MARKETS

By Greg PeelThe Dow closed up 61 points or 0.5% while the S&P rose 0.6% to 1336, pushing through the 100% rally mark, and the Nasdaq added 0.8%.Last night's geopolitical news was that of Iran's intentions to sail two warships through the Suez Canal and into the Mediterranean to visit close ally Syria. The reason provided was training exercises for new cadets who will be charged with the task of pr...

We had some news and movement yesterday in the two big financial services deals afoot in Australia: the proposed takeover of the ASX by the Singapore Stock Exchange and the proposed takeover of AXA Asia Pacific Holdings by the AMP.The two deals are worth close to $23 billion, if they go ahead.The AXA deal looks probable, although final approval from the federal government is needed, but the ASX takeover remains very uncertain.AXA revealed an 11 % drop in full year earnings to $602 million and the ASX and Singapore Exchange (SGX) revealed a change to the corporate governance and board composition of the merged company to try and win approval from investors and the federal government.Of the two deals, the $8.4 billion bid for the ASX by SGX is the most important with its political and business fallout here and offshore.The gist of the new arrangements announced late yesterday will be: the

China will go on tightening monetary policy, despite a small rise in the inflation rate in the year to January to an annual rate of 4.9%.That was up from the 4.6% rate in the year to December and under the 5.1% (a 28 month peak) in the 12 months to November.Some forecasts had put the CPI at around 5.3% to 5.4%, which would have been new 28 month highs.That was because of the rebound in fresh food prices in January ahead of the Spring Festival and the Lunar New Year, and then the emerging impact of the worst drought for 60 years in parts of the wheat growing area of the country's north and northwest.The best sign of the increasing inflationary pressures was in the

The Australian sharemarket is trading mainly flat in the first half of trade with the All Ordinaries index (XAO) off by 0.1 pct or 3.8 pts to 5015.6.

The Australian Dollar has opened weaker thismorning, currently trading around the USD0.9970, level asbase metals and equities finished lower overnight.Yesterday saw the release of the Australian RBA Minutes,which had a positive outlook on the Australian economy,despite the recent floods damage.

by Matthew Carr, Investment U Research Tuesday, February 15, 2011These days, if someone tells you they don’t own a cellphone, that’s like them saying they don’t have electricity or indoor plumbing. That’s a measure of where modern society is at the moment. But many people have kicked that up a notch further and have entered the smartphone world. Globally, more than 1.6 billion smart phones were sold last year. That was a 72% increase over 2009. And with consumers falling over themselves to get smartphones, the arena is heating up…Smartphone vs PC… A Unanimous WinnerWhen it comes to the smartphone market’s big players, Apple (Nasdaq: AAPL ) is an obvious one, with its iconic iPhone. But now, everyone is rushing to unveil their own, putting pressure on Apple to make its iPhone cheaper and more versatile. The market just opened up a little more when Verizon Communications (NYSE: VZ ) began pre-order online sales of its Apple iPhone. And the demand was astonishing. The country’s largest mobile operator recorded the most successful first day sales in the company’s history – over 500,000 orders. For Verizon, iPhone sales are projected to be the main driver of the 4% to 8% revenue growth the company expects this year.But Apple has serious competition in the shape of Google’s (Nasdaq: GOOG ) Android platform. In fact, Android phones stole the limelight during the fourth quarter of 2010, accounting for 53% of all smartphone sales. Even Facebook is getting in on the act, launching its own phone in partnership with INQ - the Cloud Touch. If you need more proof of how massive this smartphone trend is, just consider this statistic: During the fourth quarter of 2010, smartphone sales topped those of personal computers for the first time ever. A total of 101 million smartphones were purchased, compared to 92 million PCs. In market growth terms, that was an 87% increase quarter-over-quarter in smartphone sales, versus the meager 3% increase in PC shipmentsIt’s even more of a beatdown to PCs considering Apple’s iPhone was only launched in 2007. And there’s more somber news for the future of the PC market…Pad PowerHaving not even been on the market for one year, Apple’s iPad already accounts for 7% of the global PC market. And in classic “monkey-see, monkey-do” style, everyone is riding Apple’s coattails in an attempt to get their own tablet computers into consumers’ hands. It’s yet another rapidly moving trend, with Morgan Stanley (NYSE: MS ) projecting that tablet sales will hit 100 million per year by 2012. And this overall trend opens the door to secondary and tertiary markets, which are a developer’s dream and a massive boost for the smaller companies. After all, nobody would buy a smartphone just to make phone calls, send texts, or view e-mails. That’s like buying a Ferrari and then driving the speed limit. What’s the point? So this massive smartphone market is creating a booming secondary market: mobile applications, or “apps.”Is There an App for This Kind of Growth?The mobile app market topped $2 billion last year, with Gartner, Inc. expecting it to generate $15.1 billion in revenue this year. Globally, the app market is projected to increase to $27 billion by 2013, rising to $35 billion in 2014, according to International Data Corporation. Plain and simple: That’s insane growth. Apps range from the stupid, to the life-saving, to providing eternal salvation (seriously… you can purchase “Confession: A Roman Catholic App” for $1.99). But regardless of what apps are out there, if those projections are confirmed, that would see the global app market rocket to growth of 1,958% between 2009 and 2014. And with the market only just hitting its stride, suffice it to say, we’re at a huge point in the technology curve.Good investing,Matthew CarReprinted with permission of the publisher. The above story can be read on the website www.investmentU.com. The direct link is: http://www.investmentu.com/2011/February/the-tech-trend-crushing-the-pc.htmlNothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.Views expressed are not FNArena's (see our disclaimer).FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

