Good morning,

Events overseas will have to take second place to the Canberra Soap Opera which is now unravelling….this next week will be very interesting…If Rudd wins then he may find all the independents back out and off to the polls we go..if Julia wins(which is likely) then the status quo will remain..and that’s not great! The strange thing is that all the Pollies on the radio and TV say that the question is who is best placed to beat Abbott in the polls…surely the question is who is the best person to lead the country?! Isn’t that what they get paid for..leadership.. not just staying in power by whatever means possible..call me a dreamer but that’s my view!

The market will now go into a small pullback as we await the result on Monday..the two sectors that will go well are Gold and Oil..both very strong overnight as the printing presses crank up again and the embargo on Iranian Oil bites(who would have thought that eh!)..at some stage the rise in oil prices is a negative especially for Europe and China..US now is addicted to cheap gas for power but the bowser price will crimp discretionary spending..and talk about economic slowdown due to increased fuel costs will rise..

I would be looking at buying energy stocks at the moment as the tension in the  Middle east will not be soothed anytime soon..in fact Syria just looks worse and that will continue to focus attention on the area..as if it needs anymore focus!

In the UK last night there was a large takeover for an African Oil play called Cove from Shell..Africa looks like being the new frontier for the majors and East Africa especially..one that has an ambitious drilling program later in the year in the area is PCL..see my spec stock report some weeks ago..or ask for it again..stock has moved up sharply from where I tipped it but there is plenty to come on any success..

Other Oil stocks that I like include the majors and COE especially.

Gold stocks that are attractive include SLR,NCM and maybe even KCN after the placement yesterday..

Greece can’t escape a mention as ratings agencies downgrade them again and despite the bailout..I see bad things ahead for them..the people will not stomach this much austerity without a serious charismatic leader..Papa Smurf to the rescue perhaps! Or George Michael or Telly Savalas…now there’s a thought! ‘Who loves yer baby!’…although they may struggle to afford his lollipops!!!!!

A few highlights from the scoreboard yesterday

Woodside Petroleum (WPL)-Research Report Enclosed..BUY

Woodside Petroleum hopes of expanding its $14.9bn Pluto gas-export project in Western Australia have been boosted by a large offshore natural gas discovery, as it reported a modest fall in annual net profit. Australia’s largest standalone oil and gas producer by output said the Ragnar-1 well intersected 190 meters of gross gas and it intends to drill three more exploration wells this year, while also talking to potential third-party suppliers to Pluto with gas fields nearby. Woodside wants to expand Pluto to tap an expected surge in demand for cleaner-burning fuels from Asia. Fast-developing economies such as China are emerging as major buyers of Australian liquefied natural gas while Japan, a traditional customer, needs more natural gas to substitute for lower nuclear power output in the wake of the Fukushima reactor shutdown.

Seek (SEK)

Seek said first-half net profit rose 27% on year after sustained growth in its employment business, a stronger performance from its Chinese venture and improvements at its education unit. Net profit for the six months to December 31 was 60.6m, up from $47.9m in the previous corresponding period. Revenue for the first half was $208.1m, up 31% from $159m the previous year.

Have a good day and stay classy Sydney!!

Clarence

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