mga buyout of rpt, page-16

Hi dial

I don't know you're timeframe for holding Mega as yet?

Right now the exchange rate $C $A is not a concern for me. The reserve bank here has increased the rate by .25% again to combat inflation. America US$ is tanking and they are pointing to a recession in mid 2007 As demand of commodities drops we will see a reduction in interest rates in Oz over time which will in tern lower our $ value against World currencies. For me, buying core holdings in Mega and other U companies here in Oz is insurance against a protracted recession in the USA if it happens.


I probably will hold Mega until the State Governments give mining the green light. Watch Mega go ballistic then.

Below is some information as to why the C$ tanked and the sheep here sold down most U stocks last week or so, coming back now. (The Canadian dollar fell 0.82 of a cent to 88.22 cents US. “see below”)

You will make a lot of money if you are patient.

Could be wrong but it’s my view atm.

Hope this helps.

Cheers.


Canadian Press
Published: Wednesday, November 01, 2006
TORONTO -- The Toronto stock market plunged almost 300 points Wednesday as investors dumped income trusts and blue-chip companies planning to convert after Ottawa announced changes in how the popular vehicles are taxed.

The S&P/TSX composite index fell 294.2 points or 2.4 per cent to 12,050.39 after Ottawa’s announcement late Tuesday that trusts will be taxed more like corporations -- the biggest single one day drop in two and a half years.

The TSX income trust sector fell more than 12 per cent, wiping out about $20 billion from the sector.

What you need to know about income trusts
More breaking business news headlines

“The quality of the companies isn’t the issue, it’s the valuation that gets put on them,” said Ian Filderman at Scotiabank wealth management.

“There are some very good companies that happen to be in trust form right now. And I’m actually quite impressed at how well the market seems to be taking this -- I don’t sense any panic, what I really sense is a very orderly review of: 'What does this all mean and how does this impact on the strategy in my holdings?’”

New York markets were weak as investors balanced an upbeat forecast for private-sector jobs created in October with other data showing the U.S. manufacturing sector expanded at its slowest clip in more than three years in October.

The Dow Jones industrials were off 49.71 points to 12,031.02.

The proposed rules would apply a new tax on the money distributed to shareholders by newly formed income trusts and would tax “certain distributions” of income by trusts at corporate rates.

The rules are expected to apply to all publicly traded income trusts other than those that hold passive real estate investments.

Prominent casualties on the TSX included two companies that helped push Ottawa to tighten up the tax rules on trusts.

Telecom giants BCE Inc. (TSX:BCE) and Telus Corp. (TSX:T) had both announced plans to convert to trusts in the last two months.

Shares in Telus, which said the new trust rules put its planned trust conversion in doubt, were down 13.5 per cent to $56.15 while BCE shares fell 11.35 per cent to $28.10.

BCE said it will evaluate its options in the wake of federal Finance Minister Jim Flaherty’s restrictions, and retirement home operator Extendicare Inc. (TSX:EXE) said it will delay its conversion plan.

BCE also announced Wednesday that its profits fell to $285 million or 36 cents a common share for the three months ended Sept. 30, from $441 million or 48 cents a share for the same 2005 period.

The Canadian dollar fell 0.82 of a cent to 88.22 cents US.

The TSX Venture Exchange was up 8.61 points to 2,585.25. In New York, the Nasdaq composite index was down 32.36 points to 2,334.35 and the S&P 500 index gave back 10.13 points at 1,367.81.

ADP-Macroeconomic Advisers said it anticipates an increase of 128,000 private-sector jobs when the U.S. Labour Department reports payroll figures Friday.

But the Institute for Supply Management said its manufacturing index registered 51.2 in October, below September’s reading of 52.9 and at its lowest level since June 2003. Analysts had been expecting a reading of 53.

Data on the housing market also bolstered fears of an economic slowdown. Pending home sales for September fell 1.1 per cent, down 13.6 per cent from a year earlier.

On the TSX, other trusts hit by the announcement included Canadian Oil Sands Trust (TSX:COS.UN), down 9.9 per cent to C$27.41.

Penn West Energy Trust (TSX:PWT.UN) fell 14.4 per cent to $36.12, Yellow Pages Income Trust (TSX:YLO.UN) plunged 19 per cent to $12.26 and CI Financial Income Fund (TSX:CIX.UN) fell 20 per cent to $24.

But RioCan REIT (TSX:REI.UN) was down just nine cents to $24.43, since the proposed new tax rules aren’t expected to apply to trusts that hold passive real estate investments.

The TSX energy sector was down 5.15 per cent, largely as a result of the pressure from energy trusts. The energy trust sector alone fell 13.1 per cent.

Oil prices were stable even as the U.S. Department of Energy reported a rise in crude inventories of two million barrels last week. The December contract for crude on the New York Mercantile Exchange was down two cents to US$58.71 a barrel.

EnCana Corp. (TSX:ECA) fell C$1.07 to C$52.26 in Toronto.
© Canadian Press 2006