(This story was originally published on 8th February, 2011. It has now been re-published to make it available to non-paying members at FNArena and readers elsewhere).By Greg PeelAs a financial journalist, it is not my place to take sides on the climate change debate. However, I have no qualms in stating my own, honest opinion, taken from a position of simply not being a scientist.The way I see there are two arguments, and I am not including arguments put forward by industry lobbyists: (1) the earth is warming; (2) the earth is not warming and indeed may be cooling. On the assumption (1) is correct, then: (a) man-made carbon emissions are the cause; or (b) the cycle is natural and while made-made emissions don't help they don't actually make much difference.My opinion is that which ever of these variations proves to be true, where is the downside in easing the plundering the world's finite natural resources and shifting towards commercially viable alternative and renewable forms of energy? Where is the downside in curbing pollution? I have not heard a viable argument (outside of short term profits and jobs) that suggests why such pursuits are foolish, and many an argument as to why they are not. However, it would seem that in order to achieve such a transition there simply has to be a government mandated price applied to carbon. Exactly how that can best work...well...that's another debate.So it is from this relatively neutral stance that I make note of a scientific theory that has been gaining some traction of late – that of the Pacific Decadal Oscillation (PDO). I qualify this report straight away by noting the Australian Bureau of Meteorology is so far undecided on the theory's validity but would like to pursue further research before arriving at any opinion.We are all now familiar with the incidences of El Nino and La Nina. We understand they are related to periods of warming and cooling in the Pacific and other ocean waters. These cycles can be weak or strong, and the recent drought in Australia coincided with strong El Nino periods and the current “wet” coincides with a particularly strong La Nina.On average, these cycles last six to eighteen months and occur every three to seven years. There are nevertheless no hard and fast rules, and long range prediction is as good as impossible. The best we can do at the moment is see a cycle coming only when it's basically right on top of us, and then monitor when itis the temperature variations begin to turn back again. Meteorologists were able to tell us that a La Nina was apparently beginning late last year but they have only subsequently been able to note that this is a particularly severe cycle. With the benefit of historical records, research and modelling, the theory of the PDO has arisen. This suggests that overlaying the shorter, sharper El Nino and La Nina cycles are longer wet/dry cycles which last 20-30 years. Both the opposing short cycles come and go within each longer cycle, but typically if the longer PDO cycle is “dry” then El Ninos are more severe and La Ninas are less severe, and vice versa for “wet” PDO periods.Looking at the data for the twentieth century through to today, 1900 fell in a wet PDO which lasted until 1924, a dry PDO occurred from 1925-46, another wet from 1947-76, and a dry from 1977 on. But given the severity of the current La Nina, which has coincided with the breaking of one of Australia's most severe drought periods, the question is: have we now cycled into the next wet period? The timing is certainly right given a wet period is due. If so, we could be in such a period for another 20-30 years.Now let me reiterate – I am not a scientist. But out of curiosity, I thought I would create a table to explore the implications of the PDO for Australia back to 1900. It's lengthy, but the table appears at the top of this article (in excel format, for download).Using data from scientific websites (not Wikipedia) I have created four columns in my table. Column one is each year from 1900 rounded to six-moth intervals. Column two is the periods of PDO, with dry periods represented as red and wet as blue. Column three shows the periods of El Nino (red) and La Nina (blue). Column four shows periods of drought (red) and what the Bureau of Meteorology lists as “severe” flood incidents (blue).The first impression is that the results are not “perfect”. Droughts have occurred in PDO wet periods and floods in PDO dry periods. There was even one flood (1940) right in the middle of a long drought and El Nino period. According to records, this flood confounded meteorologists at the time but was correctly predicted by aboriginal elders.What is striking, however, are what I call the “triple red” and “triple blue” periods. Australia's longest droughts have occurred when the PDO is dry and El Nino is occurring. Note the periods 1937-47, 1991-95 and 2000-10 compared to other drought periods. Also note that while all the floods here are noted as “severe”, the most severe floods Australia has experienced prior to 2011 were in 1974 (Brisbane, of which we have all been reminded), 1955 (Hunter Valley, made famous by the movie Newsfront), and 1916 (Clermont Qld, inland from Mackay). Notably the Clermont flood occurred as a result of a cyclone which passed through Townsville. The most severe floods have occurred as “triple blues”, when La Nina has arrived during a PDO wet.What one can draw from my table, I believe, were the PDO theory to be granted scientific currency, is that if an El Nino occurs during a PDO dry the chance of severe drought is amplified (but not guaranteed) and if a La Nina occurs during a PDO wet the chance of severe flood is amplified (but not guaranteed).As I suggested earlier, scientists are now considering that the strong La Nina that is now upon us, subsequent to the breaking of the long drought, may signal the beginning of a new PDO wet cycle. If so, farmers can rest a little easier about the question of water supply to crops, but may face more episodes of flooding. The Murray-Darling Basin may rejuvenate itself long before politicians come up with a viable solution. Miners may well be in for more regular incidents of lost production from flooded mines.I personally am not endorsing anything here – just throwing the subject up for discussion. It is, however, interesting to note that what one might call a “skeptical” school of scientists (and again I don't mean any on the payroll of Exxon etc) points to the PDO as a possible explanation for global warming beyond that of man-made emissions.I also note, again without qualification, that to jump on Australia's recent weather as “confirmation” of the impact of man-made emissions is to ignore the wider sample set. For example, the 2011 Brisbane flood did not quite reach the height of the 1974 Brisbane flood. Cyclone Yasi did not quite prove more severe than Cyclone Tracy, which also hit in 1974. Back in the seventies scientists were actually worried the earth was cooling, such that a new Ice Age may be upon us.Food for thought. FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

Investors sold the Aussie aggressively after minutes from the Reserve Bank's meeting said 'the evident caution in household spending would, if it persisted, reduce the pressure on prices that might normally be expected in an economy with very strong terms of trade and limited spare capacity' and have 'provided additional time for the board to assess at future meetings.'

The energy sector led U.S. stocks lower Tuesday as crude-oil futures fell, while a host of U.S. economic data left investors feeling uninspired.

US retail sales rose 0.3pct in January with non-auto sales also up 0.3pct. Economists had tipped a 0.6pct lift in sales and 0.5pct increase in non-auto sales.

Australian Dollar: Investors sold the Aussie aggressively after minutes from the Reserve Bank's meeting said 'the evident caution in household spending would, if it persisted, reduce the pressure on prices that might normally be expected in an economy with very strong terms of trade and limited spare capacity' and have 'provided additional time for the board to assess at future meetings.'

U.S. stocks ended lower on Tuesday as retail sales raised doubts about the economic recovery. Energy and basic materials equities led the way downward, albeit in moderate trading volume.

The world’s fifth largest mining (in terms of capitalisation) firm BHP Billiton reported a 72 percent increase in its first-half net profit today and revealed plans to return some $US10 billion to shareholders through a buyback.

Emerging market equities have lost their lustre to US equities this month, according to a February survey of financial managers world-wide conducted by a BofA Merrill Lynch Global Research.

