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Markets Live: Shares struggle to hold gains

Australian shares end flat, losing most of their gains in listless afternoon trade.

5.15pm: That's all for today. Thanks everyone for reading this blog.

Here's our evening wrap of today's session.

4.32pm: Today has been driven by the telcos, the financials have turned around soft open, but certainly the  chase for yield is still on, says Citi’s Sean Larcombe:

  • Telstra is within one ot two cents of four year highs, this is where we’re seeing  some money parked.
  • We didn’t get much of a lead from  the US & Hong Kong  was closed today, so our market drifted lower after a strong open.

4.29pm: Some more noteworthy developments among the top 200 stocks:

  • Wotif: +16.4%
  • Discovery Metals: +4.85%
  • Fairfax: +4.1%
  • SMS Management: -23.4%
  • Coalspur: -7.9%
  • WorleyParsons: -6.15%

4.27pm: Here's how the blue chips performed:

  • BHP: +0.3%
  • Rio: +0.2%
  • ANZ: +0.4%
  • CBA: +0.8%
  • NAB: +0.1%
  • Westpac: +0.4%
  • Fortescue: +1.9%
  • Woolies: -0.5%
  • Wesfarmers: _0.3%
  • Telstra: +1%

4.17pm: Among the sectors, financials gained 0.3 per cent, materials added 0.2 per cent, but energy slipped 0.7 per cent and consumer staples lost 0.5 per cent.

The worst performing sector was IT, down 3.2 per cent due to a 23.4 per cent slide in SMS Management after the company warned of slower sales.

4.13pm: The sharemarket has ended flat, running out of puff during the afternoon. The benchmark S&P/ASX200 index edged up 2.1 points to 4543.1, while the broader All Ords gained 3.4 points, or 0.1 per cent, to 4568.

3.46pm: The Australian dollar is trading a touch softer at $US1.0314, as focus shifts to Q3 inflation report due at 11.30am tomorrow.

Forecasts centre on a tame reading of 2.2 per cent for underlying inflation, at the bottom end of the Reserve Bank of Australia's 2-3 per cent target.

"It needs to be a benign number to keep easing hopes in place given the market is currently pricing in over 80 percent chance of a cut in November, so all of the risks are to the upside. If we get a hotter-than-expected number it could catapult the Aussie higher," says David Scutt, a trader at Arab Bank.

Interbank futures imply a two-in-three probability of a quarter point cut in the 3.25 per cent cash rate in November, and are fully priced for 3 per cent by Christmas.

3.36pm: The government's announcement that the Tax Office will start managing a lot more of lost superannuation money is a win for the one in two working Australians who have had that experience, John Collett writes:

The government estimates about $17 billion is in lost super. About $5 billion of that is in eligible rollover funds (ERFs), some of which have very high fees. The rest is still with the funds (and not yet transferred to the funds' ERFs). As at June 30 last year, more than $730 million was with the Tax Office.

ERFs are run by superannuation funds and some retail ERFs have fees as high a 7 per cent, research by SuperRatings shows. By contrast, most big, well run super funds have fees of 1 to 1.5 per cent.

Federal Treasury estimates that at present, a 20-year-old with $1000 in super can unknowingly have their super savings eroded to only $418 after five years by a range of fees and deductions.

Here's the full story

3.15pm: Insurance Australia Group (IAG) says it is on track to achieve its full year financial forecasts after a steady first quarter performance.

‘‘Our performance in the first quarter has built on the momentum evident in FY12,’’ chief executive Mike Wilkins told the IAG annual general meeting today.

‘‘We are on track to deliver our full year guidance of an improved insurance margin of 11 to 13 per cent and gross written premium growth of nine to 11 per cent.’’

IAG’s insurance margin, a measure of the profit it makes on premiums, was 10.6 per in 2011-12.

3.03pm: Hard on the heels of strongly worded comments from AGL about changes to government policy forcing it to curb spending plans in several parts of the national electricity network, credit ratings agency Standard & Poor's has warned of heightened regulatory risk as well.

