column http://www.proactiveinvestors.co.uk Proactiveinvestors column RSS feed en Mon, 29 May 2017 06:51:22 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) Peace be upon you: Trump wrong-foots critics with foreign travel, US dollars and religion http://www.proactiveinvestors.co.uk/columns/jackhammer/27856/peace-be-upon-you-trump-wrong-foots-critics-with-foreign-travel-us-dollars-and-religion-27856.html Fri, 26 May 2017 14:19:00 +0100 http://www.proactiveinvestors.co.uk/columns/jackhammer/27856/peace-be-upon-you-trump-wrong-foots-critics-with-foreign-travel-us-dollars-and-religion-27856.html Commodities Week in a Minute: Quinoa in Edinburgh plus ACA, GEM, GEMD, LOM http://www.proactiveinvestors.co.uk/columns/the-commodities-week-in-a-minute/27855/commodities-week-in-a-minute-quinoa-in-edinburgh-plus-aca-gem-gemd-lom-27855.html Commodities

Diamonds and precious stones

Alrosa announced Q1 results last night. As previously noted sales volumes rose 41% to 14.1Mcts and revenues rose 38% to R84.4bn. Importantly though, given the production number of 8.9Mcts, we can clearly see that destocking has continued and the Indian demonetisation impact has reduced. Additionally, the company confirmed this week that they would be partnering Endiama to develop the largest known deposit in Angola, the Luele kimberlite pipe, part of the Luaxe concession.

Whilst details are limited, the company has confirmed that this is the largest pipe discovered in the last 60 years, certainly since the discovery of deposits in Yakutia. The total commercial value of the deposit has been estimated at over $35bn.

Precious metals

So a little while back I noted that when I started putting my ruler on the screen it looked as though we were approaching “golden cross” territory?

Only happened four times in the last five years…

To the pub then

And the Fed has slipped to #3 in balance sheet expansion race stabilising at $4.5tn since October 2014, whilst the BOJ and ECB continue to accumulate…

Happy to remain long precious metals, more to come on the silver markets in coming weeks…


Company announcements/news/meetings:

A couple of bits this week, obviously Acacia and Gemfields continue to hold the headlines but the news that the new South African Mines Minister Mosebenzi Zwane is reportedly looking to increase black ownership stakes of mining assets to 30% from the current 26%. This will send a shudder down the backs of investors, especially given the fact the Zimbabwean tourism minister recently lectured the SA Govt on land appropriation considerations… Oh, the irony.

Acacia (LON:ACA)(Under Review): Where now?

I think I have bored enough of you in the past with my views on the company, certainly when the shares were in danger of establishing a new life in 600 plus pennies-town but the events of this week actually leaves me with some sympathy with the company.

Personally I do not for one minute believe Brad and the boys intentionally sought to defraud the Tanzanian Government by falsely declaring total gold content in their concentrate sent for export but instead have an overwhelming feeling that the Presidents to do list from his missus goes something like…

As I said before, I would value North Mara at around 275p to 285p ex any impact from the closure of Buzwagi and Bulyanhulu, which I think is more likely than not unless the ban can be lifted quick sharp.

All our recommendations remain under review but for me, I would not be keen to catch the proverbial knife just yet…

Gemfields (LON:GEM) (Under review): Observations from the investment community...

As noted to me by an unnamed fund manager this week:

“The last time someone tried a gemstone heist this big, it was in Hatton Garden”

“Those chaps are now inside”

And somewhat amusingly my word of the day sent to me last Friday was: Purloin.

Hmmm.

Gem Diamonds (LON:GEMD) (Buy)*: Q1 update 

“Gem Diamonds Q1 trading update confirmed what investors already suspected, Q1 was tough. But the recent trend of larger diamond recoveries point to further improvements whilst the mine plan forecasts a significant increase in higher value satellite pit production as the year progresses. Despite this, we have taken a cautious approach to our FY17 sales volumes trimming our estimates towards the lower end of guidance (from 110kcts to 108kcts). We retain our Buy recommendation and apply a new target price of 135p”.

Lucapa Diamond Co (ASX:LOM) (Buy): Financing agreed for Mothae

Lucapa today announced that a funding package worth up to A$19m to fund the acquisition and development of the Mothae project in Lesotho has been completed. The package includes cash repatriated from Lulo, the underwriting of A$0.20c options, a bridging loan and new options to be issued. In total this package leaves Lucapa well-funded to commence commissioning at Mothae in Q1 2018.

 

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Fri, 26 May 2017 12:17:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-commodities-week-in-a-minute/27855/commodities-week-in-a-minute-quinoa-in-edinburgh-plus-aca-gem-gemd-lom-27855.html
Today's Market View - Galantas Gold Corp, Ncondezi Energy, Strategic Minerals Plc http://www.proactiveinvestors.co.uk/columns/sp-angel/27854/today-s-market-view-galantas-gold-corp-ncondezi-energy-strategic-minerals-plc-27854.html Galantas Gold (LON:GAL)  – March quarter results

Ncondezi Energy (LON:NCCL)  – Suspension of exclusive discussions with Shanghai Electric Power

Strategic Minerals* (LON:SML)  – Maiden operating profit

 

China’s environmental crackdown is having a marked impact on refiners

• Call us if you wish to know more detail on this

• The impact is being seen more in some sectors than others

 

Tanzania – Acacia gold in hot water over underreporting of grades in gold concentrate for export

• Why are we not surprised by this revelation.

• Why do certain organisations seem more prone to issues of systemic failure than some others.

• Is it management, a wider personnel issue or both?

• What will Barrick Gold do next?  Does Barrick Gold suffer similar issues?

• Transfer pricing is one way of shifting profits from one place to another.  The effective smuggling of underreported gold is quite another.

 

Strategic Minerals* (LON:SML) - Presentation to investors

• Strategic minerals presented to investors last night giving an update on their activities in the US, the UK and Australia.

• Magnetite (USA): The company is able to increase production in the US to meet new demand for the company’s Cobre magnetite in the region.  Transport costs are a significant factor for Cobre’s magnetite sales and the irony of lower iron ore prices was to increase demand for the Cobre magnetite product.  The magnetite is used in a variety of products including specialist cement, ballast, fertilizer, magnets, coal cleaning and dense media separation etc...

• Tin (Cornwall): The presentation highlighted the Redmoor tin project which appears to rank in the top five in terms of tin grade which the company is currently drilling.

• Cobalt (Australia): management are also exploring the Hanns Camp Prospect for cobalt and nickel in Australia.  We were asked to give a talk on the market for cobalt to run alongside the company’s cobalt activities.  Please contact us if you would like to see the presentation.

*SP Angel act as Nomad and joint broker to Strategic Minerals

 

Dow Jones Industrials            +0.34% at         21,083

Nikkei 225                                 -0.64%  at         19,687

HK Hang Seng                         -0.05%  at         25,619

Shanghai Composite               +0.07% at         3,110

FTSE 350 Mining                     +0.46% at         14,968

AIM Basic Resources              -0.29%  at         2,637

 

Currencies

US$1.1222/eur vs 1.1233/eur yesterday.  Yen 111.24/$ vs 111.76/$.  SAr 12.941/$ vs 12.883/$. GBP $1.288/gbp vs $1.299/gbp.     

AUD 0.744/aud vs 0.749/aud.  CNY 6.858/$ vs 6.875/$.

 

Commodity News

Precious metals:

Gold US$1,262/oz vs US$1,258/oz yesterday

   Gold ETFs 59.8moz vs US$59.8moz yesterday

Platinum US$955/oz vs US$950/oz yesterday

Palladium US$776/oz vs US$771/oz yesterday

Silver US$17.26/oz vs US$17.22/oz yesterday

           

Base metals:   

Copper US$ 5,729/t vs US$5,702/t yesterday

Aluminium US$ 1,965/t vs US$1,956/t yesterday

Nickel US$ 9,070/t vs US$9,150/t yesterday

Zinc US$ 2,649/t vs US$2,629/t yesterday – Zinc Tc rise $20/t from April in China according to the Metal Bulletin

• Zinc stocks have fallen to 91,749t in China, Shanghai causing premiums for the metal to rise to $140-150/t CIF with some trades reported >$160/t this week

Lead US$ 2,114/t vs US$2,081/t yesterday

Tin US$ 20,390/t vs US$20,450/t yesterday

           

Energy:           

Oil US$51.9/bbl vs US$54.5/bbl yesterday

Natural Gas US$3.200/mmbtu vs US$3.221/mmbtu yesterday

Uranium US$20.00/lb vs US$20.00/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$58.6/t vs US$59.0/t

Chinese steel rebar 25mm US$589.8/t vs US$588.3/t

Thermal coal (1st year forward cif ARA) US$66.8/t vs US$67.0/t yesterday

Premium hard coking coal Aus fob US$152.4/t vs US$153.5/t

 

Other:

Tungsten APT European US$000.0/mtu vs         US$000.0/mtu

FeCr lumpy Charge 52% Cr US$0.00/lb vs         US$0.00/lb yesterday

Quarterly hard coking coal US$285.0/t vs           US$285.0/t

 

Company News

Galantas Gold (LON:GAL) 6 pence, Market Cap £10.3m – March quarter results

• Galantas Gold reports a net loss of C$684k for the quarter to 31st March 2017  (loss of C$373k March 2016).

• At 31st March, the company reported a cash balance of C$2.3m.

• “Production at the Omagh mine remains suspended. However the granting of planning consent during the second quarter of 2015 for an underground operation at the Omagh site, was subject to a judicial review hearing which commenced in September 2016 and was adjourned to February 2017. The hearing has taken place and the company awaits the outcome, for which no date has been set.”

• The company received a temporary setback following notification by the Police Service of Northern Ireland that it was unable to provide the necessary security for the required explosives. The situation has now eased somewhat with the police able to provide a limited level of cover which “Whilst insufficient to sustain the development of the Omagh Gold Mine on a more than short term basis, it will form the basis for the PSNI and the Company to review matters after a period of operation.”

Conclusion: The resumption of development of the underground Omagh Gold Mine, even on a limited basis, provides some hope that ultimately the 130 new jobs and the wider economic boost the mine could bring to the local community will be delivered.

 

Ncondezi Energy (LON:NCCL) 1.5 pence, Mkt Cap £3.8m – Suspension of exclusive discussions with Shanghai Electric Power

• Ncondezi Energy reports that it has suspended exclusive discussions with SEP over the joint-development of the 300MW Bcondezi coal to power project in northern Mozambique.

