Market Update

General - Costa Grroup - Prairie Mining - Sugar

Good afternoon

Trump looks like declaring a State of Emergency, as he is fearful for the security of the United States because of not having a wall to Mexico - how deep can this country fall???

CPI and Average Weekly Earnings in the States exactly in line with expectations at 1.9%.

Germany`s Minister of Development and Aid is stuck in Zambia since Monday, as his German and state-owned plane cannot fly because of a valve…well, Angie was late to the last G7 because of her plane not being able to either…Made in Germany….Sounds like an April-joke, but it´s fact!

Equities doing surprsingly well, once again, in Europe today so far - and metals as well! Nickel up nearly 2% at lunch time..stocks falling quite heavily again…nearly 4.000t in two days. Gold ETF holdings rising again for the 10th consecutive day.

The A$ is gradually overcoming it´s recent burst of weakness…now at 0,722 against the US, which is still below most analysts forecast of 74-75ct for this year. Incredibly enough, oil up again - Brent now trading at 62,3 US$ = up by 25% from recent lows. Momentum-Investment in full swing driving the biggEst weekly gain in two years.

Macquarie analysts see indications for much larger than expected cuts in subsidies for EV´s of 50% or so, to be announced in late Jan/eraly Feb.

Costa Group - I ahve been following them for while - but have been a shareholder only for a brief period last year. The stock became one of the market darlings and saw a material expansion of PE´s. Yesterday, the company announced a profit warning and fell out of bed. Code is CGC. Costa produce berries, tomatoes, mushrooms, citrus fruit and Avaocado in Australia, Marocco and China. In fact, often our daily Blackberries are from Marocco, produced by Costa. Hard to call this company an agricultural stock . it´s more industry than agriculture. But the tendency to good quality and healthy food is clearly benefitting them, and Costa is an excellent and generally well management company, with a lot of technical know-how. I am carefully watching them - their result will be out in late Feb, and as so often a second disappointing might well be following the first one. I will probably be waiting until then - but this is a quality investment, and hopefully, we will see even better investment opportunities coming up here.

Sugar - I have been a shareholder in an unlisted, quite substantial sugar-growing company in Australia for a couple of years, and will be looking to raise some capital for them later this year. Australia hs historically been a large sugar exporter, and is generally regarded as a very low cost producer. The best land available for growing sugar cane in Australia is the Burdekin in Queensland, where the company is one of the largest growers. The company has been growing quite nicely over the years, continually raising capital, whenever opportunites to aquire land and to consolidate their large ground position in the Burdekin became available. Cash Yields from farming sugar cane are unheard of in Europe and most other places, and the company has a good track record of growing returns / ha from aquired land. Economies of scale in this unusually fragmented farming area are still to be achieved, and the company has the backing of some of the best sugar-people in Australia. If you would be interested in average , high-single digit increases in land value in Australia, and a mid-single digit, yearly dividend on average, please give me a call to discuss.

Prairie Mining - two deputy CEO´s got the sack against the will of the unions - but the CEO himslef is staying on. He is important for the deal with Prairie Mining to go ahead - but certainly not good, that government as major shareholder and unions are fighting each other. Makes it much harder to get to a sensible transaction re Prairie….

The Aussies continue to be mainly interested in Cricket and Tennis…not much happening . It just took me 5 min to go through all ASX-announcements today!

I hope that next week will see some pick-up in activity….

Have a nice weekend


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