column Proactiveinvestors column RSS feed en Sun, 01 May 2016 18:27:10 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) Will junior miners shortly be revisiting the Supercycle story? Fri, 29 Apr 2016 15:34:00 +0100 UBS picks up on BT with upgrade Fri, 29 Apr 2016 13:34:00 +0100 Today's Market View Including: Bluerock Diamonds, Kodal Minerals, Scotgold Resources, SolGold, ZincOx BlueRock Diamonds* (LON:BRD) – Placing raises £700,000 to transform diamond mining and recovery at Kareevlei
Kodal Minerals* (LON:KOD) – Taruga Quarterly report
Scotgold Resources (LON:SGZ) – Authorities issue the PBT permit
Solgold* (LON:SOLG) – Hole 16 further extends known  mineralisation at Cascabel
ZincOx (LON:ZOX) – Completion of transfer of the Korean recycling plant to Korea Zinc

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Dow Jones Industrials                          -1.17%  at         17,831
Nikkei 225                                                                    16,666 (Markets closed – Bank holiday)
HK Hang Seng                                      -1.48%  at         21,071
Shanghai Composite                            -0.25%  at         2,938
FTSE 350 Mining                                  +0.06% at         10,307
AIM Basic Resources                           +0.43% at         1,925

Economic News
US – Q1 GDP growth slowed more than expected driven by a decline in business investments, weaker consumer spending and a fall in exports on the back of strong USD.
• Q1 GDP: 0.5%qoq v 1.4%qoq in Q4/15 and 0.7%qoq forecast.
• With 2016 growth forecasts standing at 2.0%, the pace is set to accelerate through the year resembling the 2015 dynamics (Q2/Q3/Q4e in 2016: 2.3%/2.4%/2.4%).
• On a more positive note, inflation measure (ex energy) came in stronger than estimated though Q1/16.
• Core PCE: 2.1%qoq v 1.3%qoq in Q4/15 and 1.9%qoq forecast.
• This week economic news:
Date Index Period Actual Expected (Bloomberg) Previous
Monday New Home Sales Mar -1.5%mom 1.6%mom 2.0%mom
Tuesday Durable Goods Orders/Core Mar 0.8%mom/-0.2%mom 1.9%mom/0.5%mom -3.1%mom/-1.3%mom
  Capital Goods Orders Mar 0.0%mom 0.6%mom -2.7%mom (revised from -2.5%mom)
  S&PCS Propoerty Prices Index Feb 0.7%mom/5.4%yoy 0.8%mom/5.5%yoy 0.8%mom/5.7%yoy
  Markit Services PMI (P) Apr 52.1 52.0 51.3
  Markit Composite PMI (P) Apr 51.7   51.3
Wednesday FOMC Rate Decision   0.25%-0.50% 0.25%-0.50% 0.25%-0.50%
Thursday Q1 GDP (A)   0.5%qoq 0.7%qoq 1.4%qoq
  Q1 Core PCE (A)   2.1%qoq 1.9%qoq 1.3%qoq
  Weekly Jobless Claims   257k 259k 248k
Friday PCE Mar  0.1%mom/0.8%yoy -0.1%mom/1.0%yoy
  Core PCE Mar   0.1%mom/1.6%yoy 0.1%mom/1.7%yoy

Japan – The currency continues to test new highs (JPY appreciation) against the US dollar as the BoJ decided to stay put on further easing policies while poor economic data in the US led to adjustment in rate hike expectations.
• The USDJY pair gone below the 107 level briefly this morning hitting 106.97 the lowest reading since 2014.

Germany – Retail sales numbers disappoint posting a surprising mom decline in Mar.
• Retail sales: -1.1%mom/+0.7%yoy v 0.0%mom/+5.5%yoy in Feb v 0.4%mom/2.7%yoy forecast.

France – Growth accelerated through Q1/16 beating estimates while inflation remained in the negative territory in the first month of Q2/16.
• Q1/16 GDP: 0.5%qoq/1.3%yoy v 0.3%qoq/1.4%yoy in Q4/15 and 0.4%qoq/1.0%yoy forecast.
CPI: 0.1%mom/-0.2%yoy in Apr v 0.7%mom/-0.1%yoy in Mar and 0.1%mom/-0.1%yoy forecast.
• Apr marks the third consecutive month of annual declines as the second largest economy in the single currency zone struggles to escape deflation.

Spain – The economy expanded at 0.8%qoq in Q1/16 beating expectations for a 10bp slow down and coming in line with growth pace recorded in the previous two months.

US$1.1376/eur vs 1.1357/eur yesterday. Yen 107.07/$ vs 108.17/$. SAr 14.230/$ vs 14.426/$. $1.460/gbp vs 1.459/gbp
0.763/aud vs 0.763/aud. CNY 6.485/$ vs 6.479/$.

Commodity News
Precious metals:
Gold US$1,275/oz vs US$1,258/oz yesterday
• Gold ETFs 56.5moz unch vs 56.4moz yesterday
Platinum US$1,059/oz vs US$1,034/oz yesterday
Palladium US$629/oz vs US$611/oz yesterday
Silver US$17.72/oz vs US$17.38/oz yesterday

Base metals:
Copper US$ 5,000/t vs  US$4,906/t yesterday
Aluminium US$ 1,673/t vs US$1,648/t yesterday
Nickel US$ 9,445/t vs US$9,170/t yesterday
Zinc US$ 1,933/t vs US$1,884/t yesterday
Lead US$ 1,782/t vs US$1,741/t yesterday
Tin US$ 17,210/t vs US$16,890/t yesterday

Oil US$48.3/bbl vs US$47.2/bbl yesterday – Prices are heading towards new 2016 highs on the back of a falling USD and lower US production.
• US domestic oil output rate fell for a second week coming in at 8.9mmbbl in the week through 22/04/16, down from 9.0mmbbl in the previous period.
Natural Gas US$2.065/mmbtu vs US$2.145/mmbtu yesterday
Uranium US$27.40/lb vs US$27.65/lb yesterday

Bulk comodities:
Iron ore 62% Fe spot (cfr Tianjin) US$62.0/t vs US$58.9/t
Thermal coal (1st year forward cif ARA) US$46.8/t vs US$46.2/t yesterday – Australian thermal coal exporters take 9.1% cut in annual contract prices to $61.6/t
• The settlement between Glencore and Tohoku Electric Power is better than expected as it is around $10.8/t higher than spot prices
• Less than half Australia’s thermal coal exports are now priced on the Japanese reference price indicating a move away from annual contract price settlement towards spot prices

Tungsten - APT European prices stood at $188-210/mtu vs $190-200/mtu last week

Lithium – lithium batteries are now finding new use in the marine environment
• Norwegian marine services group Østensjø Rederi AS has is commissioning a new offshore construction vessel with a hybrid diesel-electric system powered in part by a lithium ion battery.

Company News
BlueRock Diamonds* (LON:BRD) 14 pence, Mkt Cap £4.3m – Placing raises £700,000 to transform diamond mining and recovery at Kareevlei
• BlueRock Diamonds which is mining diamonds at Kareevlei, Kimberly, South Africa has raised further funds to improve its mine and process plant.
• The idea is to raise plant throughput and improve recovery rates.
• Directors agreed to underwrite 390,908 shares in addition to respective allocations.
• The investment should be transformational for the company.
*SP Angel acts as Nomad & Broker to BlueRock Diamonds

Kodal Minerals* (LON:KOD) 0.05p, mkt cap $0.525m – Taruga Quarterly report
• Kodal Minerals, which has previously announced plans to acquire the west African exploration assets of ASX listed Taruga Gold, highlights the issue of Taruga’s quarterly activities report.
• The assets are held in Taruga’s wholly owned subsidiary, International Goldfields (IG), and include 8 exploration licences including 4 licences in Mali and Cote d’Ivoire and an additional 2 licences under application in Cote d’Ivoire.
• IG has a joint venture with Resolute Mining to explore the Tiebissou and Nielle licences in Cote d’Ivoire, where it also has an application for the M’Bahaikro licence. Resolute Mining is funding US$3m of exploration in order to earn a 75% interest. The exploration areas lie along strike from Endeavour Mining’s Agbaou mine. Resolute completed a programme of reconnaissance drilling and geochemical sampling during the quarter.
• IG also has a joint venture with Newcrest Mining under which Newcrest is to spend $0.75m this year and and at least $1.7m by December 2018 to earn a 75% interest in Dabakala prospect also in Cote d’Ivoire. Initial auger drilling and geochemical sampling by Newcrest to identify follow-up targets is expected to be completed in the current quarter.
• In Mali, Taruga’s geologists have been working on site to identify areas for follow-up work on the Nangalasso and SLAM project areas.
• Formal approval of Kodal’s acquisition of the Taruga subsidiary, International Goldfields (Bermuda) will put to shareholders at a General Meeting on 13th May.
Conclusion: Kodal Miinerals proposed acquisition of exploration projects in west Africa should provide exposure to areas where increasing investor interest is evidenced by a number of recent transactions including the Amara Minerals / Perseus Mining merger and Endeavour Mining’s recent acquisition of True Gold with assets in neighbouring Burkina Faso.
*SP Angel acts as Financial Advisor and Broker to the company.
*The author of this report does not hold shares in Kodal Minerals.
Three Partners of SP Angel and SP Angel LLP hold stock in Kodal Minerals due to their long running financial support for the company.

Scotgold Resources (LON:SGZ) 0.8p, Mkt Cap £11.5m – Authorities issue the PBT permit
• The Loch Lomond and the Trossachs National Park Planning Authority issued an approval (subject to certain conditions) for the Bulk Processing Trial plant.
• The decision paves the way for the start of the BPT operations once all components arrive at the site.
• The plant is currently in transition is expected to be arriving to the Cononish mining site in early May.
• The operation is envisaged to process available on-site high grade stockpiles (7,000t at 7.9g/t gold and 39g/t silver) treating 2,400t in the first six months.
• The BPT will use gravity separation to recover coarse gold from the ore as well as produce a sulphide rich concentrate.
• The plant will test the production concept and will provide the basis for a potential revision in the available BFS from a full scale flotation plant to a less capital intensive option of a phased development of the Cononish project.
• The Company is well placed to commence its trial plant operations with the latest estimated cash balance of c.£600k as of Mar/16.  

Solgold* (LON:SOLG) 3.475p, Mkt Cap £33.1m – Hole 16 further extends known  mineralisation at Cascabel
• Solgold reports the final results from hole 16 at its Alpala deposit within the Cascabel project in Ecuador.
• Hole 16 has intersected 1145.6m of mineralisation grading an average of 0.63% copper and 0.78 g/t gold from a depth of 516m. The intersection includes a higher grade section of 108m from a depth of 548m at an average grade of 1.46% copper and 1.04 g/t gold.
• The broader intersection contains two main mineralised zones; a 152m wide Upper Zone from a depth of 612m with an average grade of 1.18% copper and 1.69g/t gold (using a 0.7% copper cut-off) and a 373.6m wide Lower Zone from a depth of 928m with an average grade of 1.00% copper and 1.34 g/t gold at the same cut-off.
• These latest results extend the known strike length of the Alpala deposit by a further 120m towards the southeast and takes the overall known development of the Alpala mineralisation “from Hole 13 in the northwest to Hole 16 in the southeast to some 700m in lengh.”
• The Alpala Central deposit still remains “open in virtually all directions, and is to date defined at greater than 0.7% copper over a strike length of 625m, a lateral width of 300m and a vertical extent of 1,800m”
• The company also highlights that “the extension of Alpala Central to the south east is accompanied by increased intensity of bornite mineralisation at surface and increasing intensity of veining with depth.”
Conclusion: As drilling proceeds at Cascabel, Solgold is continuing to extend the known mineralisation which still remains open laterally and at depth. The increasing recognition of near surface mineralisation including the copper rich mineral bornite (63% copper), as well as the extensive deeper mineralisation could ultimately provide Solgold with a range of development options.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project

ZincOx (LON:ZOX) 0.7pence, Mkt Cap £1.5m – Completion of transfer of the Korean recycling plant to Korea Zinc
• ZincOx announces that it has now completed the previously announced transfer of a 90% interest in the Korean Zinc Recycling Plant to Korea Zinc through the conversion of the outstanding loans into equity of ZincOx (Korea).
• During the transition period since the announcement of the transfer in December, ZincOx (Korea) has received a further $5.4m in non-recourse loans from Korea Zinc which may also be capitalised. In this eventuality, ZincOx Resources’ residual interest would be reduced further to around 9.2%.
• “ZincOx Korea's share structure has been reorganised so that 90 per cent of the shares will be valued at US$57.1 million giving an imputed value to ZincOx Korea of US$63.4 million” – on this basis, ZincOx Resources stake in ZincOx (Korea) would be worth $6.3m.
• ZincOx has “continued to assist with the operation, as required, so as to enable a smooth transition into management by Korea Zinc.”
• In the meantime, ZincOx is in discussions with potential “strategic and project specific partners for the development of new recycling projects.”
• The company currently has £360,000 in cash and, under AIM rules “must carry out a reverse takeover within six months of the date of transfer, being 28 October 2016” in order retain its listing.
Conclusion: Despite the loss of the Korean project, ZincOx retains its proprietary technology and a wealth of operating expertise on its implementation. We wish the company well in its search for a new zinc recycling project.

Fri, 29 Apr 2016 11:16:00 +0100
SP Angel Morning Oil & Gas: Circle Oil, Gulf Keystone Petroleum, Ophir Energy Headlines
In Brief:
 Circle Oil (LON:COP – 1.88p) – (BUY – 11p) – Reserves and Resources Update
 Gulf Keystone Petroleum (LON:GKP – 5p) – Strategic Update
 Ophir Energy (LON:OPHR – 77p) – Fortuna FLNG

In Brief
Circle Oil (LON:COP – 1.88p) – (BUY – 11p) – Reserves and Resources Update: Today's reserves and resources update is a reflection of the current price environment. We believe that the core competency within the Company remains solid and it remains a solid operating base from which to grow, provided that is, that the Management team are given the opportunity to trade out from under its debt pile. We are reiterating our BUY Recommendation and 11p Target Price, but as we said initially, debt is still very much the decider.
Gulf Keystone Petroleum (LON:GKP – 5p) – Strategic Update: Today's news from the Company underlines the pressure that it is under to maintain operational integrity in the face of increasing balance sheet pressure. We believe that the asset, even at current prices, can support the debt in cash terms, provided that the management team are given sufficient headroom to sweat the asset. We have no doubt that this news will provide a headwind to the shares, but in the longer term, we continue to believe that the core of the Company remains robust.
Ophir Energy (LON:OPHR – 77p) – Fortuna FLNG: While today's news that Schlumberger have dropped out of the reckoning for the development of Fortuna is disappointing, the project continues to make progress. That in this price environment the FID is still this year and first gas in 2020 is a testament not only to the asset, but the management team too. While this will represent a headwind for the Company, we do not believe that it impacts the wider investment proposition.

Fri, 29 Apr 2016 09:06:00 +0100
In the papers: Volkswagen,Tata Steel, Goldman Sachs The Times
U.S. economy hit brakes in first quarter: The American economy slowed almost to a halt in the first three months of the year, dealing a blow to hopes of a global rebound.
Fall in house prices suggests the market is turning, say experts: Every region in England and Wales except for London and the East registered a fall in house price growth between February and March, according to figures from the Land Registry, leading some industry figures to argue that the once booming house market is turning.
Europe has been bad for growth, say Brexit economists: A group of economists led by Margaret Thatcher’s former adviser has hit back at Treasury warnings about Brexit by claiming that Europe has been bad for growth and will threaten Britain’s future.
MPs attack Javid over handling of Tata Steel crisis: The business secretary was on the back foot and did not know what he was doing as the crisis at Tata Steel unfolded at the end of last month, MPs claimed amid scathing attacks on the competence of Sajid Javid.
Weir Group pay deal rejected by investors: Weir Group became only the second company in U.K. history to lose a binding vote on Executive pay in a stunning victory for big institutional shareholders.
Shire Chief’s 25% pay rise just gets through: Shire breathed a sigh of relief as it squeaked through a vote at its annual shareholder meeting, despite nearly half its investors rebelling against “excessive” payouts at the pharmaceutical company.
The Independent
Volkswagen Bosses to be paid £49 million despite record losses after emissions scandal: Volkswagen is to pay 12 current and former Managers €63.24 million (£49 million) for 2015, a year of record losses for the company following its global emissions scandal.
Tata Steel U.K. Chief raises ‘serious question marks’ over future of Port Talbot plant: The head of Tata Steel U.K. has cast further doubt over the future of the Port Talbot steel plant in Wales and said the Government would probably have to do more to help the firm find a buyer.
Sir Martin Sorrell defends his £70 million pay package for second time as revenues jump at WPP: Sir Martin Sorrell, WPP Founder, has once again defended his pay package estimated to hit £70 million, one of the biggest cheques in British corporate history. 
Deutsche Bank profit beats expectations as legal costs fall: Deutsche Bank posted a surprise profit in the first quarter as legal expenses dropped and the trading businesses performed better than analysts forecast. The shares jumped.
The Daily Telegraph
Goldman Sachs to be grilled over BHS collapse: Goldman Sachs looks set to be dragged into the growing storm over the collapse of BHS. The House of Commons Business, Innovation and Skills select committee said it will launch an inquiry into what checks were taken to ensure Dominic Chappell and his consortium of mystery investors were the right buyers of the retailer.
Japan’s Abenomics ‘dead in the water’ after U.S. currency warnings: The Bank of Japan has been forced to retreat from further emergency stimulus after a blizzard of criticism at home and abroad, and warnings that extreme measures may now be doing more harm than good.
Investors intensify fight against high pay for poor performance with Weir and CRH amongst the victims: Investors intensified the fight against high pay for poor performance in a bruising day of shareholder activism at some of Britain’s biggest companies.
Barclays plots to cut investment bank pay: Barclays’ Chairman wants to cut investment bankers’ bonuses and told shareholders that the current period of market turmoil might provide the cover he needs to chop pay.
PwC picks Ellis as new senior partner: The accountancy giant PwC has picked a long-serving restructuring specialist to lead its U.K. and Middle Eastern business, ending Ian Powell’s eight-year reign at the top. Kevin Ellis has beaten three other candidates in a vote of partners to become senior partner from July.
Tommee Tippee maker Mayborn gets new Chinese parent as 3i sells up: The maker of the Tommee Tippee, the most popular baby feeding bottle brand in the U.K., has been bought out by one of China’s largest insurers, Ping An, for around £300 million, according to a source close to the deal.
Volkswagen to bet on electric cars following emissions-rigging scandal: Volkswagen’s Boss has sketched out a wide-ranging transformation of the company that will see it focus more on electric vehicles and services like car-sharing as it seeks to get past a scandal over cheating on diesel emissions tests.
The Guardian
Tycoon Richard Caring received £93 million in BHS dividends from Sir Philip Green: Richard Caring, the restaurateur and clothing tycoon, has emerged as one of the major beneficiaries of generous dividends paid by BHS in the early days of Sir Philip Green’s Ownership.
Buy-to-let landlords blamed for decline in DIY among under-30s: Britain’s young adults are no longer putting up shelves, hanging wallpaper or retiling bathrooms, according to figures that reveal DIY is in steep decline among the so-called “generation rent” who cannot afford to buy and fix-up their own home.
Billionaire investor Carl Icahn sells entire stake in Apple: Billionaire activist investor Carl Icahn says he had sold his entire stake in Apple Inc, citing the risk of China’s influence on the stock.
Amazon has most profitable quarter ever, but operating costs also rose: traditionally has only faced one obstacle in its quest to infiltrate every aspect of consumers’ lives: it often lost money.
Daily Mail
Facebook trounces Twitter in the first quarter of 2015 making a £1 billion profit compared to rival’s £54.6 million loss: Facebook has thrashed Twitter in the first part of 2015, making £1billion profit while its rival made a multi-million loss, writes Emily Davies.
Tullow Oil jumps nearly 8 million% after lenders agreed to extend West Africa-focused oil explorer’s loans: Shares in West Africa-focused oil explorer Tullow Oil rose nearly 8 million% after lenders agreed to extend its loans.
Howdens Joinery enjoys sales boom as families choose to update their kitchens rather than move home: Families putting in new kitchens rather than moving home have boosted sales for Howdens Joinery Group.
RBS shares hit as lender reveals it will suffer ‘significantly greater’ costs after fresh delay in Williams & Glyn sale: Royal Bank of Scotland shares were hit when the part-state owned lender revealed that it risks missing a deadline to sell its Williams & Glyn brand and will suffer ‘significantly greater’ costs as a result.
U.K. car production soars 10% with a new vehicle rolling out of a British factory every 16 seconds during March: A new car rolled out of a U.K. factory every 16 seconds during March as production soared by nearly 10%, official figures reveal.
Daily Express
New stamp duty tax hits house price growth: House price growth in Britain has fallen back after a brief surge ahead of a new stamp duty charge for second home buyers.
Europe on the brink: Greece begs EU and IMF “give us more money”: Greece’s debt crisis has reached boiling point after Athens lashed out at the International Monetary Fund (IMF) and begged Europe to hold an emergency summit over loan negotiations.
Back off: Germany isn’t going to bully us to change tack says Euro Bank Boss: German politicians have suffered another broadside from the head of the European Central Bank (ECB) as relations between the two sides break down further.
The Scottish Herald
Glasgow-based law firm says it has grown business across Scotland: Law firm Harper Macleod has said it has increased its share of the Scottish market after it grew turnover 17% in the latest year.
Housing market remains very positive, says Taylor Wimpey: Taylor Wimpey has reported that the new build housing market remains “very positive” because of good accessibility to mortgages at competitive rates.
ESpark rolls out technology initiative across U.K.: Scottish incubator business Entrepreneurial Spark has partnered with EMC, an IT specialist listed in New York, to offer technology know-how to its entrepreneurs across the U.K.
Travel group offloads hotel beds database business: Travel group TUI is selling its Hotelbeds bedbank business for €1.2 billion in cash to the U.K. buyout business Cinven and the Canada Pension Plan Investment Board.
Beattie announces record profits: Communications agency Beattie said it generated record profits in 2015 of £590,000 – a threefold increase over the previous 12 months.
AG Barr Boss sees pay drop by a fifth: The Boss of Irn-Bru maker AG Barr saw his total pay drop 22% last year as the company opted not to pay annual bonuses after a below-target performance.
Pilot hydrogen power project for Orkney: ITM Power, the energy storage and clean fuel company, has been awarded a five-year grant worth €2.27 million from the EU’s fund for “innovative green hydrogen systems in an isolated territory”.
Value of trade with EU far outweighs cost of membership, says accountancy body: The £8 million.5 billion a year it costs the U.K. to be part of the European Union is far outweighed by the value of the trading relationship, according to the Institute of Chartered Accountants of Scotland.
The Scotsman
Aggreko sticks to guidance amid market challenges: Temporary power provider Aggreko has suffered a 14% slide in underlying revenues for the first three months of the year in the face of “challenging” conditions in a number of its markets.
Wood Group wins $500 million BP contract in Azerbaijan: Energy services heavyweight Wood Group has secured a major $500 million (£343 million) contract to provide services for BP-operated offshore facilities in Azerbaijan.
Brew Lab and Deliveroo strike up coffee delivery deal: A new partnership between delivery firm Deliveroo and speciality coffee shop Brew Lab means fans of the drink across Edinburgh can have it brought to their door.
Lloyds hails ‘robust’ performance despite fall in profits: Lloyds Banking Group cheered a “robust” performance in the first three months of the year as it posted a 6% dip in underlying profits to £2.1 billion.
City A.M.
U.K. consumer confidence at highest level for two years, despite Brexit concerns: Consumer confidence in the U.K. has reached its highest level in nearly two years despite concerns over the EU referendum, new figures released show.
LinkedIn share price shoots up as earnings and revenue for the first quarter beat expectations: LinkedIn’s share price shot up by over 15% in after-hours trading, as the company beat expectations in its results for the first quarter.
Baidu’s share price jumps in after-hours trading after the company reports revenue to have soared: Chinese search engine Baidu’s share price jumped almost five% in after-hours trading after the company reported strong financial results.
Pharma consolidation continues with two new massive deals: The latest round of consolidation in the pharmaceutical industry has seen a combined £24 billion worth of potential deals.
Virgin America reports better than expected results as lower fuel costs offset fall in revenue per available seat mile: Virgin America, currently awaiting a green light on the merger with Alaska Air Group, has posted better than expected first quarter results, helped by low fuel costs.
Gaming Realms make play for worldwide gambling machine market through agreement with Scientific Games Corporation: Online gambling game creator Gaming Realms has signed a global five-year machine licensing agreement with U.S. company Scientific Games.
Heron Tower Owners secure £400 million refinancing deal: The Owners of the Heron Tower in the City have agreed a £400 million refinancing deal with ING and German bank Landesbank Baden-Württemberg (LBBW).
Hunters Property hails strong maiden results as public company: Hunters Property has posted a jump in revenues and profits in its first set of annual results since floating on London’s junior AIM market last summer.

Fri, 29 Apr 2016 08:45:00 +0100
Pre Market Briefing: US markets ended in negative territory yesterday, weighed down by a broad loss in technology firms UK Market Snapshot
UK markets closed mixed yesterday. The FTSE 100 index closed marginally higher amid gains in commodity related stocks. Anglo American surged 8.1%, after it agreed to sell its niobium and phosphates businesses in Brazil to China Molybdenum for $1.5 billion in order to reduce its debt. Peers, BHP Billiton, Glencore and Rio Tinto climbed 2.1%, 2.3% and 4.3%, respectively, following an advance in metal prices. WPP added 0.7%, as it posted a rise in its revenue for the first quarter. On the contrary, Royal Bank of Scotland Group fell 2.9%, after stating that it might not be able to sell its Williams & Glyn subsidiary by the end of 2017. Lloyds Banking Group shed 1.7%, after it reported a decline in its first quarter revenue. Berkeley Group Holdings dipped 1.7%, after a broker downgraded its rating to ‘Underperform’. The FTSE 100 marginally advanced, to close at 6,322.4, while the FTSE 250 fell 0.1%, to settle at 17,066.5.
US Market Snapshot
US markets ended in negative territory yesterday, weighed down by a broad loss in technology firms. Investor sentiment further weakened after data showed that the US economy grew at its slowest pace in two years in the first quarter. Symantec plummeted 6.9%, after it trimmed its financial outlook for the fourth quarter and announced the exit of its CEO. Apple fell 3.1%, after billionaire, Carl Icahn, sold his entire stake in the tech giant amid concerns over slowing sales. Bucking the trend, St. Jude Medical soared 25.6%, following its acquisition by Abbott Laboratories, down 7.8%, in a deal worth $25.0 billion. DreamWorks Animation rallied 24.1%, after NBCUniversal, a subsidiary of Comcast, down 0.2%, agreed to buy the former for $3.8 billion. Facebook jumped 7.2%, after it reported a 52.0% rise in its first quarter revenue. Ford Motor added 3.2%, after its first quarter earnings surpassed market expectations. The S&P 500 slid 0.9%, to settle at 2,075.8. The DJIA declined 1.2%, to settle at 17,830.8, while the NASDAQ fell 1.2%, to close at 4,805.3.
Europe Market Snapshot
Other European markets finished mostly higher yesterday, led by a rally in crude oil prices amid a mixed batch of corporate earnings. Energy sector stocks, Total, Subsea 7 and Lundin Petroleum gained 0.3%, 1.4% and 2.0%, respectively. Metal producers, Boliden and ArcelorMittal climbed 2.8% and 6.9%, respectively. Electrolux soared 9.4%, after reporting an upbeat net profit for the first quarter. Deutsche Bank advanced 1.7%, as it reported an unexpected net profit in the first quarter. On the downside, Banco Bilbao Vizcaya Argentaria tumbled 6.8%, following a 54.0% decline in its net earnings for the first quarter. Sanofi slid 1.1%, after it made an unsolicited offer to acquire Medivation for a cash consideration of $9.3 billion. The FTSEurofirst 300 index gained 0.2%, to close at 1,373.2. Among other European markets, the German DAX Xetra 30 rose 0.2%, to close at 10,321.2, while the French CAC-40 marginally slipped, to settle at 4,557.4.
Asia Market Snapshot
Markets in Asia are trading lower this morning, following an overnight loss in US equities. In Hong Kong, energy sector major, PetroChina has fallen 3.6%, after it reported its first quarterly loss since its listing in 2000. Peer, CNOOC has also declined 3.3%, as it posted a 31.0% drop in its revenue for the three months ended 31 March 2016. In South Korea, index movers, Samsung Electronics and Hyundai Motor have dropped 0.8% and 3.4%, respectively. Japanese markets are closed today on account of a public holiday. The Hang Seng index is trading 1.4% down at 21,082.6, while the Kospi index is trading 0.5% lower at 1,990.0. Yesterday, the Nikkei 225 index edged 3.6% down to close at 16,666.1.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading marginally higher at $48.14 per barrel. Yesterday, the contract climbed 2.03% or $0.96, to settle at $48.14 per barrel, amid a weaker US Dollar and signs of falling US crude production.
At 0330GMT today, Gold futures contract is trading 0.92% or $11.70 higher at $1278.10 per ounce. Yesterday, the contract climbed 1.28% or $16.00, to settle at $1266.40 per ounce, as weakness in the US Dollar lifted demand for the yellow metal.
At 0330GMT today, the EUR is trading 0.30% higher against the USD at $1.1386, ahead of the Euro-zone inflation data for April and unemployment rate for March, schedule to release today. Yesterday, the EUR strengthened 0.27% versus the USD, to close at $1.1352. The US Dollar fell against its key peers after disappointing data on the US GDP in the first quarter lowered the chances of a rate hike in June.
At 0330GMT today, the GBP is trading 0.27% higher against the USD at $1.4649. Investors will closely asses the US personal spending data for March along with the final reading of the University of Michigan consumer sentiment index for April, due later in the day. Yesterday, the GBP strengthened 0.45% versus the USD, to close at $1.4609, reversing its losses from previous session.
Fixed Income
In the US, long term treasury prices rose and pushed yields lower, after the US economy expanded at its slowest rate in two years in the first quarter. Yesterday, yield on 10-year notes fell 3 basis points to 1.84%, while yield on 2-year notes lost 5 basis points to 0.78%. Meanwhile, 30-year bond yield fell3 basis points to 2.68%.

Key Economic News
UK house prices rose less than expected in April

In April, the seasonally adjusted house prices rose 0.20% in the UK, on a monthly basis, lower than market expectations for a rise of 0.40%. House prices had registered a revised rise of 0.70% in the prior month.
UK consumer confidence slid in April
The consumer confidence fell to a level of -3.00 in the UK, in April, compared to a reading of 0.00 in the previous month. Market expectation was for the consumer confidence to fall to a level of -1.00.
UK house prices rose less than expected in April
In April, on an annual basis, the non-seasonally adjusted house prices climbed 4.90% in the UK, lower than market expectations for an advance of 5.00%. In the previous month, house prices had risen 5.70%.
UK business barometer fell in April
The business barometer recorded a drop to 38.00 in the UK, in April, compared to a reading of 43.00 in the previous month.
Euro-zone business climate indicator climbed in April
The business climate indicator registered a rise to 0.13 in April, in the Euro-zone, compared to market expectations of a rise to a level of 0.14. In the previous month, the business climate indicator had registered a revised level of 0.12.
Euro-zone industrial confidence index climbed in April
In April, the industrial confidence index registered a rise to -3.70 in the Euro-zone, compared to market expectations of an advance to -4.00. In the prior month, the industrial confidence index had registered a level of -4.20.
Euro-zone services sentiment indicator rose in April
The services sentiment indicator registered a rise to 11.50 in April, in the Euro-zone, compared to a reading of 9.60 in the prior month. Markets were expecting the services sentiment indicator to advance to a level of 10.00.
Euro-zone economic sentiment indicator climbed in April
The economic sentiment indicator recorded a rise to 103.90 in the Euro-zone, in April, compared to a level of 103.00 in the prior month. Markets were expecting the economic sentiment indicator to climb to 103.40.
Euro-zone consumer confidence index climbed in April
In April, the final consumer confidence index in the Euro-zone advanced to -9.30, in line with market expectations. The preliminary figures had also indicated an advance to -9.30. In the previous month, the consumer confidence index had registered a reading of -9.70.
German CPI advanced as expected in April
The flash consumer price index (CPI) in Germany registered a rise of 0.10% on an annual basis in April, compared to a rise of 0.30% in the prior month. Market expectation was for the CPI to climb 0.10%.
German HICP dropped more than expected in April
In April, on a monthly basis, the flash harmonised consumer price index (HICP) recorded a drop of 0.30% in Germany, higher than market expectations for a drop of 0.20%. In the prior month, the HICP had recorded a rise of 0.80%.
German number of people unemployed surprisingly eased in April
The number of people unemployed registered an unexpected drop of 16.00 K in Germany in April, compared to a revised drop of 2.00 K in the prior month. Markets were expecting the number of people unemployed to remain unchanged.
German unemployment rate remained unchanged in April
In April, the seasonally adjusted unemployment rate in Germany remained steady at 6.20%, in line with market expectations.
German HICP unexpectedly fell in April
On an annual basis, the preliminary HICP registered an unexpected drop of 0.10% in April, in Germany, compared to a rise of 0.10% in the prior month. Market anticipation was for the HICP to record an unchanged reading.
German CPI dropped as expected in April
The flash CPI recorded a drop of 0.20% on a MoM basis in April, in Germany, in line with market expectations. In the previous month, the CPI had registered a rise of 0.80%.
Italian wage inflation slid in March
The wage inflation dropped to 0.00% in Italy, in March. The wage inflation had registered a reading of 0.10% in the previous month.
Italian annual wage inflation remained flat in March
The annual wage inflation remained unchanged at a level of 0.80% in March, in Italy.
Spanish CPI advanced less than expected in April
The flash CPI in Spain recorded a rise of 0.70% on a monthly basis in April, less than market expectations for an advance of 1.10%. In the previous month, the CPI had recorded a rise of 0.60%.
Spanish CPI declined more than expected in April
In April, on an annual basis, the flash CPI in Spain fell 1.10%, compared to a fall of 0.80% in the prior month. Market anticipation was for the CPI to fall 0.70%.
Spanish unemployment rate (survey) climbed unexpectedly in 1Q 2016
In 1Q 2016, unemployment rate (survey) advanced unexpectedly to a level of 21.00% in Spain, compared to market expectations of an unchanged reading. Unemployment rate (survey) had recorded a reading of 20.90% in the prior quarter.
Spanish HICP advanced less than expected in April
The preliminary HICP in Spain registered a rise of 0.40% in April on a MoM basis, less than market expectations for a rise of 0.80%. The HICP had recorded a rise of 2.00% in the previous month.
Spanish HICP dropped more than expected in April
In April, on an annual basis, the flash HICP recorded a drop of 1.20% in Spain, more than market expectations for a fall of 0.90%. In the previous month, the HICP had registered a drop of 1.00%.
US GDP price index advanced more than expected in 1Q 2016
On a QoQ basis, in 1Q 2016, the preliminary gross domestic product price index registered a rise of 0.70% in the US, compared to an advance of 0.90% in the prior quarter. Markets were expecting the GDP price index to advance 0.50%.
US Kansas City Fed manufacturing activity index registered a rise in April
The Kansas City Fed manufacturing activity index in the US advanced to -4.00 in April, compared to a level of -6.00 in the prior month.
US initial jobless claims recorded a rise in the last week
In the week ended 23 April 2016, the seasonally adjusted initial jobless claims in the US rose to a level of 257.00 K, compared to market expectations of a rise to 259.00 K. In the previous week, initial jobless claims had recorded a revised level of 248.00 K.
US core personal consumption expenditure advanced more than expected in 1Q 2016
On a quarterly basis, the flash core personal consumption expenditure in the US registered a rise of 2.10% in 1Q 2016, higher than market expectations for a rise of 1.90%. In the prior quarter, core personal consumption expenditure had advanced 1.30%.
US annualised GDP rose less than expected in 1Q 2016
On a QoQ basis, the preliminary annualised gross domestic product (GDP) in the US recorded a rise of 0.50% in 1Q 2016, compared to an advance of 1.40% in the prior quarter. Market expectation was for the annualised GDP to advance 0.70%.
US continuing jobless claims slid unexpectedly in the last week
In the week ended 16 April 2016, the seasonally adjusted continuing jobless claims in the US dropped unexpectedly to a level of 2130.00 K, lower than market expectations of an advance to a level of 2136.00 K. Continuing jobless claims had recorded a revised reading of 2135.00 K in the prior week.
US personal consumption advanced more than expected in 1Q 2016
On a quarterly basis, the flash personal consumption recorded a rise of 1.90% in the US, in 1Q 2016, compared to an advance of 2.40% in the previous quarter. Markets were expecting personal consumption to advance 1.70%.
Japanese housing starts climbed unexpectedly in March
Housing starts in Japan recorded an unexpected rise of 8.40% in March on an annual basis, more than market expectations for a drop of 0.60%. In the prior month, housing starts had recorded a rise of 7.80%.
Japanese construction orders advanced in March
Construction orders in Japan climbed 19.80% in March on a YoY basis. Construction orders had registered a drop of 12.40% in the previous month.
Japanese annualised housing starts climbed surprisingly in March
In March, the annualised housing starts in Japan recorded an unexpected rise to 0.99 million units, compared to market expectations of a drop to 0.91 million units. In the previous month, the annualised housing starts had registered a reading of 0.97 million units.

