Morning Market Report, Jun 19, 2008

The market is down 50. Financials down 2.1% with further credit crisis concerns in the US. Industrials down 1.8%. Resources holding – up 0.1%.

Dow down 131. Down all session – down 166 at worst. All ten sectors down – 78% of S&P companies down. S&P500 down – the first time in four days. Dow at a three month low. Fifth Third Bancorp (Ohio’s second largest bank) announced it will raise $1bn in new capital, sell $1bn in assets and cut its quarterly dividend by 66% to shore up its balance sheet – comes the day after Goldmans said that US banks still need to raise $65bn in new capital. The S&P500 Regional Banks Index had its biggest drop ever and Fifth Third Bancorp had its biggest one-day fall in 28 years. Financials down 1.2% – down 2.5% at worst – hitting their lowest levels since 2003. Talk of Lehmans being forced into a sale. Goldman Sachs was one of the few financial stocks to rise after positive research post yesterday’s results. S&P500 earnings fell 19% on average in the 1st Q – the third straight quarter of lower profits – the longest stretch of declines since 2002. FedEx’s earnings missed expectations and issued an ugly outlook for the US economy. Tech stocks down – Nasdaq down 1.1%.

BHP down 0.38% in ADR form overnight, RIO up 1.45%. BHP down 17c to 4515c. RIO down 97c to 13918c.
Metals mostly up – Zinc up a big 6%, Nickel down 5.2% and Copper up 1.8%. Aluminium up 1.8%. Zinifex up 9c to 872c.
Oil price up $2.55 to $136.54 on reports that Nigerian oil workers are about to go on strike. It began the session lower after the Energy Department announced higher then expected inventories. Woodside up 211c to 6586c.
Gold up $6.60. Newcrest down 36c to 2796c.
US Bonds up with the 10 year yield down to 4.13%.

Transurban in a trading halt – Not good – following a business review, the company announced plans to raise around $1bn of equity to help it adjust to the credit crunch and has cut its distribution substantially. They say the change reflects the changed debt market environment. The announcement has also depressed Connect East’s (CEU) share price.

Orica (ORI) says they’ve made “no decision to sell any part of their business.” The AFR reported Blackstone and China National Chemical Corp may have been teaming up to buy ORI assets. ORI down 2c to 3014c.
Queensland Gas (QGC) to increase its 2P CSM reserves by 80% to more than 2,370 PJ. QGC up 6.39% at 11am.
AGL Energy (AGK) could raise $975m from the sale of its stake in the PNG LNG projects. Oil Search and Shell could be the buyers. AGK down 26c to 1396c.
Ausenco (AAX) signed a deal to develop a coal wash plant at Carborough Downs mine – first move into the Australian coal market. AAX down 3c to 1497c.
ABC Learning (ABS) under fire for an alleged breach of undertakings regarding the Peppercorn acquisition – proceedings have started in the Federal Court. ABS down 6.5c to 72.5c.
BHP Billiton (BHP) has signed a JV with Indonesian miner PT Aneka Tambang to develop a nickel laterite resource in Indonesia.
Flight Centre (FLT) has clarified its guidance upgrade from yesterday saying subject to its trading performance in June, it doesn’t expect to materially exceed the $210m-$215m pretax profit for the year. FLT down 120c to 1630c.
Babcock & Brown Infrastructure Group (BBI) planning a capital management review to strengthen its balance sheet – distribution to June 30 to be 7.5c. BBI up 5c to 92c.
B&B Wind (BBW) distribution estimate for 6 months to June is 7.25c, means the total distribution for the year is 14.5c, in line with guidance. BBW up 3.5c to 168.5c
Babcock & Brown Japan Trust (BJT) distribution estimate for 6 months to June is 6.72c – in line with previous guidance. BJT down 3c to 91c.