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The local share market, down around 1% at midday, rallied through the afternoon to close in positive territory. The major stocks among the miners and the banks were mostly flat, leaving it to the mid-cap plays to pull the market into positive territory by the close.

At the end of trading the ASX/200 was up 0.2% for the day and 0.4% for the week.

At the close, the All Ords had put on 8.9 to 4,905.2, while the ASX/200 gained 11.5 to 4,896.9. Around 2.7 billion shares worth around $7.7 billion had changed hands.

The Materials and Resources sector added 0.1% despite being down heavily at lunch.

BHP Billiton and Rio Tinto dipped 3c and 25c to $43.29 and $78.39 after the ACCC said yesterday that BlueScope Steel has publicly raised concerns about their proposed iron ore production joint venture in the Pilbara, and possible changes to the expansion plans of existing and potential competitors of the proposed joint venture entity.

Bluescope was up 1c at $2.90, while rival Onesteel also gained 1c to $3.85.

Iluka lost 2c to $4.34 despite JPMorgan upgrading its rating on the stock to “overweight”. 

Building materials company James Hardie slumped 1.9% to $7.24, while Brickworks countered with a 2% gain to $12.90.

Gold miner Lihir advanced 7c to $3.09 following a 0.4% rise in the price of the precious metal in New York overnight. Newcrest rose 11c to $32.93.

A 1.2% fall from Woodside led the Energy sector 0.5% into the red after the price of crude slid for the third consecutive day.

Santos gained just 1c to $14.77 as the rumoured takeover target agreed to sell its entire working interest in Evans Shoal in the Bonaparte Basin offshore Northern Australia to Magellan Petroleum Australia Limited for up to $200 million.

Oil Search countered, losing 1c to $5.93, while Paladin shed 2.3%.

Whitehaven and Aquila were 1% and 1.6% lower.

Coal & Allied outperformed to be up 1.1% to $90.00.

Among the big four banks the lowest return on equity was 10% in underlying terms in the last two years according to RBA Governor Glenn Stevens.

CBA, down 90c at lunch, finished up 17c, or 0.3% to $57.37.

Westpac added 0.7% to $27.98, while NAB and ANZ were 0.3% and 0.4% higher.

The Banks and Financials sector gained 0.5%.

QBE rose 19c to $21.23 as the insurer reportedly faces questions about its strategy of making a number of acquisitions to drive earnings growth.

The Industrials sector climbed 0.8% on the back of solid gains from the majors.

Brambles and Leighton advanced 1.5% and 0.9% respectively to $7.39 and $39.17.

MAp Group rallied 2.3% to $3.08, while Virgin soared 5.2%.

Consumer Staples fell 0.3% due largely to a 35c, or 1.1% drop to $31.65 from Wesfarmers.

Woolworths was up 6c to $28.63, while Elders dropped 5.5c to $1.30 as it commissioned Ernst & Young to conduct an independent review of its Forestry assets in light of sector and company specific developments.

Media stocks led the Consumer Discretionary sector to be 0.2% above the line.

Fairfax lost 1c to $1.79. Seven and Consolidated Media slumped 2.5% and 5.4%.

Gamer Aristocrat rallied 17c, or 3.8% to $4.65.

Among the retailers, Myer and David Jones gained 1.2% and 1% respectively. Billabong outperformed with a 2.5% rise.

Healthcare put on 1.5% to be the best performing sector.

CSL added 55c, 1.5% to $36.63, while Sonic and Cochlear advanced 2.9% and 1.9% to $14.36 and $73.38.

Telstra dipped 5c to $3.06 as the Telecommunications sector fell 1.5%.

TPG Telecom added to its recent rally, adding another 2c to $2.20. The stock was trading at $1.475 on March 8.

Around the region, the Nikkei 225 retreated 6.4 to 10,744.8, while the NZSE50 eked out a 6 point gain to 3,231.1. The Straits Times Index lost 4.3 to 2,877.1. The Hang Seng shed 182.8 to 21,026.9.

Spot gold was trading at US$1,104.40 per ounce, while the Aussie was buying US$0.9142.

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CBA sells St Andrews to BOQ
Commonwealth Bank of Australia announced it has entered into an agreement with Bank of Queensland to sell the St Andrew’s insurance business, consisting of St Andrew’s Insurance (Australia) Pty Ltd and St Andrew’s Life Insurance Pty Ltd. The company said the sale does not cover St Andrew’s investments, superannuation, retirement income and financial planning businesses which are being integrated into the Commonwealth Bank’s Wealth Management business.

At the end of the day, Bank of Queensland shares were up 2c to $11.77, while CBA shares were up 17c to $57.37.

