TLG Chart, page-3999

Hi Rainman

I was a little surprised by continued buying pressure this week after the record date for loyalty options last Friday.

Then the penny finally dropped.

I hold TLG both inside and outside my super. With the removal of TLG from the ASX300 index on the 23 Sep I will not be able to buy TLG shares in my super account..

Looking a long way down the track I can feasibly see TLG eventually trading at $5.00. If I sell a portion of my non-super holdings to get some spending money then any profit will be eligible for CGT. Lets say my average price for these non super holdings in $1. After a sale of some shares at $5 that's initially $4 profit, but after the long holder 50% discount then the CGT will be $2. This could be offset a little against any past trading losses, but without that then a CGT bill of around 64c per share will be due.

However with my superfund because of my age no CGT due. There is a big difference.

So I think that some of this buying pressure is coming from people who want to top up and average down their entry share price through their institutional super funds. That stops as of the 23 Sep.

Secondly some buyers will believe rightly or wrongly that the SC news is due this soonish.

Thirdly while TLG is not heavily shorted any recall of loaned shares could force shorters into the market unless they have acquired enough shares in the down trend to return them without them entering the market. Not serious pressure.

Meanwhile investment funds holding shares, in balance with the index, will be selling shares of the companies removed from the ASX300 index and using the funds to acquire the shares of the companies that are new inclusions to the index. So this process should build towards that 23 Sep date and even a few weeks afterwards. They don't have to get the company portions exact on that date.

So next week and then especially the following week before the end of Sep should prove interesting.

But DYOR

cheers Lies