The energy sector led U.S. stocks lower Tuesday as crude-oil futures fell, while a host of U.S. economic data left investors feeling uninspired. The Dow Jones Industrial Average shed 46 points, or 0.4%, to 12222. Exxon Mobil led the measure's decline with a 2.1% drop.

By Greg PeelThe Dow fell 41 points or 0.3% while the S&P fell 0.3% to 1328 (having peaked at its 100% gain from the GFC lows on Monday) and the Nasdaq dropped 0.5%.China's CPI for February was announced as 4.9% yesterday, up from 4.6% in January. Clearly the trend is continuing upward but there are a couple of points to consider. One is that Beijing changed its basket calculation in February which will have distorted the comparative result. The other is that economist consensus had 5.4%, meaning the result was actually lower than expected, but then word went out around the market before the release, apparently, that “the official number will be 4.9%”.So again we face the fact – and I mean fact – that China's data are concocted in Beijing. Not a lot we can do about it. New loan growth nevertheless fell in China which, if anywhere near accurate, suggests monetary policy tightening is starting to have an impact. It's not yet enough of an impact, however, for economists to suggest Beijing will ease up. Further rate rises are expected ahead.The UK last night released its January CPI (everyone else takes some time to work these things out) and it showed a jump to 4.0% from 3.7% in December. Pressure is building on the Bank of England to raise its cash rate from the 0.5% emergency low at a time when the country is under strict austerity budgeting. The eurozone's fourth quarter GDP came out at 0.3% growth, matching the third quarter but falling short of the 0.4% expected. A steady result nevertheless, but more attention was being paid last night to the meeting of finance ministers in Brussels. Agreement was finally reached on a permanent bail-out fund to the value of E500bn, but any further details or decisions on immediate debt problems were put off.There thus remains uncertainty in Europe, and the rolling unrest in the Arab world is spreading – right out of the Arab world. There are now protests in Iran, bringing the Persians into the mix to suggest it's not just an Arab thing, it's a dictatorship thing. Tunisia, Algeria, Egypt, Yemen, Bahrain, Iran – who's next? Remember the Berlin Wall.On Wall Street last night it was all about economic data. Punters were brought down a peg or two from their current euphoric high when the January retail sales number came in at only plus 0.3% which is the weakest rise since mid-2010. Heavy snow was, however, quickly blamed. The NAHB index of housing market sentiment stayed firmly stuck on a lowly 16 where it's been for four months now. This is a 50-neutral index.The Empire State (New York) manufacturing index rose to 15.43 from 11.92 last month which was a good result. But economists noted rapidly rising prices which are squeezing margins.Wall Street remained weak all day on the poorly received data, but commentators agreed that after a good run it was time for a bit of profit-taking.It's all about inflation across the globe at present. The US releases its CPI on Thursday but in the meantime gold pushed a bit higher last night, rising US$10.70 to US$1373.20/oz and no doubt keeping an eye on Iran as well as inflation. One might have expected oil to rise further on unrest in Tehran but last night Brent eased US83c to US$102.06/bbl.*The US dollar remained steady at 78.60 on its index but the Aussie has fallen 0.8% in 24 hours to US$0.9948. This is clearly a response to the minutes of the February RBA meeting, released yesterday, which yet again reinforced there simply will not be another rate rise for some time. Why Aussie dollar punters still jump at every bit of data (housing finance on Monday is an example) is a mystery.As I have noted, stocks and commodities have been moving in lock-step of late and as such some profit-taking was also experienced in London, where metals all fell back the same 2% or so they rose on Monday night. The flipside to the stock/commodity trade is bonds, and last night the US ten-year ticked down a couple of points to 3.61%.The SPI Overnight fell 6 points.It's another big data night tonight in the US with industrial production, housing starts, and the PPI all due for release, along with the minutes of the last Fed meeting.In Australia it's BHP ((BHP)) day (buyback?) within a batch of results which also include CSL ((CSL)) and Westfield ((WDC)).*Overnight Brent crude prices are now available in the FNArena price table alongside WTI, albeit we have now dismissed WTI as an indicator.[Note: All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.]FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

"I've listened to enough of your crap ! You're a ******* git !" – And then he began firing.- Michael Lewis' account of Irishman Gary Keogh throwing rotten eggs at the chairman of Allied Irish Bank, in his Vanity Fair article "When Irish Eyes Are Crying"."We have so much unemployment, it is so undercounted. The free market economists report that there is probably 22% of unemployment. They [the Fed] pumped in US$4 trillion, they should have added a lot of jobs, but how much did it cost us, and that of course is the price inflation that will come. We are moving into another 30 year period where we are going to see a reversal of interest rates, and we are going to see a crashing of the bonds like we saw 30 years ago and it's going to last a long, long time. The Fed deserves the blame for the inflation, and for the unemployment."- US Congressman Ron Paul.Mention "Holland" to people and you conjure up a variety of associations. Some think of a longstanding and spicy relationship of trading and military sparring with Britain that was formally salved with the Glorious Revolution of 1688. Some think of an impressively cultured and polyglot race. Some of us think of about two full school terms devoted to the Dutch Revolt that never actually featured in our History A-Level Exam, so thanks for that, Oxford and Cambridge Board. Now we can add another facet to this colourful and otherwise learned country: the quasi-fascistic bullying of an innocent pension fund.Website Zero Hedge reports that De Nederlandsche Bank went to court and forced the glassworkers' pension fund to sell most of its holdings in gold. The court sided with the central bank and ruled that the glassworkers' pension fund, with a 13% allocation to bullion, was investing in a way "inconsistent with the interests of the participants". Dutch pension funds are apparently, on average, invested in commodities to the order of 2.7%. Whether gold should even be viewed as a commodity is open to question. We would, of course, argue: No, it's natural money, and always has been. But at a time when central banks globally are busily depreciating their currencies (translation: stealing from their own citizens), what is extraordinary about the ruling is De Nederlandsche Bank's belief that the price of gold fluctuates too much for it to be classified as an investment. If the price of gold fluctuates, what about the value of paper currency ?Not only developing nations but western governments have form when it comes to stealing from their own citizens. Putting to one side recent raids on pension funds (the UK, France, Ireland) the most notorious and pertinent comparison with the current Dutch ruling was the US' Executive Order 6102 of 5th April 1933, under which President Franklin Roosevelt forbade the hoarding of gold coin, bullion and certificates by American citizens.We checked with an informed source [hat-tip and thanks, Eric] and the Dutch story and ruling appear to be correct (if not necessarily moral or legitimate in a broader sense). The ruling hinges on whether gold is money or currency (which the pension fund argued), or merely a commodity. But the upshot is that the fund is now forced to sell the majority of its (highly profitable) holding in bullion and replace it with government bonds, which one might fairly call instruments of confiscation in themselves.Man has used a variety of things as money during our relatively brief economic history – including cattle, shells, nails, tobacco, cotton, copper, silver and gold. Invariably, precious metals have been selected over the alternatives on account of their scarcity, durability, divisibility and beauty. The most important point, though, is that they were never forced on us. Through a gradual process of free choice, precious metals won against all other media of exchange in a free market. Man grew to using precious metals as money out of what J

