Banks make fools of the press

Poor old Michael Pascoe must also be spitting coffee across the breakfast bench this morning when he reads that headline. Because just two weeks ago he wrote in The Age:

“Big Four no longer banking on guarantee.”

He went on to write:

“There’s been a phoney war in recent months about the Federal Government’s bank guarantee with the occasional Big Four CEO suggesting it needs to be scrapped. As far as the Big Four are concerned, it’s already gone… But the real story is that ANZ hasn’t used the guarantee since July. It hasn’t needed to - and neither do the rest of the Big Four, the benefit of being among the very few AA rated banks left in the world and being based in a strong developed economy with a central bank and regulator that didn’t fall asleep at the wheel. No wonder the Big Four CEOs would happily wave goodbye to the guarantee.”

Ha, ha, ha… Could anyone be more wrong than that? But he’s right about one thing, the central bank and regulator “didn’t fall asleep at the wheel.” Although we wish they had fallen asleep. At least that way they couldn’t stuff things up any more than they already have.

Because far from falling asleep, to follow the motoring analogy, they’ve done worse. They’ve had their foot to the floor travelling at 120km/h driving through the economic equivalent of a school crossing.

But we’ll tell you what’s really phony, the misinformation coming from the banks about the strength of the banks. And even more worrying is the way the mainstream press just laps everything up and takes the crooked bankers’ words as gospel.

This continuing bilge about Australian banks being the best in the world with their AA credit rating is doing nothing more than suckering people into believing everything is fine.

Sucking them into believing it’s a great time to take out a glabzillion dollar mortgage just as interest rates are about to head north and property prices south.

Myer seeks $2.34bn in initial public offer of $3.90 to $4.90 a share

In its prospectus, Myer said it planned to sell 479.3 million to 499.5 million shares though the offer at $3.90 to $4.90 a share.

The share sale will raise at least $1.94bn, Myer said, and give it a total market capitalisation of $2.28bn to $2.77bn.

Private equity firms are taking advantage of improved market conditions to exit from their investments globally but the Myer IPO is one of the first such moves in Australia.

TPG and Blum Capital own 84.2 per cent of Myer, with management and the Myer family also holding stakes.

Myer was taken private for $1.4bn in 2006 by a consortium led by TPG.

If the group raises $2.34bn, the float will be the biggest in Australia since Boart Longyear raised $2.3bn through an IPO in 2007.

Credit Suisse, Goldman Sachs JBWere and Macquarie Capital Advisers are joint lead managers of the offer.

Like most markets, Australia’s IPO market has been significantly constrained by a lack of investor appetite amid the global financial crisis.

But a six-month rally in Australian equities and improving confidence in the global economic outlook is expected to prompt further IPOs in coming months.

Private equity-owned outdoor equipment retailer Kathmandu is among those that are expected to look at listing soon.

Myer said it expects to record a net profit of $160 million for the fiscal 2010, off total sales of $3.36bn, up from a net profit of $109m and sales of $3.26bn in fiscal 2009.

The department store operator expects to declare dividends totalling 20.5 cents to 21.5c a share in the 2010 financial year, which represents an annualised forecast yield of 4.3 per cent to 5.3 per cent based on the indicative offer price.

Retail sales have held up well in recent months as Australians continue to shop, with government handouts filling cash registers nationwide.

Consumer confidence is also improving, and although the nation’s unemployment rate is expected to continue to climb, retailers say they are cautiously optimistic about the outlook.

Rival department store chain David Jones said last week it was well positioned for growth amid expectations of a pick-up in conditions for the sector.

