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SP AusNet (SPN) will go ex dividend on 26/5/2010. The current dividend payment is 4 cents and it is 40% franked. The record date is 1/6/2010 and the dividend will be paid on 29/6/2010. Based on the full year payment the dividend yield is 9.0%.
*Current Yield: 4.5% Franking: 40% DRP Discount: 2.5%
*Yield has been calculated on the closing price on the 21/5/2010. Current yield is based on the current dividend payment only.
Morning Market Wrap
Bargain Hunters See Value
US Stocks closed higher Friday, led by financial companies up over 4% after the US senate passed a financial overhaul bill, as bargain hunter stepped in.
The SPI Futures is below key level of 4400, the ASX is set to open higher as the SPI closed up 58 points (or 1.3%) at 4,358; US positive lead. Huge volatility in the past few weeks will impact this weeks trading, with key levels this week are 4000 and 4600.
US Markets
US Markets Sees Bargain Hunters (and Short Covering)
Senate Passes Banking Reforms
The Dow Jones Industrial Average rose 1.25%, to 10193, but was down 4.0% for the week (off 2.3% YTD), its largest weekly drop since early May when the market dropped in the “flash crash”. The Standard & Poor’s 500 climbed 1.5%, to 1088, but was down 4.2% for the week (off 2.5% YTD). All of the S&P 500′s sectors ended Friday’s session in the green, led by financials. Metals and materials companies, enjoyed a relief rally on Friday as investors stepped back into the most beaten-down commodity-based stocks. The Nasdaq Composite rose 1.1%, to 2229, but was down 5.0% for the week (off 1.8% YTD).
UK markets (FTSE) finished down 0.2% at 5,063 (down 4.0% for the week) and the German DAX finished down 0.7% (down 3.7% for the week). In Europe the concerns over the debt issues eased as they saw a bounce in Miners and Financials. Strength in commodity-based stocks supported markets from further falls.
SP500: up 1.5% at 1,088 (down 4.2% for week)
DOW up 1.3% at 10,193 (down 4.0% for week)
Broadly Higher – Investors Bargain Hunt – Despite Europe Debt Issues
NASDAQ: up 1.1% at 2,229 (down 5.2% for week)
Dollar Index: Euro Recovers from 4-year Lows
A$ up 82.32 (recovers from 10-month Lows)
FTSE: down 0.2% at 5,063 – Financials & Miners Bonuce (down 4.0% for week)
DAX down 0.7% – Europe Runs Scared (down 3.7% for week)
Markets Sell-off over Debt has unveiled Value
CHINA: up 1.1% at 2,583 – (down 4.4% for week)
HSI down 0.2% (down 3.3% for week)
Oil: down 1.1% a ($70.55) (down 1.6% for week)
Recovers from 3-Week 25% Sell-off and focus still on spread of oil spill in Gulf of Mexico
Gold: down 1.0% at ($1,177) (down 4.2% for week)
Commodities Recover;
SPI: Below Key 4400 ASX
SPI up 58 (1.3%) at 4358 (down 4.1% for week)
ASX News
The SPI Futures is below key level of 4400 the ASX is set to open lower as the SPI closed up 58 points (or 1.3%) at 4,358; U.S. posoitive lead.
Huge volatility in the past few weeks, key levels this week are 4000 and 4600.
AUD – bounces off to 10 months lows as investors start to see sell off as over extented near term.
ANZ – The Fitch Ratings Agency has upgraded ANZ’s credit rating to AA- positive (from stable) citing improved earnings and potential diversifiction through its Asian expansion as improving its financial profile.
BHP – The Big Miner says the proposed tax on resource super profits (RSPT) should be leived on the value of minerals alone and vary commodity by commodity.
BRM – Iron ore explorer Brockman Resources is in a trading halt pending an announcement regarding market speculation over
arrangements with Chinese steel giant Sinosteel.
HSP – has sweetened bid from $5.50 to $5.75/share. Shares closed at $5.24.
ILU – Joins chorus on Henry Tax. Tax is unfair citing compliance cost s burdens and the fact that to ILU sharholders who have forgone $650million in dividends in the past 3 years,
and now that operations are about to become profitable they wuill be hit by the resources tax.
SHL – likely to sell-off as it says FY10 result will fall short due to government’s cut to Medicare fees for pathology services
SIP – SIGMA was up 37% after it has a takeover offer, valuing the company at about $707 million.