IAG lowers insurance margin guidance
Insurance Australia Group lowered its FY10 insurance margin guidance to 9.5% – 11.0%, from 10.5% – 12.0% as a result of the impact of the severe weather which struck Perth on 22 March. The company confirmed that, as at the close of business on 25 March 2010, it had received in excess of 13,500 claims.

At the close, IAG shares were up 1c to $3.92.

Suncorp receives 13.5k claims
Suncorp-Metway said its general insurance brands have received approximately 2,500 claims from Cyclone Ului in North Queensland and around 11,000 claims from the Perth storm earlier this week. The company said costs for these events would be determined when more claims in affected areas have been assessed.

At the bell, Suncorp-Metway shares were up 4c to $8.61.

Santos sells Evans Shoal stake for $200m
Santos said it has agreed to sell its entire working interest in Evans Shoal in the Bonaparte Basin offshore Northern Australia to Magellan Petroleum Australia Limited for up to $200 million. The company said Magellan would pay a cash consideration of $100 million, with completion expected to occur in the second half of 2010.

At the finish, Santos shares were up 1c to $14.77.

Elders commissions review of Forestry assets
Elders said it has commissioned Ernst & Young to conduct an independent review of its Forestry assets in light of sector and company specific developments. The company said the review would not examine strategy and operations, where Elders Forestry is well placed.

At the end of the session, Elders shares were down 5.5c to $1.30.

Western Areas prices $125m convertible bond
Western Areas announced the pricing of an issue of $125 million of convertible bonds due 2015. The company said the bonds are to be issued a premium of approximately 28% to the last price of Western Areas shares prior to the launch of $5.18 per share and carry a coupon of 6.4%.

At the close, Western Areas shares were down 12c to $5.06.

ANZ continues off-shore growth
Australia and New Zealand Banking Group is pushing ahead with plans to make the company Australia’s largest foreign bank. As a part of this plan, CEO Mike Smith said ANZ would invest up to US$100 million in capital in Indonesia during 2010 to complete the acquisition of the Royal Bank of Scotland (RBS) retail and commercial businesses in Indonesia and to accelerate organic growth.

At the bell, ANZ shares were up 10c to $25.45.

Suncorp-Metway Limited (SUN) said its general insurance brands have received approximately 2,500 claims from Cyclone Ului in North Queensland and around 11,000 claims from the Perth storm earlier this week. The company said costs for these events would be determined when more claims in affected areas have been assessed.

Suncorp-Metway said both events would contribute towards the group’s aggregate reinsurance program, which aggregates the cost of claims events above $10 million until $250 million is exceeded.

The company said claims costs for the recent Melbourne storms and flooding in southern Queensland have already contributed significantly towards the aggregate reinsurance program.

Suncorp-Metway said the combined cost of the Cyclone Ului and Perth claims events would trigger that program, which would limit their financial impact.

The company’s net cost for any other claims events until 30 June 2010 is capped at $10 million per event under the aggregate program.

As at 1409 AEDT, Suncorp-Metway shares were down 4c to $8.53.

Suncorp-Metway Limited (SUN) said its general insurance brands have received approximately 2,500 claims from Cyclone Ului in North Queensland and around 11,000 claims from the Perth storm earlier this week. The company said costs for these events would be determined when more claims in affected areas have been assessed.

Suncorp-Metway said both events would contribute towards the group’s aggregate reinsurance program, which aggregates the cost of claims events above $10 million until $250 million is exceeded.

The company said claims costs for the recent Melbourne storms and flooding in southern Queensland have already contributed significantly towards the aggregate reinsurance program.

Suncorp-Metway said the combined cost of the Cyclone Ului and Perth claims events would trigger that program, which would limit their financial impact.

The company’s net cost for any other claims events until 30 June 2010 is capped at $10 million per event under the aggregate program.

As at 1409 AEDT, Suncorp-Metway shares were down 4c to $8.53.

Commonwealth Bank of Australia (CBA) announced it has entered into an agreement with Bank of Queensland Limited (BOQ) to sell the St Andrew’s insurance business, consisting of St Andrew’s Insurance (Australia) Pty Ltd and St Andrew’s Life Insurance Pty Ltd. The company said the sale does not cover St Andrew’s investments, superannuation, retirement income and financial planning businesses which are being integrated into the Commonwealth Bank’s Wealth Management business.

The agreement is expected to be complete around July 2010 subject to sale conditions.

CBA acquired the St Andrew’s insurance business as part of its acquisition of Bankwest in December 2008, and was being integrated into its insurance arm, CommInsure.