So what lies ahead in the coming year, and a bit more for the world’s major mining group? How does it see demand and prices, and does the company still believe as strongly in the commodities boom, especially where China is concerned, as it has done in the past few years? The above graph shows the Australian dollar and the Chinese currency and they tell two stories: the Aussie’s weakness in the past month reflects the new belief that the bloom is leaving the commodities boom; the Chinese currency reflects its appreciation, which now seems to have stopped as the Government tries to keep the economy growing strongly. If that works, then despite some slow growth in coming months, there will be a revival in the value of the Aussie dollar, and that will be reflected in the performance by BHP (and its share price). But has the recent rapid drop in commodity priced, led by oil, the company’s major profit centre in 2008, caused any second doubts? From BHP Billiton’s point of view the coming year has two major tasks to do. The first is to complete or abandon the huge takeover for rival Rio Tinto. There’s not much the company can do until the European Commission rules on its 3.4 share $160 billion offer, probably around November. BHP’s CEO, Marius Kloppers said in yesterday’s profit briefing that the offer was value accretive for both sets of shareholders. “We believe the deal that we have on the table is value accretive for both sets of shareholders,” Mr Kloppers said on a conference call. Mr Kloppers said that the combination of BHP Billiton and Rio made “more sense than ever”. Mr Kloppers said the company was focused on the Rio Tinto proposal and scotched speculation that the group might move into platinum following Xstrata’s $US10 billion bid for Lonmin. BHP can continue to campaign publicly in favour of its offer, but until the EC rules, its powerless. The second is to navigate the company through the rapids of what is looking like a volatile time, with oil prices down, along with gold, copper, lead, zinc and nickel. Iron ore and coal remain high, but that could change if the bloom goes out of China’s boom. BHP is confident that won’t happen in the short or longer term: it sees greater volatility in prices, but no collapse in global price levels, even with the softening we are seeing in major economies. But it does see periods of weakness: not a turnaround in belief, more an acceptance of the current realities. Belief in the commodities supercycle is alive and well in the boardroom and management offices of the company. The big realignment of commodities and the US dollar is based on worsening economic prospects outside America with Europe, Japan and possibly China weakening. But BHP is sanguine. The company sees the strong possibility of slow growth in many western economies in coming quarters, but is confident the emerging major economies of China, brazil, India and Russia will not succumb to the slowdown. “The global economy has remained resilient in the face of significant structural weaknesses in developed economies. The continuing massive industrialisation in China is providing solid support to the global economy. “Over the past financial year there has been considerable weakening in most major developed economies. “The deflation of asset values within these economies has led to a reduction in wealth effect for consumers. “This appears to have ended the past decade’s unsustainable consumer debt driven economic growth, particularly in the US.

“However, a direct spill over into emerging market economies has remained largely contained.

“Emerging market economies have contributed more than their industrial counterparts to global growth since the year 2000.

“Led by China and India, economic growth in these economies has been strong with solid support from growth in domestic demand and strong trading activity with other emerging market economies.

“We expect short term global economic growth to slow as developed economies experience further weakening in the coming quarters.

“Liquidity is likely to remain low, and risk premia high for some time into the future.

“Rising inflation, particularly in food and energy, alongside weakening economic growth has restricted the flexibility of central banks to inject liquidity and stimulate their economies.

“Higher inflation will also have a likely negative impact on emerging market economies through their adoption of tighter monetary policies.

“However, emerging market economies should remain relatively strong on the back of continued domestic infrastructure investment and regional trade.

“While short-term disruptions may occur, we expect that their long-term economic growth will remain robust as they continue on the path to industrialisation.

“The 2008 financial year has seen higher average prices for most of our major commodities, than in the prior year.

“Demand for raw materials in the emerging market economies has remained strong. In particular, China remains a key driver of global commodity consumption through its position as a net importer of raw materials.

“China’s competitiveness and ability to innovate in downstream processing has been demonstrated again with sustained nickel pig iron production.

“In light of differing activity for the developed and emerging market economies, there have been mixed spot prices for key commodities.

“In particular, bulk and energy related commodities have tended to outperform the LME traded metals.

“The effects of current weaknesses in the developed economies on demand for our commodities should be minimal driven by ongoing strong demand from the emerging economies. Meanwhile, supply side pressures remain high.

“This has led to overestimation of the supply side response, and thus, price outcomes regularly being underestimated by industry observers.