The Australian Energy Regulator, which oversees spending plans of electricity distributors, is seeking greater flexibility in the way it reviews spending plans, which would allow it to block spending it deems not to be necessary.

"Greater discretion in determining regulatory revenues will likely have a negative impact on the predictability, stability, and transparency of regulatory framework,’’ the agency said in a report, released today.

‘‘This track record has underpinned our view of the Australian network utilities' mostly "excellent" business profiles over the past decade," said Standard & Poor's credit analyst Andrew Choi.

2.52pm: Japanese banks stepped into the gap left by European lenders pulling their capital from Australia during the latest bout of market turmoil, new figures show.

European banks continued to withdraw from Australia during the turbulent June quarter, pulling another US$17.7 billion in loans, preliminary figures from the Bank for International Settlements show.

But while foreign lending to Australia decreased as a whole, there are signs Asian banks continued to fund the economy’s expansion, despite global jitters.

During the June quarter, when fears of imminent collapse in the eurozone reached new heights, Japanese lenders boosted their lending activity to Australia by US$13.7 billion. Loans from Taiwan fell by $0.2 billion, but are up over the last six months. The figures do not cover China.

2.41pm: Fairfax Media chief executive Greg Hywood says the embattled media group has investigated a breakup of its assets and found the numbers didn’t stack up.

Mr Hywood said Fairfax management had not ‘‘blithely’’ decided to keep the company in its current form.‘‘We did a lot of work ... around whether the breakup scenario was appropriate and in the end it wasn’t,’’ he told a Citi investment conference in Sydney on Tuesday.

Fairfax's AGM is tomorrow.

2.34pm: Here's a quick look at the best and worst performers of the top 50 companies on the ASX:

2.22pm: The federal government’s announcement yesterday that the Australian Tax Office will start managing a lot more of the lost super money is a win for the one-in-two working Australians who have lost super, writes John Collett

Under the plan, revealed in its Mid-Year Economic and Fiscal Outlook, the government will lower the threshold under which lost super accounts will be automatically transferred to the Tax Office from super funds. Super becomes lost because, among other causes, fund members move between jobs or addresses without telling their funds. Most of the lost accounts are small, less than a $200 dollars, but more than 250,000 hold more than $10,000 each.

The government estimates there is about $17 billion in lost super. 

2.13pm: Rapidly expanding biotech Sirtex narrowly avoided a ‘second strike’ vote from shareholders at its annual general meeting this morning, with 75.01 per cent of shareholders supporting the remuneration report when it was put to a vote.

The remuneration report was rejected by shareholders at last year’s annual meeting in a ‘first strike’ vote, prompting concern the report would be rejected again today since a single shareholder with an 18 per cent stake in the company, its founder Dr Bruce Gray, is alienated from the board.

2.07pm: BusinessDay's Michael Pascoe has filed: Swan bets big on housing recovery.

Never mind the rats and mice and smoke and mirrors that have gone into pulling a surplus out of the budget hat this financial year, Wayne Swan is betting the next financial year on housing and farms.

Treasury's MYEFO forecasts for the 2013-14 domestic economy  make grim reading with predictions of flat or declining performances in all but two areas: dwellings investment and farm product.

It's a very brave decision, Minister, to get into the long-range weather forecasting business, but that effectively is what Treasury is doing by predicting that farm product will rise by 6 per cent in 2013-14, an upgrade from a 1 per cent rise guessed in the May budget papers.

More important for the credibility of the government's outlook is the belief that the housing industry will finally turn the corner.

1.54pm: Macquarie Bank will start trying to broker a deal with Storm Financial clients at a mediation session next week, a court has heard.

The bank is being pursued in the Federal Court in Brisbane by a group of investors whose financial security was devastated when the Townsville-based financial services company folded in early 2009.

They are seeking compensation from Macquarie on the grounds that it engaged in ‘‘unconscionable conduct’’ in approving loans and also breached the terms of those loan contracts.

The class action is being run in conjunction with a case by the Australian Securities and Investments Commission (ASIC), which is asking the court to declare that Macquarie and the Bank of Queensland were ‘‘knowingly concerned in the operation of (Storm’s) unregistered scheme’’.

