Public holidays in overseas markets meant there was little direction for the local bourse this morning. The Australian share market opened slightly higher but is trading flat at noon.
The S&P/ASX 200 index is nearly one point down at 5,512. On the futures market the SPI is 2 points lower.
Company news
Suncorp Group Limited
(ASX:SUN) will write down over $500 million dollars of its life insurance business. Group CEO Patrick Snowball has again called for fundamental reform of the life insurance industry. Mr Snowball says that Suncorp is now valuing assets and margins in the life insurance business on forward looking assumptions rather than an historical average in ‘recognition of industry headwinds and a deteriorating situation’. Current trends have shown rising lapse rate and higher claims are having a much greater effect across life insurance business than previously thought. The $500 million dollar write down will have no impact on the Group’s cash earnings or dividend however it will cost $27 million of the capital surplus. In other business a relatively quiet severe weather season in Australia provided lower than expected claims in General Insurance and the Group expects earnings for full year 2014 to be in the region of $75 million and $85 million.
Shares in Suncorp Group have dipped 2.56 per cent lower to $13.34.
Australia’s largest publicly listed software company Technology One Limited (ASX:TNE) has reported a 17 per cent increase in half year profit before tax. The company has managed to sign an increase of new customers and has expanded its business in the UK. Licence fees are up by 24 per cent and significant investment in mobile and cloud technology is reaping rewards and providind strong platforms for growth. The company says full year guidance is on track to deliver 10 to 15 per cent growth in earnings. Technology One also lifted its half year dividend by ten per cent to 1.95 cents per share fully franked. Shares in Technology One have leapt 4.86 per cent higher to $2.59.
Best and worst performers
The best performing sector is energy gaining 31 points to 14,522. Shares in Paladin Energy have risen 1.9 per cent and are trading at $0.40. Shares in AWE and Beach Energy are also stronger.
The worst performing sector is telco services, falling 8 points to 1,851. Shares in TPG Telecom have fallen 0.83 per cent, trading at $6.00. Shares in Telstra and Telecom of New Zealand are also lower.
Gold and the dollar
Gold is trading at $US1,293 an ounce.
The Australian dollar is buying 92.60 US cents.
