column Proactiveinvestors column RSS feed en Sun, 23 Oct 2016 04:12:04 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) Small Cap Wrap: Applied Graphene Materials, Cambridge Cognition, Cohort, InnovaDerma, Kibo Mining, Milestone Group, Petards Group, ProMetic Life Sciences, RM2, Sareum Holdings, Vianet Group  Applied Graphene Materials (LON:AGM 173.00p/£37.39m)

Applied Graphene Materials, the producer of specialty graphene materials, announced its full year results for the year ended 31 July 2016. Operational highlights showed first production order received from Century Composites, accelerated product development programme with James Briggs with an expectation of product launch in early 2017 and a new collaboration project with Sherwin-Williams Protective & Marine Coatings. Independent test data showing significant benefits of including the Group's graphene nanoplatelets in coatings. The financial overview showed total revenues of £0.3m (2015: £0.1m), EBITDA Loss of £4.2m (2015: loss of £3.9m) and a Loss before tax of £4.5m (2015: loss of £4.0m). Cash at bank was £7.7m (2015: £4.7m).

Cambridge Cognition (LON:COG 71.00p/£14.52m)*
The neuroscience Company, Cambridge Cognition Holdings, which develops and markets near patient technologies to facilitate the development of treatments for neurological disorders, announced a series of new contracts worth over £0.25m to assess, through CANTAB Connect, the abuse potential of investigational drugs in a new market application for the Company. Cambridge Cognition has become the leading provider of Human Abuse Liability (HAL) assessment technology, helping the Company's drug development partners to achieve multiple FDA approved abuse deterrent labels. To date the Company has signed 35 HAL contracts following the launch of the CANTAB Connect Abuse Liability product (vs. 8 before 2014), with revenues totalling in excess of £3m (vs. £0.6m before 2014) in a market which is expected to continue to grow.

Cohort (LON:CHRT 347.75p/£145.41m)
Cohort, the independent technology group, announced that its subsidiary MASS has been awarded a nine-year extension to its managed IT service contract for the Sentry Whole Life Support Programme (WLSP) at RAF Waddington. Valued at around £12m, the scope of the support contract now includes replacement of the Maintenance, Repair and Overhaul software and adds an Enterprise Performance Management solution. The team is led by Northrop Grumman with MASS, AAR Corp and Cobham Aviation Services partnering together to support and maintain the availability of the UK's fleet of Airborne Warning and Control System (AWACS) aircraft.  Northrop Grumman commented that this nine-year extension recognises MASS's agile response to ever-changing needs and the provision of a first-rate, value for money service.

InnovaDerma (LON:IDP 122.5p/£12.5m)*
InnovaDerma, a UK developer of 'at-home' and clinically proven treatments for hair loss, hair care, self-tanning and skin rejuvenation, provided an update on trading ahead of its Final Results for the twelve-month period ended 30 June 2016. The Board announced that it expects revenue and profits for the full year to 30 June 2016 will be significantly higher than the previous year, driven by underlying organic growth across its product range and the contribution of the Skinny Tan business, which was acquired in May 2015. The Group expects to report revenues of approximately AUD8.3m (£4.2m) representing a significant increase of more than 800 percent compared to the previous year FY 2015: AUD1.05m (£0.525m). It expects to announce a maiden net profit as a result of the strong top line growth. The Group has maintained a robust financial position with little external debt and a strong cash position. InnovaDerma significantly expanded its international distribution and retail network and this has been a key driver to its growth and strong financial performance. As at 30 June 2016, the Company has in excess of 2,500 retail points (FY2015: 250) in seven countries.

Kibo Mining (LON:KIBO 7.33p/£26.76m)
Kibo Mining, the Tanzania focused mineral exploration and development Company, announced that it has reached agreement with SEPCO III on the total direct development cost related to the MCPP (Mbeya Coal to Power Project). It was agreed that the direct development cost incurred on the MCPP over the past four years will be considered for determining the final development cost refund amount. After considering all information provided in this regard, the final amount is $10.9m, which was accepted by both parties as a fair reflection of the MCPP development cost over the past four years. Based on this, the total amount refundable to Kibo constitutes an amount of $5.5m, i.e. 50 percent of the total development cost as per the terms of the Agreement between SEPCO III and the Company, announced on the 25 August 2016. As Kibo has already received an advance of $1.8m, the total outstanding amount payable to Kibo will be £3.7m.

Milestone Group (LON:MSG 1.30p/£10.02m)*
Milestone, the provider of digital media and technology solutions, announced that it has agreed to issue 92,333,332 new ordinary shares of 0.1 pence per share in the Company, subject to admission to AIM, raising £1.385m before expenses, at a price of 1.5 pence per share. The proceeds of the Placing will be used for marketing of the newly launched Alchemy e-media platform, recruiting key staff, and additional development of the Passion Project platform.

Petards Group (LON:PEG 18.50p/£6.43m)*
Petards, the software developer of advanced security and surveillance systems, announced that it has been awarded a contract to supply Great Western Railway with Petards eyeTrain systems. The new contract, which is worth approximately £6m, is for the design, development, supply and installation of eyeTrain systems to be fitted to Class 165 and 166 Diesel Multiple Units trains.  The developed systems add substantial new software driven functionality to Petards' existing eyeTrain solutions. Engineering development is already underway and will make a contribution to 2016 revenues. This is expected to be completed by the third quarter of 2017 when deliveries of the integrated systems will commence with scheduled completion by the end of 2018.

ProMetic Life Sciences (TSX:PLI CAD3.21/CAD1,997.47m)*
ProMetic Life Sciences announced that its Phase 2 clinical trial in patients with metabolic syndrome and type 2 diabetes has been completed and has met its primary and secondary endpoints. In addition to safety and tolerability, the study was designed to evaluate the effect of PBI-4050 on metabolic syndrome parameters as well as on pro-inflammatory/fibrotic and diabetic biomarkers in blood and urine. The pharmacological activity of PBI-4050 was confirmed through the clinically significant reduction in HbA1c between screening and Week 12. For instance, the 15 patients with a screening HbA1c ≥ 7.5 experienced a mean decrease of - 0.75% (p = 0.0004) while the 9 patients with a screening HbA1c ≥ 8.0% experienced a mean decrease of - 0.9% (p = 0.007). The 10 patients who participated in the study's 12 week extension had a mean HbA1c of 7.7 at screening and experienced a reduction of - 0.8% at week 12: this reduction was maintained at week 24.

RM2 (LON:RM2 25.92p/£103.92m)
RM2, the sustainable composite pallet innovator, announced that it has received a commitment from a global leader in temperature-controlled warehousing and logistics to the food industry, for the deployment of RM2 pallets and management of the Company's pallet pool.  The deployment of pallets will start immediately and based upon the success of the initial locations, the business is projected to encompass the Company's North American network. It is anticipated that the agreement will require over 200,000 pallets.     

Sareum Holdings (LON:SAR 1.11p/£29.15m)*
Sareum, the specialist cancer drug discovery and development business, announced that the Japan and Singapore Patent Offices have issued notifications that patents will be granted for inventions associated with Sareum's Aurora+FLT3 kinase inhibitor programme. These patents* describe compounds that inhibit the activity of Aurora and FLT3 kinase enzymes and the medical use of these compounds, particularly in the treatment of cancer. The granting of this patent in Japan means that Sareum will now have approved patent protection in all major territories for its Aurora+FLT3 kinase inhibitor programme. The Company announced that similar patents were to be granted in the USA and Europe in September 2015 and in China in August 2016.

Vianet Group (LON:VNET 100.50p/£28.11m)
Vianet Group, the leading provider of real time monitoring systems, data management services and business intelligence for the leisure and vending sectors, provided the following trading update ahead of the Group's results for the half year ended 30 September 2016, which are scheduled for release on Tuesday, 6 December 2016.Trading for the Group's continuing businesses for the first half of the current financial year was ahead of the same period last year, achieving good growth in line with the Board's expectations. Against that background, the Board intends to declare a maintained interim dividend of 1.7p per share. The Group's UK core beer flow monitoring operations, including iDraught, has continued to strengthen its market position and maintained its contribution, and encouragingly there are signs that the rate of pub closures in the sector has slowed down. Vending Telemetry has continued to extend its penetration of the European market which has helped deliver first half growth, with good ongoing prospects

Fri, 21 Oct 2016 15:13:00 +0100
Commodities demand is picking up, blurring the lines between markets and governments Fri, 21 Oct 2016 14:00:00 +0100 Oil price, Providence Resources, Hurricane, Sound Energy, Sundry-Eni-SLB/HAL-Shell-And finally... Oil price
It was the dollar what did it, greenback strength prevailed and kept a lid on the oil price that just couldnt break the shackles and make new ground. Make no mistake, the chartists are adamant that breaking through just below 53 bucks will mean another big rise but equally if it doesnt breakout then….
Igor Sechin clearly reads the blog, my comments recently when he contradicted comrade Putin forced me to suggest that he may be taking a trip to the Gulag, yesterday when asked about cutting production  he replied ‘ I will obey Government instructions’ which is the right answer. Remember in Licence to Kill when Sanchez says, ‘remember, you’re only the president for life’….
Providence Resources
Good news this morning from PVR as they seem to have had quite a result in court in the attempt by Transocean to get more costs awarded. The Judge did award the first instance costs to Transocean but the other costs for PVR are only $1.35m against expectations of $3.9m. It means that the company carry on with the job in hand, particularly preparing to drill Druid next spring.
Hurricane Energy- The more you look at it the bigger it gets….
The Hurricane announcement came out yesterday just as the blog was going to bed but there is nothing much to add although I had a very useful meeting with CFO Alistair  Stobie this morning to tie up a few loose ends. There was very substantial over-subscription and the shareholder register has some very serious names on it which is just what they deserve. Whilst it must have been tempting to raise more, it is what they need for this two well programme and the speeding up of the EPS process and I applaud their restraint. Looking at numbers, whilst the company are now on 300m barrels I am increasingly of the view that my 400-500m range is looking conservative, the bottom end is rubber stamped, the top end could be much higher. Just make sure you climb aboard the Open Offer…
Sound Energy
Having recently visited Tendrara I was asked if I would do a short radio interview with Proactive to talk about the project and other Sound prospects such as Badile. The link is below.
Proactive Investors interview: Tendrara discovery a game-changer for Morocco, let alone Sound Energy
I notice that Eni are finally ‘in talks’ with a potential buyer of their Area 4 acreage offshore Mozambique, hardly the best kept secret in the industry…
Shell has sold various West Canadian operations for C$1.4bn, much still to go…
And Halliburton and Schlumberger have both announced third quarter figures this week and both have crept into profit but neither blew the doors off and remained cautious in outlook although both said that North America was looking much better.
And finally…
Last night in the Boropa Cup a rather grey haired former Gooner turned up at the Theatre of Dreams and eventually scored, the Red Devils saw off Fenerbaçe 4-1 but it was seeing Pogba back in form that made it worthwhile. The Saints lost at Inter, although they might have won i’m told…
In the Prem the standout game is at the Bridge where the Red Devils are the visitor along with the special one, might be tasty… Elsewhere the Gooners may go top after beating ‘Boro, the Saints go to the Noisy Neighbours and Spurs go to the Cherries. The HubCap Stealers may find the Baggies defence trying but may get through.
And the cricket is turning into quite a contest, at home with the Bangas its no walk over, no wonder the Aussies didnt want to go… At the close Bangladesh were 221-5 creeping up on England’s total…
Lewis really does have to pull his finger out on Sunday at the USA GP in Austin, Texas, after this he needs dnf’s from Nico…
Finally farewell to Anthony Foley, Man indeed of Munster….

Fri, 21 Oct 2016 13:48:00 +0100
Commodities Week in a Minute: Not quite an Australian weatherman plus ACA, AAU, FDI and POLY Commodities

Diamonds and precious stones

News this week probably had a few worrying about the demand side for diamonds again, especially when Chow Tai Fook and Luk Fook both announced retail sales that were not exactly stellar by any means. However drilling into the detail we do see that comparisons to last year are a little harsh given the large proportion of gold products sold following the declines in bullion last year. That said, Gem-set sales were not exactly great, but at least the declines are reducing…

Maybe not a precursor to industry-wide restraint, but Rio’s reduced their top end of production guidance for 2016 by 1mcts to 20Mcts this week – not surprising given some of the operational problems seen of late.

Alrosa also updated with Q3 production. 9Mcts in Q3 (down 6% vs. 2015) and 28Mcts in 2016. Reasons for the decline were given as: a decrease in processing from Nyurba, lower Aikhal volumes and the termination of open-pit mining at Udachnaya. Indicatively, the company announced sales of 8.3Mcts broken down to 5.8Mcts of gem-quality diamonds at an ave of $165/ct and 2.5Mcts of industrial diamonds at an ave of $7/ct, in line with guidance.

Our friends Lucapa in Angola announced their next sale would be in mid-November and will include both the 172ct and 104ct Type IIa D-colour diamonds recently recovered. Next week Gem will conclude their large stone tender that commenced this week.

Finally, I love the thought of finding a near $200m rock, unfortunately the logistics behind a 175t Jade stone might be a little too much for the average bear.

Diwali commences end of next week.

Precious metals

Probably not a good thing for gold, but I note that the market value of the world’s negative-yielding bonds has now fallen around 13% in two weeks to a mere $10.4 trillion.

Otherwise, without repeating last week’s and Monday’s calls, bullion is on track for its first positive week for over a month, despite a retrace in recent sessions after touching $1,270/oz and falling below $1,250/oz on Monday. I’ll take that.

Up 19% this year and worryingly close to our forecasted performance for the year, I still feel that longer-term, the most likely direction of travel is moderately lower, at least in 2017 and excluding any significant geopolitical shocks. But given that theory, taking advantage of trading opportunities within the range is going to prove increasingly important. I feel I have my work cut out for me next year.

Platinum still going lower… $929/oz on the telly, related equities are trading as if we were significantly north of $1,000/oz. Who will blink first?

Bulk commodities
Doing my weatherman bit here, the Australian Bureau of Meteorology provided a positive (of sorts) outlook for disruption to iron ore and coking coal traders this week. The prediction that "neutral to weak La Niña conditions in the tropical Pacific Ocean and warmer than average ocean temperatures to the north and east of Australia" could result in a higher number of cyclones for the region, potentially disrupting mining operations.  Western Australia, which hosts the Pilbara iron ore belt, has a 67% chance of getting more than the average 11 tropical cyclones from November to April because…

"Ocean temperatures are currently 1–2 °C warmer than average to the north and east of Australia which is favourable for tropical cyclone development. The Southern Oscillation Index, a measure of the atmospheric component of (the El Niño-Southern Oscillation, ENSO), has been positive through this period and exceeded La Niña thresholds in the last two weeks of September,"

Huh? So it’s going to rain then? A lot.

Q1 typically sees supply disruptions because of weather disruptions and the not insignificant stockpiles in China may cushion the iron ore impact, but could the Met coal rally run even further? In 2011 we saw coking coal hit $335 a tonne because of flooding in Queensland.

I searched for weatherman images but I was astounded by the frequency of phallic shapes when describing weather patterns and decided to steer clear (for once).

Company announcements/news/meetings:

Acacia Mining (Hold): Q3 update – Take some profits on this week’s trading idea.
I will publish a fuller model/valuation update sometime next week and valuation but Q3 certainly was a strong quarter, admittedly driven by some unrepeatable grades at North Mara (average 23g/t in Q3 with an exceptional 44g/t in August), offsetting the known issues at Buly and Buzwagi. Just don’t expect it to continue as management are already guiding back towards the 10g/t range. As a result, FY production guidance has been raised towards the top of the 750-780koz range whilst costs are towards the lower end of the range.
“Q3 FY16 results - Acacia Mining announced results for the three months to 30 September 2016 on 21 October that exceeded our expectations, driven by a strong performance at the North Mara operations offsetting the operational problems at Bulyanhulu and deferrals to higher grade ore at Buzwagi. Revenues of $285m are 48% higher than Q3 FY2015, driven by increased gold sales and the clear improvement in the underlying gold price received ($1,330/oz. vs. $1,113/oz.) EBITDA came in at $125m ($104m higher than Q3 FY2015) and notably higher than consensus of $105m. Net earnings closed at $53m equal to 12.9c/share again ahead of consensus of 11.6c/share. Net cash balances increased to $32m in the quarter resulting in a net position of $203m in line with our expectations.
Operational highlights – Gold production in the period was 204,726oz, 25% higher than in Q3 FY2015. Gold sales of 206,488oz rose 24% and were 1% above production. All-in sustaining costs (AISC) of $998/oz. ($901/oz before share based charges) drifted higher than expectations, largely due to the preannounced issues at Bulyanhulu and Buzwagi”
Some may say that the phone line disconnecting just as we were about to find out how much the share based payments were going to cost in Q4 and 17, but disappointingly (for headline writers) it is unlikely to be anything like that seen to date ($15m cash cost in Q4. Still, an average of $50/oz extra on costs is not to be sniffed at…

Acacia proved to be a good trade this week, but I can’t see 600p being reached again in the absence of significantly higher gold prices… Bank.

Ariana Resources (Buy): More drilling success.
Elsewhere, Ariana had another positive drilling update, much more to come from this company as the opportunity in Turkey becomes better understood, especially as the red rabbit operation starts commissioning before the end of the year.
I plan to summarise recent updates in due course in one easy to digest note.

Firestone Diamonds (Buy): That wonderful feeling of diamonds in the sort house.
Somewhat overshadowed this morning with other updates, but I was still fortunate enough to have a quick chat to the rather shattered but very happy Mr Brown this morning on the very positive update on events at Liqhobong.
The company announced a quarterly update this morning with commissioning at 96%, successful first ore blasts and stockpiles now in place. The news that the first diamonds recovered since the operation shut down some years ago is a significant event. Some of you will remember the diamonds the old plant recovered (and smashed), I certainly do, and the confirmation that fancy yellows are being recovered only reminds me of the goods I was fortunate enough to view in Antwerp all those years ago… 
With production in the year to 30 June 2017 expected to be 380kcts and 450kcts and with no need for further funding, the recovery of Firestone looks well founded and I look forward to further updates...
Polymetal (n/c): Strong update.
I note another good update from our Russian friends on Tuesday with quarterly production up 29% QoQ, driven by seasonal de-stockpiling at Mayskoye, launch of the Svetloye heap leach at Okhotsk operations, and a strong performance at Albazino and Varvara. The company reiterated production guidance of 1.26Moz GE and cost guidance of $525-575/GE/oz (Cash) and AISC of $700-750/GE/oz. To further support the case, production guidance for 2017 is expected to be 1.4M/oz (gold equivalent) and 1.55Moz for 2018.

I also have a sneaking suspicion dividend payments will also exceed market expectations.

Fri, 21 Oct 2016 12:52:00 +0100
Today's Market View - Caledonia Mining, DiamondCorp, Scotgold Resources Caledonia Mining (LON:CMCL) –Blanket mine site visit
We are repeating and correcting in red, yesterday’s report from the Blanket mine site visit
DiamondCorp (LON:DCP) – Debt notice and resignation of Euan Worthington
Scotgold Resources (LON:SGZ) – Scotgold completes delisting from ASX

FTSE100 is flat today with miners trading slightly higher with the FTSE 350 Mining Index coming close to this year’s highest level recorded last week.
• Funds inflows in commodities hit the highest level in six months of $11.6bn in Sep, Bloomberg reports citing Barclays.
• Largest inflows recorded in energy ($4.8bn), agriculture ($2.9bn) and precious metals ($2.7bn).
• This compares to a $3.2bn inflow in Aug.
• Gold is slightly off amid a stronger US$ Index.
• Brent prices are range bound consolidating at above the $51/bbl level.
• Iron ore futures finished flat (CNY 440/t) on the week holding up to previous gains and trading at close to highest levels recorded in Aug (CNY 456/t).

Dow Jones Industrials  -0.22% at 18,162
Nikkei 225    -0.30% at 17,185
HK Hang Seng           % at 23,374 Closed due to typhoon
Shanghai Composite    +0.21%  at 3,091
FTSE 350 Mining   +0.70% at 13,341 FTSE 350 +82% since 1st January
AIM Basic Resources   +1.34% at 2,567 AIM Basic Resources +57% since 1st January

Economic News
US – Weekly jobless claims posted the strongest weekly rise since late Jul which is partly related to Hurricane Matthew related disruptions.
• On a four-week average basis claims climbed only 2k to 252k which was the second-weakest reading in 2016 pointing to a continuing positive momentum in the labour market.
Date Index Period   Actual Est Previous
Monday New York Manufacturing Oct   -6.8 1.0 -2.0
  Industrial Production Sep %mom 0.1 0.1 -0.5
  Capacity Utilization Sep % 75.4 75.6 75.3
Tuesday CPI Sep %mom 0.3 0.3 0.2
  CPI Sep %yoy 1.5 1.5 1.1
  Core CPI Sep %mom 0.1 0.2 0.3
  Core CPI Sep %yoy 2.2 2.3 2.3
Wednesday Housing Starts Sep %mom -9.00 2.9 -5.6
  Building Permits Sep %mom 6.3 1.1 0.7
Thursday Weekly Jobless Claims   '000 260 250 247
  Existing Home Sales Sep %mom 3.2 0.4 -1.5
Source: Bloomberg     

China – The National Bureau of Statistics national metals production numbers show:
• Copper production climbed 8.4%yoy to 6.2mt in the Jan-Sep period.
• Aluminium production hit a 15-month high in Sep (2.75mt) taking the total for the Jan-Sep to 23.4mt (-1.4%yoy).
• Zinc production fell 0.1%yoy to 4.6mt during the same period.
• Lead output increased 6.6% to 3.2mt during the same period.
• Iron ore output fell 3.2%%yoy to 941mt.

ECB – The Bank left rates and the pace of bond purchases unchanged saying the council has not discussed extending the QE.
• The focus now shifts to the Dec meeting with markets to increasingly expect a comment on a potential for delaying the tapering past Mar/17.
• The euro slid back post the press conference and continued to decline against the US$ this morning on different monetary policy outlook in two regions.
• The currency is off 0.8% against the US$ since pre-announcement.

Indonesia – The parliament is planning to revise the existing mining law next year with an update in oil and gas laws currently being the focus, according to one of parliamentarians.
• Although, the decision on the raw and semi-processed ores exports is separate to the process with the government expected to come up with changes within three weeks.

US$1.0880/eur vs 1.0971/eur yesterday.   Yen 103.73/$ vs 103.68/$.   SAr 14.048/$ vs 13.928/$.   $1.223/gbp vs $1.226/gbp.
0.763/aud vs 0.766/aud.   CNY 6.764/$ vs 6.738/$.

Commodity News
Precious metals:
Gold US$1,265/oz vs US$1,270/oz yesterday –
     Gold ETFs 66.2moz vs 66.0moz yesterday –
Platinum US$929/oz vs US$942/oz yesterday
Palladium US$622/oz vs US$637/oz yesterday
Silver US$17.49/oz vs US$17.64/oz yesterday

Base metals:   
Copper US$ 4,638/t vs US$4,649/t yesterday –
Aluminium US$ 1,616/t vs US$1,614/t yesterday –
Nickel US$ 10,050/t vs US$10,210/t yesterday –
Zinc US$ 2,270/t vs US$2,295/t yesterday –
Lead US$ 2,021/t vs US$2,003/t yesterday
Tin US$ 19,915/t vs US$19,850/t yesterday –

Energy:Oil US$51.5/bbl vs US$52.1/bbl yesterday -
Natural Gas US$3.100/mmbtu vs US$3.196/mmbtu yesterday
Uranium US$20.50/lb vs US$20.50/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$57.2/t vs US$56.9/t –
Chinese steel rebar 25mm US$405.4/t vs US$409.1/t –
Thermal coal (1st year forward cif ARA) US$67.6/t vs US$67.9/t yesterday –
Premium hard coking coal Aus fob US$242.9/t vs US$240.9/t

Tungsten - APT European prices $191-197/mtu vs $183-197/mtu unch last week

Company News

Caledonia Mining (LON:CMCL) 142 pence, Mkt Cap £74m –Blanket mine site visit
We are repeating and correcting in red, yesterday’s report from the Blanket mine site visit
• Caledonia Mining has hosted a site visit for UK analysts to its Blanket mine in Zimbabwe where the company is well advanced on its major redevelopment project aimed at increasing production from the company’s guidance of 50,000 ounces of gold for 2016 (2015 – 42,806 ounces) to 80,000oz pa by 2021 and not 2012 as we said yesterday.
• The programme is already delivering increased throughput as a result of the improved ore handling and transport arrangements underground which increases underground ore handling from around 400tpd to 1000tpd and from the  newly installed ball mill which should lift processing capacity to the 1800tpd of ore feed expected on completion of the new Central Shaft.
• The Central shaft is currently at a depth of approximately 330metres below surface and, when completed in mid-¬2018, is intended to provide access to ore below the 750m level of the mine.
• The new shaft, which is located closer to the centre of the known orebodies than the existing shafts towards the southern end of the mine should allow more efficient access to both the northern and southern orebodies and should also improve operating costs by reducing the travel times for men, materials and ore as well as increasing the overall hoisting capacity at Blanket.
• This deeper ore is already becoming available through a newly developed decline system which provides additional flexibility to the underground ore transport infrastructure and provides the opportunity to develop and explore the deeper levels of mineralisation.
• Peak capital expenditure is now passed for the project and the impact of the improved efficiencies achieved so far is already coming through in recent quarterly production reports with June quarter cash costs of US$629/oz and all in costs of US$936/oz - reductions of 13% and 9% respectively compared with Q2 2015.
• Access to deeper levels of the mine is also providing access for drilling of the deeper extent of mineralisation which delivered a resource upgrade in July. With increasing access and a continuing on mine exploration programme backed up by digitisation of historical geological and mining information further resource upgrades seem likely over the coming months
Conclusion: Caledonia Mining’s development programme at the Blanket mine is a complex project which rejuvenates a mine already over 100 years old. In our opinion, the development is being well controlled by an experienced and capable management team and seems on track to deliver the planned production increase to 80,000 oz pa of gold by 2021.

