Hi Ht and MX.Ht where did you get the takeover premium for SFR...

Hi Ht and MX.

Ht where did you get the takeover premium for SFR of 30% you used in your calculations? Is that a standard? I would have thought a premium of 20% may have been enough although any takeover of SFR is likely to be hostile and therefore may require a higher premium.

Mx in answer to your question there are a few Australia specifics we could talk about:

1. The Govt. I don't think I have ever seen any govt of Australia launch such a sustained attacke on private enterprise like this one has. Carbon Tax, MRRT, Industrial relations etc all at the same time. Some of these may be morally right, but all at the same time?

2. Exposure to Asia. A number of commentators believe that in any world economy meltdown this time, the asian sector is likely to suffer worst.

3. I think there has been an unhealthy shrinkage in the base of the Australian economy away from value add services, which means we are more a primary producer than before and at the mercy of the demand requirements elsewhere.

4. Our interest rates are comparatively high

5. I believe we are starting to see increasing competition for capital and investment and for our products from elsewhere, particularly Africa.

Having said that I agree with you (and the govt) that the economy is fundamentally sound, with good financial markets, low debt etc. I think the Aust market has been oversold and will bounce back. Because our interest rates are highm, we do have the ability to stimulate our economy, but any stimulus the govt can provide is unlikely to impact on the mining sector and in particular OZL.

My thought and happy to be challenged or discuss.