• The agreement has been in place since October 2014 and “In July 2016, Ncondezi  and SEP signed a non-binding Shareholders Agreement Term Sheet.” However “Notwithstanding SEP’s assurances that it is committed to the Ncondezi Project, and the advanced stage of discussions, SEP has not provided funding to the project. Accordingly, despite the longstanding relationship with SEP and its credentials to acts as a strategic partner, the Board of Ncondezi believes that the ongoing delays in SEP funding the project is unsustainable and that it is now in the best interests of the Company and its shareholders to suspend exclusive discussions with SEP and to enter into discussions with alternative potential partners.”

• In the immediate term, Ncondezi has “received indications of interest totaling US$350,000 to finance the work programme and budget to 2 September 2017 when the existing Shareholder Loan becomes payable.” The “proposed financing has been committed by the Chairman Michael Haworth (US$200,000) and other existing long term shareholders ($150,000)”.

• Much of the technical and economic analysis for the project development has already been completed  and “The Company has recently received a number of unsolicited expressions of interest from other strategic investors and project developers. A new strategic partner process has commenced and initial feedback is expected before the end of August.”

• The shortage of reliable power supplies has been identified as a major impediment to the economic development of large areas of sub-Saharan Africa and a setback to a project capable of contributing to the solution of this barrier to growth must be a blow to the Mozambique Government as well as to the company.

Conclusion: The suspension of exclusive discussions with SEP is a substantial setback after their lengthy association to develop the Ncondezi coal to power project. It is encouraging to see the Chairman and other major shareholders prepared to provide some short term financial relief and to hear that other potential partners may be in the offing however pressure is clearly on to resolve matters rapidly and we imagine that the Mozambique Government will be monitoring events closely.

 

Strategic Minerals* (LON:SML) 3.25p, Mkt Cap £39.9m – Maiden operating profit

• Strategic Minerals has announced that it generated a maiden operating profit of $0.35m in 2016 reversing the $0.88m loss in 2015.

• The result reflects an increased gross profit of $1.22m on record sales from the Cobre magnetite operation in New Mexico and a $0.33m reduction in administrative expenses.

• Year-end cash balances of $1.11m reflect the improved profitability, the receipt of $675,000 in settlement of a claim against the railway and the successful outcome of two fund-raisings totalling $1.43m during the year. The company points out that the second of the two funding rounds was 300% oversubscribed.

• The Cobre operation, which has been operating at net profit margins in excess of 50%,  has also secured a substantial new contract taking effect on 1st June 2017 which “augurs well for a profitable 2017 and beyond.”

• In January 2016, the board refocussed its strategy to contain overheads and to identify bulk minerals projects with offtake agreements in place; to target advanced materials projects such as rare earths and lithium with demand upside ; and metals such as nickel, gold and tin where there was an expectation of price appreciation over the next three to five years.

• During the year, Strategic Minerals has increased its stake in Cornwall Resources, where drilling is currently underway to re-evaluate a brownfields tin/tungsten mining area in east Cornwall, to 50% through the acquisition of an additional 16.4% interest.

• Since the end of 2016, Strategic Minerals has also assumed control of the Central Australian Rare Earths project near Laverton in Western Australia where drilling at the Hanns Camp property has identified nickel and cobalt potential. Follow up work “to more clearly define the resource potential at Hanns Camp” and at the Mt Weld tenements is expected to proceed during the rest of 2017.

Conclusion: Strategic Minerals has made considerable strides in developing its strategy during 2016 and has been able to expand its cash generating operation at Cobre providing a solid platform for exploration of the Cornish project and Redmoor and the nickel cobalt project in Western Australia.

*SP Angel act as Nomad and joint broker to Strategic Minerals

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Fri, 26 May 2017 10:42:00 +0100 http://www.proactiveinvestors.co.uk/columns/sp-angel/27854/today-s-market-view-galantas-gold-corp-ncondezi-energy-strategic-minerals-plc-27854.html
Breakfast News - AIM Breakfast : 21st Century, Caspian Sunrise, Deltex Medical Group plc, Flying Brands Ltd, Ncondezi Energy, Premaitha Health, PowerHouse Energy, Plastics Capital Plc, Scientific Digital Imaging, Strategic Minerals Plc http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27853/breakfast-news-aim-breakfast-21st-century-caspian-sunrise-deltex-medical-group-plc-flying-brands-ltd-ncondezi-energy-premaitha-health-powerhouse-energy-plastics-capital-plc-scientific-digital-imaging-strategic-minerals-plc-27853.html What’s cooking in the IPO kitchen?

AIM

Touchstone Exploration— Oil exploration and production company active in the Republic of Trinidad and Tobago.  Interests of approximately 90,000 gross acres. Production c. 1,300 boepd. Raising £1.45m. Expected mkt cap £7.5m. Due 26 June.

I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK.  Offer TBC, 26 May admission.

Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p.  Admission in late May.

Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June.

Main Market Premium Listing

Curzon Energy—Report on Proactive Investors of intended LSE float this year  with acquisition of  coal bed methane assets in Oregon. Looking to raise £3m plus.

NLB Group—financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June.

Flying Brands (LON:FBDU)—Prospectus approved by FCA. RTO of Stone Checker Software,  supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun.

AEW UK Long Lease REIT—Intention to Float. Up to £150m raise. Admission early June. UK specialist and alternative property

Kuwait Energy— $150m raise plus vendor offer. Admission due June.  2p reserves 810.0 mmboe

Main Market Standard Listing

ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017.

Main Market Specialist Funds

PRS REIT—Private rental sector REIT raising up to £250m.  Admission due 31 May

  
  
 
Breakfast buffet

P2P Global Investments (LON:P2P) 877.5p £723.64m

Monthly update. 45bps NAV growth in the month

 

·    Continuing evolution of the portfolio towards new origination channels and secured asset classes, with more attractive risk return profiles

 

·    Share buybacks during the month contributed 7bps versus 16bps last month to NAV per share growth

 

·    12 pence dividend declared for the first quarter of 2017

 

·    35th consecutive month of positive NAV growth since inception

Ncondezi Energy (LON:NCCL) 2.13p £5.3m

Ncondezi has suspended exclusive discussions with Shanghai Electric Power Co., Ltd ("SEP") regarding its Joint Development Agreement ("JDA"). Exclusivity arrangements with SEP have lapsed and Ncondezi will now engage with additional strategic partners who have expressed an unsolicited interest in developing the project alongside Ncondezi.  Furthermore the Company has received indications of interest for an additional US$350k shareholder loan which would fund the Company until 2 September. Ncondezi believes that the ongoing delays in SEP funding the Project is unsustainable and that it is now in the best interests of the Company and its shareholders to suspend exclusive discussions with SEP and to enter into discussions with alternative potential partners.

Plastics Capital (LON:PLA) 122.5p £43.79m

The niche plastics products group, today announces a conditional placing to raise approximately £3.74 million, before expenses, by way of a Placing of 3,194,445 new Ordinary Shares at 117 pence per Placing Share. The net proceeds of the Placing, which are expected to amount to approximately £3.54 million, are to be applied, in part, towards the proposed increase of the Company's stake in the CCM Group, its US based minority investment focused on the production of creasing matrix. In addition, part of the net Placing proceeds will be invested in other parts of the Group in order to increase capacity to satisfy increasing demand for the Group's products and thereby accelerate organic growth. FYMar18E rev £62.7m and 35.1m PBT, Div 13p.

 

Scientific Digital Imaging (LON:SDI) 28.5p £25.32m

FY Apr 17 trading update from  group focused on the design and manufacture of scientific and technology products for use by the life science, healthcare, astronomy, consumer manufacturing and art conservation markets. Reported profits before tax are expected to be in line with management's expectations, with the latest acquisition, Astles Control Systems, as expected making a contribution to the profits of the Group. "We have once again strengthened the Group with the recent acquisition and are pleased with the positive contribution from Astles Control Systems. This is a business model we plan to continue to replicate in order to grow a diversified company with increasing revenue streams." FYApr17E £10.7m rev and £1.9m PBT.

Strategic Minerals (LON:SML) 3.1p £38.3m

FY Dec 16 results from  the diversified mineral production and development Company. Maiden profit from operations of $0.351m (loss of $0.880m). Unrestricted cash position $1.105m (2015: $0.946m). Marketing strategies at Cobre resulted in record domestic sales of $1.55m (2015: $1.25m). The Company continues to maintain controls on its overheads, is focused on expanding Cobre's profitable domestic sales, is undertaking further drilling of the CARE tenements, has commenced the Redmoor drilling programme and is examining potential expansionary projects. Now has lower overheads, a strong cash flow stream from Cobre and the potential upside from drilling programmes in Western Australia and in Cornwall.

Powerhouse Energy (LON:PHE) 0.8p £7.65m

The company focused on ultra high temperature gasification waste to energy systems, and the creation of Distributed Modular Gasification© (“DMG”), has appointed  Roudi Baroudi to its recently established Advisory Panel.  Roudi is a global energy expert with over 37 years experience of international public and private companies across oil & gas, petrochemicals, power, energy-sector reform, energy security, carbon trading mechanisms and infrastructure. In addition, he is currently a member of the United Nations Economic Commission for Europe’s Group of Experts of Gas – this is a body established to facilitate dialogue on promoting safe, clean and sustainable solutions for natural gas production.

 

Premaitha Health (LON:NIPT) 13.63p £34.13m

The leading international molecular diagnostics group focused on prenatal testing, announces that the IONA® test, the Company's CE-IVD non-invasive prenatal test ("NIPT"), has been validated for use on Thermo Fisher Scientific's Ion S5 range of instruments. The validation of the IONA® test on the Ion S5 platform, performed in partnership with Thermo Fisher Scientific, will broaden Premaitha's potential laboratory customer base.  The Ion S5 instrument being widely adopted by laboratories carrying out next generation DNA sequencing globally.  The IONA® test is therefore now a possible NIPT solution for this growing network of laboratories. Allows Premaitha to work with laboratories keen to offer NIPT as part of a wider choice of genetic tests.  FYMar17E  rev £4.1m,  £5.9m loss. 

21st Century Technology (LON:C21) 3.25p £3.03m

FYDec16 results from specialist provider of tailored solutions to the transport community. Revenue £11.6m (2015: £12.2m).  Underlying loss £1.4m before tax (2015: underlying profit £0.05m). Cash £0.5m (2015: £1.0m). £0.3m debt raised. £0.4m invoice discounting facility opened. Cost base restructured to generate £1.4m annualised savings Major framework renewals, and innovative new sales. However financial performance in H2 was poor as orders anticipated earlier in the year did not materialise. “We have created a strong platform for growth and are pleased to be looking to the future with confidence."  Moving from standalone CCTV to fully connected systems.  We could see no forecasts.

