Gold and silver rise to lift Randgold, Fresnillo and Petropavlovsk, FTSE 100 tacks on 1.8%
Overview: the FTSE 100 held on to its early gains to stay above the 5,200 mark on Monday following a bullish start in the US, where the key stock indexes gained more than 1% in early trade following the weekend’s meeting of G20 ministers, which signalled that the stimulus initiatives would stay in place. The news lifted commodity prices to bolster mining and oil & gas stocks.
The Dow Jones Industrial Average rose 1.1%, while the broader S&P 500 index and the technology focused Nasdaq composite both added 1.5%.
The UK blue chip index added almost 2%, buoyed by gains in the mining and financial sectors.
Partly nationalised bank Royal Bank of Scotland (LSE: RBS) took over the lead in the FTSE 100 from insurer Prudential (LSE: PRU), which was in demand after German counterpart Allianz reported good quarterly results. RBS climbed 6.5%, while miners Kazakhmys (LSE: KAZ) and Fresnillo (LSE: FRES) followed, bolstered by higher precious and base metal prices.
Prudential (LSE: PRU), whose gains were trimmed to 4.5% to put it in the middle of the leaderboard, was the only other non-mining stock to make it to the top risers list.
Not much was going on at the bottom of the index as no FTSE 100 constituent shed 1% or more with the exception of telecom company Cable & Wireless (LSE: CW), which declined 2% late in the afternoon. Security group G4S (LSE: GFS) was close with a 0.9% slide following a disappointing trading update. Commercial property company Segro (LSE: SGRO), clothing retailer Next (LSE: NXT), retailer Tesco (LSE: TSCO) and airline British Airways (LSE: BAY) followed with losses of about 0.5%.
Cadbury (LSE: CBRY), which today turned down another bid from American food giant Kraft Foods (NYSE: KFT), which failed to improve the initial offer that was rejected by Cadbury in September, declined 1% in the afternoon, but was able to get back to the opening level.
Commodities
Oil prices improved today with December Brent Crude reaching US$77.56/barrel, while US light, sweet crude for December delivery rose to US$79.21/barrel.
All blue chip oil and gas stocks were on the rise today. Cairn Energy (LSE: CNE), Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) emerged at the top performers in the sector with gains of 3%. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) advanced 2% and 2.5% respectively. BG Group (LSE: BG) added 1.3%.
Midcaps didn’t show much movement with the exception of Heritage Oil (LSE: HOIL), which rose 4.5%. Fellow mid tier oil company Dana Petroleum (LSE: DNX) posted marginal gains, while Dragon Oil (LSE: DGO) was flat.
North Sea explorers Xcite Energy (AIM: XEL) was among the leading risers in the sector, rallying 10%. Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) followed with a gain of over 9%. North America focused oil & gas junior Pantheon Resources (AIM: PANR) added more than 7%, while US focused junior Empyrean Energy (AIM: EME) and Ukraine focused gas producer Regal Petroleum (AIM: RPT) advanced 5% and 4.5% respectively.
North American based explorer Nighthawk Energy (AIM: HAWK) tacked on almost 4%, while Kazakhstan operating Max Petroleum (LSE: MXP) and Mongolia-focused Petro Matad Ltd (AIM: MATD) added 3%.
Energy investor Xtract Energy PLC (AIM: XTR) went in the opposite direction, sliding 4%, while Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) and Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) both lost 3%.
Miners climb as gold breaks through $1,100
Major mining stocks were buoyant after precious metals increased with gold breaking through and holding on to the US$1,100/oz mark. Silver and platinum rose to US$17.66/oz and US$1,354/oz respectively.
Silver miner Fresnillo (LSE: FRES) led the sector with a 5% advance. Fellow FTSE 100 constituents gold miner Randgold Resources (LSE: RRS) and platinum producer Lonmin (LSE: LMI) gained 3.5% and nearly 4% respectively.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose 1.7%.
Midcaps also were in demand. Gold producer Petropavlovsk (LSE: POG) led the mid tier miners with a 4.4% advance. Aquarius Platinum (LSE: AQP) gained 3.2%, while silver producer Hochschild Mining (LSE: HOC) added 3%.
Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM), South American based explorer Mariana Resources (AIM: MARL) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) led the juniors, surging 13%, 11% and 10% respectively.
African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO), Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) followed with gains of over 7%.