Fri, 29 Apr 2016 08:39:00 +0100
Beaufort Securities Breakfast Alert: Herencia Resources, Howden Joinery, Taylor Wimpey, WPP, The markets
The FTSE-100 finished yesterday's session 0.04% higher at 6,322.40, whilst the FTSE AIM All-Share index closed 0.18% better-off at 730.41. In Europe equities ended mixed as investors digested the outcome of the central bank's latest decisions, corporate earnings and a rebound in oil prices. Germany's DAX added 0.2%, whereas France's CAC 40 closed flat.
Wall Street
Wall Street retreated amid a slowdown in US GDP growth and consumer spending during Q1 2016. Meanwhile, an increase in initial jobless claims and weak corporate earnings also remained in focus. The S&P 500 dropped 0.9%, with information technology leading the nine sectors that declined, after Apple Inc shares continued their losing streak.
Markets are trading lower, tracking an uninspiring lead from Wall Street. The Bank of Japan's inaction earlier this week, continued to stoke investor concerns. The Hang Seng was trading 1.2% down at 7:00 am due to losses in energy and property shares. The Nikkei 225 was closed on account of the Showa day holiday.
Yesterday, Brent and WTI crude oil prices increased 2.0% and 1.5%, respectively. The spread between the two varieties stood at US$2.1 per barrel.

House prices in UK register slowdown in April
According to the Nationwide Building Society, house prices in the UK increased 4.9% y-o-y vis-à-vis 5.7% in March. During the month, prices increased 0.2% m-o-m. The slowdown was primarily ascribed to a surge in property sales in March to offset the additional stamp duty on buy-to-let properties.
Greece bailout meeting deferred to May 9
The Eurozone's finance ministers have decided to defer a key meeting on Greece's bailout programme to 9th May 2016. The delay would allow the ministers to assess the country's economic condition and draft an effective contingency plan, should the country miss its promised budget targets.

Company news

Herencia Resources (LON:HER, 0.02p) – Hold
Herencia Resources, the Chile focused mineral exploration and development company, announced yesterday that Next Minerals, a private Chilean mining company, has decided not to proceed with the acquisition of Herencia's Picachos copper project. In February, Herencia agreed to dispose 100% of the Picachos for US$5.1m. The company did not disclose details for Next pulling out of the acquisition and has decided to withhold the US$290,000 renewal payment for the Picachos licence while it explores other options. If the Picachos option is not renewed, the company may lose all rights to the asset but would have enough working capital to last until end of May 2016. Should Herencia decide to renew the option it would have sufficient working capital to last until early May 2016.

Our view: Given the current challenging market conditions management has been unable to finance the continued development of Picachos or find a buyer for the asset. Herencia continues to hold its Guamanga copper project and the 70% owned high-grade silver-zinc-lead Paguanta project in northern Chile. In light of the uncertain outlook for the company, we recommend a Hold on the stock.

Beaufort Securities acts as corporate broker to Herencia Resources plc

Howden Joinery (LON:HWDN, 493.70p) - Hold
Yesterday, Howden Joinery published a trading update for the period covering 16 weeks to 16th April 2016. The company, in general, performed in line with the expectations, with revenues rising 8.7% y-o-y and 6.4% on same depot basis. Although the company's cost of goods sold was impacted by adverse currency movements, it made progress by implementing a price increase for the year thus far. On the business development front, Howden remains on track to open 30 new depots in the UK this year. During the quarter, it opened six new depots and is now trading from 625 depots in the UK. In the year to date period, the company acquired 11.2 million shares for a consideration of £52.8m as part of its share buyback programmes announced earlier this year and last year. The company plans to release its half yearly report on 21st July 2016.

Our view: Howden issued an upbeat trading update for the first 16 weeks of the year. The update takes forward the company's excellent performance in 2015 when it reported high revenue and enhanced margins. The company continued to expand through the opening of new depots in the UK. Meanwhile, the company's share buyback programme remains, with Howden buying shares worth £52.8m during the aforementioned period. Though the company is well placed both financially and operationally to deliver long-term growth, the recent currency fluctuations have adversely impacted the company's cost of goods sold. As part of our general move in anticipation for UK's EU referendum-related slowdown, Beaufort has recently taken the precautionary step of downgrading the entire UK Housebuilding and Building Material sectors, including Howden Joinery, from 'Buy' to 'Hold'. That said, Beaufort is likely be quick to recommend re-building holdings following any serious correction and upon growing confidence in the electorate choosing to remain part of the EU.

Taylor Wimpey (LON:TW., 187.10p) - Hold
Taylor Wimpey, the UK focused residential developer, yesterday announced its trading statement for the period since 1 January 2016 to yesterday. During the period, customer demand advanced by +14% compared to the same period last year. Average private net reservation rates increased to 0.80 sales per outlet per week (2015 equivalent period: 0.76) for the year to date, while cancellation rates remained low at 11% (2015 equivalent period: 11%). Currently, the Group's total order book stands at 8,811 homes (2015 week 16: 8,200 homes), up +7.5%, excluding legal completions. Group also increased the total order book value by +16.6% to c.£2,168m from the equivalent point last year (2015 week 16: c.£1,859m), and by +21.9% from the year end. The short term land market remains stable and the Group converted over 3,000 plots from the strategic land pipeline totaling to c.78,000 plots as at end March 2016. The Group currently operating from 292 outlets, excluding joint ventures (2015 week 16: 302). The Group declared a final maintenance dividend of 1.18p per share (2014 final: 1.32p), giving a total maintenance dividend for 2015 of 1.67p per share (2014 total: 1.56p), to be paid on 20 May 2016. Its CEO, Pete Redfern commented "Against the backdrop of a positive housing market, Taylor Wimpey is performing well, with increased customer demand for our homes and good access to mortgages driving strong sales rates. With a strong forward order book and high-quality landbank, we are well positioned for the remainder of the year and beyond".

Our view: Taylor Wimpey announced a strong performance for the first four months of 2016 led, as expected, by continued positive demand for their new builds. Easier access to mortgages at competitive rates, together with various government subsidies schemes (such as help-to-buy) underpinned +14% customer demand. Taking advantage at this environment, the Group increased its current order book by +7.5% with value by +16.6%, compared to the first 15 weeks of FY2015. The Group had already forward sold c.70% demand for 2016 completions as at 24 April 2016. Taylor Wimpey remains a strongly managed and well positioned housebuilder. The Group stated that to date they have not experienced any impact on its trading derived from uncertainty surrounding the Brexit referendum due to the profile of its nationwide customer base. Management went on to note that, together with strong order book, "we are well equipped to react to any potential changes in the market that may be caused by the EU referendum". Such fears, have nevertheless been seen to overhang sentiment for the entire UK housebuilding sector that has considerably re-rated over the past 5-years and now finds itself very widely owned. In anticipation of this spurring a phase of profit taking, Beaufort downgraded its overweight stance on the entire sector some weeks back, during which time Taylor Wimpey was also from formally moved from 'Buy' to 'Hold'. Following yesterday's trading statement, Beaufort retains its 'Hold' rating on Taylor Wimpey, but recognises that the sharp correction recently experienced now prices in much of these concerns and considers confidence will likely return to the sector in the second half of 2016.

WPP (LON:WPP, 1,628p) - Buy
Yesterday, WPP issued a trading update for Q1 2016. The company's revenues increased 10.5% to £3.1bn, with constant currency growth of 9.0% and like-for-like (LFL) growth of 5.1%. Reported billings for the period were up 8.3% to £11.9bn and net sales were 6.7% higher on a constant currency basis. LFL revenue increased across regions and business sectors, with 6.9% growth in North America, 4.7% in the UK and 4.4% in Western Continental Europe. The contribution to the company's reported net sales from Asia-Pacific, Latin America, Africa, the Middle East and Central & Eastern Europe declined to 27.3% from 28.6% in Q1 2015, primarily due to the impact of lower growth in major fast developing markets than in mature Western markets. Among business sectors, Advertising and Media Investment Management witnessed LFL growth of 7.9%, with contribution from North America and Asia-Pacific. The division faced challenges in Western Continental Europe, where some of the restructuring costs incurred in recent years were directed. Data Investment Management's LFL revenue grew 0.5%, whereas that from Public Relations and Public Affairs expanded 2.3% for the period. The Group's branding and identity, healthcare and specialist communications divisions witnessed 4.7% rise in LFL revenue, making it the strongest performing sector. Moreover, during the period, the company completed 26 transactions: eight acquisitions and investments in new markets and 17 in quantitative and digital; eight were driven by individual client or agency needs.

Our view: WPP continued the growth momentum in 2016 as it beat revenue sales and profit targets for Q1 2016. The company performed well across business regions, with all business divisions witnessing positive LFL growth. Advertising and media investment management was the best performing business division, with revenues up 7.9% to £1.4bn and accounting for 44% of the revenue and net sales. Although there are concerns surrounding Brexit and its impact on the business of the company, performance is expected to improve in the second half of the year. The company's performance in 2016 is expected to be similar to that in 2015. Additionally the company's advertising division expected to earn more from several events, including Euro 2016, Rio Olympics, US presidential elections, among others. Going forward, the company aims to increase revenue and net sales faster than the industry average, driven by its leading position in new markets; new media; and data investment management, including data analytics and the application of technology, creativity and horizontality. Thus, in view of the overall progress made by the company, driven by strong presence in different markets, we maintain a Buy rating on the stock.

Economic news
Germany unemployment change
The number of people without a job in Germany fell by 16,000 in April compared to a revised decline of 2000 in March, the Federal Labour Agency said yesterday. Economists had forecasted unemployment change to remain unchanged for the month. The seasonally adjusted unemployment rate stood at 6.2%, similar to its previous reading a month ago.
Eurozone consumer confidence
The gauge of Eurozone consumer confidence remained unchanged at -9.3 in April, matching the preliminary estimates, the European Commission informed yesterday. The reading came in better than previous month's -9.7.
Germany CPI
Consumer prices in Germany rose 0.1% y-o-y in April 2016, down from a 0.3% increase in the previous month but matching preliminary estimates. On m-o-m basis, consumer prices fell 0.2% in April, after a 0.8% increase in March.
US initial jobless claims
Initial jobless claims in the US increased by 9,000 to a seasonally adjusted 257,000 in the week ended 23rd April, the Labor Department reported yesterday. Last week's claims were revised upwards to 248,000 from the earlier reading of 247,000. Economists, on the other hand, had expected a larger increase to 259,000. The four-week moving average dipped to 256,000 from the previous week's 260,750.
US GDP annualised
US real GDP grew at an annualised rate of 0.5% in Q1 2016, after rising 1.4% in the preceding quarter, the Commerce Department stated yesterday. The market expectation was a 0.7% expansion.

Fri, 29 Apr 2016 08:35:00 +0100
Northland Capital Partners View on the City: Octagonal, ValRix, Mediazest, Thor Mining Octagonal (LON:OCT) – BUY*: Trading update
Market Cap: £8.7m; Current Price: 1.6p; Target Price: 2.8p

Update on trading at GIS
 Despite a challenging 2H16, as a result of reduced activity in investment banking, GIS management responded quickly by reducing staffing levels and operating costs where possible. This also coincided with a migration onto a next generation operating system where savings were previously ring-fenced.
 GIS’s results are expected to be in-line with expectations with revenues exceeding £4.2m, ahead of our forecast £4.1m, and EBITDA of c. £1.1m again ahead of our £1.0m forecast for GIS for FY16E.
 GIS executed over 82,000 transactions during the year and saw a marked improvement particularly in March 2016 which continues today. Management remain positive with regards to the outlook for GIS.
 No change to forecasts at this stage, we reiterate our BUY rating and 2.8p price target, full year results due in June 2016.

NORTHLAND CAPITAL PARTNERS VIEW: Positive trading update from the Company which shows GIS trading comfortably in line with our forecasts, despite citing challenging conditions in the 2H16. There is headroom for considerable upscaling of trading volumes which will have a positive impact on profit margins for the business. Furthermore, with minimal balance sheet risk and a short working capital cycle the majority of profits converts into cash. This will enable the business to expand its service offering and fund a progressive dividend policy. The shares trade on 7.8x FY17 earnings, we maintain our BUY rating and 2.8p price target.

ValiRx Plc (LON:VAL) – CORP: New patent granted
Market Cap: £4.7m; Current Price: 10p

US patent grant for VAL401
 ValiRx announced that ValiSeek Limited, the joint venture between ValiRx and Tangent Reprofiling Limited, has received notification today from Tangent that a US patent covering the use of VAL401 as a treatment for adenocarcinoma has been allowed by the US patent office.
 Adding to the earlier US patent grant covering the composition of formulation for VAL401, as announced on 14 May 2015, the Directors of ValiSeek believe this announcement to be further validation of the innovative scientific foundation behind and supporting the VAL401 project just as the upcoming clinical trial has been designed to provide validation of the clinical applicability.
NORTHLAND CAPITAL PARTNERS VIEW: VAL401 is a reformulation of a generic drug which has over two decades of clinical use in the treatment of mental disorders. The drug is now being reformulated for the treatment of cancers, given pre-clinical data supporting these new indications. Due to its established safety profile, ValiRx expects to soon commence a Phase 2 clinical trial on the treatment. Today’s patent grant further strengthens the IP around this promising reformulation.    

MediaZest (LON:MDZ) – CORP: Pre-close Trading Update
Market Cap: £1.9m; Current Price: 0.18p

“best-ever financial performance”, positive EBITDA.
 In a Trading Update for the year ended 31 March 2016, MediaZest, the creative audio-visual company, reported its “best-ever financial performance”.
 MediaZest reports that it expects FY’16 of “not less than £3.14 million (prior year £2.48 million)”, with  improvements in margins and reductions in overhead costs, resulting in a maiden  positive full year EBITDA of approximately £50,000 (prior year EBITDA loss of £625,000).  Consequently the retained loss is reduced from £656,000 to approximately £100,000 ).
 Cash in hand at 31 March 2016 was similar to the prior year end (March 2015 - £13,000).  The Group retains its banking facilities, including an invoice discounting arrangement of up to £500,000, reporting that the amount in use as at 31 March 2016 was approximately £230,000).
 Commenting on trading performance, the Group notes that Q4 was “as anticipated quieter than the previous three quarters”, with several rescheduled projects resulting in a shortfall in projected profitability for the year. However, current clients continued to place business, with the addition of new clients including Estée Lauder and Mamas & Papas.  MediaZest reports that recurring revenues have grown strongly in the last 12 months, nearly doubling in that period, in line with Group strategy.
 In other areas, two face recognition systems live in retail stores; almost £1.0m of new business has been closed for the current year; and pitches are underway for several large projects, two of which, MediaZest says, “have the potential to be transformative for the business”.
 Recruitment of a replacement Finance Director is well underway and the Board intends to announce an appointment in the next few weeks.
 Chief Executive, Geoff Robertson, said: “The Board is pleased with the substantial improvement in financial performance during the last 12 months, whilst recognising that there is further work to be done to move to full profitability beyond the EBITDA level.  We have added several key new clients in the period, most of whom we expect to engage with on additional new projects over the coming months and years. Coupled with the growth in our contractual recurring revenues with many of the same clients, we anticipate this will build a more consistent and growing income base for the Group.”
 Mediazest notes that figures are subject to audit and do not yet include an accounting adjustment under IFRS2 (Share based payments) as a result of the Employee Share Option Scheme which was implemented during the year, a non-cash item which nevertheless will affect the year end result.
Mike Jeremy +44 (0)20 3861 6623

Thor Mining (LON:THR) – CORP: Q316 update
Market Cap: £1.2m; Current Price: 0.03p

Lone repaid from Spring Hill proceeds
 During Q316 Thor Mining sold its Spring Hill Gold Project for A$3.5m plus a royalty, to date the Company has received A$2m for a 60% interest in the project. Thor is in discussions to bring forward the receipt of A$1.5m for the remaining 40% interest in Spring Hill.
 The loan secured against the Molyhil and Pilot Mountain tungsten projects has now been repaid.
 Discussions to secure the project finance for Molyhil are ongoing.
 At Pilot Mountain planning has begun for an exploration programme.
NORTHLAND CAPITAL PARTNERS VIEW: Thor Mining has paid down the debt that was secured on its Molyhill and Pilot Mountain tungsten projects using two thirds of the initial payment received for its 60% interest in the Spring Hill Gold Project. As a result, capital remains tight for the Company and it is trying to bring forward the receipt of the balance of the proceeds from the sale of Molyhil.


Fri, 29 Apr 2016 08:31:00 +0100
Carl juices his Apple and markets peel off FTSE 100 called to open -50pts at 6275, but with the overnight sell-off finding support at 6250. Staying above the key 6220 ceiling of the March 6-week sideways channel will warm the hearts of any bulls hoping for an end-of week rebound towards late Weds’ 6340 highs. The bears are concentrating on the trend of falling lows from Wed’s night. Watch levels: Bullish 6295, Bearish 6255.

The negative opening call comes after a late US sell-off kept risk appetite in check during overnight Asian trading (Japan closed). The turnaround comes after slower than expected US GDP (4th straight quarter of slowing growth, lowest growth in 8 quarters) and activist investor Carl Icahn sent markets into a tailspin after saying he is worried about China and sold all his shares in Apple.

Japan’s Nikkei closed today but we note more Yen strength derived from a USD sell-off following a soft US GDP print that could keep the Fed from hiking interest rates. It also adds to pre-existing weakness from yesterday’s BoJ decision not to boost stimulus. Monday could be tough for the Nikkei. 

Australia’s ASX posting gains thanks to a buoyant mining sector as commodities prices benefit from a weak USD tailwind. Stocks in China suffering from a higher FX fix in the renminbi as the PBOC reacts to dollar weakness. This morning note worse than expected German Retail Sales but better French GDP (accelerated to fastest growth in 11 quarters).

US Bourses were led lower yesterday by Apple shares after activist investor Carl Icahn liquidated his entire holding in the company. GDP growth coming in softer than expected (0.5% vs. 0.7% consensus) also weighed on sentiment stateside. Note the governor of the Bank of England, Mark Carney, said that the UK economy also seems to be slowing a little, although that’s due to Brexit stuff rather than a read across from the US.

Corporate results saw some positive earnings from Ford Motor Co. and UPS with the parcel courier and economic barometer posting solid Q1 results while the car giant saw profits and EPS double those for Q1 2015 - a record for the company.

Dollar weakness is still a boon for commodities with Gold outperforming amid choppy equity market action. The yellow metal is currently consolidating having made fresh highs of $1281 overnight and is testing the trend of steep rising lows from yesterday. A confirmed break below rising support could see further correction, although note that it’s Friday with the oft observed ‘risk-off into the weekend’ potentially keeping gold green.

In focus today - Eurozone Inflation expected to show improvement to breakeven in headline CPI but a slowing in Core. The GDP reading for the region is seen inching up in the quarter but slowing slightly over the year. Comments from the Fed’s Kaplan could move the USD mid-morning as could result from oil Major Exxon-Mobil before the US open.

In the afternoon, after that poor US GDP print, watch out for US Personal Income and Spending forecast to have improved in March (didn’t help with Q1 GDP did it), although the inflation markers may garner more focus. Keep an eye out also on Chicago PMI, Michigan Consumer sentiment as well as the Baker Hughes Rig Count given the rally in oil.

Fri, 29 Apr 2016 08:30:00 +0100
VSA Capital Market Movers - Ophir Energy
Ophir Energy (LON:OPHR) has announced it has been unable to complete a deal with Schlumberger (SLB US) that would have seen it become OPHR’s upstream partner on its Fortuna FLNG project in Equatorial Guinea.

However, OPHR still believes the project is financially attractive and remains in discussions with other parties over the funding of the project. After completion of the FEED studies OPHR estimates the capex requirement from FID to first gas has now come down from US$600m to US$450-500m gross.

The result of this means it is likely that the timings on the project will now be pushed back several months and FID is now anticipated in Q4 2016 with first gas in early 2020.

Fri, 29 Apr 2016 08:28:00 +0100
U.S. Stocks Drop as Dollar Plunge Boosts Commodities to Bonds U.S. Stocks Drop as Dollar Plunge Boosts Commodities to Bonds
Here is the opening of this after hours market report from Bloomberg:

Stocks fell from Tokyo to New York as central banks showed little will to step up support for flagging economies amid disappointing corporate results. The dollar tumbled the most in six weeks.
While U.S. equities briefly overcame early losses sparked by the Bank of Japan’s surprise decision to refrain from adding to stimulus, the Dow Jones Industrial Average ended Thursday down the most since Feb. 23 as investor Carl Icahn said he sold his stake in Apple Inc. The greenback’s decline sparked gains in commodities, while haven assets jumped, driven by the yen’s steepest advance since 2010. Treasuries extended gains.
“I’ve certainly been surprised by the ability of the market to hang in there with as many mediocre earnings as we’ve seen so far and I think it was too many,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “As a bull, you don’t want to see a late-day selloff after some good morning action. It’s a market that’s just a little worn out.”

David Fuller's view
Wall Street’s influential stock market indices have been losing upside momentum in regions of previous resistance, as this service has been pointing out over the last two weeks.  We saw a good rally from the mid-February lows, helped by some favourable developments.  These included the weaker Dollar Index, now somewhat oversold, and sufficient recoveries in most commodities to suggest their bear markets are over.
What happens next?

The Biggest Windmills Now Make Jumbo Jets Look Tiny
Here is the opening of this informative article from Bloomberg:

Often derided as a blot on rural landscapes, wind turbines got bigger and stronger than ever anyway. The next generation are even larger and designed to withstand an Arctic battering.
The granddaddy of them all is a machine with rotors that cut a 164 meter (538 foot) swath made by a Vestas Wind Systems venture with Mitsubishi Heavy Industries. A single blade is 80 meters, about the entire wingspan of an Airbus A380 jumbo jet. In the intensely competitive wind turbine business, it’s rare for executives to allow a close-up look of what they’re developing, lest they tip off rivals. Vestas allowed Bloomberg News to visit and photograph the prototype units this month.
As they got bigger, the units became more efficient, boosting global installations 23 percent last year to a record 63.5 gigawatts, which at full tilt would be about as much as what flows from 63 nuclear reactors. Wind is now the most installed form of low-carbon energy. While few people outside the industry noticed, the trend lifted shares and profit of manufacturers from their crash during the financial crisis. Vestas is due to report its fifth consecutive increase in quarterly profit on Friday, overcoming a slump that forced it to cut 3,000 jobs since 2011.
Even the plunge in crude prices since  2014 has failed to derail industry growth.
“The doubling of turbine size this decade will allow wind farms in 2020 to use half the number of turbines compared to 2010,” said Tom Harries, an industry analyst at Bloomberg New Energy Finance. “This means fewer foundations, less cabling and simpler installation -- all key in slashing costs for the industry.”
The average turbine installed in Europe was 4.1 megawatts last year, 28 percent larger than in 2010, according to the London-based researcher, which expects 6.8 megawatts to be the norm by 2020. Harries said Siemens has hinted it’s working on a 10 megawatt turbine.
Standing in northern Denmark, where fjords cut through flat farmland, MHI Vestas Offshore Wind has erected the world's most powerful turbine. The turbine produces 8 megawatts of power, enough for about 4,000 homes. It could challenge the lead in offshore wind accrued by Siemens, which has almost two-thirds of installed capacity, according to BNEF. MHI Vestas is in second place, with 19 percent.
A Siemens spokesman said a 7-megawatt turbine the company is working on has a “track record of reliability” that will reduce costs for customers. It won its biggest contract for the machine on Wednesday from the Spanish utility Iberdrola, which will buy 102 turbines valued at as much as 825 million pounds ($1.2 billion).
The 80-meter blades of the MHI Vestas V164 make the machine almost as high as the Times Square Tower in New York, and are so large that they were “a nightmare” to transport on narrow country roads, Jens Tommerup, chief executive officer of the venture, said in an interview. This prototype is built for use offshore and has been tested on land since January 2014 at the wind turbine field in Osterlid, managed by the Technical University of Denmark. The goal is to spot faults before they enter service.

David Fuller's view
As with all technologies, windmills are becoming more efficient, which is obviously very good in terms of the energy produced.  Aesthetically, I do not like them.  They remind me of the invasion machines from H.G. Wells memorable science fiction novel: The War of The Worlds, first serialised in 1897.  If you live within earshot of a windmill the effects can be very disturbing.  Nevertheless, we will see more of them around the globe because their technology is improving and they are helping us to inch closer to a world in which our energy is mainly of the renewable variety.  

The Markets Now Presentations
Here is Iain Little’s excellent presentation: Trusts In Focus Up Date – Gold: In The Foothills of Recovery – What I’m Buying Today.

David Fuller's view
How about if we have the next Markets Now Seminar in early July, following the Brexit decision?

Ambrose Evans-Pritchard: The European Union Always Was a CIA Project, as Brexiteers Discover
Here is the conclusion of this historically interesting column for The Telegraph:

The awful truth for the Leave campaign is that the governing establishment of the entire Western world views Brexit as strategic vandalism. Whether fair or not, Brexiteers must answer this reproach. A few such as Lord Owen grasp the scale of the problem. Most seemed blithely unaware until Mr Obama blew into town last week.
In my view, the Brexit camp should be laying out plans to increase UK defence spending by half to 3pc of GDP, pledging to propel Britain into the lead as the undisputed military power of Europe. They should aim to bind this country closer to France in an even more intimate security alliance. These sorts of moves would at least spike one of Project Fear's biggest guns.
The Brexiteers should squelch any suggestion that EU withdrawal means resiling from global responsibility, or tearing up the European Convention (that British-drafted, non-EU, Magna Carta of freedom), or turning our backs on the COP21 climate accords, or any other of the febrile flirtations of the movement.
It is perhaps too much to expect a coherent plan from a disparate group, thrown together artificially by events. Yet many of us who are sympathetic to the Brexit camp, who also want to take back our sovereign self-government and escape the bogus and usurped supremacy of the European Court of Justice, have yet to hear how Brexiteers think this extraction can occur without colossal collateral damage and in a manner consistent with the honour of this country.
You can quarrel with Europe, or you can quarrel with the US, but it is courting fate to quarrel with the whole democratic world at the same time. 

David Fuller's view
This is an important point, although it will feel like emotional blackmail to many Brexiteers.
A PDF of this Telegraph article is posted in the Subscriber's Area. 

Please note: I will be attending a meeting tomorrow.

Japan Stocks Tumble After BOJ Holds Off on Adding to Stimulus
This article by Yuko Takeo, Toshiro Hasegawa and Yuji Nakamura for Bloomberg may be of interest to subscribers. Here is a section:
“We’ve had the knee-jerk reaction to no change as the majority expected some form of action,” said Cameron Duncan, Sydney-based co-head of income strategies at Shaw and Partners, which manages the equivalent of $7.6 billion. “In, hindsight, it’s probably consistent that they haven’t done anything because they eased three months ago.

There’s typically a lag in terms of response to that sort of easing. It’s the Bank of Japan and they’re pretty conservative and they are still waiting to see what the impact of that is.”

Goldman Sachs Group Inc. and HSBC Holdings Plc were among those expecting the central bank to add to ETF buying. Goldman Sachs estimated the BOJ would expand annual purchases to 7 trillion yen, while HSBC predicted an increase to 13 billion yen.

The central bank’s decision to forgo additional easing this time hasn’t deterred some from expecting more stimulus in the future. It’s inevitable that economic growth and inflation will take a downturn and given the outlook for a stronger yen, the BOJ will likely boost stimulus eventually, SMBC Nikko Securities Inc.’s chief market economist Yoshimasa Maruyama said.

Driven to Ease
“The situation the BOJ is in won’t change for the better because of its decision today,” Maruyama wrote in a note to clients. “It’ll be driven into easing further sooner or later.”

The Topix is down 13 percent this year, making it the worst performing developed market in 2016, after starting 2016 tumbling into a bear market on worries over oil prices and slowing global economic growth. The measure has climbed back 12 percent from a Feb. 12 low, bolstered by a recovery in oil prices and signs of stabilization in China’s economy.

Eoin Treacy's view
“If you’re going to go, go big” was something the BoJ appeared to have understood when it adopted the QE program that sent the Yen down more than 50% and ignited a major run in Japanese stocks between late 2012 and early 2015. Since the middle of last year the commitment to doing everything necessary to ignite inflation has waned. The wait and see attitude adopted of late suggests a lukewarm commitment to reform and expansion.

Monetary Policy in Wonderland
Thanks to a subscriber for this note from Doug Kass at Seabreeze Partners which may be of interest.
I continue to be struck these days by investors' deranged acceptance of current monetary policy as the norm. Few are fearful of zero or negative interest rates' adverse ramifications and disruptive impacts.

As I put it yesterday: "Two decades from now, we'll likely look back at 2000-2016 monetary policy with disbelief that investors swallowed and accepted it.

As my friend Mark J. Grant wrote on Monday, it's almost as if we all now reside in Alice In Wonderland: '"The White Knight's walking backwards and the Red Queen's off her head." We ignore it mostly. What can we do about it anyway? We have absolutely no control over the antics of the central banks.

In fact, a lot of investments are made just by trying to outthink what these people might do next.

Move your rooks first.

"Take some more tea," the March Hare said to Alice, very earnestly. "I've had nothing yet," Alice replied in an offended tone, "so I can't take more."'"

-- Doug's Daily Diary, Apple in Wonderland: What's Up with AAPL (and the Fed)? (April 27, 2016)

The aberrant and unsound have become justified and excused, while malinvestment has become a mainstay as markets reach for yield.-

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

There is no doubt we live in interesting times. Headlines this week that floating rate mortgage holders in Denmark, Belgium and Netherlands are receiving cheques from the bank because the interest rates on the loans they took out are now negative is another reason to believe we live in very strange times indeed.

Bond Traders Focus on Uptick in Inflation as Treasuries Decline
This article by Eliza Ronalds-Hannon for Bloomberg may be of interest to subscribers. Here is a section:
Treasuries declined, reversing earlier gains, after data showed a measure of inflation climbed in the first quarter by the most since 2012 even as the U.S. economy expanded at the slowest pace in two years.

Benchmark 10-year note yields rose as a bond-market gauge of consumer-price gains, known as the break-even rate, climbed to the highest on a closing basis since July. A Commerce Department measure of inflation tied to personal spending and excluding volatile food and fuel costs advanced 2.1 percent, the most in four years and in line with the Federal Reserve’s 2 percent target.

Fed officials have been looking for signs of accelerating price growth as they seek to tighten monetary policy as peers including the Bank of Japan and the European Central
Bank maintain or increase stimulus. Policy makers on Wednesday kept interest rates unchanged and signaled they were in no rush to act. The Fed removed a reference to global risks from its policy statement and emphasized concerns about U.S. economic progress, saying growth in household spending “has moderated” since its previous meeting even as labor-market conditions have improved.

