OPEC oil deal unlikely: Aus shares to still open higher

Market Reports

by David Chau

The Australian share market will open higher this morning, thanks to strong leads overseas.

At the start of this week, Wall Street’s post-US election rally faltered, with the major indexes finishing lower. But this morning, Wall Street finished higher, with the strongest gains in the healthcare and real estate sectors and the NASDAQ closing at a new record high.

The world’s major oil producers will attend the OPEC meeting in Vienna today. However, the prospects of the members agreeing to freeze oil production is looking unlikely, which led to a sharp fall in oil prices overnight. Indeed, Energy was the worst performing sector on the US stock market.

US economic news

The American economy grew faster than initially thought in the third-quarter of this year, boosted by strong consumer spending. The Commerce Department released its revised third-quarter GDP figures, which came in at an estimated 3.2% annualised rate. This beat their initial estimate of 2.9% GDP growth.

The S&P house price index showed American home prices rose 5.5% in September – driven by tight supply and high demand for housing.

The Conference Board’s latest figures show that consumers have been more optimistic lately. The Consumer confidence index came in at 107.1 this month. This is well above expectations, surpassing the October figure of 98.6.

Markets

Wall Street finished higher overnight: The Dow Jones gained 0.1% to close at 19,083, the S&P 500 added 0.1 per cent to 2,205, while the NASDAQ was up 0.1% to close at 5,381.

European markets finished mostly higher: London’s FTSE was down 0.4%, Paris gained 0.9%, and Frankfurt was up 0.4%.

Asian markets were mostly down: the Nikkei lost 0.3%, the Hang Seng slipped 0.4%, while the Shanghai Composite rise 0.2%.

The Australian share market had a weaker finish yesterday: The ASX 200 closed 7 points down at 5,458. This morning, on the futures market the SPI is up 6 points.

Currencies
The Australian Dollar at 8.20am is buying $US0.7487, 59.92 Pence, 84.11 Yen and 70.27 Euro cents.

Local economic news

The Australian Bureau of Statistics will release last month’s building approvals data later today. In September, approvals were down 8.7%. We’ll give you an update on the October figures as soon as they’re out.

Company news

Aspen Group Ltd (ASX:APZ) has continued to expand its tourism portfolio with the acquisition of BIG4 Tween Waters Holiday Park, near the border of NSW and Victoria. Aspen says it paid $6.8 million for this acquisition, and that it reflects an initial yield of 9.4% when acquisition costs are excluded. Recently, the company acquired the Koala Shores Holiday Park in Port Stephens, NSW, and says these acquisitions are part of its strategy to become an industry leader in the affordable accommodation sector. Shares in Aspen closed 0.49% lower at $1.02.

Real-estate investment manager, the Cromwell Property Group (ASX:CMW), is looking into a potential IPO in Singapore over $1 billion worth of European office properties that it manages. Last year, Cromwell acquired Valad, a European property-fund manager, from Blackstone Group for €145 million. This proposed Singapore IPO is planned for the first half of next year. Shares in Cromwell closed 1.1% higher at 92 cents.

Ex-dividends

Global Construction Services (ASX:GCS) will pay a fully franked dividend of 2 cents.

Commodities

Gold is down $0.60 to $US1,187 an ounce.
Silver has lost $0.03 to $16.64.
Copper is flat at $2.59 a pound.
Oil is down $1.84 to $45.24 per barrel.