1.46pm: The market is slightly up, here's a snapshot of how some of the major sectors are performing:

  • Materials: +0.4%
  • Telecommunications: +0.9%
  • Financials: +0.5%
  • IT: -2.9%
  • Consumer staples: -0.4%

1.28pm: Chinese suitors chasing Discovery Metals have made a formal takeover offer for the minerals explorer at the same price already rejected by the Discovery board.

Cathay Fortune Corporation (CFC) and China-Africa Development Fund (CADFund) announced on Tuesday that they would offer $1.70 in cash for each Discovery share that is not already owned by CFC. At $1.70 per share, Discovery Metals is valued at about $830 million.

The offer is subject to acceptance by at least 51 per cent of Discovery shareholders. Earlier this month, Discovery rejected a non-binding proposal by CFC and CADFund to acquire Discovery shares at $1.70 each.

1.25pm: Despite the burst of optimism on the ASX today, the Australian dollar is trading in a tight range in quiet trade as investors sit on the sideline ahead of the release of key economic data tomorrow.

CMC chief market strategist Michael McCarthy said the Australian dollar had failed to make much ground despite sharemarkets making small gains.

‘‘We did a U-turn in sentiment overnight with a weak European session leading into a weak start to the US session, which finished on a high note,’’ he said.

‘‘We’re watching the euro-US dollar cross rate very closely as a lead-in to what the Aussie dollar might be doing against the US dollar.’’

Mr McCarthy said the markets are awaiting the release of Chinese manufacturing figures for October and Australian inflation numbers for the September quarter, both due out on Wednesday. 

1.15pm: Back to the Pacific Brands AGM in Melbourne and chief executive John Pollaers, who says that while there are plenty of opportunities ahead for PacBrands, the retail environment is going to remain challenging for the next 12 months.

Mr Pollaers says the retail environment was going to remain challenging for the next 12 months.

With a bit of luck, the interest rate cuts that came through will start to have some impact, but we won’t really have a clear view until the key Christmas trading period is over, and that’s obviously about to start. We’ve got some brands in our portfolio performing and some that are a bit more of a challenge. I think it’s still a wait-and-see over the next 12 months.

Mr Pollaers - the former head of Foster’s who has been at the helm since September - says it is still too early for him to say if Pacific Brands would make more writedowns on its businesses or require further restructuring.

‘‘But my sense is the company is in much better shape as a consequence of the decisions that it’s taken over the last five years.''

1.03pm: BusinessDay's Adele Ferguson has been looking at data that reveal who gives what to charity. She says:

When it comes to giving, Melburnians living in Middle Park rank as the most charitable, followed by South Australians living in Vale Park, residents living in Kilara, NSW, and Vaucluse in Sydney’s Eastern suburbs. The data show that charitable giving in the first seven months of 2012 increased by 4.7 per cent over the same period last year and the average annual donation size increased 0.7 per cent to $292.

Read the full story here

12.57pm: Oil Search still expects to achieve its full-year production guidance despite a minor oil spill and loading terminal shutdown contributing to a 26 per cent plunge in quarterly output.

The company, Australia’s third largest oil and gas producer, produced 1.33 million barrels of oil equivalent in the three months to the end of September.

It was a 26 per cent fall on the previous quarter and 11 per cent retreat from the September quarter in 2011.

Oil Search shares have risen 3 cents to $7.63.

12.53pm: Coal baron Nathan Tinkler has all-but-settled his $17 million dispute with developer Mirvac in the NSW Supreme Court this morning, on undisclosed terms.

Earlier this year the court had ordered Mr Tinkler to pay $17 million to Mirvac subsidiary Domaine Steel River, to complete purchase of a Newcastle industrial property by September 1, a deadline which was missed.

Mirvac’s counsel Ian Jackman has handed up signed, agreed orders have been made by the court. While the content of the orders was not revealed it is understood the property purchase will be completed by next Monday.

But Mr Jackman said the matter was not “finally disposed of” as there would need to be another court appearance “in the event the expected settlement does not occur”.