“The various inflation and price trend data are all hovering at or above the 2 percent ‘price stability’ mandate,” said Russ Certo, a managing director at Brean Capital in New York. “You saw a marginally steeper curve,” he said, as “the market is choosing to first shorten duration based on the perception of this data print on overall interest-rate outlook.”

Eoin Treacy's view
The US 5-year yield is perhaps the best measure of where the most risk lies in the debt markets, since so much of the Fed’s holdings of Treasuries mature within that timeframe. The yield has been rangebound for most of the last three years but has held a progression of lower rally highs since early January. It is now trading in the region of the trend mean once more and a sustained move above 1.4% will be required to confirm more than temporary supply dominance.

Email of the day on using options in lieu of stops
Thank you for replying to my enquiry yesterday about the use of stop losses. Given your hesitations about them what do you think of the use of a put and call option in a Telsa -like situation?

Eoin Treacy's view
Thank you for this suggestion. I don’t pretend to have any specialist knowledge of options trading. I am however actively researching strategies because it is a tax efficient way of participating in the market from the perspective of a US based investor but I have not yet taken the plunge. I agree option strategies are a potentially useful way of mitigating drawdown risk.

Eoin Treacy's view
Thank you to everyone who has expressed interest in The Chart Seminar this year. Our plans are to hold a webinar sometime in June and I will share details of this as we firm up how best to conduct it. The timing of the seminar will be catered to where the majority of delegates sign up from but we’ll try to pick a time when the most possible people can tune in live.

We also plan to hold two seminars in physical locations this year. From some subscriber feedback I was thinking of holding one in Los Angeles during the summer and another in London during the fourth quarter. If you would like to express interest in any of our events please message Sarah Barnes at

Fri, 29 Apr 2016 08:25:00 +0100
Lloyds remains a ‘top pick’ for UBS despite profits drop Thu, 28 Apr 2016 11:45:00 +0100 Today's Market View Including: Anglo American, Herenica Resources, Petropavlovsk, Tri-Star Resources, Wolf Minerals Anglo American (LON:AAL) – Sale of Brazilian Phosphates and Niobium businesses
Herencia Resources (LON:HER) – Bad news on sale of Picachos project as buyers fail to proceed
Petropavlovsk* (LON:POG) 8.2p, Mkt Cap 271m – FY15 earnings, Q1 update and Strategic Agreements
Tri-Star Resources* (LON:TSTR) – Pilot plant pours first metal
Wolf Minerals (LON:WLFE) – Q1 Report – continuing ramp up at Drakelands

Anglo sells Brazilian phosphates and niobium business to China for an impressive $1.5bn
• The deal puts the asset sale at an impressive 10.1x EBITDA
• The valuation suggests that China is prepared to outbid other suitors for mineral assets and they are hungry for deals

Stillwater war chest of $460m (Bloomberg)
Stillwater Mining is looking at acquiring producing assets in Australia and Scandinavia according to its ceo
• The company produces platinum and palladium in the US and is appears keen to diversify its asset base with potential to acquire non pgm assets

China Futures Association calls for tougher risk controls as it moves to restrict futures trading activity
• Copper prices fell for a third day as the government moves to limit futures positions

Neil Woodford, a well known fund manager now managing his own funds is calling for a ‘commodity calamity’
• Woodford might have a point as commodities brought into China have raised stock levels and may serve to depress prices if not taken up by local manufacturers.
• Many funds are underweight commodities and are suffering substantial relative underperformance as this much unloved sector.
• While commodity prices do tend to lead the sector, underlying margin growth is likely to lead to a significant recovery in earnings going forward.
• Cost cutting, lower oil prices and weaker local currencies should all serve to enable margins to take off helped by a recovery in commodity prices

Extel survey – voting for the Extel survey is open
• Please feel free to express your appreciation for our work by voting on the Extel survey website

Dow Jones Industrials                          +0.28% at         18,042
Nikkei 225                                             -3.61%  at         16,666
HK Hang Seng                                      +0.12%  at         21,388
Shanghai Composite                            -0.27%  at           2,946                          
FTSE 350 Mining                                  +0.88%  at         10,055
AIM Basic Resources                           +0.58%  at           1,916

Economic News
Sorry – no time for economic news this morning due to POGs results

US$1.1357/eur vs 1.1319/eur yesterday.   Yen 108.17/$ vs 111.14/$.   SAr 14.426/$ vs 14.416/$.   $1.459/gbp vs 1.458/gbp
0.763/aud vs 0.763/aud.   CNY 6.479/$ vs 6.493/$.

Commodity News
Precious metals:
Gold US$1,258/oz vs US$1,246/oz yesterday
• Gold ETFs 56.4moz unch vs 56.4moz yesterday
Platinum US$1,034/oz vs US$1,017/oz yesterday
Palladium US$611/oz vs US$605/oz yesterday
Silver US$17.38/oz vs US$17.35/oz yesterday

Base metals:
Copper US$ 4,906/t vs US$4,939/t yesterday
Aluminium US$ 1,648/t vs US$1,645/t yesterday
Nickel US$ 9,170/t vs US$9,205/t yesterday
Zinc US$ 1,884/t vs US$1,897/t yesterday
Lead US$ 1,741/t vs US$1,752/t yesterday
Tin US$ 16,890/t vs US$17,350/t yesterday

Oil US$47.2/bbl vs US$46.8/bbl yesterday
Natural Gas US$2.145/mmbtu vs US$2.057/mmbtu yesterday
Uranium US$27.65/lb vs US$27.65/lb yesterday

Bulk comodities:
Iron ore 62% Fe spot (cfr Tianjin) US$58.9/t vs US$59.7/t yesterday
Thermal coal (1st year forward cif ARA) US$46.2/t vs US$47.3/t yesterday – Australian thermal coal exporters take 9.1% cut in annual contract prices to $61.6/t
• The settlement between Glencore and Tohoku Electric Power is better than expected as it is around $10.8/t higher than spot prices
• Less than half Australia’s thermal coal exports are now priced on the Japanese reference price indicating a move away from annual contract price settlement towards spot prices

Tungsten - APT European prices stood at $188-210/mtu vs $190-200/mtu last week

Lithium – lithium batteries are now finding new use in the marine environment
• Norwegian marine services group Østensjø Rederi AS has is commissioning a new offshore construction vessel with a hybrid diesel-electric system powered in part by a lithium ion battery.
• The cable laying vessel is designed for the North Sea market and uses a Corvus Energy ESS Energy Storage System.
• The system is expected to significantly cut fuel consumption and emissions of NOx, CO and CO2

Company News
Anglo American (LON:AAL) 784 pence, Mkt Cap £10.12bn – Sale of Brazilian Phosphates and Niobium businesses
• Anglo American has announced the sale of its Brazilian phosphates and niobium businesses to China Molybdenum Co for US$1.5bn cash.
• The sale, which has to be formally approved by the regulatory authorities in China, is expected to be completed during the second half of 2016.
• Anglo American has already received binding commitments from shareholders representing 63% of China Molybdenum.
• The cash sale is part of a move to reduce Anglo American’s debt to below $10bn by the end of 2016.
• The combined businesses generated $544m of revenue, £146m of EBITDA  and PBT of $69m during 2015.
• The Boa Vista niobium assets and associated businesses produced 6300t of metal last year while the Chapadao mine and Catalao and Cubatao treatment complexes produced 1.3m tonnes of concentrates over 1m tonnes of fertiliser and 265,000 tonnes of phosphoric acid.
Conclusion: The sale of the Brazilian businesses, which had been earlier mooted as of potential interest to X2, is part of Anglo American’s strategic reshaping announced in December 2015. The US$1.5bn sale of the Brazilian businesses represents a significant part of the US$3-4bn of disposals that the company had flagged for 2016. Anglo American’s net debt at the end of 2015 amounted to US$12.9bn.

Herencia Resources (LON:HER) 0.045 pence, Mkt Cap £1.9m – Bad news on sale of Picachos project as buyers fail to proceed
• Herencia are under pressure to find new funds as ‘Next’ the $5.125m buyer for the Picacos project sends notice that it will not proceed.
• The company is now faced with a $290,000 license payment which it has withheld.
• Herencia state the company has sufficient working capital to last till early May, eg the next one to two weeks by the sounds of things.
Conclusion:  The news may be a blessing in disguise for Herencia.  If management raise funds for the license payment and ongoing expenses then Herencia may potentially find a new lease of life.

Petropavlovsk* (LON:POG) 8.2p, Mkt Cap 271m – FY15 earnings, Q1 update and Strategic Agreements
Target price and valuation under review
FY15 financial results point to benefits of Rouble devaluation and cost cutting initiatives.
• TCC fell to US$749/oz (2014: US$860/oz) on a Rouble devaluation and cost cutting programmes.
• AISC dropped to US$874/oz (2014: 972/oz) driven by lower operating costs, a reduction in corporate admin expenses (US$30.4m v US$38.2m in 2014) and a weaker capex spend (US$32.6m v US$96.8m).
• EBITDA came down to US$172.8m (2014: US$251.8m) reflecting lower sales (599.9koz v 865.0koz in 2014) and weaker realised gold prices (US$1,160/oz v US$1,266/oz).
• Despite recording a loss of US$190.5m (2014: -US$182.2m) from continuing operations, the Company remained FCF positive allowing it to continue repaying outstanding debt.
• Net debt ctood at US$610m as of YE15 and US$596m as of Q1/16, compared to US$696m as of H1/15.
• Q1/16 production update shows a reduction in output across Pioneer (32.4koz v 43.9koz in Q1/15), Malomir (12.0koz v 16.5koz) and Pokrovka (7.5koz v 12.8koz) with output at Albyn flat (40.1koz v 39.6koz).
Total gold production was 92.1koz as the Compay focused on higher margin ounces.
• Gold sales totalled 101koz at an average realised price of US$1,164/oz.
• 2016 production guidance reiterated at 460-500koz (excl production from AZ) with TCC expected to come down to US$700/oz.
• Underground operations are planned to start at Pioneer in 2016 and at Malomir in 2029 with respective production rates of 130-180koz and 53koz.
• The Company is in the process of completing a full feasibility studies on projects.
• Net Debt target set at US$570m by YE16 assuming US$1,200/oz gold price.
• Capex forecast at US$70m with US$10m set for exploration works and US$60 for maintenance and underground operations and POX development.
• POX development, AZ acquisition and sucesful development of the underground at Pioneer are expected to see a 10-20% increase in annual production through 2017-2020 at lower costs.
POX plant development is due to unlock value of 9.3moz in refractory gold reserves and resources hosted by Malomir and Pioneer mines.
• Under the terms of the conditional agreement, Petropavlovsk to create a JV for development and operation of the Pressure Oxidation Hub (POX) project with LLC GMD Gold.
• GMD Gold has agreed to provide US$120m of capital estimated to complete the POX plant in return for 51% of the JV.
• The POX plant is more than 2/3s complete with Petropavlovsk having previously invested nearly US$200m and is 18 months away from completion.
• Petropavlovsk will not need to commit more capital should the project be completed within the budget.
• Should the cost of completion exceed the US$120m, Petropavlovsk will close the fund the remainder but the relative shareholding will stay intact.
• The plant is expected to come online in 2018.
• Based on internal feasibility study, Petropavlovsk’s share of production is expected to come in at c.200-300koz at c.US$700/oz TCC.
• Each partner will have access to 50% of the POX processing capacity with operations run on a toll-treatment basis with a margin of up to 5%.
• Petropavlovsk will initially process Malomir concentrate at the facility while GMD Gold will be treating both the material sourced from affiliated companies and third-parties’ concentrates.
• The Company agreed to sell at least 25% of the POX plant capacity to GMD Gold to help fully utilise its share of capacity.
• Flotation operations at the Malomir mine will require additional US$30m which are expected to be spent over 2017-18 ahead of the first production at the POX operation.
• The agreement is subject to a number of conditions including the approval by Petropavlovsk shareholders and creditors.
• GMD Gold is affiliated with the Novoangarsky metallurgical plant and Gorevsky GOK both Russian based operations involved in mining and processing of lead-zinc ores from the Gorevsky deposit, one of the world’s largest polymetallic deposits.
Amur Zoloto acquisition provides access to 1.55moz of non-refractory gold reserves.
• The Company agreed to acquire Amur Zoloto LLC (AZ) that owns a number of development and in production assets in the Khabarovsk region in the Far East of Russia.
• Total consideration of US$160m is comprised of US$144m to be paid in shares (1,434m at 6.89p) and US$16m of assumed net debt.
• The AZ holds 1.55moz in mineral reserves and 2.16moz in gold resources as at Dec/15 (JORC-compliant).
• AZ assets include:
o Yubileiny Complex – Krasivoye (operating UG mine with 1.13mt at 6.41g/t reserves) and Ulun (pre-production UG operation with targeted 100ktpa capacity from 2019) mines and the Yubileiny processing plant with current capacity of 100ktpa and a planned expansion to 200ktpa by 2019 to accommodate the Ulun ore.
o Perevalnoe OP mine with a 100ktpa concentrator to come into production in 2016 (concentrate to be treated at the Yubileiny leaching plant). The deposit hosts several high grade zones grading up to 40g/t.
o Malutka OP mine with a planned 2,000ktpa heap leaching operation.
o Tas-Yurakh Complex including two OP and three UG mines with a 200ktpa mining capacity and infrastructure in place.
o Gold placers (1mln m3 in washing capacity).
o AZ is expected to produce 38koz this year with budgeted expansions planned to take total output from 70koz to 127koz through the 2017-2020 period.
o Average costs are estimated at US$640/oz.
o With 3,301m share currently in issue, the deal will see owners of AZ to become 30% shareholders in Petropavlovsk.
o AZ is owned by Russia’s Alliance Mining Group and Lexor Group that ultimately controlled by Musa Bazhaev and his associates.
o The acquisition is subject to a shareholder vote.
Conclusion: We see a strategical update involving a redevelopment of the POX project and an addition of non-refractory ounces to the Petropavlovsk portfolio (AZ acquisition) as positive benefiting the sustainability of gold production and cash generation of the Group.
*SPAngel analysts have visited the Pioneer, Malomir and Albyn gold mines in Russia

Tri-Star Resources* (LON:TSTR) 0.11p, Mkt Cap £9.3m – Pilot plant pours first metal
(Tri-Star hold 40% of Strategic & Precious Metals Processing LLC ‘SPMP’, 40% Oman Investment Fund, 20% Dutco Group)
Buy - Target Price 0.36 pence
• Tri-Star have announced the approval for the development of a secondary process for the recovery of gold and silver from antimony ores.
• The process will be added to the new antimony roaster to be built in Oman.
• The addition of this process should add significant value to the ore recovery process and provide miners with additional reason to send ores to Tri-Star.
• Further test-work on new ores/concentrates will be done to test the recovery process.
• The extraction of gold will contribute a potentially significant additional revenue stream for the Roaster and will allow the conversion of a broader range of antimony ore.
• Plant engineering work in Johannesburg by SPMP is to be re-located to Sohar and should give further detail on the operating parameters for the proposed recovery of gold from refractory ores.
Conclusion:  Many antimony ores contain substantial gold and silver credits.  The roasting process should enable the recovery of gold, silver and other metals as part of the antimony recovery process.
*SP Angel acts as Nomad and Broker to Tri-Star Resources

Wolf Minerals (LON:WLFE) 8.625 pence, Mkt Cap £69.8m – Q1 Report – continuing ramp up at Drakelands
• Wolf Minerals reports on the continuing ramp up of production at its Drakelands tin/tungsten mine in Devon.
• Almost 530,000 bcm of material was removed during the quarter ending 31st March with mining activities predominantly focused on the extraction of ore from benches on the northern end of the pit. Blasting is now continuing on a regular basis suggesting that the operation has now mined through a significant part of the upper, weathered, levels of the deposit and is now starting to  access fresh rock.
• The processing plant has now treated 310,949  tonnes of ore, at an undisclosed grade, to produce 17,607 metric tonne units (mtu) of tungsten trioxide in concentrate, generating A$3.9m revenue. The plant is reported to have experienced a number of stoppages due to manufacturing faults with items of equipment. “The faults have been rectified under warranty and Wolf is working with the manufacturers and GRES [the contractor] to prevent future failures. However the down time has impacted production of tungsten concentrate during the period.”
• “Given the continuing softness of the tungsten price, the Company has taken steps to reduce its costs through active engagement with suppliers and reviewing manning levels at Drakelands.”
• During the quarter, capital expenditure totalled A$16.8m, of which A$3.9m was spent on development with a further A$7.7m on production and A$4.1m on debt servicing and repayments.
• Commenting on the market for tungsten, Wolf Minerals notes that “Demand for tungsten concentrate during the Quarter was similar to the December quarter with sound interest in Japan and Europe from the automotive and aerospace sectors while demand from other regions remained low as a result of soft conditions in the mining, oil and fracking industries.”
• As previously reported, Wolf Minerals has successfully concluded a £25m standby subscription facility with its major shareholder, RCF, which provides added financial resilience during the commissioning and ramp-up phases, which are taking place through a period of weak prices for tungsten concentrates.
Conclusion: Although there have been unforeseen issues with commissioning, Wolf Minerals and its contractors and suppliers have moved to resolve these. With the summer approaching and the move into less weathered, deeper parts of the deposit we would expect mining conditions to improve over the coming months.  As the initial problems with the plant are resolved, we would expect steady improvements in availability, throughput and recovery. Although the benchmark APT price has edged up recently, it remains at historically low levels and the support of RCF should provide Wolf Minerals additional  financial resilience.

Thu, 28 Apr 2016 11:02:00 +0100
SP Angel Morning Oil and Gas: Falcon Oil and Gas, Sound Energy, Sterling Energy,Tlou Energy Headlines
• Falcon Oil and Gas (LON:FOG – 9p/C$0.16) – Option Value
• Sound Energy (LON:SOU – 17p) – Badile Approval
• Sterling Energy (LON:SEY – 17p) – Ambilobe Withdrawal Capital Underlines Discipline
Tlou Energy (LON:TLOU/ASX:TOU – 3.50p/A$0.05) – Progress

In Brief
• Falcon Oil and Gas (LON:FOG – 9p/C$0.16) – Option Value: Today's announcement succinctly summarises the Falcon opportunity, in that it is a free option on the development of the Beetaloo shale. The Company is in a good position because if it fails to prove prospective for shale, it hasn't cost it, or its owners, anything. If, however, it is prospective, there is the likelihood that the Company will be able to valorise its position before any lengthy delay, whether by outright acquisition of the Company, or disposal of the interest in the Beetaloo assets. This is exactly what happened with Cove, the assets became too attractive to a larger player that has deeper pockets and a more strategic approach to asset development. As a consequence, we believe that Falcon is effectively a free option.
• Sound Energy (LON:SOU – 17p) – Badile Approval: While it is foolish to ever think that just because approval is given verbally in Italy, that it is given, but we would like to think that today's announcement does indeed signal the start of the long awaited Badile exploration programme. We will wait for the official decree, but on the face of it, this appears to be a positive development, and if the Badile well is successful, will transform the Company. Furthermore, given the limited contribution we believe that Badile makes to the current valuation, it is also further boosted by the fact that the downside is limited.
• Sterling Energy (LON:SEY – 17p) – Ambilobe Withdrawal Capital Underlines Discipline: It has taken a while to get to this point, but we believe that today's news has been sometime in the making for the Company. The withdrawal from the Madagascar licence effectively means that the historic portfolio of licences has all but gone, and of those that remain, we can say with confidence that they are the most attractive and highly prospective. What this also demonstrates is that there are no “sacred cows,” and that capital discipline (in the context of risk management is paramount. As Messers Beardsil and continue to demonstrate (see also Gulfsands), they are adept at identifying value and unlocking it, albeit that it also helps to have a supportive backer too. Still, we will wait and see where the Company goes from here, but as has been common with the last few companies that hav e benefitted from the Waterford group's involvement, we believe that the Company will be in better shape once the management team have completed their programme, than it was before they started.
• Tlou Energy (LON:TLOU/ASX:TOU – 3.50p/A$0.05) – Progress: Today's news is positive in the context that its CBM pilot well continues to follow the general trend (dewater/unload/degas), which at this stage is a positive. While further wells will be required to verify the initial findings and a "well type" developed with confidence, and hence an FDP developed, we believe that the initial signs should support the current value and continued development of the asset.

Thu, 28 Apr 2016 09:33:00 +0100
In the papers: Chobani, Comcast, GlaxoSmithKline The Times
I’ll buy back BHS with U.S. cash, says Chappell: Dominic Chappell, the twice-bankrupt former racing driver who owned BHS for only a year before it collapsed into administration, is trying to buy it back with the help of American investors.
Retail sales plunge as shoppers shun clothes and shoes: Retail sales fell at the fastest rate in more than four years this month, adding to concerns that the dominant British services sector is suffering a slowdown.
Carmakers set to motor past British production record: More cars — 5,000 a day — are being produced in Britain than since the collapse of Rover, new data have revealed.
Terrorism and cheap fuel dent Stagecoach’s profits: Shares in Stagecoach fell after it warned that the outlook for its U.K. rail business had become more challenging as a result of terrorism fears, low fuel prices, a slowing economy and weak consumer confidence.
Cobham sacks Directors who made accounting ‘mistakes’: Two senior Directors at Cobham’s wireless division have been dismissed as a result of revenue issues that triggered a £9 million charge against the defence company’s profit this year.
Care home Owner blames living wage for debt talks: The Owner of the country’s largest care home is in talks with investors about restructuring its debt as it reported a 39% drop in profits on the back of what it said was an “extremely challenging” market.
The Independent
U.K. standards of living lag behind European average, Glassdoor finds: Standards of living in Britain lag behind the European average, according to a Glassdoor study. The U.K. comes 10th out of an analysis of 18 European countries, behind Switzerland, Denmark and Germany.
Chobani yoghurt CEO gives 10% of his shares to workers, potentially making them millionaires: Hamdi Ulukaya, Founder and CEO of yoghurt-making company Chobani, is giving back to its employees in a very big way. Approximately 2,000 full time employees will receive a 10% Ownership stake in the company, which sold $1.6 billion worth of yoghurt last year and is now valued at between $3 billion and $5 billion.
Comcast ‘in talks to buy DreamWorks for $3 billion’: Comcast, the parent of Universal Pictures, is in talks to acquire DreamWorks Animation SKG Inc. for more than $3 billion, the Wall Street Journal reported, citing people familiar with the discussions.
Argos-Owner Home Retail reports annual profits down 28% ahead of Sainsbury’s takeover: Argos-Owner Home Retail, which agreed last month to be taken over by British supermarket Sainsbury’s, reported a 28% fall in annual profit on Wednesday, reflecting tough markets and increased investment.
The Daily Telegraph
Federal Reserve leaves door open to June interest rate rise: U.S. interest rates could rise again as soon as this June, the Federal Reserve signalled on Wednesday, as it suggested that risks to the global economy have receded.
Glaxo confounds critics after strong start to the year pushes profits higher: GlaxoSmithKline has cast doubt on calls from some investors for a break-up of the company after sales of new drugs took off in the first quarter, pushing profits higher than expected.
MPs confirm Sir Philip Green will be called over BHS collapse: Sir Philip Green will be called by MPs to give evidence over the collapse of BHS and the retailer’s pensions deficit, the Work and Pensions Committee has confirmed.
Santander’s U.K. profits jump as mortgage lending surges: Santander U.K.’s profits increased by 13% to £532 million in the first quarter of this year as it joined in the mortgage boom and won over more new current account customers.
Brexit could result in high inflation and low growth, warns Mark Carney: Leaving the European Union could result in higher inflation and lower economic growth, Mark Carney, the Bank of England Governor, has warned.
Amec Foster Wheeler reveals new Boss as performance slips: Oil and gas services group Amec Foster Wheeler has appointed Jonathan Lewis as its new Boss, filling the post left by Samir Brikho with an Executive from its U.S. peer Halliburton.
The Guardian
Bank of Japan shocks markets by voting against more stimulus: The Bank of Japan has surprised investors by deciding against any fresh market stimulus despite shocking data that underlined the huge problems facing the country’s economy.
Facebook’s net income triples in first quarter of 2016: Facebook took the occasion of positive first quarter results to announce a plan to consolidate power within the company with CEO and Founder Mark Zuckerberg.
Decline in iPhone sales leads to first revenue decline in 13 years for Apple: Apple shares dropped on Tuesday afternoon after the company reported a nearly 13% fall in quarterly sales, the first time revenue at the world’s most valuable publicly traded company has declined in 13 years.
Brexit would cost U.K. households £2,200 by 2020, says OECD: The head of the west’s leading economics thinktank has accused those campaigning for Britain to leave the European Union of being “delusional” as he warned that departure would cost the average household a month’s salary, £2,200, by the end of the decade.
Daily Mail
Fab lolly manufacturer R&R teams up with Nestle to create new U.K.-based ice cream firm named Froneri: The Yorkshire ice cream maker behind Fab lollies has signed a huge joint venture with Nestle.
Rolls-Royce Boss orders further cost-cutting after internal report found it could make an extra £1 billion if it improved margins: The Boss of Rolls-Royce has told senior Managers to cut costs even more after an internal report found it could make an extra £1billion if it improved margins to match rivals.
Foxtons’ summer fears after booming demand before stamp duty changes came in led to a surge at the start of the year: Estate agent Foxtons has warned it faces a ‘challenging’ summer after booming demand from landlords led to a surge in business at the start of the year.
Beep defect smoke alarm maker Sprue Aegis says jobs are under threat as it sets aside £5.5 million to cover customer claims: The Boss of one of Britain’s biggest smoke alarm manufacturers has warned up to 10% of jobs could be cut as it reels from the fallout of a product malfunction.
Virgin Media to invest £3 billion in bid to connect 4 million more homes to its speedy broadband network: Virgin Media is gearing up to rival BT by rolling out speedy broadband to 4 million more homes and businesses in a £3 billion investment that will create thousands of jobs.
Daily Express
More signs of a tech crash as Apple and Twitter shares plunge: Worse than expected results from Apple and Twitter have heightened that values in some of the world’s biggest tech firms are overinflated.
Do not trust ‘improbable’ claims Brexit would have no benefits to U.K. economy, say experts: The Organisation for Economic Co-operation and Development (OECD) waded into the Brexit debate with scare-mongering statements that used figures based on “improbable assumptions”, according to critics.
Blow for George Osborne as economic growth slows to 0.4%: Britain’s economic growth slowed to 0.4% in the first three months of 2016, official figures revealed.
Asda told to ‘clean up their act’ after shopping deals probe: Asda has agreed to abandon pricing tactics that were feared to have tricked customers into spending more, after an investigation by the competition regulator.
The Scottish Herald
170 Scottish jobs could go at Hargreaves as wind down accelerates: Mine operator Hargreaves Services has said as many as 170 Scottish jobs could be cut by the end of the summer as it accelerates its withdrawal from the thermal coal market.
Tennent’s calls for action to protect Scottish pubs: Lager brand Tennent’s is stepping up pressure on the Scottish Government to protect Scotland’s pub industry ahead of new legislation being introduced in England and Wales next month.
Milder weather and less wind hit profits at ScottishPower Owner Iberdrola: Less wind fuelled a 25% fall in underlying profits to £84 million at ScottishPower’s renewables business in the first three months of the year.
Nairn’s expands its gluten-free production: Oatcake maker Nairn’s is moving its gluten-free factory from Edinburgh to Midlothian in a £6 million investment.
EWM’s quiet retail billionaire looking at BHS: The man who led a management buy-out of Edinburgh Woollen Mill 15 years ago is said to be ready to snap up part of the collapsed BHS store chain.
BPI shares rise on Chinese disposal and trading: British Polythene Industries shares jumped by five% as the group reported a higher than anticipated gain on a disposal in China and stronger than expected trading in the first quarter of the year.
The Scotsman
Jack Daniel’s Owner swallows BenRiach in £285 million deal: Scotch whisky distiller BenRiach is being acquired by the parent company of Jack Daniel’s in a deal worth about £285 million.
Estate agent Coulters and HBJ property arm to merge: Edinburgh-based estate agent Coulters announced that it is to merge with HBJ Property, a division of Scottish law firm HBJ Gateley, as it looks to become a national brand and more than treble its turnover.
Smart antennas firm lands €2 million to target handset giants: An Edinburgh spin-out that develops “smart antennas” for mobile phones has secured almost €2 million (£1.6 million) of European funding.
Devro says U.S. and China plants on track amid steady trading: Sausage skin maker Devro has left its outlook for the year unchanged after trading in line with hopes since the start of 2016.
Scotland’s oil and gas “here to stay” says top industry economist: One of the oil industry’s top economists has claimed oil and gas is “here to stay” and that demand for the fossil fuels will not diminish over the next 25 years.
Brewdog could soon start work on beer themed hotel in Aberdeen: Brewdog could soon begin work on a new beer-themed hotel - dubbed The Kennel - after raising nearly £19 million in their latest Equity for Punks funding campaign.
City A.M.
Discount high street chain launched by Christo Wiese and ex-Asda Boss Andy Bond plots more store openings: Pep&Co, a discount variety chain launched last year by former Asda Boss Andy Bond and Christo Wiese, the South African retail magnate, has announced plans to roll-out more stores this autumn after opening 50 sites in just over 50 days last summer.
LK Bennett sales boosted by online expansion but closure of some weaker U.K. stores dents turnover: LK Bennett, the fashion retailer that counts the Duchess of Cambridge among its fans, said like-for-like sales grew by five% last year after winning over new shoppers through its growing portfolio of stores overseas.
Hilton checks in double profits in the first quarter thanks to tax benefits and higher rooms rates: U.S. hotel group Hilton has reported a sharp increase of 42% in like-for-like earnings per share compared to 2015 in its first quarter.
Top McCarthy & Stone investors sell their shares in £200 million placing: Investors in McCarthy & Stone, the retirement housebuilder, sold 85 million shares in a share placing worth around £200 million.
Vital Ingredient gets a £8 million health kick from Lloyds Banking Group’s private equity arm: LDC, the private equity arm of Lloyds Banking Group, has backed the management buyout of salad chain Vital Ingredient.
Total share price rises as it swings to profit in the first quarter: French energy giant Total swung into profit in the first quarter of this year, partly due to an uptick in refining revenues.
Conforama drops out of the race for Darty, paving the way for Fnac: French furniture chain Conforama has dropped out of the race to buy Darty, leaving the track clear for rival bidder Fnac to takeover the electricals retailer.

Thu, 28 Apr 2016 09:30:00 +0100
Market briefing: UK markets finished higher yesterday, buoyed by the energy sector and commodity related shares UK Market Snapshot
UK markets finished higher yesterday, buoyed by an advance in energy sector and commodity related shares. Miners, Glencore, Antofagasta and Anglo American climbed 0.6%, 1.7% and 4.5%, respectively. BP and Royal Dutch Shell gained 1.7% and 2.5%, respectively, tracking gains in crude oil prices. GlaxoSmithKline rose 2.1%, after it reported a jump in its revenue and core earnings for the first quarter. Barclays added 0.5%, after it posted better than expected revenue for the first quarter and its CEO stated that the lender would speed up the disposal process of “noncore” businesses and try to improve earnings at its investment bank. On the losing side, Sepura tanked 47.3%, as it faces a cash crunch. Standard Chartered shed 1.1%, following a broker downgrade on the stock to ‘Sell’ from ‘Hold’ who also reduced its price target to 454.0p from 460.0p.The FTSE 100 advanced 0.6%, to close at 6,319.9, while the FTSE 250 rose 0.8%, to settle at 17,083.7.
US Market Snapshot
US markets ended mostly higher yesterday, after the US Federal Reserve (Fed) indicated that it would gradually hike interest rates in future. Boston Scientific soared 11.2%, after it increased its forecasted earnings for 2016 following robust sales growth in the first quarter. Comcast added 0.4%, after its first quarter results surpassed analyst projections. On the flipside, Twitter sank 16.3%, after its revenue for the first quarter fell short of market expectations and it offered a weak outlook for the current quarter. H&R Block tanked 13.6%, as it projected lower revenue for the current fiscal year and disclosed plans of cost cutting and management changes. Apple declined 6.3%, after it reported disappointing results for the second quarter and projected lower than expected sales for the third quarter. The S&P 500 gained 0.2%, to settle at 2,095.2. The DJIA rose 0.3%, to settle at 18,041.6, while the NASDAQ slid 0.5%, to close at 4,863.1.
Europe Market Snapshot
Other European markets closed in the green yesterday, following some positive corporate releases. Statoil advanced 6.1%, after it reported a surprise profit in the first quarter amid help from a cut in its operational cost. Adidas jumped 6.0%, after it boosted its projected earnings for the full year following upbeat first quarter results. Total rose 2.8%, as its earnings for the first quarter beat market expectations due to improved results from its refining and chemicals unit. On the contrary, Neste plunged 7.8%, after it posted higher than expected drop in its earnings for the first quarter. Munich Re fell 3.9%, after it stated that first quarter earnings would be lower than prior estimates.The FTSEurofirst 300 index gained 0.3%, to close at 1,370.7. Among other European markets, the German DAX Xetra 30 rose 0.4%, to close at 10,299.8, while the French CAC-40 advanced 0.6%, to settle at 4,559.4.
Asia Market Snapshot
Markets in Asia are trading mostly higher this morning. In Japan, the Nikkei 225 index has reversed its earlier gains and has dropped about 3.0% following the Bank of Japan (BoJ) decision to keep interest rates unchanged. Exporters, Toyota Motor, Honda Motor and Nissan Motor have declined 3.6%, 4.3% and 4.8%, respectively, as the Japanese Yen gained against the US Dollar. However, Mitsubishi Motors has surged 8.1%, after it reported upbeat operating earnings for the year ended March. In Hong Kong, oil firms, PetroChina and China Petroleum & Chemical have advanced 1.7% and 2.4%, respectively. In South Korea,Samsung Electronics has dipped 2.7%, despite reporting an 11.7% annual rise in its first quarter operating profit. The Nikkei 225 index is trading 1.4% higher at 17,533.8. The Hang Seng index is trading 0.2% up at 21,400.8, while the Kospi index is trading 0.6% lower at 2,003.1.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.30% or $0.14 lower at $47.04 per barrel. Yesterday, the contract climbed 3.15% or $1.44, to settle at $47.18 per barrel, after the Energy Information Administration reported that US crude production dropped by 15,000 barrels to 8.94 million barrels per day in last week. Meanwhile, reports also showed that crude supplies in the US jumped by 2.0 million barrels in the week.
At 0330GMT today, Gold futures contract is trading 0.14% or $1.80 lower at $1248.60 per ounce. Yesterday, the contract advanced 0.66% or $8.20, to settle at $1250.40 per ounce, after the US Fed statement indicated that policy makers would take a slow approach while raising interest rates in 2016.
At 0330GMT today, the EUR is trading 0.15% higher against the USD at $1.1339, ahead of the German inflation and unemployment data, both for April, schedule to release today. Yesterday, the EUR strengthened 0.22% versus the USD, to close at $1.1321, after the GfK consumer confidence in Germany rose more than expected for May.
At 0330GMT today, the GBP is trading a tad lower against the USD at $1.4539. Investors will closely assess the US annualised GDP growth for the first quarter, due later today. Yesterday, the GBP weakened 0.26% versus the USD, to close at $1.4543, after data showed that UK’s economy slowed on a quarterly basis in the first quarter.
Fixed Income
In the US, long term treasury prices rose and pushed yields sharply lower, after the US Fed kept its interest rates unchanged at its recent policy meeting. Yesterday, yield on 10-year notes plunged 7 basis points to 1.87%, while yield on 2-year notes lost 3 basis points to 0.83%. Meanwhile, 30-year bond yield fell 5 basis points to 2.71%.