“In the short-term, we expect prices to remain high relative to historical levels, albeit with higher volatility.

Looking to the longer term, demand for our commodities is expected to remain strong.

“We expect that higher long-run raw materials and energy prices and stronger producer currencies should place upward pressure on industry supply costs, and hence, prices of minerals commodities.

“We continue to expect that commodity prices will be driven by long-run marginal cost of supply.

“The world is confronting supply constraints for energy and mineral resources.

“While there are enough resources to satisfy the world’s appetite, the industry has not moved quickly enough to meet the growth in demand.

“We are continuing our efforts to meet these needs through a deep inventory of growth options. We have an abundance of tier one resources in fiscally stable regimes that provide us with a unique set of options to deliver decades of lower risk brownfield growth.

“We also have an extensive experience operating in emerging resource regions and the capability to capture additional opportunities as they arise.

“This experience enables us to continue to build and strengthen our position for long term value creation.”

It won’t be as dramatic a week this week as last week was with four leading central banks meeting; our bank’s signalling a rate cut as soon as next month, and then the Europeans ruling out a rate rise sparking a major rise in the value of the US dollar, which was already on the turn.

Our dollar was pummelled, which will be a major theme here this week, along with June 30 companies reporting season hitting full speed. 

Oil prices should be watched closely to see if the fighting in Georgia and South Ossetia involving Russian troops, stops the recent fall in world prices (it had no impact Friday).

And, as usual, there will be some important statistics to worry about, including US consumer price inflation, European economic growth and here the third Statement on Monetary Policy from the RBA, which is out later today.

It will be be watched closely for more clues about how strong the Bank’s new found rate easing bias is.

The Bank will flesh out last Tuesday’s post rate decision statement from RBA Governor, Glenn Stevens.

The AMP’s chief economist, Dr Shane Oliver says “Our assessment is that the RBA is likely to indicate increasing downside risks to its growth forecasts and increased confidence that inflation will fall which will help reinforce expectations for interest rate cuts in the months ahead, albeit maybe not to the same degree as that already priced into the money markets”.

Of interest to the RBA will be this week’s wages price index and average weekly earnings figures for the June and May quarters respectively.

The consumer confidence figures from the Westpac-Melbourne Institute will be released and the latest monthly survey on business confidence from the National Australia Bank. Both should show a small gain perhaps in confidence on the back of the downturn in oil and petrol prices and last week’s talk about lowering interest rates.

The June half profit reporting season will also start to gather pace with stocks such as Cochlear, the Commonwealth Bank, Computershare, Telstra, Leighton and Stockland due to report.

The CBA, Telstra and Stockland will be the most watched: the CBA for banking and if it has missed most of the bad news, like Westpac revealed on Friday; Telstra because it has so far escaped most of the chat about poor results as it is not in finance, or resources; and Stockland which, of the major property investors, has so far been silent on what’s been happening to its business from the slump in financial engineering and geared property sectors.

The AMP expects profit growth for 2007-08 to have come in pretty weak at around +3%, down from +15% in the previous financial year.

According to Dr Oliver the economic backdrop to this reporting season is the toughest since 2000-01 as growth has slowed sharply and costs have picked up.

“All sectors, including resources which have been hit by rising costs, are likely to report soft results for 2007-08.

“However, while the results are unlikely to be the disaster the market is currently priced for after its 30% slump from last year’s high, the focus is likely to be on the outlook statements from companies and these are likely to be disappointing.

“While market expectations for 60% growth from resources in 2008-09 are reasonable given the latest surge in coal and iron ore prices, consensus expectations for 5 to 10% growth in the rest of the market are likely way too strong and will be revised down.

“The Commonwealth Bank’s result will likely be a key focus given the increase in debt provisioning at NAB and ANZ recently.”

In the US, data for the trade balance, retail sales, consumer prices, consumer sentiment, industrial production and a couple of business surveys are due for release.

The retail sales figures will be watched closely to see if the spate of disappointing reports last week from leading chains on July growth reflects the entire retailing sector’s performance for the month.