-Mermaid Marine's interim result proved better than expected- Strong growth is forecast to continue- Stockbrokers have downgraded their ratings on valuation grounds By Chris ShawMarket forecasts for interim earnings for marine services provider Mermaid Marine ((MRM)) had been for a profit of around $19.5 million but the company was able to better this, delivering a result for the period of $20.4 million. This was an increase of better than 30% in year-on-year terms. According to commentary from stockbroking analysts post the event, Mermaid Marine's H1 report demonstrated the ability of management to leverage the capital it invested in FY10 to take advantage of improved market conditions and a dominant position in the company's core markets. Analysts at Credit Suisse noted the result was driven by strong operating performance from both the Vessels and Supply Base/Slipway operations.Strong earnings growth is expected to continue, company management indicating second half performance should be better than that recorded in the December half. This has prompted increases to forecasts across the market. RBS Australia, for example, has lifted its earnings forecasts by 2-6% through FY13.UBS has increased its forecasts by 2-8% over the same period and is now forecasting earnings per share (EPS) of 20c this year, 24c in FY12 and 26c in FY13. Macquarie's EPS forecasts stand at 20.7c, 23.3c ad 25.8c respectively, while consensus estimates according to the FNArena database stand at 20.7c in FY11 and 24.1c in FY12.These increases in earnings estimates have pushed up price targets, the FNArena database showing a consensus price target for Mermaid Marine now of $3.62, up from $3.36 previously. Targets range from Deutsche Bank at $3.45 to Credit Suisse at $3.80.Looking longer-term there are a number of potential growth opportunities for the company. Macquarie has identified the Gorgon, Macedon, Wheatstone, Pluto 2, Sunrise and Browse projects as examples of where the company could pick up additional business.There is money available to fund growth as well, as a recent placement and share purchase plan raised about $64 million. Most of this money has still to be spent. Macquarie expects the money will be put towards additional platform supply vessels.This should strengthen Mermaid Marine's market position, something Macquarie suggests will lead to further upgrades to earnings going forward. To reflect this view, Macquarie retains its Outperform rating on the stock post the interim result.This puts Macquarie at odds with most in the market, as post Mermaid's profit announcement the stock has been downgraded by UBS, Credit Suisse and RBS Australia. All three have lowered ratings to Hold from Buy, primarily on valuation grounds. The FNArena database now shows two Buy ratings and three Holds.UBS notes recent share price gains have lifted the share price to a smaller discount to its revised price target, so necessitating the downgrade. Credit Suisse has lowered its rating for the same reason, taking the view an estimated 15 times earnings multiple in FY12 only justifies a neutral view.Morgan Stanley is not in the FNArena database but it sides with Macquarie in retaining an Overweight rating, this as part of an In-Line view on Australian emerging companies. Morgan Stanley argues Mermaid's position in its markets should allow for the current strong growth trajectory to continue into FY12 and beyond.Shares in Mermaid Marine today are slightly weaker and as at 2.40pm the stock was down 5c at $3.27. This compares to a range over the past year of $2.25 to $3.40 and implies upside of around 11% to the consensus price target in the FNArena database.FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

Leighton Holdings, Australia's biggest contractor, has cut its interim dividend after reporting a 25% slide in half year profits and revealing a 6% reduction in its full year earnings estimate.The dividend was cut to 60c a share from 65c a share after earnings per share dropped to just 72c a share from 96.9c in the December, 2009 half year.A combination of losses in the Middle East and one major Australian project, the impact of the strong Australian dollar, bad weather and the floods in Queensland hit the company's bottom line in the six months to December 31.And the impact will be felt this half as well."The profit impact from the Queensland floods and excessive wet weather in Indonesia in the period to 31 December 2010 was approximately $40 million and, combined with other major wet weather events in the second half, is expected to impact on the Group's full year results by some $100 million for the full year," directors said yesterday.To counter this the company under new CEO, David Stewart has cut non-essential spending, made some senior management and organisational changes and has started reviewing some of the company's investmentsLeighton told the ASX yesterday it said it now expected annual profit of around $480 million, down from an earlier forecast of $510 million, as devastating floods have hit its mining contracting business in Queensland and a desalination project in Victoria.The actual fall might be larger because its unclear if the decline forecast is in net profit after tax or in operating profit (i.e. before the profit on the sale of the Indian business)Net profit fell to $216.7 million for December 2010 six months,