Key Economic News
UK GDP rose as expected in 1Q 2016

On a QoQ basis, the flash gross domestic product (GDP) rose 0.40% in 1Q 2016, in the UK, in line with market expectations. In the prior quarter, GDP had risen 0.60%.
UK GDP rose more than expected in 1Q 2016
On an annual basis, the flash GDP advanced 2.10% in 1Q 2016, in the UK, compared to a similar rise in the previous quarter. Market expectation was for GDP to rise 2.00%.
UK index of services rose less than expected in February
The index of services registered a rise of 0.10% in the UK on a monthly basis in February, compared to a revised similar rise in the previous month. Market expectation was for the index of services to rise 0.20%.
UK index of services rose less than expected in February
In February, on a MoM basis, the index of services in the UK climbed 0.70%, compared to an advance of 0.90% in the November-January 2016 period. Market expectation was for the index of services to climb 0.80%.
UK CBI distributive trade survey's retail sales balance recorded a surprise drop in April
In April, the CBI distributive trade survey's retail sales balance dropped unexpectedly to 13.00% in the UK, lower than market expectations of a rise to a level of 13.00%. The CBI distributive trade survey's retail sales balance had registered a reading of 7.00% in the prior month.
Euro-zone M3 money supply advanced as expected in March
In March, M3 money supply rose 5.00% on an annual basis in the Euro-zone, meeting market expectations. M3 money supply had registered a similar rise in the previous month.
Euro-zone private sector loans advanced less than expected in March
Private sector loans in the Euro-zone registered a rise of 1.60% in March on an annual basis, compared to a similar rise in the prior month. Markets were anticipating private sector loans to rise 1.70%.
Euro-zone three-month average of M3 money supply advanced in the January-March 2016 period
In the Euro-zone, the three-month average of M3 money supply registered a rise of 5.00% on a YoY basis, in the January-March 2016 period. In the December-February 2016 period, the three-month average of M3 money supply had advanced 4.90%.
German consumer confidence index advanced unexpectedly in May
In May, the consumer confidence index in Germany registered an unexpected rise to 9.70, compared to market expectations of an unchanged reading. The consumer confidence index had registered a reading of 9.40 in the prior month.
German import price index fell less than expected in March
On a YoY basis, the import price index eased 5.90% in March, in Germany, less than market expectations for a drop of 6.20%. The import price index had recorded a drop of 5.70% in the previous month.
German import price index rose more than expected in March
In March, on a monthly basis, the import price index recorded a rise of 0.70% in Germany, higher than market expectations for an advance of 0.30%. In the previous month, the import price index had dropped 0.60%.
French consumer confidence remained flat in April
In France, consumer confidence remained unchanged at 94.00 in April. Markets were expecting consumer confidence to advance to 95.00.
Italian consumer confidence index declined surprisingly in April
Compared to a revised reading of 114.90 in the previous month the consumer confidence index eased unexpectedly to a level of 114.20 in Italy, in April. Market anticipation was for the consumer confidence index to advance to 115.00.
Italian business confidence index climbed in April
In Italy, the business confidence index recorded a rise to 102.70 in April, compared to market expectations of a rise to a level of 102.50. In the prior month, the business confidence index had registered a reading of 102.20.
Spanish retail sales advanced more than expected in March
On an annual basis, retail sales climbed 4.40% in March, in Spain, higher than market expectations for an advance of 3.40%. Retail sales had advanced 3.90% in the previous month.
Swiss UBS consumption indicator advanced in March
In March, UBS consumption indicator in Switzerland climbed to 1.51, compared to a revised reading of 1.45 in the previous month.
US Fed keeps interest rate steady
The US Federal Reserve (Fed) left interest rates unchanged and gave no clear direction on future moves. In a statement that largely mirrored the one issued after its last policy meeting in March, the central bank’s rate-setting committee described an improving labor market but acknowledged that economic growth seemed to have slowed. While it held back on its previous warnings about risks to US growth from the world economy, the Fed insisted that it would continue to closely monitor inflation indicators and global economic and financial developments closely.
US pending home sales rose more than expected in March
Pending home sales recorded a rise of 1.40% in the US on a MoM basis in March, more than market expectations for an advance of 0.50%. In the prior month, pending home sales had climbed by a revised 3.40%.
US mortgage applications fell in the last week
Mortgage applications in the US slid 4.10% on a weekly basis, in the week ended 22 April 2016. Mortgage applications had risen 1.30% in the previous week.
US pending home sales advanced more than expected in March
On an annual basis, pending home sales in the US climbed 2.90% in March, higher than market expectations for an advance of 0.80%. Pending home sales had recorded a revised rise of 5.00% in the previous month.
BoJ surprises with unchanged policy
The Bank of Japan (BoJ) kept monetary policy unchanged, with rates at -0.1% and maintained its pledge to increase base money, or cash and deposits in circulation, at an annual pace of ¥80 trillion. The bank announced a loan support program worth ¥300 billion for banks in areas hit by the recent earthquake.
Japanese industrial production rose surprisingly in March
The preliminary industrial production unexpectedly rose 0.10% on a YoY basis in March, in Japan, higher than market expectations for a fall of 1.60%. Industrial production had registered a drop of 1.20% in the previous month.
Japanese unemployment rate fell unexpectedly in March
In Japan, unemployment rate registered an unexpected drop to a level of 3.20% in March, lower than market expectations of a steady reading. In the prior month, unemployment rate had recorded a reading of 3.30%.
Japanese vehicle production climbed in March
On an annual basis, vehicle production advanced 1.20% in Japan, in March. Vehicle production had fallen 6.90% in the previous month.
Japanese retail trade fell less than expected in March
On a YoY basis, retail trade fell 1.10% in Japan, in March, less than market expectations for a fall of 1.40%. Retail trade had risen by a revised 0.40% in the previous month.
Japanese small business confidence index fell in April
The small business confidence index recorded a drop to 47.80 in Japan, in April, compared to a level of 48.80 in the previous month. Markets were expecting the small business confidence index to drop to a level of 48.50.
Japanese retail trade rose more than expected in March
In March, retail trade climbed 1.40% in Japan on a MoM basis, compared to a drop of 2.30% in the prior month. Markets were anticipating retail trade to climb 0.50%.
Japanese National CPI ex-food, energy rose less than expected in March
In March, on a YoY basis, National CPI ex-food, energy recorded a rise of 0.70% in Japan, compared to an advance of 0.80% in the previous month. Markets were anticipating National CPI ex-food, energy to advance 0.80%.
Japanese Tokyo CPI fell more than expected in April
On a YoY basis, Tokyo consumer price index (CPI) in Japan recorded a drop of 0.40% in April, more than market expectations for a drop of 0.20%. Tokyo CPI had fallen 0.10% in the prior month.
Japanese job to applicant ratio registered an unexpected rise in March
In March, job to applicant ratio rose unexpectedly to a level of 1.30 in Japan, higher than market expectations of a steady reading. In the previous month, job to applicant ratio had recorded a reading of 1.28.
Japanese Tokyo CPI excluding fresh food fell as expected in April
On a YoY basis, Tokyo CPI excluding fresh food slid 0.30% in Japan, in April, in line with market expectations. Tokyo CPI excluding fresh food had registered a similar fall in the prior month.
Japanese National CPI ex-fresh food declined more than expected in March
In March, National CPI ex-fresh food in Japan, recorded a drop of 0.30% on an annual basis, more than market expectations for a fall of 0.20%. National CPI ex-fresh food had recorded a flat reading in the prior month.
Japanese national CPI surprisingly fell in March
In March, the national CPI unexpectedly eased 0.10% on a YoY basis in Japan, lower than market expectations for an unchanged reading. The national CPI had risen 0.30% in the previous month.
Japanese industrial production rose more than expected in March
The flash industrial production registered a rise of 3.60% on a monthly basis in Japan, in March, compared to a fall of 5.20% in the prior month. Markets were anticipating industrial production to rise 2.80%.
Japanese investors became net buyers of foreign bonds in the previous week
Japanese investors were net buyers of ¥984.70 billion worth of foreign bonds in the week ended 22 April 2016, from being net buyers of a revised ¥843.00 billion worth of foreign bonds in the previous week.
Japanese investors turned net buyers of foreign stocks in the previous week
Japanese investors turned net buyers of ¥20.90 billion worth of foreign stocks in the week ended 22 April 2016, as compared to being net sellers of ¥503.40 billion worth of foreign stocks in the prior week.
Foreign investors became net buyers of Japanese bonds in the previous week
Foreign investors remained net buyers of ¥411.20 billion worth of Japanese bonds in the week ended 22 April 2016, from being net buyers of ¥770.90 billion worth of Japanese bonds in the previous week.
Foreign investors became net buyers of Japanese stocks in the previous week
Foreign investors remained net buyers of ¥602.00 billion worth of Japanese stocks in the week ended 22 April 2016, as compared to being net buyers of ¥538.60 billion worth of Japanese stocks in the previous week.
Japanese Tokyo CPI excluding food and energy advanced more than expected in April
In April, on an annual basis, Tokyo CPI excluding food and energy in Japan rose 0.60%, more than market expectations for an advance of 0.50%. Tokyo CPI excluding food and energy had registered a similar rise in the prior month.
Japanese all industry activity index fell less than expected in February
On a monthly basis, the all industry activity index recorded a drop of 1.20% in Japan, in February, less than market expectations for a drop of 1.30%. The all industry activity index had registered a revised rise of 1.20% in the prior month.
Japanese household spending dropped more than expected in March
Household spending fell 5.30% on an annual basis in Japan, in March, compared to a rise of 1.20% in the previous month. Market expectation was for household spending to drop 4.10%.
Japanese large retailer's sales declined more than expected in March
Large retailer's sales in Japan dropped 1.20% in March on a monthly basis, compared to a rise of 2.20% in the prior month. Market anticipation was for large retailer's sales to ease 0.90%.

Thu, 28 Apr 2016 09:24:00 +0100
Federal Reserve Leaves Door Open for June Rate Increase Federal Reserve Leaves Door Open for June Rate Increase
Here is the opening of this report on the Fed’s announcement from Bloomberg:

Federal Reserve policy makers left open the door to raising interest rates in June by nodding to improvement in global financial markets and downplaying recent weakness in the U.S. economy.
The Federal Open Market Committee omitted previous language that “global economic and financial developments continue to pose risks,” instead saying officials will “closely monitor” the world situation, according to a statement released Wednesday following a two-day meeting in Washington. The Fed left its benchmark interest rate unchanged.
“Their removal of the line on risks is pretty significant,” said Carl Tannenbaum, chief economist at Northern Trust Corp. in Chicago and a former Fed official. “That might reflect increased comfort on the committee that global influences appear more manageable.”
The yield on 10-year U.S. Treasury bonds dropped by about 0.06 percentage point while U.S. stocks fluctuated with the dollar. Fed Chair Janet Yellen wasn’t scheduled to hold a post-meeting press conference.
The Fed’s assessment of how economic conditions have evolved since the committee last met in March was mixed. Officials acknowledged recent weaknesses while adding dashes of optimism over what’s ahead for the labor market and consumer spending.
“Labor market conditions have improved further even as growth in economic activity appears to have slowed,” the FOMC said. “Growth in household spending has moderated, although households’ real income has risen at a solid rate and consumer sentiment remains high.”
The committee reiterated that it will probably raise rates at a “gradual” pace. The central bank’s next meeting is June 14-15.
Extending a hold since raising interest rates in December from close to zero, the committee said that inflation has continued to run below the Fed’s 2 percent target, and market-based measures of inflation compensation remain low.

David Fuller's view
The US Federal Reserve has as Dual Mandate: stable prices and maximum employment.  They will not mention countries by name but reading between the lines we can assume that they are less concerned about China and commodity producers, and not without some justification.  In other words, negative deflation is slightly less of a risk and they do not yet see the ‘whites of the eyes’ of inflation.  Meanwhile, the trend of US employment is generally favourable, even though we can quibble about the quality of jobs on offer.  
Consequently, the Fed is on course for a quarter-point rate hike in June, provided there are no shocks between now and their next meeting on June 14-15.  However, there will still be a wild card which they have not had to consider previously.

Confused by Brexit? Here is Why Voting Remain is the Sensible Option, for Now
Here is the conclusion from this interesting article by Ben Wright for The Telegraph:

The risks posed by the two options in this summer’s referendum are therefore asymmetric. If we leave, we leave. But a vote to remain keeps the country’s options open – it is like being allowed to make an each-way bet on a two-horse race.
This is an especially important consideration for undecided voters. To the extent that normal people are paying any attention to the debate whatsoever, they may by now have concluded that the UK economy is likely to suffer a hit if the country votes to leave the EU (a fact that is conceded by even ardent Brexit supporters). But they will have no idea how extensive or lasting the damage might be.
They have been told that it is better to be inside the European Union agitating for much-needed reforms, but also that there is a lack of democratic accountability in Brussels where Eurocrats turn deaf ears to the UK’s pleas.
They have heard that European countries won’t be willing to agree favourable trade deals with a post-Brexit UK for fear of giving succour to anti-EU parties within their own borders. But they have also heard that Brits eat too much brie and drive too many Volkswagens for the EU to shut them out.
They may have noticed that a range of foreign politicians, economists, companies and supranational organisations have urged against Brexit, but might have been persuaded that this is a sophisticated propaganda blitz organised by an elite cabal hellbent on safeguarding its own existence.
In short, British voters, who have been bombarded with opinions (often masquerading as facts), will be unsure about who to trust and probably find themselves torn between the two sides of the argument – between pragmatism and patriotism; between head and heart.
Those who are should comfort themselves with the knowledge that the choice is not binary. There is absolutely no reason why the UK can’t vote to remain a member of the EU this summer and, if the benefits of that relationship deteriorate (which is certainly not beyond the realms of possibility), hold another referendum in five, 10 or 20 years’ time.
It's clear that the timing of this vote is far from ideal. The global economy is not looking so hot right now. The UK is running a peacetime record current account deficit, which can only be funded through foreign investment. And that money may very well start to dry up during the protracted negotiations that will follow a Brexit vote.
Some might describe such caution as cowardly. I think it fits Michael Oakeshott’s description of a small “c” conservative, who prefers “the familiar to the unknown … the tried to the untried, fact to mystery, the actual to the possible … the convenient to the perfect”.
It’s true that this philosophy benefits the status quo and sometimes things need to be shaken up. But that puts the onus on reformers to lay out a compelling alternative. If the British public is being told to take a running jump, it seems only fair to ask what we’ll be landing in. The Leave camp has failed to persuade me that it won’t be brown and sticky.
Yes, the UK’s membership of the EU may become less beneficial over time; it may reach the point where the decision to quit becomes compelling. But we’re not there yet.
Given that, there’s only one logical course of action for the undecided come June. It’s not stirring but it is sensible: Vote Remain (For Now).

David Fuller's view
I find this view persuasive, under difficult circumstances.  While I think EU officials are the architects of its probable destruction, assuming they stay on their present course, I do not like the real possibility that the UK would be blamed for triggering an even worse crisis.
I also think many currently undecided voters will find Ben Wright’s view persuasive.
A PDF of Ben Wright's article is posted in the Subscriber's Area.

One Regulation Is Painless. A Million of Them Hurt.
Here is the opening from this is a most welcome article by Megan McArdle for Bloomberg:

“In one year,” wrote Warren Meyer in 2015, “I literally spent more personal time on compliance with a single regulatory issue -- implementing increasingly detailed and draconian procedures so I could prove to the State of California that my employees were not working over their 30-minute lunch breaks -- than I did thinking about expanding the business or getting new contracts.”
Meyer is the owner of a company that runs campgrounds and other recreational facilities on public lands under contract from the government. It doesn’t seem like regulatory compliance should be eating up so much of his time; he is not producing toxic chemicals, operating a nuclear facility, or engaged in risky financial transactions that might have the side effect of sending our economy into a tailspin. He’s just renting people places to pitch a tent or park an RV, or selling them sundries. Nonetheless, the government keeps piling on the micromanagement lest some employee, somewhere, miss a lunch break.
I know what you’re going to say: Employees should have lunch breaks! My answer is “Yes, but.…” Yes, but putting the government in charge of ensuring that they get them, and forcing companies to document their compliance, has real costs. They add up.
An economy with but one regulation -- employees must be allowed a 30-minute lunch break, and each company has to document that it has been taken -- would probably not find this much of a drag on growth. But multiply those regulations by thousands, by millions, and you start to have a problem.
A new working paper from the Mercatus Center attempts to document the cumulative cost of all these regulations. It finds that the growth of regulation between 1977 and 2012 has shaved about 0.8 percent off the rate of growth, costing the nation a total of $4 trillion worth of GDP.
Stories like Meyer’s are the tangible face of the economic theory. As is the fact that in the annual small business survey by the National Federation of Independent Business, taxes and government red tape are far and away the biggest issues that business owners cite as their most important problems. Forty-three percent of those surveyed cited one of the two as their top issue.

David Fuller's view
I have heard similar stories over and over in recent decades.  In the USA, where it is fashionable to be patronising about former President Ronald Reagan’s abilities, I believe he would have lifted the dead weight of overregulation.
Excessively burdensome regulation is most frequently introduced by left of centre governments, with the intention of protecting workers, while actually reducing their prospects.  Governments too often ignore this while taking pride in the number of white collar regulatory jobs they have created.
The EU is the gold mine of regulatory jobs.  

Email of the day
On Markets Now presentations:
Good morning David, Gillian and I thank you once more for an interesting evening. The presentations and the dialogues were enlightening. I have downloaded a copy of your power point presentation but could not find those from Iain and Charles. I would appreciate if you would forward them to me or direct me towards the place where I can find them. Best regards also from Gillian, Erich

David Fuller's view
You are very welcome, and thank you for travelling all the way from Switzerland.  Your comments in discussions were also greatly appreciated.
To avoid overwhelming email systems and winding up in a ‘Spam’ folder, I release the PowerPoints over three days, in the sequence in which they were delivered.  Here is Charles Elliott’s excellent presentation: Investing in Technology.

How Argentina Settled a Billion-Dollar Debt Dispute With Hedge Funds
This article by Alexandra Stevenson for the New York Times may be of interest to subscribers. Here is a section:

After several frantic meetings and heated discussions over conditions, including that the hedge funds continue to have a say in Argentina’s future domestic market fund-raising, NML, Aurelius, Davidson Kempner and Bracebridge signed a deal on Feb. 28. In the agreement, Argentina agreed to pay $4.65 billion to the hedge funds, which included bond principal, interest and “certain legal fees and expenses incurred.”

Two days earlier, Mr. Pollack, the mediator, requested that Judge Griesa sign an order summoning Mr. Pollock and Mr. Singer of Elliott to his offices.

On Friday, Argentina paid all of the holdout creditors who had agreed to deals — a total of $9.3 billion, the economy ministry said. Elliott received $2.4 billion, a 392 percent return on the original value of the bonds, according to the ministry.

Eoin Treacy's view
Mauricio Macri is likely to be someone we hear a lot more from in future. Since his inauguration late last year he has come through with what he said he would do during the election campaign. In terms of the improving governance we look for to justify a medium-term bullish argument Argentina didn’t have it and now it does.

Email of the day on inflation expectations and rates
You've drawn attention to the 12 month T-bill rate a couple of times over the past week. Additionally, it is also very instructive to monitor inflation expectations to gauge what is discounted in terms of the future direction of interest rates. The five-year “breakeven” rate, a market measure of inflation expectations derived from comparing the yield of Treasury Inflation protected bonds (Tips) and conventional Treasuries, has climbed from a low of 0.95% in early February, to 1.56% now. It peaked at 2.4% in October 2012 after reaching an unprecedented minus 0.9% in 2008.

Movements in Tips have tended to reflect investor expectations about future consumer price inflation, and these have been stoked by the recent rise in oil prices and a weaker dollar, which means higher import prices. In fact, the breakeven rate has been rising in tandem with oil prices since February. Interestingly, the “core” US inflation rate, which strips out the impact of volatile components such as energy and food, has also been rising. The current buying of Tips reflects a view that the cycle of dollar strength and commodity weakness has come to an end.

Like you and David, I also think that commodities have bottomed. However, there are no signs of strong underlying demand and inflationary pressures from the real economy at the moment. Furthermore, Janet Yellen, the Fed chair, has cast doubts on the durability of the recent pick-up in core inflation and inflation expectations, arguing that the case for moving cautiously on interest rates was still strong. It is not surprising that she would say that given that the Fed has reduced the likely number of rate rises this year.

My view is that the US breakeven rate will rise with commodity prices which will push conventional yields up and stock markets down but I don't believe that oil prices, for example, will get anywhere near the previous peak for the reasons discussed by this Service. Thus bond yields too will peak at a much lower level. The collapse in commodity prices in the last few years has distorted valuations in various markets and there will be a ripple effect across the other asset classes.

Eoin Treacy's view
Thank you for this thoughtful email and for highlighting breakeven rates which I have not looked at in a while. I watch the 12-month yield because if gives us a good indication of how the bond market is pricing the risk of the Fed raising rates.

The forgotten but enduring emerging markets opportunity
Thanks to a subscriber for this report from Deutsche Bank which may be of interest to subscribers. Here is a section:

As GDP goes, so does consumer products consumption
In these volatile times, the relationship between commodities, currency, pricing and consumption is as pronounced as ever, with inflationary pricing to offset f/x transaction driving bulk of EM growth as benign commodities and modestly improving macro drives modest growth in developed markets. As we discuss in this report, GDP growth is the primary industry consumption driver, with multiples tracking this growth trajectory. For instance, in 2010, when EM growth was solid and commodities high, US and EM-centric CPG companies traded at roughly the same 12% PE premium to the market; by 2015, US centric names jumped to a 40% premium versus 22% for the EM exposed names. With commodity complex still depressed and geopolitical risks omnipresent, we understand the consensus negative views on emerging markets but several stocks in our coverage have substantial leverage to improving trends in these demographically privileged markets.

BRIC by brick
Noting clear cultural, geopolitical and demographic differences across Brazil, Russia, India and China, in addition to myriad other developing markets, the per capita consumption opportunity is significant for branded consumer packaged goods manufacturers. Despite the recent malaise, emerging markets are still growing at least 3x faster than demographically challenged developed markets, with often cited but still powerful dynamics of younger, upwardly mobile populations, urbanization, female workforce participation and shift from agrarian to services jobs supporting sales, margin and cash flow growth for those who have already built the critical infrastructure.

Valuation supports market perform view on group
Group is trading above average relative to the market on historical P/E multiples; and industry DCF, which we use to derive our target prices and assumes 2.5% sales growth and 0.6 pts of margin expansion per year through 2023 (7% WACC, 1.5% TVG) suggests group is about 2% undervalued relative to its cash flow. Downside risks include cost inflation, rising rates, dollar strength, consumption declines and EM slowdown. Upside risks are US recovery, M&A rational pricing, flat commodities and f/x, accelerated restructuring, EM stabilization, and cost savings, and aggressive balance sheet redeployment.

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

The Consumer Staples and Consumer Discretionary sectors have been consistent outperformers over the course of the medium-term bull market from the 2009 lows. Part of the reason for this is because they offer exposure to the rise of the global middle class but also because they dominate their respective niches and often have reliable cash flows.

The Chart Seminar 2016

Eoin Treacy's view
Thank you to everyone who has expressed interest in The Chart Seminar this year. Our plans are to hold a webinar sometime in June and I will share details of this as we firm up how best to conduct it. The timing of the seminar will be catered to where the majority of delegates sign up from but we’ll try to pick a time when the most possible people can tune in live.

We also plan to hold two seminars in physical locations this year. From some subscriber feedback I was thinking of holding one in Los Angeles during the summer and another in London during the fourth quarter. If you would like to express interest in any of our events please message Sarah Barnes at

Thu, 28 Apr 2016 08:35:00 +0100
Northland Capital Partners View on the City: Arian Silver Corporation, Premier African Minerals, Amphion Innovations plc Arian Silver Corporation (LON:AGQ) – CORP: Placing
Market Cap: £1.3m; Current Price: 1.2p

£700,000 Placing
 Arian Silver Corporation has raised £700,000 through the placing of 70,000,000 shares at 1p per share, with a one for two warrants at 1.5p.
 The funds will be used to advance its mining concessions in Zacatecas, Mexico and in connection with the option agreement to evaluate the portfolio of assets held by Tierra Neuva Mining announced 27/01/16.
 Following admission the Company will have 183,694,941 shares in issue.
NORTHLAND CAPITAL PARTNERS VIEW: A positive fund raise for Arian Silver that further strengthens its balance sheet as it looks to advance its existing projects alongside assessing other projects.

Premier African Minerals (LON:PREM) – SPECULATIVE BUY*: Acquisition
Market Cap: £14.8m; Current Price: 0.85p

From yesterday: Acquires interest in limestone project and completes a £1.1m placing
Premier African Minerals has agreed terms to conditionally acquire an initial 52% interest in Mozambique-based TCT Industrias Florestais Limitada (TCT) that owns a limestone deposit and significant forestry operations in the Sofala Province of Mozambique.
Associated with the acquisition Prem has also completed a £1.1m placing at 0.75p per share to fund TCT’s projected exploration, operating and development expense and the initial cash acquisition cost.
Prem will acquire a 26% interest in TCT from Transport Commodity Trading Mozambique Limitada (TCTM) for US$1.1m payable in four tranches in cash or shares and a further initial 26% interest from GAPI Sociedade de Investimentos S.A. (GAPI), for US$1m payable in five trances the first tranche in cash and the others in  cash or shares.
Prem also has the right to fund the limestone exploration programme through a loan of up to US$1m that can convert into TCT equity increasing Prem’s interest to 68%.
The limestone licence covers an area of 27km2. Early test work on the surface material indicates the limestone is of a sufficient purity for cement production; and is soluble enough for agri-lime; and can also be used for aggregate production. The Tete/Beira rail link runs adjacent to the northern boundary of the project. Prem expects to commence the fully funded initial exploration and assessment work on the project shortly with a maiden resource estimate and a preliminary scoping study completed before the end of 2016.
The forestry business consists of 24,821 hectares of hardwood forestry concessions with allied milling and furniture manufacture and semi-finished goods export. It is expected to be self-sustaining after an initial capital injection from Prem and the Company believes it will have a positive contribution to the Company’s cash flow this year.
NORTHLAND CAPITAL PARTNERS VIEW: The acquisition of the limestone and forestry business in Mozambique seems like a significant departure form Premier African Minerals current core project, the RHA Tungsten Project, located in Mozambique. However, given Prem’s strategy is to focus on low capex and near-term production opportunities this acquisition is logical. Prem is securing a controlling interest in the project at what appears to be a low entry point with near-term cash flow generation potential from both the forestry business and the limestone business. The existing infrastructure makes the projects particularly attractive with existing haulage roads for the timber allowing good site access, a major rail link with spurs adjacent to the northern licence boundary, on site power and timber processing equipment.

Amphion Innovations Plc (LON:AMP) – CORP: Additional draw-down
Market Cap: £8.6m; Current Price: 4.4p

Additional draw-down on loan facility
 Amphion announced that the Company has agreed terms for the draw-down of an additional tranche of US $1,765,000 (an Additional Draw) under the loan facility as announced on 5 June 2014 (the Facility). 
 Under the terms of the Additional Draw, the interest rate will be 10% with repayments starting on 1 May 2016 and with the final repayment due on 1 February 2017. 
 The proceeds are to be used to repay the existing amount due under the Facility and for working capital for Amphion and its Partner Companies. 
 The loan is secured by the pledge by the Company of 7,774,678 ordinary shares of Kromek Group PLC and 14,906,145 ordinary shares of Motif Bio Plc.

NORTHLAND CAPITAL PARTNERS VIEW: The Additional Draw provides working capital for Amphion to progress its business pipeline. The company is working towards moving other programmes forward.

Thu, 28 Apr 2016 08:28:00 +0100
Beaufort Securities Breakfast Alert: Antofagasta, CRH, Foxtons, Ilika, London Stock Exchange, DS Smith The markets
The FTSE-100 finished yesterday's session 0.56% higher at 6,319.91, whilst the FTSE AIM All-Share index closed 0.02% lower at 729.08. On the continental equities edged higher as investors braced themselves for the outcome of the Fed interest rate meeting. In the interim, a slew of earnings releases from key companies also took centre stage. France's CAC 40 and Germany's DAX advanced 0.6% and 0.4%, respectively.
Wall Street
Wall Street ended in the green even as disappointing Apple Inc earnings depressed the information technology sector. Meanwhile, the focus remains on the Fed's policy meeting where it upheld the present interest rates. The S&P 500 closed 0.2% higher, led by the telecom sector.
Markets are trading mixed, eyeing the Fed's policy rate decision. The Nikkei shed 3.6% as no change in the Bank of Japan's economic policies left traders disappointed. The Hang Seng was trading 0.3% up at 7:00 am.
Yesterday, Brent and WTI crude oil prices rose 3.2% and 2.9%, respectively. The spread between the two varieties stood at US$1.8 per barrel.

UK GDP growth for Q1 2016 weakens amid 'Brexit' concerns
According to preliminary estimates from the Office for National Statistics, the UK's GDP growth in Q1 2016 slowed to 0.4% q-o-q compared with 0.6% in Q4 2015. The primary reason for the slowdown was ascribed to the increasing risk of Britain's exit from the Eurozone. The economy expanded 2.1% y-o-y.
UK retail sales decline sharply in April: CBI
According to the Confederation of British Industry, retail sales in the country fell the sharpest in more than four years in April, as the cold weather turned away shoppers from spring and summer ranges. The survey's reading dropped to -13 in April from +7 in March. Meanwhile, the expected sales balance for May stood at +9, compared with +17 retailers expected for April.

Company news
Antofagasta (LON:ANTO, 478.8p) – Hold
Antofagasta yesterday published its Q1 2016 production report, maintaining FY16 guidance of 710-740,000 tonnes of copper production and cash costs of $1.35/lb net of credits. Of its various mining operations, Los Pelambres produced 82,200 tonnes , up 4.3% YoY but only due to a weak Q1 2015 comparable. Versus Q4 2015, Los Pelambres production was down 15.8%. Centinela produced 49,800 tonnes, down 17.5% due to expected lower grades. The newly built ($1.9bn capex) Antucoya mine started commercial production at the beginning of April and will ramp-up to 85,000 tonnes per annum over the next few months. During the period the copper price was $2.12/lb, 19.7% lower than Q1 last year although Anto's managed to realise $2.22/lb. The molybdenum price was down 38% YoY to $5.3/lb.

Our view:Although these numbers are in line with Anto's full year guidance, a number of less positive things are worth noting. Weak numbers at Centinela and Los Pelambres reflect the perpetual challenges of grade variability and mining in general. Like most miners, Anto's has to replace reserves and build new mines as its historical assets age, a very expensive process. FY16 guided cash costs of $1.35/lb is nearly the best in sector but 30% above 3 years ago while the copper price has halved and the outlook is uncertain. As Anto's new CEO stated yesterday, "movements in the copper price over the quarter may suggest the market is beginning to stabilise. However, with price growth likely to remain subdued in the near term our focus continues to be on operating safely, efficiently and profitably." This matches Rio's new CEO's words last month "macro- economic environment is tough, and is likely to remain so for the foreseeable future, from whichever way you look at it." Due to this uncertain outlook we recommend a Hold for Antofagasta but for cautious investors reduce your position in large cap mining stocks.

CRH (LON:CRH, 2,042.0p) - Hold
CRH, the international building materials company, yesterday announced its trading update for the 3 months ended 31 March 2016 (Q1 2016). During the period, Group sales advanced +9% year-on-year ('y-o-y') compared to Q1 2015. This was largely driven by continued positive momentum in the Americas with sales gown +22% y-o-y, where the economic and business environment remains favourable. The sales in Europe were remain flat but Asia rose +12% y-o-y due to the strong demand for cement in Philippines. On the operational front, CRH completed a number of divestments and asset disposals with total proceeds of €78m during the period. While cost of acquisitions and investments amounted to €85m, most of which relates to bolt-on transactions in the Americas Materials Division. The Group expect EBITDA for the first half of the year to be c.€1bn. CRH will report its Interim Results for the six months ending 30 June 2016 on Thursday 25 August 2016.

Our view: CRH delivered a good performance during the Q1 2016, driven by the strong sales in the Americas. Usually, the first half of the year is less significant as activity typically remain lower seasonally. However, favourable weather conditions improved its construction activity which, supported by continued positive economic trends, resulted in improved sales in the Americas. In the US, demand for aggregates and ready-mixed concrete was higher with positive pricing trends, whereas asphalt volumes were also strongly ahead although prices reduced due to a continuing low input cost environment. In Europe, markets stabilised while pricing remain competitive. In Asia, strong demand for cement, particularly in the Philippines was supported by increased Foreign Direct Investment in the business process outsourcing sector, overseas workers' remittances and increasing government infrastructure spend. Looking ahead to H2 2016, the management expect to "continue to make progress on a Group EBITDA basis", in the absence of any major financial or energy market dislocations. Beaufort retains its Hold rating on the stock.

