Overseas Market Report – U.S. Stocks End Lower as Energy Weighs
U.S. stocks closed lower on Monday as plunging energy stocks helped to undo much of Friday's big rally.
The price of oil slid further after last week's OPEC meeting ended with no decision to cut production. Oil futures skidded nearly 5% to below $38 a barrel on Monday, approaching their lowest settlement in nearly seven years.
At the close, the Dow and S&P 500 were each down 0.7%, while the NASDAQ was 0.8% lower.
For Australian ADRs listed on the NYSE, BHP Billiton slipped 98 cents (3.70%) to $25.50, ResMed lost $1.29 (2.23%) to $56.53, Telstra Corporation lost 73 cents (3.67%) to $19.20, Spark New Zealand slipped 42 cents (3.86%) to $10.46 and Westpac declined 46 cents (1.93%) to $23.42.
At 7:45 AM (AEDT), the 10-year Treasury note yield was 2.22% and the 5-year yield was 1.67%.
Keurig Green Mountain (GMCR) is being purchased for $13.9 billion by an investor group led by JAB Holdings. The investors are paying $92 a share, a 78% premium to Friday's closing price. The company will continue to operate independently and the deal is expected to close in April.
Bowing to regulatory pressure, General Electric (GE) said it has scuttled the $3.3-billion sale of its appliance business to Electrolux (ELUXY). The announcement comes as GE continues to shed businesses to focus on its core industrial products.
European shares were mixed after suffering big losses last week.The FTSE 100 was down 0.2%, the French CAC 40 rose 0.9% and Germany's DAX rose 1.3%.
Asian markets were also mixed on the day. The Shanghai Composite and Nikkei 225 were up 0.3% and 1% respectively, while the Hang Seng shed 0.2%. India's Sensex fell 0.4%.
Australian Market Report – Local Market Expected To Open Lower
Ahead of the local open, SPI futures were 14 points lower at 5,135.
The local market opened higher today on the back of gains on Wall Street overnight. However, the positivity was short-lived as stock fell steadily throughout the day, weighed down by falling oil prices and the big four banks, to close marginally higher. There were mixed results from the sectors; utilities gained most significantly whilst energy were the biggest laggard. The Australian dollar fell against the greenback and had mixed results against other major currencies.
The S&P/ASX 200 edged up 4.1 points, or 0.1%, to 5155.7 after being up as much as 1.5% early in the session. Shares were initially boosted by a strong advance by U.S. shares on Friday as investors welcomed a solid jobs report that bolstered the case for the U.S. Federal Reserve to lift interest rates this year.
The basket of energy shares slumped 4.6%, while the materials subindex gained 0.6% and the heavily weighted financial index rose 0.5%.
Crude-oil prices slipped further in Asian trading after the Organization of the Petroleum Exporting Countries held its production quota steady at a meeting Friday, fuelling worries about a growing global supply glut. Oil prices have been declining since late 2014 as global demand has failed to catch up with the pace of production.
In This Issue
Beach Energy Limited (BPT)
Beach Energy announced that the Company has entered into a $530m senior secured syndicated corporate debt facility to replace existing lending arrangements. The new facility will initially be drawn to $170m to refinance current borrowings and letters of credit, with remaining headroom available for capital expenditure programs, working capital requirements and potential growth opportunities. The new facility consists of 5 tranches: 3 year revolving facility of $200m, 5 year revolving facility of $200m, 3 year revolving acquisition facility of $100m and 2 $15m letter of credit facilities. The new facility will be provided by the Co's existing lenders. The new facility remains subject to customary conditions precedent that will be progressed in order for the facility to be available for use. BPT lost 5 cents to $0.47.
Cardno Limited (CDD)
Cardno announced that under the Retail Entitlement Offer, Eligible Retail Shareholders are invited to apply for 1 New Share for every 2.175 existing Shares held as at the Record Date of 3 December 2015, at the Offer Price of $1.00 per New Share to raise $78m. The Retail Entitlement Offer opens on 7 December 2015 and will close on 16 December 2015. The Entitlement Offer is fully underwritten. The proceeds from the Entitlement Offer will be initially retained as cash on the balance sheet to reduce its net debt and improve the financial flexibility of the Company. The Entitlement Offer comprises of a pro-rata accelerated non-renounceable institutional Entitlement Offer which was successfully completed on 1 December 2015 raising gross proceeds of $50m and retail Entitlement Offer is expect to raise $28m. CDD lost 1 cent to $1.71.
Aurizon Holdings Limited (AZJ)
Aurizon Holdings announced that it has signed a Heads of Agreement with NSW Ports to operate the Enfield Intermodal Logistics Centre in Western Sydney and lease the land at the site, enabling the Company to accelerate growth plans for its intermodal freight business. The Heads of Agreement is non-binding at this stage but the parties expect a binding lease and terminal operator agreement to be signed in the first quarter of 2016. The agreement will see the Company begin to relocate its intermodal terminal operations from Yennora in March 2016 and provide a platform for growth into the import-export market with potential for services from Port Botany. The move to Enfield will be cost-neutral and offer new revenue opportunities for its intermodal business. AZJ lost 2 cents to $5.34.
Recent Contacts & Presentations
Tox Free Solutions (TOX), AWE Limited (AWE), Ausdrill (ASL), GR Engineering (GNG), 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)