DiamondCorp (LON:DCP) 2.8p, Mkt Cap £13.4m – Debt notice and resignation of Euan Worthington
• DiamondCorp remind us, in accordance with Rule 2.9 of the Takeover Code, of the relevant securities in issue.
• The company has 478,739,580 (0.1p) shares in issue + another 276,839,478 deferred shares which hold no voting, dividend or winding up rights other than the nominal amount paid on the shares. “The deferred ordinary shares effectively have a zero value, are non-transferable and have no effect on the economic interest of the holders of ordinary shares.”
• DiamondCorp also has ZAR40m of senior secured South African bonds due 14 Dec 2018
• The real reason for the announcement is to report a new Shariah-compliant secured convertible for £700,000 with a maturity date of 15 December this year. 
• £400,000 of the facility has so far been drawn.  The instrument is convertible into stock at a 30% discount to the average daily trading price since the agreement.  While this may look onerous it feels like good deal for the company considering the urgent need for cash and precarious financial position of the company. 
• DiamondCorp also reported yesterday that its Chairman, the very charming, Euan Worthington, has at long last fallen on his sword.  Part of a Chairman’s role is to foresee problems and to guide the board accordingly. 
• Worthington has resigned at the very moment when the team should have been celebrating a successful ramp up in diamond production and sales. 
• Worthington also bailed from his Chairman’s role at African Eagle on 24 April 2013 subsequently serving the company with a winding up petition on 12 June 2013 relating to unpaid salary and expenses. 
• African Eagle subsequently announced a restatement of terms on the Jacana deal on 18 June 2013 relating to an agreement to sell the very valuable Balma graphite asset for a price of just A$925,000 (£470,000) to Jacana (now Syrah Resources).  Balama graphite is reported to be the world’s largest graphite resource with Syrah Resources valued at >A$1bn almost entirely on this project. 
• Worthington later withdrew his winding up petition on 01 July 2013.
Conclusion:  Now that Worthington has left the Lace mine in the lurch it is now down to the very dedicated, long suffering and capable Paul Loudon and his team to rescue the business.
We feel confident that the technical mining issues encountered so far should be overcome and that the mine will produce significant quantities of valuable coloured diamonds going forward.  We also feel there will be a number of parties interested in the acquisition of the mine who would be prepared to pay up sensible cash under more normal circumstances.
The problem is that with insufficient cash in the bank and the next best thing to a ‘Pay-Day’ loan in place, will there be anything much left for the company’s long suffering investors.

Scotgold Resources (LON:SGZ) 0.6p, Mkt Cap £8.8m – Scotgold completes delisting from ASX
• Scotgold Resources reports it has delisted from the Australian Securities Exchange ‘ASX’ today. 
• The company are recently completed a preliminary bulk processing trial of 870t of material from its Cononish deposit in Scotland has produced 530 gms of dore gold (unrefined, impure gold) via the production of an intermediate pyrite concentrate.
• The trial has demonstrates the viability of producing a separate gold rich lead concentrate using gravity separation.
• Recovery rates of 62% are seem from a simple coarse grinde to 500microns
• Test work indicates at recovery rates should improve to around 93% on finer grinding to 150 microns.

Fri, 21 Oct 2016 11:50:00 +0100
In the papers: BHP Billiton, Time Warner, Investec The Times
Crackdown on rogue pension providers: Fears that workers’ savings have been put at risk in unsustainable and potentially fraudulent pension schemes have prompted the government to rush through tougher rules designed to tackle rogue operators.
‘Jac the Knife’ calls time on turbulent years at BHP: Jac Nasser has announced he will step down as Chairman of BHP Billiton within the next year, having stayed on to provide stability in the aftermath of the Samarco disaster in Brazil last year.
Keller prepares ground for recovery after warning: Shares in Keller fell 27% after the engineering group issued a profit warning on the back of poor trading in Asia.
Draghi’s hint of more stimulus pushes euro to four-month low: Mario Draghi has hinted that the European Central Bank will continue its €80 billion-a-month quantitative easing programme beyond March as he announced that the organisation was keeping interest rates at record lows.
Flagging Eurozone struggles to charge up recovery: Fresh questions were raised about the strength of the Eurozone recovery after official statistics showed that demand was flagging and producer prices in the region’s powerbroker, Germany, continued to contract.
Boots owner delays $9 billion merger to sell off shops: Walgreens Boots Alliance has delayed the takeover of the rival pharmacy chain Rite Aid to give it more time to offload hundreds of outlets and satisfy the U.S. competition watchdog.
Time Warner and AT&T ‘held discussions over possible merger’: Senior Executives at AT&T and Time Warner have discussed the potential for a merger during informal talks, it was reported.
Rathbones faces pension closure bill: Rathbone Brothers, the Wealth Manager, claimed it was having to raise £38 million of fresh capital mainly because it had decided to close its final-salary pension scheme.
Sky looks to ring up profits with launch of mobile phone service: Sky is to press ahead with the launch of its new mobile service this month almost two years after announcing plans to break into the market.
Airports caterer pays £60 million for an Indian takeaway: SSP Group is going into the Indian market after signing a joint venture with a local firm in the travel sector.
London reaches ‘affordability limit’ as house prices ease off: The rapid growth in the London housing market appears to be ending as price inflation in the capital fell to its lowest level in nearly two years.
The Independent
Mario Draghi dismisses threats to central banks' independence: The President of the European Central Bank, Mario Draghi, has brushed aside suggestions the independence of central banks is under threat from a rising tide of popular anger over the impact of loose monetary policies.
U.K. company moves to EU after Brexit, says it ‘can’t afford to wait’: A major Lincolnshire employer has announced it is moving its headquarters to Europe as a direct result of the Brexit vote in June.
Tesco executives to face trial in 2017 after accounting scandal: Three former Tesco executives will stand trial in September next year in relation to the £326 million accounting scandal at Britain’s biggest supermarket.
Mexican peso spikes after U.S. debate as Donald Trump fails to impress: The Mexican peso, has reached a six-week high after the third and final American presidential debate which saw Hilary Clinton leaving as the favourite.
The Daily Telegraph
Investec traders lose appeal over £6 million bonuses: Two former traders at Investec in London have lost an appeal in a long-running, £6 million legal battle with the Anglo-South African bank over bonuses.
Nissan-Renault Boss Ghosn becomes Mitsubishi chairman: Scandal-hit Mitsubishi is to get a new Chairman in the form of Carlos Ghosn, the Boss of the Nissan-Renault alliance.
Royal Mail escapes fine for late First Class deliveries: Royal Mail has escaped financial punishment after failing to hit targets for delivering first-class mail.
Heathrow's profits plunge and pension deficit grows as it awaits decision on third runway: Heathrow has reported a plunge in profits and a £474 million loss in its pension fund as it its campaign for a third runway reaches a climax.
Glencore on track to meet debt targets after selling Australian coal railway for £711 million: Mining giant Glencore is a further stop on the road to hitting its debt targets after banking £711 million from the sale of a coal haulage railway in Australia.
The Questor Column:
Lowland offers yield, rising dividends, an experienced manager and a 10% discount: Lowland has increased its dividend every year since 1972 (except for 2009, when it maintained it at the previous year’s level). The dividend has more than doubled in a decade. Further stability comes from Mr Henderson’s 26 years in charge of the fund. Although the trust’s top 10 holdings include blue-chip names such as Royal Dutch Shell, HSBC and Standard Chartered, it also invests heavily in smaller and medium-sized firms. With about 4% of its money the fund in effect acts as an “incubator”, providing capital to new businesses that offer the prospect of very fast growth. Mr Henderson describes his approach as “mildly contrarian”. This is an approach Questor likes and we recommend the trust for its attractive yield, its long record of dividend growth and the presence of a manager who has experienced many market cycles (and whose family has a holding in the trust worth around £8.7 million). The fund’s fee of 0.62% a year is reasonable and, although there is a performance fee on top, it is based on three-year returns and cannot take the overall charge over 0.75%. Questor says “Buy”.
The Guardian
Nestlé hints at price rise to offset weak pound: Nestlé has hinted that it might follow Pot Noodle and Marmite-maker Unilever by seeking to raise the price of some of its products, such as KitKat and Milkybar, to offset the weakness of the pound.
Global wine production expected to fall by 5% due to 'climatic events': Global wine production is expected to fall by 5% in 2016 because of “climatic events” causing steep drops in production in most of the southern hemisphere, particularly Chile and Argentina.
City of London weighs up regional visa system to avoid post-Brexit staff gaps: Ideas for a regional visa system have been set out by the local authority for London’s financial district in an attempt to avoid staff shortages after the vote to leave the EU.
Delivery giant Hermes faces HMRC inquiry into low pay allegations: The U.K.’s Chief taxman has referred the parcel delivery giant Hermes to HM Revenue and Customs compliance officers following complaints by couriers that they are being paid at levels equivalent to below the “national living wage”.
Daily Mail
Heathrow’s wealthy owners take £225 million dividend despite £370 million black hole appearing in airport’s retirement scheme: Heathrow’s wealthy owners have taken a £225 million dividend despite a £370 million black hole appearing in the airport’s retirement scheme.
Construction sector sees slowest growth in three years as firms are worried about the impact of Brexit: British construction firms' input costs have risen ‘firmly’ and their workload has grown at the slowest pace in over three years in the third quarter, according to new figures.
Loans provider International Personal Finance rockets as it reveals a return to growth: Loans provider International Personal Finance rocketed as it revealed a return to growth. The firm, which lends to people with little or no borrowing history, said the amount loaned through its online arm was up 44% in the third quarter, while overall customer numbers increased by 1%.
Daily Express
Retail sales boosts as shoppers go to town: Consumers flexed their financial muscle to boost Britain’s economic prospects as retail sales grew at the fastest for nearly two years in the third quarter.
Brussels should not punish Britain for leaving the EU, says Lithuanian MEP: Britain shouldn't be punished for leaving the European Union (EU) and it should be easier for more countries to exit, Lithuanian MEP and poker player Antanas Guoga has said.
Draghi defends €1.7 trillion money printing to help creaking euro economy: Desperate measures to boost Europe's ailing economy were defended by the Chief of the bloc's central bank.
The Scottish Herald
Greaves hoping the pound will rebound: Greaves Sports has warned the collapse in sterling since the Brexit vote will lead to a steep rise in the cost of importing goods as it fell into the red in its latest financial year.
Perth to get £15 million trade park: Simon Howie, the entrepreneur behind the eponymous range of meat products, has said the Scottish Government scored a “massive own goal” when it began charging landlords business rates on vacant premises.
Accountancy firm expands into Aberdeen: Accountancy firm Grant Thornton has moved into Aberdeen amid the shake up in the corporate sector in North East Scotland triggered by the crude price slump.
Grieg Seafood sees huge losses in Shetland: The largest farmed salmon producer in the Shetland Islands has suffered a £14.4 million operating loss in part because of algae damage led to loss of stocks and high treatment expenses.
Renfrewshire financial technology firm to recruit 30 staff: Financial technology company Beeks Financial Cloud has said it expects to recruit 30 staff to work at a new operations centre in Linwood as the company expands into China.
Hurricane Energy provides spur for North Sea explorers: Hurricane Energy has secured £70 million backing from private investors in a development that may boost morale in the hard-pressed North Sea oil and gas industry.
Pernod signals price rise for brands in U.K.: Pernod Ricard, owner of Scotch whisky business Chivas Brothers, has said it expects to adjust prices on brands imported to Britain following the Brexit vote.
The Scotsman
Developer creating 2,000 jobs at former Tesco sites: Property firm London & Scottish Developments is on course to deliver 2,000 jobs across Scotland through the revamp of 14 former Tesco sites it bought last year.
Financial cloud outfit ploughs £2 million into Paisley site: A Renfrewshire-based provider of cloud computing services to the finance industry is set to create 20 jobs as part of a £2 million investment in its facilities.
LendingCrowd targets new investors with ‘joining bonus’: Alternative finance provider LendingCrowd is aiming to attract more investors to the peer-to-peer (P2P) market with the promise of a “joining bonus”.
Milk market supplies continue to tighten as prices rise: Evidence of further tightening of supplies in the milk market emerged with major processor First Milk announcing a 5p per litre increase in its B milk price for all membership pools and a minimum 1p per litre rise on A prices.
Aldi under investigation by advertising watchdog over salmon claims: Budget retailer Aldi is being investigated by the Advertising Standards Authority following a complaint by a Scottish environmental campaigner over an advert which showed Scottish salmon swimming in the wild - when the store actually sells farmed fish.
City A.M.
Embattled Southern rail operator Govia bills Network Rail for more than £48 million: The owner of Southern Rail, the operator at the centre of a bitter industrial dispute, stung Network Rail for more than £48 million in fines during the last fiscal year.
BHP Billiton has rejected criminal charges filed in Brazil against the Samarco Mineracao disaster: BHP Billiton has rejected the charges against it regarding the Samarco Mineracao mine disaster in Brazil in November 2015.
Consumers feeling cheery ahead of the Christmas shopping season: Consumer confidence is looking up ahead of the biggest quarter for retailers - the Christmas season.
China's Alibaba begins its countdown to the world's biggest shopping day of the year – Singles' Day: Chinese e-commerce giant Alibaba has started the countdown to its shopping festival Singles’ Day, the world’s biggest sales event of the year.
JP Morgan and Morgan Stanley call for transition period to protect banks post-Brexit: Two senior staffers of major investment banks have called on the U.K. to secure a transition period for industry post-Brexit.

Fri, 21 Oct 2016 09:18:00 +0100
Market Briefing: US markets closed in the red yesterday, weighed down by a decline in crude oil prices and telecom shares UK Market Snapshot
UK markets ended mixed yesterday, with the FTSE 100 index closing slightly higher, bolstered by a rise in banking shares. Meanwhile, economic data showed that UK’s retail sales were flat in September compared to August. Lloyds Banking Group, Barclays and Royal Bank of Scotland Group advanced 1.3%, 3.2% and 3.5%, respectively. Airline stocks, easyJet and International Consolidated Airlines Group edged up 0.9% and 2.0%, respectively, after their European rival Deutsche Lufthansa boosted its profit target for the full year. London Stock Exchange Group rose 1.0%, after it reported upbeat results for the third quarter. On the contrary, BAE Systems and Smiths Group declined 2.2% and 3.0%, respectively, as they traded ex-dividend. The FTSE 100 rose 0.1%, to close at 7,026.9, while the FTSE 250 slipped 0.5%, to settle at 17,945.1.
US Market Snapshot
US markets closed in the red yesterday, weighed down by a decline in crude oil prices and telecom shares. eBay plummeted 10.8%, as it expects weaker than expected sales and earnings for the fourth quarter. Union Pacific plunged 6.7%, following a decline in its profit for the third quarter due to a drop in freight demand. Travelers Cos tumbled 5.8%, as it posted a decline in its profit for the third quarter. Verizon Communications shed 2.5%, after it added lower than anticipated total mobile subscribers in the third quarter. On the brighter side, American Express surged 9.0%, after it raised its projected profit for the full year amid upbeat results for the third quarter. The S&P 500 slipped 0.1%, to settle at 2,141.3. The DJIA eased 0.2%, to settle at 18,162.4, while the NASDAQ slid 0.1%, to close at 5,241.8.
Europe Market Snapshot
Other European markets finished in positive territory yesterday, after the European Central Bank (ECB) President, Mario Draghi, hinted that further easing measures would be decided at December policy meeting. Deutsche Bank climbed 4.6%, amid news that some of its investors could raise their stake in the lender. Deutsche Lufthansa advanced 2.7%, after the airline company boosted its earnings guidance for the full year. Bucking the trend, GEA Group sank 20.2%, as it expects a drop in its sales for the year 2016. Actelion plunged 6.5%, as its hiked its profit forecast that fell short of some expectations. Publicis Groupe tumbled 5.7%, after its revenue for the third quarter missed analysts’ estimates. The FTSEurofirst 300 index rose 0.2%, to close at 1,358.6. Among other European markets, the German DAX Xetra 30 added 0.5%, to close at 10,701.4, while the French CAC-40 gained 0.4%, to settle at 4,540.1.
Asia Market Snapshot
Markets in Asia are trading mostly lower this morning, following an overnight loss on Wall Street. In Japan, Showa Denko has advanced 3.4%, after the company announced plans to acquire the graphic electrode operations of German-based, SGL Carbon, for ¥15.6 billion. Nissan Motor has gained 1.1%, after the auto maker completed its deal to acquire a 34.0% controlling stake in Mitsubishi Motors, up 6.2%. On the flipside, Nintendo has tumbled 5.6%, despite revealing a preview trailer on its upcoming NX gaming console. Rakuten, and Mitsui Mining and Smelting have declined 3.8% and 5.5%, respectively. Hong Kong markets are closed today due to a typhoon warning.  In South Korea, index major, Samsung Electronics has slid 1.7%, while POSCO has risen 0.8%. The Nikkei 225 index is trading 0.3% higher at 17,285.5, while the Kospi index is trading 0.4% lower at 2,032.4. Yesterday, the Hang Seng index rose 0.3%, to close at 23,374.4.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.43% or $0.22 lower at $51.16 per barrel, ahead of Baker Hughes weekly oil rig count data, scheduled to release later in the day. Yesterday, the contract declined 2.45% or $1.29, to settle at $51.38 per barrel.
At 0330GMT today, Gold futures contract is trading 0.36% or $4.60 lower at $1262.90 per ounce. Yesterday, the contract declined 0.19% or $2.40, to settle at $1267.50 per ounce, reversing its gains from the last session, amid broad strength in the greenback.
At 0330GMT today, the EUR is trading 0.23% lower against the USD at $1.0903, ahead of Euro-zone preliminary consumer confidence data for October, slated for release later today. Yesterday, the EUR weakened 0.40% versus the USD, to close at $1.0928.Meanwhile, the ECB President, Mario Draghi, stated that policy makers had not discussed either extending the central bank’s bond-buying programme or narrowing its size. In other news, the Euro-zone current account surplus expanded in August.
At 0330GMT today, the GBP is trading 0.07% lower against the USD at $1.2241, ahead of UK’s public sector net borrowing data for September, due to release in a few hours. Yesterday, the GBP weakened 0.25% versus the USD, to close at $1.2250, after the UK retail sales remained flat in September.
Fixed Income
In the US, treasury yields were mixed, after the ECB kept interest rates steady and its quantitative easing programme unchanged. Yesterday, yield on 10-year notes remained unchanged at 1.76%, while yield on 2-year notes gained 3 basis points to 0.84%. Meanwhile, 30-year bond yield fell 1 basis point to 2.50%.

Key Economic News
UK retail sales remained flat in September

On a MoM basis, retail sales remained unchanged in September, in the UK, less than market expectations for an advance of 0.30%. In the prior month, retail sales had registered a revised flat reading.
UK retail sales advanced less than expected in September
In September, retail sales climbed 4.10% in the UK on a YoY basis, lower than market expectations for a rise of 4.70%. In the prior month, retail sales had risen by a revised 6.60%.
ECB kept interest rate on hold
The ECB kept the key interest rate and its quantitative easing (QE) programme unchanged, as widely expected. The central bank held the main refinancing rate at 0.0%, the deposit rate at -0.4% and asset purchases at €80.0 billion a month. Further, the Governing Council expects the ECB interest rates to remain at present or lower levels for an extended period of time and the QE programme is intended to run until the end of March 2017, or beyond, if necessary.
Euro-zone current account surplus rose in August
The seasonally adjusted current account surplus in the Euro-zone expanded to €29.70 billion in August, from a revised current account surplus of €27.70 billion in the previous month.
Euro-zone current account surplus dropped in August
The non-seasonally adjusted current account surplus in the Eurozone fell to €23.60 billion in August. The Euro-zone had registered a revised current account surplus of €33.80 billion in the prior month.
German PPI recorded an unexpected drop in September
On a monthly basis, the producer price index (PPI) unexpectedly dropped 0.20% in Germany, in September, compared to a fall of 0.10% in the prior month. Market expectation was for the PPI to rise 0.20%.
German PPI dropped more than expected in September
In Germany, the PPI dropped 1.40% on a YoY basis in September, compared to a drop of 1.60% in the prior month. Markets were expecting the PPI to drop 1.20%.
Italian current account surplus narrowed in August
Current account surplus in Italy fell to €3.37 billion in August, following a current account surplus of €9.42 billion in the prior month.
Spanish trade deficit expanded in August
Trade deficit in Spain widened to €2.56 billion in August. Spain had registered a trade deficit of €0.56 billion in the previous month.
Swiss trade surplus widened in September
Trade surplus in Switzerland widened to CHF 4.37 billion in September. Switzerland had posted a revised trade surplus of CHF 3.01 billion in the prior month.
Swiss imports eased in September
Imports dropped 3.30% in Switzerland on a monthly basis, in September. Imports had fallen by a revised 3.90% in the prior month.
Swiss exports climbed in September
On a monthly basis, exports rose 4.30% in September, in Switzerland. Exports had dropped by a revised 1.90% in the prior month.
US leading indicator advanced as expected in September
In the US, leading indicator advanced 0.20% on a monthly basis in September, compared to a drop of 0.20% in the prior month. Market expectation was for leading indicator to advance 0.20%.
US continuing jobless claims advanced in the last week
The seasonally adjusted continuing jobless claims recorded a rise to 2057.00 K in the US, in the week ended 08 October 2016, compared to market expectations of a rise to 2053.00 K. Continuing jobless claims had recorded a revised level of 2050.00 K in the previous week.
US existing home sales rose in September
In the US, existing home sales recorded a rise of 3.20%, on monthly basis, to a level of 5.47 million in September, compared to market expectations of 5.35 million. Existing home sales had registered a revised reading of 5.30 million in the prior month.
US Philadelphia Fed manufacturing index fell in October
Philadelphia Fed manufacturing index in the US registered a drop to 9.70 in October, higher than market expectations of a fall to 5.00. Philadelphia Fed manufacturing index had recorded a reading of 12.80 in the previous month.
US initial jobless claims advanced in the last week
The seasonally adjusted initial jobless claims advanced to 260.00 K in the week ended 15 October 2016, in the US, higher than market expectations of an advance to a level of 250.00 K. Initial jobless claims had registered a revised level of 247.00 K in the previous week.
Japanese machine tool orders eased in September
The final machine tool orders in Japan registered a drop of 6.30% on an annual basis, in September. Machine tool orders had dropped 8.40% in the previous month. The preliminary figures had also recorded a fall of 6.30%.
Japanese nationwide department store sales recorded a drop in September
In September, on a YoY basis, nationwide department store sales in Japan fell 5.00%. Nationwide department store sales had registered a drop of 6.00% in the previous month.
Japanese convenience store sales dropped in September
In Japan, convenience store sales eased 0.01% on an annual basis, in September. Convenience store sales had climbed 0.60% in the prior month.
Japanese Tokyo department store sales recorded a drop in September
Tokyo department store sales in Japan eased 3.40% on a YoY basis, in September. Tokyo department store sales had fallen 5.90% in the previous month.
Chinese MNI business sentiment index fell in October
The MNI business sentiment index in China eased to 52.20 in October, compared to a level of 55.80 in the prior month.
Chinese house price index registered a rise in September
The house price index registered a rise of 4.30% in China on an annual basis, in September. The house price index had climbed 9.20% in the previous month.


Fri, 21 Oct 2016 09:14:00 +0100
Northland Capital Partners View on the City - Starcom Starcom (LON:STAR) – CORP; Placing
Market Cap: £3.6m; Current Price: 2.63p

Placing raises £300,000 for working capital
  Northland Capital Partners has acted as Joint Broker in a £300,000 fund raise for Starcom with new and existing shareholders, through the placing of 12m new shares at a price of 2.5p/share. 
  The proceeds of the placing will provide working capital to meet a delay in payments due in Q416 which will now be made in early 2017.  Starcom adds that a US$100,000 loan facility that had been under negotiation from an industry export association in Israel was unexpectedly withdrawn.
  Starcom notes that “the enhanced certainty and transparency of the Company's near-term revenues enables the Board to be increasingly confident that Starcom will at least meet the expectations, outlined at the time of the interim results, for improvement in revenues for 2016.”
  Forecasts, rating and price target under review.
NORTHLAND CAPITAL PARTNERS VIEW:  At the June interim Starcom (announced on September 7th)  noted that it expected “most of the second half revenues to fall into the fourth quarter”, adding that compared to a year earlier, “the size and quality of the sales pipeline and the level of maturity of the new products are both significantly stronger by comparison”.  Today Starcom indicates confidence in its revenue outlook and has taken steps to address the delay in payment on H2 orders.  Our outlook is under review.

Fri, 21 Oct 2016 09:09:00 +0100
Breakfast News AIM Breakfast: Bagir Group, Immunodiagnostic Systems, Time Out Group, Michelmersh Brick Holdings, Starcom, Abzena, Trinity, DX Group, Capital European Metals Holdings, RTC Group What’s cooking in the IPO kitchen?
Filta— Schedule One from  the provider of a number of services to national and independent commercial kitchen operators and owners.
Targets early November listing. Capital raising plans as yet undisclosed
TI Van Elle—The geotechnical contractor to the UK construction market is hoping to come to AIM later this month
Ascot Lloyd— The UK IFA is also hoping to join AIM later this month. Ascot Lloyd's strategy is to grow through a combination of organic growth and further targeted acquisitions.

Breakfast buffet

Bagir Group (LON:BAGR) 3.5p £1.77m
Trading update from designer, creator and provider of innovative tailoring. ‘2016 continues to be a successful year for Bagir. We are trading in line with market expectations for this financial year and we are making significant progress under our strategic plan to maintain this momentum across the business into 2017 and beyond.‘ EGM today to approve £6.4m placing. FYDec16E revenue of £48.16m and pre-tax loss of £2.29m.

Immunodiagnostic Systems (LON:IDH) 207.5p £61.04m
H1Sep16 trading update from the specialist producer of manual and automated diagnostic testing kits and instruments for the clinical market. Revenue is expected to be £19.5m vs £19.4m.   On a like for like basis (i.e. at constant scope and constant exchange rates) revenue decreased 9%. Cash of £28.7m. The focus is on improving sales processes and capabilities, and strengthening the product pipeline through internal development and external partnerships. The next intermediate goal is to stabilise revenue on a like for like basis.

Time Out Group (LON:TMO) 141p £183.3m
The global multi-platform media and e-commerce business with food & cultural markets, is pleased to announce it has acquired YPlan, on a debt free cash free basis.  London-based YPlan is the "mobile-first" events discovery and booking platform. It offers a mix of event tickets on its app and website allowing people to discover and book things to do in the city. The consideration is £1.6m payable in TMO shares. The transaction is expected to be mildly dilutive to Time Out's earnings in the current financial year and broadly neutral in 2017.  There are no forecasts in the market.

Michelmersh Brick Holdings (LON:MBH) 63p £51.18m
Q3 trading update from the specialist brick manufacturer & landfill company.  The UK brick market has been experiencing falling output and a small increase in despatch volumes as manufacturers respond to market demand. Anticipated price increases have been difficult to put through. FY expectations revised to be in line with 2015 (£29.07m revenues, EPS 4.44p vs current consensus of £31.9m and 4.9p). Order book remains strong, 5% ahead of H1 & cost savings identified that help to mitigate the effect of negative market trends.

Starcom (LON:STAR) 2.62p £3.57m
The technology company specialising in the development of wireless solutions for the remote tracking, monitoring and protection of a variety of assets and people, has conditionally raised £300,000 with new and existing shareholders at a price of 2.5p. The proceeds of will be used to provide the Company with additional working capital.  The Board is increasingly confident that Starcom will at least meet the expectations, outlined at the time of the interims, for improvement in revenues for 2016. FY16E revs £4.87m and breakeven PBT.