PSA – PETSEC ENERGY LTD intends to grow its current reserves significantly during the next three years, by exploring
and developing its China oil fields.
RIO – will achieve almost double the price for its iron ore after securing a price agreement with major Asian steel mills except those in China.
Market volatility will continue near termas world investors come to terms with the ramifications of the credit squeeze and new regulatory regimes, but investors are starting to do some bargain hunting.
We think the trading strategy is to get small, reduce you exposure to equities, start to look for value. Be aware of short covering rallies.
ASX – to open higher
US & UK/Europe – US Recovers
US ADRs – Broadly Higher!!!…
BHP up 5.8% & RIO up 6.6%; AWC up 6.9%
ANZ up 8.9% & NAB up 5.2%
NEM up 0.5%, JHX up 1.%, NWS up 2.0%
Commodities Stock Index up 1.9%
Gold Stocks Index up 0.2%
Oil Stocks Index up 1.4%
By Michael Hevern
Head of Research
GUD Holdings Limited (GUD) confirmed that it has signed a Takeover Bid Implementation Agreement (“Agreement”) with Dexion Limited (“Dexion”) under which, subject to the satisfactory completion of confirmatory due diligence, it would make an off-market takeover bid (“Offer”) to acquire all the issued shares of Dexion, a leading provider of solutions for the industrial and commercial storage markets in Australia, New Zealand, Asia and the Middle East. Pursuant to the Agreement, the Dexion Board has agreed to recommend the Offer, in the absence of a superior proposal.
As stated above, the proposed Offer is conditional upon the satisfactory completion of confirmatory due diligence on Dexion. Dexion has agreed to allow GUD four weeks to complete its due diligence and has granted GUD exclusivity for this period. At or before the end of the due diligence period, GUD will announce whether or not it will proceed with the formal Offer. Until that time, there is no certainty that a formal offer will proceed.
The proposed Offer is at a price of A$0.80 cash per Dexion share, reflecting a 100% premium to the Dexion share price of A$0.40 at close of trade on 20 May 2010. This equates to an equity valuation and enterprise valuation (“EV”) for Dexion of A$84 million and A$109 million respectively, and represents an EV / EBITA multiple of 9.5x based on the midpoint of Dexion’s earnings guidance for the year ending 31 December 2010 as announced by Dexion at its AGM on 22 April 2010.
GUD expects the acquisition, if it proceeds, will be earnings per share accretive in GUD’s first full year of ownership. GUD has the capacity to fund the proposed Offer using existing cash and committed bank facilities; however, it is currently in the process of determining its preferred acquisition funding mix.
Commenting on the Agreement, GUD Chairman Mr Clive Hall said, “The rationale for the proposed Offer is clear and compelling, and provides benefits for both sets of shareholders.” “For Dexion shareholders, the Offer represents an excellent price for their shares at what can only be regarded as an extremely attractive premium that provides certainty of value today.”
Digislide Holdings Limited (DGI) is pleased to announce that it has signed a distribution agreement with Rights Commerce Limited (UK). This will add to the foothold Digislide is establishing in Eastern Europe through its agreement with Comagro Vest (Romania and Hungary). Digislide is now poised to enter Western European markets via a distribution deal with Rights Commerce Ltd, which is based in UK. Europe represents approximately 30% of the global market for Digislide products and the distribution agreement with Rights Commerce Limited is anticipated to assist Digislide to make significant inroads into this potentially lucrative market.
In-stat, technology analysts predict that “pico-projector” capabilities combined with consumers’ desire for larger displays will result in a new Consumer Electronic segment whose shipments will exceed more than 20 million units in 5 years. In-stat forecast for products expected to include embedded pico projection systems include handsets, notebooks, personal CE products, digital cameras, digital camcorders, digital clocks, gaming, mobile TV, portable media players etc. Digislide has lodged patents, registered designs and trademarks covering the above, many of which have already been granted. The Intellectual Property portfolio provides a solutions suite for consumer electronic maufactureres that will provide new revenue lines for this burgeoning growth sector.
Mr. Tim Burgess, Co-founder of Rights Commerce said, “Digislide’s products are ideally positioned to capitalize on the rebounding of these projector markets by focussing on the rapidly growing portable and “mobile media” device markets.” Digislide’s CEO, Ms Luceille Outhred said” Mr. Burgess and Rights Commerce Ltd bring local experience in the European electronic device markets along with a variety of business development skill sets to assist Digislide in establishing its brand into this significant market.”
