Australian shares are stronger at midday reaching highs not seen in 10 months, with the major banks gaining on optimistic comments from ANZ.
The S&P/ASX200 index is up 12 points at 4,502 and on the futures market the SPI 200’s up 11 point.
In economic news: Figures released by the Housing Industry Association show that sales of new homes rose 0.1 per cent in July after a 0.5 per cent increase in June.
And the TD Securities Melbourne Institute monthly inflation gauge was flat in August after a 0.9 per cent rise in July. The annual pace of inflation slowed to 1.7 per cent, from 1.9 per cent in July.
To business news at midday: Woodchipper Gunns Ltd (ASX:GNS) today reported a net profit of $56.2 million for the 2009 financial year, down 1 per cent on the year before. The company also announced that is to acquire ITC Timber, a subsidiary of Elders, for an enterprise value of $100 million to be funded via a $145 million equity raising. Chairman John Gay says the outlook for markets for Gunns forest products remains difficult. Mr Gay says wood fibre sales are largely dependant on the Japanese market and economic conditions which are expected to remain weak through at least the course of the first quarter of the 2010 financial year with the strengthening Aussie dollar adversely impacting the company’s competitive position. However Mr Gay says Gunns timber operations are well positioned to benefit from any recovery in the domestic construction industry. Gunns declared a final dividend of 2 cents a share. Gunns shares are in a trading halt and last traded at $1.145.
Rural services company Elders Ltd (ASX:ELD) has placed its shares in a trading halt pending the finalisation of the terms of a comprehensive recapitalisation and refinancing of the company. Today the company announced the sale of its subsidiary ITC Timber to Gunns for $100 million, which follows on from its announcement in July that it has agreed to sell its insurance operations to QBE for $270 million. QBE has also agreed to become a cornerstone investor in Elders by subscribing to a $45 million placement of Elders shares, giving it a 12 per cent stake in the company. Elders says it will release its financial results for the year to June 30 together with the recapitalisation and refinancing announcement. Elders shares are in a trading halt and last traded at 39 cents.
Turning now to market indices: The best performing sector at midday is the Real Estate Investment Trust index up 8 points to 877. Shares in Mirvac Group up 3.89 per cent at $1.47. Shares in CFS Retail Property Trust and Westfield Group are also stronger at noon.
The worst performing sector at midday is the Telco Services index, down 21 points at 1,153. Shares in Telecom of New Zealand down 4.78 per cent to $2.19. Shares in Telstra and Macquarie Telecom Group are also lower.
Looking to New Zealand and the NZSX50 is 6 points higher. Taking a look at the top five stocks by value on the NZSX50: At the top of the list is Telecom of New Zealand, stock down 1.08 per cent at $2.76, followed by Fletcher Building, APN News and Media, Air New Zealand and South Canterbury Finance.
To gold and the dollar: Gold is currently trading at $957.30 US an ounce and the Aussie dollar is trading at 84.15 US cents.
