1409 [Dow Jones] Wall Street Journal reports today that U.S. pharmaceutical giant Merck booked US$12.4 billion in revenue that it never collected, apparently becoming latest U.S. accounting shock after Reliant last Friday; hard to know how much U.S. markets will react since they've become so used to such scandals, but fact Merck is a drug firm, not an energy firm or telco, may suggest to investors that the rot is very widespread.(AXT)
1401 [Dow Jones] Seven Network (SEV) had rough week in terms of ratings, coming in third spot behind PBL's (PBL) Nine Network and Ten (TEN) in week 27 of ratings year. Nine secured 31.9% of 6pm-midnight audience, ahead of Ten on 24.7% and Seven on 23.9%. On year-to-date numbers, Nine leads with 30% share, followed by Seven on 25.3% and Ten on 23.7%. May damp Seven shares, currently up 9 cents at A$5.65. (HGU)
1354 [Dow Jones] STOCK CALL: Goldman Sachs says WMC (WMC) now represents best value in Australia's diversified resources sector, ahead of BHP Billiton (BHP) that has experienced relatively strong share price performance, and Rio (RIO). "While the prospect of an improving macroeconomic demand outlook remains the central investment theme for the entire sector, in our view WMC has added appeal." Notes demerger removes disincentives for bidders, also exposed to improving copper and alumina markets. Rates WMC "market outperformer", composite valuation A$10.50/share vs current A$9.16, up 14 cents. (AND)
1347 [Dow Jones] STOCK CALL: Merrill Lynch increases valuation range for Publishing & Broadcasting (PBL) by 1% to A$8.46-A$9.74/share, noting TV Week deal only modestly boosts profit (1% increase in FY03 and 0.5% in FY04). "Accordingly, we believe PBL is fairly priced at current levels and we maintain our neutral intermediate term recommendation." Merrill also keeps long-term buy recommendation on stock. (HGU)
1343 [Dow Jones] STOCK CALL: Merrill Lynch still "ambivalent" toward Computershare (CPU), not rating it buy or sell. Management beginning to do right things, but market unwilling to back away from "what we believe are unachievable profit expectations in FY03." Also, current equity markets weakness bodes poorly for corporate activity, it says. Merrill Lynch valuation A$1.90. Shares currently up 1 cent at A$2.11. (HGU)
1329 [Dow Jones] STOCK CALL: ABN AMRO keeps reduce recommendation on Seven Network (SEV), citing same challenges of fragmentation faced by rival Ten Network (TEN). Competition from pay TV and potential new free-to-air operators, combined with increasing programming costs, likely to reduce FTA DCF valuations in Australia by 30%, says broker. This would reduce corporate value of Seven by 44% as result of its financial gearing, ABN AMRO says; 12-month price target A$5.00 vs current A$5.66, up 10 cents. (HGU)
1323 [Dow Jones] Suncorp (SUN) to extend gains following announcement that investment returns on general insurance shareholders funds for 6-months to June 2002 should be marginally positive. Strong active investment management and positive returns on non-equity asset classes (property and cash) responsible for better 2H02 performance, although A$7 million loss on investment income in 1H02 will result in slight loss on investment income in FY02. SUN up 19 cents at A$11.90. (RAT)
1318 [Dow Jones] STOCK CALL: ABN AMRO keeps "reduce" recommendation on Ten Network (TEN), noting growth in pay TV and any issue of 4th free-to-air TV license would likely reduce FTA DCF valuations by 30%. Broker says current market valuations for Ten assume return to historic advertising growth rates and moderate programming costs increases. But viewer fragmentation likely to become increasingly important issue over coming decade. Fragmentation risk explains "very vocal" stance of Ten's Nick Falloon over future of Foxtel, says ABN AMRO. Broker's 12-month price target is A$1.95 vs current A$2.18, up 1 cent.(HGU)
1314 [Dow Jones] AUD/USD moves above 0.5600 to 0.5610, taking heart from gains by EUR and U.S equities; next resistance 0.5650 but reaching this in short term dependent on continued gains by U.S. equities. Dealers note solid bounce by pair off 0.5550 support positive for overall outlook in coming sessions. (CMR)
1308 [Dow Jones] STOCK CALL: ABN AMRO lauds Foster's (FGL) management decision to swing spotlight back to domestic beer operations. CEO Ted Kunkel wants Carlton & United Breweries unit to grow EBIT by 5%-plus over time, up from 3%-5% EBIT growth of recent years. Broker also thinks A$75 million-A$100 million in costs can be stripped out of this traditional cash cow, with consolidation of CUB, Continental Spirits sales force just the start. Construction of WA brewery would be EBIT enhancing if product demand continues to climb in that state. Foster's shares steady at A$4.66.(VTB)
1304 [Dow Jones] STOCK CALL: ABN-Amro maintains add recommendation on Boral (BLD), says confidence growing in company's earnings outlook over FY02-FY05. Aggressive cost cuts, price increases and pickup in non-dwelling construction should comfortably offset key negatives of expected fall in housing demand and possible reduction in plasterboard margins due to new competition, says analyst. Target price is A$4.40/share vs current A$3.91, up 2.9%. (RAT)
1257 [Dow Jones] STOCK CALL: ABN-Amro maintains add recommendation on Boral (BLD), says confidence growing in company's earnings outlook over FY02-FY05. Aggressive cost cuts, price increases and pickup in non-dwelling construction should comfortably offset key negatives of expected fall in housing demand and possible reduction in plasterboard margins due to new competition, says analyst. Target price is A$4.40/share vs current A$3.91, up 2.9%. (RAT)
(END) Dow Jones Newswires 08-07-02 0427GMT(AP-DJ-07-08-02 0427GMT)