Wal-Mart’s latest quarterly earnings and more retailed commentary also leads off a string of financial reports from the sector, which will help reinforce the message from the retail sales numbers.

US consumer prices rose 5% (annual rate) in June. Any advance on that will get markets a bit anxious, even though the Fed ruled out a rate rise (while warning of the risks from higher inflation).

It also ruled out a rate cut to further soften the downside risks to growth, which in the minds of many analysts, remains the bigger of the two dangers to the US.

Reuters and Bloomberg polls top a US CPI headline rate of 0.4% for July, compared with June’s 1.1% for June alone.

The CPI is out Thursday night in the US, our time. Tuesday sees the US trade deficit for June, Wednesday retail sales and import prices and business inventories (for June) and on Friday consumer confidence and industrial production.

 
MONDAY:

The Reserve Bank releases its third Monetary Policy Statement of the year at 11.30 am; The Australian Bureau of Statistics (ABS) releases Lending Finance figures for June. Final profits from United Group, Crane Group, Bendigo Bank; Dexion interim; Housing Industry Association (HIA) June quarter national and state outlook

 
TUESDAY:

Final profits from Bradken, Cochlear and Worleyparsons; interims from APN News and Media and Australian Agricultural Co; National Australia Bank monthly business conditions survey; St George Bank briefing; Singapore Telecom/Optus first quarter results.

 
WEDNESDAY:

The ABS releases the Labour Price Index for the June quarter; final results from Telstra, the Commonwealth Bank, Fletcher Building, Computershare, Specialty Fashion group, Talent2, Boom Logistics and Pharmaxis; Westpac/Melbourne Institute consumer sentiment survey.

 
THURSDAY:

The ABS releases Average Weekly Earnings figures for the May quarter; final results from Leighton, ASX, Stockland, PMP, Futuris and Reverse Corp; David Jones full year sales figures.

 
FRIDAY:

Final results from Biota, IDT Australia and SAI Global; Babcock and Brown Japan Property Trust annual results; June quarter housing affordability report from the HIA and Commonwealth Bank.

Australia stock market news

Market Roundup 08/08/08

The market is down 25 (down 72 at worst) following the Dow wiping-off nearly an entire week of gains. Seems the credit crisis is not over after all. Financials underperforming – down 1.3% following the 5% drop in the US financial sector. Resources down 0.4% after significant 3% falls in BHP and RIO in the US last night. Most of the big industrials struggling – down 0.8%. SFE Futures down 58. 

Dow down 225. Down all session – 239 at worst. AIG posts massive loss, Citigroup caves in to fraud allegations and announce they’ll buyback debt securities sold to the public, jobless claims way up, Wal-Mart sales poor and outlook soft, and crude jumped. 

All 10 industry groups down. Indices still shaping up for a gain this week post the 331 point rise on Wednesday. Financials down 5% - AIG fell 18% (largest one-day decline ever) on a $5.4bn 2Q loss – posted $0.51c per share short of the expected profit of $0.63. Pandora’s Box opens – Citigroup has agreed to buy back $7.5bn of auction-rate debt securities from 40,000 retail clients and pay a $100m fine for misleading investors about the risk. After hours the Bank of America has received subpoenas and requests for information about its auction rate securities – could follow the way of Citigroup – other banks being investigated too. Citigroup down 6.24%, Merrill Lynch down 8.42%, BoA down 5.77%. S&P500 retailing Index down 2.1% - July numbers of 21 of the 31 retailers posted same-store-sales short of consensus. Wal-Mart said outlook is soft. Techs down 0.1% - outperformed relatively – semiconductors up 2.3%. Intel up 3.8% positive comments from Citigroup. Crude prices up 1.2% - broke the 3-day dive of $5.00. Resources down 0.3%.