Abzena (LON:ABZA) 42p £57.59m
The life sciences group providing services and technologies enabling the development and manufacture of biopharmaceutical products, notes that Gilead Sciences, Inc. has announced top line Phase II clinical study results of its product, GS-4997 (selonsertib) in combination with the investigational monoclonal antibody, simtuzumab (SIM) or SIM alone, in patients with non-alcoholic steatohepatitis (NASH). GS-4997 demonstrated anti-fibrotic activity in an open-label Phase 2 clinical trial that included 72 patient.

Trinity Capital (LON:TRC) 1.75p £3.68m
The boutique investment banking firm  has conditionally agreed to dispose of all remaining assets held jointly with Immobilien Funds for approximately £8.8m. The agreement requires that the main disposals be concluded within eight weeks, failing which it will terminate. The Company will make a further announcement to Shareholders as and when it has further clarity regarding the completion of the disposals of assets.

European Metals Holdings (LON:EMH) 29.88p £37.02m
‘Outstanding lithium recoveries’ during  the on-going pre-feasibility study  at Cinovec in the Czech Republic. Wet magnetic separation achieved a near pure lithium mica concentrate grading 2.85% Li2O with a lithium recovery of 92%. Lithium recoveries are 10-15% higher than those achieved via floation in  scoping study. Total Indicated Resource of 49.1Mt @0.43% Li2O & Inferred Resource of 482Mt @0.43% Li2O containing  combined 5.7 Mt Lithium Carbonate Equivalent; the largest in Europe.

DX Group (LON:DX) 88p £37.6m
The independent parcels, mail and logistics operator, notes today's announcement by the UK Competition and Markets Authority  regarding the Company's acquisition of the trade and assets of The Legal Post (Scotland) Limited and First Post Limited. The CMA has confirmed that its investigation into the acquisition is now closed and that no further action will be taken. Targeting full integration by end of 2016. FYJun17 revenues of £297.6m and 4.83p EPS. Dividend 2.5p.

RTC Group (LON:RTC) 53.5p £7.78m
Trading update from the company engaged in the recruitment of human capital resources and the provision of managed services.  Whilst trading in H116 was in line with expectations, H2 has seen delays in the commencement of infrastructure projects affecting the short term performance of ATA, primarily in their permanent vertical market activities. Consequently full year results are expected to be lower than current market expectations.  FYDec16E £71,6m rev and £1.6m PBT. Delayed projects expected to start in near future.

Fri, 21 Oct 2016 09:01:00 +0100
Fed Risks Repeating Lehman Blunder as US Recession Storm Gathers Fed Risks Repeating Lehman Blunder as US Recession Storm Gathers
Here is the opening of an ominous warning article by Ambrose Evans-Pritchard for The Telegraph:

The risk of a US recession next year is rising fast. The Federal Reserve has no margin for error.
Liquidity is suddenly drying up. Early warning indicators from US 'flow of funds' data point to an incipent squeeze, the long-feared capitulation after five successive quarters of declining corporate profits.
Yet the Fed is methodically draining money through 'reverse repos' regardless. It has set the course for a rise in interest rates in December and seems to be on automatic pilot.
"We are seeing a serious deterioration on a monthly basis," said Michael Howell from CrossBorder Capital, specialists in global liquidity. The signals lead the economic cycle by six to nine months.
"We think the US is heading for recession by the Spring of 2017. It is absolutely bonkers for the Fed to even think about raising rates right now," he said.
The growth rate of nominal GDP - a pure measure of the economy - has been in an unbroken fall since the start of the year, falling from 4.2pc to 2.5pc. It is close to stall speed, flirting with levels that have invariably led to recessions in the post-War era.
"It is a little scary. When nominal GDP slows like that, you can be sure that financial stress will follow. Monetary policy is too tight and the slightest shock will tip the US into recession," said Lars Christensen, from Markets and Money Advisory.
If allowed to happen, it will be a deeply frightening experience, rocking the global system to its foundations. The Bank for International Settlements estimates that 60pc of the world economy is locked into the US currency system, and that debts denominated in dollars outside US jurisdiction have ballooned to $9.8 trillion.
The world has never before been so leveraged to dollar borrowing costs. BIS data show that debt ratios in both rich countries and emerging markets are roughly 35 percentage points of GDP higher than they were at the onset of the Lehman crisis.
This time China cannot come to the rescue. Beijing has already pushed credit beyond safe limits to almost $30 trillion. Fitch Ratings suspects that bad loans in the Chinese banking system are ten times the official claim.
The current arguments over Brexit would seem irrelevant in such circumstances, both because the City would be drawn into the flames and because the eurozone would face its own a shattering ordeal. Even a hint of coming trauma would detonate a crisis in Italy.
To be clear, the eight-year old US cycle has not yet rolled over definitively. The picture remains fluid, hard to read in a world where key signals have been distorted by central bank repression. The third quarter will almost certainly look a little better.
"We are getting closer and closer to a recession, but we are not quite there yet, looking at our forward-indicators," said Lakshman Achuthan from the Economic Cycle Research Institute in New York.
"I can understand why people are getting worried. We have been seeing a 'growth-rate' cyclical downturn for the last two years. The longer this goes on, the less wiggle room there is," he said.
"We are sure there will be no recession this year or into the first two months of 2017, but beyond that there are worrying signs. The deterioration of our leading labour market index is very clear," he said.
Mr Achuthan thinks it is still possible that US growth will pick up again for another short burst - lifted by a global industrial rebound of sorts - before the storm finally hits.

David Fuller's view
Well, we have certainly been warned.  AEP even treats us to a sobering quote from Dante Alighieri: “lasciate ogni speranza, voi ch’entrate’” (abandon all hope, you who enter here)
This item continues in the Subscriber’s Area, where a PDF of AEP's article is posted..

May in Brussels to Tell EU There Is No Turning Back From Brexit
Here is the opening of this topical article from Bloomberg:

Theresa May will tell her fellow European Union leaders that the Brexit vote must be honored and there will be no second referendum as a way to stop the U.K. leaving the bloc.
Arriving at her first EU summit on Thursday, the prime minister said Britain is on a one-way track out of the EU after some leaders suggested Brexit might not happen.

“I’m here with a very clear message, the U.K.’s leaving the EU,” May told reporters in Brussels. “But we will continue to play a full role until we do and will be a strong and dependable partner after we leave.”
May’s comments to her fellow leaders, which she is planning to deliver during a working dinner during the two-day summit, will be her clearest signal yet that she isn’t seeking a close relationship between the U.K. and the EU after Brexit, a British official said.
While German Chancellor Angela Merkel is among those who have said the bloc must face reality on Brexit, the starkness of May’s message will quash any lingering hopes of a reversal and risks fanning speculation that the government wants a clean break from the single market.
EU President Donald Tusk said last week that Britain could ultimately decide to stay in the EU because the 28-nation bloc wouldn’t offer May any alternative deal to a so-called “hard Brexit,” which would probably mean the loss of tariff-free trading rights.

David Fuller's view
Theresa May will have to be very candid.  She is sensibly doing this by telling the EU that the Referendum decision was final.  The follow-up should be that the UK will be leaving the EU without delay.  This is crucial because she will be at a disadvantage if trying to negotiate within the farrago of the EU’s delaying tactics, so obviously intended to prevent countries from leaving.
Conversely, she will have the upper hand in negotiations once the UK is out of the EU.  Everyone knows that the EU will be weaker if it does not have close ties with an independent UK.     

WikiHillary for President
My thanks to a subscriber for this informative column by Thomas L Friedman for the New York Times.  Here is the opening:
Thank God for WikiLeaks.
I confess, I was starting to wonder about what the real Hillary Clinton — the one you never get to see behind closed doors — really stood for. But now that, thanks to WikiLeaks, I’ve had a chance to peruse her speeches to Goldman Sachs and other banks, I am more convinced than ever she can be the president America needs today.
Seriously, those speeches are great! They show someone with a vision, a pragmatic approach to getting things done and a healthy instinct for balancing the need to strengthen our social safety nets with unleashing America’s business class to create the growth required to sustain social programs.
So thank you, Vladimir Putin, for revealing how Hillary really hopes to govern. I just wish more of that Hillary were campaigning right now and building a mandate for what she really believes.
WikiHillary? I’m with her.
Why? Let’s start with what WikiLeaks says she said at Brazil’s Banco Itaú event in May 2013: “I think we have to have a concerted plan to increase trade ... and we have to resist protectionism, other kinds of barriers to market access and to trade.”
She also said, “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.”
That’s music to my ears. A hemisphere where nations are trading with one another, and where more people can collaborate and interact for work, study, tourism and commerce, is a region that is likely to be growing more prosperous with fewer conflicts, especially if more of that growth is based on clean energy.
Compare our hemisphere, or the European Union, or the Asian trading nations with, say, the Middle East — where the flow of trade, tourism, knowledge and labor among nations has long been restricted — and the case for Hillary’s vision becomes obvious.
The way Bernie Sanders and Donald Trump have made trade and globalization dirty words is ridiculous. Globalization and trade have helped to bring more people out of poverty in the last 50 years than at any other time in history.

David Fuller's view
Thomas Friedman makes a good point at a time when there appears to be less enthusiasm for either candidate than at any previous US Presidential Election which I can recall, staring with Eisenhower versus Stevenson in 1956.

Australian Seaweed Found to Eliminate More Than 99% of Cow Burp Methane
Here is the opening of this interesting story from New Atlas:

Australia's CSIRO has identified a strain of seaweed that can reduce bovine methane emissions by more than 99 percent if added to cow feed in small amounts. This could be huge for climate change, but it also has significant benefits for farmers.
I thought this was a cow fart story; it's not. Sadly, according to Australia's CSIRO, the vast majority of bovine methane – some 90 percent of all emissions – comes from burps, not from backdraft.
But whichever end it comes from, methane represents a problem. In climate change terms, methane is a greenhouse gas 28 times more powerful than carbon dioxide. In agricultural terms, when cows burp out methane, as much as 15 percent of the energy in their feedstock is being thrown away instead of converted into meat.
For more than a decade, researchers have been aware that adding seaweed to a cow's diet made a significant reduction to that methane release, leading to cleaner agriculture and better meat production. Early tests found seaweed could cut back methane release by as much as 20 percent.
But recently, Australian scientists have been re-running tests with a variety of different species of seaweed to find out which is the most effective, and now, a very clear winner has emerged.

David Fuller's view
This has the potential to be a very important discovery.  Clearly the challenge of growing and harvesting many thousands of hectares of a particular type of seaweed known as Asparagopsis taxiformis sounds daunting, controversial and expensive.  Nevertheless, assuming biochemists can identify and recreate the key ingredients for methane reduction, they should be able to reproduce them much more efficiently.

Fri, 21 Oct 2016 08:20:00 +0100
Beaufort Securities Breakfast Alert: British American Tobacco Markets

The FTSE-100 finished yesterday's session 0.07% higher at 7,026.90, whilst the FTSE AIM All-Share index closed 0.07% better-off at 827.12. In continental Europe, the CAC 40 index ended the day 0.44% higher at 4,540 and the DAX closed 0.52% up at 10,701.
Wall Street
In New York overnight, the Dow Jones declined 0.22% to 18,162.35, the S&P 500 dropped 0.14% to 2,141.34 and the Nasdaq shed 0.09% to 5,241.83.
In Asian markets this morning, the Nikkei 225 had fallen 0.02% to 17,232.73, while the Hang Seng was up 0.3% at 23,374.4.
In early trade today, WTI crude was down 0.4% to $50.43/bbl and Brent was down 0.27% to $51.24.

British American Tobacco in $47bn Reynolds merger deal

British American Tobacco (BATS) is to merge with its US partner Reynolds in a deal valued at $47bn (£38bn). BAT wants to buy the 57.8% of Reynolds it does not already own. The merger would bring together some of the tobacco industry's best-known brands, including Rothmans, Dunhill and Camel cigarettes. BAT has been a shareholder in Reynolds since 2004 and the company said the merger was "the logical progression in our relationship"


Fri, 21 Oct 2016 08:18:00 +0100
Mario makes markets mull FTSE 100 Index called to open flat at 7025, but still in a mid-September uptrend that bodes well for a rally back to early Oct 7130 highs. After 7000 proved supportive yesterday, Bulls look for a bettering of 7050 as confirmation of progress whilst Bears likely need to see 7000 give way (possibly even 6950) before getting hopeful of a bigger sell-off. Watch levels: Bullish 7050, Bearish 6995.

A flat opening call for the last session of the week comes after losses in the US and Asia as investors digest a host of risk events having passed under the bridge (ECB policy update, China GDP, US election debate) and some weak earnings. Lower commodity prices on account of a stronger USD (derived from a weak Euro) are also weighing on risk appetite.

Although ECB President Mario Draghi may have kept shtum about any QE extension, he has pretty much teed markets up for a December announcement on extension/tweaking once working committees have had time enough to evaluate and deliver their verdict. December also happens to be when markets are pricing in another Fed rate hike, so a busy monetary policy year-end is in store.

Japan’s Nikkei is in the red in spite of a weaker Yen as lower oil prices weigh on Energy and Nintendo got a negative reception for its latest hybrid console. A Typhoon has kept Hong Kong’s Hang Seng closed while China is posting losses after its MNI Business Indicator fell to summer lows and despite an acceleration in house price growth. Australia’s ASX weighed by China business data and a stronger USD hurting commodity prices.

US equities closed Thursday’s trading session lower, Oil prices coming off highs in a 2% slide and a shaky performance from the Telecos sector leading markets. Solid macro data caused the Dollar to strengthen against its peers (helped by Euro weakness post-ECB press conference) which led to Oil’s decline. Verizon drove sector losses with a fall in revenues worrying investors, while after-hours releases from Microsoft and PayPal both impressed, the former’s share price making fresh all-time-highs.

Crude oil prices suffer as the dollar strengthens during Asian trading, however, both US and Brent remain above the $50 per barrel mark. A 2% slide attributed to dollar weakness and Russia’s largest crude producer Rosneft stating a production capacity increase is possible, did not see prices break the $50 barrier, suggesting investors still have faith that an OPEC production cut will address supply fears.

Gold also declined on the back of the strengthened greenback, falling back into the tight $1250-$1265 trading channel it has occupied for the best part of the last two weeks. This comes despite the ECB’s decision to leave interest rates unchanged, normally a precursor for safe-haven assets such as Gold to rally as investors flock to alternative investments.

In focus this morning will be UK Public Finances for the impact on a Pound Sterling buffeted in FX markets by rising and falling hopes and fears related to a soft or hard Brexit; as well as monetary policy intentions at home, on the continent and of course stateside. Forecasts are for an improvement from August’s 9-month borrowing high, back closer to the average over the last 12 months.

Fri, 21 Oct 2016 08:17:00 +0100
Oil price, Hurricane Energy, President Energy-Catch up-Aminex-Range-Circle Oil- And finally... Oil price
I return from Norway, where little seems to phase them, to find a modest rise in the oil price that looks as if it is going to stay, at least for the time being. There are still plenty of bears around but the people that count appear to think that they can influence on the upside. This was perfectly described by the Saudi Oil Minister when speaking at the oil and money conference in London when he said that he had the distinct impression that the market was clearly balancing or did he say, nearly balancing? Must have been the former as he went on to say that ‘the oil market is on the brink of a turnaround’ and thanks for the $17.5bn from the bond raise…
The other change has been that the inventory stats keep defying the wit of the analysts that are paid vast sums to guess the number each week, this  time they again got the sign wrong, expecting a build of 2.7m barrels the EIA reported a draw of 5.2m which also rallied the market. Watch out for WTI expiry tonight after which we are in the December contract.
Hurricane Energy – Stop Press…
Hurricane has just announced a £70m placing and up to £4.4m open offer to shareholders. This will be by issuing of 205.9m shares at 34p, an 11% discount to VWAP. Kerogen and Crystal Amber are holding their corner by the looks of it taking 93m shares but K won’t subscribe for Open Offer shares. This looks like a proper raise for a company with a big discovery, well oversubscribed with a number of new institutions on board aiming to kick in with the Lancaster EPS and other drilling. That looks like being on Lincoln and maybe Warwick or similar and will take advantage of low industry costs, I note that the current rig, the Transocean Spitsbergen will be continued to be used which mustn’t be underestimated.  The farm-out can be restarted at some stage with HUR in a very strong position as the FID on Lancaster should be 1H 2017 with first oil 1H 2019. Much more to follow after a chat with the company but yet again Dr Trice and his team have delivered the goods for the shareholders.
President Energy
Another Argentina update from President today where they seem to be having more than their fair share of downtime. The first well in the latest coiled tubing programme suffered from a leak in the tubing ironically and ‘provided valuable information’, as it does but only a .limited amount of oil to surface. On the DP 1002 S/T drilling remains suspended whilst investigations continue but the company points out that it was mechanical failures which wont affect the long term drilling potential.
Catch up
Aminex has announced that on Ntorya-2 appraisal well the rig is being mobilised and will spud in the last quarter.
And Range Resources quarterly report confirmed all the activities that had been announced already. Key here is that the company is concentrating on focusing on the waterflood projects and that Morne Diablo will achieve production in 4Q 2016 and Beach Marcelle in 1Q 2017. The last remaining 2 development wells will drill in 4Q of this year.
And as if it needed any more hassle, Circle Oil has received news from Circle Link that it is calling in its $20m loan by the 15th November as it believes that a default has occurred in the CLA, join the queue is probably the best advice…
And finally…
The Noisy Neighbours went to Barcelona in the Champions League last night but it wasnt pretty, unless you are a Barca fan that is. 4-0 on the night with all sorts of action on the pitch. The Gooners won as easy as could be, it might be their year…Tonight the Saints are at Inter while Fenerbahçe travel to the Theatre of Dreams.
And the first test match of the series has started in Bangladesh where England played three spinners and Joe Root. Batting first England didnt find it easy and at the close were 258-7 almost a good day.

Thu, 20 Oct 2016 15:30:00 +0100
Today's Market View - BlueRock Diamonds, Caledonia Mining, Georgian Mining Corporation, IronRidge Resources Thu, 20 Oct 2016 12:21:00 +0100 Apple supplier Laird downgraded by JP Morgan Cazenove Thu, 20 Oct 2016 10:38:00 +0100 In the news: Hummingbird Resources & Weatherly International FROM THE BROKING DESK

Just last week Hummingbird Resources announced the start of civil works at its Yanfolila Gold Project in Mali. Now there’s some further news on progress. Land compensation has been completed, long-lead items (eg, crushing circuit equipment and agitators) have been ordered and concrete has started to pour. Dan Betts and his team are not hanging about. Progress is shown in the picture below, and if you require video evidence please click here.

The company remains on schedule and on budget for first gold pour by the end of next year. The first full year of operation should see 132,000oz of gold produced, with very attractive projected life-of-mine AISC of just US$695/oz gold produced, with very attractive projected life-of-mine AISC of just US$695/oz (at a gold price of US$1,250/oz). That puts Yanfolila’s costs firmly in the lowest quartile of African producers



LON:WTI | 0.3p | US$3.6m | Speculative Buy | TP : 1.2p
Quarterly Operations and Production Update
Weatherly International has announced its update for the quarter ended 30 September 2016. Production came to 3,641t of copper cathode, 14% below nameplate, with the drop off in run-rate being attributed to increased levels of groundwater inflow relative to the range accounted for in the feasibility study. As a result, costs for the quarter rose to US$5,073/t; they are expected to fall back to the US$4,100-4,200/t range in FY17, when the company expects production to return to design levels of 17,000tpa.
COMMENT: We understand that the company has upgraded the in-pit groundwater management systems and is looking to finish a number of de-watering boreholes in and around the pit. Mining has since resumed; this could lead to production reaching nameplate levels as early as the end of the current quarter.
Despite this slight setback over the last two quarters, it is worth highlighting Tschudi’s overall strong operating performance previous to the water issues of the last two quarters, with the average C1 cost figure for the nine-month period of US$4,199/t having surpassed the guidance range of US$4,250-4,350/t. The company has guided towards competitive LT C1 costs for Tschudi of US$3,865/t; meanwhile, the previous March 2016 quarter beat FY16 cost guidance, with 4,442t of copper cathode produced at just US$3,429/t.

Thu, 20 Oct 2016 10:32:00 +0100
Northland Capital Partners View on the City - Churchill Mining, Thor Mining, Botswana Diamonds Churchill Mining (LON:CHL) – SPECULATIVE BUY: Full year results
Market Cap: £42m; Current Price: 28.6p

LBT widens and further details on ICSID proceedings
  LBT increased to US$3.2m in FY16 from US$2.8m in FY15, largely due to an increase in administrative expenses.
  Net cash totalled US$1m in FY16 compared to US$1.2m in FY15.
  In its letter of 9 September 2016 the ICSID Tribunal referred to the 2014 ICSID case of Minnotte v. Poland and invited the parties to comment on this decision and provide views on; (i) the admissibility in international law of claims tainted by fraud or forgery where the alleged perpetrator is a third party; (ii) the lack of due care or negligence of the investor to investigate the factual circumstances surrounding the making of an investment; and (iii) the deliberate "closing of eyes" to indications of serious misconduct or crime, or an unreasonable failure to perceive such indications. The Parties were asked to provide submissions based only on the evidence currently on the record and limited to 15 pages in response to the above questions by 23 September 2016.
  Churchill believes that the fundamental principle of international law that underlies paragraph 163 of the Minnotte decision is good faith. This explains why the Minnotte tribunal held that an investor's failure to make enquiries that might (or might not) have detected third-party wrongdoing does not automatically deprive that investor of treaty protection as an investor can fail to make such inquiries whilst still acting in good faith. This also explains why the Minnotte tribunal held that, if the proven facts clearly show that the investor did more than fail to make such inquiries, and instead deliberately closed its eyes to serious third-party criminal wrongdoing, that may vitiate the investor's claim because it may mean the investor was not acting in good faith.
  Churchill also believes paragraph 163 of the Minnotte decision cannot however be viewed in isolation. Paragraphs 129 to 140 explain the basis on which the Minnotte tribunal reached the above conclusions.
  In response to the Tribunal's first question, Churchill believes that in circumstances where jurisdiction has previously been determined (Churchill's case) a claim can only be found to be inadmissible on some ground other than jurisdiction or the ultimate merits of the case. Accordingly the parameters for the Tribunal to consider in regards Indonesia's objection to admissibility are (i) if any ground of Indonesia's objection goes to jurisdiction, that ground cannot form a basis for a finding of inadmissibility as jurisdiction has already been determined and (ii) if any ground of Indonesia's objection goes to the ultimate merits of Churchill's claims that ground cannot form a basis for a finding of inadmissibility either.
  In response to the Tribunal's second question, in looking to determine where the level of due diligence should sit in relation to any investment, Churchill believes that the appropriate commercial benchmark is what a reasonably prudent investor would do in the circumstances. Due diligence is also about reasonably foreseeable risks at the time an investment is made. The record shows firstly that Churchill conducted extensive due diligence (well in excess of that conducted by the investors in Minnotte) including multiple legal reviews on their investments prior to making any investment and secondly that the risk that signatures on mining licences could be forged was not foreseeable throughout the process of applying for and obtaining the Ridlatama licences. Although forensic document authenticity testing may be on an Indonesia due diligence checklist today, there is nothing to suggest that this level of due diligence was required at the time Churchill made its investment in East Kutai.
  In response to the Tribunal's third question, Churchill believes that, whilst not defined in Minnotte, the deliberate closing of eyes might be akin to the concept of wilful blindness as it is understood in some national legal systems. For wilful blindness to be established, a very high legal threshold must be met and proven. Firstly it must be proven that the individual person subjectively believes that there is a high probability that a fact exists and secondly it must be proven that the individual concerned took deliberate actions to avoid learning that fact. The record shows that far from closing its eyes to indications of serious misconduct or taking deliberate actions to avoid learning of such indications, Churchill actively pursued all challenges to its mining licences by instigating such actions as police investigations and fully supporting the investigations being undertaken by statutory government bodies such as BAWASDA.
  Both parties filed their respective reply submission as requested. In its reply submissions, Churchill argued that Indonesia's Forgery Dismissal Application has devolved to a point where it can no longer credibly be labelled an "admissibility" challenge (as it originally was). Churchill argued that Indonesia's motion is, instead, a broad-ranging objection comprising elements of jurisdiction (which have already been decided), liability and quantum (which are for later stages), underpinned by baseless allegations of forgery, fraud, and corruption. Churchill also addressed the many other legal authorities that Indonesia relied upon in its submission.
  Once the Tribunal has considered the Parties' further submissions and replies, the Tribunal will proceed to finalise and issue its decision in respect of Indonesia's Forgery Dismissal Application.

Thor Mining (LON:THR) – CORP: Molyhil update
Market Cap: £1.9m; Current Price: 0.025p

From yesterday: Assay results confirm XRF analysis
  Assay results reinforce the prospectivity of the Cattle Track, Gap Track and Think Big targets following the completion of the RAB drill programme at the Molyhil Tungsten Project, located in Australiana.
  The Company identified both prospective geology and geochemical anomalies during the programme.
  Thor plans additional drilling on each of the three targets in due course.
  At Thor’s Pilot Mountain Project, located in the US, an efficient route to increase the in-situ resource at the Project has been identified.
NORTHLAND CAPITAL PARTNERS VIEW: Thor Mining’s assay results have confirmed what the XRF analysis indicated, demonstrating the presence of elevated tungsten at two to three times background levels in the vicinity of the Cattle track target and along the southern margin of the Gap Track target. At Gap Track target, a larger spread of data was collected and an elevated tungsten trend appears to be related to the elevated magnetic response. These results can be considered particularly promising because of the low chemical reactivity and high physical density of tungsten means it does not disperse in the soil and weathered rock profile like more reactive metals such as copper, so the presence of tungsten is positive.

Botswana Diamonds (LON:BOD) – SPECULATIVE BUY: PL135 update
Market Cap: £1.4m; Current Price: 4.8p

Drilling commences
  The Botswana Diamonds and Alrosa joint venture has commenced the first phase of a four hole drill programme has commenced on PL135, in the Gope Region of Botswana.
  Results are expected in c. twelve weeks.
NORTHLAND CAPITAL PARTNERS VIEW: Prospecting licences 135 is considered a high priority target for new kimberlites by Botswana Diamonds and Alrosa based on geochemical and geophysical anomalies, and has not previously been drilled.

