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Amp, Banks Keep Index In The Black

Sydney Morning Herald

Thursday January 24, 2002

Allison Jackson

The Australian sharemarket finished flat yesterday after sharp falls in News Corp were offset by strong gains in banks and insurance stocks.

News Corp shed 22c to $13.90 after overnight weakness on Wall Street, while NAB gained 32c to $32.50 and AMP surged 42c to $19.

The All Ordinaries index closed up 1.1 points at 3363.7.

AGL shares rose 14c to $9.84. The stock has risen 8.25 per cent since January 2 on speculation the company will be a potential takeover target if the 5 per cent shareholder limit is removed in June.

But JB Were cast doubt on any corporate activity in the short to medium term, noting that no-one had made a bid for Origin Energy, which already has an open register and offers quality exposure to the industry.

Meanwhile, JP Morgan has downgraded ERG from a long-term buy to market performer due to decreased certainty over its earnings profile and the replacement of recently appointed chief financial officer Michael Slater with Richard Howson.

``Investors are likely to perceive that internal disagreements regarding accounting treatments and disclosure were the biggest factors in the parting of ways," the broker said.

``This event reflects poorly on ERG, which arguably needs to normalise its reporting methodology or at least provide more detailed disclosure of its operating contracts in order to attract any significant interest from mainstream investors." ERG closed down 2.5c to 41c.

Amity Oil rose 12c to $1.02 after Burdett, Buckeridge & Young released an independent review valuing the oil explorer at between $1.35 and $1.76.

Amity has started drilling out the Beyazkoy-1 well, 120 kilometres west of Istanbul and 4.5 km north-west of its Gocerler gas field, and is expected to hit the target zone next Wednesday. If it is linked to Gocerler, Amity's share price could go even higher.

ABN Amro reinstated its buy recommendation for Colorado after revising its forecasts up 3 per cent and lifting its 12-month price target from $2.25 to $2.90.

``The acquisition of Diana Ferrari will be completed by the commencement of January. This adds $50 million revenue and another well-placed brand name to CDO's fashion stable," a research note said.

It said the acquisition price of $18 million, including a $3 million earn-out, looked attractive and was immediately positive for earnings per share.

Colorado closed up 8c, at $2.49.

WMC jumped 34c to $10.26 on continued speculation of a new bid by Alcoa priced at $10.80.

But as a dealer pointed out, Alcoa has already been told the board of WMC will not accept a bid offer unless it is within the valuation range which starts at $11.14.

ResMed plunged 75c to $9.10 and Fisher & Paykel Healthcare dived 62c to $13.20 after a rival maker of medical equipment for sleeping disorders released a new product.

Junior oil and gas explorer Eqitx was heavily traded with 16.6 million shares pushed through the market.

YESTERDAY'S MOVES
Rises 642       Falls 564       Steady 347
Mar SPI                         3418.0  -10.0
ASX 200                         3422.0  +0.5
Biz.com Tech            1356.5  -17.0
All Industrials                 5706.5  -6.8
All Mining              821.2   +13.1
 Volume Value           758.8m  2.287bn

POPULAR STOCKS
Telstra                         5.54    -1
BHP Blt                         11.18   +3
Cwlth Bank              31.82   +1.4
Woolworths              11.73   -2.1
Qantas                  3.72    -2
AMP                     19.00   +42.1
Insur Aust              3.32    stdy

WINNERS
Brazin                  +8.99%
Oil Search              +8.89
Orogen Minerals                 +8.37
PMP                     +5.26
Australian Mag          +5.08
MIM Hldgs               +4.96
Orica                   +4.79
Challenger Intl                 +4.07
GWA Intl                +3.56
Ridley Corp             +3.51

LOSERS
ResMed Inc              -7.77%
Powerlan                -5.95
Auiron Energy           -5.56
ERG                     -4.60
Axon Instruments                -4.44
Tap Oil                         -3.42
Renewable Energy        -3.23
Solution 6              -2.99
SMS Management  -2.74
Symex Hldgs             -2.52

© 2002 Sydney Morning Herald

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