CNBC adjectives of the Day - “Nosedive” – “Reality check” - “Sell the rallies”

• Both BHP and RIO down in ADR form overnight, 2.98% and 3.16% respectively. BHP and RIO dragging on the market, down 0.9% and 1.3%.
• Metals mostly up – Nickel the big mover up 6%, Lead up 3.29% and Copper up 0.55%. Zinc down 1.14%. Oz Minerals up 2.3%. Panoramic Resources up 8.4%, Minara up 7.1%.
• Oil price up $1.27 to $119.84 after Kurdish rebels claimed responsibility for a fire at key Turkish pipeline that supplies Western countries. Woodside up 2%.
• Gold down $5 to $873.80. Newcrest up 0.3%.
• US Bonds up with the 10 year yield down to 3.93% from 4.05%.

Iron ore stocks underperforming the resources as China’s trade surplus narrows by 17% YonY and posts its 4th monthly consecutive fall as their economic growth drops down a gear – FMG down 2.2%, PMM down 1.0% and MMX down 1.4%.

WESTPAC TRADING UPDATE(WBC) – Well received - Main point is that there is no need for an ANZ or NAB style profit warning – they say they are not at risk “from the types of significant write-down in securities portfolios that have impacted some other financial institutions“. FY08 cash earnings growth on track for 6-8% growth on-year – revenue forecast to rise by 8-9% and expense growth of 6-7%. Lending growth has slowed but housing growth has been strong. WBC expects margins to be stable. Provisions expected to be at similar levels to 1H08 - don’t expect significant writedowns. WBC outperforming its peers – up 1.4%. Three other big banks down – CBA down 0.8%, ANZ down 3.0% and the NAB down 2.5% taking the ASX200 index down 12 points on their own.

Property Trusts underperforming all sectors– down 2.1% on news that even LPTs that haven’t had profit warnings like Westfield (results on the 29^th) face an evaporating credit market and may have to sell assets rather than raise capital through the market. WDC down 2.5%.

Apart from that not a lot of news:

Newcrest (NCM) have announced they have increased their 30% stake in the PNG Gold Morobe JV to 50%. NCM up 4c to 2525c despite the $5 fall in the gold price overnight.

Boral (BLD) and Adelaide Brighton (ABC) are rumoured buyers of Cemex Australia’s concrete pipes and products assets. BLD up 3.1% and ABC down 2.3%.

UBS say Constellation Brands are unlikely to bid for Foster’s (FGL) wine business. FGL down 2.0%.

Tabcorp (TAH) down 2.1% after yesterday’s better-than-expected results and today’s broker research – there was some relief they weren’t a disaster with one broker saying they did well to meet guidance.

Connect East (CEU) up 1c to 86 after a big fall on their disappointing Eastlink traffic numbers yesterday. Rumour has it broker analysts are ripping up and down the link as we speak to justify their BUY recommendations.  Goldman Sachs JB Were cut to HOLD this morning.

CSR up 3.98% today as Goldman Sachs JB Were ups their recommendation on the stock from HOLD to BUY with a 271c target price. Now 236c. They have also upgraded their Boral recommendation to BUY from HOLD and the stock is up 3.14%. 688c target price. Now 592c.

Monadelphous Group’s(MND) results on August 19. UBS Warburg cut their target price to NEUTRAL from BUY due to recent share price appreciation, up nearly 20% in the past 6 weeks.

MQG – Macquarie Group– Credit Suisse cut their target price to 6500c from 6800c but maintain their OUTPERFORM recommendation after MQG released their specialist fund quarterly report for the 1Q. Total assets under management fell 3% over the past quarter to $225.4bn.

Goldman’s analyst comments on Vale’s (Brazil) market update – Vale enthusiastic about long-term iron-ore pellet demand for steel production. Comment that stainless steel producers have been unwilling to restock nickel inventories in the face of a deteriorating economic backdrop. Copper and coking coal are its favoured commodities for future growth.

Banks Climb as Market Prices in Interest Rate Cut

For a start, everyone loves an interest rate cut. We don’t have one yet, but that doesn’t deter a horde of rampaging investors with a little bit of knowledge. So financials and retail stocks caught the buying bug.

