Thursday February 8, 7:29 AM MARKET TALK/AU-EQ: Telstra Shares Fall In Early Trade
[Contact Us: Sydney 61-2-8235-2950; djnews.sydney@dowjones.com]
1023 [Dow Jones] Telstra (TLS) down 7 cents at A$6.81 on concerns over funding of Asia ventures with HK's Pacific Century (Singapore: PCEN.SI - news) CyberWorks. Mobile, Internet IPOs unlikely this year, leaving investors wondering where cash for expansion will come from. Telstra says Internet operation has strong revenue but analysts forecast earnings slowdown at HKT, an integral part of mobile joint venture. (GFM)
1021 [Dow Jones] STOCK CALL: Macquarie Equities says BHP (BHP) 1H profit in line with expectations and unlikely at this stage to change FY forecast of A$2.55 billion. Notes BHP warning that it's reviewing troubled Venezuela HBI plant a concern. Says share buyback a "prudent" move that doesn't prevent BHP from making an acquisition. (AND)
1020 [Dow Jones] AUD/USD steady around 0.5460, with dealers noting support at 0.5440 but sell orders at 0.5480; say pair still seems heavy, with U.S. selling of AUD/NZD not helping sentiment and downside test seems likely in coming sessions. (CMR)
1016 [Dow Jones] BHP (BHP) latest up 13.5 cents at A$19.19 and should stay in A$18.10-20.00 range, where it's been since October. Factored-in flat-but-supported base metals prices and coal price increase should keep in range until metals move. Today's announced share buyback to underpin prices, with short-term support at A$19.00. Stock technically overbought, and coupled with buyback timing uncertainty should limit initial rise to A$19.70. (DJF)
1007 [Dow Jones] STOCK CALL: Salomon Smith Barney "comfortable" with BHP (BHP) buyback plan, says analyst Ian Maxwell, noting that BHP has flexibility to also make acquisitions; says 1H result in line with SSB expectations and now unlikely to change FY forecast around A$2.5 billion; while result at lower end of market expectations, says it's unlikely to overly worry market. Keeps Neutral recommendation, reflecting uncertainty over US economy, but says "very comfortable" with way BHP managed and financial performance. (AND)
1009 [Dow Jones] BHP (BHP) shares open 2.5 cents higher at A$19.08 and then gains 17.5 cents or 0.9% to A$19.22 following record 1H net profit of A$1.43 billion and share buyback of up to 5%. Brokers say buyback will put floor on stock and should offset any investor disappointment that 1H result was at low end of market expectations. (IGP)
1000 [Dow Jones] U.S. SUMMARY: Tech stocks tumbled, with Cisco hitting 52-week low after poor 2Q results and Lehman Brothers downgrade; but overall index losses not too dramatic given thumping some bellwethers took. Nasdaq shed 2.3% and DJIA 0.1%. USD rose over 1JPY to high around 116.40 amid renewed calls on BOJ to inject liquidity and ahead of 3Q GDP data that's likely to be revised down, and as U.S. Treasury Secretary O'Neill reiterated support for strong USD policy. EUR/USD little changed; 4Q non-farm productivity rose 2.4% on-quarter vs consensus 1.7% but brushed off as considered backward-looking. Treasurys slipped as long end of yield curve moved down to accommodate new supply ahead of US$10 billion long-bond auction Thursday; well-bid 10-year auction day's marquee event, aftermath of which put pressure on market to end lower; 10-year down 5/32 late yielding 5.20%. March Nymex crude oil rallied 85 cents to US$31.35, triggered by gasoline gains on inventory drawdown and high natural gas prices. (JRH,WJK)
0959 [Dow Jones] BHP (BHP) shares will be underpinned by 5% buyback announcement, says head of institutional dealing at major broker. "I would have thought the market will be disappointed by the earnings but accept the fact that the buyback will help the share price," broker says, adding that program will boost EPS. Brokers says BHP record 1H net profit of A$1.43 billion won't boost shares as came in at bottom end of expectations. (IGP)
0951 [Dow Jones] All Ords expected to open flat then drift lower, with suggestions of 18 point fall, after DJIA ended while Nasdaq fell 2.2%, with techs and banks biggest losers there. Analysts still digesting rate cut and its timing implications for movement back into cyclicals, probably funded by selling in banks, which will also suffer from falling rates and narrowing lending margins. Coles Myer (CML) expected to benefit from lower rates. News Corp (NCP) expected flat as strategists suggest New Corp (NCP) profit results unsustainable as most derived from erratic film and media sectors. BHP (BHP) lower overnight, but should be underpinned by announced buyback, though timing uncertain. Technical indications point to lower All Ords. A fall through support at 3260 would target 3225. (DJF)
0948 [Dow Jones] BHP (BHP) CEO Paul Anderson optimistic about rest of financial year; says will continue cost-cutting program and ready to take advantage of upturn in key commodity markets. But investors may take dimmer view of outlook as record 1H net profit of A$1.43 billion was at low end of A$1.41-48 billion expectations, as well as heavy reliance on petroleum division for profit boost, and decision to proceed with 5% share buyback rather than find big takeover target as some analysts want before rerating company compared with Rio Tinto. (IGP)
0946 [Dow Jones] News Corp (NCP) president and COO Peter Chernin says not planning to buy stake in Austar United (AUN). "We certainly are not involved in any deep look at purchasing those assets on an overall basis," he told media conference call, but "might potentially be interested in purchasing" Austar's joint venture channels such as XYZ Entertainment. (HGU)
0944 [Dow Jones] ACCC won't oppose Wesfarmers' (WES) proposed acquisition of IAMA (IAM) if parties give "significant undertakings," says ACCC Chairman Allan Fels. Undertakings to involve sale of some rural merchandise outlets and fertilizer distribution assets. Wesfarmers Dalgety unit discussing merger with IAMA, giving Wesfarmers major stake. Wesfarmers stock at record levels on positive sentiment toward its A$1.65 bid. (GFM)
0941 [Dow Jones] News Corp. (NCP) president and COO Peter Chernin says no plans to launch free Sydney paper, following launch by both News and Fairfax (FXJ) of free tabloids in Melbourne, "although we obviously would defend our competitive position if that was something that became necessary." Says News' MX paper won't cost company more than A$4 million. Downturn in overall Australian newspaper business in 2Q not expected to last; as the economy picks up and the effect of GST introduction subsides, "we expect our earnings from the Australian newspapers to quickly rebound," says Chernin. (HGU)
sg.biz.yahoo.com |