BOQ said through the purchase it would acquire the consumer credit insurance and life insurance products which St Andrew’s distributes through a base of financial institutions and other providers.

BOQ managing director, David Liddy said the acquisition fits within the BOQ growth strategy, including income diversification through businesses with complementary products to its core mortgage distribution.

“BOQ is already a significant customer of St Andrew’s and has a deep understanding of its business model,” Mr Liddy said.

The company intends to operate the business as a stand-alone entity and maintain the St Andrew’s Insurance Perth-based headquarters.

“The acquisition supports the Bank’s objective of improving our position relative to the majors in terms of interest to non-interest income split,” Mr Liddy said.

He added that the acquisition expected to have a positive impact on BOQ’s return on equity from FY11.

“This is a true bolt-on acquisition, in keeping with our strategy, and the capital requirements are within our existing footprint,” Mr Liddy said.

”The capital impact is less than half a year of organic growth impact.”

BOQ expects the purchase to be immediately earnings per share accretive, based on current trading performance, however added that there would be no material impact on EPS in FY10.

Commonwealth Bank group executive, Wealth Management, Grahame Petersen, said the company had been approached by BOQ.

“St Andrew’s insurance largely replicates an existing insurance capability within CommInsure, and the sale avoids the complexities and costs of integrating the two insurance businesses,” Mr Petersen said.

As part of the deal, Bankwest will maintain its existing relationship with St Andrew’s through an exclusive long-term distribution agreement.

As at 1347 AEDT, Bank of Queensland shares were down 12c to $11.63, while CBA shares were down 36c to $56.84.

Commonwealth Bank of Australia (CBA) announced it has entered into an agreement with Bank of Queensland Limited (BOQ) to sell the St Andrew’s insurance business, consisting of St Andrew’s Insurance (Australia) Pty Ltd and St Andrew’s Life Insurance Pty Ltd. The company said the sale does not cover St Andrew’s investments, superannuation, retirement income and financial planning businesses which are being integrated into the Commonwealth Bank’s Wealth Management business.

The agreement is expected to be complete around July 2010 subject to sale conditions.

CBA acquired the St Andrew’s insurance business as part of its acquisition of Bankwest in December 2008, and was being integrated into its insurance arm, CommInsure.

BOQ said through the purchase it would acquire the consumer credit insurance and life insurance products which St Andrew’s distributes through a base of financial institutions and other providers.

BOQ managing director, David Liddy said the acquisition fits within the BOQ growth strategy, including income diversification through businesses with complementary products to its core mortgage distribution.

“BOQ is already a significant customer of St Andrew’s and has a deep understanding of its business model,” Mr Liddy said.

The company intends to operate the business as a stand-alone entity and maintain the St Andrew’s Insurance Perth-based headquarters.

“The acquisition supports the Bank’s objective of improving our position relative to the majors in terms of interest to non-interest income split,” Mr Liddy said.

He added that the acquisition expected to have a positive impact on BOQ’s return on equity from FY11.

“This is a true bolt-on acquisition, in keeping with our strategy, and the capital requirements are within our existing footprint,” Mr Liddy said.

”The capital impact is less than half a year of organic growth impact.”

BOQ expects the purchase to be immediately earnings per share accretive, based on current trading performance, however added that there would be no material impact on EPS in FY10.

Commonwealth Bank group executive, Wealth Management, Grahame Petersen, said the company had been approached by BOQ.

“St Andrew’s insurance largely replicates an existing insurance capability within CommInsure, and the sale avoids the complexities and costs of integrating the two insurance businesses,” Mr Petersen said.

As part of the deal, Bankwest will maintain its existing relationship with St Andrew’s through an exclusive long-term distribution agreement.

As at 1347 AEDT, Bank of Queensland shares were down 12c to $11.63, while CBA shares were down 36c to $56.84.

Insurance Australia Group Limited (IAG) lowered its FY10 insurance margin guidance to 9.5% – 11.0%, from 10.5% – 12.0% as a result of the impact of the severe weather which struck Perth on 22 March. The company confirmed that, as at the close of business on 25 March 2010, it had received in excess of 13,500 claims.

IAG said as a consequence it expects to claim on its catastrophe reinsurance cover, capping the total pre-tax cost of this event at $75 million.

The company said the revised guidance assumes IAG’s natural peril costs in the second half of the financial year will exceed the budgeted $184 million allowance by $180 million.

Managing director and CEO, Michael Wilkins, said that while the vagaries of the weather have again forced the company to refine its full year guidance, be continues to be confident that the fundamentals and underlying performance of the business remain strong.