The whole financial sector soard 5% in fact. Even the money markets are beginning to act as though the cash rate is 25-50 points lower. You’ll note the Bank Pain Index to your right has eased considerably this week. You can pretty much put that all down to traders’ expectations. They think a cut’s coming. They’ve moved early, pushing down short-term market interest rates.

What we want to know is whether markets rates will keep dropping.

If so, banks earnings will benefit. If not, they’ll continue sliding. We’re going for option B. And if their costs stay high, there’s every chance the Big Four will keep their rates up if the RBA cuts. But that isn’t a good thing. It means they’re running faster to stay in the same place. They’d be keeping prices high to maintain earnings, not grow them.

For Australia’s central bank meanwhile, things are way off the charts. It used to have a nice, easy formula of raising or lowering rates in response to consumer inflation. That plan’s holding up like a pavlova under an elephant. If it cuts rates this year, it’s basically admitting that.

We see the big drivers of inflation coming from gaps in supply (think oil) in the near future. That makes the RBA’s economic policy far less relevant than it used to be. Petrol prices are the new Reserve Bank of Australia.

Aussie Dollar Pushes Up Two Sectors

One of the victims of interest rate speculation has been the Aussie dollar.

Our falling currency might’ve helped push the miners up yesterday. Some of them (notably Rio and BHP) report their earnings in US dollars. Most commodities are traded in greenbacks. It makes sense. But this means that a rising Aussie D reduces earnings from the Australian shareholder’s perspective.

Manufacturers too. Our blazing currency hasn’t helped them sell anything overseas.

But while our dollar takes a rest, both of these types of companies could turn out to be short term trades.

Three Surprisingly Good Bottom Lines

As for Earnings results…the market got a bunch of good ones yesterday. But it was the most surprising, wacky collection of winners you’ve ever seen. Imagine Willy Wonka and a handful of Oompa-Loompa’s taking out the men’s 4×400m relay gold medal. Now you’re getting close.

The oddities began with this: online ticket portal Webjet (ASX:WEB) increased its profits by 134% last year. Airline prices are soaring. Yet this company managed to profit from that somehow. Its share price added 11%.

The only thing more Australian than a backyard clothesline is a football player being remanded in police custody. Hills Industries (ASX:HIL), the firm responsible for the Hills Hoist clothesline, somehow pulled off a 16th straight profit record.

That’s not bad. Especially when you consider how it must be hurting from steel prices.

And sleep specialist Resmed (ASX:RMD) added 66% to its net profit. Actually, that’s not surprising at all. This market’s enough to give anyone insomnia.

And as for the latest on Energy.

The market is up 132. Financials rocketing – up 4.2% after the strong lead from the US. The main theme has changed in the last 24 hours from inflation fears and pressure on interest rates to lower inflation and interest rate cuts. It is a very important change in market thinking and at the risk of crying “Wolf” is a significant foundation for a market rally from here….whereas other rallies have been little more than a thrashing herd changing direction. 

RBA set to cut rates in September with a 68% chance of a 50bp point cut factored into Futures markets. Property flying – up 3.8%. Building stocks strong.  SFE Futures were up 88 this morning. Resources also up 2.0% but getting left behind.

Dow up 331. Up 332 at best. Gradually rose all session and closed on high. Dow up the most in four months. All 10 sectors up. 7 sectors up more than 2%. 91% of S&P500 components up. FOMC leave the Fed funds rate unchanged at 2.00%.Key point: Oil fell to a 3-month low and resources fell - the talk on CNBC this morning is that the Fed expect commodity prices to fall allowing them to ease up on the prospect of interest rate rises. Some signs of growth - July’s ISM non-manufacturing index up more than expected. Crude down another 2.4%helped oil-sensitive stocks. Consumer discretionary sector up 4.4% (steepest advance in 5-years), Retailers up 5.3%, Airlines up 9.4% and Transportation up 4.9%. Commodities CRB Index lost 10% in July – steepest decline in 29-years as oil, copper and wheat prices plummeted. Energy underperformed on falling oil prices – only up 1.1%. Financials up a whopping 5.1% - helped by a rise in European banks after Paris’s Societe Generale posted better-than-expected earnings. AIG led the jump – up 12% on an upgrade to BUY at UBS. Mortgage related stocks jumped – MBIA up 8.79%, AMBAC 12.89%, the 2F’s (Fannie and Freddie) up 14.96% and 6.91%.

