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Thursday Stockwatch: Morning Report

  1. munch

    3,567 Posts.


    Shares in Australia's largest life insurer and funds manager climbed 47¢ or 4 per cent to $11.90, buoyed by Wednesday's news that it would not need to inject further shareholder capital into its UK subsidiaries and overnight gains for the FTSE index in the UK. However, JB Were has maintained its short term hold recommendation. "While we continue to see long term value, with the current uncertain market conditions prevailing we maintain our short term hold." JB Were has a long term buy rating, valuing the shares at $17. It noted that at recent lows of around $10.90 the market was valuing AMP's UK operations at zero. Also, some market watchers have said it remains unclear if the UK authorities have approved of AMP's proposals. A spokesman for AMP, when asked if the UK authorities had given the green light to the proposals, said he could not comment on their behalf. The UK Financial Services Authority, when contacted by afr.com early on Wednesday evening, said it too could not comment. "The legislation on these things is quite strict, we cannot comment on individual cases," a spokeswoman for the authority said.

    St George

    Australia's fifth largest bank was down 14¢ at $18.52, adding to the 34¢ dropped on Wednesday when senior management made a presentation on its "Even Better Bank" restructuring program to investors and analysts. While managing director Gail Kelly said St George was targetting sustained double digit earnings per share growth in 2003, and on in to 2005, she also revealed that the bank will book a deferred expenditure write-down of $60 million in its 2001-02 annual result (due out in November). A Sydney-based analyst told afr.com that St George had indicated earlier this year there would be no further deferred expenditure writedowns, but had gone back on its word. "It all smells of a new CEO coming into a bank and wanting to just clear the boards," the analyst said. Merrill Lynch has downgraded St George from a buy recommendation to neutral despite its acquisition appeal. "We are of the view that short term earnings concerns and accounting issues are likely to weigh heavily on the stock, which will rightly or wrongly lessen appeal in the shorter term," it said. JB Were maintained its short term and long term hold recommendations.

    APN News & Media



    JBWere has upgraded its short-term investment recommendation on APN News to a buy from a hold. Analysts note that stocks offering high dividend yields have performed relatively well amid the recent sell-off in domestic media stocks "In this context, we note that APN has had the worst quarterly performance of these media stocks (-18 per cent) and is now priced on a dividend yield of 5.4 per cent fully franked," JBWere analysts said in a research note. "This makes it the highest yielding large cap media stock. Accordingly we have upgraded our short term view to buy." Shortly after opening on Thursday, shares in APN were trading up 4¢ to $2.80.


    Shares in Occupational Medical Innovations embarked on their 9th consecutive rally on Thursday, which has taken the shareprice from $1 less than 2 weeks ago to $2.40 at the close on Wednesday. In early trade on Thursday, the shares had surged another 20 per cent, or 49¢ to $2.89. Fuelling the gains was an announcement by the company it had gained approval from the Therapeutic Goods Administrations for the sale of a new surgical scalpel. The Safety Scalpel has been hailed by leading surgeons as a breakthrough in safety standards. "The OMI scalpel has a unique blade allowing the instrument to be rendered completely safe, which is very important in a operating theatre," founder and managing director Bruce Kiehne said. OMI has also recently announced a deal had been struck between itself and B.Braun - one of the world's largest medical supply companies.


    Shares in pharmaceutical company Novogen jumped 2.3 per cent, or 4¢ to $1.79 after the company announced the US patent office had approved a patent to Novogen for its skin repair compound NV-07 which works to protect the skin from sun-induced immunosuppression and UV damage. Novogen recently announced successful results from two human clinical trials of the compound. Novogen managing director Christopher Naughton said the US patent acknowledged the novelty of its approach and the validity of the scientific principles used.

    News Corp

    Shares in Australia's largest media company, News Corp gained 21¢ to $9.16 amid confusion remains over the state of play in News Corp's proposed purchase of Telepiu from Vivendi. While Vivendi stated overnight it had "definitely signed the Telepiu deal," for a reported 920 million euros, News Corp executives subsequently released a statement saying it is continuing to negotiate and no definitive agreement has yet been signed. Analysts said the divergent statement could point to further haggling over price but expected the uncertainty to be cleared up within the next few days with the probable announcement of a deal.

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