12.52pm: UBS has been identified as the stockbroking firm behind the mystery price spike of a number of blue-chip stocks on the Australian Securities Exchange last Thursday.

Data available today showed that UBS had a $200 million order revised down to $56 million moments before the ASX 200 opened, according to sources inside the investment banking and broking community.

BusinessDay understands that at 9.56am on Thursday, six seconds before the trade began, a seller changed their price and volume order on stocks including ANZ Bank, Commonwealth Bank and AGL.

The sudden change in price lifted the ASX 200 futures index to 4606, pushing it above the 4600 level for the first time since the GFC, and raising fears of market manipulation.

UBS confirmed that it was one of their client's orders but had no further to comment.

Read more here

12.45pm: A private equity firm founded by Chinese billionaire Yu Yong has made a hostile $824 million takeover bid for Discovery Metals after the copper explorer’s board rebuffed a similar offer earlier this month.

Discovery shares are up 6.1% at $1.75

‘‘It is one of many, many stories that will be unravelling over the next 3 to 6 months,’’ said Patersons Securities senior dealer Martin Angel.

Among other small and mid-size miners, Aquila Resources gained 2.2 per cent, Northern Iron was up 1.6 per cent and rare earths company Arafura jumped 13.2 per cent.

‘‘There is still a lot of M&A activity going to happen there, especially in copper and gold, so people are still nibbling away,’’ said Mr Angel. 

12.28pm: Commonwealth Securities market analyst Juliana Roadley says a strong performance by banking stocks has been driving the positive sentiment on the Australian equities market, ahead of key earnings results during the next week.

"Maybe people are positioning themselves,’’ she said.

The Finance sector is up 0.39% today.

12.36pm: MySmall Business has an interesting article tapping the secrets of two highly successful franchise operators - La Porchetta CEO Sara Pantaleo and Mad Mex's Clovis Young.

12.34pm: The market heavyweights are all ahead today, with the both the big banks and the major miners forging ahead.

  • BHP is 0.32% higher to $34.81
  • Rio is 0.42% higher to $57.99
  • Fortescue is 2.90% higher to $4.26
  • CBA is 0.39% higher to $56.89
  • ANZ is 0.27% higher to $25.73
  • NAB is 0.19% higher to $26.07
  • Westpac is 0.28% higher to $25.45

12.24pm: Shares in Mirvac Group are up on hopes that the property giant and mining magnate Nathan Tinkler will reach a settlement over a failed $17 million-dollar agreement to buy industrial land for a new coal terminal in the NSW Hunter region.

In the NSW Supreme Court this morning Justice Slattery said that if the settlement was not ‘‘perfected’’ by 11.30am, ‘‘some important decisions will need to be made’’.

Mirvac shares are up 1.5 cents, or 0.99 per cent, at $1.53.

Read more

12.15pm: More on troubled retailers and the discount store business owned by Kathmandu founder Jan Cameron, where questions are growing about the number of stores closing around the country amid reports of mounting losses and unpaid bills.

Ms Cameron acquired Retail Adventures — the operating company behind Go-Lo, Sam's Warehouse, Crazy Clark's and Chickenfeed — for $70 million in 2008 after it had collapsed under its previous private equity owners.

The appointment of high-profile spokesman Grant Vandenberg has not led to any explanation of the recent closures or any response to claims that the company has been behind on its rent and payments to suppliers.

"There's nothing [to report]," Mr Vandenberg told BusinessDay's Colin Kruger today.

Read more here

12.10pm: Launa Inman, the chief executive of embattled surfwear and streetwear retailer Billabong, has backed up her confidence in the company's turnaround potential with cold hard cash, buying her first parcel of shares since she got the job in May.

In a statement to the Australian Securities Exchange this morning it was revealed Ms Inman had purchased 59,000 shares in Billabong on October 19 for the total price of $49,610. The average price paid for her stock was 84¢.

Billabong shares are up 1.8% at 84.5 cents

12.05pm: Virgin Australia’s boss, John Borghetti, says he is yet to see evidence of any lessening in competition on domestic routes as the airline battles with Qantas for lucrative business travellers, writes BusinessDay's Matt O'Sullivan.

