Stocks to watch at the open

Real estate investment trusts could get a lift from low US bond yields, while Leighton Holdings has scored a much-needed contract.

Trading Today

The SPI futures are pointing up 7 points, but with news still coming out of the US and China’s final PMI numbers due out today, the market could easily go either way.

Investor sentiment will best be judged by the volume of shares traded. The heavy sell-off yesterday came about on the number of shares trading hands at around 17% lower than the 30-day average. While the index gave up 1.66%, the lack of shares traded suggest it wasn’t an all-out capitulation.

Sector-wise, real estate investment trusts (REITs) look like they will provide the market with a shining light as the yield on the US 10-year Treasury note slipped to 2.61% overnight (see Brendon Lau's Warning signs on A-REITs). Gold miners will also be back in focus as gold once again lost ground.

Leighton Holdings

Leighton Holdings (LEI) has won a $370 million construction contract at Melbourne Airport. In a time when mining contracts are sparse, it is a much needed win and should be viewed favourably by investors, especially as there were concerns about the company's future cash flows in a weaker operating environment.

After Leighton reported for the half-year in August, the overriding theme of gaining more control over its cash flow and reducing costs where it can still remains.

The current analyst consensus target price, as compiled by Bloomberg, is $17.78 against Leighton's last closing price of $19.25.

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