Probable Ore Reserve of 1,725,000 tonnes at an average grade of 4.1% nickel containing approximately 70,200 tonnes nickel has been estimated from below the Tim King Pit to 525m vertical depth.

At the finish, Western Areas were up 3c to $4.95.

Metcash axes Campbells Cash & Carry
Metcash has decided to axe its Campbells Cash & Carry business as it struggles to compete with branded convenience stores such as 7 Eleven. Metcash said the company would set aside $15.4 million in restructure provisions.

By the end of the day, Metcash shares were down 3c to $4.12.

Sydney Airport visitors up 12% in Feb
MAp Group this morning reported an increase in traffic across its portfolio of airports, including a 12.3% increase at its flagship Sydney Airport. The increase in numbers was, once again, driven by visitors from the US, which saw a 20% increase in passenger numbers.

At the close, MAp shares were down 3c to $3.05.

Rio Tinto Limited (RIO) and Chinalco have signed a non-binding memorandum of understanding (“MoU”) to establish a joint venture covering the development and operation of the Simandou iron ore project in Guinea. The company said Chinalco would acquire a 47% interest in the new JV by providing US$1.35 billion on an earn-in basis through sole funding of ongoing development work over the next two to three years.

“Once Chinalco has paid its US$1.35 billion, the Rio Tinto and Chinalco effective interests in the Simandou project will be 50.35% and 44.65% respectively,” Rio said.

The company said the scope of the proposed joint venture covers rail and port infrastructure as well as the mine itself.

Rio said it currently owns 95% of the project with the remaining 5% being owned by the International Finance Corporation.

CEO of Rio Tinto, Tom Albanese, said the company believes the project is a large scale, long life asset and is the single best undeveloped source of high grade iron ore.

The company said its Simfer subsidiary would continue to manage the development of the project following the formation of the JV.

Rio said the two companies would now work on finalising definitive and binding transaction documentation.

The company said the Guinean Government holds an option to buy up to 20% of the project and that any interest acquired by the government would proportionally reduce the effective interests of Rio Tinto, Chinalco and the IFC in Simandou.

Rio Tinto has already spent over US$600 million on exploration and evaluation work necessary to develop the mine.

As at 1458 AEDT, Rio shares were down 60c to $76.39.

The local market edged higher by lunch, despite the fact the big four banks and the heavyweight miners were unable to get any traction in either direction. Even though every sector, with the exception of the miners, was up the market gain was minimal and generally buoyed by the mid-cap stocks.

At midday, the All Ords had edged 8.1 higher to 4,885.8, while the ASX/200 shed 6.6 to 4,869.7. Over 1.1 billion shares worth around $1.7 billion had changed hands.

Among the big four banks, ANZ and NAB were 0.3% and 0.2% higher to $24.96 and $26.80 respectively.

Westpac and CBA were 0.4% and 0.2% lower.

The Banks and Financials sector was 0.1% above the line.

It was a similar story among the insurance stocks. AXA Asia Pacific and QBE added 0.59 points between them to the broader ASX/200, while combined AMP and IAG saw 0.6 points wiped off.

Macquarie’s share price was a little more pronounced, up 60c, or 1.2% to $50.26.

The Property Trusts sector gained 0.5%, with Westfield adding 10c, or 0.8% to $12.20.

Stockland and Mirvac added 5c and 1.5c to $4.02 and $1.49 respectively.

By lunchtime, BHP Billiton was unchanged despite its London listed stock losing ground and base metal prices falling overnight.

Rio Tinto dipped 43c, or 0.6% to $76.56.

Fortescue lost 1c to $4.89, despite announcing a 300 million tonnes upgrade to reserves at its Solomon Project in the Pilbara.

Other stocks to also show next to no movement included the gold miners and steel stocks.

Among the chemicals makers, Incitec Pivot was the sector’s major mover, slumping 17c, or 4.6% to $3.53.

The Materials and Resources sector dipped 0.2%.

Energy shares were in favour, with the sector gaining 0.5%.

Woodside climbed 43c, or 0.9% to $46.68, while Coal and Allied lead the coal stocks higher for the second straight session. Its shares were up $3.34, or 3.8% to $91.17.

Whitehaven and Centennial Coal were 1.2% and 1.8% higher, while New Hope spiked 2.8% higher to $5.11 per share.

Arrow Energy shares were in a trading halt pending a market update on the takeover offer received from PetroChina and Royal Dutch Shell.

The Consumer Discretionary sector was also mixed, and flat to lunch.

Among the retailers David Jones retreated 12c, or 2.4% to $4.97, while Harvey Norman was flat.

