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The Round Up
9 June 2010
Issue No. 347
Equities
Move Last % Move Range Volume
ASX 200 +55.3 4381.2 +1.3% -4 to +60 $5.2 bn(A)
SPI - yesterday +56.0 4394.0 +1.3% -20 to +59 31,426(A)
Dow Jones +123.5 9940.0 +1.3% -59 to +137 Avg
S&P 500 +11.5 1062.0 +1.1% -8 to +13 Avg
Nasdaq -3.3 2170.6 -0.2% -34 to +9 Avg
FTSE -40.9 5028.2 -0.8% -84 to +15 Low
Commodities
Move Last % Today % Past Month
Oil-WTI spot +0.89 72.33 +1.2% -3.7%
Gold Spot -3.22 1237.03 -0.3% +2.4%
Nickel (LME) +12.70 835.16 +1.5% -18.1%
Aluminium (LME) +2.42 85.64 +2.9% -7.5%
Copper (LME) +3.02 278.25 +1.1% -11.2%
Zinc (LME) +4.81 77.22 +6.6% -17.4%
Silver +0.14 18.30 +0.7% -0.3%
Sugar +0.55 14.88 +3.8% +8.2%
Equity Structured Products and Warrants
Overnight Commentary
US markets were whippy overnight before finding support from material and energy names to close near highs. Tech
shares however weighed on the market with concerns over their exposure to Europe. The Dow rose 124pts, the S&P
added 1.1% but the Nasdaq dropped 0.2%.
Economy - ABC Consumer Confidence was -43 as expected and up from -44 prior. An interview with Bernanke overnight
saw comments like "the unemployment rate will stay high for a while". Fellow Fed Governors were also cautiously
optimistic on the economy but were worried by the jobless recovery and the time taking to repair household balance
sheets.
Materials - A good bounce from the sector after comments from Brazil, an economy heavily reliant on resources, that saw
its strongest 1Q growth in 14 years. Caterpillar rose 1.4% with Alcoa adding 2.5%. Freeport jumped 4.8% with Newmont
ending 2.3% higher. Exxon rose 3.3% with crude also enjoying a bounce.
The FTSE fell 41 points Tuesday with many of the same excuses being put forward. Banks continued to fall on fears of
European exposure and incoming levies while miners managed to buck the trend with most posting gains on the back of
firmer metal prices. The market finished the day -0.8%, the DAX -0.6% and the CAC -1%.
Banks - Banks remained under pressure as European finance ministers sought agreement on how to make banks pay for
financial crisis's. Lloyds, Barclays, RBS and Standard Chartered some of the hardest hit off 1.9% to 4.1%.
Commodities Commentary
Miners - Miners enjoyed a day in the black as commodity prices found support after days of selling. BHP, Anglo,
Randgold, and Antofagasta all up 0.8% to 4.6%.
Energy - Energy plays failed to track crude higher. BP continued its demise falling 5% after fresh concerns surrounding
the oil spill in the Gulf were made public. BG, Royal Dutch, Cairn Energy and Tullow Oil followed suit off 0.5% to 1.2%.
SPI Commentary
The SPI traded up 56pt to 4394. Open at 4338 with a high of 4397 and a low of 4294. Volume 38,068 Overnight the SPI
traded up 5pts to 4401.
*SPI report taken from the 9:50am open to the 4:30pm close on the previous trading day. Charts taken from IRESS
Source: IRESS
Investment view
Prior to the initial bid, our preference was for NCM over LGL for gold exposure due to diversification by mine and
geography, its strong growth pipeline, management strength and a relatively low P/NPV multiple. Should the merger be
successful we are of the view that NCM's management team will be able to extract greater operational synergies over
time than the A$85m currently factored in to our numbers, and remain buyers on a long term view. We maintain our view
that a competing bid for LGL is unlikely but would continue to hold that stock with a view to NCM exposure now that a
timeline for the merger has been established.
Source: IRESS
Source: IRESS
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