- Today's released RBA minutes confirm interest rates are likely to remain unchanged for some time- The RBA last hiked in November, by 25bp to 4.75% By Greg PeelIt's not really new news given RBA chairman Glenn Stevens has already aired his thoughts to the public via parliamentary testimony, but today saw the release of the minutes of the February monetary policy meeting.The previous meeting was two months prior but, leaving the weather aside for a moment, not much has changed since.Emerging market demand continues to boom and the developed world is also getting back on its feet. This is pushing up Australia's terms of trade at a time when investment in the resource sector is rising fast and unemployment is low. Under any normal circumstances, inflationary pressures should be building. Indeed, in November the RBA was sufficiently worried about such pressures to make a preemptive strike on inflation by raising the cash rate to 4.75% – a level it considered just to the restrictive side of neutral.But these aren't normal circumstances given the reverberations of the GFC. What the RBA hadn't counted on was the counteractive disinflationary influence of shell-shocked consumers and borrowers who have since seen the error of their ways and stayed out of stores and away from banks and credit card providers. Debt bad – savings good. This trend is not showing any signs of turning around in the short term and hence Australia's two-speed economy is balancing itself out to relieve medium term inflationary pressure.On that basis alone, the RBA currently sees no reason to tighten monetary policy further in the foreseeable future.Nor does the RBA feel the weather-related disasters in the interim period will meaningfully impact on this view. While tragic for many, there is again a balance of lost output and fresh spending on reconstruction to counteract on GDP growth and inflationary pressure.In marking its first board meeting of the new year, the RBA decided to recap. The minutes recall that the RBA has steadily removed the stimulus put in place during the GFC and by late 2010 had moved to a slightly restrictive stance. This was appropriate at the time and remains appropriate now.Thus importantly, the RBA believes that lower than expected inflation outcomes provide “additional time for the Board to asses at future meetings the evolving balance of risks”.This suggests the board now feels it can relax a bit after the turbulent period of the last three years. Then it was an every day proposition, a matter of keeping a very close eye on data, and a matter of being ready to strike swiftly and decisively. Now we are getting closer to what one might call those “good old days” pre-GFC. Monetary policy decisions do not need to be made on the hop. Rather, the RBA can assess the “evolving balances”. Evolution is a slow process, not a month-to-month process.No rate rise ahead for some time.Read the minutes here.FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

- Spot uranium, as determined by TradeTech, slipped slightly for the week ending Friday- One large seller seems to have been responsible- TradeTech does not believe spot market dynamics have changed By Greg PeelSupply of U3O8 into the spot market (as opposed to the term contract market) has been sparse over the past six weeks, notes industry consultant TradeTech, which is why the spot uranium price has risen considerably in the period. Sellers have backed off their prices and buyers have reluctantly been forced to chase.Last week, however, 500,000 pounds of U3O8 came onto the market from what TradeTech describes as a “non-traditional” seller, which one assumes suggests a speculative holder. This helped to ease the upward price pressure and as such the spot price indicator for the week fell US25c to US$72.75/lb.The supply was nevertheless cleared and by week-end 950,000lbs had changed hands at spot. TradeTech notes the sellers are again holding firm at higher prices and buyers have begun to realise they simply have to pay up. Hence there is little evidence last week's price dip will upset spot uranium's current upward trend.There were no transactions in the longer term markets and as such TradeTech's mid-term and long-term price indicators remain at US$75/lb and US$70/lb respectively.FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

SUMMARY- Thermal coal, fertiliser fundamentals remain favourable- Short-term support for iron ore prices- Palladium, alumina tipped to go higher By Chris ShawIn a not surprising outcome, Australian thermal coal export shipments were weak in January as those in the market had to deal with the impact of significant flooding in Queensland in particular. Macquarie notes Queensland shipments in January are likely to come in below 30 million tonnes on an annualised basis.Shipments for New South Wales in contrast remained steady at an annualised rate of around 102 million tonnes in both December and January. Combining the two implies total annual shipments of around 130 million tonnes, which compares to total thermal coal shipments in 2010 of 141.3 million tonnes. While the impact of the floods is fading, Macquarie suggests one constraint that may continue to linger is the incentive to switch from thermal coal production to production of semi-soft/PCI coal where possible. Macquarie notes recent semi-soft contract negotiations were settled at US$180 per tonne for the first quarter of 2011 and will be set at 80% of hard coking coal (HCC) prices in the second quarter. With HCC contracts to be settled at around US$290-$300 per tonne in this quarter, producers who can wash thermal coal into semi-soft coal may be able to take advantage of prices of US$230-$240 per tonne. This is well above the US$119.75 per tonne for the second quarter currently priced into Newcastle swaps.This suggests some switching is likely to occur, leading Macquarie to forecast total Australian thermal coal exports in 2011 will be in the order of 148 million tonnes. This, plus signs the market for spec coal is likely to be tighter than that implied by export growth from Newcastle, leads Macquarie to suggest there is upside risk to what is being priced into coal futures markets at present.This view fits in with that of Citi, who expects continued strong thermal coal prices as strong demand and supply restrictions continue to support the market. Citi estimates the rains in Australia will see about five million tonnes of thermal coal supply lost given the Queensland rail system remains closed, while it too picks up on the fact some producers are now giving priority to higher priced products such as semi-soft coal.Production in Indonesia has also been hampered by heavy rains, while a shortage of rail wagons is impacting on the Russian market. An easing in some of these restrictions saw thermal coal prices come back from recent highs, but Citi remains positive on price prospects in the market.One reason is if European demand for thermal coal was to recover, the global market would tighten significantly as coal from South America and South Africa is at present being delivered to Asia rather than its more traditional European markets. As well, Citi expects China will remain a net importer this year, as while domestic production continues to grow it is not increasing fast enough to keep pace with demand. India should also see significant increases in the amount of thermal coal it imports in coming years, as urbanisation and increasing electrical intensity continue to push up demand. Elsewhere in the bulk commodities space, Goldman Sachs notes the seaborne spot iron ore market has started the Chinese New Year strongly, prices either at or near record highs. This price strength had been expected and has been met by higher steel prices through Asia.Goldman Sachs expects this rally has further to run in the short-term, as steel demand from China improves and as major suppliers continue to deal with constraints. Longer-term though Goldman Sachs is more cautious, as scrap prices have fallen and steel price gains appear more a function of cost push from higher raw material prices than evidence of significantly stronger demand. Any weakening in underlying demand will see steel prices fall and as this would impact on margins Goldman Sachs suggests it could be a precursor to weaker iron ore prices. This is unlikely in coming weeks, but remains a distinct possibility in the second half of this year in the broker's view.Deutsche Bank in contrast sees scope for iron ore to remain somewhat scarce for the next two years, thanks largely to bottlenecks as mining companies build infrastructure and source equipment needed to handle the amount of material has to be transported over long distances. There is also potential for some structural issues in iron ore markets, Deutsche suggesting these include the Indian steel industry attempting to ban iron ore exports and a slow recovery in Brazilian export levels. Cost inflation in China may also emerge as an issue, pushing the marginal cost of production in that market to around US$115 per tonne.Deutsche expects steel production growth this year will decelerate after increasing by a double-digit rate next year, something that is likely to limit demand for iron ore. But with supply expected to continue to struggle to meet demand, the broker sees iron ore prices averaging US$175-$180 per tonne over the next two years.Turning to palladium, Standard Bank notes the metal continues to enjoy good price support on the back of solid industrial demand. Contributing here are auto sales, where numbers for major manufacturers were up in January. This follows steady improvement in 2010.Using adjusted sales numbers, Standard Bank suggests auto sales appear much more supportive for palladium than at the start of last year and more supportive than similar figures for platinum. A further seasonal pick-up is expected in February and March.On a six-month view Standard bank expects both palladium and platinum prices will head higher, but current market conditions suggest palladium is favoured to perform the better of the two metals.In the base metals, Goldman Sachs notes a recent recovery in primary aluminium production has driven an equally sharp improvement in demand for metallurgical grade alumina. The stockbroker estimates demand in 2010 was 87.6 million tonnes, forecasting this will increase to 111.2 million tonnes in 2015.Based on current estimates for refining capacity, Goldman Sachs estimates this would imply a steady increase in refinery utilisation rates in the low 90% range in 2014 and 2015, so as legacy metal-linked contracts expire in coming years it is expected the average contract price will converge with the spot price.This improvement in utilisation, along with increasing cost pressures, should be enough in Goldman Sachs's view to generate gradual price improvement. From levels of around US$340 per tonne (FOB) in 2010, the broker is forecasting alumina prices of US$371 per tonne this year and US$455 per tonne by 2015. Alumina Ltd ((AWC)) is the primary pure play on the Australian market, the FNArena database showing the company is rated as Buy twice, Hold five times and Sell once with a consensus price target of $2.70.Turning to the agricultural commodities markets, BA Merrill Lynch notes the USDA has lowered is 2010/11 global grain inventory estimate by 24bps to 19%. The change saw inventory estimates lowered for all crops.BA-ML suggests falling grain supplies should continue to support grain prices at elevated levels, so giving farmers encouragement to invest in agricultural inputs this year. This implies good news for fertiliser plays such as Incitec Pivot ((IPL)) and Nufarm ((NUF)), enough for BA-ML to rate both stocks as Buy at present.BA-ML is not the only one to pick up on this theme as the FNArena database shows Incitec Pivot is rated as Buy five times, Hold twice and Sell once with a consensus price target of $4.60, while Nufarm scores four Buys and four Sells and has a consensus price target of $4.82. FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