Rights Commerce develops Smart Hub and Device Technologies for Home Automation and metering and interaction with wireless Smart meters; Smart Card transaction ans Security Systems; ORDL digital rights managements of Property Rights and virtual goods; secure media delivery and monetization platform; etc. Digislide is an Australian based company that has developed and continues to develop globally relevant innovative miniaturized projection technologies with broad applications.
Nycomed and Immuron (IMC) intend to collaborate to complete the development of an antibody-based product based on Immuron’s technology and existing pre- clinical program to prevent influenza in humans. The aim is to target this product into the large over-the-counter cold-and-flu market. The influenza specific market is in excess of US$2 billion per year globally, while the pharmacy cold-and-flu segment of the OTC market is $150 million per year retail in Australia alone (according to IMS figures, 2008). Input in this product is expected to come from Immuron in Melbourne, Australia as well as from Jerusalem, Israel. Expertise from Nycomed will be sourced from both Nycomed in Europe and in Australia.
Nycomed is a privately owned pharmaceutical company that provides medicines for hospitals, specialists and general practitioners, as well as over-the-counter medicines in selected markets. Nycomed is one of the top 25 global pharmaceutical companies and 16 in rank world-wide for consumer healthcare products with a total net turnover of more than 3.5 billion Euro (AU$6 billion). Nycomed Australia, based in Sydney, has grown quickly over the last 7 years to achieve over AU$100 million turnover and employs 100 staff locally. Nycomed is most active in the areas of gastroenterology, respiratory diseases, pain management and tissue management. A key corporate strategy within Nycomed is to license in new promising products and to work with innovative partners to co-develop their concepts to a profitable conclusion.
Immuron is a biopharmaceutical company focused on oral immunotherapy using dairy- derived polyclonal antibody products for humans. Current products target infectious diseases of the gastrointestinal tract, while more recent projects are targeting immunotherapy to influence chronic diseases such as diabetes type 2 and fatty liver (NASH), and to prevent and treat respiratory infection with influenza. Immuron’s main scientific alliances are with Hadassah Medical Centre (Israel) and University of Melbourne (Australia).
One of the ways you can dramatically improve your current trading results is to take into account what is happening on multiple time frames. If the set up you are looking at on one chart is also a set up on a longer time frame chart, then it is far more likely that the set up will work in your trading timeframe. The Bourse is ideally set up to deliver this information for a wide variety of shares using layouts and the SYNC feature.
If you are trading based on daily charts, a look at the weekly chart may show you something you did not see on a daily chart. You may want to buy a share based on the up trend you can see on a daily chart, but the market may be in a down trend on a weekly chart. This violates the key principle of trading in the direction of the trend and you were not even aware you were doing it. Also you could use an hourly chart to time your entries if you trade end of day. If you get a signal to buy on the daily chart, but a review of the hourly chart shows you that the share has had a strong run, then maybe you are better waiting until the next day to place your entry order.
Take a look at the charts below of BHP Billiton. BHP is in a down trend on the weekly chart and the daily chart, but when we look at the hourly chart in the bottom right hand corner, BHP is very oversold. It is a long way from the trend line and this means it is more likely to bounce back to the trend line than continue lower in the short term. An end of day trader would certainly not want to be selling short BHP today. An intraday trader could use the 5 min chart, on the top right, to enter the trade long when it breaks out of the down trend.
The Bourse can be set up to display multiple timeframes for the one share very easily using layouts.
To create a new view layout:
1. An easy way is to be in Classical MDI mode. You can do this from the “Window” menu. However, you can select one of the pre-formatted pane-mode layouts to start off with. Start by selecting a pane mode layout.
2. Select the “Window” menu, and select a view with 2 vertical panes indicated by this icon. 
3. The screen will look like the screen shot below.
4. Click on the button with the two right arrows – we will call this the menu button. 
This will drop down a menu. From here select “My Watch Lists.”
5. Repeat the same on the other side and select “Chart” and your screen will look like this:
6. Now size the windows to suit. Place the mouse pointer on the division between the two panes and move the division to the left to shrink the size of the Watch List and increase the size of the Chart.
7. Your final screen will look like this:
8. It is now recommended that you change to Classical MDI mode. This will restore the screen layout into normal “windows” mode and allow you to better control the window position. Do this by selecting the “Window” menu and clicking on “Classical MDI”. You will notice that the menu button 
has been replaced.
