citi cuts anz target to 23.90, page-17

1)TA its at the very bottom of their long term support line

2)ANZ losing some of their legal cases, they wont lose them all but some of their cases are hard to win. Where there has been direct involvement of ANZ staff in beneficial ownership assurance for instance.

3)Justice Finkelstein's attitude and the "test case" to decide whether the contract is a share-lending or share-mortgage contract

"I want to determine what the agreement means,"
"This is a live issue right around the country"
"I am not sure I can tell what this contract means"

If the judge decides that the clients in fact entered into share-mortgage arrangements with Opes, and not share-lending contracts in which they gave up all rights to their securities, then the Opes clients might be able to claim their losses directly from Opes' financiers.

4)The lawyers smell blood

http://www.theaustralian.news.com.au/story/0,25197,23519667-17044,00.html

I have had some personal exposure to friends lawyers her are litigating there is a general belief that ANZ are on shaky ground on some of the larger cases

5)ANZ's $1.5bn Chimaera connection, if Justice Finkelstien finds that the contract constitutes a share-mortgage then the entire business model will collapse ANZ could find itself with $1.5B in exposure to Chimaera with little security

6)Mike Smith taking personal charge of the investigation, this shows he is very worried about path of these issues, if the fiasco was over and done he wouldn't be leading the witch hunt, bringing on independent experts is another way of preparing for a major storm. This move (a good one) places him right at the wheel when the storm hits.

7)ANZ's undisclosed exposure to the US fixed interest bond market, at the moment this is hidden from view because the bond insurer counter parties are still rated AA a downgrade to B level of any of his counter parties forces him to make debt provisions.

Remember $15 is only another 25% drop if Finkelstein rules against ANZ even on just one case then the ANZ price will cliff dive off $20 and sentiment will take it lower than the $18 folks have been discussing.

Remember Finkelstien has commented that he saw no reason why ANZ should not be forced to re aquire the shares at market.

This could force ANZ into a very difficult position where they are trying to acquire shares in a market where the entire market knows how many shares they need to buy .

Its a nightmare scenario for ANZ that could unfold before the end of April.