likely to rise 5 percent today

It looks like rams will rebound strongly today. I called rams to fall friday but some strong sentiment over the weekend and likely decreased volume should push the stock up this afternoon.

Funding deals are coming together - scotlands RBS has raised £3.5 billion ($8b AuD) for its stake in ABN which was eight times oversubscribed with bids amounting to well over £25 billion ($57b AuD). A growing wave of liquidity is returning as cash holdings held back are sought to be returned to the CP market.

Milton Ezrati, senior economic and market strategist with investment fund Lord Abbett, in Jersey City, N.J. argues the increasing possibility of more US rate cuts, means it's time to start moving into high-quality corporate paper. Yields on 2 yr bonds were at 3.94 percent on Wall Street Friday, falling 11 bp since Monday's close. Ezrati argues yields on AAA CP will fall even further - with prices rising and yields falling 50bp.

Bidders are also emerging in the obscure market for top-rated securities backed by credit-card receivables - spreads vs. LIBOR narrowing to around 37 basis points vs. a crisis high of 50 and a good-times low of nearly zero, according to Jane L. Caron, chief economic strategist of Dwight Asset Management in Burlington, Vt. One clear indicator of recovery is that investors are finally distinguishing between risky and less risky AAA rated securities instead of trashing them all equally. 'There's just a little more clarity out there now rather than people acting like deer in the headlights,' says Frank Pallotta, a managing director in Morgan Stanley's fixed income division.

For rams which is pitching its first issue for its lower grade loans, this means that if it can get these away around 53bp then worries over the future look debunked. Issues with less of these low doc elements will attract lower spreads. Indeed the lead manager NAB has said investors are now beginning to worry with spreads falling they need to get in asap . Global head of securitisation at NAB Capital Manny Arabatzis, said in the AFR: 'Is 40bp the right price? Do I jump in now because it may be 30bp next week'.

Also as of next monday the RBA will take AAA RMBS as security, which will make issues like rams particularly attractive to investors.

Everything is building to build demand for strong RMBS issues on AAA debt. Rams is coming together and once the first deal is announced confidence will begin to be restored and the AFR reckons this will encourage instos back on board. I remain bullish longer term and will continue to buy on any dips but today I see it rising solidly.