• Both BHP and RIO down in ADR form overnight, 2.09% and 2.42% respectively. BHP up 93c to 3675c. RIO up 311c to 11390c.
• Metals mixed overnight – Copper up 0.44% and Aluminium up 0.64%. Zinc down 1.31% and Nickel down 2.31%. Oz Minerals up 6.1% or 10c to 173c.
• Oil price down $2.74 to $118.71 on belief that a slower US economy will reduce demand. WPL up 69c to 5189c.
• Gold down $21.70 to $881.80. NCM down 71c to 2560c.
• Bonds down with the 10 year yield up to 4.02% from 3.97%.

Gold stocks getting belted again today - as a hedge against inflation Gold will struggle with the lower inflation theme.

Stocks that struggle with a higher A$ doing well today on hopes that interest rates and the A%$ have peaked. Talk of the A$ going under 90c.
 

Australian Housing Finance slumps 3.7% in June- more than the 2.0% expected – investor housing finance also down 0.3%. Weak numbers will support the RBA’s bias towards cutting rates.

Most Oil stocks up despite an overnight fall in the oil price.

Asciano (AIO) up 6c to 501c on results and comments that they have had approaches for their assets. The company rejected a private equity bid on Monday at 440c.

News Corp’s (NWS) up 4Q results see a 27% jump in net income. Said their pace of growth will ease and that more challenging economic conditions are ahead. Well received in the Us and here and benefiting from the fall in the A$. NWS up 3.84% or 62c to 1672c.

Corporate Express (CXP) half year results not flash and contains net profit guidance of $61.7m-$66.1m. CXP negotiating with possible acquisition targets. Weres think result disappointing and they are reviewing forecasts. CXP flat at 560c.

ResMed (RMD) announced 4Q net profit grew by 7% and FY08 earnings up 66%. CEO says well positioned to deliver strong growth in FY09. RMD up 13.65% or 55c to 458.

NAB announced the first phase of its Next Generation Platform initiative to replace core banking systems over the next 5-years. Up 90c to 2565c.

Beach Petroleum (BPT) announced substantial coal seam gas reserves upgrade – 282% jump in probable reserves at Surat Basin. BPT up 4c or 3.85% to 108c.

Newcrest Mining (NCM) says partial gas from Varanus island now flowing to Telfer mine – 50% of gas to Telfer under contract with Apache will now be possible. NCM down 2.7% or 71c to 2560c.

Tower Australia (TWR) said St George Bank’s switch to AIG Life as favoured new life insurance partner will impact around $60m on TWR’s $700m in-force book. No impact on FY08 with slight profit impact in FY09. TWR up 4.62% or 7.5c to 170c.

Tabcorp (TAH) tipped by Weres to spend $400m in capex for its Star City casino. TAH expected to write down the value of its Victorian gambling license in FY results tomorrow. Analysts consensus for net profit before one-offs is $515m, up 14% on last year. TAH up 21c to 877c.

PanAust (PNA) confirms high-grade Copper-Gold at Puthep, Thailand – project study at feasibility stage and to be completed 1H09. PNA up 1.5c to 70.5c.

Seven’s (SEV) FY year results yesterday sees brokers holding or cutting target prices this morning – acquisitions seen as the key to unlocking value - buyback to support share price. SEV up 11c to 850c.

PaperlinX (PPX) being tipped by JP Morgan to report FY08 net profit of $50m, 32% down on FY07 on August 21^st. PPX up 12.44% or 25c to 226c.

WA News (WAN) tipped by JP Morgan to post FY profit of $126m later today. WAN up 2.57% or 23c to 919c.