Given that valuations at the start of the year were already above-average and earnings expectations are barely positive, one could only put the early 2015 Australian share rally down to central bank policy, both domestic and foreign... There will be two waves in Australia from the search for yield surge and we are currently seeing the first with lower bond yields sparking a rise in valuations with investors paying above-average prices for below-average earnings. However, there is likely to be another large wave which may have started yesterday as cashed up global businesses take advantage of the declining Australian dollar and make bids for our large industry leaders. The Japan Post bid for Toll Holdings was excessive and won't be the last. Indeed, in the next six months is a significant rise in the level of M&A in Australia is expected to as the lower Australian dollar offsets the valuation premium that global companies have to pay to acquire their targets. Toll will not be the last, nor the largest takeover in 2015. (VIEW LINK)