IAG said its FY10 insurance margin guidance is subject to losses from natural perils being within the revised natural perils forecast for the second half, no material movement in foreign exchange rates and no material movement in investment markets.

As at 1325 AEDT, IAG shares were down 1c to $3.90.

Australian stocks lost 1% by midday Friday as the broader market looks to be heading for its second successive day closing in the red. Heavyweight commodity and financials stocks led falls in a morning of broad based losses.

The three major indices on Wall Street closed within 5.1 points either side of the gain line after an early rally. The rally followed assurances that borrowing costs would remain low in the US and that sovereign borrowers would make good on their debts sooner rather than later.

At noon, the All Ords lost 45.3 to 4,851.0, while the ASX/200 fell 48.1 to 4,837.3. Around 1.1 billion shares worth around $4.8 billion had changed hands.

The Materials and Resources sector weakened 1.3% despite metals prices climbing in London.

BHP Billiton and Rio Tinto shed 1.5% and 2.1% to $42.68 and $76.95 after the ACCC said yesterday that the only significant purchaser of iron ore in Australia – BlueScope Steel – has publicly raised concerns about their proposed iron ore production joint venture in the Pilbara, and possible changes to the expansion plans of existing and potential competitors of the proposed joint venture entity.

Bluescope was 1% lower at $2.86, while rival Onesteel dropped 8c to $3.76.

Iluka lost 3c to $4.33 despite JPMorgan upgrading its rating on the stock to “overweight”. 

Building materials company James Hardie slumped 3.4% to $7.13, while Fletcher Building countered with a 2.1% gain to $6.46.

Gold miner Lihir advanced 3c to $3.05 following a 0.4% rise in the price of the precious metal in New York overnight. However, Newcrest dipped 49c to $32.33.

A 2.4% fall from Woodside led the Energy sector 1.7% into the red after the price of crude slid for the third consecutive day. The sector heavyweight was trading at $ by midday.

Santos lost 24c to $14.52 as the rumoured takeover target agreed to sell its entire working interest in Evans Shoal in the Bonaparte Basin offshore Northern Australia to Magellan Petroleum Australia Limited for up to $200 million.

Oil Search shed 4c to $4.90, while sector mid-caps Paladin, Whitehaven and Aquila were between 2.2% and 3.3% lower.

Coal & Allied outperformed to be up 0.8% to $89.70.

In other sector news Macquarie spin-off Miclyn Express Offshore debuted on the stock market up 3c to $1.93.

Among the big four banks the lowest return on equity was 10% in underlying terms in the last two years according to RBA Governor Glenn Stevens.

CBA was the worst performer of the majors in the market this morning, losing 90c, or 1.6% to $56.30.

Westpac shed 1.2% to 427.47, while NAB and ANZ dipped 0.9% and 0.8%.

The Banks and Financials sector lost 0.9%.

QBE gained 5c to $21.09 as the insurer reportedly faces questions about its strategy of making a number of acquisitions to drive earnings growth.

Consumer Staples fell 1% on the back of a 70c, or 2.2% drop to $31.30 from Wesfarmers.

Woolworths was flat, while Elders dropped 4.8% to $1.29 as it commissioned Ernst & Young to conduct an independent review of its Forestry assets in light of sector and company specific developments.

Media stocks led the Consumer Discretionary sector to be 0.8%below the line.

Fairfax lost 3.5c to $1.765. Seven and Consolidated Media slumped 3.4% and 5.4%.

Gamer Aristocrat rallied 13c, or 2.9% to $4.61.

Healthcare put on 0.9% to be the only sector above the gain line.

CSL added 37c, 1% to $36.45, while Sonic and Cochlear advanced 1.7% and 1.6% to $14.20 and $73.17.

Telstra dipped 3c to $3.08 as the Telecommunications sector fell 1.5%.

Tpg Telecom added to its recent rally, adding another 6c to $2.22. The stock was trading at $1.475 on March 8.

Around the region, the Nikkei 225 gained 91.4 to 10,920.3, while the NZSE50 eked out a 1.8 point gain to 3,239.3. The Straits Times Index lost 1.1 to 2,887.3.

Spot gold was trading at US$1,090.08 per ounce, while the Aussie was buying US$0.9074.

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Santos sells Evans Shoal stake for $200m

 

Santos said it has agreed to sell its entire working interest in Evans Shoal in the Bonaparte Basin offshore Northern Australia to Magellan Petroleum Australia Limited for up to $200 million. The company said Magellan would pay a cash consideration of $100 million, with completion expected to occur in the second half of 2010.

At lunch, Santos shares were trading down 25c to $14.50.