Thu, 20 Oct 2016 09:25:00 +0100
Breakfast News AIM Breakfast: Challenger Acquisitions, Milestone Group, Water Intelligence, Action Hotels, IXICO, Aggregated Micro, REDX Pharma, Quantum Pharma, Solid State What’s cooking in the IPO kitchen?
Misys— Press reports that the IPO valuation is to be cut by £1bn against an expected £5bn
TI Van Elle—The geotechnical contractor to the UK construction market is hoping to come to AIM later this month
Ascot Lloyd— The UK IFA is also hoping to join AIM later this month. Ascot Lloyd's strategy is to grow through a combination of organic growth and further targeted acquisitions.

Breakfast buffet

Challenger Acquisitions* (LON:CHAL) 16.88p £3.66m
The main market listed leader in the Giant Observation Wheel industry has updated on construction of the New York Wheel Project. $300m has been spent on the project so far. The majority of the parking garage is now operational and the terminal building is expected to be structurally complete in December. The legs for the wheel have arrived in the South Brooklyn Marine Terminal. Each of the four legs weighs 550 tonnes, measuring 18 feet wide and 275 feet tall. The grand opening is April 2018 with an estimated 3.5 million annual visitors expected.

Milestone Group* (LON:MSG) 1.32p £10.39m
The provider of digital media and technology solutions has raised £1.385m at 1.5p, a 13.6% premium to yesterday’s closing mid price. The proceeds of the Placing will be used for marketing of the newly launched Alchemy e-media platform, recruiting key staff, and additional development of the Passion Project platform.

Water Intelligence (LON:WATR) 81.5p £8.65m
The provider of non-invasive leak detection and remediation solutions, is pleased to announce a partnership as an industrial affiliate  of the Institute for Molecular Engineering at the University of Chicago (IME).  Water Intelligence and IME plan to collaborate on the commercialisation of technology for potable and non-potable water applications.  FYDec16E revenues of £7.48m and EPS of 6.26p. PE13x.

Action Hotels (LON:AHCG) 52p £76.77m
The owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia, is pleased to announce that ibis Styles Brisbane Elizabeth Street has won a "Best Economy Hotel" award at the 2016 Hotel Management Awards. HM Magazine described Ibis Styles Brisbane as a "prime example of how new-build hotels can thrive and tap into the modern day economy traveller".  FYDec16E revenues of £52.3m and PBT of £0.98m.

IXICO (LON:IXI) 23.5p £6.2m
The brain health company, has signed a new contract worth US$1.2m with a top 15 global pharmaceutical company for advanced imaging clinical trial services in a rare neurodegenerative disease, progressive supranuclear palsy ("PSP").   The project is for a Phase IIa clinical study of patients in the early stages of PSP to develop a first-in-class therapy that could prevent further degeneration and will utilise IXICO's TrialTracker™ and Assessa® digital platforms to collect and analyse MRI data from specialist imaging centres across Europe & North America.

Aggregated Micro (LON:AMPH) 68p £21.2m
The specialist in the sale of wood fuels and the development of distributed energy projects, announces that it has secured further funding for the financing of its biomass boiler portfolio and future grid balancing projects from Aggregated Micro Power Infrastructure 2 plc ("AMPIL2"), a newly launched vehicle which has raised an initial £10.17 million in the form of 8% loan notes, listed on the Cayman Islands Stock Exchange. There are no forecasts in the market.

REDX Pharma (LON:REDX) 47.75p £44.74m
The drug development company, has identified a drug development candidate for its reversible Bruton's tyrosine kinase ("BTK") inhibitor program. The compound, named RXC005, has the potential to treat the majority of patients suffering from chronic lymphocytic leukaemia ("CLL"), including those who become resistant to the increasingly used treatment ibrutinib. The Company will now progress studies to prepare the RXC005 program for first-in-human clinical trials. These trials are currently expected to commence early 2018.

Quantum Pharma (LON:QP) 34p £42.5m
The service-led, niche pharmaceutical developer, manufacturer  and supplier has announced a proposed placing of £15m at 34p, a small premium of 0.7%. The Placing Shares are being offered by way of an accelerated bookbuild. The Board believes that the Net Proceeds of the Placing will reduce the Group's net debt to a more appropriate level for a business of Quantum's type and size. Net debt was £23.8m at 31 July. FYJan17E revenues £83.6m and PBT of £6.9m, 1.47p dividend.

Solid State (LON:SOLI) 440p £37.2m
HYSep16 trading update  from the  supplier of specialist industrial/ ruggedised computers, electronic components, secure communications systems and battery power solutions to the electronics market. Expects H1 ahead of the equivalent period in 2015 and consistent with market expectations for FYMar17 and a strong debt free balance sheet.  The Group had an order backlog at 30 September 2016 of £14.8m, comprising £12.7m of underlying revenue and £2.1m of Creasefield revenue, acquired in June 2016. FYMar17E rev £44.1m. EPS 34.45. 12.7xPE.

Thu, 20 Oct 2016 09:16:00 +0100
In the papers: EDF, Morgan Stanley, Travis Perkins The Times
EDF ordered to switch off five reactors: The company building Britain’s first nuclear power station for 21 years has been ordered to shut down five more reactors in France for emergency tests.
Britain’s tax system is ‘too complex and stops growth’: The “punishingly complex” tax system is holding back private companies, according to the Institute of Directors and a group of entrepreneurs, investors and accountants.
French tourism suffers after terror attacks: Hotels, restaurants and retailers in Paris and the Riviera are facing a “disastrous” drop in income as a consequence of tourists staying away for fear of terrorism and ordinary crime, industry Bosses have warned.
Morgan Stanley jumps on banks’ profit bandwagon: Profits at Morgan Stanley rose by more than 50% in the third quarter, boosted by a near-doubling in revenues at its trading business.
Dennis fights to stay behind the wheel at McLaren: Ron Dennis is fighting to hold on to his job in charge of McLaren.
Sales revenue falls by third at estate agent: Property sales at Foxtons have fallen by more than a third in three months.
Saving euro clearing is ‘not priority’: Safeguarding the business of processing trillions of euro-denominated transactions through London is not a key part of the negotiations to leave the European Union, according to a Treasury minister.
May opposes higher tariffs against China steel dumping: Theresa May is opposing tougher European protection against Chinese steel imports, dashing hopes in Brussels of a shift in position.
New Barbies leave Mattel sitting pretty: Barbie was the star of the show for Mattel in the third quarter, with a 16% rise in worldwide sales.
The Independent
Cannabis drug developer GW Pharma cancels London stock market listing: A U.K. drug company specialising in cannabis-based medicines has ditched its stock market listing in London in favour of trading exclusively on New York’s Nasdaq, but claims it will keep its headquarters in Cambridge.
Jobs market holds up in August: The jobs market held up well in August and September, showing few adverse effects from the June Brexit referendum result.
Banks consider ‘moving London staff to Luxembourg to get access to EU’: The Head of financial development for Luxembourg said a string of overseas banks and fund managers had explored moving London staff to the tiny country since the Brexit vote.
China's economy grows 6.7% but experts warn of 'unsustainable' bubble: China’s economic growth remained stable in the third quarter, all but ensuring the government’s full-year growth target is met and opening a window for policy makers to deliver on vows to rein in excessive credit and surging property prices.
Travis Perkins to close 30 branches and axe up to 600 jobs: Travis Perkins, Britain’s biggest builders' merchant and the owner of the DIY chain Wickes, has announced plans to shut stores amid ‘uncertain trading’ in a move impacting up to 600 jobs across the group.
The Daily Telegraph
Big businesses warn U.K. will be the loser from government intervention on foreign takeovers: Top businesses have spoken out about the damage that a heavy-handed government clampdown on foreign takeovers is likely to inflict on the U.K.’s interests at home and overseas.
Housebuilder Barratt's London Boss suspended after arrests linked to the awarding of contracts: A senior Executive at Barratt Developments has been suspended after being arrested on suspicion of bribery over possible misconduct in awarding contracts for new housing developments.
Google in talks with Disney, Fox and CBS to launch online TV channel: Google has signed a deal with CBS to provide channels for its planned online TV service, according to reports, and is in “advanced talks” with Disney and Fox to broadcast their shows too.
Handelsbanken shrugs off Brexit to post rising profits: Handelsbanken, the Swedish lender that is growing quickly in the U.K., has boosted profits, lending and deposits in Britain, shrugging off the uncertainty caused by the Brexit vote.
Eurostar traffic falls 10% on terror fears but weak sterling boosts Channel Tunnel operator: Demand for train travel to the Continent has dropped this year as terror attacks in Brussels and Paris spooked holidaymakers, the latest figures from Eurotunnel suggest.
The Questor Column:
Park cash in this Aim-listed storage firm to protect it from inheritance tax: And while Aim has something of a reputation as the Wild West of the stock market, its members include some well-established businesses that pay reliable dividends. One example is Lok’nStore Group, which offers “self-storage” to individuals and businesses that don’t have enough space for all their possessions. One fund manager who has a large holding in Lok’nStore is Mark Slater, the son of the late Jim Slater, the financier and former Telegraph share tipper. Mr Slater pointed out that the use of self-storage was routine in America and said he expected the same to happen here in time. Questor pays special attention to fund managers who have “skin in the game” and Mr Slater certainly qualifies, with a £4.5 million holding in the Slater Income Fund. Questor says “Hold”.
The Guardian
Philip Hammond attempts to ease concerns over hard Brexit: Philip Hammond has sought to allay fears that the economy will be sacrificed in Brexit negotiations, with support for foreign high-skilled workers, the expectation of a favourable deal for the City and a staunch defence of the Bank of England’s independence.
Saudi Arabia raises $17.5 billion from bonds to repair damage to public finances: Saudi Arabia has raised $17.5 billion (£14 billion) from its first foray into the global bond markets as it seeks to repair the damage to its public finances caused by the collapse in the oil price since 2014.
Bank of England rebuts May and Hague's attacks on quantitative easing: The Bank of England has hit back at attacks by Theresa May and Lord William Hague on its money creation programme by pointing to the beneficial impact on the economy of the quantitative easing (QE) announced in its emergency post-Brexit stimulus.
TV advertising market set for worst year since 2009 amid Brexit fears: Broadcasters are facing the prospect of the worst year for TV advertising since the recession of 2009, as uncertainty over the likelihood of a hard Brexit has seen jittery companies strip more than £400 million from marketing budgets.
Daily Mail
Technology firm Laird loses almost half of its value after becoming latest victim of global slowdown in smartphone sales: Technology firm Laird lost almost half of its value when it became the latest victim of the global slowdown in smartphone sales.
Demand for black clothes in Thailand to mourn death of country’s King causes rush in Tesco’s South Asian outlets: Demand for black clothes in Thailand to mourn the death of the country’s King has caused a rush in Tesco’s South Asian outlets.
Country-wide boycott of Reckitt Benckiser products in South Korea leads chemicals firm to post weakest sales growth in five years: A country-wide boycott of Reckitt Benckiser products in South Korea led the chemicals firm to post its weakest sales growth in five years.
Drivers will be able to buy a car simply by signing up for smartphone when Volvo's Chinese owners launch new vehicle: Drivers will be able to buy a car as simply as signing up for a smartphone when a new vehicle is launched by the Chinese owners of Volvo.
Restaurant king Sir Terence Conran fights off allegations that he deprived former business partner of £3 million payday: Restaurant king Sir Terence Conran has fought off allegations that he deprived a former business partner of a £3 million payday.
Daily Express
European Commission could reject Italy's budget plans in shock and unprecedented move: Italy's spending plans for next year may be slapped down in an extraordinary and extreme move by the European Commission (EC).
Are you getting a refund? 750,000 mortgage customers set for compensation: Thousands of home owners could be in line for hundreds of pounds in compensation after lenders wrongly hiked mortgage bills. More than 750,000 people have had arrears lumped in with their monthly mortgage payments, found the industry watchdog.
Government axes plans for pensioners to sell retirement income: Pensioners hoping to sell poor-value retirement income next year have been left disappointed after the Government scrapped its plans for a secondary annuity market.
City beasts lose rag with Government over Brexit ineptitude: Top bankers and key City figures have accused the Government's Brexit officials of ignoring Britain's crucial financial sector amid preparations to leave the European Union (EU).
Britain's employment rate at record high following Brexit vote: Britain's employment rate remains at a record high, as the number of people in work increased in the weeks following Britain's vote to leave the European Union (EU), official data revealed.
The Scottish Herald
Law and finance firms face big risk of collapse: Nearly one-third of professional services firms in Scotland are still considered to be at a heightened risk of insolvency, underlining fears expressed ahead of the EU referendum in June that a Brexit vote would have a damaging effect on the sector.
Algy Cluff hails exciting North Sea prospects: North Sea-focused Cluff Natural Resources has hailed a big increase in estimates of the size of the possible resource base on its licences which it said underlined the potential to make big finds in the area.
Aberdeen LatAm IT in return to growth: Sterling’s weakness, a mild recovery in commodity prices and the growing strength of Latin American markets helped the Aberdeen Latin American Income fund make a positive return in the last financial year.
Online peer-to-peer platform LendingCrowd offers joining bonus to attract new investors: Peer-to-peer platform LendingCrowd is offering new investors a 2.5% joining bonus as it seeks to increase the pot of cash it has available to lend to small and medium sized enterprises.
Property developer pledges to create 2,000 Scottish jobs over 10 sites: London & Scottish Developments has pledged to deliver an estimated 2,000 new jobs across ten retail sites it acquired from Tesco last year, by leasing space to the likes of Aldi, Lidl, Home Bargains and Marks & Spencer.
Clark upbeat after landing £25 million of new contract wins: Paisley-based Clark Contracts has reported contract wins worth £25 million in the last six months.
Rearo seals £1-million-bathroom deal: Rearo, a Glasgow-based manufacturer of bathroom and kitchen surfaces, has secured a £1 million distribution deal with Meyer Timber for its bathroom wall panel product, Selkie. The range will be distributed from Meyer Timber’s depots in a deal that Norrie McLeod from Rearo, said was an excellent opportunity to increase Selkie’s exposure across the U.K.
McGill’s lifts profits in tough year: Greenock’s McGill’s Buses defied tough trading conditions to hike profits by 12.5% to £3.6 million last year.
The Scotsman
North Sea industry seeks to tap into ‘small pools’: The regulator for the North Sea industry has highlighted the “very significant” potential of more than three billion barrels of oil waiting to be tapped in U.K. waters.
Travel booking tech firm checks in with £5.3 million funding: An East Kilbride-based provider of booking systems for the travel sector is looking to ramp up its overseas presence after securing a £5.3 million investment.
Food allergy app sees appetite for growth in Scotland: An app focused on food allergies is to officially launch in Scotland next year, amid an expected strong appetite for the service.
East Lothian energy supplier gearing up for launch: An East Lothian energy supplier that is promising to share three-quarters of its profits with customers is preparing to launch next year after beating its fundraising target.
Crisps maker Mackie’s grows exports with Russia deal: Mackie’s at Taypack, the Perthshire crisps maker, has landed a deal to supply Russian supermarket chain AzbU.K.a Vkusa.
Property group seals seven-figure deal for Dundee halls: Dundee property and investment firm Carling Property Group has acquired Alloway Halls in the city from Abertay University in a seven-figure deal.
City A.M.
Chemical Industries Association urges tariff-free Single Market access to keep investment rolling in as part of Brexit manifesto: The U.K.'s chemical industry has urged the government to negotiate tariff-free access to the Single Market in a Brexit manifesto published.
London construction slowing after the Brexit vote: Construction in London is undergoing a slowdown following the Brexit vote, according to chartered surveyors.
Private equity firms backed to capitalise on Brexit opportunities: Private equity houses have been backed to capitalise on uncertainty over the U.K.’s Brexit vote with new investments.
BT comes under pressure from digital minister: The minister for digital policy has said the government is committed to improving competition in the U.K. broadband market as watchdog Ofcom weighs the case for breaking up BT.
Twitter fires its new head of VR... in the same week it hired him: Twitter is ploughing on into the world of virtual reality, though it faced a small setback after announcing it had fired its new head of VR (roughly 48 hours after he started his new job).
West Texas Intermediate crude price highest level in more than a year on U.S. stockpile data: Prices of the black stuff rose more than 2% after a surprise fall in U.S. crude inventories.

Thu, 20 Oct 2016 08:42:00 +0100
Market Briefing: US markets closed in the green yesterday, led by gains in financials sector shares and crude oil companies UK Market Snapshot
UK markets ended firmer yesterday, registering their gains for the second session in a row, buoyed by an advance in energy sector shares and retailers. Burberry Group climbed 4.2%, rebounding from its loss in the prior session. Other retail firms, Next, Wm Morrison Supermarkets and Tesco advanced 2.7%, 2.9% and 3.1%, respectively. Foxtons Group gained 2.9%, as it expects its revenue for the full year to be in line with market estimates. Oil majors, BP and Royal Dutch Shell rose 0.9% and 1.0%, respectively, as crude oil prices increased. On the contrary, Laird sank 48.7%, after the supplier to Apple reduced its earnings outlook. Travis Perkins tumbled 4.4%, after it issued a profit warning amid slack demand. Reckitt Benckiser Group lost 2.6%, following dismal sales for the third quarter. The FTSE 100 added 0.3%, to close at 7,021.9, while the FTSE 250 rose 0.3%, to settle at 18,040.5.
US Market Snapshot
US markets closed in the green yesterday, led by gains in financials sector shares and crude oil companies. Comerica advanced 3.4%, after its profit for the third quarter topped market expectations. Morgan Stanley added 1.9%, as it posted better than expected profit for the third quarter, driven by surge in trading revenue. Yahoo! edged up 2.5%, after it reported upbeat earnings for the third quarter. On the losing side, Cree tanked 11.1%, as it posted a decline in its revenue for the first quarter of fiscal 2017. SUPERVALU plummeted 8.8%, after it reported weaker than expected revenue for the second quarter. Intel plunged 5.9%, as it provided a disappointing sales outlook for the fourth quarter. The S&P 500 rose 0.2%, to settle at 2,144.3. The DJIA added 0.2%, to settle at 18,202.6, while the NASDAQ advanced marginally, to close at 5,246.4.
Europe Market Snapshot
Other European markets finished higher yesterday, amid upbeat earnings releases and as rising crude oil prices led to a jump in energy producers. Statoil, Lundin Petroleum and Repsol added 1.2%, 1.4% and 1.5%, respectively. Zalando surged 7.2%, after it boosted its profitability forecast following an unexpected profit for the third quarter. Accor climbed 5.0%, as the hotel operator reported a rise in its sales for the third quarter. Carrefour advanced 4.7%, after its sales for the third quarter surpassed analysts’ estimates. ASML Holding gained 2.2%, as it projected higher than anticipated profit margins for the fourth quarter. Bucking the trend, Akzo Nobel slid 2.4%, following a decline in its revenue for the third quarter. The FTSEurofirst 300 index edged up 0.3%, to close at 1,355.3. Among other European markets, the German DAX Xetra 30 rose 0.1%, to close at 10,645.7, while the French CAC-40 gained 0.3%, to settle at 4,520.3.
Asia Market Snapshot
Markets in Asia are trading higher this morning. In Japan, Sharp has jumped 7.1%, extending its rally from the last session. News emerged that Foxconn, which has a majority stake in Sharp, was trying to expand into the semiconductor industry by partnering with SoftBank-owned ARM Holdings to create a chip design center in Shenzhen. Real estate stocks, Mitsubishi Estate and Sumitomo Realty & Development have advanced 4.2% and 5.5%, respectively. In Hong Kong, lenders, Bank of East Asia and Industrial and Commercial Bank of China have risen 0.8% and 1.3%, respectively. In South Korea, index majors, Samsung Electronics and LG Electronics have added 0.1% and 1.2%, respectively. The Nikkei 225 index is trading 1.0% higher at 17,174.1. The Hang Seng index is trading 0.6% up at 23,448.0, while the Kospi index is trading marginally higher at 2,041.8.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.17% or $0.09 lower at $52.58 per barrel. Yesterday, the contract climbed 1.92% or $0.99, to settle at $52.67 per barrel, after the Energy Information Administration reported that US crude oil inventories surprisingly plunged by 5.2 million barrels for the week ended 14 October 2016. Meanwhile, Saudi Arabia’s Energy Minister, Khalid Al-Falih, stated that many non-OPEC nations are willing to join the cartel in cutting production and thereby support oil prices.
At 0330GMT today, Gold futures contract is trading 0.27% or $3.40 higher at $1273.30 per ounce. Yesterday, the contract advanced 0.55% or $7.00, to settle at $1269.90 per ounce, extending its winning streak for a consecutive third session.
At 0330GMT today, the EUR is trading marginally higher against the USD at $1.0975, ahead of the European Central Bank (ECB) interest rate decision, scheduled to be released today. Moreover, the German producer price index for September, set to release in some time, will be assessed by traders. Yesterday, the EUR slid 0.05% versus the USD, to close at $1.0972. On macro front, the US housing starts unexpectedly declined in September, while building permits rose more than expected on a monthly basis in the same month.
At 0330GMT today, the GBP is trading 0.10% higher against the USD at $1.2293, ahead of UK’s retail sales data for September, slated to release in a few hours. Additionally, the US weekly initial jobless claims and Philadelphia Fed manufacturing survey for October, due to release later today, will be on investors’ radar. Yesterday, the GBP weakened 0.12% versus the USD, to close at $1.2281.
Fixed Income
In the US, long term treasury yields were mixed, after the Federal Reserve’s (Fed) Beige Book indicated that most of the districts experienced modest or moderate growth amid tight labour markets conditions and steady wage gains. Yesterday, yield on 10-year notes rose 1 basis point to 1.76%, while yield on 2-year notes fell 1 basis point to 0.81%. Meanwhile, 30-year bond yield remained steady at 2.51%.

Key Economic News
UK ILO unemployment rate remained unchanged in the June-August 2016 period

In the June-August 2016 period, the ILO unemployment rate in the UK remained unchanged at a level of 4.90%. Market anticipation was for the ILO unemployment rate to record a flat reading.
UK average earnings excluding bonus rose more than expected in the June-August 2016 period
The average earnings excluding bonus rose 2.30% on a YoY basis in the UK in the June-August 2016 period, higher than market expectations for an advance of 2.10%. In the May-July 2016 period, the average earnings excluding bonus had advanced by a revised 2.20%.
Number of unemployment benefits claimants in the UK recorded a rise in September
In the UK, number of unemployment benefits claimants climbed by 0.70 K in September, lower than market expectations of an advance of 3.20 K. Number of unemployment benefits claimants had recorded a revised gain of 7.10 K in the previous month.
UK claimant count rate remained unchanged in September
The claimant count rate remained unchanged at a level of 2.30% in September, in the UK, compared to market expectations of a fall to a level of 2.20%.
UK average earnings including bonus advanced as expected in the June-August 2016 period
In the June-August 2016 period, the average earnings including bonus registered a rise of 2.30% on an annual basis in the UK, at par with market expectations. In the May-July 2016 period, the average earnings including bonus had advanced by a revised 2.40%.
Employment in the UK climbed in the June-August 2016 period
Employment in the UK climbed by 106.00 K in the June-August 2016 period, following an advance of 174.00 K in the May-July 2016 period. Markets were expecting employment to rise 76.00 K.
Euro-zone construction output declined in August
In the Euro-zone, the seasonally adjusted construction output dropped 0.90% on a monthly basis, in August. Construction output had climbed by a revised 1.50% in the prior month.
Fed's Beige Book: US economic activity increased at a modest pace in most regions
The Fed’s latest report on regional economic conditions, known as the Beige book, indicated that most districts in the US reported modest or moderate growth amid tight labour markets and steady wage gains between late August and early October. It also stated that uncertainty in advance of the upcoming presidential election is weighing on some business sectors in the country.
US mortgage applications recorded a rise in the last week
Mortgage applications in the US rose 0.60% in the week ended 14 October 2016 on a weekly basis. In the previous week, mortgage applications had registered a drop of 6.00%.
US building permits recorded a rise in September
In September, building permits recorded a rise of 6.30%, on MoM basis, to an annual rate of 1225.00 K in the US, compared to market expectations of 1165.00 K. Building permits had recorded a revised level of 1152.00 K in the prior month.
US housing starts unexpectedly dropped in September
In September, housing starts in the US recorded an unexpected drop of 9.00%, on MoM basis, to an annual rate of 1047.00 K, lower than market expectations of 1175.00 K. Housing starts had registered a revised reading of 1150.00 K in the prior month.
BoC kept key interest rate unchanged, lowered growth outlook
The Bank of Canada (BoC) held the benchmark interest rate at 0.50% and reduced its growth outlook for the economy, citing a looming slowdown in housing and a weaker outlook for exports. The central bank now expects Canada’s real GDP to expand by 1.1% this year and 2.0% in 2017, down from its July projection of 1.3% and 2.2% respectively.
Foreign investors remained net buyers of Japanese bonds in the previous week
Foreign investors remained net buyers of ¥365.40 billion worth of Japanese bonds in the week ended 14 October 2016, from being net buyers of ¥289.60 billion worth of Japanese bonds in the previous week.
Japanese investors remained net buyers of foreign stocks in the previous week
Japanese investors were net buyers of ¥145.40 billion worth of foreign stocks in the week ended 14 October 2016, from being net buyers of ¥87.10 billion worth of foreign stocks in the previous week.
Japanese investors turned net buyers of foreign bonds in the previous week
Japanese investors turned net buyers of ¥317.70 billion worth of foreign bonds in the week ended 14 October 2016, as compared to being net sellers of a revised ¥733.80 billion worth of foreign bonds in the previous week.
Japanese all industry activity index rose as expected in August
The all industry activity index climbed 0.20% on a MoM basis in Japan, in August, at par with market expectations. The all industry activity index had registered a revised similar rise in the prior month.
Foreign investors became net buyers of Japanese stocks in the previous week
Foreign investors were net buyers of ¥72.00 billion worth of Japanese stocks in the week ended 14 October 2016, from being net buyers of a revised ¥432.40 billion worth of Japanese stocks in the prior week.

Thu, 20 Oct 2016 08:36:00 +0100
Fund Managers Hike Commodity and EM Exposure to Three-Year High but Raise Cash Levels Fund Managers Hike Commodity and EM Exposure to Three-Year High but Raise Cash Levels
Here is the opening of this interesting report from Investment Week:

Investors are no longer underweight commodities for the first time since December 2012, according to the October Fund Manager Survey by Bank of America Merrill Lynch.
The report said the move has been driven by inflation expectations being at a 16-month high and the lack of value seen in developed bond and equity markets.
Furthermore, there has been a surge in oil prices in recent months with OPEC agreeing to limit supply and Russian president Vladimir Putin supporting the plans. Brent Crude is currently trading at $51.75 a barrel.
However, Adrian Lowcock, investment director of Architas, added "if OPEC fails to deliver on its promises, there is a mild winter or a slowdown in demand then we could see another slump in oil prices".
Oil jumps 6% as OPEC surprises with production cut
Meanwhile, gold prices continue to rise, up 26% this year, due to political uncertainty in the US and across Europe.
The survey also highlighted a rotation out of healthcare/pharma, REITs and bonds, into banks, insurance, equities, and emerging markets.
Emerging market equities positions rose to their highest overweight in three and a half years, from a 24% allocation last month to 31% in October.

