As we discussed in last week’s Market Comment, US second quarter earnings season got off to a good start with Alcoa and Intel both exceeding expectations. There is still a long way to go, with a swathe of major names yet to report. The outlook has however dimmed somewhat, given that the latest batch of numbers hasn’t impressed the market.
Amcor’s recent spate of acquisitions has left it with plenty of work to achieve the lucrative synergy benefits available from these transactions. The market has responded positively to the quite cheap prices paid for each of the new businesses and the stronger position it places Amcor in each market. We think the time is right for Members to take some of the benefit of Amcor’s re-rating by selling half of their holdings.
Most people would have experienced the simple pleasure of putting on an old jacket or pair of jeans, only to find a few forgotten dollars in its pockets. Or perhaps the spring clean yields some handy currency that had slipped behind the couch. Well, Avoca has just found an extra 2.9 million ounces of gold in its South Kalgoorlie (South Kal) assets that the company acquired in February this year.
Ramsay Healthcare’s stock price received a welcome boost yesterday, bucking the trend of a declining broader market to rise 5.4%. One of the factors behind the rejuvenated investor enthusiasm for the private hospital operator was the outcome of a bidding war for its smaller Australian competitor, Healthscope. The bid for Healthscope underlines the value of the sector and we certainly remain bullish with regards to Ramsay’s longer term prospects.
The telecommunications landscape in Australia is changing at both ends of the scale. The National Broadband Network is still at the very early stages of its life, but will change the economics of the industry for all participants. For the smaller carriers, gaining scale quickly appears to be a necessary route to survival and is drawing a good deal of attention to the sector. TPG Telecom is well positioned to play a part in this consolidation and faces some interesting choices.