Caspian Sunrise (LON:CASP) 9.75p £91.4m

The Central Asian oil and gas company, with a focus on Kazakhstan (Formerly Roxi Petroleum), confirms that the Company expects that all conditions for the Baverstock merger and the associated capitalisation of the $10.1 million Vertom loan, will be concluded by 1 June 2017. The proposed merger has been longed planned and once completed will bring 99% of thr principal asset BNG under direct control removing any funding constraints associated with maintaining the current structure. 

Deltex Medical Group (LON:DEMG) 3.62p £10.76m

The company specialising in Oesophageal Doppler Monitoring ("ODM"), has launched its first ODM system designed specifically for veterinary use which has generated £15,000 on release from the first sale of a system to a leading continental Europe Veterinary University. Deltex is planning the marketing launch of the new system for the annual meeting of the International Veterinary Emergency and Critical Care Symposium ('IVECCS') in Nashville, Tennessee in September 2017. In the meantime it is promoting the system to existing contacts. FYDec17E rev £6.8m and £2m loss

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Fri, 26 May 2017 09:07:00 +0100 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27853/breakfast-news-aim-breakfast-21st-century-caspian-sunrise-deltex-medical-group-plc-flying-brands-ltd-ncondezi-energy-premaitha-health-powerhouse-energy-plastics-capital-plc-scientific-digital-imaging-strategic-minerals-plc-27853.html
In the news: Base Resources, KEFI Minerals & Amani Gold http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27852/in-the-news-base-resources-kefi-minerals-amani-gold-27852.html FROM THE BROKING DESK

A quick reminder that we’ve released a couple of pieces this week. First we have Base Resources† — Enhanced Economics from Phase 2, 23 May 2017. The Kwale Phase 2 Project at its mineral sands operations in Kenya will increase throughput and offset declining grades. This will come with slightly higher capex, but this is more than offset by efficiency gains and the positive NPV impact of bringing production forward. With the end of the mine life brought forward on the basis of existing reserves, the likely life extension from exploration at Kwale has become even more significant. We increased our target price from A$0.43 to A$0.49 and maintained our Buy rating.

And second, to follow up the latest release from KEFI Minerals†, we put out KEFI Minerals — Tulu Kapi 2017 DFS Update, 25 May 2017. The company updated its DFS for the Tulu Kapi Gold Project in Ethiopia. Reserves and the mining schedule remain the same as our previous estimates, and cash costs are marginally lower. There were minor changes to capex too and an increased level of disclosure, plus the presentation of management’s upside case. Our target price has been revised downwards (from 10.5p to 8.8p) to reflect the new capex information and the latest FX rates. Our Buy rating was reiterated.

COMPANIES

Amani Gold

ASX:ANL  | A$0.038 | US$36m | Speculative Buy

More Drill Results from Kebigada

Amani Gold is continuing to work towards the completion of a maiden mineral resource estimate this June at its Kebigada deposit on its 55%-owned Giro Gold Project in the north-eastern DRC. It has just announced the results from a further three diamond drill holes and one reverse circulation hole. These were positive, and included 63m grading 2.40 g/t in Hole GRDD 025 in the west-central portion of the deposit. The drill programme for the resource estimate has been completed and the results from the final 11 (reverse circulation) holes are expected shortly.

We also note that the proposed A$25m investment by a Chinese investor (500m shares, and 250m options exercisable at A$0.07/share for two years) remains subject to the completion of due diligence by the investor (which was due to be completed yesterday) and to approval from Amani shareholders.

COMMENT: We have previously suggested that the maiden resource could contain around 2Moz of gold at a grade of around 2 g/t. There has been a string of apparently better-than-expected infill drill results, implying that there may be upside to the scale of our suggested resource. We continue to recommend the company as a Speculative Buy.
 

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Fri, 26 May 2017 09:06:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27852/in-the-news-base-resources-kefi-minerals-amani-gold-27852.html
In the Papers - BHS, Spotify, Abercrombie & Fitch, Wagamama http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27851/in-the-papers-bhs-spotify-abercrombie-fitch-wagamama-27851.html Newspaper Summary

The Times

White-collar crime agency in dock after trial of Sean Fitzpatrick collapses: The political fallout has been unrelenting since the collapse of the longest running criminal trial in the history of the Irish state.

Royal Dutch Shell develops smart charging for electric cars to prevent blackouts: Royal Dutch Shell is stepping up its drive into the electric vehicle market by developing smart charging technology to prevent battery-powered cars causing blackouts.

Housing crisis drives families to Urban & Civic’s brownfield sites: The exodus of people forced out of London by unaffordable housing is benefiting Urban & Civic, which specialises in building huge developments in commuter hotspots on large brownfield sites.

Monaco-based Unaoil has top clients and a taste for secrecy: Founded at the start of the 1990s by Ata Ahsani, an Iranian engineer who fled his homeland in the wake of the 1979 revolution, Unaoil has an enviable blue-chip client list, including Halliburton, Samsung and Hyundai.

Upbeat services sector ready for hiring spree, says CBI: Optimism among companies working in the U.K.’s dominant services sector has improved for the first time since November 2015, according to the CBI.

Fees for BHS administrator keep climbing: One of the administrators to BHS could receive about another £302,000 in fees, taking its total remuneration for winding down the failed retailer to just over £3.6 million.

Discount retailer B&M adds 100 outlets to its shopping list: Profits and sales are soaring at B&M and the discount retailer has increased its total U.K. store target by a further 100 outlets as consumers continue to hunt for bargains.

The Independent

Consumer confidence at lowest level since Brexit: Consumer confidence has slipped to its lowest level since the month after the EU referendum, according to a survey.

BT Chief Gavin Patterson suffers multi-million pay cut: BT has dramatically cut Chief Executive Gavin Patterson’s pay, as the telecoms giant struggles to recover from a damning accounting scandal in its Italian business that caused it to issue a profit warning and sent shares tumbling.

Apple’s Design Chief says U.K. must keep doors open after Brexit: The U.K. must continue to welcome immigrants from around the world if it wants to keep its thriving technology industry, one of Apple’s top Bosses has said.

The price of wine could be about to rocket because of Brexit: Wine lovers across the U.K. might soon have to shell out close to a quarter more for their favourite tipple after Brexit, as a weaker pound and sluggish economy takes its toll, a new study shows.

Weak GDP data sends pound sterling down: Sterling fell on Thursday after the Office for National Statistics revised down the U.K.’s growth in the first quarter to just 0.2%.

U.K. GDP growth revised down to 0.2% in the first quarter 2017: The U.K.’s GDP growth in the first quarter of 2017 has been unexpectedly revised down to 0.2%, in news that will compound fears that the economy is slowing as the impact of last June’s Brexit vote finally hits home.

European supermarkets recruit children for taste tests to cut sugar: Before cutting the sugar in its children’s yogurt, Dutch grocer Albert Heijn conducted a taste test modeled on a classic U.S. TV ad in which two young boys get their little brother to sample a new cereal.

Opec and oil producing allies extend production cuts for nine months: Opec and its allies extended oil production cuts for nine more months after last year’s landmark agreement failed to eliminate the global oversupply or achieve a sustained price recovery.

Carrier factory Donald Trump ‘saved’ will lay off hundreds of workers before Christmas: Donald Trump famously boasted about persuading a company in the U.S. heartland not to move its furnace plant to Mexico.

The Daily Telegraph

Lloyds Chairman dismisses warnings the City could collapse like a Jenga tower after Brexit: The Chairman of Lloyds Banking Group has dismissed a warning made by his counterpart at HSBC that the City could collapse like a Jenga tower following Brexit and predicted that financial services firms would cope if the U.K. left the EU without a deal.

Key Steinmetz aide cancels Guinea testimony at last minute on advice of lawyers: A key associate of mining magnate Beny Steinmetz has declined to testify at an arbitration hearing in Paris at the last minute, on the advice of his lawyers.

Spotify hires four new Directors ahead of expected float: Spotify has bolstered its board by recruiting four new Directors as it prepares for a possible float later this year.

Weak pound sends Tate & Lyle profits soaring as restructure pays off: Profits at ingredients giant Tate & Lyle soared by 85% as it was boosted by the weak pound following the vote to leave the European Union.

QinetiQ eyes global expansion with Rockwell Collins partnership: QinetiQ has announced a partnership with U.S. industrial giant Rockwell Collins to develop military navigation systems that the Boss of the FTSE 250 company said shows its growth strategy is taking hold.

The Questor Column:

This property fund trades at a slight premium, but the 5% yield is just one reason to buy: The portfolio, Ediston Property, which yields 5%, was the top pick in a recent report on property funds from the stockbroker Canaccord Genuity. The report’s authors, Alan Brierley and Ben Newell, pointed out that annual returns from commercial property as a whole were expected to fall to 5.5% after double-digit returns in recent years. This is because capital growth is expected to all but disappear, leaving rental income as the only source of returns. As a result, the report said, investors who want to beat the 5.5% level will have to seek out funds that could get more out of their property assets by developing them so that capital values, rents or both would be enhanced. In other words, instead of buying properties, letting them out and passively banking the rental income, while relying on general trends in the property market to boost capital values, managers would improve or redevelop their properties to enhance their value. The trust, which pays income monthly, commands a small premium of 1.3%. Mr Brierley said this did not affect his belief that it offered the best prospects among the property trusts. His report also compared the performance of ordinary “open-ended” property funds with their investment trust counterparts. With gearing, trusts had an effective exposure to the performance of their assets of 124%, whereas open-ended funds’ exposure was diluted by their cash reserves to just 78%. We believe that investment trusts offer the best route into commercial property and that Ediston Property is the most attractive trust at this stage. Questor says ‘Buy’.

The Guardian

Brexit economy: workers face squeeze but firms remain upbeat: The Brexit squeeze on household budgets has intensified over the past month, but companies and investors remain cautiously optimistic about the economic outlook in the run-up to the election, a Guardian analysis shows.

RBS shareholders refuse to settle in effort to force Goodwin to take stand: A group of “diehard” shareholders determined to see the former Royal Bank of Scotland Chief Executive Fred Goodwin in court are refusing to accept a settlement in their £700 million legal claim against the bank.

Deliveroo accused of ‘painting a false picture’ at work tribunal: Deliveroo has been accused of running a campaign of misinformation and implementing last-minute changes to contracts in an effort to prevent riders from gaining better employment rights.

Oil price slides as Opec production cuts fail to impress markets: The world’s major oil producers have voted to continue their production cuts into 2018 in an attempt to prop up the oil price. However, the deal failed to impress the market and the oil price started to slide even as the details of the agreement were being hammered out.

