Despite negative leads, the Australian share market has tip-toed into positive territory on the back of takeover offers and a strong performance from the gold miners.
The S&P/ASX 200 index is 3 points higher at 5,534. On the futures market the SPI is 6 points lower.
Economic News
Commsec’s State of the States report released today has Western Australia clinging to its top spot as best-performing economy in the nation ahead of the Northern Territory and a sharply improving NSW. NSW has jumped from fifth to third while the ACT has fallen from third to sixth behind Queensland and Victoria. South Australia and Tasmania are the worst performers.
Company News
Goodman Fielder Limited
(ASX:GFF) is rejecting an unsolicited takeover bid by major shareholder Wilmar International. Wilmar, which owns a ten per cent stake in Goodman Fielder has joined with Hong Kong investment manager First Pacific to pitch a non-binding and highly conditional offer of 65 cents per share.
The wholesale food supplier says the $1.27 billion offer does not reflect the company’s true value and is labelling the proposal ‘opportunistic’. The offer came after Goodman Fielder recently down-graded full year profit forecasts by $27 million and warned of further write downs to come. Shares in Goodman Fielder have plunged dramatically from a high of $2.60 in 2007 as the food supplier struggled to maintain profit margins in the face of strong competition from Woolworths and Wesfarmers own-name brands. Today, the shares 17.27 per cent stronger at $0.65, the value offered by Wilmar.
Acrux Limited
(ASX:ACR) has taken beating today after the drug delivery company warned it is in danger of missing a crucial
$50 million payment from a distributor. Sales of the Acrux’s premier earner, Axiron, a testosterone replacement therapy, have been hugely impacted by an announcement that the US Food and Drug Administration would investigate whether the product increased the risk of heart attack and stroke in some men. Studies that sparked the investigation have been criticised as being ‘no longer credible’ but while the FDA has not advised patients to stop using the drug the news has spooked the market for testosterone products. Shares in Acrux have sagged 35.95 per cent to trade at $1.06
Best and worst performers
The best performing sector is consumer staples gaining 58 points to 10,276. Shares in Goodman Fielder are leading the surge rising 17.27 per cent and trading at $0.65. Shares in Treasury Wines Estates and Coca Cola Amatil are also stronger.
The worst performing sector is healthcare, falling 93 points to 14,205. As we heard, Shares in Acrux have reacted strongly to the market news, back pedalling 35.95 per cent, to $1.06. Shares in Mesoblast are down and Ramsey Health Care are dragging after the Financal Review reported founder and chaiman Paul Ramsey is critically ill.
Gold and the dollar
Gold is trading at $US1,305 an ounce.
The Australian dollar is buying 92.86 US cents.
