Treasury Wine Estates downgraded: Aus shares 0.1% higher at noon

Market Reports

by Katrina Bullock

The Australian share market opened lower following mixed leads from wall Street but is now tracking 0.1 per cent higher at noon. The Real Estate, Communications and Energy sectors are lifting the market today resulting in a steady boost for the local bourse in the first two hours of trade. The financial services sector is flat this morning following a warning from ASIC that the bill to introduce a stronger penalty framework for corporate and financial sector misconduct will allow the regulator to pursue "extremely harsh civil penalties and criminal sanctions" against banks and their executives. Domain Holdings Australia (ASX:DHG) and Medibank (ASX:MPL) are among the top performers this morning following the release of their half year results.

Broker upgrades/downgrades

Goldman Sachs has downgraded Treasury Wine Estates (ASX:TWE) to a sell with a 12 month price target of $13.70. This follows concern about the company's working capital and cash conversion ratio, as well as the company's growing reliance on new brands and regional products.

The S&P/ASX 200 index is 7 points up at 6,067. On the futures market the SPI is 7 points higher.

Company news

Litigation funder, IMF Bentham (ASX:IMF) is funding a new combustible cladding class action litigation in the Federal Court. The proceeding will be conducted by William Roberts Lawyers in Sydney. The class action is on behalf of persons who own interests in buildings where certain types of panel cladding with a combustible core comprised of polyethylene have been installed. It is funding the action on an unconditional basis, and will be financing this investment through its Rest of the World Funds. This comes after combustible cladding led to tragic fires at Grenfell Tower in London and the Lacrosse building in Melbourne. Shares in IMF Bentham (ASX:IMF) are trading 1.95 per cent lower at $3.27 at noon.

Energy giant, Origin Energy (ASX:ORG) has inked an agreement to acquire OC Energy for $58 million. If completed, the acquisition is expected to add 55,000 embedded electricity network and serviced hot water customers to Origin. They expect an additional 30,000 customers to come onboard as contracted developments are completed and centralised energy services are installed. Origin are aiming to complete the deal with quarter. Shares in Origin (ASX:ORG) are trading 0.74 per cent higher at $7.50 at noon.

Best and worst performers

The best performing sector is Real Estate adding 1.3 per cent, while the worst performing sector is Healthcare shedding 0.6 per cent.

The best performing stock in the S&P/ASX 200 is Domain Holdings Australia (ASX:DHG), rising 15.79 per cent to $2.42, followed by shares in Lynas Corporation (ASX:LYC) and Nine Entertainment Co Holdings (ASX:NEC).

The worst performing stock in the S&P/ASX 200 is Whitehaven Coal (ASX:WHC) dropping 10 per cent to $4.31, followed by shares in Automotive Holdings Group (ASX:AHG) and CYBG (ASX:CYB).

Commodities and the dollar

Gold is trading at $US 1,312 an ounce.
Iron ore price rose 1.3 per cent to US$88.32.
Iron ore futures are pointing to a rise of 0.2 per cent.
One Australian dollar is buying 70.95 US cents.