Fever-Tree co-founder makes £73 million from selling shares: Fever-Tree, the upmarket tonic water maker, suffered the rarest of hiccups in its meteoric rise after co-founder Charles Rolls cashed in £73 million of shares.

U.K. gamblers lose record £13.8 billion as industry braces for FOBT crackdown: British gamblers lost a record £13.8 billion in the year ending September 2016, including an all-time high of £1.82 billion on controversial fixed-odds betting terminals (FOBTs).

Daily Mail

Daily Mail owner DMGT celebrates 19% revenue lift to £60 million: Online revenues at DMGT Group, owner of the Daily Mail, rose 19% in the first half of the year to £60 million.

Discount chain B&M celebrates 18% profit boost as customers snap up cut-price pizza ovens and garden furniture: B&M is ramping up plans to open hundreds more stores offering trendy garden furniture to win over budget-conscious shoppers.

Moody’s raises the alarm around the toxic danger of car loans: Anyone driving around Britain will see the tell-tale signs. Citizens used to take pride in front gardens, now it is the gleaming SUV parked in the driveway.

Sir Philip mounts rescue bid for Topshop Australia after chain collapses threatening 760 jobs: Billionaire retailer Sir Philip Green is mounting a rescue bid for the Australian arm of Topshop after it collapsed into administration.

Asian food chain Wagamama continues expansion as it lands in Italy after U.S. launch: Asian-themed chain Wagamama is opening its first restaurant in Italy, in partnership with W Italia Srl.

Halfords looks to reverse 10.5% profit decline by fitting batteries and bulbs: Halfords hopes that fitting extras such as batteries, bulbs and windscreen wipers for customers who can’t do their own repairs will help reverse a decline in retail sales and profits.

Daily Express

Eurozone economies are fragile amid huge risks to stability, warns ECB: Eurozone economies remain fragile and risks to financial stability are still significant, the European Central Bank (ECB) said in a report.

Saudi Arabia says U.S. won’t stop oil price rise as Kingdom defiant in OPEC plan: The U.S. won’t be able to stop Saudi Arabia’s plans to curb oil supply and raise prices, according to the kingdom’s energy Minister at a significant OPEC meeting in Vienna.

Deutsche Bank doom-monger forecast: Lender says pound and economy will get weaker in 2017: Germany’s biggest lender Deutsche Bank talked the pound down and predicted Britain’s currency will weaken amid Brexit negotiations and a deterioration in the U.K. economy.

U.K. growth slowed more than thought in Q1 but economy is set to bounce-back, say experts: Britain’s economy slowed more than previously thought at the start of the year, but growth is set to rise in the coming months, said experts.

Pound rises against dollar as FTSE 100 set for new record high: The pound is up against the dollar, as Britain’s top stock index the FTSE 100 looks set to smash through a fresh record high.

The Scottish Herald

Fresh attack on Menzies distribution deal plan: The odds-on Edinburgh-based John Menzies completing a controversial plan to merge its newspaper and magazine distribution business with DX Group appear to have lengthened after an activist investor stepped up its attack on the proposal.

Enquest gives positive update as Opec countries extend production cuts: North Sea-focused Enquest has said it is on track to start pumping oil soon from one of the biggest new developments competed in the area in recent years and made clear it also sees potential in mature fields.

Martin Currie trust to revamp dividend policy after better year: The Chairman of the £154 million Martin Currie Asia Unconstrained investment trust has hailed the vehicle’s return to form despite it narrowly underperforming its benchmark in the year to the end of March.

New office options at Savoy Tower: A new shared office space has been launched in Glasgow’s Savoy Tower. Clockwise will aim to attract tenants, such as start-ups, digital companies, freelancers and consultants, which are looking for flexible hot desking, co-working and serviced offices.

University in $4 million windfall after biotech shares sale: The University of Glasgow has netted $4 million (£3.1 million) from the sale of its stake in Cara Therapeutics, a U.S. biotech company focused on novel treatments for chronic pain.

Hollinshead in new PR venture: Former Trinity Mirror Director Mark Hollinshead has launched a new Glasgow-based public relations agency. Mr Hollinshead, who was latterly Chief Executive of The Great Run Company, has launched Hollicom with an eight-strong team. The agency will serve clients south of the Border as well as in its native Scotland.

The Scotsman

Balfour Beatty to close seven offices across Scotland: Infrastructure group Balfour Beatty is consolidating seven of its offices in Scotland in a move partly aimed at cutting costs.

Lidl launches first Scottish ‘craft beer festival’: Lidl joined the Scottish craft beer bandwagon by launching its first “festival” in conjunction with 13 brewers.

Standard Life Boss confident of AAM merger approval: The Chief Executive of Standard Life has said he is confident the group’s merger with Aberdeen Asset Management (AAM) will gain shareholder approval, despite governance concerns over the £11 billion tie-up.

Fintech dealmaker optimistic about industry’s Scottish prospects: Quest Corporate, the Edinburgh-based boutique corporate finance advisory firm, celebrated a stellar 2016 rounded off by one of the year’s largest fintech deals.

Economic growth downgraded as inflation hits spending: The U.K. economy suffered an even deeper slowdown at the start of the year as the services sector came under pressure and inflation dealt a blow to household spending.

City A.M.

Abercrombie & Fitch has posted its fifth quarter of falling sales: Teen clothing retailer Abercrombie & Fitch has posted its fifth quarter of falling sales in a row.

Trinidad and Tobago oil firm Touchstone Exploration announces plans to float on London Stock Exchange: Trinidad and Tobago-focused oil firm Touchstone Exploration has announced plans to float on the London Stock Exchange.

Wizz Air flies in the face of challenging conditions with record profits as it shrugs off concern over Brexit hitting demand: Budget airline Wizz Air has announced soaring full-year results, saying the Brexit vote hasn’t dampened demand to or from the U.K.

Petrofac has suspended its Chief operating officer amid a fraud investigation by the SFO sending shares slumping: Petrofac has suspended its Chief operating officer Marwan Chedid as an investigation gets underway by the Serious Fraud Office (SFO), causing a plunge in shares by as much as 30 per cent.

Old Mutual to list wealth management arm in London and sell down Nedbank holding as part of four-way split: Old Mutual is to spin off its wealth management arm with a separate London listing next year, as the break-up of the firm gathers pace.

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Fri, 26 May 2017 08:56:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27851/in-the-papers-bhs-spotify-abercrombie-fitch-wagamama-27851.html
Market Briefing - UK markets finished higher yesterday http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27850/market-briefing-uk-markets-finished-higher-yesterday-27850.html UK Market Snapshot

UK markets finished higher yesterday. Intermediate Capital Group surged 14%, after the company posted a rise in its profit for the year ended 31 March and announced a new dividend policy. Aviva rose 0.2%, after the company announced that it would buyback its ordinary shares worth up to £300.0 million. On the losing side, Petrofac sank 30.0%, after the company suspended its COO, Marwan Chedid, following a criminal investigation by the Serious Fraud Office (SFO) for suspected bribery, corruption and money laundering charges against the company. Energy giants, Royal Dutch Shell and BP slipped 0.3% and 1.1%, respectively, tracking losses in crude prices. BT Group slid 1.1%, after a leading broker downgraded its rating on the stock to ‘Underperform’ from ‘Neutral’. The FTSE 100 marginally advanced to close at 7,517.7, while the FTSE 250 rose 0.1%, to settle at 19,967.6.

US Market Snapshot

US markets ended in the green yesterday, with the S&P 500 index and the NASDAQ index closing at a record high, rising for the sixth consecutive session, boosted by gains in consumer discretionary stocks. Best Buy rallied 21.5%, after the retailer’s profit and same-store sales for the first quarter surpassed market estimates and it provided a robust outlook. Sears Holdings surged 13.5%, after the company reported lower than expected loss for the first quarter. On the flipside, Signet Jewelers plunged 7.8%, after the company posted downbeat results for the first quarter. Hormel Foods tumbled 6.4%, following weaker than anticipated net profit for the second quarter. The S&P 500 gained 0.4%, to settle at 2,415.1. The DJIA rose 0.3%, to settle at 21,083.0, while the NASDAQ advanced 0.7%, to close at 6,205.3.

Europe Market Snapshot

Other European markets closed in negative territory yesterday, dragged down by a slump in energy sector shares, after the outcome of the OPEC meeting disappointed market participants looking for deeper production cuts. Oil majors, Statoil, TOTAL and Eni slipped 0.1%, 0.9% and 1.9%, respectively, amid lower crude prices. Intesa Sanpaolo shed 0.8%, following a broker downgrade on the stock to ‘Hold’ from ‘Buy’. On the brighter side, Zodiac Aerospace added 0.6%, after the company accepted a reduced takeover offer from Safran, up 3.1%, following a series of profit warnings. The FTSEurofirst 300 index marginally declined to close at 1,540.8. Among other European markets, the German DAX Xetra 30 slid 0.2%, to close at 12,621.7, while the French CAC-40 declined 0.1%, to settle at 5,337.2.

Asia Market Snapshot

Markets in Asia are trading mostly lower this morning. In Japan, oil stocks, JXTG Holdings and Inpex have fallen 0.3% and 2.2%, respectively, following lower crude oil prices. Toshiba has slid 0.2%, after a news report indicated that the company would start negotiating with four suitors that submitted second-round bids for acquiring its memory chip unit. In Hong Kong, energy stocks, CNOOC and PetroChina have declined 1.3%, each. On the other hand, airline stocks, China Eastern Airlines, China Southern Airlines and Air China have advanced 1.8%, 3.2% and 3.9%, respectively. In South Korea, Samsung SDI and LG Display have climbed 2.2% and 4.0%, respectively, while, Hyundai Motor and POSCO have slid 0.3% and 1.0%, respectively. The Nikkei 225 index is trading 0.3% lower at 19,762.1. The Hang Seng index is trading marginally down at 25,621.5, while the Kospi index is trading 0.4% higher at 2,353.4.

