Good morning Sports fans,

I am starting to think that ‘Teacozy’  and ‘Moaning Myrtle’ are having an affair and the Euro summits are just a cover story…they meet every weekend at an exotic location and lock them selves away and nothing ever seems to get resolved..I think it’s a front!!

But this is truly crazy!! I woke to read this first thing..thought it was a Aprils fool Joke…

Germany sold six-month treasury bills at a negative yield for the first time amid demand for the debt securities of Europe’s biggest economy as a haven from the sovereign debt crisis roiling the region.
The government auctioned 3.9 billion euros ($4.98 billion) of securities maturing in July at an average yield of minus 0.0122 percent, the Federal Finance Agency said in an e-mailed statement today. It was the first time it sold the securities at a negative yield, Joerg Mueller, a spokesman in Frankfurt, said in a telephone interview. The Netherlands sold 107-day bills at minus 0.007 percent on Dec. 12.
Some investors are prepared to pay when lending to the most creditworthy governments in exchange for the assurance of getting their capital returned as a solution to the euro-region debt crisis, which forced Greece, Ireland and Portugal to seek bailouts, eludes policy makers. Yields on three-month U.S. Treasury bills fell below zero for the first time in December 2008 after the collapse of Lehman Brothers Holdings Inc.

So with all this negativity and uncertainty you would expect people to be paying big prices for insurance..really?Well the fear index is back around 21!!There seems to be some complacency creeping in ..almost apathy…as US Investors have taken more money off the equities table the index has pushed up to nearly 12,500 and commentators seem to be pretty bullish out there..Not convinced myself..US reporting season is upon us and then we will start to get an idea of how corporate US is travelling..the consensus is the market is cheap ,trading 30% below historic p/e’s..again not completely convinced on this argument as it may be that the E part has peaked!Time will tell.

In our market ,volumes remain pathetic around 2.5bn dollars which is not enough to feed anyone and makes stock selection very hard as they can be pushed around on low volumes..as most readers of this rant will know I have been a massive fan of TLS even to go as far as to say that if you don’t buy TLS you don’t like money..well, they have started to touch my target at 3.40…so now what to do..my best guess is the easy money has been had and the dividend now holds the key..we all know its going to be 14cents at the half and another 14c in the final..I do not think there will be any capital management issues until the ACCC issue with structural separation is settled..so at 3.40 they are a hold…if you are long at 2.90 to 3.00 I would suggest looking at lightening the load above 3.40…if the  ‘Zombieland’ mess explodes they may be a safe haven especially with the fully franked yield and safety aspect but 3.50 should cap them in the short term….

So the question is where do I put the TLS money…ah thats trickier..if you are just going to pop it on deposit you might as well keep it in TLS!!However one potential is the AUN situation..as you may remember they are currently under takeover at 1.52 in cold hard cash..however the ACCC has yet to agree to the merger so they are trading around 1.20..as the world staggers back to work and starts to focus on 2012, the ACCC decision should be forthcoming..I strongly believe that the merger will  be allowed through and even if it’s not they will fight it in the courts which is time consuming and expensive especially for the ACCC which has just lost its case on Metcash and has been criticised for wasting money…I think given this backdrop they will allow it to go through…so anywhere around 1.20 should be rewarded in the next month or so.

On Sky TV last night I talked about NWH (NRW Holdings) which is a Mining services company..I need to do some more work on this one but it looks interesting with a big new contract under its belt and a profit upgrade (I know remember those!) to boot..the stock is currently around 2.50 ish and any weakness I would start to accumulate for a move up to $3.00 in time.

The other area that is starting to look interesting for 2012 is Bio Tech Land..not for the faint hearted but Global drug companies are moving to buy up competitors and advanced trial bio techs…we all their big patents running out soon they need to find the next big thing…M&A activity will increase substantially and Australian Companies will benefit..MSB (Some brokers ahve a $13.00 traget price!!!) should be on watch list plus SPL and PRR together with an old favourite and one I hold of UNS (syringe maker and delivery system).No need to be in a rush but time to put Bio Techs on the radar!Could be a good first half for them..

ECONOMIC EVENTS

US Consumer Credit (Survey: $7bn, Actual: $20.374bn) AU Building Approvals MoM (Survey: 6.0%) AU Building Approvals YoY (Survey: -19.8%)

 

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