Australian Index Struggle in First Quarter, Seven and Nexus in Merger Talks

Marcus Jacob
31 Mar, 2014
New York City

Market indexes in Australian gained 0.5% today, rose 0.2% in the month and gained 0.8% in the first quarter. Seven Group is set to takeover Nexus Energy for $423 million. Ten Network Holdings reported its worst market share last night.

[R]5:00 PM Sydney – Market indexes in Australian gained 0.5% today, rose 0.2% in the month and gained 0.8% in the first quarter. Seven Group is set to takeover Nexus Energy for $423 million. Ten Network Holdings reported its worst market share last night.[/R]

Australian stocks gained on the last day of the month and the quarter but the market index advance was small.

The rising tensions in Europe between Russia and NATO nations and ongoing tapering of U.S. government bond buying by the U.S. Fed and the contracting economic conditions in China weighed on the market sentiment in the period.

Australian dollar increased to 92.28 U.S. cents and stock market trading turnover declined to 661 million shares worth $4.04 billion.

The ASX 200 index increased 27.90 or 0.5% to 5,394.80 and the broader All Ordinaries gained 26.20 to 5,403.

For the month, ASX 200 rose 0.2% and for the quarter gained 0.8%.

Stocks in Review

Rio Tinto added 31 cents to $63.55. BHP gained 33 cents to $36.47. Woodside Petroleum Limited increased 37 cents to $39.02.

Westpac Banking Corp rose 13 cents to $34.56.

Funtastic Limited closed unchanged at 13 cents and the company took $24.2 million write-down on its home entertainment distribution Madman business. The company reported net in the first-half swung to a loss $26 million compared to a profit of $9.3 million a year ago.

Recall Holdings Ltd climbed 2.9% to $4.65 after the information technology provider secured a ten-year contract with HSBC to process equivalent of 45 million cartons of documents.

SP AusNet closed unchanged at $1.31 and the company terminated its management contract with its key shareholder Singapore Power and agreed to pay $50 million to end the agreement. The company had announced the winding down of the deal at the time of the release of its first-half results in November.

The company also announced that the restructuring of its IT services should be less than $7.5 million.

Singapore Power recently sold a 19.9% stake to China’s State Grid Corp.

Seven Group Holdings Ltd rose 0.4% to $8.26 after the diversified investment company is in a conditional merger talk with Nexus Energy Ltd.

Seven has offered to acquire the company for $423 million or $0.02 a share. Nexus is still in a trading halt and the stock last traded at $0.059.