The AUD is currently treading water justabove the parity level this morning prior to the Chinesedata which is due to be released today.

Strong underlying Chinese economic data spurred the Aussie's rally to 1.0070 against the Greenback overnight.

U.S. stocks traded in a tight range Monday, as Wal-Mart weighed on the Dow Jones Industrial Average, but materials gained in the wake of a surge of Chinese exports and imports last month.

US President Obama has unveiled his fiscal 2012 budget proposal. The aim is to reduce the budget deficit by US$1.1 trillion over the next decade and cut the deficit from 10.9pct of GDP to 3.2pct of GDP by 2015.

By Greg PeelThe Dow fell 5 points while the S&P closed up 0.2% to 1332 and the Nasdaq added 0.3%.The news out of China yesterday, if accurate, was well received in all quarters. China's trade surplus fell to US$6.5bn in January from US$13.1bn in December to mark its lowest level since April last year. Chinese exports rose 38% over the previous January which is healthy for the Chinese economy but it was nicely balanced by a 51% increase in imports.Last decade, China's economy was all about exporting undervalued goods to the world supported by a pegged currency and lending back the receipts mostly to the US, thus exacerbating global imbalance. But now China's domestic economy is on the move, providing receipts to China's trading partners and correcting that imbalance.The two biggest imports were petroleum and iron ore, with copper not far behind. Rising commodity prices are clearly serving to bring down the Chinese surplus but Beijing will still be happy given the extent of surplus already held and the apparent strength in the domestic economy. America will be happy because it is selling goods to China – from fast foods to iThings and cars – while Australia is selling raw materials. Everybody wins.The news was not so pleasing in Europe overnight, however. Eurozone finance ministers again met in Brussels in their ongoing attempts to nut out a more formal plan for addressing financial crises in the zone both current and future. Unsurprisingly there are ongoing disagreements amongst members who are split over calls for further injections of funds and more severe reductions in debt.The feeling is that Europe is sliding inevitably towards its first default if debt restructuring in the likes of Greece and Portugal is not quickly forced. This is exactly what we were all worrying about this time last year. Portuguese debt continues to blow out in yield and over in Ireland the opposition party – which is all but guaranteed to assume government shortly – has pledged to force haircuts on the creditors of troubled Irish banks. Meanwhile in Germany, the distressed West LB Bank which required government support soon after the GFC, has announced another round of asset sales in order to stay afloat.None of which engenders much confidence in an improving Europe at a time when North Africa and the Middle East continue to see rolling protests which suggest an uneasy transition into who knows what. Bahrain has now joined in with Algeria and Yemen in mounting Egyptian style people power movements.Concern over Europe sent the euro lower last night and pushed the US dollar index slightly higher to 78.60. But commodity prices are no longer tethered to the greenback (conversely) and base metal prices shot up on the solid Chinese import numbers. Increases of around 2% across the spectrum saw copper easily reclaim the US$10,000/t mark.Growing Middle Eastern tension has seen oil rising steadily, and last night Brent crude jumped US$2.14 to US$103.08/bbl. West Texas actually fell US77c to US$84.81/bbl but the world is no longer looking at the parochial WTI as a relevant global indicator*. It was strength in the oil and material stocks on Wall Street which saved the indices from earlier weakness, on a day when President Obama tabled his new austerity budget, and ensured a relatively flat close.The S&P 500 may have only risen three points last night, but it crossed 1332. We recall that the GFC low marked in March 2009 was 666. Yes – the US stock market has doubled.The Aussie is still hovering above parity at US$1.0031 while gold continues its consolidation, rising US$6.20 to US$1362.50/oz.The SPI Overnight was up 7 points following on from yesterday's surge on Mubarak's departure and the Chinese data.Chinese inflation data is due to be released today which will keep the world on edge over Beijing's tightening efforts. In Australia the minutes of the last RBA meeting will be released.On the local result season front today's report highlights include AXA Asia-Pac ((AXA)), Brambles ((BXB)) and Foster's ((FGL)) along with a quarterly update from Westpac ((WBC)).* Look out today for our story “Death in West Texas” which explains the reasons behind WTI's fall into global irrelevance. The FNArena website will shortly publish overnight Brent crude prices in the price table.[Note: All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.]FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

