The market has started the week off in a positive mood — up 33 — despite the SFE Futures suggesting a 20 point fall this morning and the 122 point fall in the US on Friday. Financials, Property Trusts and Resources are maintaining their recent good form.

The Dow was down 122. Up 60 at best. Down 143 at worst. No major announcements or company reports moving the market. US Financials down 5.3%. US Industrials lag — down 3.3%. GE down despite positive broker comments about their liquidity. Defensives outperformed — up 0.1% after their recent underperformance. Healthcare stocks up 0.2%. Volumes relatively heavy due to the quarterly expiration of options and futures. BHP and RIO both down in ADR form Friday. Metals down. Oil up. Gold down. Bonds up slightly. A$ up. Banks down in the UK with HSBC down 17.8% and Barclays down 6.7%. GM and Ford up 10% in the US ahead of a statement on the auto industry from Obama’s task force this week.

A bit of a quiet week domestically but a very busy week in the US for economic numbers. 4Q GDP number on Thursday. It is the final number — expecting -6.2% although some brokers expect -6.6%. We are almost at the end of the 1Q so the 4Q number is now very historic and unlikely to surprise. Obama speaks on the budget and his economic recovery plan on Tuesday night with Tim Geithner and Bernanke testifying before the House Financial Services Committee earlier in the day on the subject of AIG.

  • Lihir (LGL) have put out their annual report — they say they expect 2009 to be another record year. The price is down 1c to 337c this morning. They are offering shares at the placement price of 300c.
  • Sigma Pharmaceuticals (SIP) up this morning on posting FY NPAT of $80.1m — up 3.9% on-year — below consensus of $84.8m. Final dividend to be 4c. Expect modest growth in FY10 — aim for EPS growth of 5-10%. Said their market share remains steady.
  • Link Energy (LNC) said in their coal tenements sale update they have non-Australian approvals for their Emerald sale to China’s Xinwen Mining Group, and expect to execute the sale in 3 to 4 weeks.
  • Australian Worldwide Exploration (AWE) said it will expand into Vietnamese oil exploration through earning a 23.33% interest in Block 06/94 of the Nam Con Son Basin.
  • Straits Resources (SRL) in a trading halt — plans announcement on strategic review.
  • Mineral Deposits (MDL) remain in a trading halt with a proposed capital raising to sell shares at C$0.52 each.
  • Babcock and Brown Capital (BCM) ends management deal with BNB paying $5m.

Other…

  • Citi raises Oz Mineral (OZL) to a BUY from Hold believing there is +50% upside if the FIRB approve Minmetal’s 82.5c bid for OZL. Downside risk if the banks pull the plug on OZL’s funding is 20-30c. Keeps 83 price target.
  • Merrill Lynch move Perpetual (PPT) to Underperform with a 2555c target price — after announcing on Friday it will change its valuation basis for underlying investments in its Exact Market Cash Fund to “hold to maturity”. They say, “With PPT at 16.4x FY10e, a 30% premium to peers, we retain our Underperform rating”.
  • Macquarie Group says Telstra (TLS) is still expensive on an international EV/EBITDA multiple basis. Remain cautious on the impact of any structural changes to the industry from the national broadband network. Reiterate UNDERPERFORM. Maintain a 360c price target.
  • The AFR this morning ran an article speculating that coal seam gas stock Eastern Star Gas (ESG) will be bid for.
  • Babcock & Brown has its first creditors meeting on Wednesday.
  • Tabcorp (TAH) is considering a bond offering.

The Dow Jones futures suggest a 71 point rise on Wall Street tonight.

MARCUS PADLEY is the Author of the MARCUS TODAY Daily Stockmarket Newsletter.

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