Australian Stock Market Report – Midday 12/6/13

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By Tom Piotrowski, CommSec Market Analyst | December 6, 2013 2:40 PM EST

Commsec Midsession Report
(13.00 AEST)

The selling that began with some conviction late Thursday afternoon has persisted in the early part of trade on Friday, although the ASX 200 is recovering from intraday weakness as banks pare declines. The question hanging over the market in the afternoon session will be whether it can hold the lows that have been established or will sellers continue to test the resolve of the market and gun for the low of the day which currently sits at 5154.6.

Qantas' week of inglorious outcomes continued on Friday. Ratings agency Standard and Poor´s has lowered its credit rating f to BB+, which is considered below investment grade. S&P´s outlook for the group´s credit rating was also negative. S&P also lowered the airline´s corporate debt to rating BB+ from BBB- and placed it on negative watch. In more common parlance the group´s credit rating is at junk status, which means a higher cost of financing. Equally significant is the restricting of access to the investor pool whose investment parameters do not allow investment in lower rated companies. Having emerged from a trading halt the stock is at $1.06, within sight of the all-time low of $0.97

Veda Group (VED) shares have added to yesterday's gains. The shares surged 40 per cent yesterday, their first day of trade on the ASX. Veda provides credit information in Australia and New Zealand. Veda raised about $341.1 million via the issue of 272.8 million shares at $1.25 each. The company says it has more than 12,500 business customers that use its services to make decisions on credit risk, verify identity, check employee information, and reduce identity theft and fraud. The shares were up 1.4% at lunch time.

Nine Entertainment Co (NEC) has listed on the Australian stock market. Nine shares began trading at noon and fell below the listing price the recovered and were trading flat at their $2.05. The company owns the Nine Network, Ticketek and ninemsn. The listing price values the group at $1.93 billion, making it the biggest listing on the ASX this year.

QBE (QBE) Insurance Group have been placed in a trading halt which will last until the start of trade on Tuesday or when an announcement is made to the share market. The group is expected to downgrade is earnings guidance in the wake of a review of its operations. QBE shares last traded at $15.45.

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