9. To make navigating through codes easier make sure that you have “SYNC: ON” in the status bar. To switch between sync modes just double-click on the SYNC status. With sync on you can select a code on the watch list and the chart will also change.
10. Most importantly, you now need to save your layout. Click on the “File” menu and select “Save”. You will be asked for a name for the layout. Click “OK” and the layout will be saved.
11. To reload your saved layouts use the “File” menu and select the “Open” menu item. Alternatively, if they have been opened recently, they will be pinned to the “File” menu.
Here is an example of the layout I use to look at multiple time frames. When you select Intraday for the charts you will be asked what time frame you want to display. Enter a value in minutes e.g. 60 for 1 hour candles. With this setup and SYNC ON I can click on any share in my watch list and it will be displayed in all time frames in the charts on the right.
By always considering multiple time frames when you make your trading decisions you can dramatically improve your trading results. Make sure the trade is set up in your favour on all charts, not just the time frame you are trading.
By Jeff Cartridge
Education Manager
Morning Market Wrap
GFC Mark II? – as Overseas Markets Meltdown
US stocks sank again, closing at their lows, as concerns over poor employment figures, European debt, the advance of financial overhaul legislation and austerity measures sent investors heading for the exit yet again. In Europe we saw a market sell-off as credit markets cease and Germany calls for new banking regulations.
The SPI Futures are below key level of 4400, the ASX is set to open lower as the SPI closed down 106 points (or 2.5%) at 4211 and overseas weakness will weigh.
US Markets
Germany’s short selling ban worries investors & now calls for banking regulations.
US markets join European route.
SP500: down 3.9% at 1,071
DOW down 3.6% at 10,068
Broadly Lower – Investors are scared over Europe
NASDAQ: down 4.1% at 2,203
Dollar Index: Euro Sinks Again Towards 4-year Lows
A$ down 81.38c (Risk Aversion Rules)
FTSE: down 1.7% at 5,073 – Financials Weighs
DAX down 2.0% – Europe Runs Scared
Markets Sell-off over Debt and Germany’s “Temporary Naked Short Selling Bans”
Oil: down 2.7% at ($68.28)
Recovers from 8% Sell-off and focus still on spread of oil spill in Gulf of Mexico
Gold: down 0.5% at ($1,180)
Commodities Weigh;
SPI: Below Key 4400 ASX
SPI down 106 (-2.5%) at 4211
ASX News
The SPI Futures is below key level of 4400 the ASX is set to open lower as the SPI closed down 106 points (or 2.5%) at 4211, and overseas weakness will weigh.
BHP – Execs are going to Canberra to meet with Treasury over Henry Tax Reform today
HSP – gets bid sweetened from $5.50 to $5.75/share. Shares were up 2.9% at $5.33.
ILU – Joins chorus on Henry Tax. Tax is unfair citing compliance cost s burdens and the fact that to ILU sharholders who have forgone $650million in dividends in the past 3 years,
and now that operations are about to become profitable they wuill be hit by the resources tax.
SHL – likely to sell-off as it says FY10 result will fall short due to government’s cut to Medicare fees for pathology services
Market volatility will continue to rise near term as world investors come to terms with the ramifications of the credit squeeze and new regulatory regimes.
ASX – to open sharply lower
US & UK/Europe – meltdown
U.S. ADRs – Broadly Lower!!!…
BHP down 6.2% & RIO down 8.7%; AWC down 8.2%
ANZ down 8.3% & NAB down 6.2%
NEM down 4.5%, JHX down 5.9%, NWS down 5.3%
Commodities Stock Index down 4.9%
Gold Stocks Index down 4.5%
Oil Stocks Index down 4.0%
Presented by Michael Hevern
MDS Financial
Anglo Pacific Group plc (AGP) announces that it has agreed to purchase the DFD Rhodes Group iron ore royalty, covering three exploration licences in the central Pilbara region of Western Australia, for a sum of A$23 million in cash. The vendors comprise DFD Rhodes Pty Ltd, JCO Investments Pty Ltd, Eamon Ian Cornelius and Brenton Anthony Parry (DFD Rhodes Group). The tenements, covering 263 square kilometres, are owned by a wholly owned subsidiary of BHP Billiton (‘BHPB’) and are subject to a 1.5% royalty on total gross revenue. The royalty tenements host a number of known iron occurrences, the most significant being the Railway deposit. The tenements are supported by extensive rail infrastructure including the rail lines from Rio Tinto’s West Angelas and Yandicoogina mines and BHPB’s rail line serving its current operations at Mining Area C, which lies immediately to the east of the Railway deposit.