Foxtons (LON:FOXT, 151.0p) - Hold
Yesterday, Foxtons issued a trading update for the quarter ended 31st March 2016. Foxtons reported a 16.2% y-o-y rise in revenue for the quarter to £38.4m, primarily driven by a 28.5% increase in property sales commissions. The company benefitted from a spike in transactions before the introduction of a 3% stamp duty surcharge on buy-to-let investments and second homes in April. Letting revenue remained flat on a y-o-y basis, as tenants continued to renew existing tenancies and entered into longer tenancy tenures. The company's newly established 'Institutional Private Rental Sector' business won its first contract. The business is expected to develop and invest in fresh initiatives to expand its letting business. Foxtons' mortgage broker, Alexander Hall, registered 57.6% revenue growth for the quarter. Foxtons' focus would remain London and outer territories in future. During the quarter, the company opened four new branches in Loughton, New Malden, Sutton and Fulham (Bishops Park), increasing its branch network to 62 whereas three more offices are scheduled to be opened in 2016.

Our view: Foxtons quarterly performance was strong; however, its half-yearly performance is expected to be subdued owing to increasing uncertainty over the UK's future in the Eurozone. As large number of completions were brought forward during the quarter before the introduction of the additional stamp duty surcharge on buy-to-let properties, sales pipeline for the second quarter is likely to be lower than that in the previous year. Although Foxtons' expansion strategy remains on track and there are significant opportunities to expand its network across London, we are concerned about the company's reduced sales pipeline entering into Q2 2016. We remain confident of the company's long-term prospects, given its strong balance sheet and low debt, the recent uncertainty in the property market is likely to depress its growth and profitability in the near-to-medium term. Thus, in view of the factors mentioned above, we maintain a Hold on the stock for now.

Ilika (LON:IKA, 73.00p) - Speculative Buy
Yesterday, Ilika announced the launch of Stereax™ M250, a new, miniaturised solid-state battery technology for IoT (Internet of Things) devices. The new battery family is expected to enable smaller, higher energy-dense batteries to accelerate IoT products to market. Stereax™ batteries use patented materials and processes, enabling superior energy density per battery footprint, up to 40% improvement in current solid-state solutions, and increased temperature range support to over 100°C (30°C higher than existing solid-state products). Further, Ilika's batteries do not contain any free lithium, which makes them more moisture-resistant. The company would demonstrate the capability of its first Stereax™ battery in its perpetual beacon for temperature sensing at IDTechEX in Berlin during 27–28th April 2016.

Our view: With the launch of Stereax™ M250, Ilika has taken the solid-state battery concept to the next level of evolution with its expertise in material development. The battery is expected to gain wide acceptance as its 'fit-and-forget' design enables IoT sensors to be fitted without further maintenance. In IoT batteries, self-sufficiency is a critical requirement, as they may be deployed at difficult-to-service places. Solid-state battery is a key component of IoT, as they can be used in conjunction with all current energy-harvesting technologies while matching the energy needs of IoT devices. At present, connected devices are a constant drain on batteries and therefore, they are required to be efficient and lightweight. Thus, with the launch of this new battery, the company is at an interesting juncture and may be able to establish a significant new revenue stream. In addition, the company has made good progress towards its other battery development endeavours. We believe the steps undertaken by Ilika would generate positive results and drive growth. Therefore, Beaufort maintains a Speculative Buy rating on the stock.

London Stock Exchange (LON:LSE, 2,765.00p) - Buy
The LSE yesterday released an Interim Management Statement covering the period to 26th April together with KPIs for the three months ended March 2016. Management detailed a strong performance - all main business divisions delivering growth on an organic and constant currency basis, Q1 total income from continuing operations up 9% to £387.6 million and sale of Russell Investment Management, for gross proceeds of US$1,150 million, is on track to complete in Q2 2016. The CEO, Xavier Rolet confirmed the Group had achieved underlying growth in each of its core business areas, with particularly strong performances in LCH's OTC clearing, at FTSE Russell and good results across Capital Markets. It also continued to make good progress integrating recent acquisitions, developing innovative new products and expanding services and partnerships in line with our successful open access strategy. He went onto detail his opinion that LSE's proposed merger with Deutsche Börse presents a compelling opportunity to expand the LSE's business in an industry-defining combination, creating a global markets infrastructure group. With substantial cost synergies and multiple opportunities to extend its product offerings, he stated his view that the transaction offers significant value and benefits to customers and shareholders.

Our view: Excellent results and confidence in the future - No surprise there. But the trouble is that M. Rolet appears to be surrendering this veritable UK crown jewel to the Germans on the cheap. In fact, much too cheap! Given the overwhelming belief that the endgame for the LSE is now approaching, the only questions investors are now actually being asking is 'When will the bidding war begin?' and 'Will the competition authorities be seen to block the creation of a clearly dominant European clearing and trading player?' Most probably, the answers to these are 'very shortly' and 'no'. Remember, this is the third time that the LSE and Deutsche Börse have attempted to combine - which is no surprise given their overwhelming cost and revenue synergies – so this time they undoubtedly did knock on their respective regulators' doors to establish what exactly would be required to get the deal done. Seemingly, the outline conditions, Brexit notwithstanding, were not insurmountable. Having agreed a basis to go ahead, the two Boards proposed a marriage of convenience. Noting it is proposed that Deutsche Börse will control the entity's majority while also appointing the CEO, however, both LSE shareholders and its global peers have smelt a rat. So far, only the Intercontinental Exchange has formally advised the market that it was considering making its own bid – on which basis it now has a 'put-up-or-shut-up' deadline of 8th May (or 53-days post formal merger announcement). The CME Group is also said to have run its own slide rule over the numbers, while less contentious operators like Hong Kong's HKeX might possibly also enter the fray. Given the rarity of jewels such as the LSE, it would be a genuine surprise if bidding war of some type does not get underway soon and the firepower available suggests that it is unlikely to stop anywhere short of the £33/share mark. At the very least, the other global peers will be intent on ensuring Deutsche Börse is forced to pays a more realistic price even if they do not genuinely expect to walk away with the prize itself. LSE shares should certainly be bought on this basis, although it may be best for investors to consider locking in profits before the battle enters into months of regulatory abeyance. The LSE remains on Beaufort's Buy list.

DS Smith (LON:SMDS, 382.80p) - Buy
Yesterday, DS Smith, a recycled packaging company, released its trading update for the year ended April 2016. The company traded in line with the guidance. This was due to strong volume growth across the business and robust returns on sales compared with those in the previous year. DS Smith's rapidly expanding e-commerce channel helped in growing the company's large pan-European customer base. Furthermore, the integration of the acquisitions made during the year progressed well. The company plans to publish annual results on 23rd June 2016.

Our view: The company's trading update was in line with the guidance and marked another year of progress. It largely benefitted from acquisitions totalling €600m made during the year and high activity in its fast-growing e-commerce channel. During the year, DS Smith grew organically and inorganically while improving its margins. The multichannel retail environment is evolving, and the importance of the packaging business has grown as it is a crucial part of the supply chain. DS Smith plans to develop high-quality packaging and further expand its footprint. We are encouraged by the company's progress and look forward to more such encouraging updates on its developments. Therefore, we maintain a Buy rating on the stock.

Economic news
Eurozone M3 money supply
Eurozone's M3 money supply expanded at an annual pace of 5.0% in March after growing a revised 4.9% in the previous month, the European Central Bank said yesterday. The growth came in line with the market forecast. Loans to the private sector and households increased 1.1% and 1.6%, respectively. On a three-month average from January to March, growth in money supply stood at 5.0% y-o-y.
US MBA mortgage applications
US mortgage applications declined 4.1% w-o-w% in the week ended 22nd April after increasing 1.3% in the prior week, the Mortgage Bankers' Association said yesterday. Refinance applications fell 5% for the week, while the gauge of loan requests for home purchases fell 2.0% over the week.
US FOMC rate decision
The US Federal Reserve Open Market Committee (FOMC) maintained the benchmark interest rate in the range of 0.25-0.50%. The rates were hiked for the first time in a decade in December last year. However, a stubbornly low inflation and a sluggish economy have kept the FOMC from raising interest rates since then.

Thu, 28 Apr 2016 08:25:00 +0100
VSA Capital Market Movers - Anglo American Anglo American (LON:AAL) has made further progress with its deleveraging programme, selling its niobium and phosphates businesses for US$1.5bn to China Molybdenum. The key assets are located in Brazil and include mining and processing facilities as well as undeveloped mineral deposits.

Although there have been rumours of a sale for some time the niobium mine is one of the top three globally and represents a key strategic purchase by the Chinese, in our view. AAL is targeting net debt of below US$10bn for the end of 2016 from US$12.9bn at year end 2015.
KAZ Minerals (KAZ LN)
Kaz Mineral (KAZ LN) has released solid Q1 2016 production results despite the seasonal weakness. Copper cathode production of 21.5kt was up 13% YoY although down 5% QoQ. Overall average ore grades fell sharply due to the commencement of ore extraction at Bozshakol and Aktogay with the former contributing 1.1kt Cu since February. Consequently ore mined was up tenfold YoY and 32% QoQ. Copper grades meanwhile were down 26% QoQ and 72% YoY to 0.65%. 

The impact of the increased mining is likely to be a negative impact on costs and KAZ remains the UK listed copper play with the highest operational leverage to copper prices.

Thu, 28 Apr 2016 08:22:00 +0100
BoJ inaction undoes Fed caution Mike van Dulken and Augustin Eden at Accendo Markets commented to clients this morning:
FTSE 100 called to open -35pts at 6285, back below the recent 6300 bugbear level after a sharp overnight sell-off (this time blame the BoJ) from 3-day highs 6340. This potentially puts us back within the confines of the sideways channel from earlier in the week, but in the context of the February uptrend could represent continued consolidation after the 17% rally. April uptrend still safe so long as 6250 support holds. Watch levels: Bullish 6305, Bearish 6245.

Negative opening calls are courtesy of the Bank of Japan (BoJ) disappointing markets by refraining from any additional monetary policy easing which sent the Yen north and saw Nikkei equities plunge 3.5%. This despite fresh deflationary data and the central bank cutting its growth targets. The BoJ's overnight decision undid a positive response to the US Fed’s dovish update yesterday evening, with the US central bank's tempering of concerns regarding external risks being offset by mixed US data to keep us guessing about the timing of the next US rate hike.

Asian equities mixed with Japan’s Nikkei the clear underperformer. Despite weak Japanese inflation data, there was some good news via improvements in unemployment, retail sales and industrial production which may be helping regional sentiment hold up, even if Japan remains in trouble in terms of persistently absent growth and inflation.

Australia’s ASX positive despite AUD strength, with BoJ-inspired Yen strength dealing a welcome blow to the US dollar, to the benefit of the commodities space - metals and miners - as well as an oil price resilience around recent recovery highs. Chinese stocks still weighed by tech sector weakness even if social media giant Facebook managed to buck a weak sector results season trend by beating expectations.

No rate hike from the US Fed was either expected or delivered yesterday evening, although the hitherto standard commentary about ‘risks’ was absent, indicating a tentative upgrade to the Fed’s assessment of the global economic situation. This left markets pondering the possibility that June might still be on the table, although an unfortunate slowing in the US economy will have served to offset positivity elsewhere.

Not much in the way of an equity market reaction - a mixed close on Wall Street - while the USD saw some volatility and is, in fact, very much on the back foot this morning as the Dollar Basket (DX) falls through the floor of its Apr rising channel to test that uptrend.

US corporate results saw Facebook (FB)’s quarterly profits triple on advertising growth, while payments processor Paypal (PYPL) also reported strong Q1 earnings. These announcements came as a welcome reprieve from other silicon valley names that have been struggling of late (like Twitter).

Dollar weakness is helping commodities with Gold having broken out above $1250 overnight - with equity markets called a tad lower this morning and broad USD weakness continuing, it’s probable it’ll hold those gains as the day passes, but note momentum failing to match gold’s new highs on the hourly chart.

Crude oil prices are STILL supported yet uptrends are under threat from diverging technicals through April. Brent’s hourly RSI is heading towards rising lows that coincide with its zero line, such that a test and break below will be sought by bears as a sell opportunity. Oh, and do we hear more chat about rising US supply? Yes, we do. Note, however, traders are still flitting between bullishness on declining production and bearishness on growing inventories which is likely to make things choppy in the near term.

In focus today will be the fallout from the Fed and BoJ updates and the ramifications for global monetary policy outlook. Data-wise, listen out for German unemployment  (no change expected) as well as Eurozone Business Confidence readings (minor improvements forecast). German Inflation may however show a drop back to deflation in April, reminding us about Eurozone fragility, while US GDP is likely to have slowed markedly and a good reason for the Fed to hold off from a rate hike to avoid any worsening of the situation. US Results today from Amazon, Colgate, Dow Chemical, Ford, and global economic barometer UPS.

Thu, 28 Apr 2016 08:20:00 +0100
Deutsche Bank downgrades Standard Chartered Wed, 27 Apr 2016 10:51:00 +0100 Today's Market View Including: Antofagasta, Berkeley Energia Antofagasta (LON:ANTO)– Q1 Production Report – 2016 guidance unchanged
Berkeley Energia (LON:BKY) – Quarterly Report – Salamanca Uranium project moving into development

Economic News
US – Durable goods orders report undershoot estimates with GDP on its way to report weak Q1.
• Q1 GDP data is due tomorrow with estimates for a 0.6%qoq increase forecast (Q4/15: 1.4%qoq; Q1/15: 0.6%qoq).
• This week economic news:
Date Index Period Actual Expected (Bloomberg) Previous
Monday New Home Sales Mar -1.5%mom 1.6%mom 2.0%mom
Tuesday Durable Goods Orders/Core Mar 0.8%mom/-0.2%mom 1.9%mom/0.5%mom -3.1%mom/-1.3%mom
  Capital Goods Orders Mar 0.0%mom 0.6%mom -2.7%mom (revised from -2.5%mom)
  S&PCS Propoerty Prices Index Feb 0.7%mom/5.4%yoy 0.8%mom/5.5%yoy 0.8%mom/5.7%yoy
  Markit Services PMI (P) Apr 52.1 52.0 51.3
  Markit Composite PMI (P) Apr 51.7   51.3
Wednesday FOMC Rate Decision     0.25%-0.50% 0.25%-0.50%
Thursday Q1 GDP (A)     0.6%qoq 1.4%qoq
Q1 Core PCE (A)   1.9%qoq 1.3%qoq
  Weekly Jobless Claims     260k 247k
Friday PCE Mar  0.1%mom/0.8%yoy -0.1%mom/1.0%yoy
  Core PCE Mar   0.1%mom/1.5%yoy 0.1%mom/1.7%yoy
Source: Bloomberg       

China – Following a 13.8%yoy decline in industrial profits recorded by state-owned enterprises (CNY 432bn) in Q1/16 announced yesterday, a more broad measure of earnings in the industrial sector was released todaty.
• Profits in industrial companies with annual revenues of more than CNY 20m per annum climbed 11.1%yoy in Mar taking the total for th quarter up 7.4%yoy (c. CNY 1,340tn).
• This marks an improvement on a 4.8%yoy increase in the Jan-Feb period.
• Gains were driven by chemical and agricultural and food processing companies that recorded 20.8%yoy and 12.1%yoy growth rates.
• Ferrous metal smelting and rolling firms posted a 15.8%yoy decline during the quarter while coal miners recorded a 92.6%yoy decline.
• Oil and gas producers also reported declines.
• Interestingly, nearly a third of profits in Mar came from investments and non-core activities raising questions over the sustainability of earnings growth in the sector.
• Borrowings by Chinese industrial companies continued to build up rising 5.2%yoy to CNY 55.2tn by end-Mar.

Germany – Consumer sentiment beat forecasts for May on positive growth outlook as well as ECB-induced increase in propensity to spend.
• “The recent decision of the ECB to lower the key interest rate to 0% to extend the bond buying program again, and to raise the penalty interest rate for banks that want to deposit money with the ECB caused propensity to save among Germans to fall to a new historic low in Apr”.
• “Conversely, propensity to buy increased.”
• GfK Consumer Confidence: 9.7 in May v 9.4 in Apr and 9.4 forecast.

UK – Q1 GDP came in line with estimates slowing down 20bp ahead of the Jun EU membership referendum.
• Q1 GDP: 0.4%qoq/2.1%yoy v 0.6%qoq/2.1%yoy in Q4/15 and 0.4%qoq/2.0%yoy forecast.
• The  currency is trading slightly higher on the day at 1.459.

Australia – Poor Q1 inflation numbers released this morning raise chances for a further rate cut and drive the currency lower.
CPI: -0.2%qoq/1.3%yoy v 0.4%qoq/1.7%yoy in Q4/15 and 0.2%qoq/1.7%yoy forecast.
• Core CPI: 0.2%qoq/1.7%yoy v 0.6%qoq/2.1%yoy in Q4/15 and 0.5%qoq/2.0%yoy forecast.
• The probability of a 25bp rate cut (currently at 2.0%) during the next week’s meeting surged to 46% today, up from 15% yesterday.
• AUDUSD currently trades around 0.763 versus 0.773 a day earlier.

US$1.1319/eur vs 1.1298/eur yesterday. Yen 111.14/$ vs 110.87/$. SAr 14.416/$ vs 14.471/$. $1.458/gbp vs 1.457/gbp
0.763/aud vs 0.774/aud. CNY 6.493/$ vs 6.493/$.

Commodity News
Precious metals:
Gold US$1,246/oz vs US$1,235/oz yesterday
Gold ETFs 56.4moz vs 56.4moz yesterday
Platinum US$1,017/oz vs US$1,014/oz yesterday
Palladium US$605/oz vs US$600/oz yesterday
Silver US$17.35/oz vs US$17.01/oz yesterday

Base metals:
Copper US$ 4,936/t vs US$4,949/t yesterday
Aluminium US$ 1,645/t vs US$1,647/t yesterday
Nickel US$ 9,205/t vs US$9,040/t yesterday
Zinc US$ 1,897/t vs US$1,867/t yesterday
Lead US$ 1,752/t vs US$1,732/t yesterday
Tin US$ 17,350/t vs US$17,350/t yesterday

Oil US$46.8/bbl vs US$44.8/bbl yesterday
Natural Gas US$2.057/mmbtu vs US$2.068/mmbtu yesterday
Uranium US$27.65/lb vs US$27.50/lb yesterday

Bulk comodities:
Iron ore 62% Fe spot (cfr Tianjin) US$59.7/t vs US$61.8/t yesterday
Thermal coal (1st year forward cif ARA) US$47.3/t vs US$43.0/t yesterday

Tungsten - APT European prices stood at $188-210/mtu vs $190-200/mtu last week

Company News
Antofagasta (LON:ANTO) 471.2 pence, Mkt Cap £4.65bn – Q1 Production Report – 2016 guidance unchanged
• Antofagasta reports a 7.3% increase in copper output vs Q1 2015 at 157,100 tonnes. Compared to the preceding quarter (Q4 2015) output was 7.5% lower.
• The increase is attributed to the “first full quarter of production from Zaldivar [12,400 tonnes] and increases at Antucoya [which achieved commercial production at the end of the quarter] offset by lower production at Centinela Cathodes, as grade declined, and no contribution from Michilla, now that it is on care and maintenance.”
• Group costs before by-product credits at $1.72/lb were 6% lower than Q1 2015 (but 4.2% higher than Q4 2015). On a net basis, the strength of gold prices reduced costs to $1.37/lb (Q1 2015 $1.43/lb).
• The Los Pelambres mine, which produces over 50% of the group’s copper, showed a 4% increase in output (82,200 tonnes) compared to Q1 2015 which was affected by community action blocking access to the mine. The impact of an extended maintenance period at Los Pelambres during February is reflected in a 14% decline in output compared to Q4 2015. Net cash costs for the quarter amounted to $1.22/lb.
• Lower grades at both the Centinela Cathodes and Centinela Concentrates operations resulted in reductions in copper output of 12.5% to 12,600t at the Cathodes Division and 3.1% to 37,200t with net cash costs steady at $1.57/lb (Q1 2015 $1.58/lb) helped by a higher contribution from by-products.
• Zaldivar (50% share) reported initial quarterly production of 12,400 tonnes at a cash cost of $1.59/lb.
• The new Antucoya produced 12,700 tonnes of copper during the quarter and is expected to ramp up during the current quarter. The “final total capital expenditure was in line with the budget of $1.9 billion.”
• The Company’s guidance for 2016 “remains unchanged at 710-740,000 tonnes at a net cash cost of $1.35/lb.” We observe that this target guidance implies average production for each of the remaining 3 quarters of the year in excess of 185,000 tonnes at similar or slightly lower net cash costs. Given the ramp up of Antucoya and the contribution from Zaldivar, we share the Company’s confidence at this stage that the guidance will be achieved.
• Antofagasta comments that “Movements in the copper price over the quarter may suggest the market is beginning to stabilise. However, with price growth likely to remain subdued in the near term our focus continues to be on operating safely, efficiently and profitably.”

Berkeley Energia (LON:BKY) 27.75 pence, Mkt Cap £50.5m – Quarterly Report – Salamanca Uranium project moving into development
• Berkeley Energia reports that the Salamanca Uranium Project is moving into development as contractors start work on rerouting a power line and road to facilitate the start of mining at the Retortillo pit which will be the first area to be mined.
• Meanwhile, continuing optimisation work is contributing to the definitive feasibility study which is due for publication in June.  The main areas of attention are:
 Upgrading the geological model to bring some of the resources to measured status
 Geotechnical work to optimise pit slopes and mine design
 Cut-off grade studies to provide greater selectivity of mining units
 Optimisation of metallurgical performance and review of waste management
 Further reductions to the steady state cost of US$15.60/lb of uranium produced
 Analysis of “different production ramp up scenarios in order to use internally generated cash flows to fund growth.”
 Discussions and negotiations are under way with potential off-take partners  for yellow-cake. The company aims “to enter into a combination of fixed-pricing and market-related pricing contracts, looking to balance certainty over pricing for financiers whilst maintaining an exposure to any future increases in the uranium price.”  Discussions have been initiated with potential customers in the US, Europe and Asia.
o “General market consensus appears to be that whilst uranium prices are expected to remain flat in the near term there are an increasing number of utilities that will be re-contracting off-take from 2018 onwards and are looking to enter into such contracts during the current calendar year.”
o The company is also continuing exploration targeting further high grade mineralisation similar to the Zona 7 style deposits. Recent reinterpretation of geophysical information and previous drilling data has identified new shallow targets within 10 kilometres of the proposed process plant. After wet winter weather, drilling has now commenced on the Luis target and further targets will be drilled during the year.
o The Company currently has cash of A$6m available to complete the studies. “The company is considering a range of financing options with a view to fully funding the project’s development during the second half of 2016. The Company is focussing on minimising dilution in ordert to protect the equity of its shareholders.” At this stage, a “potential sale of a project interest may include associated off-take rights over a minority portion of production on commercial terms.”
Conclusion: Berkeley Energia has made significant advances on the technical, marketing and financing of its Salamanca Uranium Project; we look forward to the publication of the forthcoming definitive feasibility study

Wed, 27 Apr 2016 10:33:00 +0100
In the news: Plateau Uranium & Burey Gold Plateau Uranium†† has announced the appointment of the experienced environmental consultant ACOMISA. It will commence the baseline study work required for permitting and EIA studies at Plateau’s Macusani Project in Peru. This comes on the back of reported positive discussions with the Ministry of Mines and Energy and representatives of Congress on the permitting process for uranium mining in the country. According to the updated January 2016 PEA, at a US$50/lb uranium price the project has a post-tax NPV8 of US$603m and an IRR of 41%, with highly competitive operating costs of just US$17/lb U3O8 and AISC of US$18/lb. We have Ian Stalker and Ted O'Connor from the company available for calls at any time, and we’ll be looking to market the team in London and elsewhere during May.

Burey Gold††
ASX:BYR | A$0.026 | US$16m | Speculative Buy
More Assays from Giro; Set to Test Large Douze-Match Geochemical Anomaly
Burey Gold has announced assay results from the last ten holes of its recently-completed 14-hole diamond drilling programme. With four holes previously reported from the Kebigada Shear Zone, assays from Hole GRDD005, the last hole drilled into this zone, included 68.8m @ 1.1 g/t. The two holes at the Giro Vein intersected narrow, high-grade mineralisation, with assays including 0.7m @ 37.5 g/t. Four holes were drilled at Mangote, with intervals including 8.9m @ 3.1 g/t. A further two holes were drilled at Adoku and one at Peteku.
Following the recent outlining of a large-scale (4km by 2.5km) soil anomaly of over 50ppb at Douze-Match (located 20km NNW of the Kebigada Shear Zone and 5km SSW of Mangote) the company plans to undertake a programme of shallow RC holes to test the anomalies to bedrock.
COMMENT: Assay results from all 14 diamond drill holes in this programme have now been released. In our view, the most significant were from the Kebigada Shear Zone, where assays more than doubled the depth of mineralisation outlined by previous RC drilling. Results from the programme were very impressive and included: 23.5m @ 3.1 g/t, 38.1m @ 2.5 g/t, 21.0m @ 6.1g/t and 69.6m @ 1.7g/t.
We believe that a significant deposit has been outlined at the Kebigada Shear Zone, but acknowledge that a significant infill drilling programme is likely to be required before a resource can be estimated here. The planned testing of the large-scale Douze-Match geochemical anomaly with shallow RC holes should enable the company to prioritise future exploration on the large-scale Giro Project area before committing to any such infill programme.
We believe that the continued positive exploration results from Giro should attract further interest. In anticipation of further positive exploration results, we continue to recommend the company as a Speculative Buy.

Kebigada Shear Zone Drill Plan Showing Better Drill Results


Kebigada Shear Zone Drill Section Showing DD Holes 003 and 005

Geological Map Showing Location of Soil Anomalies on Licences 5049 and 5046

Licence 5049 — Douze Match and Mangote Soil Anomalies


Wed, 27 Apr 2016 10:12:00 +0100
SP Angel Morning Oil & Gas: Eland Oil and Gas, Green Dragon Gas, LGO Energy, Rose Petroleum Headlines
 In Brief:

 Eland Oil and Gas (LON:ELA – 36p) – Incremental Gains and Losses
 Green Dragon Gas (LON:GDG – 265p) – Starting to Deliver on its Promise
 LGO Energy (LON:LGO – 0.28p) – Swagger Returning
 Rose Petroleum (LON:ROSE – 0.16p) – A Curates Egg

In Brief
Eland Oil and Gas (LON:ELA – 36p) – Incremental Gains and Losses: Today’s update is positive on the one hand, as its incremental development programme starts to yield fruit in the shape of additional reserves and resources, and a loss as today’s update also discloses the departure of Louis Castro from the Company. While one man does not a company make, we believe that the departure of Castro provides an internal headwind to the Company that it doesn’t need at this stage. All things considered, on balance, we believe that despite the reserves addition, today’s news is net negative, but once the cash flows start to flow to the Company from Gbetiokun, then this will be reversed. 
Green Dragon Gas (LON:GDG – 265p) – Starting to Deliver on its Promise: It has taken an inordinate length of time, and there have been a number of howlers along the way, but in today’s results we see the start of a company that looks as if it might just have the legs to exploit its asset base and generate a return for shareholders. For the first time in a long time, in looking at the statements we observe investment at the wellhead seeming to take preference over investment in the corporate structure, which to our mind has now started the process of rightsizing the Company. While there needs to be a sustained period of growth at the drillbit, and migration of Contingent Resources in to Reserves, this is at least evidence that this has started.
LGO Energy (LON:LGO – 0.28p) – Swagger Returning: Today’s news is positive not just because it will result in additional cash flow for the Company, but it also signifies the return to “normal” operations. While there is a distance to go yet before the Company gains back the same kind of forward momentum that it once had, at least this is the start of that journey.
Rose Petroleum (LON:ROSE – 0.16p) – A Curates Egg: We have highlighted in the past that we do not believe that oil and gas and mining assets run by the same people is a recipe for success, and today’s news is the evidence of that. We get the impression that the management team heard the word “shale” and jumped on board without really understanding the additional engineering and reservoir issues that come with oil and gas, over and above a mine. While the Company is retaining its interest in the Paradox asset, we don't believe that the team will be able to deliver a coherent strategy while they have mining assets within the same stable competing for management and capital resources, obfuscating both the opportunities and risks associated with it. In that vein, we think that today's announcement is a Curates Egg, we like the capital discipl ine demonstrated by its withdrawal from the Mancos assets, but we can help but wonder about the issues and tensions that it masks within the business.