Key Corporate Announcements Today

AGMs

4D Pharma, Access Intelligence, Circassia Pharmaceuticals, Escher Group Holdings, Informa, Intertek Group, Restaurant Group, Rotala, Spectris, Spire Healthcare Group

EGMs

PJSC Novorossiysk Commercial Sea Port GDR (Reg S), Urals Energy Public Co Ltd. (DI)

Final Dividend Payment Date

Antofagasta, Cello Group, Cenkos Securities, Centaur Media, Charles Taylor, Communisis, Dunedin Income Growth Inv Trust, Ebiquity, Elementis, EP Global Opportunities Trust, esure Group, Fevertree Drinks, Frenkel Topping Group, Fresnillo, Greggs, Inmarsat, IWG, Just Group, Marshall Motor Holdings, Maven Income & Growth 4 VCT, Maven Income & Growth VCT, Microgen, Morgan Advanced Materials, Polymetal International, Randgold Resources Ltd, Senior, Servelec Group, SimiGon Ltd. (DI), Spirax-Sarco Engineering, StatPro Group, Stock Spirits Group, Total Produce, Travis Perkin, Volga Gas

Interim Dividend Payment Date

Aberdeen Asian Income Fund Ltd., BlackRock Greater Europe Inv Trust, Blackstone/GSO Loan Financing Limited, British Smaller Companies VCT, Chenavari Capital Solutions Limited Red, City Merchants High Yield Trust, City Natural Resources High Yield Trust, CVC Credit Partners European Opportunities Ltd GBP, Drum Income Plus Reit, Greencoat UK Wind, P2P Global Investments, Secure Income Reit, Swallowfield, Target Healthcare REIT Ltd

Special Dividend Payment Date

Elementis, EP Global Opportunities Trust, esure Group, Volga Gas

Quarterly Payment Date

Primary Health Properties, SQN Secured Income Fund

Trading Announcements

Intertek Group

Key Corporate Announcements for Monday

AGMs

Aeci 5 1/2% Prf, Applegreen, TCS Group Holding GDR (Each Repr 1 A Shr) (Reg S)

Interim Dividend Payment Date

Symphony International Holdings Ltd.

Quarterly Ex-Dividend Date

Canadian General Investments Ltd.

Key Economic News

UK index of services surprisingly climbed in March

The index of services recorded an unexpected rise of 0.20% on a monthly basis in March, in the UK, higher than market expectations for a steady reading. The index of services had recorded a revised rise of 0.10% in the prior month.

UK government spending advanced more than expected in 1Q 2017

In 1Q 2017, the flash government spending rose 0.80% on a QoQ basis in the UK, compared to an unchanged reading in the prior quarter. Market anticipation was for government spending to advance 0.40%.

UK BBA mortgage approvals fell in April

BBA mortgage approvals eased to 40.75 K in April, in the UK, lower than market expectations of a drop to a level of 40.80 K. In the prior month, BBA mortgage approvals had registered a revised level of 40.87 K.

UK gross fixed capital formation surprisingly rose in 1Q 2017

In 1Q 2017, the preliminary gross fixed capital formation registered an unexpected rise of 1.20% in the UK on a QoQ basis, higher than market expectations for a fall of 0.20%. In the previous quarter, gross fixed capital formation had advanced 0.10%.

UK private consumption advanced as expected in 1Q 2017

The flash private consumption in the UK registered a rise of 0.30% on a quarterly basis in 1Q 2017, at par with market expectations. In the previous quarter, private consumption had recorded a rise of 0.70%.

UK index of services rose less than expected in March

On a monthly basis, in March, the index of services rose 0.20% in the UK, less than market expectations for an advance of 0.30%. The index of services had climbed by a revised 0.40% in the December-February 2017 period.

UK exports surprisingly eased in 1Q 2017

The flash exports in the UK unexpectedly eased 1.60% on a quarterly basis in 1Q 2017, less than market expectations for a rise of 0.50%. Exports had recorded a drop of 2.60% in the prior quarter.

UK imports rose more than expected in 1Q 2017

On a quarterly basis, the preliminary imports in the UK rose 2.70% in 1Q 2017, more than market expectations for an advance of 0.90%. In the prior quarter, imports had risen 1.30%.

UK total business investment advanced more than expected in 1Q 2017

On a quarterly basis, in the UK, the preliminary total business investment rose 0.60% in 1Q 2017, compared to a drop of 0.90% in the prior quarter. Market anticipation was for total business investment to climb 0.30%.

UK GDP rose less than expected in 1Q 2017

In 1Q 2017, the second estimate of gross domestic product (GDP) registered a rise of 2.00% on a YoY basis in the UK, less than market expectations for an advance of 2.10%. The preliminary figures had indicated a rise of 2.10%. In the prior quarter, GDP had climbed 1.90%.

UK GDP rose less than expected in 1Q 2017

In 1Q 2017, the second estimate of GDP climbed 0.20% in the UK, on a quarterly basis, lower than market expectations for a rise of 0.30%. The preliminary figures had indicated an advance of 0.30%. GDP had risen 0.70% in the prior quarter.

UK total business investment rose in 1Q 2017

In 1Q 2017, on an annual basis, the flash total business investment climbed 0.80% in the UK. Total business investment had dropped 0.90% in the prior quarter.

Italian industrial sales rose in March

The non-seasonally adjusted industrial sales registered a rise of 7.20% in Italy on a YoY basis, in March. Industrial sales had climbed 4.60% in the previous month.

Italian industrial sales climbed in March

The seasonally adjusted industrial sales rose 0.50% on a monthly basis in Italy, in March. Industrial sales had climbed 2.00% in the previous month.

Italian industrial orders rose in March

The non-seasonally adjusted industrial orders advanced 9.20% on a YoY basis, in March, in Italy. In the previous month, industrial orders had advanced 7.80%.

Italian industrial orders declined in March

The seasonally adjusted industrial orders in Italy slid 4.20% in March on a monthly basis. Industrial orders had climbed by a revised 5.20% in the prior month.

Spanish GDP advanced as expected in 1Q 2017

In 1Q 2017, on a QoQ basis, the final GDP recorded a rise of 0.80% in Spain, meeting market expectations. In the prior quarter, GDP had recorded a rise of 0.70%. The preliminary figures had also recorded a rise of 0.80%.

Spanish GDP rose as expected in 1Q 2017

On an annual basis, in 1Q 2017, the final GDP climbed 3.00% in Spain, meeting market expectations. GDP had registered a similar rise in the previous quarter. The preliminary figures had also indicated a rise of 3.00%.

OPEC Vienna meeting: Oil production cuts extended until March 2018

In an attempt to prop up oil prices, the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members have agreed to extend oil production cuts for a further nine months.

US advance goods trade deficit widened in April

The US has posted advance goods trade deficit of $67.60 billion in April, from a revised advance goods trade deficit of $64.20 billion in the prior month. Markets were expecting the nation to record a advance goods trade deficit of $64.50 billion.

US initial jobless claims advanced in the last week

In the week ended 20 May 2017, the seasonally adjusted initial jobless claims in the US advanced to 234.00 K, compared to market expectations of a rise to 238.00 K. In the previous week, initial jobless claims had registered a revised reading of 233.00 K.

US continuing jobless claims rose in the last week

In the US, the seasonally adjusted continuing jobless claims climbed to 1923.00 K in the week ended 13 May 2017, compared to a revised level of 1899.00 K in the prior week. Market expectation was for continuing jobless claims to rise to 1925.00 K.

US wholesale inventories unexpectedly dropped in April

In April, the seasonally adjusted preliminary wholesale inventories registered an unexpected drop of 0.30% on a MoM basis in the US, less than market expectations for an advance of 0.20%. The wholesale inventories had advanced 0.20% in the prior month.

US Kansas City Fed manufacturing activity index climbed in May

In the US, the Kansas City Fed manufacturing activity index rose to a level of 8.00 in May, lower than market expectations of an advance to a level of 9.00. The Kansas City Fed manufacturing activity index had recorded a reading of 7.00 in the previous month.

Japanese Tokyo CPI excluding fresh food surprisingly advanced in May

Tokyo CPI excluding fresh food in Japan unexpectedly climbed 0.10% on a YoY basis in May, more than market expectations for an unchanged reading. In the previous month, Tokyo CPI excluding fresh food had recorded a drop of 0.10%.

Japanese National CPI ex-fresh food rose less than expected in April

On an annual basis, National CPI ex-fresh food in Japan advanced 0.30% in April, lower than market expectations for a rise of 0.40%. In the prior month, National CPI ex-fresh food had advanced 0.20%.

Japanese Tokyo CPI remained unchanged in May

On a YoY basis in May, Tokyo consumer price index (CPI) remained steady in Japan, meeting market expectations. In the prior month, Tokyo CPI had dropped 0.10%.

Japanese national CPI rose as expected in April

In April, on an annual basis, the national CPI in Japan advanced 0.40%, in line with market expectations. The national CPI had registered a rise of 0.20% in the previous month.

Japanese corporate service price index advanced less than expected in April

The corporate service price index rose 0.70% on an annual basis in Japan, in April, compared to an advance of 0.80% in the previous month. Market anticipation was for the corporate service price index to rise 0.90%.

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Fri, 26 May 2017 08:52:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27850/market-briefing-uk-markets-finished-higher-yesterday-27850.html
The Quants Run Wall Street Now http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/27849/the-quants-run-wall-street-now-27849.html The Quants Run Wall Street Now.

Further to yesterday’s Email of the day 1 on Quants, my thanks to a contributor for this article by Gregory Zuckerman and Bradley Hope for The Wall Street Journal.  Here is a middle section:

Up and down Wall Street, algorithmic-driven trading and the quants who use sophisticated statistical models to find attractive trades are taking over the

investment world. On many trading floors, quants are gaining respect, clout and money as

investment firms scramble to hire mathematicians and scientists. Traditional trading strategies, such as sifting through balance sheets and talking to companies’ customers, are falling down the pecking order.

“A decade ago, the brightest graduates all wanted to be traders at Wall Street investment banks, but now they’re climbing over each other to get into quant funds,” says Anthony Lawler, who helps run quantitative investing at GAM Holding AG . The Swiss money manager last year bought British quant firm  Cantab Capital Partners for at least $217 million to help it expand into computer-powered funds. Guggenheim Partners LLC built what it calls a “supercomputing cluster” for $1million at the Lawrence Berkeley National

Laboratory in California to help crunch numbers for Guggenheim’s quant investment funds, says Marcos Lopez de Prado, a Guggenheim senior managing director. Electricity for the computers costs another $1 million a year.

Algorithmic trading has been around for a long time but was tiny. An article in The Wall Street Journal in 1974 featured quant pioneer Ed Thorp. In 1988, the Journal profiled a little-known Chicago options-trading firm that had a secret computer system. Journal reporter Scott Patterson wrote a best-selling book in 2010 about the rise of quants.

Prognosticators imagined a time when data-driven traders who live by algorithms rather than instincts would become the kings of Wall Street. That day has arrived. In just one sign of their power, quantitative hedge funds are now responsible for 27% of all U.S. stock trades by investors, up from 14% in 2013, according to the Tabb Group, a research and consulting firm in New York.

Quants have almost caught up to individual investors, which outnumber quants and collectively have 29% of all stock-trading volume.

