Mid Session Report
The selloff that started in earnest in the early part of November has neutralised the October rally. It's back to square one in some respects. The area around 5150 has taken on new significance as a result. The way prices behave around these levels will reveal valuable insights into market sentiment. At this point it appears as though sellers remain in the ascendant notwithstanding the 300 point retracement that has been a feature of recent weeks.
There was a brief cease fire on the part of sellers as they contemplated a US budget agreement. A bipartisan budget deal announced Tuesday morning local time is modest in its spending cuts, although there is hope that nearly three years of partisan stand-offs between Democrats and Republicans that culminated in October with a partial government shutdown could be in the rear view mirror. The cessation of sellers lasted only a short time and sellers resumed pressure thereafter.
Miners have been the weak spot in early trade on Wednesday. The leading lights of BHP, RIO and FMG have been down in the range of 1% to 2%. Although OZL has been the poster child for the sector in a less than flattering light. The stock was marked down heavily in the wake of lacklustre production levels forecast for next year and no increase in resource estimates. The shares had fallen as much as 30 % in early trade.
Bega Cheese has extended the offer period for its takeover bid for Warrnambool Cheese and Butter. Bega´s offer will now remain open until December 20, a week later than its previous closing date. Bega is one of three companies vying for control of Warrnambool, and has offered 1.5 Bega shares plus $2 in cash for each Warrnambool share, which at current prices represents a value of $8.60. BGA shares were down almost 1% at lunchtime.
Dexus Property Group (DXS) & the Canada Pension Plan Investment Board have increased their offer to acquire the $3.8 billion Commonwealth Property Office Fund (CPA) valuing the fund higher than rival GPT Group's current offer. The DXS consortium made a fresh cash-and-scrip offer valuing the office tower landlord at $1.27 net tangible assets per security or $2.9 billion, higher than GPT's $1.24 cash-and scrip offer. CPA share were up 2.4% at lunchtime.
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