Wed, 27 Apr 2016 09:53:00 +0100
In the papers: BHS, Nokia, Mitsubishi The Times
BHS board ‘divided over £1.5 million loan to Chappell’: A key board member of the former Owner of BHS raised concerns about the conduct of Dominic Chappell and corporate governance at the collapsed retailer at least six months ago.
Sales blow takes chunk out of Apple: Sales of the iPhone fell off a cliff in the first quarter, the first decline since Steve Jobs launched it in 2007 with a promise to revolutionise the mobile world.
Barclays Chiefs ‘were aware of rate-rigging fears’: Barclays Executives were drawn deeper into the Libor-rigging scandal after a court heard that a senior employee received “multiple emails” about the practice.
Clearing bad debts pays off in Standard Chartered profit: A reduction in bad debt and the impact of internal reforms helped Standard Chartered to bounce back in the first three months of the year.
Twitter falls short of expectations: It was a message that Twitter probably didn’t want to send and certainly one that Wall Street did not want to hear, as the micro-blogging site reported lower-than-expected first-quarter revenue.
Withings deal puts Nokia in the wearable tech game: Nokia has taken another step toward a fully-fledged return to the consumer market after it paid €170 million to buy French smartwatch maker Withings.
Snoozebox is becoming a recurring nightmare: Shares in Snoozebox fell out of bed, again, after the portable hotel operator warned that it may not be able to continue as a going concern.
The Independent
Mitsubishi admits ‘improper’ fuel tests dating back to 1991: Mitsubishi has admitted to using false fuel methods dating back to 1991. Half the company’s value has already been wiped out since Mitsubishi admitted to falsifying fuel economy data on April 20.
BHS collapse: Sir Philip Green called to answer questions before MPs: Sir Philip Green will be called to answer questions in front of MPs about the collapse of BHS.
Scottish Power fined £18 million for poor customer service that prompted one million complaints: Scottish Power has agreed to pay £18 million for failing to treat its customers fairly.
The Daily Telegraph
Channel 4 would not dumb down in private hands, claims Whittingdale: The Culture Secretary has rejected suggestions that privatising Channel 4 would force it downmarket, claiming the potential investors that have approached the Government are attracted by the broadcaster’s reputation for quality and would seek to maintain it.
End in sight for banks £100 billion bad behaviour charges: Britain’s big four banks face another £20 billion of misconduct fines and compensation in the next two years – but then their painful £100 billion ordeal will be over, according to analysts at credit ratings agency Standard and Poor’s.
SSE smart tech partner raises $23 million ahead of winter heating revolution: A German start-up that supplies smart-heating technology to millions of SSE’s U.K. customers has raised $23 million to help fund its expansion into new markets and roll out a remote monitoring system for household boilers in Britain.
Bob Diamond has the funds to buy Barclays Africa: Former Barclays Chief Bob Diamond said he has the funding in place to bid for Barclays Africa Group (BAG), the business which is currently up for sale as the British bank cuts back its global operations.
World Bank lifts oil price forecasts but warns of further pain: The World Bank has boosted its forecast for global oil prices by 10% for 2016 but at the same time warned that commodity prices will remain well below last year’s levels inflicting further pain on resource-rich countries.
City watchdog starts search for British links to Panama Papers: The City watchdog has begun sifting through the British links to the law firm at the heart of the Panama Papers leak, although its acting Chief Executive said it is “far too early” to predict how many U.K. firms might have broken the law.
The Questor Column:
Don’t jump on Standard Chartered’s recovery: In years to come, this could be seen as the moment Standard Chartered bounced back. The bank’s return to profit in the first quarter of 2016 took investors and analysts by surprise, sending shares soaring by as much as 12%. Chief Executive Bill Winters only joined the bank last year, setting out a tough three-year reform plan bolstered by a $5.1 billion (£3.5 billion) rights issue – a painful tonic for a battered bank, and particularly a serious challenge at a time when its core markets are in turmoil. But reforms rarely happen in the good years, as crises tend to precipitate overdue clean-ups in the financial world. Key to the return of profits was a substantial fall in booking of new non-performing loans, down from $1.1 billion in the fourth quarter to $471 million in the first. The long-term prospects for the bank are also not entirely positive. For years Standard Chartered was a favoured stock for investors who wanted to bet on the growth of the Chinese economy and the rest of the emerging markets. China’s economic slowdown has knocked the bank’s profits and its prospects, limiting growth in areas such as trade finance which is a staple of Standard Chartered’s business. “Should there be a further slowdown in China, we feel that we’re in reasonably good shape,” he said. It is not only the Boss who has urged caution – analysts are also concerned. Joseph Dickerson at Jefferies noted that on an annualised basis the bank’s revenues are 6% below market expectations, while Gary Greenwood at Shore Capital said investors should be “mindful of jumping the gun given the challenging revenue environment.” That is sound advice, and Questor recommends investors hold the stock. Standard Chartered at 571p +50.8p. Questor says “Hold”.
The Guardian
Upmarket tailor Austin Reed goes into administration: Austin Reed has collapsed into administration, putting almost 1,200 jobs at risk.
Tata Steel may yet keep U.K. business if outlook improves: Tata Steel has not ruled out keeping its U.K. business, including the Port Talbot steelworks, despite having begun the process of selling it and announcing it wants to pull out of the country.
U.K.’s big four banks face £19 billion in compensation, fines and legal costs: The U.K.’s four biggest banks face paying out £19.5 billion in fines, compensation and legal expenses this year and next, taking the total since 2011 to more than £75 billion, according to the ratings agency Standard & Poor’s.
Luxleaks trial of tax whistleblowers begins in Luxembourg: A trial of three people accused of involvement in the leaking of documents that revealed industrial scale tax avoidance has begun in Luxembourg, with attending MEPs vowing to propose a whistleblowers’ charter to prevent such cases in future.
Daily Mail
German Bosses behind LSE takeover insist it must be based in Frankfurt if Britain leaves the EU: The London Stock Exchange must be headquartered in Frankfurt if Britain leaves the European Union, German Bosses have said.
EDF to face MPs’ questions over Hinkley Point nuclear plant after announcing further delays: EDF Bosses will be hauled back before MPs to face questions about Hinkley Point nuclear power station after the energy giant announced further delays.
First a shareholder revolt over Boss Bob Dudley’s pay – now BP racks up a £334 million loss: BP has reported a loss of £334 million just a fortnight after Boss Bob Dudley faced a shareholder revolt over his £13.8 million pay deal.
Sterling hits 12-week high against the dollar as investors brush off Brexit fears: Sterling raced to a 12-week high against the dollar as investors brushed off fears about Britain leaving the European Union.
Bosses of smoke alarm firm which just announced nearly 100,000 of its devices are faulty set to share £500k windfall: Bosses of a smoke alarm manufacturer will share a windfall of more than £500,000 despite revealing that nearly 100,000 of its most popular devices are faulty.
Daily Express
Barkley Plastics flourishes after joining forces with other Midlands manufacturers: Its tools and parts – for car headlights to hospital kits – help make the world go round and in the process Barkley Plastics is forging a bright future for the British supply chain sector.
Landlord making tenants homeless blasts Osborne’s ‘immoral’ property tax: Landlords are being forced to sell buy-to-let properties and make vulnerable tenants homeless as a result of tax changes being introduced. From next year, Owners of rental properties will have a number of tax perks axed, leaving many landlords with little option but to sell up.
Ticking time-bomb: Greece set to run out of cash by May pushing Europe into another crisis: Debt-ridden Greece is dangerously close to running out of cash and plunging the Eurozone into a fresh crisis.
The Scottish Herald
Alexander Dennis celebrates FirstGroup bus order: Alexander Dennis has won a £50 million order for more than 200 buses from transport company FirstGroup, a contract which will help underpin employment of around 900 at the manufacturer’s Falkirk factory.
Scottish Friendly managed funds pass £2.6 billion: Scottish Friendly has revealed that funds under management have more than doubled, from £1.1 billion in 2014 to more than £2.6 billion in 2015, a rise of 147%.
Edinburgh dental firm joins stock exchange elite: Medical devices company Calcivis has been accepted into the next cohort of the London Stock Exchange (LSE)’s Elite programme that supports ambitious companies towards growth and investment.
Bad debts in Scotland at lowest level in whole of U.K.: Scotland has witnessed the largest decline in the volume of business bad debts in the U.K. over the last three years.
Johnston Press appoints non-Executive: Johnston Press has appointed Mike Butterworth to the board with effect from June 1. He will also become Chairman of the audit committee when Mark Pain steps down from the board later this year after seven years.
SeaEnergy running out of time for funding: SeaEnergy has said it is taking advice from insolvency practitioners as it runs out of time to secure a cash lifeline from a disposal.
McColl’s Moventas invests in Yorkshire: Moventas, the Finland-based gearbox specialist bought by Jim McColl’s Clyde Blowers for £85 million five years ago, has invested in a test rig at its West Yorkshire base.
The Scotsman
KPMG names new head for Scottish operations: Accountancy and professional services group KPMG has appointed a new head to its Scottish business, saying this represents the first female senior partner of a big four accountancy firm north of the Border.
Plexus raises $5 million to ramp up Russian activities: Oil and gas technology firm Plexus Holdings has raised $5 million (£3.4 million) to “fast track” its expansion into the Russian energy market.
STV reports ‘positive start’ to 2016 as digital sales jump: Broadcaster STV said it has made a “positive start” to its new financial year, with digital revenues soaring by 25%.
Cala aims to build on success of ‘modest’ homes: Upmarket housebuilder Cala said that sales of “modest” homes – costing an average of more than £310,000 – have beaten its forecasts.
Collagen Solutions to form Chinese joint venture: Life sciences firm Collagen Solutions announced plans to create a joint venture targeting the huge Chinese market.
City A.M.
AT&T’s share price dips despite beating expectations: AT&T’s share price has fallen in after-hours trading after the telecoms group posted first quarter profit ahead of expectations.
Salaries are soaring among building firms as pressure mounts to find skilled bricklayers, says Federation of Master Builders: More than two-thirds of small U.K. building firms forecast a jump in salaries and wages over the next six months as competition for skilled bricklayers intensifies.
Exxon Mobil has been stripped of its top-notch credit rating: Ratings agency Standard & Poor’s has busted Exxon Mobil down from its perfect credit rating. Exxon, the world’s largest publicly-traded energy group, has lost its top rating due to the problems caused by the collapse of the oil price.
U.K. drug developer Vernalis looks to raise £40 million for U.S. expansion: Drug developer Vernalis, maker of cough and cold treatments, is looking to raise £40 million from a share issue to fund U.S. expansion and bring more products to market.
Glencore’s biggest shareholder reduces stake in embattled miner: Glencore’s biggest shareholder has reduced its stake in the embattled miner and trader which has been whipsawed by tumbling commodity prices.
Luxembourg grants Bitstamp the first European bitcoin exchange licence: One of the world’s largest bitcoin exchanges, Bitstamp, has been awarded a licence to operate as a fully regulated payment institution in Luxembourg.
Unions warn that tens of thousands of industry jobs are at risk in South Africa: Tens of thousands of jobs in mining, metals and engineering are at risk in South Africa as firms cut costs due to the commodity rout.
Renewables-focused E.On eyes profit of up to €1 billion in 2016: E.On set its sights on net income of up to €1 billion (£775 million) this year as Germany’s largest utilities company pushed forward on plans to spin-off its power plant and trading businesses to focus on renewable energy and distribution grids.

Wed, 27 Apr 2016 08:31:00 +0100
Market Briefing: UK markets closed mixed yesterday. Standard Chartered soared 9.8%, after it reported a surprise decline in its impairment losses UK Market Snapshot
UK markets closed mixed yesterday. Standard Chartered soared 9.8%, after it reported a surprise decline in its impairment losses on bad loans in the first quarter. BP climbed 4.3%, after its underlying earnings for the first quarter surpassed market expectations. Whitbread rose 2.6%, following an increase in its pre-tax profit for the full year and it raised its full year dividend by 10.0%. Barclays gained 2.1%, amid news that Bob Diamond’s Atlas Mara is mulling an acquisition bid for the lender’s African business. On the downside, Cobham tanked 17.5%, as it plans a £500.0 million rights issue in the second quarter following a sharp fall in its first quarter trading profit. Mining sector stocks, Rio Tinto, Anglo American and Glencore shed 0.8%, 1.8% and 1.9%, respectively. The FTSE 100 advanced 0.4%, to close at 6,284.5, while the FTSE 250 fell 0.1%, to settle at 16,945.5.
US Market Snapshot
US markets closed mostly higher yesterday, amid gains in energy and raw material stocks. Pioneer Natural Resources surged 7.7%, after it raised its production growth target for the full year. Peers, Chevron and ConocoPhillips rose 0.8% and 3.9%, respectively. EI du Pont de Nemours gained 2.4%, as it increased its earnings outlook for 2016 after reporting better than expected results for the first quarter. Bucking the trend, Whirlpool dropped 3.6%, following downbeat results for the first quarter. Procter & Gamble fell 2.3%, after it reported lower than expected sales for the third quarter and projected a drop in its core earnings for fiscal 2016. 3M shed 1.3%, despite posting results for the first quarter that topped analyst projections. The S&P 500 gained 0.2%, to settle at 2,091.7. The DJIA rose 0.1%, to settle at 17,990.3, while the NASDAQ slid 0.2%, to close at 4,888.3.
Europe Market Snapshot
Other European markets finished mostly lower yesterday. Ams sank 15.6%, after it posted a drop in sales in the first quarter. Air Liquide slid 4.8%, as it reported downbeat revenue for the first quarter. Randstad Holding declined 3.0%, after its sales slowed in the first quarter compared to the last quarter. ThyssenKrupp dipped 2.8%, after France’s DCNS Group won a $39.0 billion contract to build submarines in Australia by beating the former’s bid. Bayer fell 0.8%, despite posting better than expected earnings for the first quarter. However, banks, Deutsche Bank, UniCredit and Banca Monte dei Paschi di Siena rose 2.3%, 5.0% and 5.7%, respectively. Orange added 1.3%, following a rise in its first quarter revenue as growth returned in Spain.The FTSEurofirst 300 index gained 0.2%, to close at 1,367.0. Among other European markets, the German DAX Xetra 30 slid 0.3%, to close at 10,259.6, while the French CAC-40 shed 0.3%, to settle at 4,533.2.
Asia Market Snapshot
Markets in Asia are trading weaker this morning, ahead of today’s interest rate decision by the US Federal Reserve (Fed). In Japan, Canon has tumbled 5.8%, after trimming its projected earnings for the full year as it reported a decline in net profit for the three months ended March. Apple’s suppliers, Alps Electric and Murata Manufacturing have fallen 1.9% and 3.7%, respectively, after the US tech giant reported downbeat revenue for the second quarter. On the flipside, Coca-Cola West and Coca-Cola East Japan have soared 10.1% and 12.3%, respectively, after disclosing plans to merge with each other. In Hong Kong, Sinopec Oilfield Service and PetroChina have added 1.8% and 2.3%, respectively, amid higher crude oil prices. In South Korea, POSCO and Hyundai Motor have shed 0.6% and 2.0%, respectively. The Nikkei 225 index is trading 0.6% lower at 17,253.0. The Hang Seng index is trading 0.1% down at 21,379.1, while the Kospi index is trading 0.2% lower at 2,014.8.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 1.07% or $0.49 higher at $46.23 per barrel, ahead of the Energy Information Administration weekly oil inventory data, scheduled to be released later today.  Yesterday, the contract climbed 2.83% or $1.26, to settle at $45.74 per barrel, after the American Petroleum Institute reported that US crude supplies unexpectedly dropped by 1.1 million barrels for the week ended 22 April 2016.
At 0330GMT today, Gold futures contract is trading 0.26% or $3.20 higher at $1245.40 per ounce. Yesterday, the contract advanced 0.27% or $3.30, to settle at $1242.20 per ounce, as a weaker US Dollar raised demand for the precious yellow metal.
At 0330GMT today, the EUR is trading 0.06% higher against the USD at $1.1304, ahead of the GfK consumer confidence data for Germany, due to release in a few hours. Yesterday, the EUR strengthened 0.26% versus the USD, to close at $1.1297. The US Dollar fell against its key peers following weaker than expected data on US durable goods orders for March and consumer confidence in April.
At 0330GMT today, the GBP is trading a tad lower against the USD at $1.4579, ahead of the UK GDP growth for the first quarter, set to release today. Market participants will also closely await the US Fed’s decision due later in the day. Yesterday, the GBP strengthened 0.68% versus the USD, to close at $1.4581, as fears about the UK leaving the EU subsided.
Fixed Income
In the US, long term treasury prices fell and pushed yields higher, with investors awaiting the outcome of the US Fed monetary policy meeting due today. Yesterday, yield on 10-year notes rose 3 basis points to 1.94%, while yield on 2-year notes gained 1 basis point to 0.86%. Meanwhile, 30-year bond yield rose 4 basis points to 2.76%.

Key Economic News
UK BBA mortgage approvals declined unexpectedly in March
BBA mortgage approvals eased unexpectedly to 45.10 K in March, in the UK, compared to a revised level of 45.65 K in the previous month. Market expectation was for BBA mortgage approvals to rise to a level of 46.50 K.
Italian trade surplus rose in March
In March, (non-EU countries) trade surplus in Italy widened to €4.04 billion. Italy had registered a revised trade surplus of €2.61 billion in the prior month.
US Richmond Fed manufacturing index registered a drop in April
In the US, the Richmond Fed manufacturing index recorded a drop to 14.00 in April, compared to a reading of 22.00 in the prior month. Market anticipation was for the Richmond Fed manufacturing index to ease to a level of 12.00.
US S&P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas advanced less than expected in February
In February, the S&P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas in the US rose 5.38% on an annual basis, lower than market expectations for a rise of 5.50%. In the previous month, the S&P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas had climbed by a revised 5.68%.
US durable goods orders (ex transportation) unexpectedly slid in March
In March, on a monthly basis, the preliminary durable goods orders (ex transportation) unexpectedly eased 0.20% in the US, lower than market expectations for an advance of 0.50%. In the prior month, durable goods orders (ex transportation) had dropped 1.30%.
US Markit services PMI recorded a rise in April
The preliminary Markit services PMI climbed to 52.10 in the US, in April, compared to market expectations of a rise to a level of 52.00. In the previous month, Markit services PMI had registered a reading of 51.30.
US S&P/Case-Shiller home price index recorded a rise in February
In February, the S&P/Case-Shiller home price index recorded a rise to 182.79 in the US, compared to a revised level of 182.44 in the prior month. Market anticipation was for the S&P/Case-Shiller home price index to rise to 182.83.
US non-defence capital goods orders (ex aircraft) remained steady in March
In March, the preliminary non-defence capital goods orders (ex aircraft) in the US remained unchanged on a monthly basis, compared to a drop of 2.50% in the previous month. Markets were expecting the non-defence capital goods orders (ex aircraft) to rise 0.60%.
US Markit composite PMI climbed in April
The preliminary Markit composite PMI in the US climbed to 51.70 in April. In the previous month, Markit composite PMI had recorded a level of 51.30.
US S&P/Case-Shiller composite index of 20 metropolitan areas rose less than expected in February
In February, the seasonally adjusted S&P/Case-Shiller composite index of 20 metropolitan areas in the US, rose 0.66% on a MoM basis, lower than market expectations for a rise of 0.80%. The S&P/Case-Shiller composite index of 20 metropolitan areas had registered a revised rise of 0.79% in the previous month.
US non-defence capital goods shipments (ex aircraft) rose less than expected in March
In March, the flash non-defence capital goods shipments (ex aircraft) in the US rose 0.30% on a MoM basis, less than market expectations for a rise of 0.90%. The non-defence capital goods shipments (ex aircraft) had recorded a drop of 1.70% in the prior month.
US Redbook index slid in the last week
The seasonally adjusted Redbook index fell 3.10% in the US on a MoM basis, in the week ended 22 April 2016. The Redbook index had registered a similar fall in the prior week.
US CB consumer confidence index recorded a drop in April
In April, the CB consumer confidence index eased to 94.20 in the US, compared to a revised reading of 96.10 in the previous month. Market expectation was for the CB consumer confidence index to drop to 95.80.
US durable goods orders rose less than expected in March
The flash durable goods orders in the US advanced 0.80% in March on a MoM basis, compared to a revised fall of 3.10% in the previous month. Markets were anticipating durable goods orders to climb 1.90%.
US Redbook index rose in the last week
In the week ended 22 April 2016, on a YoY basis, the Redbook index advanced 0.80% in the US. The Redbook index had risen 0.50% in the prior week.

Wed, 27 Apr 2016 08:27:00 +0100
Northland Capital Partners View on the City: Altona Energy, Rockwell Diamonds Altona Energy (LON:ANR) – CORP: Business update
Market Cap: £11m; Current Price: 1.25p

First Arckaringa joint venture Board meeting
The first Board and shareholder meeting of the Arckaringa Coal Chemical Joint Venture Co Pty Ltd was held on 20/04/16. Qinfu Zang (Executive Chairman of Altona) was appointed Chairman of the JV, Yueqin Yin (Chairman of Sino-Aus Energy Group) was appointed CEO of the JV, Phil Sutherland (Non-Executive Director of Altona), Guang Chen (Director of Sino-Aus Energy Group) and Jiahong Zhang (Director of Wintask Group) were all appointed as Directors of the JV.
The JV will open an office in Xi’an, China where the day to day administrative and financial business will be conducted.
The JV will immediately focus on preparing a project plan and bankable feasibility study (BFS) to investigate the viability of the project. As part of the BFS, the JV will undertake further engineering, geological and hydrological analysis, and trails of underground coal gasification (UGS), alongside initiating an environmental protection plan.
WSP Parsons Brinkerhoff has been appointed to develop an overall Framework Agreement that defines the role and scope of service required to carry out the project. It will conduct a drill programme to analyse the volume and quality of the coal resource at various depths, and undertake a technology review of current UGC technologies.
NORTHLAND CAPITAL PARTNERS VIEW: Since the completion of the first tranche of funding from its joint venture partners, the Arckaringa joint venture company has wasted no time in moving the project forward. The next step in the joint venture is a detailed plan of the tasks that need to be completed as part of a bankable feasibility study and the order in which these tasks should be completed.

Rockwell Diamonds (CVE:RDI) – CORP: Q416 production and sales update
Market Cap: CAD$6.6m; Current Price: 12c

Q416 was a difficult period but new operations are poised for improvement
Gravels processed were down 40% to 789,000m3 in Q416 compared to 1,315,000m3 Q415, due to the change in operational profile. Grades were up 11% to 0.6cphm3 in Q416 compared to 0.54cphm3 in Q415. As a result, diamond recoveries were down 33% to 4,714cts in Q416 compared to 7,063cts in Q415.
The average realised price per carat was down 6% to US$1,448/ct in Q416 compared to US$1,544/ct in Q415. Carats sold were down 42% to 4,925cts in Q416 from 8,467 in Q415. As a result, revenue from diamond sales was down 45% to US$7.1m in Q416 from US$13.1m in Q415.
The closure of Saxendrift has been postponed until May 2016 from February 2016 due to a change in operational parameters. The imminent end of Rockwell’s mining activities at Saxendrift has necessitated an official restructuring process under terms of Section 189 of the South African Labour Relations Act.
The construction and commissioning of additional in-field screening capacity at the Remhoogte-Holsloot Complex is on track to research designed capacity of 180,000m3 of gravel per month.
The recommissioning of Wouterspan is expected to begin in Q117, the mine has a target production of 200,000m3 per month. A second phase to increase production to 400,000m3 is under consideration. The recommissioning of operations at Wouterspan is expected to absorb a large proportion of Saxendrift’s workforce and equipment.
NORTHLAND CAPITAL PARTNERS VIEW: As expected Q416 was a difficult period for Rockwell Diamonds due to the restructuring of its operational portfolio. The Company has undertaken extensive expansion plans at the Remhoogte-Holsloot Complex Mine and with the recommissioning of the Wouterspan mine expected to begin in this current quarter, the Company is positioned for improvement.


Wed, 27 Apr 2016 08:24:00 +0100
VSA Capital Market Movers - Antofagasta
Antofagasta (ANTO LN) has released robust Q1 2016 production results. Although YoY copper production was up 7.3% to 157kt due to the contribution of Zaldivar and Antucoya, this was offset by maintenance at Los Pelambres, grade weakness at Centinela and the closure of Michela which meant that on a quarterly basis production was down 7.5%. Gold production of 57koz was down 1% YoY although up 2% QoQ. Meanwhile, molybdenum production was down 19% YoY and 39% QoQ to 1.7kt.

Net cash cost performance was robust at US$1.37/lb, down 4.2% YoY and 0.7% QoQ. Although production was lower QoQ this was offset by a stronger contribution from gold by-product credits. With Los Pelambres due to come back online full year guidance for production and cash costs remains unchanged at 710-740kt and US$1.37/lb respectively.

Given our positive outlook on copper prices, ANTO remains our preferred large cap exposure globally.

Wed, 27 Apr 2016 08:22:00 +0100
US tech dents global sentiment FTSE 100 called to open -10pts at 6275, showing renewed weakness overnight (blame US tech results) following failure of yesterday’s rebound to overcome 6300. The bulls are watching 6250 for another bounce, pinning hopes on a daily RSI close to 8-month rising support. The Bears are making much of the breach of April’s uptrend, focusing on potential for a 3-day bearish flag from recent 6430 highs. Watch levels unchanged: Bullish 6305, Bearish 6245.

Expectations for a negative open in Europe can be pinned on more disappointing results from US Tech (Apple, Twitter) which knocked sentiment in Asia overnight and offset the positive US close and a rebound in Chinese industrial profits. This has only added to recent reticence ahead of central bank meets by the Fed and BoJ. While hopes are high that the latter eases, the risk is that the former delivers a less dovish message that disappoints markets.

Asian bourses in the red with Australia's ASX underperforming, despite a weaker AUD, as inflation data missed expectations to flirt with deflation for the first time in seven years. This has raised the odds of a rate cut by the RBA in May even after it suggested a 2% floor in April’s minutes. Commodity price weakness from a USD rebound also weighing on the index’s mining sector, even as Oil pushes higher.

US bourses quiet ahead of this evening’s FOMC announcement with broad market buoyancy provided by the energy sector on a still-rising oil price. Note also a couple US macro data misses (Durable Goods Orders, Consumer Confidence).

Corporates will be weighing on the Dow today after Apple (AAPL) posted its first drop in quarterly revenue in 13 years, part of a set of numbers that pretty much missed across the board. Fellow tech hipster Twitter (TWTR) also fared poorly. In both cases, investors will almost certainly be looking more at the guidance than the numbers though. Apple’s got complacent in its assumption that people will buy a new £650 mobile phone every year, while the outlook for Twitter’s money making potential remains as opaque as Jack Dorsey’s beard.

Crude oil prices are STILL strong this morning after making new YTD highs overnight as traders appear to be reacting to a perceived re-balancing in supply and demand. Brent and WTI are currently consolidating after making breakouts above $46 and $44 respectively. Note buyers’ remorse could see a little retracement today.
Gold is currently trading near a falling trend line around $1245 which could prove to be a hurdle with potential for a bit of pre-emptive USD strength to see the yellow metal back towards $1232 ahead of the US Central bank this evening. It’ll take a good bit of risk-on to see gains north of $1250, though poor US data of late might well tip the Fed’s rhetoric towards the dovish end of the spectrum.

In focus today will be the US Federal Reserve policy update this evening. No change expected but language of statement to be closely scrutinized for clues about timing of next rate hike. UK GDP is seen slightly slower in Q1, but still a solid 2% on an annual basis. In the afternoon, US Pending Homes Sales are expected to have seen much slower in March. US Oil inventories always of interest but no surprise that consensus is for another build. US Results today from Texas Instruments, United Tech, Boeing and Facebook.

Wed, 27 Apr 2016 08:21:00 +0100
Beaufort Securities Breakfast Alert: Keras Resources,, BP, British American Tobacco, Horizon Discovery, St. James Place, Whitbread The markets
The FTSE-100 finished yesterday's session 0.38% better-off at 6,284.52, whilst the FTSE AIM All-Share index closed 0.34% lower at 729.22. In continental markets equities ended in the red as investors digested a slew of corporate earnings, while focusing on the meeting outcomes of several central banks due later this week. Germany’s DAX and France’s CAC 40 fell 0.3% each.
Wall Street
Wall Street ended in the positive terrain yesterday as improved oil prices propped the energy sector. Meanwhile, the Fed commenced its two-day policy meet, the outcome of which is expected to be released later today. The S&P 500 closed 0.2% higher, led by gains in the energy sector.
Markets are trading lower ahead of the key policy rate decisions from the Fed and Bank of Japan. The Nikkei pared initial gains to close 0.4% lower as several Japan-based suppliers of iPhone parts declined after Apple Inc. reported a drop in iPhone sales. The Hang Seng was trading 0.5% down at 7:00 am.
Yesterday, WTI and Brent Crude Oil prices rose 3.3% and 2.8%, respectively. The spread between the two varieties stood at US$1.7 per barrel.

UK banks approve fewer mortgages in April: BBA
According to figures released by the British Bankers’ Association, banks in the country approved just 45,096 mortgages for house purchases in March, compared with 45,646 mortgages in February. This number is the lowest since December, but recorded an increase of 14% y-o-y. The number of mortgages has been impacted particularly by the imposition of higher tax on buy-to-let properties.
Eurozone meeting on Greece reforms delayed
The finance ministers of the Eurozone countries have decided against meeting this Thursday to discuss future bailout plans for Greece. They require more time to assess the contingency package and debt for the country.

Company news

Keras Resources (LON:KRS, 1.20p) – Speculative Buy
Keras Resources, the Australian gold mining company, announced yesterday that it has completed its second ore parcel haulage to the Paddington Mill from the Accord deposit, located within the Grants Patch Gold Tribute lease area in Western Australia.  Approximately 17,000t grading 1.93g/t Au for an estimated 1,055oz of contained Au was hauled and will be processed under the agreement with Paddington Gold, a subsidiary of Norton Gold Fields. An estimated 1,427oz of contained gold has now been delivered with mining operations moving between the Accord and Anomaly 22 deposits.  Once ore parcels are delivered (minimum 3,000t each), Paddington Gold has 42 days to pay for the agreed contained gold, as determined by truck weights and gold grades based on rigorous sample procedures at the processing plant.

Our view:Keras has, in less than a month, delivered some 1,427oz of contained gold from two deposits within the Grants Patch Gold Tribute lease area. This represents a significant milestone for the company as it continues to improve efficiencies and advance plans for the next open pits. We look forward to updates regarding the refurbishment of the high-grade Prince of Wales mine as well as confirmed gold grades and payments of the first two ore deliveries. In the meantime, we maintain our speculative buy on the stock.

Beaufort Securities acts as corporate broker to Keras Resources plc (LON:BOO, 49.25p) - Buy (‘boohoo’), one of the UK’s largest online own-brand fashion retailers, yesterday announced its results for the year ended 29 February 2016 (‘FY2016’). During the period, revenue advanced +40% to £195.4m (FY2015: £139.9m), where revenue for the UK, rest of Europe (‘ROE’) and rest of world (‘ROW’) increased by +38%, +25%, and +56%, respectively. Revenue growth in the ROE was impacted by the weaker Euro, whereas encouraging growth in the ROW was driven by strong performances in the Australian and US markets. Gross margin declined by -300 basis points to 57.8% due to adverse exchange rate movements and lower margin third party sales. Adjusted EBITDA expanded by +32% to £18.7m (FY2015: £14.1m) and pre-tax profit rose +42% to £15.7m (FY2015: £11.1m). Consequently, basic earnings per share jumped to 1.11p per share from 0.75p per share, up +48% compared to a year ago. Cash at the end of the period stood at £58.3m (FY2015: £54.1m). On the operational front, number of active customers (who shopped during the period) has grown to 4 million, up +33.8% compared to the previous year with accelerated international growth which now stands 33.4% of total revenue (FY2015: 32.5%). The Group has launched mobile apps for UK, USA and Australia while introduced responsive websites for European sites. The Group also completed £7.7m, 270,000 square feet warehouse extension. The capacity now stands at 525,000 square feet and it is already in use. Its joint CEOs, Mahmud Kamani and Carol Kane commented “we are pleased to report a year of strong revenue growth across all geographic regions. We have had an encouraging start to the 2017 financial year and we currently anticipate sales growth of c.25% for the financial year, in line with current market expectations. We will continue to look at opportunities to invest in incremental growth, which may impact margins on a short term basis, although we will look to maintain EBITDA margins at similar levels to the financial year just ended (in line with current market expectations)".

Our view: boohoo delivered robust result for the FY2016 as it expanded revenue across all regions. This growth was helped particularly by strong performances in the Australian and US markets, as well as successful trial to distribute products through third party internet retailers. Although third party sales have reduced the overall gross margin (by -100 basis point), the Group intend to expand the number of partners in order to build its brand internationally and broaden customer reach. The Group has strengthened its balance sheet, which had £58.3m cash at the year-end, despite completing a warehouse extension of 270,000 square feet with another 275,000 square feet extension already started. The conversion of large number of warehouse operatives' contracts from agency to permanent together with capacity extension should result smooth operation with some cost savings and enable boohoo to power future growth. Though Group strategy is to increase its spending on marketing & promotions and third party retailers may further impact its gross margins, EBITDA margins are still expected to be maintained. While sales growth of c.+25% in FY2017 anticipated by the Board appears rather conservative, we believe worldwide market for internet fashion sales will continues to expand as shopping preferences shift towards convenience and competitive pricing affordable by internet retailers as was, perhaps, evidenced by the collapsed of BHS last Monday. Even in an unexpected circumstance of BREXIT, we do not expect any significant impact on the Group given that just 11.6% of its total revenue is derived from EU (excluding UK) which could, in theory at least, be imposed with a minor additional online levy. Beaufort retains its Buy rating on the stock.

BP (LON:BP., 375.90p) - Buy
Yesterday, BP released its results for Q1 2016. The company’s underlying replacement cost profit for the quarter improved to US$532m from US$196m in Q4 2015 and US$2.6bn in Q1 2015. The underlying operating cash flow in the first quarter was US$3.0bn, excluding payments of US$1.1bn related to the Gulf of Mexico oil spill, offset by divestment proceeds of US$1.1bn. Organic capital expenditure for the period was US$3.9bn, compared with US$4.4bn in Q1 2015. For the year 2016, the total organic capital expenditure is estimated to be around US$17bn. Moreover, if oil prices continue to remain low, it may move to US$15–17bn in 2017. At the end of the quarter, BP's gearing level was 23.6%. The company intends to return to managing gearing within its historical range of 20–30%. Segment-wise, BP's Downstream segment reported an underlying pre-tax replacement cost profit of US$1.8bn for this quarter, higher than US$1.2bn in the previous quarter. BP's Upstream segment recorded an underlying pre-tax replacement cost loss of US$747m for the quarter, broadly similar to the previous quarter's result. Meanwhile, the company progressed on the strategic front with the extension of the Khazzan licence agreement in Oman. BP also entered into a shale gas production sharing contract in China and an agreement to work on future opportunities with the Kuwait Petroleum Company across all business lines. Production was commenced in January 2016 on two other upstream projects: the In Salah Southern Fields project in Algeria and the Exxon-operated Point Thomson project in Alaska. In the Downstream segment, the global rollout of BP's Ultimate with ACTIVE technology project continued, its biggest fuel launch in a decade. BP also expanded its convenience retail partnerships with new agreements in Germany and the Netherlands.

Our view: Despite a challenging oil price environment, BP reported profits for the first quarter of the year. This was primarily led by strong operational refining and a positive trading performance. BP’s restructuring and cost reduction plans have progressed well, with the company reporting significant savings during the quarter. Furthermore, upbeat performance from the Downstream segment has helped the company beat the estimates for the quarter. The company remains on track for the development of its next wave of material upstream projects. Market fundamentals continue to suggest that the combination of robust demand and weak supply growth would move global oil markets closer into balance by the end of the year. The Brent oil marker price averaged US$34 per barrel in the quarter, compared with US$44 in 4Q 2015 and US$54 in 1Q 2015. Moreover, refining margins were at the lowest quarterly average for over five years. As the company steadily improves cost, we expect it to adjust further within its financial frame despite low oil prices. In light of this and the partial recovery in oil prices anticipated during H2 2016, Beaufort maintains a Buy recommendation on the shares.

British American Tobacco (LON:BATS, 4,144.50p) - Buy
British American Tobacco (‘BAT’), one of the world’s largest tobacco company, yesterday announced its interim management statement for the 3 months ended 31 March 2016 (Q1 2016). During the period, revenue increased by +1.7% at current exchange rate, compared to the same period last year, largely impacted by the adverse foreign currency movement. Revenue at constant exchange rate basis, on the other hand, advanced +7.5% and increased +6.1% on organic basis. Cigarette volume from subsidiaries increased by +3.6% to 158 billion, or +2.4% organically. Like-for-like volume grown +1.1%, excluding the effect of inventory movements in the comparator period. The volume growth for its five Global Drive Brands (Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans) expanded +10.5% and its UK Next Generation Products (such as e-cigarettes) has also grown. The Group has notes that the trading environment remains challenging due to continuing impact of adverse exchange rates, and estimated a profit headwind of c.-7%, with a consequent impact on operating margin. On the other hand, there will be positive effect of c.+3% on earnings if sterling stays at the current rate. Its CEO, Nicandro Durante commented “while profit growth will be weighted to the second half of the year, partly due to the impact of foreign exchange on our cost base, I remain confident that we will deliver another year of good earnings growth at constant rates of exchange".

Our view: British American Tobacco delivered a good result for the first quarter, despite the continuing pressure of volatile currencies. BAT increased organic market share by +0.2%, and number of countries recording increases in cigarette volume more than offset relatively sluggish activity from Pakistan and Malaysia who were impacted by significant excise-led price hikes. The Group’s Global Drive Brands expanded well, while it also continued to improve its range of Next Generation Products, having recently completed the acquisition of Ten Motives, an e-cigarettes company in UK. Next Generation Products, other than e-cigarette, contain Licensed Medicinal Products (a nicotine product licensed as a medicine) and Tobacco Heating Products (an electronic device that heats a nicotine-containing liquid into an inhalable vapour). One of Licensed Medicinal Products, Voke, a nicotine inhaler, is plan to be launched in the UK later 2016 and the test marketing for a new Tobacco Heating Products will also start this year. As an increasing number of countries adopt new and various means in order to reduce domestic cigarette consumption, we believe BAT’s continuous investment in transforming its existing product portfolio is correct way to move the business forward. Beaufort reiterates its Buy rating on the stock.

Horizon Discovery (LON:HZD, 182.50p) – Speculative Buy
Yesterday, Horizon Discovery released its preliminary results for the year ended 31 December 2015. During the period, with a contribution of £7.8m and £12.2m from products and services, respectively, the company’s revenues increased 69% to £20.2m. The EBITDA loss for the period stood at £6.6m, which was better than market expectations. The company expanded its research milestone portfolio by 32% to approximately £208m, plus royalties. On the operational front, the company expanded its product catalogue to over 23,000 genetically defined cell line and in-vivo models, and molecular diagnostic re-agents. Horizon Discovery entered into new partnerships and acquired new firms to broaden its product offering. The company appointed Grahame Cook as Non-Executive Director and Chairman of the Audit Committee. At the end of this period, the company formed a joint venture with Centauri Therapeutics Ltd called Avvinity Therapeutics to explore the development and discovery of novel therapeutics for immuno-oncology.

