Overseas Market Report – U.S. Stocks End Higher on M&A Activity
U.S. stocks pushed higher on Monday as investors appeared to brush off weak manufacturing data and focused instead on a spate of deals and earnings.
The Institute for Supply Management said its index of manufacturing conditions fell slightly to 50.1 in October from 50.2, the lowest reading in more than two years. Economists expected the reading to come in at 50.0. This level is just above the cut-off separating expansion from contraction.At the close, the Dow was up 0.9%, the S&P 500 had gained 1.2% and the NASDAQ was up 1.5%.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 15 cents (0.44%) to $32.74, ResMed gained 60 cents (1.04%) to $58.22, Telstra Corporation lost 24 cents (1.25%) to $18.96, Spark New Zealand lifted 11 cents (0.97%) to $11.43 and Westpac declined 14 cents (0.63%) to $22.22.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.19% and the 5-year yield was 1.56%.
Shares of Visa Inc. (V) fell after the payment processing company announced plans to buy Visa Europe in a deal that could be worth more than $23 billion and would consolidate all of Visa's operations worldwide. In addition, Visa also reported its fiscal fourth-quarter and full-year results, which were largely in line with analysts' expectations.
Bristol-Myers Squibb Company (BMY) rose after the pharmaceutical company said it plans to acquire Cardioxyl Pharmaceuticals Inc., a biotechnology company focused on cardiovascular disease, in a deal that could be valued at as much as $2.07 billion.
Shares of Dominion Resources (D) fell after the company reported strong third-quarter operating earnings of $1.03 per share versus $0.93 per share in the same period last year. The reported operating earnings were near the middle of the guidance range of $0.95-$1.10 provided in last quarter's earnings call.
European markets were mixed.
The FTSE 100 was flat, the French CAC 40 was up 0.4% and Germany's DAX was up 0.9%.
Asian shares were lower.
The Shanghai Composite fell 1.7%, the Nikkei 225 plunged 2.1% and the Hang Seng lost 1.2%. India's Sensex lost 0.4%.
Australian Market Report – Local Market Expected To Open Higher
Ahead of the local open, SPI futures were 58 points higher at 5,188.
Monday 2 November – close. The Australian market extended its losing streak for the sixth consecutive session, as soft Chinese economic indicators and concerns about tomorrow's cash rate decision continued to weigh on the market. The big four lenders ended lower with Westpac being the worst performer, whilst the retail giants Woolworths and Wesfarmers slid further down. All sectors finished in the red, with health care dropping the most. The Australian dollar appreciated against most major currencies.
The All Ordinaries lost 67.30 points to 5,221.30 while the S&P/ASX 200 fell 73.60 points to 5,165.80.
iProperty Group (IPP)
iProperty Group announced that it has entered into a Scheme Implementation Deed with REA and Realestate.com.au, a company wholly owned by REA, under which it is proposed that a newly incorporated wholly owned subsidiary of REA (BidCo) will acquire all the Company shares. The Proposal is to be implemented by way of a Court approved scheme of arrangement. If the Scheme is implemented, the Company shareholders will be entitled to elect, on a per Company share basis, either $4.00 in cash or $1.20 in cash and 0.7 shares in an unlisted entity with a continuing indirect interest in the Company. Mixed Alternative allows its shareholders to elect to receive a mix of cash and scrip in an unlisted Australian company and retain an indirect ongoing interest in the Company until no later than the first half of calendar year 2018. IPP soared 33 cents to $3.84.
Monadelphous Group (MND)
Monadelphous Group announced that the Company has been awarded new contracts and contract extensions for customers in the resources and energy markets with a combined value of $150m. In SA, the Company has been awarded a contract with Nyrstar Port Pirie, for the installation of structural, mechanical and piping works at its Port Pirie smelter. The contract is part of the Nyrstar Port Pirie Transformation project to redevelop the smelter into an advanced multi metals processing and recovering facility. The company's maintenance and industrial services division continued to bolster recurring revenue from oil and gas customers, with the award of additional work. The latest agreements take the value of new contracts and additional work secured since July to $600m. MND gained 12 cents to $7.04.
In This Issue | Argonaut Research
Orbital (OEC) | Sells Synerject Stake | SPEC BUY
The sale of the remaining 30% Synerject stake for $25m reflects successful value realisation of OEC generated technology. The focus is on replicating this success and considerable funding is available to pursue the most advanced opportunities in the small unmanned aircraft market and in the sale of remote power isolation systems. In our view the current EV does not fully reflect the growth potential. Speculative buy.
Recent Contacts & Presentations
Ausdrill (ASL), Austal (ASB), Southern Cross Electrical (SXE), Tox Free Solutions (TOX), AWE Limited (AWE), Medusa (MML), Resolute (RSG), Kingsgate (KCN), Troy (TRY), Northern Star (NST), Sandfire (SFR), Regis (RRL), Saracen (SAR), Sino Gas & Energy (SEH), Dacian (DCN), Buru Energy (BRU), Carnarvon Petroleum (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), FAR Limited (FAR), Central Petroleum (CTP), Senex Energy (SXY), Fortescue Metals (FMG)