Aussie stocks are slightly lower at midday, lacking direction from overseas markets, the major miners mixed, but coal stocks are rallying on takeover talk in the sector. Macarthur Coal today received an approach from a third party, widely tipped to be major player Peabody Energy.
All Ordinaries index was down 2 points, or 0.04 per cent, at 4,934.
In economic news: According to data released by the ABS today, building approvals fell 3.3% in February from the month before. And retail sales dropped 1.4% also for the month of February.
Coal miner Macarthur Coal Ltd (MCC) has gone into a trading halt this morning after receiving an approach from a third party.The company, who is currently in the process of negotiating a takeover of Gloucester Coal Ltd (GCL), placed its shares in halt while it considered interest from a third party in acquiring a controlling stake in the company. Speculation is rife that major player in the private-sector, coal company Peabody Energy Corp has made the offer. Macarthur Coal has requested that its shares remain in a trading halt until it can make an announcement regarding this potential interest in the company. Macarthur Coal earned profit of $168.56 million in the year to June 30, 2009.
James Hardie Industries (JHX) has been upgraded to BUY at a price target of $8.30 by UBS. The upgrade is despite ongoing uncertainty in the US housing market and a 38% rise in pulp prices, a key component of cement. James Hardie shares gained 1.54% to $7.26.
QBE Insurance (QBE) says it is in talks with various parties regarding a number of acquisitions and is on track to meet its full year insurance profit margin. However, the insurer says strength in the Aussie dollar could hurt its profits and revenue in 2010. QBE earns three-quarters of its premium income in currencies other than the Australian dollar, with close to 46% in US dollars. Shares in QBE fell 0.95% to $20.85.
Macquarie DDR Trust (MDT) has placed its shares in voluntary suspension this morning to allow the company further time to resolve its debt position. There is concern that if the company cannot reach a refinancing agreement with lenders it may be forced into involuntary administration. The company says in particular the suspension was requested so that it can finalise the status of a number of loans and derivatives that matured on Friday last week. The loans include a US$49.5 million unsecured trust loan facility and US$37.4 million in derivative contracts.
According to a Fairfax report the Trusts CEO Luke Petherbridge says the companys other loans are a US$145 million portfolio debt facility and A US$267.8 million revolving facility. At its half year results in February the company said it was in advanced negotiations with lenders to extend the revolving facility. Macquarie DDR Trust reported a $616.36 million loss for the 2009 financial year.
The best performing sector at midday is the Consumer Staples index, up 35 points at 7,813.
The worst performing sector is the Telco Services index, down 3 points to 1,031.
Gold is trading at US$1,105.70 an ounce and the Aussie dollar is trading at 91.65 US cents.