At the end of the first quarter, quant-focused hedge funds held $932 billion of investments, or more than 30% of all hedge-fund assets, estimates HFR Inc. In 2009, quant funds held $408 billion, or 25% of all hedge-fund assets.

Quants got $4.6 billion of net new investments in the first quarter, while the overall hedge-fund business saw withdrawals of $5.5 billion.

 

David Fuller's view

Quants certainly appear to be a more varied and ethical business model than high frequency trading (HFT), where firms were spending fortunes trying to get slightly faster access to the markets so that they could pre-empt other orders.  HFT appears to be far less popular than a decade ago. 

The performance of Quants varies but they are much less susceptible to the go for broke gambles which we have seen too frequently in recent years from various hedge fund managers.

Will Quants succeed and if so for how long?

This item continues in the Subscriber’s Area where a PDF of the article is also posted.

 

The U.S. Intelligence Ship Is Too Leaky to Sail

Here is a latter section of this interesting article by Leonid Bershidsky for Bloomberg:

On Tuesday, former CIA Director John Brennan testified to the House Intelligence Committee that he had concerns, without citing specific evidence. “I encountered and am aware of information and intelligence that revealed contacts and interactions between Russian officials and U.S. persons involved in the Trump campaign that I was concerned about,” he said.

That’s the really important matter to investigate. If Putin and Trump -- or people working for them -- actually made a deal to swing a U.S. election, that calls for impeachment and treason charges. If Trump was complicit in such a plot, he shouldn’t be president. If he tried and failed to shut down investigations that later revealed collusion by his underlings without his knowledge, it’s a more complicated matter.

For now, the public case against Trump appears to be about his clumsy interactions with U.S. intelligence officials, not about any evidence of collusion. This threatens to further chill delicate and extremely important relations between the U.S. and Russia for petty political reasons. I also fear that Russian people will be stigmatized in the U.S. regardless of whether they have anything to do with Putin’s Kremlin. If Trump is undone by this secondary, derivative scandal, soon no one will remember exactly what happened and the collusion story may be validated by default, as far as most Americans are concerned.

I hope Mueller’s investigators will remember what they’re investigating, and I hope they do an honest job.

 

David Fuller's view

This is an undistinguished chapter in the history of US intelligence and Trump has obviously not helped the situation.  Nevertheless, I think this is inexperienced bungling rather than a treasonable offence.

Former FBI Director Robert Mueller has been appointed as special prosecutor and is highly regarded by both political parties for his experience and integrity. 

 

Modi's Idea of India

Here is the opening of this controversial article by Pankaj Mishra for Bloomberg:

Three years after he was elected, Prime Minister Narendra Modi looms over India’s political scene like no other leader in the country’s recent history. And his critics must explain why his mass appeal seems unimpaired, despite his increasingly authoritarian ways and growing failures.

Modi is far from realizing his promises of economic and military security. Pakistan-backed militants continue to strike inside Indian territory. The anti-Indian insurgency in Kashmir has acquired a mass base; Maoist insurgents in central India attack security forces with impunity. Industrial growth, crucial to creating jobs for the nearly 13 million Indians entering the workforce each year, is down, at least partly due to Modi’s policy of demonetization.

That gambit was, as the economist Kaushik Basu writes, “a monetary policy blunder,” which “achieved next to nothing, and inflicted a large cost on the poor and the informal sector.” Yet Modi’s Bharatiya Janata Party subsequently swept elections in Uttar Pradesh, India’s politically most significant state. He looks almost certain to be reelected as prime minister in 2019.

Many commentators assumed that once in office, Modi would downplay his ideological commitment to remaking India into a Hindu nation for the sake of economic development. Today, Modi seems to mock such aspiring fellow-travellers, choosing a virulently anti-Muslim Hindu priest as Uttar Pradesh’s chief minister and maintaining an eloquent silence as Hindu vigilantes, aiming to protect the sacred cow, lynch anyone suspected of selling or eating beef.

Ascendant in both new and old media, Twitter as well as radio, television, and the press, Modi is moving India away from debate, consensus-building and other democratic rituals. He is presiding over what Mukul Kesavan, a sharp observer of Indian politics and culture, calls an “infantilization of Indians.” “Instead of being proud, equal, adult members of a republic,” Kesavan writes, they “are reduced to being the wards of an all-seeing parent.”

Certainly, Hindu chauvinists, intolerant of minorities and indeed anyone who can be identified as a “liberal,” seem determined to replace the secular and democratic principles outlined by Jawaharlal Nehru, India’s first prime minister, with the creed of Hindu nationalism.

To such accusations, Modi might respond that the founding “idea of India” was always open to radical revision by the will of the people. France, where the language of secular republicanism was invented, has experimented with several republics since its revolution in 1789 launched the earth-shaking experiment in democracy. Most of these were authoritarian in nature, hospitable to repressive leaders and acclaimed by citizens.

The French thinker Claude Lefort once described how “democracy inaugurates the experience of an ungraspable, uncontrollable society in which the people will be said to be sovereign, of course, but whose identity will constantly be open to question.” Modi has understood this dynamic aspect of democracy better than those who cling to Nehru’s idea of India.

 

David Fuller's view

Any strong-willed politician who is economically savvy and also charismatic, as we see with Narendra Modi, is bound to have some critics. I read and decided to post this column because I want to be objective. Readers with an interest in India may feel the same.

Personally, I think Narendra Modi is the most impressive national leader currently in office.  He is also strong-willed, and he needs to be because to successfully lead a huge, sprawling, widely diversified emerging market with the world’s second largest population is a daunting task.

So far, India’s strong GDP growth rate, leading stock market and enthusiastic support for their Prime Minister speak volumes in favour of Narendra Modi.

 

Wall Street continuing to lead

 

Eoin Treacy's view

The S&P500 broke out to new highs today to reassert its medium-term uptrend. A clear downward dynamic would now be required to question potential for additional upside.

 

OPEC, Allies to Extend Oil Cuts for Nine Months to End Glut

This article by Nayla Razzouk, Golnar Motevalli and Laura Hurst for Bloomberg may be of interest to subscribers. Here is a section:

"The market seems to be a bit disappointed as there is no ‘something extra,’” said Jan Edelmann, a commodity analyst at HSH Nordbank AG. “It seems as though OPEC fears letting the stock-draw run too hot.”

The Organization of Petroleum Exporting Countries agreed in November to cut output by about 1.2 million barrels a day.

Eleven non-members joined the deal in December, bringing the total supply reduction to about 1.8 million. The curbs were intended to last six months from January, but confidence in the deal, which boosted prices as much as 20 percent, waned as inventories remained stubbornly high and U.S. output surged.

OPEC agreed earlier Thursday to prolong their own output cuts by nine months. Nigeria and Libya will remain exempt from making cuts and Iran, which was allowed to increase production under the original accord, retains the same output target, Kuwait’s Oil Minister Issam Almarzooq said after the meeting.

That deal gave the Islamic Republic room to increase output to a maximum of 3.797 million barrels a day.

 

Eoin Treacy's view

The oil markets rallied ahead of today’s OPEC announcement on the expectation that the production cuts would be extended. The fact the announcement came in line with expectations has resulted in a clear “buy the rumour sell the news” response. Oil prices pulled back sharply today to confirm the progression of lower rally highs with a downside key day reversal.
 

Some reflections on Japanese monetary policy

This article by Ben Bernanke for The Brookings Institute may be of interest to subscribers. Here is the conclusion:

If all goes well, the BOJ’s current policy framework may yet be sufficient to achieve the inflation objective. We’ll have to wait and see. If not, there are relatively few options available. The most promising possibility—should we get to that point—is more explicit coordination of monetary and fiscal policies. Monetary policy that is aimed at limiting the impact of fiscal expansion on the government’s debt could both make fiscal policymakers more willing to act and increase the impact of their actions. The BOJ may be reluctant to take such a step. In the possible future state that I am contemplating, however, there would be no real alternative other than to abandon the fight to raise inflation and, perhaps, even to accept a new bout of deflation. After such a long and valiant effort to end deflation and raise interest rates from their effective lower bound, that would be a most disappointing outcome.

 

Eoin Treacy's view

Japan has had modest success with attempting to foment inflation but so far has failed to embed the belief prices are going to rise among the populace. The deflationary forces of technological innovation and lower energy prices have particular meaning for Japan quite apart from the fact the yield curve is flat and at nominally low levels.

 

Are Cryptocurrencies Becoming a New Asset Class?

Thanks to a subscriber for this article by Mark Chandler at Brown Brothers Harriman for FinancialSense. Here is a section:

The volatility also does not lend itself to being a store of value (another agreed upon function of money). Consider that it is not unusual in recent days for the price of the Bitcoin to change by 2%-3% a day. The US dollar, in contrast, rarely moves one percent a day, and while the Bitcoin has appreciated by nearly 50% over the past month, the Dollar Index has fallen 2.3%.

Crypto-currencies appear easy to buy but are more difficult to liquidate. Reports suggest that even modest amounts take days to complete. It appears that a small part of the float actually trades, and the supply is limited. There are around 16.3 mln Bitcoins and 1800 new ones a day.

The rising price for crypto-currencies and new interest does not alter our assessment. These are not currencies in any meaningful sense. To the extent that some retailers accept them is a bit of a novelty and marketing fluke. Some of the larger businesses, like Virgin, who previously indicated a willingness to accept Bitcoins as payment, reportedly convert such payments into hard currencies. It is a gimmick, not confirmation of its currency status.

Leaving aside questions on the origin of money, under conditions of modernity, money facilitates exchange and is used to pay taxes and settle debts. When crypto-currencies can be used to pay taxes, and/or are generally accepted to retire debt, then their money status needs to be reviewed. Under present condition, none of the functions of money are met by crypto-currencies. They are hardly used as a means of payment. They are poor stores of value. They are not units of account.

People can still make and lose money trading them. They are part of the universe of paper assets, with their own niche rules governing supply. One can use some crypto-currencies to conceal transactions, but do not expect the taxman, the landlord or grocer to accept them anytime soon. They are currencies to the extent that contacts on Facebook are friends and that "grande" means medium at Starbucks.

 

Eoin Treacy's view

Bitcoin has been discovered by US investors. At least that is what the flow on fiatleak.com tells me. When I was looking at the website in March, China accounted for the vast majority of traffic but today US volumes outpaced China by 5:1. The other largest buyers are the EU, Russia, Brazil and South Africa.

 

 

Email of the day - on the Australian Dollar

What's with the USD/AUD? Looks like the AUD is OVERBOUGHT!!!