By Rudi Filapek-Vandyck, Editor FNArenaThe Conscious Investor, Profiting from the Timeless Value Approach, by John Price, PhD.Let there be applause. "The Conscious Investor" by John Price is one mighty effort. No doubt it will be of great assistance to anyone seeking to master the art and practice of establishing a value for share market listed equity. However, and there is one big however, the most important characteristic of "The Conscious Investor" is not what is printed on its 366 pages, it is what has remained absent and that should have been a passionate plea about why valuing shares is something every serious long term investor should embrace.There are two obvious catalysts for making this point. One is that many self-do investors have been burnt, and badly so, by the relentless sell-offs in global equity markets between late 2007 and early 2009. The experience has not only left a lasting sour taste with prospective retirees, leading many to simply abandon the market place, but it has also transformed large numbers into punters and traders with a shorter-term market focus. Big drivers behind remaining investor interest are now "momentum" and technical charting, not "value" with patience having all but evaporated.The second catalyst is the book itself. The Conscious Investor is a marvelous and insightful, thorough compilation with encyclopedic quality of known, popular and lesser known methods -even including the obscure- to generate a valuation for corporate equity. It combines the weird and the wacky with the straightforward and the practical. At times, however, the reader is left with inner discomfort, possibly even disappointment as all valuation techniques have one painful conclusion in common: they are all imperfect, one way or the other. This then leads to obvious questions such as "why exactly did I just read that chapter?", "is this really going to help my understanding of the share market?", culminating into the obvious "should I be paying attention to any of this?"Readers who have been reading my personal analyses and observations throughout the years know the answer to that last question is a firm "yes". Because if you're participation in the market is not aimed at making an extra buck in the next five minutes, then "valuation" might just turn out to be your best friend. But you gotta have confidence and patience too. This is why I think John Price should consider adding a chapter or two for the next edition, and make it a personalised, passionate recourse of how and why a combination of decent research, a cheap valuation and a good amount of time more often than not will generate returns most market participants can only dream about.In the absence of such two chapters I think The Conscious Investor comes with a major risk; it risks sapping one's enthusiasm for true and genuine value-investing. As much as the author's drive to explain and document thoroughly, and to display pros and cons, has produced a truly handy investment bible for valuers of corporate equity, it also provides plenty of potential discouragement for the lesser experienced and the not so confident. I am making this statement as an analyst of financial markets who's equally passionate and convinced that when it comes to investing, valuations do matter, even if that isn't always immediately apparent to those with a shorter-term focus.The information on display is diligent, impartial and well-documented. Those with a similar passion for value-investing can only be grateful for the time and the passion that led to the end result achieved. A passionate plea that mastering this essential skill in order to become a successful investor is definitely worth the time and effort would make The Conscious Investor an even better achievement. This is one book that will retain a prominent spot on my book shelf.The Conscious Investor. Profiting from the timeless value approach by John Price, PhD was published by Wiley Finance. 366 pages with a hard cover. Recommended Retail Price $62.95 but those interested can purchase a copy for $56.65 via the FNArena Investment Shop (see website).Readers interested in more book reviews can also read the following stories:FNArena Book Review: The Profit PrincipleFNArena Book Preview: How an Economy Grows and Why it Crashes – by Peter and Andrew SchiffFNArena Book Review: Shares & Taxation by Jimmy B PrinceFNArena Book Review: The Big Short by Michael LewisFor those readers looking to purchase the next investment book at a discount, we have lined up our Top Ten of Best Selling Books:Shares and TaxationShares to Buy And WhenTrading from Your GutTop Stocks 2010Way of the TurtleTrade Your Way to Financial FreedomCatherine Davey CFD Twin PackTrading For A LivingTrading in the ZoneSecrets for Profiting in Bull and Bear MarketsFor more information on these books/discounts available, see http://www.moneybags.com.au/default.asp?d=0&t=1&c=148&a=171FN Arena is building the future of financial news reporting at www.fnarena.com . Our daily news reports can be trialed at no cost and with no obligations. Simply sign up and get a feel for what we are trying to achieve.Subscribers and trialists should read our terms and conditions, available on the website.All material published by FN Arena is the copyright of the publisher, unless otherwise stated. Reproduction in whole or in part is not permitted without written permission of the publisher.