In a boon for dometic flyers, figures released last week show that fares for business seats this month are almost a third cheaper in real terms than in 2003 – the baseline for aviation statistics.

Mr Borghetti said that Virgin remained focused on boosting its capacity in the domestic market by between 8 and 9 per cent in the first half of this financial year.

‘‘If it has slowed down, I haven’t seen it in terms of aggressive competition between the two of us,’’ he told a Citi investor briefing in Sydney today.

‘‘It is very aggressive, but you would expect it to be because for a decade there hasn’t been any competition.’’

12.01pm: AGL Energy chief executive Michael Fraser has been facing shareholder anger over the development of NSW coal seam gas assets.

There were several cries of ‘‘rubbish!’’ from shareholders during Mr Fraser’s speech at AGL’s annual general meeting in Sydney this morning.

Mr Fraser said coal seam gas was in the NSW community’s long-term interests.

‘‘It is very clear, particularly here in NSW, that we need to develop additional resources to meet demand,’’ Mr Fraser said.

‘‘If we don’t, we are going to have supply issues here in NSW within a few years.’’

11.52am: From London to Tokyo now, where stocks opened 0.61 per cent higher this morning after the dollar surged against the yen overnight to its highest levels since early July.

The Nikkei 225 index at the Tokyo Stock Exchange was up 55.32 points to 9,066.03 at the start of trade.

‘‘Despite the Nikkei’s strong performance over the past six sessions, the weak yen is salve for the market, and should help exporters to outperform,’’ Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, said.

Financial markets in Hong Kong and Thailand are closed today for public holidays.

11.48am: And staying in the Old Dart with the news that Manganese Bronze, the maker of London’s famous black cabs says it is going into administration after failing to secure an injection of cash from one of its largest shareholders.

The company has been losing money for years, hit both by Britain’s economic downturn and stiff rivalry from vehicles such as the Vito, made by Mercedes, an arm of German car giant Daimler AG.

Manganese Bronze had been in talks about a cash injection with Chinese company Geeley, which already owns a 20 per cent stake.

11.44am: Phone hacking in Britain has reared its ugly head again with the revelation that England's former football coach Sven-Goran Eriksson and a former nanny to the Beckham family are taking legal action against Britain's Mirror Group Newspapers over alleged phone hacking.

Eriksson's claim dates back to when Piers Morgan was editor of the Daily Mirror. Morgan, who now hosts a talk show on US broadcaster CNN, has always denied any involvement in phone hacking.

This is the first time a publisher outside Rupert Murdoch's News International has faced court action over hacking allegations in Britain.

11.42am: More on Network Ten and its attempts to sell off its outdoor advertisong business. 

Ten has revealed that Outdoor Media Operations (OMO), which is controlled by Champ private equity, has made an offer of about $110 million for Eye Corp.

The new bid is 24 per cent lower than OMO’s original offer price of $145 million.

The original offer was withdrawn by OMO last week, reportedly due to concerns about Eye Corp’s financial performance.

‘‘It is anticipated that the final sale price will be subject to the outcome of these further negotiations,’’ Ten said.

Ten's shares, which soared 7.1 per cent yesterday and were up another 3.3% early on have softened slightly on the news. They're at 30.5 cents, up 1.7%.

11.36am: Got a great idea for a product? Special guest small business expert Guy Ward says having that lightbulb moment is the easy bit - the challenge is working out how to commercialise that idea and build a successful business around it.

11.34am: The economy seems to be softening but monetary policy will provide support and hopefully spark a housing market revival, RBA policy board member Heather Ridout said this morning.

Speaking at an economics conference, Ms Ridout - the former AiGroup chief executive -   also said the resources boom had some way to run yet, with a substantial increase in export volumes still to come.

She made it clear her views were her own and she was not speaking on behalf of the RBA.

Ridout, a non-executive member of the RBA board, said monetary policy had not "lost its teeth" in Australia and low inflation meant there was scope for policy to provide support.

11.26am: Woodside Petroleum, operator of the $15 billion Pluto liquefied natural gas project, said it is in the early stage of bidding for a stake in Israel's largest natural gas field.