 

Eoin Treacy's view

Thank you for highlighting this currency pair. The US Dollar has been quite weak recently which has seen a significant number of currencies rally against it and not least the Australian Dollar.

 

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Fri, 26 May 2017 08:37:00 +0100 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/27849/the-quants-run-wall-street-now-27849.html
Beaufort Securities Breakfast Alert: Amryt Pharmaceuticals, YOUNG & CO 'A', United Utilities Group PLC http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27848/beaufort-securities-breakfast-alert-amryt-pharmaceuticals-young-co-a-united-utilities-group-plc-27848.html Today's edition features:

• Amryt Pharma (LON:AMYT)

• United Utilities (LON:UU)

• Young & Co.'s Brewery (LON:YNGA)

 

OPEC and Non-OPEC nations agree extension but not deeper cuts

An extension for a further nine months of the 1.8 million barrels per day reduction in output agreed last year is the result of the latest meeting. Global oil stock levels have remained high despite these efforts and on the back of sustained growth in US shale production. After a day of swings, the price of Brent crude has slipped to the $51 pb. Level. As usual, part of the challenge for the success of these arrangements is a genuine attempt by nations to exercise self-discipline. Apart from President's pledge to reduce US inventories, OPEC is expected to reduce the total volume of oil it ships to the US.

On the Brexit negotiation front, signs of slowing in the UK economy are not helpful but to be expected after the sharp drop in Sterling last year. Revised year-on-year GDP growth for the first quarter 2017 came in at 2.0% against 2.1% reported previously. However, an element of support to Theresa May's campaign has come in the drop of net immigration to a three-year low at 248,000 in 2016 against 323,000 in 2015. Of course, what is critical in these numbers is what they represent in terms of the talents the UK needs to attract and retain.

The FTSE-100 Index was barely changed on the day but remains close to the 7,533 all-time high achieved on the 16th May. Two stocks, Acacia Mining (ACA.L) and Petrofac (PFC.L), continued to record sharp falls after allegations emerged about possible bribery and corruption in their operations. Though the recent price declines have left them technically oversold, it may take a matter of weeks or even months for the results of investigations to emerge. "

- Mike Franklin, Chief Investment Strategist

 

Markets

Europe

The FTSE-100 finished yesterday's session 0.04% higher at 7,517.71 whilst the FTSE AIM All-Share index was up 0.17% at 989.10. In continental Europe, the CAC-40 finished down 0.08% at 5,337.16 whilst the DAX was 0.17% lower at 12,621.72.

Wall Street

In New York last night, the Dow Jones rose 0.34% to 21,082.95, the S&P-500 firmed 0.44% to 2,415.07 and the Nasdaq gained 0.69% to 6,205.26.

Asia

In Asian markets this morning, the Nikkei 225 had fallen 0.38% to 19,738.01, while the Hang Seng firmed 0.03% to 25,637.28.

Oil

In early trade today, WTI crude was down 0.57% to $48.62/bbl and Brent was down 0.37% to $51.27/bbl.

 

Headlines

New payday loan regulations come into force

New payday loan regulations come into force on Friday, requiring all online lenders to advertise on at least one price comparison website. The new rules are the result of an investigation by the Competition and Markets Authority (CMA), published in February 2015. Lenders are also required to display "prominently" a link on their own websites to a price comparison site. The industry has already complained about the increasing regulations. Following a separate investigation, the Financial Conduct Authority (FCA) imposed a cap on payday loan costs from the start of January 2015.

Source: BBC News

 

Company news

Amryt Pharma (LON:AMYT, 27.00p) – Speculative Buy

Amryt, the pharmaceutical company focused on best-in-class treatments for rare and orphan diseases, yesterday provided its AGM statement. Within this, the Group confirmed that its licensed product, Lojuxta, for the treatment of Homozygous Familial Hypercholesterolemia ('HoFH'), is expected to deliver annualised sales of €10.5m. The management said it was "encouraged" by the study results of 'Real-World' experience of Lojuxta, announced recently, which showed maximal mean reduction of LDL-C ('bad cholesterol') of 76.5%, with 30% of the patients achieving a greater than 90% reduction. Moreover, the Group also confirmed that Phase III 'EASE' trial of AP101 for the potential treatment for Epidermolysis Bullosa ('EB') is on track. Amryt's Chairman, Harry Stratford, commented "The Board continues to view prospects very positively".

Our view: Amryt continue to perform well. Having passed an important milestone, the first patient first visit, for its lead drug candidate, AP101, at the end of last month, the Phase III trial continue to progress on track. EB is a rare and distressing genetic skin disorder which has achieved Orphan Drug Designation in both the US and EU. There is currently no treatment available for EB, which affects approximately 500,000 people worldwide, with global market for a treatment estimated to be in excess of US$1.35bn. Having secured €20m facility with European Investment Bank, the Group is fully funded to take AP101 to the 'Topline Data' in Q3'2018, while also supporting more modest on-going spend for AP102 (pre-clinical stage for Acromegaly and Cushing's Disease). Amryt is significantly de-risked by securing a licensing deal for Lojuxta, which is generating revenue, transformed the Group into a diversified pipeline of therapies ranging from earlier to later stage development along with a commercial offering which together target multiple Rare (or Orphan) Diseases. Beaufort's discounted-NPV for Lojuxta has on its own, significantly exceeds the Group's current market capitalisation, suggesting nothing is apportioned to AP101 development. Such anomalies, of course, can and do correct and this cannot be long away for Amryt. We continue to believe there is significant upside potential. Beaufort reiterates its Speculative Buy rating on Amryt Pharma with a price target of 62.0p. Beaufort has published initiation research on Amryt 'It's good to be an Orphan' on 23 May 2017. Beaufort Securities acts as Retail Investment Advisor to Amryt Pharma plc

 

United Utilities (LON:UU, 1,054.00p) – Buy

United Utilities, the UK's largest listed water company, holding a licence to provide water and sewage services to around 7 million people and 200,000 businesses in North West of England, yesterday announced its results for the 12 months ended 31 March 2017 ('FY2017'). During the period, revenue fell by -1.5% to £1,704m due to accounting impact of its Water Plus Business Retail JV (between United Utilities and Severn Trent), partly offset by tariff (price) increase, against the comparative period (FY2016). On an underlying basis, operating profit, advanced by +3.1% to £622.9m as a result of reduction in infrastructure renewals expenditure and lower total costs, while pre-tax profit fell by -4.6% to £389.4m reflecting £36m increase in underlying net finance expense, leading to underlying earnings per share declined to 46p (FY2016: 47.7p). On a reported basis, operating profit, advanced by +6.6% to £605.5m helped by reduced restructuring costs and pre-tax profit jumped +25.1% to £442.4m primarily due to fair value movements as well as a £22m profit on disposal of the non-household retail business. Earnings per share consequently improved by +9.1% to 63.6p. Net cash generated from continuing operating activities increased to £821m (FY2016: £686m), while net debt at the period-end widened to £6,578.7m (FY2016: £6,260.5m). On the operational front, the Group invested £804m during the period, taking total investment during AMP6 (Asset Management Plan regulatory period 2015 to 2020) to £1.6bn. Water Plus JV, its non-household retail market was fully opened on 1 April 2017. United Utilities' CEO, Steve Mogford, commented "Our performance in the early part of this regulatory period puts us in an industry leading position and demonstrates that we are well placed to deliver further value for customers, shareholders and the environment. This is supported by a robust capital structure and good credit ratings". The Group declared a final dividend of 25.92p per share, bringing full year dividend to 38.87p, up +1.1%, to be paid on 4 August 2017.

Our view: United Utilities performed in line with expectation during FY2017. Underlying operating profit increased amid increase in tariffs (price), a reduction in infrastructure renewals expenditure and lower total costs offset by the accounting impact of Water Plus JV. Underlying pre-tax profit, on the other hand, fell by £19m (or -4.6%) as £19m increase in underlying operating profit was more than offset by the £36m rise in underlying net finance expense, primarily due to impact of higher RPI inflation on the Group's index-linked debt. Looking down the Key Performance Indicators (KPIs), the Group achieved customer Outcome Delivery Incentives ('ODI') reward of £6.7m (FY2016: £2.5m), taking total net ODI reward earned during AMP6 to date of £9.2m, ahead of management's initial expectations. The strong performance in ODI this year was led by net £9.5m reward in Wastewater business as private sewers service and pollution performed well. Although improved, the total ODI was partially offset by £2.8m net penalty in Water business, mainly due to issues around reliable water service and water quality service. Looking ahead, the Group announced additional £100m of new investment over the AMP6 to improve "resilience for customers", taking total regulatory capex programme to c.£3.6bn. Its Systems Thinking approach (for operational performance enhancement) is on track to deliver £100m of efficiency savings across 2015-2020. The Group has set new target for ODIs which reduced its downside risk of net penalty from -£70m to -£50m, while potential upside remained at the same level (+£30m net reward). The Shares are valued at FY2018E and FY2019E P/E multiple of 23.1x and 20.9x, along with dividend yield of 3.8% and 3.9%, respectively. Given gearing is comfortably within its target range of 55% to 65% net debt to regulatory capital value, along with strong balance sheet, it continues to support solid A3 credit rating for United Utilities. The Group is operating in defensive sector, has strong track record with sustainable dividend growth. Beaufort reiterate its Buy rating on the Shares, although our top pick in the sector remains Pennon Group (FY2018E P/E 20.2x, yield 4.3%).

 

Young & Co.'s Brewery (LON:YNGA, 1,329.50p) – Buy

Young & Co.'s Brewery ('Young'), a London and South East focused operator of British pubs and hotels, yesterday announced its preliminary results for the 12 months ended 3 April 2017 ('FY2017'). FY2017 is comprised of 53 weeks whereas its comparative period is 52 weeks (FY2016), unless stated otherwise. During the period, revenue advanced by +9.4% to £268.9m, operating profit increased by +11.9% to £46.1m, and pre-tax profit jumped by +12.8% to £37.0m which led to basic earnings per share of 61.51p, up +12.4%. On an adjusted basis, in absence of, for example, properties revaluation, tenant compensation and goodwill impairment, pre-tax profit advanced by +13.5% to £40.4m and basic earnings per share increased +13.7% to 66.43p. Operating cash generation improved to £63.5m (FY2016: £60.4m), while cash at the period-end stood at £6.6m (FY2016: £13.2m). Net debt at the period-end was reduced by -£3.6m to £126.6m, representing net debt to EBITDA of 1.9x (FY2016: 2.2x). On a 52 weeks basis, revenue in Managed Houses (pubs and hotels under Young's and Geronimo brand) increased by +7.0% with Like-for-like ('LFL') growth of +4.7%, while Ram Pub Company (tenanted pubs) revenue rose +7.1%, with LFL growth of +3.2%. On the operational front, the Group has invested £38.2m in acquisitions, transformational developments and estate upgrades. The Group acquired 4 pubs, sold 1 and 2 leases expired during the period, taking total estate to 252 pubs (Young's 135 (include 23 hotels), Geronimo 38, Ram Pub Company 79). The Group added one hotel during the period with total room stock increased to 486 (FY2016: 475). Young's CEO, Patrick Dardis commented "I am delighted with these results. We will continue to surprise and delight our customers, and to grow our estate through carefully selected acquisitions and developments, all in pursuit of delivering superior returns for our shareholders." The Group declared a final dividend of 9.62p per share, bringing full year dividend to 18.50p, up +6.0%, to be paid on 13 July 2017.