David Fuller's view
With most investors keeping a close eye on US markets, not least because of their size and influence, and with additional interest in next month’s Presidential Election and especially the Fed’s probable rate hike in December, we can expect some volatility. 
We also know that a number of central bankers and also international economists are calling for more fiscal spending to spur GDP growth.  There are also calls for corporations to invest in the development of their business, rather than just parking capital in financial assets or using it for share buybacks.
Against this background we should not assume that inflation will remain dormant.  In fact, the cost of living has increased for most households.  They are experiencing rising property prices in many countries, higher rents, increased school fees and insurance costs, to mention just a few contributors to the inflation which is seldom mentioned in financial reports.   

Why It Is Time for a New Campaign for Brexit
Here is the opening of this topical column by Allister Heath for The Telegraph:

There is no such thing as permanent victory in politics. History never ends: triumphs are fleeting; majorities can turn into minorities; and orthodoxies are inevitably built on foundations of sand. Communism was supposed to be discredited forever after the collapse of the Berlin Wall; yet many young people in Britain and America now call themselves socialists.
Progress is never guaranteed in politics: there are just ups and downs and swings of the pendulum.
This applies to Brexit too, of course: those who thought that Leave’s victory on June 23 somehow settled the question were deluded. The good news is that it remains likely that we will leave the EU in 2019.
Theresa May is fully committed and will be canny and steely in her negotiations. But the Remainers are staging a fight-back which is beginning to inflict serious damage on the Brexiteer cause.
Every piece of bad news is blamed on Brexit; an endless supply of reports, economic “forecasts” and articles explain how leaving the EU is self-evidently bound to hurt us, slash our GDP, make us the world’s laughing stock and wreck our prosperity. Even Ed Miliband and Peter Mandelson are back.
Remarkably, given that the insurgents were meant to have seized power, the propaganda wars have been one-sided: the Government isn’t really taking part, and the other Brexiteers have vacated the battlefield.
Unless Mrs May decides to change tack, and becomes much more aggressive in defence of the policy that will come to define her, the Brexiteers will have only one option left: reconstitute a version of Vote Leave and relaunch a full-throttled, independent campaign.
One thing is cLear: concern is mounting in Eurosceptic circles.
It’s not just the specifics of how we leave the EU that are still up for grabs. Some Remainians still hope that withdrawal can be delayed long enough for it never to happen; others are discussing whether Article 50 could be reversed once it’s invoked.

David Fuller's view
I sympathise with these comments and the sentiments of many friends and colleagues who voted for Brexit.  Wouldn’t it be wonderful to fast forward and be entirely outside of the EU, a sovereign state once again, trading with the global economy and not just the failing EU.  
To happen anytime soon, this requires a declaration of Article 50 in early January, followed by a list of UK terms for trading with EU partners in our mutual interests, which does not impinge on UK sovereignty.  This is not a blink moment for the UK.  It is a final offer, which we should assume will probably not be accepted by Merkel and Hollande, in which case we respectfully withdraw.  I believe this is what Patrick Minford and Roger Bootle advise, and they would be very useful contacts for the Prime Minister.
EU threats of fines, ongoing commitments and binding agreements extending well into the decade, which have been bandied about, are little more than attempted bullying tactics to prevent any country, heaven forefend, from leaving the dysfunctional EU.  There are no Brexit terms; the UK is creating them as it leaves.
Would hard Brexit result in turmoil?  Almost certainly for a brief period.  Thereafter, I think the majority of UK citizens and residents from other countries contributing to the UK economy would welcome the new challenge and get on with it in our mutual interests.  The UK government should now be forming its plan of action and recovery, in this event.
The Prime Minister may think a more cautious, exploratory approach could be more effective, not least as dissatisfaction and turmoil within the EU is not only increasing, but could easily lead to the electoral fall of Holland and perhaps also Merkel in 2017.  Perhaps, but that would not necessarily favour the UK.  Moreover, a long drawn-out negotiating process would likely be far worse for the UK - in terms of national morale, unity and capital - than a swift, hard Brexit. 

Want to Know Why Central Bankers Can Not Solve World Problems? Read a Book
Here is the opening from this is a splendid, erudite column by Ben Wright for The Telegraph:

Ever since the writer Thomas Carlyle coined his rude epithet about economics, the world of letters and the “dismal science” have circled each other warily. But in his new book about the history of the Nobel Prize, Avner Offer, a professor of economic history at Oxford University, says economics actually has more in common with literature than, say, physics.
It isn’t an obvious pairing. Literature’s understanding of economics is, at best, patchy and simplistic. Polonius’s advice in Hamlet to “neither a borrower nor a lender be” is well-meaning. But, taken too literally, it would undermine the entire global financial system.
Yet the literary canon, in all its vastness, does occasionally, almost accidentally, brush up against economics.
The monetary principle known as Gresham’s law, which states that “bad money drives out good”, is said to have been prefigured by Aristophanes in The Frogs. King Lear, who thought that “distribution should undo excess/and each man have enough”, was clearly a bit of an old Marxist. And when Levin isn’t mowing in the fields or moping after Kitty in Anna Karenina he’s voicing Leo Tolstoy’s slightly warped views on agricultural reform.
But those novels that really try to grapple with economic issues – like George Orwell’s The Road To Wigan Pier, which discusses why many of those that might best benefit from socialism are most implacably opposed to it – either date quickly or – like Ayn Rand’s paean to capitalism Atlas Shrugged – are borderline unreadable.
There are rare exceptions. The second part of Johann Wolfgang von Goethe’s Faust is essentially an extended treatise on fiat money (currencies that are deemed legal tender by governments) and the perils of expansionary monetary policies.
Mephistopheles (the devil), disguised as a court jester, advises an indebted emperor to issue promissory notes against his country’s yet-to-be-discovered gold, saying: “Such paper’s convenient, for rather than a lot / Of gold and silver, you know what you’ve got. / You’ve no need of bartering and exchanging, / Just drown your needs in wine and love-making.”

David Fuller's view
Alternatively, enjoy the Royal Opera’s production of Gounod’s Faust – one of Bryn Terfel’s best roles.

Thu, 20 Oct 2016 08:32:00 +0100
VSA Capital Market Movers - Rio Tinto Rio Tinto (LON:RIO) has released strong production results for Q3 2016. Iron ore production was up 2% YoY and 3% QoQ to 83.2mnt, however, we note a 5% YoY and 2% QoQ decline in shipments due to rail maintenance. This is likely to impact 4Q 2016 also as shipment guidance has been reduced for iron ore to 325-330mnt for the full year. Met coal production was up strongly, 17% YoY and 21% QoQ to 2.18mnt, due to outperformance at the Kestrel mine. Thermal coal production was down 2% YoY and up 4% QoQ to 5.4mnt due to planned mine sequencing at Hunter Valley.

Aluminium production of 924kt was up 11% YoY and 1% QoQ owing to the restart of the Kitimat smelter earlier this year. Bauxite production of 12.4mnt was up 10% YoY and 3% QoQ driven by record performance at Weipa and Gove arising from productivity enhancements. Guidance for the full year remains unchanged for aluminium and bauxite at 3.6mnt and 47mnt respectively.

Titanium dioxide production was up 10% YoY and 13% QoQ to 267kt; however, production for the full year remains down 14% YoY as a result of significant idled capacity. Diamond production of 4.4mnct was flat QoQ although up 3% YoY.

Copper production of 133kt was up 16% YoY although down 4% QoQ. The impact of weak grades at Escondida was offset by strong performance at Kennecott where production was up 63% YoY although down 3% QoQ to 36kt.

Exploration spending was marginally lower at US$379m versus US$392m in 3Q 2015.

Thu, 20 Oct 2016 08:29:00 +0100
Beaufort Securities Breakfast Alert: Advanced Oncotherapy, Hummingbird Resources, Horizon Discovery Markets

The FTSE-100 finished yesterday's session 0.31% higher at 7,021.92, whilst the FTSE AIM All-Share index closed 0.39% better-off at 826.54. In continental Europe, the CAC 40 index ended the day 0.25% higher at 4,520 and the DAX closed 0.13% up at 10,646.
Wall Street
In New York yesterday evening, the Dow Jones gained 0.22% to stand at 18,202.62, the S&P-500 rose 0.22% to finish at 2,144.29 and the Nasdaq was up 0.05% at 5,246.41.
In Asian markets this morning, the Nikkei 225 rose 1.13% to 17,191.11, while the Hang Seng added 0.67% to stand at 23,460.89.
In early trade today, WTI crude was down 0.43% to $51.38/bbl and Brent was also down 0.27% at $52.53.

Travis Perkins says 600 jobs at risk amid branch closures
The UK's biggest builders merchant, Travis Perkins (TPK.L), is closing 30 branches, putting 600 jobs at risk. The company, which employs 28,000 people and has 2,060 stores, said it was taking the steps due to an "uncertain UK outlook" for next year. Profits will also be lower than expected this year due to weak sales in its plumbing and heating division. The firm is closing branches of Travis Perkins, Benchmarx, BSS and PTS, but not its DIY store Wickes.

Company news

Advanced Oncotherapy (LON:AVO, 115.0p) – Speculative Buy
Advanced Oncotherapy ('AVO'), the developer of a next generation proton therapy system for cancer treatment, announced that planning permission for its Harley Street site has now been granted by the Westminster City Council's Planning Committee. AVO's Executive Chairman and CEO, Dr. Michael Sinclair commented "The Harley Street Proton facility will make an important contribution to the advancement of next generation radiotherapy in the UK, and add even further lustre to the international reputation of the Howard de Walden Estate and the Harley Street Medical Area. Now that we are in a position to continue with the development, our partner, Howard de Walden Estates, plans to start work on the site as soon as possible. During the construction period every effort will be made to ensure minimal inconvenience to local residents."

Our view: The announcement placed AVO a step closer towards the development of UK's first Proton Therapy Centre using the LIGHT (Linac Image Guided Hadron Technology) system located in 141-143 Harley Street, London. Harley Street is the most prestigious medical address in the UK and recognised globally as a centre for medical excellence. The lease was agreed in January 2015 with Howard de Walden Estates who managed the planning application and bearing the total cost of the redevelopment cost of c.£7m. The c.11,800 sq ft property will comprise LIGHT system and 2 treatment rooms as well as other services required for a fully functional clinic. Back in October 2015, AVO has signed a joint venture agreement with Circle Health, owned by AIM-listed Circle Holdings Plc, to operate AVO's Harley Street Centre. Circle Health will take full responsibility for operational and clinical matters at the facility as well as the additional procurement, fit-out and facility testing requirements needed for full commissioning and beyond the testing required during the technical development of the system. Circle Health will also take responsibility for insurance provision for the Centre. Having confirmed in its interim report on 30 September 2016 that the technical development of the LIGHT system remains on track, management continues to confidently express its view that the product now presents little or no technical or commercial risk, while introducing a giant new market opportunity. Recent successful raise of £10m (before expenses) through share issuance and currently undergoing c.£4m Open Offer to existing shareholders, as well as potential implementation of a financing plan with banks and strategic partners will enables AVO to trigger £24m financing facility from Metric Capital Partners LLP for the installation of LIGHT machine in Harley Street. As has already been explained in numerous research documents, Beaufort's commercial scenario for LIGHT is that the cost, safety, operational and size advantages it brings to the world of proton therapy, will effectively render 'first generation' systems all but obsolete; its development will also have the potential to expand the international market for such systems from some US$2.5bn annually right now, to a figure potentially ten-times as large as LIGHT becomes the obvious successor to the similarly-priced but now relatively antiquated X-ray radiation systems that have a global installed base in excess of 20,000 units. In this respect, LIGHT uniquely faces a giant and accelerating global opportunity. Beaufort remains an enthusiastic supporter of Advanced Oncotherapy and repeats its Speculative Buy recommendation on the shares.

Beaufort Securities acts as corporate broker to Advanced Oncotherapy plc

Hummingbird Resources (LON:HUM, 24.25p) – Speculative Buy
Hummingbird Resources, the gold exploration and development company with assets in Mali and Liberia, announced today that the first concrete has been poured for foundations at its 2.2Moz Yanfolila gold project in Mali. IMARGI-SARL, a leading specialist of building, mining and industrial infrastructure in Mali, is responsible for the completion of plant civil works. Several material orders have also been placed with suppliers including crushing circuit equipment, agitators, carbon regeneration kiln and interstage screens. Management also notes that it's maintaining a good relationship with local communities by initiating a proactive Corporate Social Responsibility programme including on-going support to local teachers, nurses and market garden programmes. Hummingbird states that the project remains on schedule and within budget for first gold pour by the end of 2017.

Our view: Having secured the majority of project funding Hummingbird is now laying the ground work for full-scale construction at Yanfolila. The first concrete pour is a significant milestone for the company as it continues to target first gold pour by end of 2017 and 132,000oz of production within the first year of operation. We look forward to further developments as the construction process for Yanfolila proceeds. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Hummingbird Resources plc

Horizon Discovery (LON:HZD, 137.5p) - Speculative Buy
Horizon announced new bioproduction outlicense deal with a minimum value of £500,000, with an unnamed commercial partner. The novel licensing model allows early access over a 5 year period to bioproduction cell line innovations as well as for immediate use of Horizon's GS Null CHO K1 bioproduction cell line for drug manufacturing. Under the terms of the license, the Partner will gain immediate access to one of Horizon's cutting-edge engineered cell lines (CHO SOURCE GS Null cell line), for an indefinite period of time in order to manufacture their novel therapeutics. The Partner will also gain early access to Horizon's programme of continuous cell line innovation, enabling them to license, via the subscription, any follow-on cell lines developed as part of the program at a 50% discount within a 5-year period from signature. The minimum fee will be paid up front, with a significant amount to be recognised in FY2016. The license deal follows an evaluation period initiated in Q4 2015 and reflects the confidence of the Partner that Horizon will provide a number of additional cell lines over the next five years, leading to significant efficiency improvements in their biomanufacturing capability.

Our view: Horizon continues to be a disruptive influence in the bioproduction arena, using technical and commercial innovation to accelerate advancements in drug manufacturing. This new announcement further validates the Company's approach, with the Partner demonstrating their confidence by making a five-year commitment via subscription model to the program. Horizon first out-licensed the CHO SOURCE cell line in 2015 and several additional commercial licenses have been executed since, driven by the combination of top tier innovation and disruptive commercial licensing terms. Horizon's business model is focused on securing significant market share and then using continuous innovation to develop strong customer loyalty. We emphasise our Speculative Buy stance.

Thu, 20 Oct 2016 08:15:00 +0100
Hillary Clinch-ton? FTSE 100 Index called to open flat at 7020, still trying to challenge for 4-day highs although unable to make headway overnight. The uptrend of the last 4 weeks remains intact, with rising support at 6980, but Bulls will be looking for a print above 7040 to revive hopes of another attempt at fresh all-time highs. Bears will be hoping for another retrace to test rising support at 6980. Watch levels: Bullish 7040, Bearish 6990.

A flat opening call comes in spite of positive US and Asian sessions with investors interpreting Hillary Clinton as solidifying perhaps even extending her poll lead over Trump following last night’s final televised US presidential debate. The election is now less than three weeks away and the USD, as expected, has ticked higher, which could weigh on the FTSE, a Fed rate hike now more likely based on the perception of a more stable political leadership outcome.

Japan’s Nikkei is outperforming thanks to a stronger USD translating to a weaker Yen, benefiting exporters. Oil prices holding around their recent highs is also playing their part to help Energy names. Australia’s ASX is, however, underperforming after disappointing employment data sent the AUD lower, while a stronger USD and a Rio Tinto iron ore guidance cut (echoing BHP Billiton’s output drop yesterday) holds back raw materials prices and the Miners.

US equities finished the trading session predominantly higher, with the Energy sector and earnings-beating Goldman Sachs leading the Dow Jones to a gain of 0.2%. Elsewhere, the S&P 500 also closed 0.2% higher, while the NASDAQ composite closed virtually flat. Overnight after-market earnings releases saw both eBay and Intel missing forecasts, whilst American Express beat forecasts by over 20%.

Crude oil prices have retreated overnight as profit taking by investors following a surprise 5.2m barrel inventories drawdown that led Brent crude to post 12-month highs yesterday evening. US crude also saw prices approaching 2016 highs, although failed to reach the highs of its counterpart after the DOE EIA inventories data release. OPEC production cut optimism still running high.

Gold showed little reaction to last night’s US presidential debate and it is now strengthening in the run-up to today’s ECB monetary policy update having broken out (bullish two week triple-bottom reversal) above $1265 from a two week trading channel yesterday. The yellow precious metal, sensitive to monetary policy updates, is likely to be one of the largest movers today in reaction to the ECB meeting, while any potential strengthening of the Euro against the US Dollar would also see the gold price rise.

Today’s focus will be the ECB policy update. No change expected to headline rates but markets are itching to know what Draghi’s plan is (or isn’t) in terms of its QE bond-buying stimulus programme; especially after this month’s ‘taper tantrum’. Increase monthly purchases? Purchase beyond March? Change the makeup of purchases? Lower the negative yield threshold? Some, even all of the above?

Data-wise this morning, it’ll be interesting to see whether UK Retail Sales adds to the flow of post Brexit data that has done anything but signal panic and collapse since end-June. September is seen showing a retail rebound from a weak August although the annual rate is likely to have slowed.

In the afternoon, weekly US Jobless Claims - forecast flat - are sure to be eyed for evidence about the state of the US economy and its ability to weather another Fed rate rise by end year, itself likely still dependent on both the US election result and what peer central banks do.

The October Philly Fed probably normalised after a strong September and 18-month high. After divergent US housing data yesterday, Existing Home Sales will be looked to for more evidence while the US Leading Index may have rebounded in September.

Speakers of note this afternoon include the Bank of England’s Shafik, ECB President Draghi at his policy update press conference and the Fed’s Dudley. We also have UK PM Theresa May participating at the EU leaders summit in Brussels, hoping to urge for a smooth Brexit. To close the day, German Finance minister Schaeuble speaks after the European market close.

Thu, 20 Oct 2016 08:10:00 +0100
Today's Market View - Kodal Minerals, Ortac Resources, PolyMet Mining and SolGold Kodal Minerals* (LON:KOD) – Project update
Ortac Resources* (LON::OTC) – Ortac maintains stake in Casa Mining
PolyMet Mining* (NYSEMKT:PLM) – PolyMet raises US$19.5m in private placement
SolGold* (LON:SOLG) – New drilling contracts signed covering 95,000m and up to 10 rigs

Equity markets range bound as Chinese GDP numbers came broadly in line with estimates.
• Good earnings season so far: while the majority of US public companies are yet to announce their quarterly earnings, c.80% of 57 companies included in the S&P500 Index beat market estimates, Bloomberg reports.
• Brent prices climbed following the API report showing drawdowns in crude stockpiles over the last week with inventories down 3.8mmbbl v a 2.7mmbbl expected by markets.
• The US EIA will release its official inventory numbers later today.
• Gold together with the US$ index are flat this morning.
• Iron ore futures are trading higher today following steel prices which climbed for fourth day amid reports China continued to grow steel production through the first nine months of the year.

Lithium – next generation batteries
• Scientists at the University of Michigan have filmed the formation of dendritic lithium in next generation batteries.
• Dendrites are fern shaped structures which grow in minerals and in this case in lithium batteries sometimes causing short circuits and fires.
• The film is important because it is the formation of dendritic whiskers of lithium which causes thermal runaway and fires in lithium batteries.
• Next generation batteries are likely to use all-metal electrodes in Lithium Sulfur and Lithium Air batteries but suffer from lithium dendrite formation.
• Immersing electrodes in a stabilising salt solution before assembly is thought to work while limiting charging current and temperatures also helps to avoid lithium dendrite formation.
• A recent study also found that adding two chemicals, lithium nitrate and lithium polysulfide, into the electrolyte may also prevent the formation of dendrites while smart batteries may be able to detect the formation of dendrites and signal the need for replacement before the situation becomes critical.
Conclusion:  The ability to view dendrite formation is an important step towards solving this critical problem.  Preventing Lithium dendrite formation should have multi-billion dollar value and enable the roll-out of next generation lithium batteries with potentially 5-10 times current storage capacity.

Dow Jones Industrials  +0.42% at 18,162
Nikkei 225    +0.21% at 16,999
HK Hang Seng    -0.38% at 23,305
Shanghai Composite    +0.03%  at 3,085
FTSE 350 Mining   +0.16% at 13,190 FTSE 350 +80% since 1st January
AIM Basic Resources   +0.08% at 2,516 AIM Basic Resources +54% since 1st January

Economic News
China – Q3 GDP growth came exactly in line with market expectations and the government targeted range of 6.5-7.0%.
• Q3 GDP (%yoy): 6.7 v 6.7 in Q2/16 and 6.7 forecast.
• Q3 GDP (%ytd): 6.7 v 6.7 in Q1-Q2/16 and 6.7 forecast.
• Separate reports showed industrial production has slightly underperformed estimates with the growth rate unchanged through Sep v the first eight months of the year.
• Industrial production (%ytd): 6.0 v 6.0 in Jan-Aug/16 and 6.1 forecast.
• Retail sales growth accelerated slightly taking ytd growth to 10.7% v 10.6%ytd in Jan-Aug/16 and 10.6%ytd forecast.
• As has been lately the case, fixed asset investments growth has been driven by the government (21.1%ytd v 21.4%ytd in Jan-Aug/16); although, private investments posted a slight increase from multi year lows recorded in the Jul/Aug (2.5%ytd v 2.1%ytd in Jan-Aug/16).

US – Counter to seasonal moves, gasoline prices jumped 5.8%mom (-6.5%yoy) accounting for a diverging dynamics in general and core CPIs.
• Core CPI (ex food and energy) slowed a little in Sep with services sector inflation continuing to drive prices growth (0.2%mom/3.2%yoy) and goods sector remaining in a deflationary territory (-0.1%mom/-0.6%yoy).
• New inflation data had little effect on market expectations for the Fed rate hike which is assigned a 63% chance to take place before year end.
Date Index Period   Actual Est Previous
Monday New York Manufacturing Oct   -6.8 1.0 -2.0
  Industrial Production Sep %mom 0.1 0.1 -0.5
  Capacity Utilization Sep % 75.4 75.6 75.3
Tuesday CPI Sep %mom 0.3 0.3 0.2
  CPI Sep %yoy 1.5 1.5 1.1
  Core CPI Sep %mom 0.1 0.2 0.3
  Core CPI Sep %yoy 2.2 2.3 2.3
Wednesday Housing Starts Sep %mom  2.9 -5.8
  Building Permits Sep %mom   1.1 0.7
Thursday Weekly Jobless Claims    
  Existing Home Sales Sep %mom   0.4 -0.9
Friday Markit Manufacturing PMI Oct       51.5
Source: Bloomberg     

UK – Employment numbers showed a deceleration in the jobs growth, albeit a weaker drop than expected, with earnings slightly down in the three months to Aug.
• Amid prospects for an accelerating inflation, steady jobs earnings numbers are likely to weigh on households’ real incomes.
• Employment change: 106k in Jun-Aug v 174k in May-Jul and 76k forecast.
• Unemployment rate: 4.9% , unchanged from the rate recorded in the previous three months (May-Jul) and in line with market estimates.
• Av Weekly Earnings: 2.3%yoy in Jun-Aug v 2.4%yoy in May-Jul and 2.3%yoy forecast.
• The pound is up slightly today trading above the $1.23 level this morning.

UK Inflation soars to 1% in September - Panic now and avoid the rush!
• The expression ‘soars’ is relative really to those of us who grew up in the 1970s and still remember the ‘Winter of Discontent’ and Ted Heath’s ‘3 Day week’.
• 1% is just about enough inflation to help the economy and but may still persuade the BoE that it can cut rates to potentially 0.1% in November.
• Those rather intransigent Eurocrats in their ivory towers in Brussels who appear to care little about youth unemployment and the recovery of the Southern European economies might care to take some notice of the robust economic activity of the UK.

US$1.0995/eur vs 1.1018/eur yesterday.   Yen 103.47/$ vs 104.04/$.   SAr 13.925/$ vs 14.062/$.   $1.231/gbp vs $1.225/gbp.
0.768/aud vs 0.768/aud.   CNY 6.737/$ vs 6.739/$.

Commodity News
Precious metals:
Gold US$1,265/oz vs US$1,262/oz yesterday –
     Gold ETFs 66.0moz vs 66.0moz yesterday –
Platinum US$944/oz vs US$946/oz yesterday
Palladium US$641/oz vs US$641/oz yesterday
Silver US$17.64/oz vs US$17.65/oz yesterday

Base metals:   
Copper US$ 4,666/t vs US$4,700/t yesterday – Olympic Dam may resume production at full capacity in a week time following a two weeks suspension caused by a power outage.
• The management estimates the outage will cost 25kt in lost copper production.
• The mine produced 203kt of copper in FY16 with the management having guided flat growth in FY17 before the temporary suspension.
• The Company reiterated its forecasts that copper will move into deficit in 2019 on growing demand and falling grades at existing operations.
• Q3CY16 operations results released this morning showed BHP copper production fell 6%yoy to 355kt on the back of lower grades at Escondida and a weaker output at Olympic Dam.
Aluminium US$ 1,623/t vs US$1,675/t yesterday –
Nickel US$ 10,280/t vs US$10,375/t yesterday –
Zinc US$ 2,276/t vs US$2,308/t yesterday –
Lead US$ 1,970/t vs US$2,013/t yesterday
Tin US$ 19,705/t vs US$19,610/t yesterday –

Oil US$52.4/bbl vs US$51.8/bbl yesterday -
Natural Gas US$3.218/mmbtu vs US$3.262/mmbtu yesterday
Uranium US$20.90/lb vs US$21.65/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$56.4/t vs US$56.4/t –
Chinese steel rebar 25mm US$408.2/t vs US$406.2/t – Chinese steel production totalled 603.8mt in the first 9-months of the year marking a 0.4%yoy increase.
• Monthly output was slightly down on the mom basis at 68.2mt v 68.6mt in Aug and up 3.9%yoy.
• Growth, almost a modest one, comes in contrast to widespread expectations for annual steel production to record a record contraction this year.
• A credit-fuelled rebound in the property market raised steel demand improving mills’ profit margins.