Our view: The year saw Horizon reinforce its business engine through targeted investments in internal infrastructure, including e-commerce and ERP systems. Moreover, with the integration of recent acquisitions into the company, Horizon has been successful in creating a fully integrated life science gene-editing service company. New marketing channels were established through partnerships with leading organisations such as ThermoFisher and Abcam. During the year, the company grew in strength on the core capabilities front and expanded its catalogue of products to over 23,000. Horizon is at the forefront in these game-changing areas of medicine as we believe that the new era of Personalised and Genomic Medicine is here to stay. The company’s pipeline of innovative products leads us to believe the outlook is positive. Thus, in view of the above developments, we maintain a Speculative Buy rating on the stock.

St. James Place (LON:STJ, 918.0p) - Buy
Yesterday, wealth management group St. James Place issued an update on new business inflows and funds under management for the three months ended 31st March 2016. For the period, the gross inflow of funds stood at £2.45bn, up 16% y-o-y, whereas the net inflow of funds under management was £1.36bn. The company retained 95% of the client funds, and the total funds under management reached £62bn. Other initiatives during the period included the acquisition of Technical Connection Ltd to deliver technical support and insight, and for proposition development. The company also launched the St. James Place inter-generational mortgage suite in conjunction with Metro Bank. This new product range, exclusive to the clients of St. James Place, is specifically designed for parents and grandparents who wish to support their children or grandchildren with purchasing their first home.

Our view: The quarter has been quite fruitful for the company, considering the variability in the global stock markets. The company’s investments reached £62bn, accompanied by the strong retention of clients and their investments. Consequently, the company recorded a substantial jump in the net inflow of funds, supported by a record £1bn in gross monthly inflows in March. Furthermore, no changes in pension tax relief and a high limit for individual savings ISAs in 2017, coupled with reduced capital gains tax, bode well for the company’s future prospects. St. James Place acquired Technical Connection Ltd, specialist in technical support, insight, and proposition development, which would enhance the company’s ability to provide business-focused technical support to its partners to guide clients in making effective financial decisions. We believe the company has the potential to improve profit and generate substantial returns for its shareholders. Therefore, we continue to recommend a Buy rating on the stock.

Whitbread (LON:WTB, 3,969.0p) - Buy
Yesterday Whitbread issued its results which were broadly in line with its pre-close trading update and market consensus. Revenues rose 12% to £2,921m and operating profit up 12.4% at £600.4m. The full year dividend was up 10% at 90.35p. Both Premier Inn and Costa benefit from attractive market growth opportunities and the company will continue to capitalise on these by developing its network and brand strength as the company confirm its targets to reach c.85,000 UK hotel rooms and c.£2.5 billion system sales in Costa, by 2020. The company has identified three key strategic themes to develop the business: grow and innovate in the core UK businesses; focus on the company’s strengths to grow internationally; and build the capability and infrastructure to support long-term growth. The company believe this strategy will enable Whitbread to deliver its significant growth ambitions, grow earnings and dividends, maintain good returns on capital and create further value for shareholders. Whitbread comment that, while it is only six weeks into the new financial year the company remain confident of making good progress this year.

Our view: Whitbread has made good financial and operational progress this year. Its financial success is based on another year of strong growth in their two leading brands, Premier Inn, the UK's best economy hotel brand and Costa, the UK's favourite coffee shop chain (according to British Travel Awards 2015). Premier Inn and Costa both continue to benefit from what Whitbread regard as significant structural market opportunities. The budget hotel market is continuing to grow as the independent sector declines, and there is an increasing demand for great coffee. It is worth highlighting three strategic themes that the company has identified 1) grow and innovate in the core UK businesses, 2) focus on strengths to grow internationally 3) build the capability and infrastructure to support long term growth. So, in our view, more of the same. Following the underperformance in the share price we recommend Whitbread as a Buy.

Economic news
US durable goods orders
US durable goods orders remained improved 0.8% in March, following a revised drop of 3.1% in February, the Commerce Department said yesterday. Excluding orders for transportation equipment, durable goods orders edged down 0.2% after a 1.3% fall in the previous month.
US consumer confidence index
As per the Conference Board, US consumer confidence index fell to 94.2 in April, from a downwardly revised 96.1 in March. The reading missed the market estimates of 95.8. 

Wed, 27 Apr 2016 08:14:00 +0100
Saudi Prince Vows Thatcherite Revolution and Escape From Oil Saudi Prince Vows Thatcherite Revolution and Escape From Oil
Here is a latter section of this topical column by Ambrose Evans-Pritchard for The Telegraph:

The reform blueprint is inspired by a McKinsey study – Beyond Oil – that laid out how the country can double GDP over the next fifteen years and reinvent itself with a $4 trillion of investment across eight industries, from electrical manufacturing, to cars, healthcare, metals, steel , aluminium smelting, solar power, and most surprisingly tourism. McKinsey warned that half-hearted reform risks disaster, and bankruptcy.  
There is some logic to the Vision2030 plan given Saudi Arabia’s access to cheap energy. Delivery is another matter. “We have seen these sorts of transition plans before and they never come to much,” said Patrick Dennis from Oxford Economics.
“I don’t think they can pull this off. The riyal peg is grossly overvalued and that makes it even harder. We think market pressures will become overwhelming if there is little evidence of real reform by 2018.” 
Under the plan, Riyadh will sell up to 5pc of the state oil giant Aramco to global investors, and convert the secretive behemoth into a modern company with transparent accounts.
He valued the group at $2 trillion but this figure is plucked out of thin air. Investment funds have demanded a steep discount before buying into partial privatisations of this sort in Russia and other petro-states with a weak rule-of-law, fearing that they may be held hostage to politics.
The aim is to transfer the proceeds into the country’s sovereign wealth fund, using the money to diversify into global investments. These will generate a non-energy income in the future along the lines of the Norwegian petroleum fund.
It is unclear how this Saudi fund can plausibly reach $3 trillion unless oil rises back above $100 a barrel, and stays there for a long time. The country is currently depleting its foreign exchange reserves by $10bn a month to cover a budget deficit still near 15pc of GDP, drawing down its overseas wealth to fund its military build-up, a war in Yemen and life-support for Egypt, as well as paying state salaries.
The Saudis may have left it too late to break oil dependency in time, especially as renewable energy reaches parity and the COP21 climate accords signal a move to worldwide carbon pricing. India is already examining plans to switch its entire transport system to electric power.

David Fuller's view
I hope Prince Mohammad bin Salman succeeds, as that would be best for a degree of stability in the Middle East.  However, I agree with all the reservations in this article above and also others which I have published.  Nevertheless, at least the Prince has ambition, energy and a plan for dragging his country into the 21st Century.  Good luck to him.
This item continues in the Subscriber's Area where a PDF of AE-P's article is also posted.


The Markets Now Presentations

David Fuller's view
We had a lively evening at The East India Club last night, featuring the best presentations from Charles Elliott and Iain Little that I have heard to date, plus some topical views on Brexit from delegates. 
Two PowerPoint presentations are posted in the Subscriber's Area.

The Weekly View: A Letter to the Post-Boomer Generation
My thanks to Rod Smyth for his excellent letter, published by RiverFront.  Here is a brief sample:
In the earlier years, do not be alarmed by market declines.  Investing is an emotional experience, which is where advice can help.  Bull and bear markets (significant rises and significant declines in price) will likely happen during your saving years.  Think about it – you would probably much prefer to see declines in the early years, while you have less money and are adding every year or every pay period.  Assuming what you are investing in goes up over time, you want to have prices at their lowest when you are buying and at their highest as you approach retirement.  Emotionally, we like to see our money grow, even in the early years, but logically we should recognize that when we are “putting pennies in the jar”, lower prices are a good thing as long as we believe markets will go up over time.  If we do not believe that, then we shouldn’t be investing. 

David Fuller's view
Inevitably, there is a significant element of luck with investing. Catch a market or sector at the beginning of a long-term economic expansion and you do exceptionally well, particularly if dividends are reinvested.  Conversely, commence investing in what eventually proves to be the top of a long-term cycle and you could be lucky to break even.
It is the same with many developed country government bond markets which have enjoyed tremendous bull trends over the last 35 years.  I think the next 35 years are likely to be distinctly mediocre.
Art has always interested me but it also has a big element of fashion, in addition to doing much better during inflationary rather than deflationary periods.   
My children in their 40s, who live in London, have mainly invested in their homes and done very well despite mortgage costs.  However, London is not typical having tremendous bolthole appeal, which has so far ensured that demand way outstrips supply.  In Tokyo, property investors made fortunes during the 1960s through the 1980s, but have seen valuations plummet since 1990.
What can we say about investments going forward?
This item continues in the Subscriber’s Area, where a copy of Rod Smyth's Letter is also posted.

Roger Bootle: The Things Economists Know and Do Not Know About Brexit
Here is the conclusion of this informative column published by The Telegraph:

Meanwhile, the EU would have to embark on truly momentous changes in order to make the eurozone work. Banking union, fiscal union and political union must be put in place for the euro to survive.
We don’t know what effects this cocktail of changes will have upon European politics and economic performance – and hence on us.
“'We know that inside the EU we do not have full control of our destiny.’”
Roger Bootle
The overwhelming majority of the EU will be inside the euro, and what needs to be done to make the euro work would be the EU’s leading concern.
We do not know what things will be forced upon us by qualified majority voting. Moreover, with the referendum behind us, there is a good chance of a renewed push to get the UK into the euro. What have the calculations that produce the figure £4,300 a year got to say about this? The answer, of course, is precisely nothing.
And all this is before we take account of the dynamic effects and their political consequences. Perhaps after a Brexit our leaders would become enmeshed in rivalrous infighting and it would be impossible to put together an economic programme for national renewal.
But there is surely a good chance, as Michael Gove suggested last week, that by contrast EU departure would be the equivalent of a shot in the arm.
Nor did the study have anything to say about the congestion and social costs implied by uncontrolled immigration, which are at the heart of so many people’s concerns about the EU.
Although the future is beset with uncertainty, about this issue we do know some things. We know that over recent decades the EU has been a comparative economic failure.
We know that unless something really radical happens, it is set to fall sharply in relative economic performance over the decades to come. We know that the EU is set to embark on a course of integration from which we aim to stand aside. We know that inside the EU we do not have full control of our destiny.
We know that inside the EU but outside the eurozone we will be marginalised.
I cannot say what all this means in terms of pounds per annum for the UK average household in 15 years’ time. But I can recognise the difference between a situation of opportunity and a pig in a poke.

David Fuller's view
For myself and also my three-generation British family, staying in the EU feels like the inertia of running a loss on a trading position, hoping that it might improve but without any analytical evidence or conviction that it is likely to do so.  

Email of the day on stops
The piece that you wrote on Tesla immediately made me think of the "stop loss" technique that you teach at the seminar. It seems to me that Tesla shareholders who are worried about its share price would do well to use stop losses now and in the future.

Eoin Treacy's view
Thank you for an email of general interest. I have to admit I feel increasingly conflicted about the use of stops. On the one hand they are useful because they force us to think about when to decide to get out. On the other they represent siren calls to increasingly sophisticated programs informing them of where people have decided to exit positions.

Too often I have placed stops where I believe it is reasonable to do so, taking the consistency of the price action, the potential for a drawdown and volatility of the instrument into account, only to see it triggered and prices rally subsequently. Einstein’s definition of insanity is doing something over and over again and expecting a different result so I have felt under pressure to evolve my attitude to stops.

Genetic Superheroes?
This article from 23andMe may be of interest to subscribers. Here is a section:

A Few Examples Of How Resilient Individuals Have Already Helped Researchers
Human Knockout Project — Daniel MacArthur started this project out of his lab at Massachusetts General Hospital and the Broad Institute. He’s looking for healthy individuals with so-called loss function variants, genes that do not code for a protein. Researchers routinely “knock-out” the function of a gene in mice when studying what a gene does.

PCSK9 — The gene regulates the level of LDL cholesterol, but researchers found that certain individuals with loss function variants in the gene were protected against high lipid levels. Since the discovery several pharmaceutical companies have used this discovery to develop new therapies for combating high cholesterol.

Alzheimer’s Escapers  — “Escapers” are individuals who have the genetic variants that put them at very high risk for disease, but for whatever reason never develop it. The Washington University School of Medicine is looking at families that are genetically predisposed to
Alzheimer’s Disease looking for individuals who have “escaped” getting the disease for insights into new treatments. 23andMe has also found escapers.

HIV — By identifying rare mutations in the gene CCR5 that provide resistance to HIV infection, researchers hope to find a vaccine against AIDS.

Diabetes — A few years ago researchers discovered that a variant in the gene ZNT8 protects even obese people from diabetes. Since then researchers have been using this as a possible drug target to protect against diabetes.

Eoin Treacy's view
The movement to study healthy people as a way to identify how to treat illness is quickly gaining ground in the technology community. After all when you go to hospital it is full of sick people but the wider world is full of people who are healthy.  Doesn’t it make sense to find out why some people get sick and others don’t?


Bob Diamond Confirms the Rumors: He Wants Barclays Africa Back
This article by Richard Partington for Bloomberg may be of interest to subscribers. Here is a section:
Staley is putting one of Barclays’s more profitable businesses on the block at a time of low commodity prices and political turmoil in South Africa. He’s preparing to sell an initial 10 percent stake in the Johannesburg-based business to several large investors, while keeping the option to divest its entire holding, people familiar with the matter have said.

“There will be some people who would be slightly nervous about selling a business to somebody who was an insider before,”

Piers Hillier, who helps oversee about $123 billion, including Barclays shares, as chief investment officer of Royal London Asset Management, said in an interview with Anna Edwards on Bloomberg TV. “We’d want to see not just one candidate, who’s effectively a former insider, as the only available candidate to purchase. It doesn’t tend to mean you’re going to be able to secure the best price.”

Atlas Mara said its board of directors “supports the exploration of the potential combination” of the company with Barclays’s African operations, while Diamond and Thakkar will “recuse themselves” from the firm’s internal discussions over the potential approach.

Atlas Mara stock gained 7.3 percent at 3:10 p.m. in London trading. It has still fallen about 16 percent this year amid a reversal of the commodities boom that made Africa the last great growth frontier.

Atlas Mara also reported its first annual profit today as lending jumped 15 percent and deposits rose 12 percent.

“Strategically, the building blocks are falling into place and I fully expect that 2016 will demonstrate further progress on our journey towards building sub-Saharan Africa’s premier financial institution,” Chairman Arnold Ekpe said in the statement.

Eoin Treacy's view
With Africa expected to account for the bulk of population growth over the coming decades the continent represents one of the few remaining big growth stories for the banking sector. The decline in commodity prices and the associated uptick in political discontent is not going to stop young people from growing up and wish for a better standard of living.

The Chart Seminar 2016

Eoin Treacy's view
Thank you to everyone who has expressed interest in The Chart Seminar this year. Our plans are to hold a webinar sometime in June and I will share details of this as we firm up how best to conduct it. The timing of the seminar will be catered to where the majority of delegates sign up from but we’ll try to pick a time when the most possible people can tune in live.

We also plan to hold two seminars in physical locations this year. From some subscriber feedback I was thinking of holding one in Los Angeles during the summer and another in London during the fourth quarter. If you would like to express interest in any of our events please message Sarah Barnes at

Wed, 27 Apr 2016 08:12:00 +0100
Brokers: Royal Mail bag contains mixed views Tue, 26 Apr 2016 12:12:00 +0100 Oil price, BP, Egdon, Victoria Oil & Gas, Ithaca Energy, Sundry-Halliburton-COPL-Plexus, And finally... Oil price
Blogs later this week may be a bit patchy I’m afraid with company meetings in and away from the UK.
The WTI price took the brunt of the fall yesterday primarily due to the Genscape figures pointing to a 1.5m barrel increase in the stocks at Cushing. As I said earlier inventory numbers are pretty key at this time of year and have to be watched carefully, these numbers dont bode well for API or EIA stats later in the week.
Elsewhere it was news from the KSA that teased the market, they have announced that they are to expand the Shaybah field this quarter and expect to increase capacity to 12m b/d which if accurate would not be helpful but would serve to irritate Iran. They have also made a preliminary announcement regarding the IPO of Saudi Aramco as part of the ‘Saudi in 2030 Vision’, whereby it is valued at $2tn+ and they will sell a stake of less than 5%.
First quarter figures from BP this morning which beat the whisper but were still very mixed. Interestingly and in line with my comments in the last few months, lower costs have now more than offset weaker oil prices and BP are confident about the cash flow figures, at least in the short to medium term. Bo Diddeley appears to be backing down from the lower for longer or even lower for ever by saying ‘robust demand and weak supply growth will move global markets closer into balance by the end of the year’. Welcome to the real world Bobby…Unfortunately the last quarter has not been about the figures but about the scandal of his $20m pay packet, for which responsibility must lie with the non executives and the committees upon which they serve, not suitable for a major, if that is what BP are trying to be…
Egdon Resources
Interims today from Egdon which for some reason the market havent initially liked the look of. The numbers themselves are not that relevant and I would suggest that the 9 licences received in the 14th Round which increased their acreage by some 50% in favoured areas was good news. Wressle is also set to proceed this year achieving production in the second half which will be helpful. Drilling at Holmwood is imminent and as it is adjacent to the Horse Hill oil discovery it will be closely watched. The company has £5.26m of cash and no debt so about ok there but the rarely miss a chance to raise money if the ducks are quacking albeit not necessary at this stage. A minor point is that I would prefer to see the statement by Mark Abbott who knows what’s going on but the Chairman has to do something occasionally I suppose. Although the Egdon price has been in the doldrums lately the company are doing all the right things, Wressle will bring in revenue, Holmwood adds some exploration and the portfolio is now full of things to work on.
Victoria Oil & Gas
I reported last week on VOG’s operations outlook but commented that I was meeting the company so would come back with more after that. I met with Kevin Foo, Laurence Read and Ahmet Dik who is the CEO of GDC, VOG Director and seemingly heir apparent. With such an array of main board open to me I have to say that it was a very good meeting and we fleshed out a number of points from the statement during the session.
AD seems very impressive and just who the company needs to be in control in Cameroon, very much hands on and if there was any complacency from suppliers or contractors before, I strongly suspect that has been disabused in pretty short time. Work on the Bonaberi pipeline continues apace, with speed increasing especially as they move out of the city, a perfect example of cutting costs is the use of open trenching and sharing expertise with road builders. To go with this expansion the company has signed more GSA’s and are approaching all sorts of potential clients for their gas and this area looks very promising.
The key to providing feed-stock is the drilling campaign on the Logbaba field, the large photographs of the site show just how much work has already been done in preparation and the scope for further expansion. These wells are very important and as with other areas of the industry costs are down dramatically. There has been significant renegotiation leaving VOG with very favourable terms indeed. The advantage of drilling success is not just to supply gas, it will move 2P reserves into the 1P category thus increasing the value of the portfolio. Drilling should start in late Q2 and expect 180 days in total and at a cost of less than $40m, substantially less than previous estimates. In addition to all this the Logbaba gas plant which is adjacent to the drilling site is already expanding and in stage one of the process.
The recent purchase of the Matanda block from Glencore is significant in that it shows that the company’s plans for the future are very much under way. Matanda dwarfs Logbaba and is 2/3 onshore and 1/3 offshore, I suspect that the offshore bit will be farmed-out or at least stay on the back-burner for a while. The onshore part though is already seeing some action although the company point out that it is very definitely to be done after Logbaba, having said that by the end of this year there will be a good idea about seismic work and other activity making Q1 2018 a likely probability for drilling the prospect.
Financially VOG are in good shape, revenues will rise again modestly in the 2Q and although there will always be wet season/dry season factors they are doing all they can to mitigate that. At the quarter end they had net cash of $4.6m and  since then they have signed a $26m debt facility with BGIFI Bank of which around half has been drawn down. In conclusion I would say that VOG looks in a good place to me and looks extremely undervalued on  much any yardstick, as an explorer, a pipeline operator and a utility selling to a wide range of customers in a market where there appears to be no end to potential demand, what is not to like?
Ithaca Energy
Ithaca recently hosted a trip to the ship yards of Gdansk where the infamous FPF-1 modifications are being completed. I say modifications but if you look at the before and after pictures they might have virtually rebuilt the rig from the legs upwards. After all sorts of delays the current programme remains on track for a May/June sail away and first hydrocarbons in 2H 2016. Ithaca is an absolute favourite in the bucket list due to its outstanding management, rigorous cost control, effective hedging policy and resultant strong cash flow. With a placement raising $66m to Delek last year at a 39% premium to the share price, IAE  exhibits all the characteristics and more that are required to  remain right at the top of its peer group.
PS Never, ever, fly Wizz Air whose  incompetence and total disregard for its passengers knows no limits, an 11 hour delay, at the gate, at Gdansk was only conspicuous by the absence of any announcements save for saying that there would be a further one in 30 minutes.
Expecting results from Halliburton yesterday? Now on the 3rd of May as all sorts of skulduggery is being surmised as they try and rescue the Baker Hughes bid…
Plexus has announced that it has raised $5m at 52.05p from LLC Gusar as it accelerates its Russian roll-out which manages to avoid any sanctions. The area is, along with the Middle East, still showing some growth and with partners Gusar and Konar, Plexus are addressing the wellhead market and have an additional licence to enter the larger and more active platform production wellhead equipment markets.
Finally I notice that COPL which I mentioned last week has increased the London private placement from $6m to $8.25m, I find this stock most interesting to keep an eye on.
And finally…
So, have Spurs blinked first after they dropped points in their 1-1 draw with the Baggies last night? Not completely done but Leicester will probably get more than one bite at this particular cherry yet…
Tonight it’s the Noisy Neighbours taking on Real Madrid in their semi-final first leg, certainly one to watch…

Tue, 26 Apr 2016 12:10:00 +0100
In the news: Hummingbird Resources, Pacific Environment, Peninsula Energy, North River Resources & White Rock Minerals We are marketing Hummingbird Resources (HUM LN) in London this week. The company’s Yanfolila Project in Mali is an attractive mid-scale, high-grade, open-pittable gold development project with low capital intensity and operating costs and high projected returns. These attributes combine to generate a very healthy project IRR of 60% at a gold price of US$1,250/oz.

Recent company updates showed improvements in the project’s parameters. This should lead to the company being in a far stronger position to gain an attractive financing package for the project; it is currently working through these options and hopes to be able to update the market on progress in the near future. 

We have a BUY rating and target price of 45p. We established our TP at the time of the DFS publication in January 2016, since when the potential development of Gonka and the optimised mine plan have been announced, adding considerably to the value proposition. However, pending the finalisation of the project financing we continue to value Yanfolila on a 0.7x multiple to derive our target price of 45p. The shares currently trade around the 25p level. Please let us know if you would like a meeting.

In a brief piece of company news (we have plenty of longer stuff for you below!), Pacific Environment*** has released an update. This focused on its continued success in its Thames Water contract, which it won through a competitive tender alongside its Dutch partner Odournet last March. The initial contract has a one-year duration and involves two of Thames Water’s key sites, with the option to extend both the duration and scope (Thames Water operates over 30 sites where the company’s pioneering EnviroSuite environmental monitoring system could be applied). The contract represented Pacific Environment’s first step into the wastewater sector, which the company believes doubles its overall addressable market through the >100,000 public wastewater facilities worldwide.

Pacific Environment is working closely with Thames Water at the two sites under contract, whilst looking towards the opportunity to upscale the material US$0.3m deal across the wider Thames Water group. Odournet’s subsidiaries in Spain and France have also been working to secure similar wastewater management agreements in other targeted European cities.


Peninsula Energy††
ASX:PEN | A$0.78 | US$105m | Buy | TP : A$1.60
Secures US$15m Convertible to Fund Working Capital
Peninsula Energy has recommenced trading following the announcement that it has made substantial progress towards securing the finance required for the Stage 2 expansion of its Lance ISL uranium operation in Wyoming from 0.6Mlb pa to 1.2Mlb pa. It announced that it has secured a US$15m convertible loan facility from major shareholders RCF and Pala, and also that a term sheet has been signed for a Revenue Streaming Facility (RSF) for a further US$25m, with due diligence on this was at an advanced stage.
The US$15m convertible facility is to be used for general wellfield development, resource development drilling, Stage 2 engineering design, drilling and feasibility studies at the Karoo Project in South Africa and for general working capital purposes. The company plans to use the US$25m RSF to fund the engineering and construction of the Stage 2 Central Processing Plant (CPP) and the development of a further seven header houses and wellfield units.
The company also provided an update on the production ramp-up at Lance. A total of three header houses (out of the seven planned to be in production by the end of the year) are now operational and head grades were reported to have reached 27mg/L, equivalent to 61% of the planned peak grade for the first year of operation.
A number of Board changes were reported, with changing roles for John Harrison (moving to Non-executive Chairman) and Richard Lockwood (moving to a Non-executive Director) and Mark Wheatley replacing Neil Wharberton as a Non-executive Director.
COMMENT: Securing the US$15m convertible funds should provide the funds necessary to advance the Stage 2 expansion to the construction-ready stage and, at the corporate level, to progress the Karoo Project in South Africa. In addition to doubling the project’s production capacity to 1.2Mlb pa, a significant benefit of the Stage 2 development is that it is planned to reduce operating costs by US$9-10/lb, with this split roughly equally between economies of scale and bringing the back-end of the processing plant (elution, precipitation, drying and packaging) in house.
We reiterate our Buy recommendation, with a target price of A$1.60.

Three-stage ramp-up to 2.3Mlb pa U3O8 at Lance — Having received the final regulatory production approvals in early December, Stage 1 operations are ramping up at the Ross Permit Area, which should deliver a production rate of 600,000-800,000lb U3O8 pa through 2016 and 2017. Stage 2 is planned to increase production capacity from 2018 for a capital commitment of US$35m; meanwhile, Stage 3, commencing in 2020, will see the production rate brought to a steady state of ~2.3Mlb pa for US$78m capex over the remaining life-of-mine. JORC resources total 53.7Mlb, which the company states supports a mine life of at least 20 years.
Declining LoM all-in-costs to US$29/lb by 2020 — The company guides that all-in-costs for Stages 1, 2 & 3 will be US$41/lb, US$31-32/lb and US$29/lb, while the current long-term uranium benchmark price stands at US$44/lb U3O8.
Peninsula has signed five long-term contracts with investment-grade US and European utilities — These cover a total of 7.9Mlb at a weighted-average price of US$56/lb, to be delivered over the next ten years. Contracts cover 75% planned production from Stage 1 and 54% of Stage 2.
Current finances — Cash at the end of December 2015 was A$6.3m after operating cash outflows during the quarter of A$13.0m. During the December quarter the company secured a US$15m financing facility from Investec, from which it had drawn US$2m by the end of the year. This facility matures in December 2017 and has a current interest rate of around 6% pa.
US$15m convertible loan terms — The loans provided by RCF and Pala have a maturity date of 22 April 2017 and bear interest at 8%, plus an arrangement fee of 2%. They are convertible at the lower of A$0.80/share or the price of any equity issued prior to the repayment.

LON:NRRP | 0.1p | US$3.4m
Further High-grade Drilling at Namib and Submission of Mining Licence Proposal
North River Resources has provided an update on its ongoing diamond drilling programme to test depth extensions to the North and South orebodies of the Namib Project in Namibia. The 3,800m programme is now approximately halfway complete, with 18 holes having been drilled over 1,800m, eight of which were reported previously. Sampling or assays are still pending for seven. Of the three new drillholes, two intersected high-grade mineralisation:
• NLDD069 — 35.7m (true width of 9m) at 33.8% zinc
• NLDDK077 — 3.8m (true width of 1.5m) at 10.6% zinc and 5.8m (true width of 2m) at 12.2% zinc and 10.9% lead
Holes NLDDK078, NLDDK079 and NLDD070, which are awaiting assaying, are reported to show visually mineralised intercepts (although these are expected to be lower-grade due to the disseminated and semi-massive nature of the mineralisation).
Concurrent with the drilling update, the company has announced that it has formally submitted its proposal to the Ministry of Mines regarding its mining licence application for the Namib Project. The company believes the proposal takes account of the government’s objectives of providing opportunities for in-country project ownership and management.
COMMENT: Considered together, the results from the drilling programme to date indicate a continuation of high-grade mineralisation 80m below the existing Northern portion of the orebody, with results from infill and extension targets and the South orebody (being tested by the company’s Kempe drill rig) yet to be received. As previously highlighted, we calculate that, running our models at the current spot price, a 25% and 50% increase in mining inventory should boost project NPV10 approximately twofold and 2.5x respectively. At the DFS price deck of US$2,400/t zinc and US$2,300/t lead, we estimate that 25% and 50% rises in the mining inventory should raise project NPV10 by closer to 40% and 75% respectively.
The submission of the formal mining licence proposal clearly represents a positive step towards bringing the project to the production stage on the back of an expanded resource estimate and providing access to development funding. We look towards further newsflow on any outstanding issues regarding the impact of government’s proposed NEEEF bill on the structure of the proposal in due course; negotiations are ongoing.

ASX:WRM | A¢2.2 | US$6.4m
Completed Acquisition of Atlas Resources
Following overwhelming shareholder support at last week’s EGM, White Rock Minerals has completed the 100% acquisition of Atlas Resources, and now holds the option to acquire wholly the Red Mountain VMS Project in central Alaska. White Rock issued 1.147 shares for every Atlas share, and 1.147 White Rock five-year options will be issued for every Atlas option, exercisable at A¢3.5/option. Hence, White Rock issued 63.8m new shares to Atlas shareholders (representing 19% of the proposed enlarged share capital), plus 6.4m options.
COMMENT: This acquisition provides White Rock with exposure to a high-quality exploration prospect in the zinc space, where an upcoming supply deficit is widely forecast. The company has been undertaking a desktop review of Red Mountain historical exploration data with a view to publishing a JORC-compliant exploration target and developing drill targets. This is coupled with White Rock’s second Mt Carrington Au-Ag project, where an update to the 3Q14 scoping study has recently been released; this demonstrated material uplift to project economics, driven by the improving domestic Australian gold price and falling opex, pushing estimated project IRR above 100%.

Red Mountain comprises Dry Creek and West Tundra Flats, with historical resources of 5.7Mt at 5% Zn, 2% Pb and 120 g/t Ag — Historical estimates are sourced from prior owner Grayd Resource Corp, based on drilling completed between 1996 and 1998. Drilling highlights to date include grades of 26% Zn and 12% Pb over 5.5m at Dry Creek, and 7% Zn and 4% Pb over 3m at West Tundra Flats Preliminary metallurgical test-work has indicated recoveries of over 90% Zn, >80% Au and >70% Pb & Ag. Statistical analysis of VMS clustering patterns indicates that, further to Dry Creek and West Tundra Flats, the Red Mountain camp has the potential to host a sizeable 10-15Mt deposit with similar Zn, Ag and Pb grades.
Updated scoping study for the company’s Mt Carrington Au-Ag project gives an NPV10 of US$44m with an IRR of over 100% — Capex for the seven-year LoM project remains low at A$24m, with a capital payback of <1 year, while opex estimates have been revised down to give project C1 cash costs of under A$800/oz (>US$600/oz). The initial 2014 scoping study was revised in mid-2015 to reflect the more favourable Australian gold price environment, and the incremental improvements to project economics are shown in the table below.
Improvements to Mt Carrington Project Economics between Scoping Study Updates

Downward opex revisions were primarily sourced from a softening in the labour market and lower assumed power costs following reassessment of ore characteristics and flow sheet design — With estimated C1 costs of ~A$750/oz, at an A$1,600/oz gold price the project would achieve operating margins of over 50%. In terms of capex, the Mt Carrington Project benefits from existing infrastructure valued at ~A$20m within the approved mining leases, comprising: a 1.5Mt tailings dam, 750ML freshwater dam, a reverse osmosis plant, access to grid power and a site office.

Tue, 26 Apr 2016 11:41:00 +0100
SP Angel Morning Oil & Gas: BP, Egdon Resources Headlines
• BP (LON:BP – 360p) – Downstream Saves it for BP
Egdon Resources (LON:EDR– 7p) – Managing the Cycle

In Brief
• BP (LON:BP – 360p) – Downstream Saves it for BP: While not usually company that we comment on, today’s results from BP indicate, to our mind at least, what we believe is the stabilisation in the wider oil market. While you can’t compare the last quarter in a financial year with the first quarter of financial year, due to year-end effects, year-on-year the fact that they are broadly in line despite what has been one of the worst nadirs in the oil markets since 1998. In the UK specifically, however, what is an interesting feature has been the strength of the downstream segment, which unlike the upstream segment, has broadly benefited from lower crude prices and relatively “stickier” product prices. Nevertheless, looking through the inertia associated with larger companies, and BP’s specific problems, we see signs of a strengthening oil market, in the near term at least, and while we believe that this will be good for profits in the wider segment, in reading these results we do not get any confidence that management teams are returning to the larger “world scale” projects that will have an impact on the global supply/demand balance. As a consequence, we still believe that the overall outlook for the oil price continues to strengthen, especially the further out you look.
• Egdon Resources (LON:EDR – 7p) – Managing the Cycle: Today’s news results announcement has been confirmed what we thought we already knew. However, what is interesting to note is that despite the fact that the Company has almost £5mm in the bank, the Company is still pursuing a “zero cash” operating cost policy. While this will inevitably mean that the Company may miss out on some opportunities, it does mean that you can be fairly confident that as we come through the current oil price environment that it will be in a stronger position to take advantage of any opportunities that have been created by those that haven’t.

Tue, 26 Apr 2016 11:38:00 +0100
Today's Market View Including:Mariana Resources, Petra Diamonds, Sierra Rutile, SolGold Mariana Resources (LON:MARL) – Raising up to £6m (including US$5m with a strategic N American investor)
Petra Diamonds (LON:PDL) – Q3 Production, sales and increased production guidance
Sierra Rutile (LON:SRX) – Plant commissioning of Gangama Dry Mine Project
Solgold* (LON:SOLG) – Cascabel drilling update and modelling of the geometry of mineralisation

Economic News
US – New home sales unexpectedly contracted in Mar while Feb numbers have been revised down.
• Mar saw a third monthly decline in newly built homes sales.
• Dynamics differed across regions with the West posting a 23.6%mom decline, the Northeast unchanged and the Midwest showing a 18.5%mom increase.
• The data follows a 8.8%mom decline in housing starts and a 7.7%mom fall in new property building permits.
• Market commentators point to the warmer than expected winter which might have pulled forward homebuilding activity from spring.

