Morning all,

Who said this recently…the answer later!

“…we’ve had volatile times and I think while the world has on balance, poured a lot more into equities; the reality is that the underlying situation in the world has probably not changed as much as the equity markets reflect.”

Our market struggled yesterday to support CBA which pushed to another all-time high. Looked like other things were getting sold to pile into CBA! However Chinese market dips and business confidence worse than expected took the gloss off things. Expect another go nowhere day today as the main thrust of our market the banks do look a little tired. Even Morgan Stanley has come out with a hold from buy on WBC. Also expect news of a strategy review from NAB, which is code for redundancies!

Gold had a positive night last night so expect to see a little enthusiasm leak into that sector but it is vapourised quickly at the moment .Merely an illusion .Maybe we will start to get a pullback in some of these banks and defensives with some rotation into resources but it is early days in this trade and no one wants to be the first Penguin to jump..There have been a few commentators who have put in a 5% yield for the banks and extrapolated that into the prices that they would have to go to on that basis. Interesting exercise and it does highlight the upside in NAB. Unfortunately the situation in the UK also highlights the negatives in the stock. Some weeks ago when it first emerged that NAB were looking at selling their UK business I wrote that this would be a catalyst for a rerating in the stock..well since then it has gone up 6 bucks!!!No news is good news it seems. Anyway I cannot bring myself to advise buying banks at these levels but in the constant search for yield these ones still stick out I am afraid but a bit of share price downside will take the warm feeling out of the yield story.

Patience is required in this market the FOMO(Fear of missing out) is strong!

I was on TV last night talking media stocks..again..I know..anyway I continue to like the sector despite it having run. My pick at the moment would be APN around 36…had a good run since the management and board implosion but think there is more to come over the next six months.BUY!

Idea of the Day

More on APN: This from our analyst who puts things far better than me!

BUY call on APN is contrarian, but it is a value play on the media sector, with its share price trailing behind the recoveries seen in Fairfax Media (ASX:FXJ) and Seven West Media (ASX:SWM).

Although APN’s publishing revenues have been under pressure, the company is focusing its efforts on generating costs savings

Other parts of APN’s business are performing reasonably well and some such as the Australian Radio Network are showing improved earnings.

We see substantial scope for a re-rating, providing management succeeds in stabilising NPAT. Furthermore, there is the potential for management actions around asset sales to facilitate further debt-reduction.

 

Things to make me go mmmm!

1.Stuff out today..

Westpac consumer confidence for March – 10.30am

ABS home loans for January – expecting a rise of 0.5% – 11.30am

ABS lending for investment homes – 11.30am

2.Nathan Tinkler will have to answer questions in the NSW Supreme Court later this week about the dealings of his failed Mulsanne Resources.He even tried to take over the company to try and halt these proceedings!

3.In the Champions league,Barcelona beat AC Milan 4 Nil to proceed to the quarter finals…Messi scores two fantastic goals..that guy is getting good!

4.Senator Conjob’s media reforms yesterday are an all or none thing..so probably will be none…looks like more committees and public interest test and the Reach rule looks to be too courageous,as Sir Humphrey would say, for Conjob to tackle .And he said a bad word too..***K…

5.The competition regulator is forcing Telstra to cut the price it charges wholesale customers for broadband on its legacy copper network. These wholesale customers then sell the high-speed broadband to their own retail customers.The Australian Competition and Consumer Commission has ordered Telstra to reduce wholesale prices in metropolitan areas to $24.56 a month for access to the network from $25.40. In rural areas prices will fall to $29.81 from $30.80.

6.The Shanghai index has dropped 4.9 % from this year’s high set on Feb. 6 on concern the economic recovery will falter. It remains up 1.9 % this year. It’s valued at 9.5 times earnings for the next 12 months, compared with the five-year average of 13.5, according to data compiled by Bloomberg.

Trading volumes in Shanghai Composite were 31 % lower than the 30-day average today, Bloomberg data showed. The index’s 30-day volatility dropped to the lowest in a week yesterday.

7. China’s plans to unlock what could be the world’s biggest shale gas reserves risk running further off track after 16 firms awarded exploration rights in the latest auction lacked one core skill – not one has drilled a gas well before. Maybe they should just buy an Aussie Shale explorer and use their expertise, looks like there will be a few sitting around after the Government imposed more restrictions on CSG and Fracking yesterday.

8.Italy has an estimated six  million companies, businesses of all sizes which  have been going belly up at the rate of 1,000 a day over the  last year, especially among the small and midsize companies that represent the backbone of Italy’s shrinking economy.

9.Meanwhile in Greece the Pollies are Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month.

10.And in another long running Greek tragedy..BBG look set to issue an update on how things are progressing with its two bidders.Both are pitched at 1.10 but the market is convinced that is too high given the state of the company and the price looks set to be adjusted downwards..all this on a background of improving economies and the retail environment…no one has told BBG obviously! Or they are just hopeless!!I suspect Hopeless is the answer.

And finally….

The top ten reasons for being Italian

1. In-depth knowledge of bizarre pasta shapes.

2. Unembarrassed to wear fur.

3. No need to worry about tax returns.

4. Glorious military history prior to 400 a.d.

5. Can wear sunglasses inside.

6. Political stability.

7. Flexible working hours.

8. Live near the Pope.

9. Can spend hours braiding girlfriend’s armpit hair.

10. Country run by Sicilian mafia.

And the quote today was from Marius Kloppers!CEO BHP

Enjoy

 

Clarence

XXX

 

Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.