The S&P 500 was up by 2.10points or 0.11%on Tuesday and closed at 2,000.02.  U.S. stocks edged higher on Tuesday to lift the S&P 500 just a bit above the 2,000 mark, its first close above that milestone, after data that pointed to a brighter future for the economy. Best Buy Co Inc shares slid 6.9 percent to $29.80 after the electronics retailer reported second-quarter revenue that missed expectations.

Digital Ally Inc extended its meteoric rise, surging another 14.2 percent to $14.28 on heavy volume. The recent fatal police shooting of an unarmed black teenager in Missouri has fueled interest in the company's wearable camera. Across the Atlantic FTSE Eurofirst 300 rose 0.8% to its highest finish since July 24 although the Nikkei 225 in Tokyo fell 0.6%. Amazon.com Inc. added 2.3 percent after the company said it’s buying video-game service Twitch Interactive Inc. in one of its biggest-ever acquisitions. 


Amazon Daily Chart (Source – Thomson Reuters)

S&P ASX 200was up by 2.7points or 0.05% on Tuesday and closed at 5637.6 points. Woodside Petroleum ended up 0.6 per cent at $44.14.Ainsworth Game Technology disappointed with an 18 per cent increase in net profits. It lost 9.8 per cent on the day, to be $3.33 at the close. Beach Energy lost 3.9 per cent at $1.62. Senex Energy lost 9 per cent after unveiling a production outlook that was lower than analysts had expected.

Earnings from Boral, Charter Hall, Flight Centre, Lend Lease, Sandfire, Senex Energy, Veda Group, Whitehaven Coal, WorleyParsons are released today. The Australian dollar is trading at US93.05¢, compared with US92.94¢ at Tuesday’s local close.  Iron ore is trading at $US88.90 a tonne. The best performing stock on the ASX 200 was BURU Energy. The following stocks will trade ex-dividend today:

Aurora Dividend Income Trust, BigAir Group, Federation Centres, Henderson Group, Oakton, Primary Health Care, QBE Insurance, Santos, Telstra, Transpacific Industries, Watpac, Woodside.


ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:- 



Stock of the Day – ROC Oil (ROC)

ROC has takeover offer on the table from Fosun International Limited – A Hong Kong listed but Shanghai based Investment Company. The all-cash bid is set at $0.69/share. The investment thesis for ROC is therefore around whether another bidder could emerge in competition to Fosun, however our view is that this is unlikely with the Fosun bid a 6% premium to our Net Asset Value (NAV). If another bidder emerges for ROC, it could result in share price appreciation.



ROC Beibu Gulf Asset, Offshore China (Source – Company Reports)

ROC reported NPAT of $53.8m and underlying NPAT of $22.7m. The key reason for such a good result was a very low exploration expense and lower operating costs. Reported NPAT was boosted by the $32.6m profit booked on the sale of the Basker-Manta-Gummy gas fields earlier in the year. No dividend was declared as expected. Production guidance for 2014 was 8,500-9,500 BOE/day an increase on prior guidance thanks to the incorporation of the D35 acquisition in Malaysia.


ROC Portfolio (Source – Company Reports)

On 4^th August ROC announced it had received an all cash bid from Fosun International Limited (HK Listed, Shanghai based company) to acquire all shares in ROC for $0.69/share. This was deemed superior to the proposed nil-premium merger on the table at the time and was unanimously supported by the ROC board. The proposed merger with Horizon Oil has been cancelled. Next step is for Fosun to lodge a Bidder’s statement in early September with the offer to be open for 1 month.


ROC Daily Chart (Source – Thomson Reuters)

Key focus for investors is whether another bidder may emerge for ROC. Management has confirmed that the other conditional non-binding bid they had received previously was no longer on the table. Directors have unanimously recommended that the ROC shareholders accept the Fosun offer, in the absence of a superior proposal. We gave the BUY on the stock at the price of $0.465 on 08/02/2014. We recommend a SELL on the stock at the current price of $0.685.

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