Thursday, February 8 11:09 AM SGT MARKET TALK-AU-EQ: Telstra-PCCW's Reach Has Some Fans
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1406 [Dow Jones] Telstra (TLS) executive Gerry Moriarty, who will chair Reach Internet backbone company owned as venture with HK's Pacific Century CyberWorks, says more than one partner could come on board. Some analysts have speculated AT&T could be interested but Moriarty won't comment. Also says no hurry to arrange IPO for Reach as it can utilize annual revenue of nearly US$2 billion to fund generic growth while assessing expansion strategies. (IGP)
1401 [Dow Jones] Optus (CWO) CEO Chris Anderson says won't pay too much for 3G spectrum to be auctioned next few months. Optus likely to bid against Telstra (TLS) and Vodafone Pacific. Optus has own internal valuation of 3G spectrum. "We don't expect the prices to reach that level. If they do we will walk away," he says. Government hopes to raise A$2.6 billion from spectrum sales in 00-01, with the bulk from 3G. Analysts say expectation is reasonable, unlike some European nations which wanted too much, or in case of UK and Germany, got top dollar before telco market slumped. (IGP)
1400 [Dow Jones] BHP (BHP) to make decision on future of troubled Venezuela HBI plant by end of March quarter; options include buying out partner or even shutting down operation; BHP has spent US$189 million on plant and has US$300 million in associated debt; BHP reviewing future of plant where operational difficulties persist and low U.S. HBI prices are putting pressure on BHP's equal partner in operation, Siderurgica Venezolana. (AND)
1346 [Dow Jones] Suncorp Metway (SME) scouting for local banking, insurance acquisitions to expand outside Queensland, says Salomon Smith Barney. "Part of the group's expansion plans revolve around growth via acquisition. Joint ventures are unlikely to be the order of the day, with outright management control to lie with Suncorp-Metway in any deals," Salomon says in note to clients. (AYC)
1326 [Dow Jones] Nikkei ends morning down 2.3% at 13055.00, below Jan. 11 intraday low of 13123.81, leaving many players asking where the bottom is. Early profit-taking turned into major sell-off as yesterday's Matsushita Communication outlook cut dragged on electrical sector, followed by banking stocks on fears that new lows will weigh on capital adequacy ratios. With lots of cross-share unwinding left to go and foreign buying interest described as slack, 13000 level may be vulnerable in afternoon, says foreign brokerage trader, though short-covering may emerge and pare losses, but "not by much." (LCT)
1316 [Dow Jones] BHP (BHP) CEO Paul Anderson says dual listing option remains as company seeks greater access to global capital markets. "With regard to listing in the U.S., what I have said is that I want access to global cap markets and that might require looking at a dual listing structure, another listing some place...all kinds of things," he says. BHP also encouraged by stronger links between share markets and development of global indexes. BHP market value A$34 billion; latest price A$19.18 compares with Anderson's A$40 target for stock in next few years. (IGP)
1250 [Dow Jones] AUD/USD down as far as 0.5430 after Australia jobs data, and expected to remain lower on view data show weaker economy, says IBJ Australia forex manager Darrin Stewart; 0.5410 may break fall as strongest support clustered there, but weaker EUR/USD not helping AUD either. (BWS)
1247 [Dow Jones] STOCK CALL: Merrill Lynch cuts Coles Myer (CML) forecast EPS to 30 cents from 40 cents for FY01, to 37 cents from 43 cents for FY02 and to 41 cents from 45 cents for FY03 after retailer announced steep profit downgrade; broker says 1H sales growth of 5.5% in line with its forecast but aggressive discounting in non-food businesses hit gross margins "beyond our expectations". Merrill retains Neutral/Neutral on stock, last trading 1 cent higher at A$6.30. (VTB)
1243 [Dow Jones] News Corp (NCP) up 4.2% at A$17.97 as earnings result seen as positive, though analysts divided on stability of future film income prospects. Stock fell from A$26.30 September to recent low of A$13.51 late December, with technical retracement targeting Fibonacci levels A$18.39, A$19.90 and A$21.41. Prices continue to follow Fibonacci sequences, rising late January to A$18.41 before falling back to A$16.51. Now higher and likely to soon test resistance at A$18.41. Outlook remains positive, with medium-term targets back to Fibonacci levels and possible longer-term move to A$24.43. (DJF)
1225 [Dow Jones] All Ords back close to early morning high of 3278.4, up 14.2 points at 3277.0. News Corp (NCP) up 4.1% as profit result seen as positive, but analysts divided on stability of film income prospects. BHP (BHP) result and buyback seen as positive, up 0.7%. C&W Optus (CWO) paring losses, now down 1.0% on reports Vodafone and Telecom NZ submitted bids. Banks recovering on some re-rating of medium-term outlook for lending book margins and quality. All Ords remains vulnerable, still in 3260-3290 range. (DJF)
1222 [Dow Jones] March Nymex crude oil stabilizes after big floor-trade gains on bullish U.S. gasoline inventory data, up 7 cents at US$31.34 in after-hours Access trade. "As long as gasoline continues to be strong, (Nymex crude) will hold," says Chris Mennis, broker with California-based New Wave Energy. (SSJ)
1219 [Dow Jones] Regional Wireless, Mobile JV between Telstra (TLS) with 60% and Pacific Century CyberWorks with 40% may bid for HK 3G mobile license, says newly appointed head Hubert Ng. CSL, the mobile unit of PCCW now under Regional Wireless, is one of largest operators in HK and probably still holding largest share in lucrative corporate market, so Regional bidding for license not surprising. Existing 2G operators, which would likely be eligible to participate in proposed hybrid 3G auction, have complained about terms of license. (IVW)
1217 [Dow Jones] U.S. Treasury Secretary O'Neill relatively positive on U.S. economy: doesn't think it's sliding into recession and expects improvement in growth rate by year-end. Also indicates Bush administration, like previous, concerned about Japan economy; but, unlike Clinton administration, which engaged in running battle with Tokyo over trade issues, new government likely to take less confrontational approach.(RXM)
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