Anglo Pacific Group plc is a global natural resources royalties company. The strategy of the Group is to expand its mineral royalty interests in low-cost, long-life mining assets. The Group achieves this through both direct acquisition and investment in projects at the development and production stage. It is a continuing policy of the Group to pay a substantial proportion of these royalties to shareholders as dividends.
Downer EDI Limited announced it has secured new orders totalling more than $300 million across the Group.
Downer Managing Director and CEO, Geoff Knox, said the contract wins reinforce Downer’s strong market position and highlight its ability to leverage opportunities across all business activities. “Since February 2010, the Group has secured more than $1 billion of work and we are in a preferred position on over $3.5 billion of projects which we expect will be awarded in the next few months,” he said.
“Our Engineering division has been awarded over $200 million worth of work in the energy and renewable energy sectors including a contract, valued at over $100 million, for the design and construction of 111 wind turbine generators as well as access roads and civil and electrical balance-of-plant works at Collgar Wind Farms, in central Western Australia. This consolidates Downer’s position as the pre-eminent supplier of ‘balance-of-plant services to the wind farm industry,” Mr Knox said.
“Downer’s Works division has also secured a $50 million contract for road surfacing and traffic control services on Brisbane’s Airport Link, Northern Busway (Windsor to Kedron) and Airport Roundabout Upgrade projects. Again Downer was able to demonstrate innovative pavement solutions and delivery options to meet our client’s requirements”, he added. “In New Zealand, we have secured a three-year contract for the maintenance, resurfacing and emergency response winter services on State Highway 5. “These long-term road maintenance contracts across Australia and New Zealand further strengthen Downer’s recurring revenue base and validate the Group’s Asia-Pacific strategy,” Mr Knox said. Mr Knox reported that Downer has over $16 billion of work-in-hand, excluding preferred position status and continues to see a strong pipeline of tendering opportunities across all sectors.
The contract is for the design and construction of a combined 132/275kV double circuit transmission line from Yabulu South to Ingham in North Queensland (approximately 93 km). Works also include the removal of an existing 132kV line consisting of steel lattice towers over a distance of approximately 87km.
Downer EDI Limited is an Australian top-100 company that provides comprehensive engineering and infrastructure management services to the public and private transport, energy, infrastructure, communications and resources sectors, across Australia, New Zealand, the Asia Pacific region and the United Kingdom.
Data and transaction services company Connxion Ventures Limited transactional (CXN) today announced that it has secured new and extended contracts that strengthen the company’s recurring revenue streams and continues to accelerate its organic growth. The projects include – a two-year partnership agreement to manage loyalty and membership rewards programs with a Hong Kong hotel, which is part of the Mandarin Oriental Hotel Group. The Group currently operates 17 hotels across Asia and has other properties under development which offers further upside potential for CXN’s Rewards business. This project commences on June 1, 2010 and it is CXN’s fifth hotel loyalty and rewards program secured since November last year. This is in addition to the new scope of works secured in March of this year.
CXN’s Chief Executive Officer, Mr. Bill Brooks, said “While our revenue and earnings continue to grow rapidly, these contract successes represent two very important developments for CXN.
Firstly, the new project with Mandarin Oriental clearly demonstrates that our service model is now delivering significant organic revenue growth and we can secure and service larger, multi-million dollar contracts. This contract is the fifth new contract that has been won in this the highly competitive Asian Hotel Loyalty Program market since the original Rewards business was acquired last year. The new contract is further evidence of sustainable organic growth resulting from its core data and transactional services strategy.
Secondly, we have again managed to expand our scope of works with Jetstar. This clearly demonstrates that our work for Jetstar continues to expand as part of CXN and they are recognising the value of our service delivery capability across Australia and Asia. Additionally, both projects further underpin our growing base of recurring and predictable revenue which in turn is translating into profit for CXN at an operational level.” Mr. Brooks added that CXN has a wide range of tendering opportunities that are currently being pursued in Asia and Australia whilst continuing to assess suitable growth opportunities that make a further contribution to earnings.
