The Australian share market opened well down after news the US will continue to taper its quantitative easing program as well as hints of an interest rates rise caused a slide on Wall Street. Negativity in all major sectors had the market 0.8 of a per cent down at noon.
The S&P/ASX 200 index is 46 points down at 5,309. On the futures market the SPI is 14 points lower.
Spending across the Australian economy grew for the 18th consecutive month in February, but at a slower pace than in recent months according to the Commonwealth Bank Business Sales Indicator (BSI).
Business sales growth fell to 10.4 per cent in February, down from a six year high of 10.8 in January.
Analysts hailed a 23rd consecutive year of growth as December quarter growth trumped all expectations. There were also significant signs that the economy was shifting away from resource-led growth.
The BSI tracks spending across the Commonwealth Bank's point of sales terminals which showed sales for February rose in seven of the eight states and territories, with Queensland posting the highest growth rate at 1.1 per cent.
Shares in Australand Property Group (ASX:ALZ)
have risen nearly 2% against a negative market this morning after the company announced the appointment of an independent chairman after market close yesterday. Lead Independent Director Paul Isherwood was appointed to the role of Independent Chairman and has resigned as the chairman of the company’s audit committee.
Earlier yesterday, property developer Stockland (ASX:SGP)
had acquired a strategic stake in the company. Shares in Australand Property are trading up 1.76 per cent at $4.05.
Activist investment may have arrived in Australia with reports this morning that Echo Entertainment Group Limited (ASX:EGP)
has been targeted by hedge fund VGI Partners. The $600 million fund has acquired a stake of up to 3 per cent in Echo Entertainment and is already pushing for the casino operator’s newly appointed CEO to restore value to what it believes is "the cheapest casino stock in the developed world”.
VGI Partners manages wealth for high net worth individuals and trusts. Company rules require all staff to not purchase any securities outside of the Fund. VGI already has a track record of acquiring substantial holdings in companies and then agitating for strategic change, as it did recently with auctioneers Sotheby’s. Shares in Echo Entertainment are trading up 0.21 per cent at $2.43.
The best and worst performers
The best performing sector is Utilities gaining 19 points to 5,575. Shares in Spark Infrastructure Group (ASX:SKI)
have risen 1.19 per cent and trading at $1.71. Shares in Energy World Corporation Limited (ASX:EWC)
and DUET Group (ASX:DUE)
are also stronger.
The worst performing sector is Industrials, falling 76 points to 4,016.5. Shares in Decmil Group Limited (ASX:DCG)
have fallen 4.95 per cent, trading at $1.92. Shares in Asciano Limited (ASX:AIO)
and Sydney Airport Holdings (ASX:SYD)
are also lower.
Gold and the dollar
Gold is trading at $US1,330 an ounce.
The Australian dollar is buying $US0.9024.