Despite a positive lead from Wall Street, the Australian share market is flat at midday, pulled down by losses in the materials sector.
The S&P/ASX200 index is 1 point higher at 4,854 and on the futures market the SPI200’s up 2 points.
In economic news: A new report has found household finances worsened in the three months to March this year, after four interest rate rises in under six months inflated family costs. The Melbourne Institute’s Household Financial Conditions index dropped 16.6% to 28.8 points in March from 34.5 points in December. The number of households drawing on their savings in the March quarter rose to 12.3% from 9%. In company news: Sigma Pharmaceuticals Ltd (ASX:SIP) has announced it does not expect to pay a final dividend and is renegotiating the terms of its banking covenants amid a forecast fall in cash flow. The company says it is still finalising its full-year accounts for the year ended January 31, but a reduction in expected cash flows and higher capital costs are likely to put pressure on its balance sheet. The full-year results are also likely to be impacted by inventory write downs and redundancy costs. The company says it is in talks with lenders to resolve the implications of the expected adjustments to its banking covenants. Sigma Pharmaceuticals shares have been suspended from trading until further notice. They last traded at $0.90.
Zinc miner CBH Resources Ltd (ASX:CBH) has recommended Toho Zinc’s bid for a 49.9% stake in the company, trumping a competing $290 million takeover offer from Belgium’s Nyrstar. The company’s independent board committee voted in favour of Toho’s proposal because Nyrstar’s bid is conditional on acquiring all of CBH’s convertible notes. The revised deal with Japan’s Toho Zinc includes a sale of 50% of the Rasp zinc project at Broken Hill for $57.5 million to establish a joint venture for ownership and development of the mine. Subject to shareholders approving the Rasp transaction, Toho will also make a partial takeover for up to 49.9% of CBH at 25 cents a share. Shares in CBH Resources are up 2.7% at $0.19.
Turning now to market indices: The best performing sector at midday is the Telco Services index, up 15 points at 1,082. Shares in Macquarie Telecommunications Group rose 1.92% to $5.30. Shares in Telstra and iiNet were also higher at noon.
The worst performing sector is the Health Care index, down 79 points to 8,893. Shares in ResMed are down 0.15% to $6.69. Shares in Probiotec and Cellestis are also lower at midday.
Looking to New Zealand and the NZSX50 is 20 points higher. Taking a look at the top 4 stocks by turnover: First in the list is Telstra, stock is up 1.99% at $4.10, followed by Telecom of New Zealand, Fletcher Building and Westpac.
To gold and the dollar: Gold is trading at US$1,122.90 an ounce and the Aussie dollar is trading at 92.18 US cents.