• This week economic news:    

China – Declines in industrial profits accelerated to 13.8%yoy in Q1/16 driven by losses in petroleum, coal, steel and nonferrous metals industries.
• This compares to an annual 6.7% fall in 2015.

UK – The Pound climbed to the strongest level in 10 weeks against the US dollar as betting odds show a 75% chance of the Remain campaign success.
• Sterling traded at 1.457 this morning, up from 1.448 recorded yesterday.

US$1.1298/eur vs 1.1255/eur yesterday. Yen 110.87/$ vs 111.18/$. SAr 14.471/$ vs 14.499/$. $1.457/gbp vs 1.443/gbp
0.774/aud vs 0.771/aud. CNY 6.493/$ vs 6.495/$.

Commodity News
Precious metals:
Gold US$1,235/oz vs US$1,234/oz yesterday
Gold ETFs 56.4moz vs 56.5moz yesterday
Platinum US$1,014/oz vs US$1,006/oz yesterday
Palladium US$600/oz vs US$603/oz yesterday
Silver US$17.01/oz vs US$16.95/oz yesterday

Base metals:
Copper US$ 4,949/t vs US$4,987/t yesterday – Prices fell below US$5,000/t declining for a second consecutive day amid climbing inventories and weak industrial profits’ numbers in China.
• LME inventories increased to 152,400t yesterday, the highest level since Mar 21.
• Codelco production target not to be affected by a three-day stoppage at El Teniente this month due to heavy rains.
• A number of tunnels at El Teniente remain flooded.
• The management expect operating levels to be dewatered in a week.
Aluminium US$ 1,647/t vs US$1,637/t yesterday
Nickel US$ 9,040/t vs US$9,070/t yesterday
Zinc US$ 1,867/t vs US$1,883/t yesterday
Lead US$ 1,732/t vs US$1,777/t yesterday
Tin US$ 17,350/t vs US$17,270/t yesterday

Oil US$44.8/bbl vs US$44.5/bbl yesterday – The Saudi Arabian cabinet approved a plan to IPO a 5% stake in state-run oil company Aramco based on a more than US$2tn valuation.
Natural Gas US$2.068/mmbtu vs US$2.147/mmbtu yesterday
Uranium US$27.50/lb vs US$28.00/lb yesterday

Bulk comodities:
Iron ore 62% Fe spot (cfr Tianjin) US$61.8/t vs US$62.1/t yesterday – Iron ore track Chinese steel prices lower as local exchanges continue to tighten trading rules to supress speculation.
Thermal coal (1st year forward cif ARA) US$43.0/t vs US$45.5/t yesterday

Tungsten - APT European prices stood at $188-210/mtu vs $190-200/mtu last week

Company News

Mariana Resources (LON:MARL) 1.925p, Mkt Cap £16.5m – Raising up to £6m (including US$5m with a strategic N American investor)
• Mariana Resources has announced that “A strategic North American royalty company and its consortium have agreed to participate in the private placement for a committed US$5m. Mariana has already received commitments in excess of the minimum placement amount of GBP4million, with the ability for the raising to be increased up to GBP6million.”
• The placement of up to 330m new share will include a warrant for every two shares subscribed. The warrant will be exercisable for two years and allow the holder to acquire an additional share in Mariana at an exercise price of 2.5p.
• The funds will assist the work for a Preliminary Economic Assessment, and ultimately feasibility work on the 30% owned Hot Maden project in Turkey where the company has already announced a maiden resource of over 2m oz of gold equivalent.

Petra Diamonds (LON:PDL) 125p, Mkt Cap £653.5m – Q3 Production, sales and increased production guidance
• Petra Diamonds reports a 26% increase in Q3 (to March 2016) diamond output to 995,905 carats (Q3 2015 – 791,443 carats). The increased output benefitted from a 15% increase in ROM production plus a 53% rise (to 349,055 carats) from tailings production as a result of the integration of the Kimberley tailings operations acquired in January 2016.
• The company has increased its full year production guidance for the year to June 2016 to 3.6-3.65 million carats from the previously indicated 3.3-3.4 million carats, indicating that it expects to produce at least 974,000 carats in the final quarter
• Revenues for the quarter rose 25% to US$120.5m as a result of “increased sales volumes and the sale of the 32.33 carat pink diamond from Williamson for US$15m.” Based on the reported sales of 937,526 carats, and including the “special” stone, sales value per carat has increased by approximately 11% to 128/ct.
• Petra Diamonds notes that industry measures to improve the rough diamond market taken in late 2015 through reduced production, increased marketing and price reductions has seen the market start 2016 on “a noticeably firmer footing with good sales demand from the midstream diamond pipeline (the cutting and polishing / manufacturing segment).” Petra, however, “remains cautious with regards to diamond pricing for the remainder of the financial year”
• The expansion projects at the Cullinan and Finsch mines and elsewhere are reported to be progressing “in line with expectations” and Petra remains “focussed on delivering the capital projects on time and within budget.”
• Petra reports that net debt at 31st march amounted to US$395.6m, however with undrawn bank facilities of US$114.2m as it nears “the end of its peak Capex year … the Group is confident that its revised covenant and debt facility levels are aligned to successfully complete its expansion programmes.”
• The company also announces that following “the completion of the acquisition of the Kimberley Mines from De Beers … Petra and Ekapa Mining have entered into negotiations with a view to combining the respective operations owned and operated by the consortium members in the Kimberley area – namely Petra’s Kimberley Underground operations, Ekapa Mining’s tailings operations … and the newly acquired Kimberley Mines tailings resources and associated assets including the Central Treatment Plant.”

Sierra Rutile (LON:SRX) 22.75p, Mkt Cap £135.5m – Plant commissioning of Gangama Dry Mine Project
• Sierra Rutile reports that construction has been completed at the Gangama Dry Mine project and that commissioning is now underway.
• The project remains on time and within budget and commercial production is expected to be achieved during Q2 2016.
• The company also announces that it “has restrted sales into the titanium metals market. After several years of subdued demand as stockpiles were depleted, the Company views this initial order as an encouraging sign that the demand for high-grade titanium feedstocks is continuing to strengthen.”

Solgold* (LON:SOLG) 3.275p, Mkt Cap £31.2m – Cascabel drilling update and modelling of the geometry of mineralisation
• Solgold reports on the progress of its exploration holes 15R2 and 17 at Cascabel.  
• Hole 15R2 with a planned depth of 1800m has reached 1401m and intersected “over 400m of porphyry copper style copper sulphide mineralisation thus far”. Although assays are not yet reported, this is an encouraging result from a borehole designed to test the northward and depth extensions of the Alpala deposit approximately 100m north of the intersection in “Hole 9, which returned 1050.8 m @ 0.68% Cu and 0.92 g/t Au, including 420m @ 1.00% copper and 1.34 g/t gold.”
• The company is also reporting that Hole 17, which is testing upper extensions of the copper/gold mineralisation previously intersected in holes 5 and 12  “both of which returned world class intersections of over 1000m grading above 1% copper equivalent”. Hole 17 is currently at a depth of 519.4m in visible mineralisation and with a planned depth of 1300m.
•  Solgold has achieved a high hit rate in its drilling programme to date with virtually every hole drilled to date encountering copper gold mineralisation. Much of this success can be attributed to the integrated use of geological and geochemical exploration, drilling information and advanced geophysical modelling which continues to provide an evolving “insight into the geometry of copper and gold mineralisation and the potential source of intrusions.”
• The company’s evolving understanding of the deposit is well illustrated in its most recent presentation and video (available at – “April Presentation”), which shows a series of 3D interpretations at different copper cut off grades.  Although the grade shell models do not yet constitute a resource, they show a continuity of the mineralised structure from surface to a depth of at least 1500m below surface (this continuity is particularly evident at the 0.3% cut-off illustrated on slide 60 of the presentation).
• Elsewhere in the same presentation (slide 49) the company indicates a “Pre-Resource Estimate of 426.4mt @ 1.05 Cu Eq” also using the 0.3% copper cut-off. “The Company continues to work towards the calculation of its maiden resource statement for the Cascabel project, the exact timing of which will be dependent on, amongst other things, the progress of drilling throughout the year.”
Conclusion: Solgold’s drilling at Cascabel continues to intersect copper/gold mineralisation and a recent company presentation, while stressing that this is not a formal resource estimate, gives an indication of the tonnage and grades which Solgold considers it may have located at Cascabel. Modelling released by the company also shows a continuity of mineralisation from surface to depth which may well ultimately provide the company with a variety of mine development options. We look forward to further assay results from the current drilling.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project.

Tue, 26 Apr 2016 10:42:00 +0100
In the papers: Snoozebox Holdings, Hotelbeds,BHS The Times
Insolvency experts call for U.S.-style protection: The insolvency industry has called for troubled companies to be given an American-style “grace period” to protect them from creditors.
Boss is thinking outside the box after resigning: The revolving boardroom door at Snoozebox Holdings was spinning again when Lorcan Ó Murchu resigned as Chief Executive.
I’m out (of cash): TV Dragon’s computing firm nears collapse: The cloud computing company set up by Piers Linney, a former star of Dragons’ Den, is on the brink of collapse. Outsourcery said that it had run short of funds because of factors outside its control and that it was exploring options to restructure or sell non-strategic assets to plug gaps in its finances.
Four into three won’t go, says Brussels: The plan to create Britain’s largest mobile phone network provider is set to be scuppered by European regulators, who will veto the £10.25 billion takeover of O2’s U.K. network by CK Hutchison, the Owner of Three.
Private equity heads the queue for $1 billion Hotelbeds: Cinven is being tipped as the frontrunner in the €1 billion-plus auction of the Hotelbeds business.
The Independent
Shell to close BG Head Quarters near London by the end of the year: Royal Dutch Shell will close the head office of BG Group, the gas producer it agreed to acquire for $50 billion in February, by the end of the year, it said on Monday, as part of a plan to save costs and cut 10,300 jobs worldwide.
TTIP: U.K. Government found trade deal had ‘lots of risk and no benefit’ in its only assessment: The Transatlantic Trade and Investment Partnership will have “few or no benefits to the U.K.”, according to the only official assessment of the deal commissioned by the U.K. Government.
Asda launches ‘quiet hour’ to help autistic customers: An Asda store plans to introduce a “quiet hour” to make shopping easier for customers living with autism.

The Daily Telegraph
Sir Philip Green attacked over BHS collapse: Sir Philip Green has been labelled the “unacceptable face of capitalism” after BHS, the retailer he sold for £1 last year, collapsed into administration with a £571 million hole in its pension fund.
Fraudsters steal £9 billion from Britain’s small businesses: Britain’s small businesses are losing more than £9 billion a year to fraudsters who send false invoices, viruses posing as bills, or who pose as suppliers on the phone, it has emerged.
Oil rally loses steam after three week climb: Oil prices stalled at around $45 a barrel on Monday after three weeks of bullish trade pushed prices to five month highs last week.
Falkner House to launch London’s first pre-prep boys’ school for 15 years: The family behind the Falkner House girls’ school in South Kensington has invested £10 million in launching a new pre-preparatory school for boys to meet a surge in demand.
Deutsche Bank co-Chief cleared in court: Deutsche Bank’s outgoing co-Chief Executive Juergen Fitschen has been cleared in court of lying to judges in a lengthy legal battle.
Saudi Arabia’s Aramco valued at more than £1 trillion ahead of stock market debut: Saudi Arabia has confirmed plans to sell up to 5% of the state-owned oil giant Aramco through a stock market listing, valuing the company at more than $2 trillion (£1.38 trillion).
Channel 4 seeks more diverse board: Channel 4’s new Chairman has launched a search for ethnic minority and disabled non-Executive Directors amid concerns that the broadcaster’s board does not reflect its Government-imposed diversity remit.
Ikea starts selling solar panels again: Ikea has rebooted its solar panel offering with several ‘solar shops’ opening at stores across the U.K. this week as part of the retailer’s renewed sustainability drive.

The Questor Column:
Profits jump 156% at Lok’n Store: Let’s face it, we all have too much stuff cluttering up the home, and when this is combined with a housing crisis which prevents us from moving up the ladder it is understandable why first-half profits soared 156% at storage company Lok ‘n Store sending the shares almost 5% higher. The company operates from a total of 27 stores, of which 13 are freehold and long leasehold, 8 are on shorter leases, and the remaining 6 are managed by Lok ‘n Store but owned by a third party. The value of the store portfolio was £98.5 million at the end of January, a £10.1 million increase on a year earlier, and this underpins the net asset value of 307p per share. The company has net debts of £25.8 million at the end of January, up from £24.3 million a year earlier. Like-for-like revenue increased 8% to £8 million during the six months to the end of January and operating profits before exceptional items increased 17% to £2.4 million. The reported pretax profit performance was even more impressive, jumping 156% higher to £3.8 million. However, £2 million of that increase was a one-off payment for a property that was disposed of two years ago. The demand for storage units has been helped by a recovery in the U.K. housing market during the past seven years. The company is clearly exposed to a downturn in the housing market and the wider economy, but risk of someone who rents a unit defaulting on the payments is covered by a deposit and the ability to take Ownership of the contents. The company is performing well but the shares price in much of the good news trading on 29 times forecast earnings, falling to 21 times next year. Being a smaller company listed on Aim they also tend to be quite volatile. Lok’n Store at 317p +13p. Questor says “Hold”.
Vodafone shares retain defensive quality: Vodafone is enjoying growth in its new money transfer system and the company is beginning to answer questions over its highly rated shares and uncovered dividend. The FTSE 100-listed mobile group said it had 25 million people at the end of March using its service that connects to your bank account and allows you to send and receive money, or pay bills across Africa, Asia and Europe. The number of people using the service had increased 27% on a year earlier. The performance of the mobile payment service comes as the revenue and profits at Vodafone have returned to growth. The organic service revenue has steadily increased for more than 18 months now. Vodafone spent £19 billion on “Project Spring” to improve the coverage of its mobile network. The project was finished at the end of March and it was needed because customers are downloading far more data through their phones to watch films and TV shows. The growth is important for Vodafone because the shares are highly rated, trading on 40 times forecast earnings, compared to BT on 14 times earnings. The other criticism of Vodafone is that the dividend of 11.4p per share is not covered by the earnings of 5p per share.  The market consensus is for revenue of £40.9 billion and pretax profits of £2.2 billion, giving 5p in earnings per share for the year to the end of March. The shares are clearly highly rated, but the possibility of a U.S. takeover bid and the improved trading performance warrant this. Buy. Vodafone at 227p -0.7p. Questor says “Buy”.

The Guardian
BHS collapses into administration as rescue deal fails: BHS has officially collapsed into administration after failing to agree a last-minute deal to rescue the department store chain.
Saudi Arabia approves ambitious plan to move economy beyond oil: Saudi Arabia has approved an ambitious strategy to restructure the kingdom’s oil-dependent economy, involving diversification, privatisation of massive state assets including the energy giant Aramco, tax increases and spending and subsidy cuts.

Daily Mail
Kodak pins its revival hopes new camera phone aimed at older customers: Kodak may have missed the boat when it came to successfully producing digital cameras but it hopes to have better luck with its camera phone.
Investor fury as building materials giant CRH awards its CEO an 8.5% raise plus bonus increase taking his pay to £7.5 million: Building materials giant CRH is the latest blue-chip company to anger shareholders over high levels of boardroom pay.
Loss-making RBS facing £1 billion claim it destroyed small firms and stripped their assets: Loss-making Royal Bank of Scotland could be facing a £1billion damages claim over allegations it destroyed small businesses for a profit.
Thomas Cook in talks with rivals to sell its fleet of 91 aircraft: Thomas Cook is believed to have held talks with rival airlines about selling its fleet of 91 aircraft.
CPP Founder Hamish Ogston wins fight to sack the board and take control of card firm: The Founder of scandal-hit credit card firm CPP appears to have won a battle to sack its board and regain control.
British manufacturing sees some green shoots in the face of external headwinds and ongoing export concerns: U.K. factory output stabilised over the three months to April, according to a survey published, although export orders remain a cause for concern for manufacturing firms.

Daily Express
Former Barclays Boss Diamond eyes up takeover of Barclays Africa: Former Barclays Boss Bob Diamond is stepping up his efforts to buy the lender’s African operations in a multi-billion pound deal after joining forces with U.S. private equity giant The Carlyle Group.
Fears grow China’s huge debt bubble will spark a devastating global crash: Stock markets across the world plunged amid growing fears China’s monstrous debt bubble is about to burst and trigger a devastating financial crisis.
11,000 banks urged to check security amid fears hackers could steal tens of millions: Thousands of global banks and financial firms have been urged to check security amid fears hackers have found a way to access systems and steal cash.

The Scottish Herald
Scotland could be world leader in technologies to store excess renewable energy: Scotland could become a world leader in developing new technologies to store excess electricity production from wind farms, creating thousands of jobs, a leading business organisation has declared.
William Duncan & Co launches new division and opens Kilmarnock office: AYR-based accountancy firm William Duncan & Co has expanded its operations in Glasgow and opened an office in Kilmarnock. William Duncan & Co has established a corporate advisory division in Glasgow, which will provide services in areas such as mergers and acquisitions and fundraising for small and medium sized enterprises.
Scottish manufacturers post tumble in orders and output: Scottish manufacturers suffered a sharp acceleration in the pace of decline of new orders and output volumes in the three months to April, a survey has revealed.
Glasgow-based Smart Metering Systems says Paul Dollman to step down as Chairman: Glasgow-based Smart Metering Systems has said Paul Dollman intends to stand down as Chairman with effect from the company’s general meeting on 26 May.
Wood Group wins North Sea contracts from Norwegian giant: Wood Group has won a series of contracts to support Statoil’s plans to expand its operations in the Norwegian North Sea amid the crude price plunge.
Oil slowdown fails to halt Burness Paull momentum: The downturn in Aberdeen has failed to clip the wings of Burness Paull, the region’s biggest corporate law firm, which reports continuing buoyancy after a year which saw it comfortably top the dealmaking chart for Scotland’s law firms.
Robertson invites bids for £110 million projects: Robertson Group is inviting construction industry companies in the Edinburgh area to share in a £110 million boom of work in the city.
Former Credit Suisse Executive rejoins Aberdeen board: Gerhard Fusenig has rejoined the board of Aberdeen Asset Management with immediate effect.
Glasgow property boom: Glasgow’s property market saw a 103% increase in total take-up in the first three months of 2016, when compared with 2015.

The Scotsman
Arran Brewery takes to the skies with Red Arrows: Craft beer producer Arran Brewery is taking flight after signing a deal for its name to appear on a Red Arrows Hawk during next year’s aerobatic display season.
Campbell Dallas says yes to new apprentices: Accountancy firm Campbell Dallas is investing £250,000 on the recruitment and development of 15 apprenticeship accountants this year.
Fibre optic technology firm lands £1.2 million investment: Optoscribe, a spin-out from Edinburgh’s Heriot-Watt University that specialises in fibre optic communications, has raised £1.2 million to ramp up its headcount and manufacturing capabilities.
Skyscanner hails tie-up with cab booking service: Travel search engine Skyscanner has launched a partnership with a taxi price comparison app that claims it can save travellers up to 20% off their fares to and from airports.

City A.M.
Charter’s $55 billion takeover of Time Warner Cable is approved by the U.S. Department of Justice: Charter’s $55 billion (£38 billion) takeover of Time Warner Cable has been granted antitrust approval by the U.S. justice department.
Pizza chain Zizzi to cut staff perks in wake of the National Living Wage: Zizzi’s staff have had their perks cut as the National Living Wage puts a strain on the business. The private-equity owned restaurant chain has become the latest business to respond to changes in the minimum wage.
Former Marks & Spencer Boss Marc Bolland tipped to take up Director role at British Airways Owner IAG: Marks & Spencer’s former Chief Executive Marc Bolland is tipped to be named as a non-Executive Director of International Airlines Group (IAG), the Owner of British Airways.
Empiric buys student property in Manchester for £30 million: Empiric Student Property has bought a 561 bed scheme in Manchester for £29.5 million as well as the 50% stake it doesn’t already own in a student accommodation in Southampton.
Online gambling site 21Bet nets 15,000 customers in first month after scoring a clutch during Cheltenham Festival and ahead of new casino site launch: Upstart online bookmaker 21Bet has signed up over 15,000 customers in its first month in a bid to establish a foothold in the U.K. online betting scene.
Xerox’s revenue slips on printer sales slowdown as it refocuses on services, share price nosedives: Printer and copier maker Xerox has posted a 4.2% fall in quarterly revenue to $4.28 billion (£2.96 billion) from $4.47 billion a year earlier after a strong dollar dragged on already low sales of its hardware.
Ladbrokes’ non-Executive Director Richard Moross will step down from board in May: Ladbrokes’ non-Executive Director, Richard Moross, has announced he will step down from the betting giant’s board of Directors at this year’s annual general meeting (AGM).
Jury on Operation Tabernula case retires to consider verdict: The jury on the Tabernula case, involving five former financial services professionals accused of insider trading, was retired to consider its verdict.

Tue, 26 Apr 2016 08:30:00 +0100
Market Briefing: US markets ended weaker yesterday, as raw material and industrial sector shares slid amid a drop in crude oil prices UK Market Snapshot
UK markets closed mixed yesterday. Mining sector stocks, Vedanta Resources, Rio Tinto, BHP Billiton and Anglo American fell 4.0%, 4.2%, 5.8% and 7.3%, respectively, on lower base metal prices. Oil companies, BP and Royal Dutch Shell dropped 2.2% and 3.0%, respectively, as crude oil prices slid. John Wood Group declined 3.6%, after employees at the North Sea warned to go on strike regarding issues of pay cuts. Allied Minds dipped 1.2%, after it reported a broader loss for 2015 due to an increase in investment in R&D and establishment of four new businesses during the year. On the contrary, Imperial Brands rose 3.1%, following a broker upgrade to ‘Buy’ from ‘Neutral’. Ashtead Group climbed 2.7%, after a leading broker upgraded its rating on the stock to ‘Buy’ from ‘Underperform’ and also raised its target price to 1,100.0p from 800.0p. The FTSE 100 declined 0.8%, to close at 6,260.9, while the FTSE 250 rose 0.6%, to settle at 16,965.7.
US Market Snapshot
US markets ended weaker yesterday, as raw material and industrial sector shares slid amid a drop in crude oil prices. Energy producers, Exxon Mobil, Cabot Oil & Gas and Transocean declined 0.2%, 4.2% and 4.9%, respectively. Perrigo tanked 18.1%, as it reduced its projected earnings for the year and announced that its CEO, Joseph Papa, would leave the company to join Valeant Pharmaceuticals International, down 2.3%. Xerox sank 13.3%, as it posted downbeat earnings for the first quarter. Bucking the trend, Tribune Publishing soared 52.9%, after Gannett, up 6.5%, made an $815.0 million unsolicited offer for the company. Time Warner Cable advanced 4.1%, after US regulators approved its $55.0 billion takeover by Charter Communications, up 4.6%. The S&P 500 slipped 0.2%, to settle at 2,087.8. The DJIA shed 0.2%, to settle at 17,977.2, while the NASDAQ slid 0.2%, to close at 4,895.8.
Europe Market Snapshot
Other European markets finished in the red yesterday, led by losses in commodity related shares and after the German Ifo business climate index unexpectedly declined in April. Electricite de France sank 11.1%, after its board approved selling new shares worth €4.0 billion and increased its cost cutting measures to boost its finances. Metal producers, Boliden and ArcelorMittal edged 1.6% and 4.8% down, respectively, tracking a fall in base metal prices. Royal Philips shed 4.3%, after stating that it is considering an IPO of its lighting division. Energy sector majors, Total, Statoil and Technip slid 0.5%, 1.8% and 2.7%, respectively, on lower crude oil prices. However, Novartis rose 0.3%, as it mulling selling its stake worth about CHF13.5 billion in Roche Holding, down 1.2%. The FTSEurofirst 300 index declined 0.6%, to close at 1,364.1. Among other European markets, the German DAX Xetra 30 slid 0.8%, to close at 10,294.4, while the French CAC-40 shed 0.5%, to settle at 4,546.1.
Asia Market Snapshot
Markets in Asia are trading lower this morning, following an overnight loss on Wall Street amid weakness in commodity prices. In Japan, JSR Corp. has tumbled 5.0%, after projecting lower than expected operating profit for the full year. Kawasaki Heavy Industries and Mitsubishi Heavy Industries have shed 3.2% and 4.1%, respectively, after they failed to win the contract to build Australia’s new fleet of submarines. On the flipside, Hitachi Chemical has jumped 7.6%, following upbeat profit for the fourth quarter. In Hong Kong, CNOOC and PetroChina have dropped 2.2% and 2.3%, respectively. In South Korea, Lotte Shopping and POSCO have fallen 0.9% and 1.5%, respectively. The Nikkei 225 index is trading 1.3% lower at 17,219.4. The Hang Seng index is trading 0.9% down at 21,123.0, while the Kospi index is trading marginally lower at 2,013.9.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.67% or $0.30 higher at $44.78 per barrel. Yesterday, the contract declined 1.40% or $0.63, to settle at $44.48 per barrel, after reports stated that crude oil inventories in Cushing, Oklahoma hub in the US climbed by about 1.5 million barrels.
At 0330GMT today, Gold futures contract is trading a tad or $0.30 higher at $1239.20 per ounce. Yesterday, the contract advanced 0.83% or $10.20, to settle at $1238.90 per ounce, as a softer US Dollar boosted demand appeal for the yellow metal.
At 0330GMT today, the EUR is trading marginally higher against the USD at $1.1271. Yesterday, the EUR strengthened 0.39% versus the USD, to close at $1.1268. Meanwhile, the German Ifo business climate and current assessment index unexpectedly fell in April. The US Dollar lost ground against its major peers following disappointing data on US new home sales for March.
At 0330GMT today, the GBP is trading 0.08% higher against the USD at $1.4494. Investors will closely assess the US durable goods orders data for March along with consumer confidence and US services PMI figures, both for the month of April, set to release today. Yesterday, the GBP strengthened 0.55% versus the USD, to close at $1.4482.
Fixed Income
In the US, long term treasury prices fell and pushed yields higher, with investors looking forward to the US Federal Reserve’s 2-day monetary policy meeting, scheduled to begin today. Yesterday, yield on 10-year notes rose 2 basis points to 1.91%, while yield on 2-year notes gained 1 basis point to 0.85%. Meanwhile, 30-year bond yield rose 2 basis points to 2.72%.

Key Economic News
UK CBI trends selling prices advanced in April

In April, CBI trends selling prices in the UK advanced to 4.00. In the prior month, CBI trends selling prices had recorded a reading of -1.00.
UK CBI business optimism rose in 2Q 2016
Pessimism among London businesses for the next six months has increased, with a net 5.00% of firms showing pessimism about their business prospects in 2Q 2016, as compared to a net 4.00% of firms that showed pessimism in the prior quarter.
UK balance of firms reporting total order book above normal recorded an unexpected rise in April
The balance of firms reporting total order book above normal in the UK rose unexpectedly to a level of -11.00 in April, compared to market expectations of a drop to a level of -17.00. The balance of firms reporting total order book above normal had recorded a level of -14.00 in the previous month.
German Ifo current assessment index slid surprisingly in April
In April, the Ifo current assessment index fell unexpectedly to 113.20 in Germany, compared to a level of 113.80 in the previous month. Market anticipation was for the Ifo current assessment index to record a flat reading.
German Ifo business expectations index climbed in April
The Ifo business expectations index advanced to 100.40 in April, in Germany, compared to market expectations of an advance to 100.90. In the prior month, the Ifo business expectations index had registered a reading of 100.00.
German Ifo business climate index dropped unexpectedly in April
Compared to a level of 106.70 in the previous month the Ifo business climate index in Germany eased unexpectedly to 106.60 in April. Markets were anticipating the Ifo business climate index to advance to a level of 107.10.
Spanish PPI climbed in March
The producer price index (PPI) in Spain recorded a rise of 0.70% in March on a MoM basis. In the previous month, the PPI had recorded a drop of 1.30%.
Spanish PPI registered a drop in March
The PPI eased 5.40% in Spain on an annual basis, in March. In the previous month, the PPI had fallen 5.70%.
US new home sales surprisingly slid in March
New home sales unexpectedly eased by 1.50%, on monthly basis, to a level of 511.00 K in the US, in March, compared to market expectations of 520.00 K. New home sales had recorded a revised reading of 519.00 K in the previous month.
US Dallas Fed manufacturing business index unexpectedly fell in April
The Dallas Fed manufacturing business index registered an unexpected drop to -13.90 in April, in the US, compared to a reading of -13.60 in the previous month. Market anticipation was for the Dallas Fed manufacturing business index to advance to a level of -10.00.
Japanese leading economic index declined in February
In February, the final leading economic index registered a drop to 96.80 in Japan. The leading economic index had registered a reading of 101.80 in the prior month. The preliminary figures had indicated a fall to 99.80.
Japanese coincident index registered a drop in February
The final coincident index in Japan eased to 110.70 in February. The coincident index had registered a level of 113.50 in the previous month. The preliminary figures had recorded a fall to 110.30.

Tue, 26 Apr 2016 08:25:00 +0100
Cloudy with a chance of monetization Cloudy with a chance of monetization
Thanks to a subscriber for this report from Deutsche Bank which many of interest. Here is a section
US colleagues Karl Keirstead and Ross Sandler describe public cloud services as "the biggest and most disruptive trend impacting the technology industry." DB estimates the total addressable market for cloud to be USD500b. Cloud service providers have captured only a low-single-digit piece of this TAM. In China, the opportunity is even younger and less penetrated. AliCloud is the clear hometown favorite, with 65% of DB survey respondents using its solutions. Alibaba is our preferred play on cloud over Tencent and Baidu, which have much smaller cloud businesses that should also grow appreciably.

China: catching the “growth story” even earlier on; both public and private
The value proposition of the public cloud is simple: enabling deep cost savings and freeing up resources for enterprises to pursue more core business activities. While public cloud revenues at AliCloud and others continue to grow in the triple digits, China is also seeing strong growth in private cloud, as government bureaus, SOE’s and large private companies heed government exhortations to reform their hidebound IT regimes behind its “Internet+” initiative. Before the introduction of the cloud, about 70-80% of companies’ IT budgets and time were spent on low-value-added areas such as infrastructure maintenance, upgrades and integration. With external cloud operators taking over these burdens, management is able to concentrate on growth-centered initiatives, with cloud assisting in saving time and expense. Some 72% of respondents to our survey indicate that they are reducing significantly their IT spend through the use of cloud computing services. Alibaba Research Institute, for instance, estimates that 70% of computing costs can be saved.
China's CIO speaks: results of DB proprietary survey
As part of our overview of China's nascent cloud industry, we surveyed more than 50 CIO's, CTO’s, Directors and VPs of IT. Results revealed cloud computing to be the #1 priority this year, followed by security services at #2, and IT infrastructure and datacenters at #3. These companies expect to spend approximately 27% and 30% on cloud computing services in 2016 and 2017, respectively, compared to 20% in 2015. Over 50% of the respondents stated that they were able to save up to 40% of their IT spending thanks to cloud computing.

Eoin Treacy's view
A link to the full report is posted in the Subscriber/s Area.

Making the state owned sector more nimble is a primary policy objective of the Chinese administration. Under Xi Jinping, the desire to have an all-encompassing database, with greater visibility over the affairs of various agencies has reached new heights and the expansion of cloud services gels with that ambition. That’s is likely to fuel growth in both the private and public sectors. 

For Counterfeit Fighters on Social Media, Fake Profiles Are a Real Ally
This article by Kathy Chu for the Wall Street Journal may be of interest to subscribers. Here is a section:
Globally, sales of fake goods amount to between $250 billion and $600 billion each year, as products made mostly in China are dispersed through brick-and-mortar shops as well as online platforms from the Philippines to the U.S., government and industry groups say.
More than half of counterfeiters now use social media to sell their products, up from about 10% three years ago, estimates Ken Gamble, who tracks fake goods for global brands. Brands now want monitoring of counterfeit sales extended to social media, he said.

Ugg, the maker of sheepskin boots, created anticounterfeiting pageson Facebook and Twitter last year to alert consumers to the growing problem.

“You hear these stories about how they’re being duped and losing their money,” said Graham Thatcher, brand protection associate at Deckers Outdoor Corp., Ugg’s parent company.

Eoin Treacy's view
Counterfeiting is big business and there is a well-trodden route for getting the goods in question out of China. It’s an issue that will always be with us because demand is steady and the profits than can be made, often in a short period of time, are large. Certainly, China is a major source of counterfeit goods and is unlikely to begin really enforcing patents until it has a vested interest in doing so. However even then, respect for patents is likely to remain spotty. Where counterfeiters becomes a problem for investors is when manufacturers can latch onto a large target to get a high profile win in their efforts to combat the practice.

Email of the day on Tesla's Model-3
What to do? If you were offered the choice between paying $ 1000 and wait a year for your car or receive $ 4000 cash back and drive your new car tomorrow, what would you do? The answer 400.000 consumers gave, is that they are happy to wait for a year to drive their car. The Tesla model 3, the car that will be more affordable, is breaking sales records even though the production hasn't started. Obviously the heart of real car lovers who want to drive an electric car beats faster when thinking about themselves driving this Tesla 3, than when they think about themselves driving a Nissan Leaf. With 400.000 pre ordered cars the share price of Tesla was speeding to a new high almost every week until recently. I worry that at some time in the near future the share price will drop at the same rate as it went up. Why? Because Tesla is unable to make a profit on the expensive models. Will Tesla be able to make a profit on a much cheaper model? When will Tesla join the rotation you mentioned in your audio?

Eoin Treacy's view
Right now Tesla, more than any other car company, has a cool cache people are willing to pay and wait for. By contrast the Nissan Leaf or Chevrolet Volt don’t come close. The model 3 is the closest thing to the original Ford Mustang, but for the modern era, and the surge in orders to data is a reflection of that. Fulfilling the timeline for production is an altogether different story.

Tue, 26 Apr 2016 08:22:00 +0100