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The Round Up
18 June 2010
Issue No. 353
Equities
Move Last % Move Range Volume
ASX 200 -31.7 4527.3 -0.7% -44 to +4 $5.6 bn(A)
SPI - yesterday -22.0 4532.0 -0.5% -49 to +6 25,949(L)
Dow Jones +24.7 10434.2 +0.2% -90 to +32 Low
S&P 500 +1.4 1116.0 +0.1% -9 to +3 Low
Nasdaq +1.2 2307.2 +0.1% -17 to +12 Low
FTSE +16.0 5253.9 +0.3% -5 to +56 Avg
Commodities
Move Last % Today % Past Month
Oil-WTI spot -1.10 76.57 -1.4% +9.3%
Gold Spot +17.95 1246.95 +1.5% +2.0%
Nickel (LME) -10.84 894.99 -1.2% -4.3%
Aluminium (LME) -1.74 87.79 -1.9% -1.5%
Copper (LME) -9.24 291.19 -3.1% -0.2%
Zinc (LME) -2.87 78.55 -3.5% -7.3%
Silver +0.28 18.75 +1.5% -0.8%
Sugar -0.48 15.79 -3.0% +13.7%
Equity Structured Products and Warrants
Overnight Commentary
US markets ignored weaker economic data with investors taking a glass half full approach thinking that interest rates will
be kept lower for longer. A late bounce saw the Dow add 25pts, the S&P rose 0.1% as did the Nasdaq.
Economy - The Philly Fed general economic index slumped to 8 in June from 21.4 the previous month where readings
above zero signal growth. Initial Jobless Claims were also above expectations at 472k vs 450k and up from 460k
previously. CPI was inline across the board and Leading Indicators was inline at +0.4%.
Consumer Staples - Kroger, up 3.3%, led the way for the sector after the largest US grocery store chain beat
expectations. Kroger's results helped the sector with Wal-Mart up 0.8% and Costco rose 0.4%.
Consumer Discretionary - The sector was lower thanks to the weaker jobs report. Home Depot was 2nd worst on the Dow
off 0.7% while Bed, Bath & Beyond slumped 7.6% with Macy's off 0.6%.
The FTSE added 16 points and finished in the black for the 7th straight session. Banks added most of the points with
George Osborne wrong footing most investors with a statement claiming the BOE will have ultimate control over financial
supervision. The market finished the day +0.3%, the DAX +0.5% and the CAC +0.2%.
Banks - enjoyed a day in the black as parliamentary comments and retail sales data gave the sector a shot in the arm.
RBS, Lloyds and Barclays all up 2.6% to 3.4%.
Commodities Commentary
Energy - BP was the markets top performer adding 6.7% as investors gained a little clarity around the stocks position
however BG and Petrofac fell around 2% tracking a lower crude price.
SPI Commentary
The SPI traded down 14pt to 4532. Open at 4546 with a high of 4572 and a low of 4505. Volume 31,241 Overnight the
SPI traded up 12pts to 4540.
*SPI report taken from the 9:50am open to the 4:30pm close on the previous trading day. Charts taken from IRESS
Source: IRESS
Investment view
Prior to the initial bid, our preference was for NCM over LGL for gold exposure due to diversification by mine and
geography, its strong growth pipeline, management strength and a relatively low P/NPV multiple. Should the merger be
successful we are of the view that NCM's management team will be able to extract greater operational synergies over
time than the A$85m currently factored in to our numbers, and remain buyers on a long term view. We maintain our view
that a competing bid for LGL is unlikely but would continue to hold that stock with a view to NCM exposure now that a
timeline for the merger has been established.
Source: IRESS
Source: IRESS
For further information please do not hesitate to contact us on the details below
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