Any speculation about the price and commercial terms is premature, the Perth-based company said in a statement.

International gas explorers, including Woodside, have submitted bids to acquire as much as 30 per cent of the prospect, partners in the Leviathan field said yesterday.

Woodside Chief Executive Officer Peter Coleman, who joined Woodside last year after 27 years with Exxon Mobil, met yesterday with Israeli Prime Minister Benjamin Netanyahu.

The company’s shares are higher this morning - up 0.3 per cent, or 9 cents, to  $35.70.

More here

11.22am: Ten Network has confirmed reports that it is in negotiations to sell the Eye outdoor advertising unit to Champ for around $110 million after a deal to sell it to the private equity firm for $145 million fell over last week.

Shares in Ten are up 1 cent at 31 cents.

11.17am: The market has been brighter than many had been anticipated, as the momentum from a last-minute burst of buying that pushed Wall Street into positive territory has spurred investors here.

An hour and a bit into the day and the All Ordinaries index is 20.3 points higher, or 0.4 per cent, to 4584.9, while the benchmark S&P/ASX200 is 19.7 points higher, or 0.4 per cent, to 4560.7.

Sentiment has been helped by other news from the States where, after the market closed, internet corporation Yahoo reported a quarterly profit of $US3.2 billion ($A3.11 billion), better than analysts had expected.

‘‘Positive momentum at the end of the US market and a better than expected result from Yahoo should lead to a mildly positive sentiment in the local market this morning,’’ CMC Markets chief market analyst Ric Spooner said.

Aside from the lead from Wall Street, there was little news to influence the overall market, Mr Spooner said.

11.08am: Investors don’t like what they heard from AGL this morning.

Its shares are 1.9 per cent lower at $14.67 in a rising market after the company this morning said its underlying profit for the year to June 30, 2013, could be reduced by up to $60 million.

The weak share price performance today comes despite AGL forecasting a rise in overall net profit.

Full story

11.04am: Shares in SMS Management & Technology have fallen heavily in early trade - down 15 per cent - after the chief executive flagged lower demand during the first quarter of fiscal year 2013.

Speaking at today’s AGM, CEO Mr Tom Stianos said lower demand was coming from a major Hong Kong client, which ‘‘has had a significant impact on the company's first quarter financial performance and will continue to do so for the remainder of the first half.’’

Mr Stianos also said demand was weaker after ‘‘a major Australian resources company ... deferred a multi-billion dollar project due to depressed commodity prices, and weaker demand from the ICT and Federal Government sectors of the market.’’

The company’s shares have lost $1.00 to $5.46.

10.59am: The early sliders on the ASX200 include: 

  • SMS Management & Technology: -15.17%
  • Energy World: -2.74%
  • AGL: -2.41%
  • QBE: -1.85%
  • Treasury Wine Estates: -1.57%
  • APN News & Media: -1.35%

More on SMS and AGL in a tick...

10.56am: Back to the sectors and only a couple are in reverse this morning:

  • Information technology: -1.89%
  • Utilities: -1.07%

10.50am: Prime Minister Julia Gillard has weighed in to the debate over foreign ownership of farms, telling the National Farmers Federation that the federal government will introduce a foreign ownership register for agricultural land.

The register will provide a more comprehensive picture of the specific size and locations of foreign agricultural landholdings.

10.44am: And back to AGM season and, as promised, online travel booking service, whose shares are 15 per cent higher after the company said demand for overseas travel remains strong thanks to the high Australian dollar.

Despite a flat profit outlook, outgoing chief executive Robbie Cooke said "it would be reasonable to assume our international flights business will continue to be a beneficiary of the cycle in the current financial year".

Its shares have added as much as 63 cents to $4.84.

More here

10.42am: Early risers on the ASX200 so far this morning include:

  • +14.25%
  • Mirabela Nickel: +6.38%
  • Bathurst Resources: +5.48%
  • OZ Minerals: +3.62%
  • Fortescue Metals: +3.14%

We'll have more on Wotif in a moment ...