Thermal coal (1st year forward cif ARA) US$69.5/t vs US$68.9/t yesterday –
Premium hard coking coal Aus fob US$232.6/t vs US$232.6/t

Tungsten - APT European prices $191-197/mtu vs $183-197/mtu unch last week

Company News
Kodal Minerals* (LON:KOD) 0.1p, mkt cap $4.2m – Project update
• Kodal Minerals which is looking to develop gold and lithium in Mali is slowing expenditure on the Kodal project in Norway.
• The move reflects management’s new focus on bringing forward a number of gold projects and its new lithium project in west Africa.
• The Kodal Project is on a phosphate titanomagnetite deposit which contains unusually clean phosphate, eg with no uranium.
• We hope the European Union will one day limit or even ban the use of uranium-rich phosphate fertilizer which comes in from Morocco and other destinations.
• This event should serve to raise fertilizer prices and help to revive projects like Kodal which have been effectively stalled by low phosphate and titanomagnetite prices.
• Fertilizer prices have fallen due to an unusually wet spring preventing many growers from applying phosphate and potash fertilizers and serving to keep prices low.  Phosphate DAP prices rose to >$1,200/t in April 2008 from around $260/t in January 2007 due to increasing in demand and rising use for biofuel production in the US, Brazil and Europe as well as higher sulphur prices.  Farmers were unwilling to restock fertilizer at these price levels and this combined with credit issues caused phosphate prices to subsequently collapse.
• Titanomagnetite was very saleable with Chinese steel producers paying good prices for concentrates a few years ago till iron ore prices collapsed.  This has caused most titanomagnetite producers to shutdown in recent years.  eg IRC was forced to close its Kuranakh mine at the start of this year.
• The collapse in use of titanomagnetite is also having an interesting effect on the market for titanium raw materials.  Ilmenite prices are seen rising as titanium from titanomagnetite production falls away and consumers look for new sources of supply.  This is helping Kenmare Resources, Sierra Rutile (which is subject to a bid from Iluka Resources) and FinnAust** which has a large and promising ilmenite project in Greenland
• Meantime, Kodal Minerals is pushing ahead advancing the lithium project at Bougouni in Mali alongside exploration on a number of key gold projects in Mali and some early stage exploration in the Ivory Coast.
• Management are withdrawing the Kodal Project from the planning process so as to avoid expending further management time or incurring additional cost.
• The Kodal project has been previously written down in value and is carried at nil value on Kodal’s balance sheet so there is no further financial adjustment to make for slowing down the advance of the project.
Conclusion:  Kodal is able to park the Kodal project at almost no cost pending future recovery in phosphate and titanomagnetite prices.  There is potential for the project to be revived at some future stage particularly if scientists conclusively prove the connection between lung cancer and the concentration of uranium from fertiliser in tobacco plants.  The problem is it’s going to be more expensive to source significant non-uranium or low-uranium content phosphates and EU policymakers would risk protests from French Farmers if they were to take action causing prices to rise.
*SP Angel acts as Financial Advisor and Broker to the company.  *Robert Woodridge, a partner at SP Angel is also Chairman of Kodal Minerals. 
**SP Angel acts as Nomad and Broker to FinnAust

Ortac Resources* (LON:OTC) 0.03p, mkt cap £2.3m – Ortac maintains stake in Casa Mining
• Ortac Resources reports that it is maintaining its stake in Casa Mining at 19.5%.
• The company are stumping up a further $50,000 to take up a further 62,5000 new shares to maintain its position in Casa.
• Premier African Minerals has agreed to pay $250,000 for a 4.5% stake valuing Casa Mining at US$5.57m and implying a value of US$1.1m for Ortac’s stake in the business.
• MDM and SRK produced s scoping study for the Akyanga project showing an IRR of 35% with an NPV@8% of $171m at a gold price of US$1,300/oz.  This assumes a capital cost of $87.4m and total operating costs of $628/oz.
• The mine plan shows 5.5mt of ore grading 1.5g/t for around 272,000oz of gold with a futher 16.2moz grading 1.8g/t for around 927,000oz of contained metal.
• Casa is currently drilling a further 5,000m to help validate its 3moz gold potential.
Conclusion:  We reckon Casa Mining will be worth substantially more assuming the project starts gold production not only because >US$30m has been spent on project evaluation to date but because there is substantial value to be gained from mining the project in the DRC.
*SP Angel acts as Nomad and broker to Ortac Resources

PolyMet Mining* (NYSEMKT:PLM) ) US$0.8, Mkt Cap US$230m – PolyMet raises US$19.5m in private placement
• PolyMet Mining reports that it has placed close to 26m new shares at US$0.75c/s for US$19.5m.
• The issue also includes an additional half warrant exercisable at US$1.00.
• Glencore will also maintain its pro rata share raising a further US$10.6m for an additional 14m new shares.
• Polymet have so far spent $108m on environmental review and permitting, of which $101.2m has been spent since the NorthMet Project moved from exploration to development stage.
• Management expect to Complete the Definitive Cost Estimates and Project Update, Complete the Project Implementation Plan and Complete the Construction Finance Plan in 2017 in advance of financing and construction.
• The company is making good progress in its permit applications and towards the “Section 404 wetlands permit for review”.  Polymet’s NorthMet project offers significant future potential and the permitting and redevelopment of the giant Erie processing plant presents further opportunity for the company.  There should be very substantial interest in the operations once final permits are received.
*SP Angel act as advisors and UK brokers to Polymet

SolGold* (LON:SOLG) 20.9p, Mkt Cap £255m – New drilling contracts signed covering 95,000m and up to 10 rigs
• SolGold report a new four-year exploration and appraisal program following the raising of ~US$33m of funds from Newcrest and other investors.
• Drilling has started with Hubbard Drilling and Major Drilling for work at Cascabel in Ecuador.
• Three rigs are currently on site with a fourth due to start by end February.
• The first few holes will test deep rich portions of the Alpala Central deposit down to 2,800m where the company reckons it has a good chance of seeing strengthening mineralisation.  These holes will be >1,000m deeper than the deepest drilling to date.
• The team are also looking at using directional drilling systems to enable more drilling within the deposit while drilling fewer drill holes and less meters overall.
• Man portable rigs will test six other defined targets at Moran, Trivinio, Aguinaga, Tandayama – America, Alpala South East and Hematite Hill.
• The scaling up of the drill program should cut the all-in-field and fixed program costs excluding corporate overheads to $370m from $670m.
• The drillers are contracted for a 12-month program for 36,000m using up to six rigs leading into a two year program ending end October 2018 for 95,000m with up to 10 rigs.
• The new Cecila-Carmen road will provide access to multi-hole drill pads for Major-50 rigs and will make it much easier to get supplies in and core out for assay.
Conclusion:  SolGold is moving fast to capitalise on the funds raised and to discover what lies beneath the ground at Cascabel.  Initial drilling is designed to test the hypothesis of a high grade copper, gold core at the Alpala project while smaller rigs will go further afield to test new targets in rougher terrain.
The bigger rigs supplied by Major Drilling and the use of directional drilling equipment means that assay results should come through faster and more frequently than seen previously.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has previously visited the Cascabel project.

Wed, 19 Oct 2016 10:49:00 +0100
ASOS and Burberry get reality checks; Reckitt fails to cut the mustard Wed, 19 Oct 2016 10:46:00 +0100 Veltyco Group plc, Premier African Minerals, Alexander Mining Veltyco Group plc (LON:VLTY) – CORP*: Change of Adviser
Market Cap: £17m; Current Price: 24.5p

Appointment of Northland Capital Partners Ltd. as Nomad & Broker

Veltyco Group plc announced the appointment of Northland Capital Partners as Nominated Adviser and Broker to the company with immediate effect.

NORTHLAND CAPITAL PARTNERS VIEW: Veltyco Group plc is a marketing and promotion company, active in the online sports betting, online casino, online lottery and online binary options markets. The Company refers customers to online betting, casino, lottery and binary options brands and in return generates a share of the revenues generated by the operators.

Premier African Minerals (LON:PREM) – CORP: Circum Minerals update
Market Cap: £7m; Current Price: 0.38p

From yesterday: Mining licence expected before the end of the year

Circum Minerals, a company in which Premier African Minerals holds 2,000,000 shares (2%), has updated shareholders on progress at the Danakil Potash Project, located in Ethiopia.

The optimised post-tax NPV10 is US$2.1bn and the IRR is 26% for the Danakil Project. Mining licences negotiations are well advanced and are expected to be completed before the end of the year.

Morgan Stanley is running a process to find a strategic partner for Circum and/or provide a liquidity alternative to shareholders. As part of this, the Company is considering a potential floatation.

NORTHLAND CAPITAL PARTNERS VIEW: The Government of Ethiopia recently declared a six-month state of emergency following a wave of violent protests in the Oromia and Amhara Region where ethnic groups feel marginalised by the Government. This has slowed Circum Minerals process for finding a strategic partner, but Circum has a number of options for realising shareholder value, which will be a major development for Premier African Minerals that holds 2,000,000 shares. The recent funding of the Yara Project, which is smaller than Danakil Project, at a value of US$200m sets a benchmark. This is equivalent to US$2 per Circum share suggesting an implied valuation of Prem’s interest of US$40m, though given Danakil’s size the valuation could be even higher.

Alexander Mining (LON:AXM) – CORP: Accudo Metals update
Market Cap: £1.96m; Current Price: 0.21p

From yesterday: Positive initial laboratory test work

Accudo Metals has advised Alexander Mining that the initial laboratory hydrometallurgical test work on the AmmLeach® technology has been completed.

The reports are yet to be fully reviewed but Accudo reports that the AmmLeach® technology leached copper from the copper oxide and transition zone ore at good recovery rates.

Accudo is reviewing the proposed work programme for a scoping study and expects to make a decision on where to complete a scoping a scoping study in the near future.

NORTHLAND CAPITAL PARTNERS VIEW: Another positive development for Alexander Mining with the initial leaching tests appearing to have been a success, though the reports have not yet been fully reviewed. The next step towards commercialisation of Alexander Mining’s AmmLeach® technology would be the completion of a scoping study by Accudo Metals, this would be a major milestone for Alexander Mining if it proceeds.

Wed, 19 Oct 2016 09:03:00 +0100
Breakfast News AIM Breakfast: Eco Animal Health, Feedback, Tern, Ariana Resources, Taptica International, Hotel Chocolat, Plutus PowerGen, One View Group, Advanced Oncotherapy, GW Pharmaceuticals What’s cooking in the IPO kitchen?

Misys— Press reports that the IPO valuation is to be cut by £1bn against an expected £5bn

TI Van Elle—The geotechnical contractor to the UK construction market is hoping to come to AIM later this month

Ascot Lloyd— The UK IFA is also hoping to join AIM later this month. Ascot Lloyd's strategy is to grow through a combination of organic growth and further targeted acquisitions.

Breakfast buffet

Eco Animal Health (LON:EAH) 495p £317.9m

The specialist in the development, registration and marketing of pharmaceutical products for animals has received a marketing authorisation from the Thailand Food and Drug Administration for the use of Aivlosin® 625 mg/g water soluble granules in chickens laying eggs for human consumption. This approval, the first following the European approval in June, will allow ECO to start selling Aivlosin® in Thailand for the medication of drinking water for the treatment of respiratory infection in poultry laying eggs.  Thailand is one of the top 20 egg producers globally.

Tern (LON:TERN) 7.37p £8.49m

The company specialising in cloud and Internet of Things ("IoT") sectors, is pleased to announce that it has invested a further £2m in Device Authority taking its stake to 56.9%. “Over recent months we [Device Authority] have been delighted to sign up new partnerships with Intel, Dell, DigiCert and Cumulocity, all of which are highlighting that IoT security is becoming a bigger concern.“ The funding will be used to expand Device Authority's sales and marketing teams to respond to their new and growing go to market partnerships and to meet the increased demand in the Industrial and Healthcare IoT markets.

Ariana Resources (LON:AAU) 1.68p £14.1m

The gold exploration and development company operating in Turkey, announced further results for its Phase One drilling programme of 2016, completed during early September at the Kiziltepe Project. 7 holes. Best intercepts from the southern end of Arzu South include, 5m @ 6.9g/t gold + 138.5g/t silver. Intercepts testing the ASP vein returned with anomalous grades including, 1m @ 3.7g/t gold + 9.7g/t silver. This suggests good potential for further addition to resources at the 50% owned project.

Taptica International (LON:TAP) 152.5 p £95.35m

The end-to-end mobile advertising platform for advertising agencies and brands, announces that it has been appointed as exclusive mobile advertising partner by Codoon, China's largest sports events and social service platform, to drive qualified user installs of its Runtopia app in the UK, US, Canada, Australia and elsewhere. This is the first campaign that Codoon has conducted in the US.  Runtopia is a sports community app, which consumers can use to track runs as well as share exercises and meet others through its social network. FY16EPE 9.5x.

Hotel Chocolat (LON:HOTC) 227.5p £256.7m

Maiden Jun16 prelims from the premium British chocolatier and omni-channel retailer. Revenue up 12% to £91.1m (2015: £81.1m), EBITDA (pre-exceptional) up 57% to £12.3m. Pre-tax profit (pre-exceptional)  up 181% to £8.2m. & new store openings and expansion of factory capacity by 20%. There are no forecasts in the market.

Plutus PowerGen (LON:PPG) 1.48 p £10.2m

The power company focused on the development, construction and operation of flexible power projects in the UK, has signed a Letter of Intent with a specialist UK based energy company to work together to develop a 100MW gas-powered energy generation portfolio.  The agreement, which is subject to contract, will expand the Company's power supply capabilities and is in line with its strategy to become a dedicated merchant supplier and producer of energy for the UK market.

Feedback (LON:FDBK) 1.88p £3.82m

The provider of imaging tools for clinical decision makers has released FYMay16 results. Revenue for the year was £431k (2015: £382k) and the loss after tax was £183k (2015: Loss £1.1m). Cash as at 31 May 2016 was £105,673 (31 May 2015: £63,261). Cash as at 13 October 2016 was £94,629. After the year end Feedback announced a large-scale collaboration with Future Processing Sp. z o.o., a software development service provider based in Gliwice, Poland to develop medical imaging software. Healthy new product and partner pipeline.

GW Pharmaceuticals (LON:GWP) 853p £2,567m

The biopharmaceutical company focused on discovering, developing and commercialising novel therapeutics from its proprietary cannabinoid product platform,  intends to delist from AIM on 2 December and maintain only its NASDAQ listing. Since listing on NASDAQ in 2013, GW has raised nearly $800 million largely from U.S. investors. Following the cancellation of the AIM listing, GW will continue to be headquartered and domiciled in the UK

Advanced Oncotherapy (LON:AVO) 115p £79m

The developer of next-generation proton therapy systems for cancer treatment, announced that at a meeting held yesterday at Westminster City Council, planning permission for the Harley Street site was granted. Recent press reports had highlighted concerns from locals. We are glad that patients will be  able to access this life saving technology.

One View Group (LON:ONEV) 5.38p £18.9m

The digital transformation software provider for in store customer service,  has provided a trading update. The first UK hosted customer was a pivotal event and there is strong interest but delays in the pipeline mean that current year revenues are likely to be below market expectations.

Wed, 19 Oct 2016 08:41:00 +0100
In the papers: GB Energy, Bellway, Asos The Times
Pound ‘can still crash a further 10%’: The pound is “not yet cheap”, despite falling almost 15% against the currency basket since Britain’s vote to leave the European Union, Goldman Sachs has claimed. Sterling was still “around 10% overvalued”, the investment bank said.

Stop delaying report on RBS malpractice, Tyrie tells regulator: The Financial Conduct Authority has been told to say when it will publish its delayed report into the abuse of distressed companies by the Royal Bank of Scotland.

Norwegian competes to the max with £200 transatlantic flights: Flights from Manchester and Edinburgh to the United States will be available for as little as £200 return next year when Norwegian becomes the European launch carrier of the 189-seat Boeing 737 Max.

GB Energy increases tariffs as small suppliers feel heat: Fresh signs of the growing pressures being faced by independent energy suppliers emerged when GB Energy lifted its prices by up to 30%.

Capital gains overshadow rising U.K. house prices: The average price of a home in Britain continues to rise, jumping by £3,000 between July and August, driven by steep rises in London and the southeast.

Supermarket watchdog could be let loose down on the farm: The government is considering extending the remit of the supermarket watchdog to cover farmers and other producers amid concerns about unfair practices.

Bellway is ringing up record sales: One of Britain’s biggest housebuilders has reported record sales for the year but warned that some suppliers would want to raise their prices following the fall of sterling.

Mobile shoppers keep Asos on trend: Sales and profits soared at the online clothing retailer Asos last year even as overall fashion sales plummeted.

China sales are a gift for Rémy: Rising American sales might have been the highlight for many in Rémy Cointreau’s rising sales, but the French spirits maker was looking east rather than west as it toasted its latest results.

BP ‘can achieve growth’ on oil price below $55 a barrel: BP will break even if the oil price remains below $55 a barrel next year, the oil major’s Chief Executive has said.

Freight operator plans 900 job cuts: Britain’s biggest rail freight operator is preparing to cut more than a quarter of its workforce after a “dramatic decline” in demand from its key markets.

Ignoring disabled consumers is costing brands £420 million a week: Failing to create products tailored to disabled people is costing businesses up to £420 million a week in lost sales, a report has claimed.

The Independent
The pound is recovering but airports are still selling it for a euro: Holidaymakers are still facing appalling exchange rates at several airports as they are being charged a one-for-one rate against the dollar.

Burberry boosted by weak pound but shares slump as Asian sales fall: Burberry returned to growth last quarter, helped by a £125 million boost from the falling pound, but its shares slumped as much as 9% as concerns about growth in key Asian markets spooked investors.

British fashion industry in steepest decline since 2009: The British fashion market has witnessed its steepest decline in sales since 2009, according to new data. Figures from Kantar Worldpanel covering the year to 25 September show that the sector, which encompasses clothing, footwear and accessories, has seen four months of consecutive sales decline.

Brexit pound slump good news for U.K. property as auction sales boom: Commercial property auctions are proving an unlikely bright spot in Britain's real estate market where a steep drop in sterling has attracted overseas buyers and local investors are as yet unfazed by potential fallout from Brexit.

William Hill and Amaya abandon mega-merger after shareholder revolt: William Hill and Canada’s Amaya, owner of Poker Stars, ended merger discussions, squelching one of the biggest possible deals in the betting industry, after the U.K. bookmaker’s largest shareholder voiced opposition to the move.

Pound sterling slide sees Ryanair cut its earnings forecast for 2017: Ryanair has cut its forecast for full-year profits, blaming the sharp drop in the value of the pound after the U.K. voted to leave the EU.

Self-employed wages still lower than two decades ago: The average earnings of Britain’s still growing army of self-employed workers are still lower than they were two decades ago, new research from the Resolution Foundation suggests.

The Daily Telegraph

World's longest subsea power link to generate at least £1.3 billion income for National Grid: National Grid is to be guaranteed a minimum of £1.3 billion income for building the world's longest subsea power cable to import electricity from Norway.

BHP Billiton's iron ore output falls 6%: BHP Billiton, the world's biggest mining company, reported first-quarter iron ore production fell 6% as it carries out a rail maintenance program, has lower volumes from its Yandi mine and with an operation in Brazil halted.

Yahoo profits leap – but it dodges scrutiny over data hack: Internet group Yahoo’s profits increased at a healthy pace in the third quarter, defying worries over its enormous data leak scandal which hit the firm last month.

Bernard Matthews takeover by 'Chicken King' raises monopoly fears: The takeover of Bernard Matthews by food tycoon Ranjit Boparan is being investigated by the U.K.’s competition watchdog amid fears that the so-called “Chicken King” will have a monopoly on the market.

Wireless broadband operator Relish signals national ambitions despite mounting losses: U.K. Broadband, the company behind the wireless broadband operator Relish, has signalled plans to create a new national network despite further heavy losses in its existing business in London.

The Questor Column:

Buy ITV for its lowly valuation and well-covered 4% dividend yield: In some ways British stocks remain trapped in a post-referendum, pre-Brexit hiatus. But plenty of companies are reporting numbers that are beating expectations that were lowered in the immediate aftermath of the vote and seeing their shares respond favourably as a result. In some ways British stocks remain trapped in a post-referendum, pre-Brexit hiatus. But plenty of companies are reporting numbers that are beating expectations that were lowered in the immediate aftermath of the vote and seeing their shares respond favourably as a result. The lowly valuation prices in some of the potential dangers while any positive surprise in earnings could leave the shares looking too cheap. The company was a favourite of the late Jim Slater when he tipped shares for The Daily Telegraph in years past. Questor says “Buy”.

SSP: Last week’s “Marmite war” between Tesco and Unilever was a timely reminder of the importance of pricing power. If a firm can raise its prices with a minimum of fuss, it has a potentially great business; if it can’t, the business model may be weak and the company one to avoid. Pricing power can come from strong brands, market share, a technological edge or an installed base of equipment, but SSP has a different recipe: a captive audience. SSP’s brands include Ritazza and Upper Crust, while it has franchise agreements with big names such as Starbucks and Yo! Sushi. Two thirds of sales are generated overseas and Chief Executive, Kate Swann, formerly of WH Smith, can be relied on to tightly control costs. The valuation means SSP is no giveaway but earnings increases and debt reduction could still lift this steady business. Questor says “Buy”.

The Guardian
Hard Brexit 'will reduce need for airport expansion': The need for urgent airport expansion by 2030 could be diminished by Brexit, according to a new study suggesting the number of U.K. air passengers could be around 25 million fewer than forecast by government – or more than the entire annual traffic of Stansted.

Warnings over rising food prices as U.K. inflation hits near two-year high of 1%: Britain’s biggest supermarket has warned that dearer food prices triggered by the plunge in the value of the pound will have a lethal impact on poor families worst affected by the expected jump in inflation over the next two years.

Tesco increases grocery market share for first time in five years: Tesco has increased its share of the grocery market for the first time in five years, with a revamp of the supermarket’s own brand range helping drive sales of fresh produce.

Treasury carries out major U-turn on pension annuities: Plans to allow millions of people to raise money by selling their pension annuities have been scrapped by the government, amid warnings that it could have turned into “the next big mis-selling timebomb”.

Daily Mail
Spain handed £150 million deal to build steel parts for Britain's taxpayer-funded wind farms: A decision to build parts in Spain for Britain's newest taxpayer-backed wind farm has sparked outrage.

New Restaurant Group Boss set to pocket up to £1 million of shares under bonus scheme: The new Boss of The Restaurant Group, owner of Frankie & Benny's, is set to pocket up to £1 million of shares under a bonus scheme.

U.S. hedge fund HarbourVest is shock winner in the £1.1 billion SVG Capital takeover saga: The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize.

Goldman bankers pocket £75,000 each for three months’ work as profits bounce back: Goldman Sachs bankers pocketed an average £75,000 each for three months’ work as the U.S. firm's profits bounced back.

Daily Express
Fraudsters get green light from the Government: Motor insurance premiums are set to accelerate as the Government stalls on plans to crackdown on whip lash fraudsters, ambulance-chasing lawyers and uninsured motorists.

Taxman grabs family fortunes thanks to inheritance tax ignorance: Families could end up paying tens or even hundreds of thousands of pounds in tax through an ignorance of the rules which can prove costly.

Is this proof Italy is dumping 'doomed' euro? Huge sums of cash being pulled out of Rome: Huge sums of cash are flowing out of Italy amid fears the country's banks could fail and Rome may abandon the euro. A whopping €354 billion (£317 billion) has been pulled out of troubled Italy this year - up €118 billion (£105 billion) from the same period last year, figures show.

Government throws out right to sell annuities in exchange for cash: Plans to let hundreds of thousands of pensioners sell their annuities in exchange for cash lump sums have been abandoned.

The Scottish Herald
Billions of barrels at risk in North Sea: More than three billion barrels oil and gas are held in North Sea discoveries that firms have no plans to develop according to an expert study that highlights the challenges facing the area.

Standard Life probe may cost £125 million in redress: Standard Life is facing a compensation bill of up to £125 million after being ordered by the Financial Conduct Authority to carry out an investigation into how it sold annuities to retiring customers.

Clyde Bergemann grows sales: The Glasgow-based Clyde Bergemann boiler cleaning operation increased sales by four% to £8.1 million in the year to 28 February, from £7.8 million in the preceding year.

Retailers see sales again fall as food improves: Total retail sales continued to fall in Scotland last month – in spite of food recording its best sales performance since July 2013.

Tech firm secures £5.3 million in equity backing: Scottish technology company Traveltek is to use a £5.3 million cash injection from private equity house YFM Equity Partners to fund the launch of up to eight new offices over the next two years.

Remy Cointreau reports profit: Remy Cointreau, the French spirits giant that owns the Bruichladdich Distillery Company, has seen a 2.5% jump in sales to €513.4 million in the first half of its 2016/17 financial year, led by its Cognac brands. Its Scottish business saw double-digit growth in the first half, driven by demand in the U.S., Europe and in travel retail.

The Scotsman
Skyscanner said to mull possible sale or flotation: Skyscanner, the Edinburgh-based travel search engine valued at more than £1 billion, is considering a possible sale or initial public offering (IPO), it was reported.

Leith owner Cello Signal consolidates three agencies: The consumer and business-to-business marketing division of Aim-quoted Cello Group is consolidating three of its marketing agencies behind its new Signal brand.

Failure of windows supplier results in 44 job losses: A Stirling-based window and soft furnishings group has gone into liquidation with the loss of 44 jobs.

Currency upheaval leaves exporters in buoyant mood: Scottish meat exporters were in upbeat mood at SIAL – one of the world’s largest and most influential food fairs – with recent swings in currency helping their sales efforts.

Floating pier helps growing Argyll timber economy set sail: A new floating pier is to be built on the shores of Ardcastle Forest in Argyll which could unlock an estimated £10 million of the region’s growing timber supplies.

MBN lands deal to find jobs for Data Lab graduates: Specialist recruitment firm MBN Solutions has won a deal to help find roles for master’s students on courses backed by Scotland’s publicly-funded innovation centre for data science.

City A.M.
The City is struggling with the Whitehall Brexit machine: Key figures in the City are growing increasingly frustrated with what they see as an indifferent and unsupportive approach towards the Square Mile in two of the government departments responsible for hammering out the U.K.’s Brexit deal.

Construction demand stays strong for small to medium-sized firms in quarter following Brexit vote: Consumer demand for building work stayed strong in the three months following the EU referendum, according to the Federation of Master Builders (FMB).

Gap is closing down all of its U.K. Banana Republic stores: Gap has said it will be closing all eight of its Banana Republic stores in the U.K. as part of a global re-evaluation.

Chinese industrial duo Yinyi Group and Impro to battle it out for Doncasters: Two Chinese industrial firms, Yinyi Group and Impro, have emerged as two of the bidders for engineering giant Doncasters.

Lineker-backed insurer scores £1 million in funding: Internet of Things insurer Neos has hit the back of the net with £1 million in initial seed funding, valuing the business at £8.4 million.

Wine prices could go up by more than 29p a bottle due to Brexit: Wine from the EU could increase by an average of 29p per bottle as a direct result of Brexit, drinkers have been warned.

