MARKET TALK: S&P/ASX 200 Up 0.5% After Centennial Coal Bid

5th Jul 2010 01:48

0048 GMT [Dow Jones] S&P/ASX 200 up 0.5% at 4259.3, despite Wall Street's modest falls on disappointing economic data. Banpu's revised bid for Centennial Coal (CEY.AU), worth about A$2.45 billion, has given a minor bullish catalyst. Highlights improved landscape for M&A after the government agreed with major miners on a reworked mining tax. "It certainly looks like agreement on a revised mining tax has turned the 'takeover tap' back on," says IG Markets strategist Ben Potter. "The certainty brought about by the new tax has facilitated the latest bid and will likely see further foreign capital invested in Australian mining and energy assets." Among coal sector pure plays, Whitehaven Coal (WHC.AU) up 6.4%, Macarthur Coal (MCC.AU) up 5.3%, while among diversified miners, BHP (BHP.AU) up 0.5%, Rio Tinto (RIO.AU) up 0.8%. Major banks up 0.3%-1.0% despite U.S. peer weakness. "Given Monday's U.S. holiday, most people are expecting quiet trading in Asia," says Potter. "But this(Centennial bid) is good evidence that the new mining tax deal will bring the M&A players back into action. Materials and energy sectors are quite strong and I think a lot of that is built on this M&A activity and I think we will see more." However, Potter doubts S&P/ASX 200 will test Friday's high at 4281.6 without some recovery on Wall Street. CEY resumes trade at 0100 GMT. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires July 04, 2010 20:48 ET (00:48 GMT)