10.38am: Coal baron Nathan Tinkler’s NSW Supreme Court dispute with developer Mirvac is said to be close to a settlement this morning.

Justice Slattery adjourned until 11.30am a hearing in the $17 million dispute between Mr Tinkler’s Ocean Street Holdings and Mirvac subsidiary Domaine Steel River over an uncompleted property transaction.

Justice Slattery this morning said two days were still set aside for hearings and if the settlement was not “perfected” by 11.30am, “some important decisions will need to be made”. 


10.37am: Shares in OZ Minerals have risen strongly this morning on the back of a quarterly report that confirmed the company was still on track to hit its most recent production and cost guidance, writes BusinessDay's Peter Ker

OZ shares have risen 30 cents in early trading to be $8.59.

The market appears to be focusing more on the solid production rate, rather than the high costs that continue to dog the company.

Three months after the company was punished by investors for a sharp rise in costs, OZ today reported only the slightest of improvements in costs at its South Australian operations.

However investors appear to be taking some consolation that costs were within the guidance offered three months ago.

OZ plans to produce at least 100,000 tonnes of copper and at least 130,000 ounces of gold in the 2012 calendar year.

10.32am: Back to Insurance Australia Group's AGM, and investors are liking the company's claim that it's first quarter results put it on course to hit full-year targets. IAG's shares are going well in early trade - they're up 4 cents to $4.58.

10.28am: There's not much movement so far this morning, but some sectors are doing better than others. The winners so far include:

  • Materials: +0.79
  • Telecoms: +0.74
  • Consumer discretionaries: +0.29
  • Energy: +0.23
  • Finance: +0.12

10.25am: Shares in BHP Billiton are responding well to yesterday’s finalisation of a workplace deal with coal miners at the company’s BMA joint venture with Mitsubishi.

BHP shares are up 23 cents - 0.7% - to $34.93.

10.20am: More from AGM season and Insurance Australia Group, which says it is on track to achieve its full-year financial forecasts after its first quarter performance.

Chief executive Mike Wilkins said this morning that IAG had begun the financial year as expected.

‘‘Our performance in the first quarter has built on the momentum evident in FY12,’’ he said.

‘‘We are on track to deliver our full-year guidance of an improved insurance margin of 11 to 13 per cent and gross written premium growth of nine to 11 per cent.’'

10.16am: Things have perked up a little since the first few minutes of the day - and we're back in positive territory, even if only slightly. The All Ordinaries index is 5.2 points higher, or 0.1 per cent, to 4569.8, while the benchmark S&P/ASX200 is 4.1 points higher, or 0.1 per cent, to 4545.1.

10.07am: Early take - Aussie stocks are cautious in early trade. Both the All Ords and the ASX200 are a couple of points lower, roughly in line with what the futures market suggested.

9.56am: In breaking news on Telstra, telco reporter Lucy Battersby writes that Telstra International Group has lost its managing director, Tarek Robbiati, who will become the new chief executive of financial services and leasing company Flexigroup.

The Hong Kong-based Mr Robbiati wanted to return to Australia after five years overseas, according to an announcement released by Flexigroup chairwoman Margaret Jackson. Mr Robbiati replaces John DeLano, who will return to north America. Mr Robbiati will take on the new role in early 2013.

Telstra International manages Telstra's mobile network in Hong Kong, CSL New World Mobility Group, and Telstra's network of underwater cables, which carry data around the Pacific and across the world.

He is the second Asian-based executive to leave Telstra this month. A director who was hired specifically for his China-based connections and experience, Timothy Chen, resigned in early October after just six months on the board. He wanted to pursue a corporate career in China, the board said at the time.  

More soon.

9.51am: On a quietish morning for local news, BusinessDay's Chris Zappone has taken a trip down memory lane for blog readers. As many of you will know, this week marks the 25th anniversary of the 1987 stock market crash. Chris writes:

In Australia, the All-Ordinaries lost nearly 25 per cent of its value or 516 points to hit 1549 on Tuesday, October 20, 1987. The next two sessions, shares rose modestly 1.2 and 3.8 per cent, before plunging 7 per cent, 6.56 per cent and 6.9 per cent in the following sessions, in sympathy with the crash on Wall Street.