Wed, 19 Oct 2016 08:29:00 +0100
Market Briefing: US markets closed in the green yesterday, amid some cheerful corporate earnings results UK Market Snapshot
UK markets ended in positive territory yesterday, helped by gains in retailers and commodities stocks. Marks & Spencer Group and Next climbed 4.3% and 5.3%, respectively, following upbeat consumer price inflation in the UK in September. Tesco rose 3.5%, after its market share increased slightly for the 12 weeks ended 9 October. Polymetal International added 3.5%, after the precious metal miner reaffirmed its gold production outlook for 2016. Other miners, Rio Tinto, Anglo American and Glencore rose 1.0%, 1.7% and 3.2%, respectively. Oil stocks, Royal Dutch Shell and BP added 0.2% and 0.4%, respectively, as crude oil prices recovered. On the losing side, Burberry Group plunged 7.2%, after its wholesale sales dropped more than expected for the first half of its fiscal year. The FTSE 100 edged up 0.8%, to close at 7,000.1, while the FTSE 250 gained 1.1%, to settle at 17,994.4.

US Market Snapshot
US markets closed in the green yesterday, amid some cheerful corporate earnings results. Netflix rallied 19.0%, after it reported larger than expected increase in additional subscribers for the third quarter. Celanese surged 9.1%, after the specialty materials company reported its earnings for the third quarter that surpassed market projections. Harley-Davidson jumped 9.0%, as its revenue for the third quarter beat market expectations and the company announced plans to cut costs in the coming quarter. UnitedHealth Group climbed 6.9%, following upbeat results for the third quarter and it raised its earnings guidance for the year. The S&P 500 gained 0.6%, to settle at 2,139.6. The DJIA rose 0.4%, to settle at 18,161.9, while the NASDAQ advanced 0.8%, to close at 5,243.8.

Europe Market Snapshot
Other European markets finished higher yesterday, as softer US Dollar led to a rally in commodities related stocks and a surge in banking shares. UniCredit, Commerzbank and Banca Popolare dell'Emilia Romagna climbed 2.7%, 2.8% and 5.1%, respectively. Metal producers, Tenaris and Boliden advanced 1.5% and 1.8%, respectively. Remy Cointreau edged up 1.5%, after it reported upbeat sales for the second quarter on enhanced cognac sales in China and stronger demand for its premium cognac in the US. On the contrary, Bureau Veritas lost 2.7%, as it trimmed its guidance for the full year. Kuehne + Nagel International dropped 2.6%, after its earnings for the third quarter fell short of analysts’ estimates. The FTSEurofirst 300 index added 1.4%, to close at 1,351.0. Among other European markets, the German DAX Xetra 30 rose 1.2%, to close at 10,631.6, while the French CAC-40 gained 1.3%, to settle at 4,508.9.

Asia Market Snapshot
Markets in Asia are trading mostly higher this morning, after data showed that China’s economic growth for the third quarter was in line with market expectations on a yearly basis. In Japan, Sharp has soared 10.6%, as it expects its results to improve drastically for the full year. Maruha Nichiro has climbed 5.1%, on the back of news that its operating profit might have doubled for the three months ended September. Bucking the trend, Hitachi has slid 2.0%, after a leading broker downgraded its rating on the stock to ‘Neutral’ from ‘Buy’. In Hong Kong, energy producers, PetroChina and CNOOC have shed 0.4% and 1.3%, respectively. In South Korea, index majors, POSCO and Samsung Electronics have gained 0.8% and 3.0%, respectively. The Nikkei 225 index is trading 0.1% higher at 16,987.2. The Hang Seng index is trading 0.1% down at 23,362.6, while the Kospi index is trading 0.3% higher at 2,045.7.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.85% or $0.44 higher at $52.12 per barrel, ahead of the Energy Information Administration’s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 0.31% or $0.16, to settle at $51.68 per barrel, after the American Petroleum Institute reported that US crude oil inventories unexpectedly declined by 3.8 million barrels for the week ended 14 October 2016.

At 0330GMT today, Gold futures contract is trading 0.06% or $0.70 higher at $1263.60 per ounce. Yesterday, the contract advanced 0.50% or $6.30, to settle at $1262.90 per ounce, extending its gains from the prior session, amid softness in the greenback.

At 0330GMT today, the EUR is trading 0.10% higher against the USD at $1.0989, ahead of the Euro-zone construction output data for August, scheduled to release today. Moreover, the US housing starts and building permits data, both for September, due to release later today, will be assessed by traders. Yesterday, the EUR weakened 0.17% versus the USD, to close at $1.0978. On macro front, the US consumer price index rose in September, meeting market expectations.

At 0330GMT today, the GBP is trading 0.08% lower against the USD at $1.2286, ahead of UK’s ILO unemployment rate for the three months to August, set to release in a few hours. Yesterday, the GBP rose 0.94% versus the USD, to close at $1.2296, after economic data showed that the UK consumer price inflation advanced more than expected in September and reached its highest level in nearly two years.

Fixed Income
In the US, long term treasury prices rose and pushed yields mostly lower, after data showed that the US core consumer price index rose less than expected in September. Yesterday, yield on 10-year notes lost 2 basis points to 1.75%, while yield on 2-year notes rose 1 basis point to 0.82%. Meanwhile, 30-year bond yield fell 1 basis point to 2.51%.

Key Economic News

UK CPI advanced more than expected in September

On a monthly basis, the consumer price index (CPI) recorded a rise of 0.20% in September, in the UK, more than market expectations for an advance of 0.10%. In the previous month, the CPI had climbed 0.30%.

UK CPI rose more than expected in September

The CPI in the UK registered a rise of 1.00% in September on a YoY basis, compared to an advance of 0.60% in the previous month. Markets were expecting the CPI to advance 0.90%.

UK input PPI remained unchanged in September

The non-seasonally adjusted input producer price index (PPI) in the UK remained steady on a MoM basis in September, lower than market expectations for an advance of 0.40%. Input PPI had recorded a rise of 0.20% in the prior month.

UK PPI core output advanced as expected in September

The non-seasonally adjusted PPI core output in the UK climbed 1.40% on a YoY basis in September, compared to a revised similar rise in the prior month. Markets were anticipating PPI core output to advance 1.40%.

UK retail price index rose as expected in September

In the UK, the retail price index rose 2.00% in September on a YoY basis, compared to an advance of 1.80% in the prior month. Market expectation was for the retail price index to advance 2.00%.

UK input PPI rose less than expected in September

On a YoY basis, the non-seasonally adjusted input in the UK climbed 7.20% in September, less than market expectations for an advance of 7.40%. Input PPI had risen by a revised 7.80% in the prior month.

UK output PPI advanced more than expected in September

On a YoY basis, in the UK, the non-seasonally adjusted output PPI rose 1.20% in September, higher than market expectations for a rise of 1.10%. Output PPI had registered a revised rise of 0.90% in the prior month.

UK retail price index registered a rise in September

Compared to a reading of 264.40 in the previous month, the retail price index climbed 0.20%, on monthly basis, to a level of 264.90 in September, in the UK. Market anticipation was for the retail price index to advance to 264.70.

UK PPI core output rose less than expected in September

The non-seasonally adjusted PPI core output in the UK registered a rise of 0.10% in September on a MoM basis, compared to a revised similar rise in the previous month. Markets were expecting PPI core output to rise 0.20%.

UK output PPI advanced as expected in September

In September, the non-seasonally adjusted output PPI registered a rise of 0.20% on a MoM basis in the UK, compared to a rise of 0.10% in the previous month. Market expectation was for output PPI to advance 0.20%.

UK house price index advanced more than expected in August

On a YoY basis, in the UK, the house price index recorded a rise of 8.40% in August, more than market expectations for a rise of 7.80%. In the previous month, the house price index had recorded a revised rise of 8.00%.

UK core CPI rose more than expected in September

On a YoY basis, the core CPI advanced 1.50% in the UK, in September, higher than market expectations for an advance of 1.40%. The core CPI had registered a rise of 1.30% in the prior month.

UK retail price index ex-mort int. payments advanced as expected in September

On a YoY basis, in September, the retail price index ex-mort int. payments advanced 2.20% in the UK, in line with market expectations. The retail price index ex-mort int. payments had risen 1.90% in the previous month.

US housing market index dropped in October

The housing market index in the US recorded a drop to 63.00 in October, at par with market expectations. In the previous month, the housing market index had recorded a level of 65.00.

US Redbook index remained flat in the last week

The seasonally adjusted Redbook index in the US remained steady in the week ended 14 October 2016 on a MoM basis. In the previous week, the Redbook index had recorded a drop of 0.20%.

US CPI rose as expected in September

In September, the CPI recorded a rise of 0.30% on a MoM basis in the US, meeting market expectations. In the previous month, the CPI had registered a rise of 0.20%.

US net TIC long term purchases recorded a drop in August

In the US, net treasury international capital (TIC) long term purchases dropped to $48.30 billion in August, compared to a revised level of $102.80 billion in the prior month.

US core CPI advanced in September

The seasonally adjusted core CPI rose to a level of 248.61 in September, in the US, compared to a revised level of 248.33 in the previous month. Markets were expecting the core CPI to climb to a level of 248.73.

US Total net TIC flows registered a drop in August

Total net TIC flows in the US recorded a drop to $73.80 billion in August. Total net TIC flows had recorded a revised level of $118.00 billion in the previous month.

US CPI (ex-food & energy) advanced less than expected in September

In September, the CPI (ex-food & energy) advanced 0.10% in the US, on a monthly basis, less than market expectations for a rise of 0.20%. The CPI (ex-food & energy) had registered a rise of 0.30% in the previous month.

US Redbook index climbed in the last week

The Redbook index registered a rise of 1.00% on an annual basis in the US, in the week ended 14 October 2016. In the prior week, the Redbook index had advanced 0.50%.

US CPI registered a rise in September

The non-seasonally adjusted CPI advanced to 241.43 in the US, in September, lower than market expectations of a rise to a level of 241.50. The CPI had recorded a revised reading of 240.85 in the prior month.

US CPI rose as expected in September

On a YoY basis, in the US, the CPI registered a rise of 1.50% in September, in line with market expectations. The CPI had risen 1.10% in the previous month.

US CPI (ex-food & energy) advanced less than expected in September

In September, the CPI (ex-food & energy) climbed 2.20% on an annual basis in the US, lower than market expectations for an advance of 2.30%. The CPI (ex-food & energy) had registered a rise of 2.30% in the prior month.

Canadian manufacturing shipments advanced more than expected in August

On a MoM basis, manufacturing shipments in Canada climbed 0.90% in August, higher than market expectations for a rise of 0.30%. Manufacturing shipments had recorded a revised flat reading in the prior month.

Chinese industrial production (YTD) advanced less than expected in September

In September, on an annual basis, industrial production (YTD) climbed 6.00% in China, less than market expectations for an advance of 6.10%. Industrial production (YTD) had registered a similar rise in the previous month.

Chinese M0 money supply rose less than expected in September

In September, on an annual basis, M0 money supply recorded a rise of 6.60% in China, lower than market expectations for a rise of 7.30%. M0 money supply had climbed 7.40% in the previous month.

Chinese retail sales (YTD) rose more than expected in September

In September, retail sales (YTD) in China registered a rise of 10.40% on an annual basis, compared to an advance of 10.30% in the previous month. Markets were expecting retail sales (YTD) to climb 10.30%.

Chinese GDP advanced as expected in 3Q 2016

On an annual basis, gross domestic product (GDP) climbed 6.70% in China, in 3Q 2016, at par with market expectations. In the previous quarter, GDP had registered a similar rise.

Chinese GDP rose as expected in 3Q 2016

On a QoQ basis, GDP in China climbed 1.80% in 3Q 2016, compared to a similar rise in the prior quarter. Market expectation was for GDP to climb 1.80%.

Chinese fixed assets investment excl. rural YTD advanced as expected in September

Fixed assets investment excl. rural YTD registered a rise of 8.20% in China on an annual basis in September, at par with market expectations. In the prior month, fixed assets investment excl. rural YTD had registered a rise of 8.10%.

Chinese M1 money supply rose more than expected in September

M1 money supply recorded a rise of 24.70% on a YoY basis in September, in China, higher than market expectations for a rise of 24.50%. In the prior month, M1 money supply had climbed 25.30%.

Chinese aggregate financing recorded an unexpected rise in September

In September, aggregate financing in China recorded an unexpected rise to a level of CNY 1720.00 billion, compared to a revised level of CNY 1469.70 billion in the previous month. Market expectation was for aggregate financing to fall to a level of CNY 1390.00 billion.

Chinese M2 money supply advanced less than expected in September

In September, on an annual basis, M2 money supply climbed 11.50% in China, lower than market expectations for an advance of 11.60%. M2 money supply had advanced 11.40% in the prior month.

Chinese industrial production rose less than expected in September

Industrial production rose 6.10% on a YoY basis in September, in China, compared to an advance of 6.30% in the prior month. Market anticipation was for industrial production to climb 6.40%.

Chinese retail sales rose as expected in September

In September, on a YoY basis, retail sales climbed 10.70% in China, compared to an advance of 10.60% in the prior month. Markets were expecting retail sales to climb 10.70%.

Chinese new Yuan loans advanced in September

In September, new Yuan loans recorded a rise to CNY 1220.00 billion in China, compared to a level of CNY 948.70 billion in the prior month. Markets were expecting new Yuan loans to climb to CNY 1000.00 billion.

Wed, 19 Oct 2016 08:21:00 +0100
Central Banks Have Lost the Plot, QE is Sending the World Over a Cliff Central Banks Have Lost the Plot, QE is Sending the World Over a Cliff
Here is an early section of this powerful article by William Hague for The Telegraph:

In 2008 the central banks reacted to a massive crisis they had completely failed to foresee by cutting rates to record lows and embarking on “quantitative easing” – pumping trillions of dollars into their economies by buying up the assets of commercial banks. The trouble is that eight years later they are, to varying degrees, still doing it. Like doctors keeping their patients on a drip many years after an operation, they are losing credibility and producing very dangerous side effects. 
There are at least 10 serious drawbacks to this – all of which can be accepted for a short period but become either politically explosive or economically unwise if continued indefinitely.
Savers find it impossible to earn a worthwhile return, which drives them into riskier assets thus causing the price of houses and shares to be inflated ever higher.
Higher asset prices make people who own them much richer, while leaving out many others, seriously exacerbating social and political divides and fuelling the anger behind “populist” campaigns.
Pension funds have poor returns and therefore suffer huge deficits, causing businesses to have to put more money into them rather than use it for expansion.
Banks find it harder to run a viable business, contributing to the banking crisis now visibly widespread in Italy and Germany in particular.
Those people who are able to save more do so, because they need a bigger pot of savings to get an equivalent return, so low interest rates cause those people to spend less, not more.
Companies have an incentive to use borrowed money to buy back shares – which they are doing on a big scale – rather than spend the money on new and productive investments.
Central banks are starting to buy up corporate bonds, not just government bonds, to keep the system inflated – so they are acquiring risky assets themselves and giving preference to some companies over others.
“Zombie companies”, which can only stay in business because they can borrow so cheaply, are kept going even though they would not normally be successful – dragging down long-term productivity.
Pumping up the prices of stock markets and houses without an underlying improvement in economic performance becomes ever more difficult to unwind and ultimately threatens an almighty crash whenever it does come to an end – wiping out business and home buyers who got used to ultra-low rates for too long.
People are not stupid; when they see emergency measures going on for nearly a decade it undermines their confidence in authorities, who they think have lost the plot.
I am not an economist but I have come to the conclusion that central banks collectively have now indeed lost the plot. The whole point of their independence was that they could be brave enough to make people confront reality. Yet in reality they are blowing up a bubble of make-believe money to avoid immediate pain, except for penalising the poor and the prudent.
Earlier this year I put this view to the top staff at the central bank of a major Far East economy, thinking they might set my mind at rest and explain why everything made sense. But, far more alarmingly, they said they agreed with me: their problem was that no single authority can opt out of these policies because they might cause a recession for their own country unless there was a global, co-ordinated move gently to raise interest rates.

David Fuller's view
I think most economically savvy people would now concur with William Hague’s article.  I also think a coordinated global response led by the USA and other developed economies would be the least disruptive.  The problem is that the US economy, while somewhat firmer than others due mainly to its technology lead, significant energy production and healthier banking sector, is clearly leading the economic recovery cycle among major nations.
Consequently, a unilateral rate hike, even if only 25-basis points, could push the US Dollar Index up out of its current trading range.  If so, this would be a headwind for not only the US economy, in proportion to additional USD strength, but also for emerging markets which borrowed in the highly liquid currency at lower levels.  In other words, a too strong Dollar could further delay the next global economic recovery which is sorely needed.

Investor Cash Levels Jump Toward Levels Not Seen Since 9/11
Here is the opening of this interesting article from Bloomberg:

Fears of a bond-market crash, a breakdown in globalization, a new crisis in the euro area?
There were a bevy of reasons for fund managers to push their cash balances to 5.8 percent of their portfolios in October, up from 5.5 percent last month, matching levels not seen since the aftermath of the Brexit vote. The share of cash hasn't been higher than that since November 2001, shortly after the terrorist attacks in the U.S.
The amount of dry powder in portfolios is above that seen during both Europe's sovereign-debt crisis and the U.S. debt-ceiling debacle, according to Bank of America Merrill Lynch's monthly survey of money managers.
“This month’s cash levels indicate that investors are bearish, with fears of an EU breakup, a bond crash and Republicans winning the White House jangling nerves,” said Michael Hartnett, the bank's chief investment strategist.
There are no shortage of risks on the investor horizon, according to market participants surveyed, with 18 percent fearful of a disorderly adjustment in the bond market.
The monthly survey solicits the views of investors with more than half a trillion dollars in cumulative assets under management.
Over the past year and a half, Hartnett has advised investors to hold more cash in their portfolios or be outright long paper money on multiple occasions.
In mid-September, a Goldman Sachs Group Inc. team led by Managing Director Christian Mueller-Glissman downgraded bonds on a three-month basis while also retaining an overweight position on cash.

David Fuller's view
These cash reserves are higher than many of us expected and this news may have contributed to today’s firm performance by stock markets.

The Weekly View: We Favor Stocks and Corporate Bonds
My thanks to Rod Smyth for this astute letter published by RiverFront Investment Group.  Here is a brief sample from the opening:
3rd Quarter Review: This week, we will publish our October Chart Pack, which looks back at the markets in the 3rd quarter and discusses our outlook and current positioning.  Stocks bottomed shortly after the Brexit vote and rebounded nicely during the 3rd quarter.  Non-US stocks improved, led by emerging markets, and high yield bonds added another strong quarter.  In the case of both emerging markets and high yield bonds, we believe 2016’s strong returns should be viewed in the context of the tough year they both experience in 2015.  While high yield has more than recovered its 2015 losses, emerging markets are still below January 2015 levels.  Both have been influenced by the commodity cycle and have been helped by the recovery in commodity prices this year.  

David Fuller's view
Historically, commodities have generally been cyclical outperformers in the latter stages of stock market cycles.  Brazil demonstrates this very clearly over the last two cycles, with this year’s strong rebound and also by advancing strongly in 2Q 2008, after the DJIA and other broadly diversified US indices peaked in 3Q 2007.  

Wed, 19 Oct 2016 08:18:00 +0100
VSA Capital Market Movers - BHP Billiton BHP Billiton (LON:BLT) has released soft operational results with QoQ and YoY declines in production of petroleum and copper, flat production of iron ore and met coal whilst thermal coal production was impacted by adverse weather. However, BLT should benefit from stronger prices in bulk commodities through the quarter.

Petroleum production was down 15% QoQ and 3% YoY to 55MMboe although full year guidance of 200-210 suggests further production cuts. Copper production of 355kt was down 6% QoQ and 14% YoY due to continued grade weakness at Escondida, although this has been an issue for some time. Olympic Dam production was affected by planned maintenance as well as an unplanned power outage. As a result of the power outage full year production guidance for group copper production of 1.66mnt is now under review.

Iron ore production of 58mnt was flat YoY and up 4% QoQ, on an attributable basis. Full year guidance of 228-237mnt remains unchanged although production is weighted towards the balance of the year as additional capacity is added at Jimblebar.

Met coal was up 1% YoY although down 9% YoY to 11mnt with full year guidance of 44mnt unchanged. Thermal coal production was down 4% YoY although up 9% QoQ with full year guidance unchanged at 30mnt. Coal production was adversely affected by weather conditions in New South Wales in the period.

Wed, 19 Oct 2016 08:15:00 +0100
Breakfast News AIM Breakfast: Bellway, Ryan Air Markets

The FTSE-100 finished yesterday's session 0.76% higher at 7,000.06, whilst the FTSE AIM All-Share index closed 0.35% worse-off at 823.31. In continental Europe, the CAC 40 index ended the day at 4,508.91 and the DAX closed at 10,631.55.
Wall Street
In New York, the Dow Jones rose 0.42% to 18,161.90, the S&P-500 added 0.62% to end at 2,1339.60 whilst the Nasdaq gained 0.85% to finish at 5,243.84.
In Asian markets this morning, the Nikkei 225 was up 0.21% at 16,998.40, while the Hang Seng gained 0.66% to 23,394.39.
In early trade today, WTI crude was up 0.99% to $50.79/bbl.

Major pension plan shelved by government
The government has given up on plans to allow pensioners to raise cash through selling their annuities to insurance companies. The idea was initially brought to light within the March 2015 Budget by the then Chancellor George Osborne as part of his plan for "pension freedoms". Despite coming to the conclusion last December that the plan would come into affect next April, the government has since changed its mind. It addmitted that several pensioners might be lured into making the wrong decision.

Company news

Bellway (LON:BWY, 2,373.84p) – Buy
Bellway, the UK housebuilder, yesterday announced its preliminary results for the year ended 31 July 2016 (FY2016). During the period, the Group sold 8,721 homes, up +12.5% at an average selling price of £252,793, up +12.9% against comparable period (FY2015). This has resulted revenue to advance +26.9% to £2.2bn, while operating margin (before exceptional items of £17.3m profit from Barking Riverside interest disposal) improved by +1.6% to 22%. Pre-tax profit therefore jumped by +40.6% to £497.9m and consequently, EPS grew by +42% to 328.7p per share. During the period, net asset value per ordinary share has increased by +18.4% to 1,522p and return on capital employed rising by +4.3% to 28.2%. The Group contracted 9,555 new plots during the period. Net cash at the period-end stood at £26.5m (end-FY2015: net bank debt of £38.5m). Bellway’s Chairman, John Watson commented “Bellway has invested significantly in high quality land opportunities and infrastructure over recent years. As a result, with its strong balance sheet and structure of nineteen operating divisions, the Group is well placed to deliver additional value for shareholders through further disciplined volume growth in the current financial year.” The Group proposed to pay a final dividend of 74p per share, taking full year dividend of 108p, up +40.3%.

Our view: As previously reported in August, Bellway delivered excellent full year results, achieving record volume and operating margin and confidently hiked the dividend up by +40%. Notwithstanding the Brexit vote, housebuilding sector continue to perform strongly, driven by the strong market fundamentals, which are a result of the continuing supply-demand imbalance, low interest rates, government incentives and a ‘business-as-usual’ attitude by mortgage lenders, altogether keeping customer demand high. However, London is an exception, where the Group’s revenue and completions have both fallen slightly to 21% (FY2015: 24%) and 14% (FY2015: 19%), respectively, although the Group said demand in London remains strongest in more affordable locations. Post the period, in the 9 weeks since 1 August, average reservations per week stood at 162, up +9% compared to the same time last year. This has resulted order book to further expand to 4,701 homes (4 October 2015: 4,432 homes), with a value of £1,159.3m (4 October 2015: £1,032.9m), as at 2 October, with sales prices on reservation in line with or slightly ahead of expectations. Brexit has created some uncertainty, nevertheless, as an experienced housebuilder who has been operating in a sector that is recognised to be viciously cyclical, Bellway has strengthened its balance sheet and retained a strong cash reserve at the period-end in order to maintain flexibility to adapt rapidly to any change in market conditions. Given Bellway’s continuing confidence for FY2017, along with a £1.2bn forward order book, the likelihood of ‘lower for longer’ UK interest rates as well as the ability to take advantage of a current supportive environment with its strong land bank, Beaufort maintain its BUY rating on the shares.

Ryan Air (LON:RYA, 12.30p) – Buy
Ryanair has reduced its full year net profit guidance by 5% from a previous range of €1.375bn - €1.425bn to a new range of €1.30bn - €1.35bn. The primary cause of this slightly lower growth in full year profitability is the double digit fall of Sterling post Brexit which will reduce H2 average fares by between 13% to 15% as opposed to the previously guided 10% to 12%. Ryanair confirmed that its H1 fares were marginally weaker at -10% compared to previously guided -9%. However, these lower fares will be partly offset by a better than expected cost performance. Ryanair now expects full year ex-fuel unit costs to decline by 3% compared to previously guided 1%. Ryanair also expects full year load factor to be 1% better than guided at 94%, and now expects that full year traffic will increase to 119m, which is 12% growth on last year's 106m customers.

Our view: The recent sharp decline in Sterling post Brexit (which accounts for approx. 26% of Ryanair's FY17 revenues) will weaken H2 yields by slightly more than the Company had originally expected. While higher load factors, stronger traffic growth and better cost control will help to ameliorate these weaker revenues, it is prudent now to adjust full year guidance which will rise by approx. 7% (over FY 2016) rather than its original guidance of 12%. This decline is primarily due to the impact of weaker Sterling on our H2 fares. This revised guidance remains heavily dependent upon no further weakness in H2 fares (-13% to -15%) or Sterling from its current levels (€1 = £0.9050). The Company have raised traffic guidance from 117m to 119m for FY16 (FY15: 106m). This, and the Company’s ex-fuel costs decline, will put added pressure on competitors and we therefore retain our Buy stance on the Company.

Wed, 19 Oct 2016 08:07:00 +0100
Too stable to be true? FTSE 100 Index called to open flat at 7000, holding above the round number overnight following yesterday’s breakout. A bullish pennant pattern has potentially formed, a breakout from which could help the index back to 7100. Bulls will be looking for a breakout from the pennant to confirm the September uptrend is alive and well. Bears will be hoping that 7000 and overnight rising lows give way. Watch levels: Bullish 7020, Bearish 6990

A lukewarm open follows a mixed Asian session where investors failed to derive any excitement whatsoever from spookily stable Chinese GDP growth of 6.7% (that’s three quarters in a row!) that puts the world’s #2 economy on track to meet its full year target. Faster growth for Retail Sales was offset by weakness for Industrial Production. The GDP stability leads some to ask whether more aggressive measures might be dared to try and calm credit and property-inflated bubbles. Delicate.