SUMMARY- Demand for lithium is projected to rise for years to come- Australia harbours the world's largest producer- Talison Lithium (TSX – TLH) is listed on the Toronto Stock Exchange- Galaxy Resources ((GXY)) also offers exposure (see "Lithium Reaches For The Stars", Sell-and-Buy-ology, published on March 17, 2009) Talison Lithium - The World’s Only Pure Lithium ProducerBy Richard (Rick) Mills, Ahead of the herdAs a general rule, the most successful man in life is the man who has the best informationThroughout our history, some elements, much more than others, have advanced technologies and driven our economic growth – from wood to coal and then to burning oil to produce steam stands out as a recent example.Today we are witnessing a revolutionary change in the way our electrical storage needs are being met.Leading the change is lithium, which until very recently, has been used primarily for the production of aluminum, tritium, ceramics, high temperature grease and glass.But lithium makes an excellent battery for use in a wide range of applications - batteries using lithium have been found to have a high energy to weight ratio, can be molded into amazing shapes and have longer lives than conventional batteries.And when used as a rechargeable battery there is no memory effect.Talison Lithium Inc. (TSX – TLH) is the world's largest primary lithium producer - production from its Australian operation fills roughly a third of the world’s lithium demand and supplies 75% of Chinese demand.Talison began trading on the Toronto Stock Exchange September 22nd 2010. The company’s initial public offering (IPO) raised $40 million. An additional bought deal financing of $80 million, including over allotment, was recently announced. This money is being used to nearly double production at their Greenbushes lithium mining operation in Australia, and exploration at their new Salares 7 project in Chile.The Greenbushes Lithium Operation has been producing lithium for over 25 years. The mine is located 250 kilometers (km) south of Perth/Fremantle - a major container shipping port - and 90 km south east of the Port of Bunbury - a major bulk handling port - in Western Australia.The Greenbushes ore body is a highly mineralized zoned pegmatite with a strike length of more than three km - Greenbushes mineral reserve is unique, it grades 50% spodumene. This makes Greenbushes the highest grade lithium mineral resource in the world at 3.9% Li2O mineral reserves and 3.5% Li2O mineral resources versus 1.0 – 2.0% Li2O for other known hard rock deposits.Talison’s Greenbushes lithium mineral resource is open along strike and at depth so there is significant potential to increase lithium mineral reserves and mineral resources extending the life of mine (LOM) while at the same time increasing production rates.Talison’s Greenbushes Lithium Operation produces two categories of lithium concentrates:• Technical-grade lithium concentrates - low iron content for use in the manufacture of glass, ceramics and heat-proof cookware• High yielding chemical-grade lithium concentrate - used to produce lithium chemicals which form the basis for manufacture lithium-ion batteries for laptop computers, mobile phones and electric carsTalison does not produce lithium chemical products, instead the company sells lithium concentrate directly to customers for processing into lithium chemicals. Presently Talison is expanding its lithium production to supply the growing need in the battery market. Talison designed its initial Stage 1 expansion to increase total production capacity to approximately 62,000 tonnes of lithium carbonate equivalent.Aggressive and continual demand caused Talison to plan for further expansion by nearly doubling the current run-rate production of 50,000t lithium carbonate equivalent to 100,000t - the Stage 2 expansion of the chemical-grade plant is being funded by the recent $80 million financing. Long lead time items for the expansion have already been ordered.Most of the world's lithium comes from a small group of producers:• Talison• Sociedad Quimica y Minera (SQM), the Chilean national mining and chemical company• Chemetall, part of Rockwood Holdings• FMC, part of FMC CorporationTalison is the only primary pure lithium producer in the group and is the only one of the four not producing from brine operations in South America.Talison’s IPO completed the merger between itself and Vancouver based Salares Lithium Inc. Talison bought Salares Lithium to get control of of their early stage Salares 7 lithium brine project in Chile.This two pronged approach – combining hard rock and brine mining in one company - towards meeting increased global demand for lithium makes a lot of sense. Lithium production from brine is dependent on the weather, if the sun isn’t shining evaporation rates suffer - but brine mining lithium has the added benefit of potentially low cost production with margins as high as 50%. Meanwhile production of lithium from hard rock carries on 24/7/365.Ahead of the Herd Special ReportBrine MiningThe synergies of the two production methods, together in one company, means guaranteed delivery of lithium supplies to Talison’s customer base with potentially lower overall production costs.Talison’s “Salares 7″ project is siutated in the Atacama Desert, Chile. Drilling is expected to start in early February 2011. The potential for potash credits may very well come along with this drill program.The “Salares 7” lithium project consists of 117,904 hectares with over 39,400 hectares of exploration potential solely within actual salares/brine lakes. Historic sampling (non NI43-101 compliant) has returned lithium and potassium in all seven salares with grades up to 1,080 ppm lithium and 10,800 ppm potassium.Talison controls 100% of five of the salares.Surveys have presently been conducted on two salars:Salar de la Isla - Encompasses a total of 16,500 hectares and is approximately 22 kilometers long and 6 km wide on average. The northern area surveyed and studied comprises approximately 65% (10,750 hectares) of the areal extent of the salar.Using the results obtained from the 38.5 line km survey, Geodatos SAIC ("Geodatos") of Santiago, Chile constructed a three dimensional model of the distribution of the interpreted brine bearing horizon.Using a resistivity cut-off of 1 ohm/meter (interpreted by Geodatos as definite brine), Geodatos than calculated the brine bearing horizon within the northern portion of the salar to have a volume of 2.459 billion kilolitres (a kilolitre is equal to a cubic meter). Using a resistivity cut-off of 2 ohm/meters (interpreted by Geodatos as possible brines) the calculated volume of this horizon increases to 5.393 billion kilolitres.Salar de las Parinas – This salar is situated approximately 6.5 kilometres southeast of the Company's Salar de la Isla and encompasses a total areal extent of 5,400 hectares. The TEM survey lines for Las Parinas were extended beyond the boundaries of the salar onto areas covered by alluvial and/or volcanic material. The survey identified a continuous brine bearing horizon that extends up to 2.5 km from the salar’s edge and underneath the adjacent rocks.Using the results obtained from the 26.5 line km survey Geodatos constructed a three dimensional model of the distribution of the interpreted brine bearing horizon. This horizon extends from surface to a depth of 170 meters.Using a resistivity cut-off of 1 ohm/meter (probable brine) Geodatos has calculated the brine bearing horizon within the surveyed portion of the las Parinas salar to have a volume of 1.177 billion cubic meters. Using a resistivity cut-off of 2 ohm/meters (possible brines) the calculated volume of this horizon increases to 4.009 billion cubic metres.Share StructureShares Issued: 93,529,157Options: 6,699,915Warrants: 2,472,916Fully Diluted: 102,701,988Cash: $38,000,000 (As of December 31st.) Pre-FinancingConclusionTalison, as the only pure producing lithium play, offers potential investors many attributes:• Unique exposure to both mineral (hard rock) and brine sources of lithium• Talison is the primary lithium supplier to China – China is the largest and fastest growing consumer worldwide• Growing demand for lithium from traditional uses and new applications• Proven and experienced leadership• Highest grade lithium mineral resource in the world at its 100% owned Greenbushes operations• 25 years of lithium production and sales history• Well established and diversified global customer network• Low cost, rapid plant expansion currently in progress• Salares 7: prospective brine exploration project in Chile• Potential lithium carbonate plant in Western Australia• Talison is the largest lithium producer globally by sales since 2009Talison has been included in the Solactive Global Lithium Index. Global X Lithium is the world's first lithium based Exchange Traded Fund (ETF) and uses the Solactive Global Lithium Index to track the performance of lithium mining, refining and battery producing companies.Talison increased sales in the three months ended December - the company's second quarter - to 97,559 tonnes of lithium concentrate, 54% higher year over year (yoy). Both production and sales rose to company records in the December quarter.Talison is producing at capacity and sells 100% of its production. The companies output will continue to rise from the recently completed Stage 1 expansion and the recently initiated Stage 2 expansion will add to production levels in the future.Global lithium carbon