By October 29, the All-Ords stood at 1284 points, 41 per cent below their October highs.

Melbourne-based Wilson HTM senior adviser Richard Topham was active in the market then and he recalls: "It was a very severe fall one day and then it drifted on down on for the next few days and you began to wonder what on earth was going on? When was this ever going to stop?"

Mr Topham sees little chance of a re-run of such a plunge in Australia's market today.

"We aren't at the peak of a long boom. We haven't got things looking fully valued, let alone overvalued. If anything, shares are looking undervalued. I don't see what the catalyst would trigger such a disastrous effect,’’ he said.

9.46am: Here are some analyst rating changes from late yesterday:

  • Treasury Wine Estates cut to 'sell' at Deutsche Bank
  • Gindalbie Metals cut to 'neutral' at Credit Suisse
  • Aurora Oil & Gas cut to 'neutral' at Macquarie
  • NAB cut to 'neutral' at Macquarie
  • Westpac cut to 'underperform' at Macquarie

9.43am: Also in local company news this morning, clothing and homewares retailer Pacific Brands says sales have been down so far this financial year and the company doesn’t expect significant improvement.

The company, which owns brands including Bonds, Rio and Sheridan, posted a $451 million loss in the 2011/12 financial year due to the cost of a restructure and writedowns on some of its businesses.

‘‘There has been no noticeable improvement in the operating environment so far this year,’’  chief executive John Pollaers told the company’s annual general meeting this morning.

‘‘Time will tell whether the latest interest rate cut has much impact, but, prudently, our plans assume more of the same. Trading remains volatile, with September down but October month-to-date is in line with last year.’’

Mr Pollaers, the former head of Fosters’ Group, took over from Sue Morphett at Pacific Brands in August. Since taking the job, he has travelled to all the company’s major sites in Australia, China, Hong Kong and Indonesia, and said there were many opportunities available to Pacific Brands.

9.39am: We'll take a look at some local news now. AGL Energy is cutting back on customer discounts in South Australia and reviewing similar moves in NSW because of regulatory decisions to cut wholesale electricity prices.

The company said its underlying profit for the year to June 30, 2013, could be reduced by up to $60 million because of a recent adverse Queensland Competition Authority (QCA) pricing decision and a similar draft decision by the Essential Services Commission of South Australia (ESCOSA).

Those decisions together, if the ESCOSA one is confirmed, would reduce underlying profit by about $60 million, it said.

However, the company has forecast an overall rise in its full year underlying profit, due mainly to the contribution of Victoria’s Loy Yang A power station, which AGL acquired in June. Full story here.

9.35am: Locally today, AGM season continues with AGL Energy, Insurance Australian Group, Pacific Brands, Sirtex Medical and WorleyParsons among the big names fronting shareholders. Click here for a full list of today's meetings and what's on for the rest of the week. Click here for the BusinessDay AGM homepage.

9.32am: Aussie stocks are set for a steady start after Wall Street clawed back early losses to close higher on some good results. Heavy equipment maker Caterpillar became the latest to exceed expectations on the bottom line - or profit - but fall short of revenue forecasts on the top line. And Apple, which is scheduled to report  results on Thursday, jumped 4 per cent as the launch of the iPad mini looms.

For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:

  • SPI futures are 1 point higher at 4534
  • The $A is higher at $US1.0321 
  • In the US, the S&P500 rose 0.04% to 1433.79
  • In Europe, the FTSE100 fell 0.22% to 5882.91
  • Gold rose $US0.67 to $US1727.95 an ounce
  • China iron ore added $US2.20 to $US117.50 a metric tonne
  • WTI crude oil fell $US1.18 to $US88.87 a barrel
  • Reuters/Jefferies CRB index was flat at 306.05

9.30am: Good morning everyone. Welcome to the Markets Live blog for Tuesday.

Contributors: Richard Hughes, Thomas Hunter, Jens Meyer, Max Mason

This blog is not intended as investment advice

BusinessDay with agencies


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