Issue 8 Covering the period: 3â€“ 7/03/14
The Australian share market closed higher on Friday, with energy stocks leading the charge, as investors remained unfazed by Russia's incursion into Ukraine and drew comfort from local economic data. At the close on Friday, the benchmark S&P/ASX200 index was 16.4 points, or 0.3%, higher at 5,462.3, while the broader All Ordinaries index was up 17.3 points, or 0.32%, at 5,477.0. In the local resources sector, BHP Billiton improved six cents to $37.72, Rio Tinto gained 36 cents to $64.94 and Fortescue Metals edged two cents higher to $5.43. Among the major banks, Commonwealth Bank jumped 45 cents to $76.00, Westpac shed 41 cents to $33.90, ANZ added one cent to $32.58 and National Australia Bank dropped 11 cents to $34.74. Carsales.com shares surged 86 cents, or 7.8%, to $11.89 following Thursday's announcement that it would pay $126 million for a major stake in South Korea's leading car seller's website. Economic news: Better than expected economic growth during the December quarter, and a rise in retail sales.
US Wall Street stocks finished mixed on Friday as a better-than-expected US jobs report lifted the S&P 500 to a new record, fending off anxiety over Ukraine. The S&P 500 edged 0.05% higher to 1,878.04, notching its third record in four days. The Dow Jones Industrial Average gained 0.19% to 16,452.72. But the tech-rich Nasdaq Composite Index fell 0.37% to 4,336.22. The US jobs report said the economy added 175,000 jobs in February, an improvement after jobs growth had plummeted the prior two months.
But Ukranian tensions continued to "fester," said a market note from Charles Schwab. Markets in Britain, France and Germany all moved sharply lower following a threat from Russian gas company Gazprom to halt deliveries to Ukraine. Supermarket chain Safeway fell 2.2% to $38.60 after unveiling a merger with Albertsons that will create a retail giant with more than 2,400 stores and 250,000 employees. Under the deal, Albertsons owner Cerberus agreed to pay $40 a share for Safeway. Earnings from Foot Locker came in at 81 cents a share, five cents above expectations, lifting the stock by 8.8%. Europe Europe's main stock markets perked up on Friday on the strong US jobs data but the optimism proved short-lived as Russian energy giant Gazprom's threat to cut off gas to Ukraine quickly sent the indices back down. Frankfurt's DAX 30 tumbled 2.01% to close at 9,350.75 points, while London's FTSE 100 dropped 1.12% to 6,712.67 points and in Paris the CAC 40 fell 1.15% to 4,366.42 points.
Exchange Rate and Commodities The Aussie dollar, at 9:00am AEST, was trading at:
Carsales.com As mentioned earlier in the piece, Carsales.com has agreed to pay $126 million for a major stake in the online operations of South Korea's leading car seller, further expanding its international reach. The company plans to take a 49.9% interest in SK Encar's online operations, which includes the country's top car sales website.
"More than 1.6 million new vehicles are expected to be sold in South Korea in 2014 - nearly 60 per cent more than in Australia during the same period," Carsales managing director Greg Roebuck said. "In addition, around 3.3 million used vehicles will find new homes." As well as its Australian business, Carsales also has interests in Brazil, Malaysia, Indonesia, Thailand, China and New Zealand. Its half-year profit recently rose by 17 per cent to $44 million, and it has forecast a 15 per cent rise in its full year profit. The South Korean purchase requires approval from SK Encar's shareholders and Korean regulators, and Carsales expects the deal to be completed by June 30.
Samsung Samsung on Friday unveiled a free music service for users of its Galaxy smartphones, entering a crowded market that includes Pandora, Spotify and Apple's iTunes. The service dubbed "Milk Music" will offer some 200 ad-free radio stations to US customers with Samsung Galaxy devices. "Milk introduces a fresh approach to music that reflects our innovation leadership and our focus on creating best-in-class consumer experiences," said Gregory Lee, president and chief executive of Samsung Telecommunications America. Milk is powered by the radio service Slacker. The company suggested it may take a page from Apple by offering "unique music programming from top selling and emerging artists" available exclusively through the platform. The South Korean Electronics giant, which is the world's biggest smartphone maker and is challenging Apple in the US market, said the service will be offered with no log-in required and no need to browse for a specific artist or song. It will have 200 genre-based and curated stations and some 13 million songs, and like other service will allow six song skips per hour per station. Apple last year introduced its ad-supported iTunes radio service, which also allows customers to make purchases from the iTunes catalogue.
Collins Foods and KFC Collins Foods has completed the acquisition of 42 KFC restaurants in Western Australia and the Northern Territory with its purchase of Competitive Foods. The deal, worth $55.6 million when announced last November, takes Collins Foods' national KFC network to 169.
KFC brand owner Yum! Restaurants Australia also announced that finalisation of the deal ends a long-running dispute with fast food mogul Jack Cowin, former owner of Competitive Foods. Yum! had been in dispute with Mr Cowin over his ownership of the KFC franchises because of his investment in competitor Domino's Pizza. Mr Cowin became a KFC franchisee 44 years ago but the sale to Collins ends his relationship with the chicken chain. Collins Foods chief executive Kevin Perkins said the KFC stores acquisition would boost earnings per share in the first full year of ownership. "We are targeting a 15% uplift in normalised EPS in FY15 before the benefit of potential margin improvement," Mr Perkins said in a statement.
Sources: Yahoo Finance Bloomberg
Published on Mar 7, 2014
Bond Investment Group's five minute guide to some of the deals made globally and what the markets did and economic news of the week just gon...