Market: T3, BIL, WPL

Sydney, Nov 21, 2006 (ABN Newswire) - Was that a very large bell being rung yesterday to tell us that the five month run up in share prices had peaked?There will be little guide today for a while: commodity prices such as oil and copper were weak in the US, world stockmarkets were mixed: sentiment seems to have become quite confused in the past week.There was a late slump that seemed to be driven by the Share price Index which closed down 137 amid rumours of a big futures position being sold off.On top of that there was the active move out of Telstra shares and into the higher yielding T3 instalments: that went on all day and seems to have driven much of the sentiment.The All Ords to shed 88 points and the ASX 200 97, signsthat investor confidence isn't as solid as some traders had thought.The selling late yesterday seemed to gather pace and accelerate the closer trading got to the 4 pm close.

Banks, big mining companies and other leaders had a tough day: The ANZ for example shed 62c while the NAB lost more than a dollar and the CBA a similar amount.

Among the major resource stocks, the two leaders were down: Rio Tinto dipped $1.82 to $73 and BHP Billiton lost 44 cents to $26.05.

The Telstra 3 floated at $2.11, and closed at $2.18. (Retail investors paid $2 for the first part of the T3 shares) on a huge 502.821 million shares, worth more than a billion dollars.

But the fully paids continued to ease, slumping 12c to $3.63, about where the pricing of T3 said they would finish on the opening day (the T3 range was $3.60 for punters and $3.70 for the big investors).Some brokers were saying the full paid TLS shares could dip to $3.40.

But the volume was more than 476 million fully paid TLS shares, worth a massive $1.7 billion: that means more than $2.7 billion TLS shares were traded yesterday.

Now as I have said previously: for every seller there's a buyer and an optimist: there's likely to be more selling of the full paid and partly paid receipts for a few more days but the fully paids should start settling down around the $3.60 mark or a touch less.

The other big news was the Seven network's $4 billion deal with KKR, the private equity group from the US. Apart from injecting a bit more life into an overheated media sector, it had no impact on the wider market.

Only 18 per cent of existing small shareholders in Telstra took up the T3 offer and interest from wealthy investors and retail investors who did not own Telstra shares was far greater than expected thanks to the investment's high yield.

Telstra said yesterday that it gained 100,000 new shareholders as a result of the T3 offer, lifting its total investor base to 1.65 million.

"It seems that many investors agree that Telstra's transformation strategy is delivering results, and recognise our leadership team's achievements in driving dramatic change through the company," Telstra chairman Donald McGauchie said in a statement.

The Government has now raised $45.8 billion from the three Telstra sales. It raised $16 billion as investors paid $7.40 for T2, while it raked in $14.3 billion in 1997 from T1, sold at $3.30 a share.

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Meanwhile market action of a different kind in Brambles which says it will launch a $US 926 million ($A 1.21 billion) share buyback as part of its plan to streamline its structure.

The group is planning to merge its Australian and British operations under a single Australian holding company, Brambles Ltd and the company said in a statement yesterday that it will spend $US 926 million in cash price for 93.86 million shares, equating to STG 5.20 or $12.8475 per share, through the cash alternative arrangement for shareholders under its unification plan.

The shares represent 5.7 per cent of the Brambles' total issued capital and will be made up of 90.7 million shares in the British Brambles Industries plc (BIP) and 3.12 million shares in the Australian arm, Brambles Industries Ltd.

Brambles' shares at first rose 11 cents to $12.94 yesterday but then fell during the hard afternoon's trading to close 11c lower at $12.72.

Some shareholders were obviously disappointed that the buy back means the likelihood of a takeover or private equity deal has now become very remote.

Brambles revealed plans for the unification in September, which will see it having a primary listing on the ASX and a secondary listing on the London Stock Exchange.

The unification is expected to be completed on December 4 with deferred settlement trading in Brambles starting on the ASX on November 27 and on the London Stock Exchange on November 24.

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And its been a tough few weeks for Woodside Petroleum: the falling world oil price isn't making life and easier nor is the company's problems with its Enfield and Mauritanian oil fields, or with expansion plans on the North West Shelf.

Now, as widely forecast, its takeover bid in the US for Energy partners Ltd has failed.

Woodside said yesterday the $883 million bid had lapsed without reaching 50 per cent acceptance level.

The bid was made through ATS Inc., a subsidiary of Woodside, in August at $23 a share for the New Orleans-based EPL as an attempt to boost its Gulf of Mexico presence.

The offer expired at close of business in the US last Friday.

Woodside shares fell 63c to $35.73 and it has shed more than 10 per cent of its value since the recent peak of just over $40 a share on October 18.

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