Elders commissions review of Forestry assets
Elders said it has commissioned Ernst & Young to conduct an independent review of its Forestry assets in light of sector and company specific developments. The company said the review would not examine strategy and operations, where Elders Forestry is well placed.

By noon, Elders shares were down 7c to $1.285.

Western Areas prices $125m convertible bond
Western Areas announced the pricing of an issue of $125 million of convertible bonds due 2015. The company said the bonds are to be issued a premium of approximately 28% to the last price of Western Areas shares prior to the launch of $5.18 per share and carry a coupon of 6.4%.

As at 1047 AEDT, Western Areas shares were down 18c to $5.00.

ANZ continues off-shore growth
Australia and New Zealand Banking Group is pushing ahead with plans to make the company Australia’s largest foreign bank. As a part of this plan, CEO Mike Smith said ANZ would invest up to US$100 million in capital in Indonesia during 2010 to complete the acquisition of the Royal Bank of Scotland (RBS) retail and commercial businesses in Indonesia and to accelerate organic growth.

At the close Thursday, ANZ shares were trading down 21c to $25.14.

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Market Watch by egoli

Cudeco Limited (CDU) said that first pass shallow RC drilling had shown ‘exceptional results’ from high grade rare elements and molybdenum at its Rocklands Copper Project in Central Queensland.Wilgar has long been flagged by the Company as holding potential importance, due to high grade near-surface gold assay results. Meanwhile, the area immediately surrounding Wilgar has become the subject of renewed interest and detailed geological investigation.

Cudeco Limited (CDU) said that first pass shallow RC drilling at its Wilgar Prospect, located in the Rocklands Copper Project in Central Queensland, had shown ‘exceptional results’ from high grade rare elements and molybdenum. The company said Wilgar has long been flagged as holding potential importance, due to high grade near-surface gold assay results. Meanwhile, the area immediately surrounding Wilgar has become the subject of renewed interest and detailed geological investigation.

Iluka Resources Limited (ILU) has appointed former managing director of Alcoa of Australia Limited Wayne Osborn and founder of International Ferro Metals Limited Stephen Turner as non-executive directors. The company said Mr Osborn is a non-executive director of Leighton Holdings Limited and Wesfarmers Limited, and chairman of Thiess Pty Limited, while Mr Turner was the CEO of International Ferro Metals from 2002 to 2009 and continues as a non-executive director of that company.  

Matilda Zircon Limited (MZI) said indications are that Chinese demand for Zircon is robust with increasing signs of supply tightness in the market and it also appears that many Chinese firms are running close to capacity. The company said major producers have signalled price increases with indications that a price increase of between US$20 and US$50 per tonne of zircon could occur in April with a further price increase in the third quarter. Matilda said it is moving towards commencing zircon production at the Tiwi Islands project in the Northern Territory during 2010.

Doray Minerals Limited (DRM) said it has reached agreement with Hayjae Enterprise Pty Ltd to purchase 100% of Hayjae’s Webbs Patch project in the Murchison Region of Western Australia. The company said it would issue Hayjae 500,000 Doray shares and make a payment of $100,000. Doray said the project comprises a number of granted exploration and prospecting licences and one exploration licence application covering approximately 22 kilometres squared. The company said Webbs Patch contains a 6,600oz gold JORC-compliant resource, which is open at depth and along strike. Doray said the project also contains a number of advanced exploration targets including a coherent 550 metre long zone of gold mineralisation in historic drill holes sub-parallel to the Tuckabianna trend with encouraging intersections.

Elders Limited (ELD) said it has commissioned Ernst & Young to conduct an independent review of its Forestry assets in light of sector and company specific developments. The company said the review would not examine strategy and operations, where Elders Forestry is well placed.

The company said the review would involve Ernst & Young overseeing separate reviews of the various forestry assets held by Elders and delivering a final report.

Elders anticipates receiving a final report by no later than end-April 2010.

Managing director, Malcolm Jackman, said there are a number of events and developments that could impact assets valuations across the industry including Elders Forestry.

The company said developments identified with potential to impact Elders Forestry assets include the current and unprecedented levels of plantation and forest land for sale, uncertainty over the future of Forest Enterprises Australia, and reviews of plantation growth rates and yield estimates for specific regions.

Elders said Forestry assets to be included in the review include: plantation land; accrued income and income anticipated under SGARA accounting from Elders’ own plantation trees; the Company’s shareholdings; grower loans of $27 million and goodwill.

“Elders will assess land values for 100% of its 47,000 hectares of freehold plantation land under the review,” the company said.

“This compares to the review of one-third of freehold land that would normally occur under the rotational valuation review methodology.”

As at 1105 AEDT, Elders shares were down 4c to $1.315.