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Morning all,

For years now, the Germans have been really peeved by the Banks in Cyprus. Offering high interest rates ,low tax and no questions, was a winning combination .So it has come as no surprise that the German led ‘bail in’ is heavily weighted to destroy the banks and in turn the country! The moves yesterday to take deposit money and tax, although not called a tax, the rest is a lesson in retribution. Moaning Merkel will look great at home but she should not think about holidaying anywhere in Southern Europe for some time. Even if she gets down to the pool early and pops her towel down ,she will not be welcome. It remains to be seen what happens when the rest of the Cypriot banks open..I suspect there will be a rush for the exits. Of course things were made worse by the Dutch Finance Minister ,whilst having his dinner, suggesting that this is the new model for countries that are bad boys…nick their depositors money. Once again we see the banks let off the hook and the poor old Russian Mobsters paying the price..is it really fair. Anyway in a month’s time, there won’t be a single dodgy Euro in a Cypriot, Greek, Italian Spanish or Portugese bank! So mission accomplished Mertle!

Anyway our market rallied yesterday, will not today. Reality bites.The futures spiked on the bail in news and dragged the usual suspects with them. Banks in demand as usual. Still think they are a tad overvalued but hey it’s the yield stupid!

Expect a bit of backing and filling today as ‘what the Lord giveth the Lord taketh away’…still believe that patience is required in this market rather than chasing stocks higher..usually Easter is a high point and then the market starts its sideways to down period!

Idea of the Day

KAR-Had a shocker yesterday as their 2nd well out of three came up very disappointing ..however they still have one more to go and the oil biz is inherently risky…would like to see a small bounce today as I think things were a tad overdone..buy around 5.30 for a bounce back to 5.90 -6.00…

From our analyst who knows far more about this stuff than I do..

  • KAR’s second well in offshore Brazil, Emu-1 was disappointing.
  • KAR stated the presence of some oil fluorescence and elevated mudlog gas readings, the reservoirs are water bearing – i.e no commercial hydrocarbons present.
  • While Emu-1 is disappointing, KAR has already announced an oil discovery at the nearby Kangaroo prospect.
  • The third well in the program Bilby-1 is subject to an option deal with Pacific Rubiales.
  • They must exercise the Bilby-1 option within 3-4 days of completion of the drilling of the Emu-1 well, so we expect sometime this week or early next week.
  • We think there are other interested parties that could take up this option.

STRONG BUY recommendation MAINTAINED
12 month share price target = $9.00/sh

Things to make me go mmmm!

One retailer has worked it out.. Kathmandu has defied difficult retail conditions to post a hefty rise in first half profit as new stores performed well and online sales grew.

Kathmandu reported a 72.7 per cent rise in first half net profit to $NZ10.33 million ($8.33 million).The result was above company estimates of net profit between $NZ9.5 million and $NZ10 million, issued in February. Revenue rose 13.1 per cent to $NZ165.9 million.

Another shock horror poll for Labour…I mean we all know where this is going to end up…let’s get the election sooner and either get Dumb or Dumber in!

Billagone has been raised to neutral by UBS and expects a 91 cent bid…final bids in soon..can’t be easy running a company under these circumstances…if these bids fall over the downside is probably 60 cents!

Maybe all the money has already left Cyprus as the UK branches and some Russian branches of the banks have remained open..let’s hope when they open the doors on Tuesday there is still something left to confiscate…this is shaping up as a great Hollywood script…if it wasn’t so sad for Cyprus …maybe Ben Affleck with a beard may get the rights….Oceans 15 perhaps..There were rumours last night that customs officers were checking luggage out of the country and confiscating any money in them!

Telstra is scouring Silicon Valley and other hotbeds of technology innovation in Asia for potential applications in the digital media, education and IT services sectors as part of chief executive David Thodey’s plan to tap into “billions of dollars” in opportunities. Telstra’s innovation, products and marketing boss Kate McKenzie has revealed the telco is reviewing thousands of technology investments.

 

And finally…..

A little Jewish boy was telling his mother about how he had won a part in a play that was being done at school. His mother asked, “What is the part you will play, Saul?” Saul responded, “I shall play the Jewish husband,” to which the mother replied, “Well, you go right back to that teacher and tell her that you want a SPEAKING part!”

Happy Passover

Clarence

XXX

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