Pacific Brands continued its recent strong run, adding 3c, or 2.2% to $1.385. Its shares have rallied around 42% in the last three weeks.

The gamers were flat, while among media stocks Austereo and Southern Cross Media shed 5.1% and 3.2% respectively.

A 42c, or 1.4% rise in Wesfarmers' shares to $31.53 helped the Consumer Staples sector to a 0.3% gain.

Second-tier supermarket chain Metcash lost 1% to $4.11 after saying it would shut down its Campbell Cash & Carry business.

Woolworths, Coca-Cola and Fosters were all within 0.4% either side of the gain line.

A series of gains from the larger capped Industrials sectors saw the sector add 0.6%.

Leighton gained 53c, or 1.4% to $39.63 and Brambles put on 10c, or 1.3% to $7.53.

Downer EDI spiked 24c, or 3.2% to $7.71.

MAp Group added 1c. The operator Sydney Airport said passenger numbers had increased 12% in February.

Telstra added 1c to $3.18, while the broader Telecommunications sector rose 0.5%

Around the region, the Nikkei 225 gained 41.4 to 10,785.4, while the NZSE50 lost 4.2 to 3,216.5. The Straits Times Index added 12.0 to 2,926.0.

Spot gold was trading at US$1,123.08 per ounce, while the Aussie was buying US$0.9203.

---

AGL to sell pipeline for $82.6m
AGL Energy said it has entered into an agreement to sell the Berwyndale to Wallumbilla Pipeline for $82.6m to APA Group. The company said it has also entered into a 17 year Gas Transportation Agreement (“GTA”) with APA in relation to the BWP.

At noon, AGL shares were up 12c to $15.09, while APA shares were up 2c to $3.47.

Significant gap between Telstra and NBN
Telstra Corporation said there is currently a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome in regards to the negotiations regarding the future of Telstra’s fixed local access network and associated matters. The company said there are also a range of commercial matters that are yet to be agreed.

At lunch, Telstra shares were up 1c to $3.18.

Ore reserve exceeds Western Areas' expectations
Western Areas announced that the ore reserve for the first stage of the planned underground mine at Spotted Quoll has exceeded the company’s expectations. The company said a Probable Ore Reserve of 1,725,000 tonnes at an average grade of 4.1% nickel containing approximately 70,200 tonnes nickel has been estimated from below the Tim King Pit to 525m vertical depth.

At midday, Western Areas were up 6c to $4.98.

Metcash axes Campbells Cash & Carry
Metcash has decided to axe its Campbells Cash & Carry business as it struggles to compete with branded convenience stores such as 7 Eleven. Metcash said the company would set aside $15.4 million in restructure provisions.

At lunchtime, Metcash shares were down 3c to $4.12.

Sydney Airport visitors up 12% in Feb
MAp Group this morning reported an increase in traffic across its portfolio of airports, including a 12.3% increase at its flagship Sydney Airport. The increase in numbers was, once again, driven by visitors from the US, which saw a 20% increase in passenger numbers.

At noon, MAp shares were up 1c to $3.09.

AGL Energy Limited (AGK) said it has entered into an agreement to sell the Berwyndale to Wallumbilla Pipeline (“BWP”) for $82.6 million to APA Group (APA). The company said it has also entered into a 17 year Gas Transportation Agreement (“GTA”) with APA in relation to the BWP.

AGL said the sale would result in a pre-tax profit to AGL of approximately $2 million after transaction costs.

”The parties intend to complete the transaction as soon as practicable with proceeds to be applied to reduce AGL’s bank debt,” AGL said.

The company said it constructed the BWP to transport gas from Queensland Gas Company Limited’s gas fields in the Surat Basin to the Wallumbilla hub, with the pipeline commissioned in February 2009 and commenced operation in April 2009.

AGL said the GTA includes an option for increased capacity which, if triggered by AGL, would see APA make an additional payment to AGL of up to $21 million.

The company also has options to extend the term of the GTA up to 10 years.

AGL managing director, Michael Fraser, said the development of the BWP was necessary to allow AGL to deliver gas to market because options then available did not provide a suitable solution.

”Now that we have a long-term transportation agreement in place, ownership of this pipeline is no longer core to our integrated strategy,” Mr Fraser said.

APA managing director, Mick McCormack, said along with the Roma-to-Brisbane Pipeline, the assets are linked to the Wallumbilla hub.

“This acquisition allows us to join our existing assets to one of the most promising coal‐seam gas regions in the country,” Mr McCormack said.

“We expect a growth in demand for gas transmission services to move this gas into east coast markets and APA’s assets will continue to play a key role in providing this service.”

As at 1127 AEDT, AGL shares were up 4c to $15.01, while APA shares were up 1c to $3.46.