Philippines focused gold producer Medusa Mining (AIM&ASX: MML) and Argentina focused gold explorer Patagonia Gold (AIM: PGD) both tacked on 5.5%. Western Australia operating Norseman Gold (AIM: NGL) added almost 5%.
Tajikistan operating gold miner Kryso Resources (AIM: KYS) and Africa focused gold miner Pan African Resources (AIM: PAF) added 3.5%.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) went in a different direction, sliding 5.7%. Africa operating gold miner GMA Resources (AIM: GMA) and Brazil focused gold miner Horizonte Minerals (AIM: HZM) also were in selling mode, shedding 3%.
Copper and nickel slide
Base metals slid during the day, still marking a slight improvement from Friday’s levels. Copper was down to US$2.97/lb, while nickel declined to US$7.87/lb. Zinc was just short of US$1/lb.
Kazakhmys (LSE: KAZ) led the sector with a 6.3% climb, while Rio Tinto (LSE: RIO), Vedanta (LSE: VED) and Xstrata (LSE: XTA) followed with gains of 5%. Anglo American (LSE: AAL), Antofagasta (LSE: ANTO) and BHP Billiton (LSE: BLT) all added more than 4%, while Eurasian Natural Resources (LSE: ENRC) rose 1.7%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, tacking on 4%.
Laterite nickel specialist European Nickel (AIM: ENK) was among the top performers in the mining sector, rising 9%. Uranium and copper explorer Kalahari Minerals (AIM: KAH) and zinc mining and recycling specialist ZincOX (AIM: ZOX) tacked on 3.5%.
Mineral sands producer Kenmare Resources (LSE: KMR) was one of the leading fallers in the sector with a 7% loss. Copper and nickel explorer Regency Mines (AIM: RGM) and tantalum concentrate supplier with assets in Mozambique Noventa (AIM: NVTA) were in selling mode, sliding 6.5% and 4.5% respectively.
Banks, insurance, private equity
Financial stocks were on the rise on Monday.
Royal Bank of Scotland (LSE: RBS) led the banking sector with a 6% climb. Barclays (SLE: BARC) followed with a gain of almost 3%. HSBC (LSE: HSBA) added 1.8%, while Lloyds (LSE: LLOY) rose 1.5%.
Standard Chartered (LSE: STAN) posted small gains.
JP Morgan Chase (LSE: JPM) added almost 2%.
Prudential (LSE: PRU) led the insurance sector, rising 4.5%. Legal & General (LSE: LGEN) also added more than 4%. Standard Life (LSE: SL) was up 3.5%, while Aviva (LSE: AV) and Old Mutual (LSE: OML) both tacked on more than 2.5%.
Car insurer Admiral Group (LSE: ADM) rose 1%, while RSA Insurance Group (LSE: RSA) posted insignificant gains.
Private equity group 3i (LSE: III) rose 2.5%.
Large and Mid Cap News
JKX Oil & Gas (LSE: JKX) released their third quarter interim statement today, which revealed a 24% increase in production in the quarter compared with Q3 2008. According to JKX Chief Executive Dr Paul Davies, JKX has made ‘ good progress’ on its development and exploration projects.
The London Stock Exchange Group (LSE: LSE) revealed a further month-on-month increase in trading volumes in October, the number of trades executed on the LSE rose by 8%. The monthly volume report also reflected the increasing prominence of ETF (Exchange Traded Funds) and ETC (Exchange Traded Commodities) on the London Stock Exchange (LSE), the average number of trades per day has increased by 84% compared with the same month last year.
Inmarsat plc (LSE: ISAT) reported its interim results for the quarter ended 30 September 2009, which underlined continuing growth for the Mobile Satellite Services (MSS) provider. During the period Inmarsat achieved a substantial improvement in both revenues and profitability, with after tax profits rising 33% compared with 2008.
Small Cap News
Invicta Capital has launched a renewable energy fund to raise £300 million for the funding of the construction and operation of nine biomass combined heated and power (CHP) plans in Scotland with a total generating capacity of 90MW (megawatts) of electricity.
Solomon Gold PLC (AIM: SOLG) said it has entered agreements for a placing of 21.43 million shares this week at A$0.14 for A$3 million to private investors.