Japan’s Nikkei is posting small gains with a stronger Yen offsetting Energy’s benefit from higher oil prices. Australia’s ASX is outperforming thanks to solid China GDP data and a weaker Aussie dollar and while BHP Billiton (BLT) reported Iron Ore output -6% last quarter, this is denting metals prices but not hurting Miners too much. Chinese bourses underperforming in spite of GDP.

US equities posted gains at session close yesterday as macro data met expectations and Q3 earnings season continued. The Dow Jones finished 0.4% higher and was led by the Healthcare sector, positive results from UnitedHealth & Goldman Sachs helping to offset a poor performance from IBM & J&J having missed earnings forecasts. The Nasdaq outperformed with a gain of 0.9%, helped by guidance busting Netflix shooting up over 20%, while the S&P 500 closed 0.6% higher, also led by Healthcare. After market results sent Intel’s shares -5%  but Yahoo’s were +1%.

Crude Oil prices are showing a strong gain after overnight API inventory data that showed a surprise drawdown following last week’s first build in 4 weeks. A consensus-beating 3.8m drawdown helped to buoy prices of the black stuff, with Brent back above $52 per barrel and US steady around $50.75. Official DoE EIA inventories later today will, as always, either confirm or dispel this, with forecasts similar to API projections of a build around 2.8m barrels.

Gold, having reached the top of its two-week $1250-1265 trading channel overnight, has fallen as the USD strengthens after a strong overnight performance from the Pound and Euro. Speakers from the Fed this afternoon have potential to produce movements in the precious metal, as any hints about an imminent Fed rate hike will be seized upon by investors following dovish comments from the Chair and Vice Chair last week.

Today’s focus, beyond the fallout from overnight China GDP data, will be UK Unemployment and Wages. Both are expected to have held firm in the three months to August, adding to arguments that the backside isn't falling out of the UK economy despite Brexit, but GBP could still move as a result.

Thereafter, investors will be left wanting for anything major until early afternoon when we get the latest update on US Housing Starts and Building Permits (seen unchanged but could influence US equities) and Weekly Oil Stocks which have a high probability of moving US Crude prices, especially after another bullish API print.

The evening sees the latest US Fed Beige book provide us with a summary of anecdotal information on current economic conditions that may sway sentiment about US growth and the likelihood of a US rate hike by year end. Watch US equities and indices.

Speakers today include the Fed’s Williams, the UK Chancellor Hammond, the Bank of England’s Haldane and the Fed’s Kaplan. A sprinkling of comment from the EU’s Juncker, Tusk and the ECB’s Nouy are also on the roster.

Wed, 19 Oct 2016 08:04:00 +0100
In the news: Base Resources, Weatherly International & KEFI Minerals At the end of last week Jim Taylor and Spiro Pippos put out a couple of pieces that I think it’s worth reminding you about. First up was Base Resources*† — September Quarterly Activities Report, 13 October 2016. Base’s 1QFY17 activities report shows that it is continuing to offer quality exposure to an improving market for mineral sands from its high-margin Kwale operations in Kenya. Production was in line with forecasts, with little change on last quarter, while sales remained strong, albeit lower than last quarter’s record shipment levels. Guidance for 2017 Kwale production remains unchanged. We kept our Buy rating and target price of A$0.30.
This was followed by Weatherly International*† — Annual Results to June 2016, 14 October 2016. During FY16 Weatherly saw its Tschudi operation in Namibia produce 15,884t of copper at C1 costs of US$4,199/t (US$1.91/lb). Cash outflows from operations were US$1.4m and cash invested was US$6.2m. The resulting shortfall was funded by an increase in debt, and at the end of the period cash stood at US$4.5m and debt at US$105.4m. The impact of water inflows on production are expected to be resolved by the end of the year and production guidance for FY17 was maintained at 17,000t at C1 costs in the range of US$4,100-4,200/t (US$1.86-1.91/lb). We maintained our Speculative Buy rating, with a target price of 1.2p.

Tue, 18 Oct 2016 13:37:00 +0100
Today's Market View - Bacanora Minerals, DiamondCorp, Kefi Minerals, Mkango Resources Bacanora Minerals (LON:BCN) – Jamie Strauss appointed as non-executive director
DiamondCorp (LON:DCP) – Restart of mining following Section 54 shutdown and strategic review
Kefi Minerals* (LON:KEFI) – Q3 operational update
Mkango Resources* (LON:MKA) – The Phalombe license renewed until Jan/19

China – Credit expansion numbers released this morning show a pick up in the monetary base growth pace (M2 based) through Sep which bodes well with growth-supportive government measures seen so far this year.
• New Yuan Loans (CNY): 1,220bn v 949bn in Aug and 1,000bn forecast.
• Aggregate Financing (CNY): 1,720bn v 1,470bn in Aug and 1,390bn forecast.
• M2 Money Supply (%yoy): 11.5 v 11.4 in Aug and 11.6 forecast.
• A different report showed FDI by Chinese companies continued to grow at fast pace increasing 53.7%yoy in the first nine months of 2016 and coming in at $134.2bn (cumulative).

Stronger metals and Brent prices on the back of an improved risk appetite over better than forecast credit growth Chinese numbers drive equities higher this morning. 
• US$ index extended Monday’s decline from a seven-month high.
• Brent prices climbed 0.9% today reflecting lower US$ index and as markets are looking forward to the meeting of OPEC members later this month when national output quotas to be discussed.
• Iron ore futures prices post the first daily decline in the last six days despite steel prices growing stronger and hitting the highest level since May this year. China is due to release national steel production numbers tomorrow.

China – to build 50,000pa hybrid electric vehicle plant for Rmb2.02bn ($300m)
• China has approved a plan to build 50,000pa green vehicles .
• The plant is to be built by Qiantu Auto who unveiled a the K50 electric roadster in May this year which looks like a cross between a BMW i8 and a Bugatti Veyron.  The new K50 coupe is on sale this year with roadster sales next year.  Top speed 200kph, 0-100 in 4.6 seconds. Range 300km. Batteries unknown.  It has an aluminium frame and a carbon fibre body.  The car marks a new era in China’s entry into the top league of motor manufacturing.
• The Chairman of the Society of Automotive Engineers in China, Mr Fu Yuwu, said the nation may need another 15 years of development before reaching a world-leading level.
• Fu said: "Mild hybrid consumes less fuel than combustion, so our society propose hybrid technologies without plugs be included in the roadmap as energy saving vehicles."  Hybrid car buyers are eligible for incentives worth thousands of yuan which halved the tax on purchases of passenger vehicles with engines that are 1.6ltrs or smaller.

Dow Jones Industrials  -0.29% at 18,086
Nikkei 225    +0.38% at 16,964
HK Hang Seng    +1.55% at 23,394
Shanghai Composite    +1.40%  at 3,084
FTSE 350 Mining   +2.35% at 13,227 FTSE 350 +80% since 1st January
AIM Basic Resources   +0.83% at 2,514 AIM Basic Resources +54% since 1st January

Economic News
US – New York state manufacturing index recorded a third consecutive monthly contraction in Oct as producers are reported to be struggling with a strong US$ and cautious global economic outlook.
• On a more positive note, the report pointed to improved 6m outlook.
Date Index Period   Actual Est Previous
Monday New York Manufacturing Oct   -6.8 1.0 -2.0
  Industrial Production Sep %mom 0.1 0.1 -0.5
  Capacity Utilization Sep % 75.4 75.6 75.3
Tuesday CPI Sep %mom  0.3 0.2
CPI Sep %yoy  1.5 1.1
Core CPI Sep %mom  0.2 0.3
  Core CPI Sep %yoy   2.3 2.3
Wednesday Housing Starts Sep %mom  2.9 -5.8
  Building Permits Sep %mom   1.1 0.7
Thursday Weekly Jobless Claims    
  Existing Home Sales Sep %mom   0.4 -0.9
Friday Markit Manufacturing PMI Oct       51.5
Source: Bloomberg     

Australia – The RBA keeps a close eye on the nation’s unemployment and housing markets saying there is “considerable uncertainty” over momentum, released policy meeting minutes showed.
• While unemployment has been trending lower after hitting a more than a decade high at the end of 2014, the underemployment rate is reported to have increased over the past year pointing to the presence of slack in the labour market.
• Housing market is reported to be showing mixed dynamics with some parts of the country posting strong increases and declines recorded in others.
• A strong growth in new apartments is expected to be completed over the next few years with the RBA to be following the market closely measuring the effect of increased supply on prices.

US$1.1018/eur vs 1.0996/eur yesterday.   Yen 104.04/$ vs 104.12/$.   SAr 14.062/$ vs 14.256/$.   $1.225/gbp vs $1.218/gbp.
0.768/aud vs 0.760/aud.   CNY 6.739/$ vs 6.738/$.

Commodity News
Precious metals:
Gold US$1,262/oz vs US$1,254/oz yesterday –
     Gold ETFs 66.0moz vs 66.0moz yesterday –
Platinum US$946/oz vs US$938/oz yesterday
Palladium US$641/oz vs US$648/oz yesterday
Silver US$17.65/oz vs US$17.39/oz yesterday

Base metals:   
Copper US$ 4,700/t vs US$4,687/t yesterday –
Aluminium US$ 1,675/t vs US$1,652/t yesterday –
Nickel US$ 10,375/t vs US$10,450/t yesterday –
Zinc US$ 2,308/t vs US$2,261/t yesterday –
Lead US$ 2,013/t vs US$1,999/t yesterday
Tin US$ 19,610/t vs US$19,550/t yesterday –

Oil US$51.8/bbl vs US$51.9/bbl yesterday -
Natural Gas US$3.262/mmbtu vs US$3.238/mmbtu yesterday
Uranium US$21.65/lb vs US$21.90/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$56.4/t vs US$55.9/t –
Chinese steel rebar 25mm US$406.2/t vs US$402.9/t
Thermal coal (1st year forward cif ARA) US$68.9/t vs US$67.0/t yesterday –
Premium hard coking coal Aus fob US$232.6/t vs US$226.3/t

Tungsten - APT European prices $191-197/mtu vs $183-197/mtu unch last week

Company News

Bacanora Minerals (LON:BCN) 83p, Mkt Cap £89.5m – Jamie Strauss appointed as non-executive director
• Bacanora Minerals has announced the appointment of Jamie Strauss as a non-executive director to the board.
• Having worked previously with Jamie at Societe Generale in London after it bought ‘Strauss Turnbull’ we can vouch for his good character.
• More recently Jamie worked for Hargreave Hale and BMO Capital Markets.
• Jamie a non-executive director of Altius Minerals and Gold Standard Ventures and was on the board of Extorre Gold Mines till its sale to Yamana in 2012.
• Bacanora is working towards the financing and construction of a 17,500tpa lithium carbonate mine and plant from lithium rich clays in Mexico.  The project should expand to 35,000tpa once the upscaling and expansion of the plant is proven to work from an economic and technical perspective.
• Bacanora are currently running a pilot plant for to prove the lithium extraction process, to produce samples for potential consumers/offtakers and to train staff and management ahead of the upscaling to the Phase 1, 17,500tpa plant.
• A pre-feasibility study reports an initial capital cost of US$240m and a further US$178m for the second phase of construction
• The full scale project is estimated in the PFS to have a capital cost of US$428m with an NPV of US$776m and a post tax IRR of 25% for the full 35,000tpa plant.  The project could payback in five years.  There is further potential to produce up to 50,000tpa of potassium sulphate in the third year for sale to the domestic fertiliser industry.
• A fuller feasibility study is expected in late Q1 of 2017.

DiamondCorp (LON:DCP) 3.3p, Mkt Cap £15.8m – Restart of mining following Section 54 shutdown and strategic review
• DiamondCorp have regained access to the Lace diamond mine following the DMR’s Section 54 shutdown to investigate the cause of a fire in a loader.
• The company has recovered quickly from the shutdown and should restart diamond production imminently. 
• DiamondCorp is acutely short of cash at this very sensitive point in its development and is also suffering from the effects of blasting into old workings causing problems with mining and mine development.
• The result has been to halve ore production from the mine at a particularly critical time in the mine commissioning process.
•  Management are to be commended for getting through the Section 54 shutdown with just four days of mining lost to the fire.
• The ‘strategic review’ and commencement of a potential ‘formal sale process’ appears to involve the City Code on Takeovers and Mergers.

Kefi Minerals* (LON:KEFI) 0.4p, Mkt Cap £16.7m – Q3 operational update
• Kefi Minerals has published an operational update for the third quarter.
• The company reports it has raised £3.8m mainly to support its pending project finance for the development of the Tulu Kapi gold project in Ethopia.
• Management also reckon the company is entitled to US$3.5m worth of VAT refund from the Ethiopian Tax Authorities.
• Mark Wellesley-Wood also joined the Kefi Minerals as a non-executive director in the last quarter to strengthen the board and help give confidence to project lenders.
• “The company also reports that community resettlement, livelihood restoration and community development programmes progressed and remain ongoing.
• Tulu Kapi project contract drafting advanced with Ausdrill for mining and Lycopodium for plant.
• Progressed drafting of shareholders' agreement with the Government of Ethiopia.
• Development Bank of Ethiopia completed its evaluation process and the National Bank of Ethiopia (the central bank) approved the proposed maximum senior debt-gearing.
• Updated the Project timetable with the Government, project contractors and potential finance syndicate and revised the date for start-up of production to mid-2018.
• Received formal Front End Engineering and Design ("FEED") proposal for US$68 million from Lycopodium under its proposed fixed price Engineering Procurement and Design ("EPC") contract. This capital item, which is the largest single component of total Tulu Kapi capital expenditure, has increased 4% since the tender twelve months ago, mainly due to currency movements.
• Reviewed other capital estimates with contractors and financial advisers. After also adding contingencies and provisions for non-Tulu Kapi costs, the estimated funding requirement has been increased to c. US$150-160 million, which is fully covered by the financing proposals being considered and remains significantly less than the original c. US$289 million Tulu Kapi capital expenditure estimates of the previous owner of the Project.”
*SP Angel act as Nomad and broker to Kefi Minerals

Mkango Resources* (LON:MKA) 3.9p, Mkt Cap £2.9m – The Phalombe license renewed until Jan/19
• The government extended the Exclusive Exploration Licence 0284 (EPL 0284) hosting the Company’s flagship Songwe Hill rare earth project by another two years.
• The Phalombe license is now set to run through Jan/19 allowing the Company to continue de-risking the project and advancing it towards the development stage.
*SP Angel acts as Nomad and Broker to Mkango Resources

Tue, 18 Oct 2016 13:09:00 +0100
Burberry not in fashion, according to broker Liberum Tue, 18 Oct 2016 10:43:00 +0100 Northland Capital Partners View on the City - Premier African Minerals, Botswana Diamonds, Mercom Capital, Altona Energy Premier African Minerals (LON:PREM) – CORP: Gold acquisition
Market Cap: £7.5m; Current Price: 0.4p

Premier acquires a 4.5% stake in Casa Mining
Premier African Minerals has acquired a 4.5% stake in Casa Mining Limited that holds 71.25% and is the operator of, the Misisi Gold Project, located in South Kivu in the Democratic Republic of Congo, for US$250,000. Prem has an irrevocable right to acquire an additional interest of up to 30% of Casa within 60 days from the date of this announcement at a price to be agreed.

Prem has raised £300,000 through the issue of 93,750,000 shares at 0.32p per shares to fund the investment in Casa, as well as, general working capital.

Casa owns three mining licences in the South Kivu Province in the Eastern Congo Gold Belt. The Company has established an initial near-surface inferred mineral resource estimate of 1.2moz at 1.7g/t Au at the Akyanga Deposit, which remains open at depth and along strike.

A scoping study at the project confirms the potential for an 80,000oz Au heap leach operation with a capex cost of US$87.4m and a cash operating cost of US$628/oz. The Project has a NPV8 of US$171m and IRR of 35% at a gold price of US$1,300/oz Au.

Casa has spent US$30m since 2009 and has identified a 60km long corridor prospective for gold with multiple prospects identified. Drill testing and trenching at some of these prospects has returned significant intercepts.

Casa plans to commence a 5,000m exploration programme to validate the 3moz Au target at Akyanga and issue a revised scoping study by the end of 2017.

Following the placing Prem will have 1,979,963,770 shares in issue.

NORTHLAND CAPITAL PARTNERS VIEW: A positive acquisition for Premier African Minerals with a 4.5%-interest in Casa Mining, a gold development company with an advanced feasibility stage gold project in the high-risk destination of the DRC. Importantly, Prem has the potential to increase its stake by an additional 30% interest giving it a major stake in the Casa and the ability it exert influence on the business direction, should it proceed with the acquisition of additional shares.

Botswana Diamonds (LON:BOD) – SPECULATIVE BUY*: AK22 update
Market Cap: £5.4m; Current Price: 1.6p

Drilling commences
Drilling has commenced on kimberlite pipe AK 22 on PL260, located in the Orapa region of Botswana.

A further announcement will be made in due course regarding the commencement of drilling on PL135, located in the Gope region of Botswana.

Mercom Capital (LON:MCC) – CORP: Potential investment
Market Cap: £4.6m; Current Price: 13p

From yesterday: Investment in Mobile Wireless and Satellite SAPI
Mercom Capital will invest £600,000 for a 16% interest in Mobile Wireless and Satellite SAPI – MOWISAT - a newly-established Mexican company in the financial technology and payments industry.

MOWISAT intends to be the first provider of fintech solutions for unbanked communities in Mexico which it plans to deliver as a mobile virtual network operator - MVNO. MOWISAT has executed a Letter of Intent to offer these services on an exclusive basis through a nationwide commercial and retail distribution network with over 25,000 outlets accessing approximately 40m people in rural areas and the outskirts of every major city in Mexico.   MOWISAT plans to deploy its financial services offering in Q1 2017, and subsequently launch in similar rural markets elsewhere in Latin America.

The Mexican cellular market has around 109m subscribers, around 84% of which are on prepaid packages. Mobile penetration is approaching 89% with average ARPU across the market of approximately US$12. The new Mexican Telecommunications Regulation (Ley Federal de Telecomunicaciones y Radiodifusión), which became effective in the second quarter of 2014, opened up a variety of business opportunities for MVNOs which currently have an aggregate market share of approximately 0.8%.

MOWISAT will offer services such as micro lending, debit/credit cards, payment systems, affordable remittances, e-commerce and payment platforms (e-wallet) in collaboration with one of Mexico's leading banks which currently offers online banking services and has the resources to handle over 50 million online bank accounts. In addition, the company will provide access to its platforms to other complementary fintech solutions.  Founder MOWISAT shareholder Guillermo Zambrano Martinez, of Lottus Capital Partners (a private equity firm specializing in growth oriented companies) and his team have initiated a series of collaborations to further enhance and differentiate the business model of MOWISAT.

The Universidad de Guadalajara has recognized this unique offering and will be promoting MOWISAT's services to all its students who number approximately 16,000.

MOWISAT's experienced management team includes Davide Ferri as COO. Mr Ferri has been in the telecoms industry for over 16 years and for more than a decade has focused on Mexico as a founding partner of Aircrowd SA de CV, a provider of development platforms and services for MVNOs and MNOs including bulk SMS platforms currently handling over 10m messages per month. Bullet 1.

In a separate announcement, Calvet International Ltd., which holds 10.19% of Mercom, states that “it is intending to requisition a General Meeting of the Company for the purposes of proposing certain Board changes and implementing a strategy to deliver enhanced shareholder value”.

NORTHLAND CAPITAL PARTNERS VIEW: The combination of high mobile penetration in Mexico and emergence of deregulated opportunities for MVNOs means that this type of fintech project is well-timed.  It is also important to note the presence of an established financial network to underpin the technology and offer scale.  The proposition addresses a significant potential user population and has at the outset a number of key elements for its realisation.

Altona Energy (LON:ANR) – CORP: Petroleum Exploration Licence application
Market Cap: £3.3m; Current Price: 0.375p

PEL application submitted
On the 17/10/16 the Arckaringa UGC joint venture company submitted an application for a Petroleum Exploration Licence that covers the overlapping area covered by PEL Application 604, which was lodged by Sapex Limted a 100%-owned subsidiary of Linc Energy (now in administration).

The PEL application follows talks with the South Australian Government, which remains supportive.

NORTHLAND CAPITAL PARTNERS VIEW: Submission of the PEL application seems to be an important step forward for the Arckaringa UGC joint venture project to be advanced, though at this stage there can be no certainty of the outcome of the application.

Tue, 18 Oct 2016 09:03:00 +0100
Breakfast News AIM Breakfast: Botswana Diamonds, Directa Plus, Clinigen Group, Tethyan Resources, Accesso Technology, Orogen Gold What’s cooking in the IPO kitchen?

Misys— Press reports that the IPO valuation is to be cut by £1bn against an expected £5bn

TI Van Elle—The geotechnical contractor to the UK construction market is hoping to come to AIM later this month

Ascot Lloyd— The UK IFA is also hoping to join AIM later this month. Ascot Lloyd's strategy is to grow through a combination of organic growth and further targeted acquisitions.

Breakfast buffet

Directa Plus (LON:DCTA) 121p £53.5m

The producer and supplier of graphene-based products for use in consumer and industrial markets, announced that Ufficio Brevetti e Marchi (Italian Patent and Trademark Office) has issued notification that a further two patents have been granted covering Directa Plus' proprietary G+ manufacturing process. The Company now has a portfolio of 14 patents granted and eight pending.

Clinigen Group (LON:CLIN) 750p £860m

The global pharmaceuticals and services group, has launched its Japanese business with the opening of an office in Tokyo, Japan. The establishment of Clinigen KK further expands the Group's presence in Asia, following Clinigen's acquisition of Link Healthcare in 2015. Alongside the launch, Clinigen KK will transfer the Marketing Authorisation for its lead Specialty Pharmaceutical (SP) product Foscavir® (foscarnet sodium) back from Nobel Pharma on 1 November 2016. FY Jun16E EPS of 41.18p and 4.75p dividend.

Accesso Technology (LON:ACSO) 1620p £360m

The technology solutions provider to leisure, entertainment and cultural markets, today announces a three year agreement with Village Roadshow Theme Parks to install the accesso LoQueue virtual queuing solution at Wet'n'Wild Sydney. The agreement will see accesso's patented Qban­dsm deployed across nine attractions in one of Australia's most visited water parks. FYDec2016E revenues of £77.4m and EPS of 34.24p.

Digital Barriers (LON:DGB) 46.5p £76.79m

The specialist provider of visually intelligent solutions to the global surveillance, security and safety markets has agreed a two year £10m revolving credit facility with Investec Bank plc. The funds available through the facility will be used to meet the increasing working capital requirements of the Group's organic growth, helping to ensure that the Group's stock levels are better able to keep track with contracted revenue growth.  FYMAR17E revenues of £43.7p and pre tax profit of 0.5p rising to £48.2m and £2.9m for FY18E.

Orogen Gold (LON:ORE) 0.02p £1.33m

The gold exploration company, reports on its review of the recent diamond drilling programme and further planned step-out drilling at the Mutsk gold project in southern Armenia. Management strongly encouraged by preliminary modelling of 2016 drill results. Potential for significant strike additions. Step-out holes planned to north and south. Immediate drilling start-up.  The additional drilling is expected to be completed in approximately 4-5 weeks.

Tethyan Resources (LON:TETH) 2.25 p £2.03m

Tethyan has announced an exploration update for the Suva Ruda project over which it has an option and its proprietary Gokcanica copper-gold project both located in Central Serbia. A sampling programme has defined a coincident copper and molybdenum anomaly in soils over a 1200 meter by up to 600 meter area, with a maximum molybdenum sample value of 59 ppm. Molybdenum is a good indicator for porphyry mineralisation as it is not generally mobile in the weathering environment. 2500m drill programme to start imminently.

Botswana Diamonds (LON:BOD) 1.6p £5.4m

Further to the notification of 9 September 2016, drilling has commenced on kimberlite pipe AK 22 on Licence PL 260 in the Orapa area of Botswana. A further announcement will be made as soon as practicable regarding the commencement of drilling on licence PL 135 in the Gope region.

88 Energy (LON:88E) 2.82p £110m

The Company has provided an update on Project Icewine, located onshore North Slope of Alaska (77.5% working interest). Interpretation of modern 2D seismic data acquired by 88 Energy in early 2016 has identified multiple large conventional leads in Brookian Sequence across the Project Icewine acreage. 758 million barrels of prospective mean recoverable oil (gross) identified in current top 5 leads. 88E will undertake further technical work in order to mature the evolving conventional portfolio from which future likely drilling candidates will be selected.

Hardide (LON:HDD) 0.95p £14.58m

The provider of advanced surface coating technology, announced a pre-close trading update ahead of the publication of its preliminary results for the year ending 30 September 2016.  The Company expects to report preliminary year-end results that are in line with current market expectations with H2 seeing an improvement over H1, as projected at the time of the interim results. There are signs of a slow recovery from oil and gas markets, both from existing customers and from new opportunities. Positive progress in aerospace.

Marshall Motor Hldgs (LON:MMH) 137p £106.3m

The top 10 UK motor dealer with 103 franchises has noted the recent (downwards) movement in its share price. Other than general speculation surrounding the potential impact of Brexit on the UK economy and the automotive sector in particular, the Board knows of no reason for this. Reiterated that the outlook for the full year remains in line with previous expectations. Specifically, that FYDec16E should represent a significant improvement in earnings per share versus that achieved in the year ended 31 December 2015 (19.7p).

Tue, 18 Oct 2016 08:32:00 +0100
VSA Capital Market Movers - Stratmin Global Resources, Polymetal Stratmin Global Resources (LON:STGR)

Stratmin Global Resources (STGR LN) has received an environmental permit for its JV with Tirupati Madagascar Ventures (TMV); the Vatomaina graphite project in Madagascar. This is the final regulatory permission required for work on site development to begin. We also note that the hydro studies indicate the potential for hydroelectric power production which could benefit the project by substituting diesel power.

The Vatomaina project is a 12ktpa large flake high grade graphite project in Madagascar and TMV has significant experience of the graphite industry throughout the supply chain.
Polymetal (POLY LN)

Polymetal (LON:POLY) has announced weak production numbers for Q3 2016 at 372koz gold equivalent, down 5% YoY although up 29% QoQ due to seasonal destocking. The decline in production was a result of weak grades at Dukat and Omolon although POLY maintains that it is on track for full year production of 1.26moz gold equivalent.

The decline in production was largely a result of weaker silver grades which were down 19% YoY to 386g/t at Dukat while at Omolon grades in gold and silver declined 31% and 20% YoY respectively to 4.3g/t and 182g/t. Consequently group silver production was down 14% YoY to 8moz and gold production declined 1% to 268koz YoY.

Although cost performance has yet to be announced for Q3 2016, POLY has reiterated full year total cash cost guidance of US$525-575/oz and AISC of US$700-750/oz.

Tue, 18 Oct 2016 08:18:00 +0100