Uruguay Mineral Exploration (TSX-V: UME, AIM: UGY) said today it has signed a definitive arrangement agreement with Fortune Valley Resources (TSX-V: FVX) to combine their businesses after extending the deadline from October 30 last week to undertake due diligence prior to moving forward with the transaction.
Broker HansonWesthouse published a research report on Caza Oil & Gas (AIM: CAZA), reaffirming its valuation of the US focused oil and gas junior after it reported exploration successes and the new acreage in its Abo/Wolfcamp play in New Mexico.
Edison Investment research published a report on Botswana operating nickel and copper miner Discovery Metals (AIM: DME, ASX: DML), following the upgrade of the resource at its Zeta prospect at the Boseto project in northwest Botswana last month, putting its potential value at as much as 48.5 pence per share and Discovery’s potential share price at 220 pence.
Cambodia and Vietnam focused property investment group JSM Indochina Ltd (AIM: JSM) said that the requisition of an EGM by 13.66 percent shareholder Passport Capital LLP represents a significant cost and distraction to the company at a time when the focus should be on looking at investment opportunities.
African Medical Investments PLC (AIM: AMEI) said it has signed an agreement with American International Group (NYSE: AIG) unit AIG Travel Assist under which African Medical's healthcare facilities will be recommended by AIG Travel to its clients in need of medical care when travelling in Africa.
Inspired Gaming Group PLC (AIM: INGG) said the business has stabilised and recovered in the year to September 26 2009, following an “exceptionally difficult” 2008, and announced a capital reorganisation aimed at simplifying the capital structure and improving liquidity in the stock.
Shares in Synairgen PLC (AIM: SNG) rocketed in morning deals today after the respiratory drug discovery and development company announced that recent laboratory experiments have been completed which confirm the antiviral potency of its inhaled interferon beta against the 2009 strain of the H1N1 swine flu virus.
Top Level Domain Holdings Ltd (AIM: TLDH) has welcomed the latest move by the Internet Corporation for Assigned Names and Numbers (ICANN) to authorise the creation of new top-level domains (TLDs), or web addresses, in non-Latin scripts.
Self-storage company Lok’n Store Group (AIM: LOK) said its full year revenues declined 7.6% to £10.01 million against the “difficult economic backdrop,” while pre-tax losses narrowed to £0.65 million from £0.74 million as occupancy rose and operating and financing costs were reduced.
Eco-technology company TyraTech (AIM: TYR) said its partner Arysta LifeScience North America has introduced new insecticide “Shooter” with the Responsive Pest Management (RPM) Technology, developed under the strategic partnership agreement between the two companies signed earlier this year.
Trading Emissions Plc (AIM: TRE), a closed end investment company that specialises in renewable energy projects and emissions instruments such as carbon credits, confirmed this afternoon that it may merge with Leaf Clean Energy in an all share deal.
Coal and uranium investment and development group, Polo Resources (LSE: PRL) announced that it increased its stake in Namibia focussed uranium play Extract Resources (TSX, ASX: EXT). Following a purchase of ordinary shares Polo and its associates increased their shareholding by 1%, and now hold an aggregate interest of 10.32%.
Strategic Natural Resources PLC (AIM: SNRP) confirmed that South Africa-focused Coal of Africa Ltd (AIM, ASX, JSE: CZA) and Switzerland based international wealth management group Caldwell Management AG have taken a 4.67 percent and 4 percent stake, respectively, in the fundraising the group announced last week.
ThirdForce (AIM, IEX: THF) CEO Brendan O’Sullivan and Chairman Pat McDonagh have made an improved offer for the company through their privately owned investment vehicle, LearnVantage. The offer implies a cash value of €27.2m for the Irish based E-Learning company. LearnVantage’s offer provides shareholders three options with the cash and composite (cash & share) offer representing a significant premium on yesterday’s close.
Chime Communications PLC (LSE: CHW) said it has reached agreement with Pelham Public Relations Ltd to merge its Bell Pottinger Corporate & Financial business with Pelham. James Henderson, founder and CEO of Pelham, will become managing director of the new business which will be called Pelham Bell Pottinger. Chime will own a majority of the enlarged business.
University IP commercialisation company Fusion IP (AIM: FIP) has raised £3.2 million in a proposed subscription by its cornerstone investor IP Group (LSE: IPO) and a placing with another new institutional shareholder. The proceeds will be used to fund the spin out of its portfolio companies.