Our view: Young delivered strong performance for the FY2017, recording positive LFL growth in all its divisions, with recording 20th consecutive year of dividend growth. Managed House's total LFL was up +4.7%, comprised of Young's +5.0% and Geronimo +3.8%, supported by strong growth in both drink (particularly Wine and Spirits) and food (successful Ultimate Sunday Lunch). Hotel recorded +2% increase in occupancy rate to 74.9% with flat revenue per available rooms of £60.86 (FY2016: £60.01). Rum Pub Company's LFL was up +3.2% as its estates were benefitted from the previous year's capital investments, along with improved wine range. Post the period, for the first 7 weeks of FY2018, the Group confirmed its trading is "positive" with Managed Houses revenue increased by +6.1% or up +4.7% on a LFL basis, helped by mild and dry weather in April and increase in "staycations" over the Easter holidays, somewhat offset by wet May. Looking ahead, the sector continues to face various cost pressures such as energy inflation, increase alcohol excise duty, National Minimum and Living Wage and Business Rates, particularly in London. The new business rate alone is estimated to cause c.£1.8m impact to the Group during FY2018. The Shares are valued at FY2018E and FY2019E P/E multiple of 20.1x and 18.3x, along with dividend yield of 1.5% and 1.6%, respectively. Despite number of cost headwinds and political/economic uncertainties, considering the Group's ability to continuously outperform the sector, management's future confidence and strong track record of growth, Beaufort reiterate a Buy rating on the Shares, although for an income investors, its peer such as Marston's (FY2017E P/E 9.6x, yield 5.6%) and Greene King (FY2017E P/E 10.4x, yield 4.5%) offers more attractive dividends.

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Fri, 26 May 2017 08:32:00 +0100 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27848/beaufort-securities-breakfast-alert-amryt-pharmaceuticals-young-co-a-united-utilities-group-plc-27848.html
A crude awakening for OPEC http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/27847/a-crude-awakening-for-opec-27847.html FTSE 100 Index called to open flat at 7520, having traded sideways overnight in a tight 7510-7525 range that takes close to the apex of a bullish narrowing pattern. A break from this could see it revisit yesterday’s fresh record highs and maybe even complete that 2-week bullish inverse Head & Shoulders pattern. Bulls need a break above 7530; Bears require a breach of rising support at 7510. Watch levels: Bullish 7525, Bearish 7515.

A flat opening call comes after more record highs on Wall St and despite a negative session to close the weak in Asia. The FTSE outperforms peers thanks to overnight GBP weakness that helps offset oil prices -6% as traders are left underwhelmed by the OPEC decision.

The negative oil reaction to a 9-month OPEC production cut extension is a prime example of ‘buy the rumour, sell the fact’. With nine months having become the baseline - prices +17% in the run-up, hoping for longer and maybe even deeper cuts - potential for an upside surprise was already limited.

If anything, the simple extension begs questions about what happens next March and what OPEC’s long-term strategy is for combating rising US production and a prolonged global supply glut, to get prices back above $60.

Both Japan’s Nikkei and Australia’s ASX are in the red to the same degree as their Energy contingent smarts from the oil price drop. The former is also hampered by a firmer Yen following solid inflation data, while the latter’s Miners suffer from Oil’s knock-on as well as continued weakness in Iron ore and Copper off its highs.

US equity markets moved higher for a 6th consecutive session, ignoring falling Crude Oil prices, as major Tech stocks extended recent gains. Popular growth companies Alphabet, Netflix and Facebook helped lead the Nasdaq to a fresh all-time closing high alongside the S&P 500. The Dow Jones also closed higher, however underperformed relative to peers, with UnitedHealth leading risers on Trump healthcare reform hopes, while Chevron and Goldman Sachs contributed most losses after recent strength.

As alluded to above, Crude Oil prices have suffered on the back of OPEC’s 9-month extension to production cuts. Both Brent and US benchmarks have fallen back to 10-week rising lows support at $51 and $48.50 respectively, crashing through three support levels on the way. Crude bulls will be hoping for prices to retrace yesterday’s losses to $54.50 (Brent) and $52 (US), while bears will be hoping downward pressure mounts on both benchmarks for support to give way.

Having tested rising lows support at $1253 overnight, Gold has recovered to trade $1258.5 on account of the US dollar coming off overnight highs. The precious metal - trading in a narrowing pattern between $1253-1261 - has seen safe-haven demand (US politics, UK terror attack) dissipate and, with no Fed speakers scheduled today, focus will likely remain on FX market movements.

In focus today will be the negative oil market reaction to yesterday’s OPEC meeting delivering the widely priced in 9-month extension, but also fuelling questions about its exit strategy.

In terms of data, this afternoon the second reading of US GDP (1pm) is expected to confirm growth of 2.3%, while Personal Consumption Expenditure is expected at 2.0%. The final May reading of the University of Michigan Sentiment (3pm) is seen cooling from the first reading of the month, although holds above the 2017 average.

While speakers are few and far between today - the ECB’s Coeure (9am; meeting of Francophone central bank governors, Switzerland) the only speaker of note - investors will closely follow commentary from the meeting of G7 leaders in Sicily, as President Trump continues his European tour, while UK election campaigning restarts after the Manchester tragedy.

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Fri, 26 May 2017 08:31:00 +0100 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/27847/a-crude-awakening-for-opec-27847.html
Today's Market View - Anglo Asian Mining Plc, Atalaya Mining, Mkango Resources Ltd, Rambler Metals and Mining PLC, Savannah Resources Plc http://www.proactiveinvestors.co.uk/columns/sp-angel/27846/today-s-market-view-anglo-asian-mining-plc-atalaya-mining-mkango-resources-ltd-rambler-metals-and-mining-plc-savannah-resources-plc-27846.html Anglo Asian Mining* (LON:AAZ) – Strong earnings and FCF help reduce debt levels

 

Atalaya Mining  (LON:ATYM) – Production guidance maintained on Q1 Results

Mkango Resources* (LON:MKA) – Q1 Results

Rambler Metals (LON:RMM) – March quarter results

Savannah Resources (LON:SAV) – Savannah acquires 75% of Lithium prospects in Portugal

 

Equities are broadly resilient to the details of the May FOMC meeting minutes showing authorities are convinced monetary tightening should proceed as planned with members also discussing a potential to gradually reduce the size of the outstanding balance sheet.

• The US$ index in fact came off yesterday and is slightly down this morning supporting gold prices at $1,260/oz.

• Brent is up 1.2% at $54.6/bbl as OPEC members are holding the meeting today.

• Iron ore futures fell to 7-month low as markets continue to digest the effect of a Moody’s credit rating downgrade.

 

Tanzania – Tanzanian President fires the Minister of Mines

• The firing follows an investigation into the under reporting of mineral exports

• Yesterday we saw news that seized containers of gold concentrate assayed 10x their declared grade

 

Dow Jones Industrials  +0.36% at 21,012

Nikkei 225   +0.36% at 19,813

HK Hang Seng   +0.79% at 25,630

Shanghai Composite    +1.43% at 3,108

FTSE 350 Mining   +0.26% at 15,004

AIM Basic Resources   +0.22% at 2,644

 

Economic News

US – Fed official agreed that another rate hike will be needed “soon” assuming the economy continues to perform in line with estimates and discussed a potential strategy for gradually reducing the Bank’s balance sheet currently standing at $4.5tn.

• The Q1 drop in growth rates has been characterised as “transitory” with expectations for the recovery to gain traction through the remainder of the year.

• “Nearly all policymakers indicated that as long as the economy and path of the federal funds rate evolved as currently expected, it likely would be appropriate to begin reducing the Federal Reserve’s securities holdings this year,” the minutes read.

• While several participants suggested that “a somewhat more rapid” tightening might be needed should unemployment continue to decline further, wage growth accelerate more than estimated and Congress embarks on “highly stimulative” fiscal policy.

• Markets currently ascribe a roughly 80% chance of June 14 meeting rate increase.

 

 

UK – Q1/17 GDP growth revised downwards on a weaker consumer spending and trade data.

• GDP climbed 0.2%qoq, less than the 0.3%qoq released last month and down from 0.7%qoq recorded at the end of 2016.

• Auto production growth continued to slow in Apr with YTD output posting just a 1%yoy increase compared with a 10.8% last year, according to the SMMT data.

• This compares to a 7.6%yoy increase in the first three months of the year.

• April production numbers were down 18.2%yoy at 122k units reflecting timing differences in Easter holidays, a one-day strike at the Mini plant in Oxfordshire on pay-related issues and slowing orders from the overseas markets.

 

Spain – Final Q1 GDP growth numbers confirmed at 0.8%qoq/3.0%yoy making Spain the top growing economy in the Eurozone.

• This compares to 0.7%qoq growth recorded in Germany, 0.5%qoq in the Eurozone and 0.3%qoq in France.

• On the composition of the growth rate, consumer spending accounted for 2.2pp of the total with positive trade balance accounting for most of the balance.

 

Philippines – President Duterte said the martial law declared at the southern island of Mindanao on Tuesday may be extended throughout the country if it appears that “the ISIS has already taken foothold also in Luzon and terrorism is not really far behind”,

• The martial law in the Mindanao group of islands was established following deadly clashes between Filipino government troops and islamist militants around the city of Marawi.

• Militants are reported to have taken over several government buildings in the city.

 

Currencies

US$1.1233/eur vs 1.1178/eur yesterday.   Yen 111.76/$ vs 111.84/$.   SAr 12.883/$ vs 13.062/$.   $1.299/gbp vs $1.298/gbp.  

0.749/aud vs 0.746/aud.   CNY 6.875/$ vs 6.890/$.

 

Commodity News

Precious metals:

Gold US$1,258/oz vs US$1,250/oz yesterday – Russia (+0.2moz at 54.2moz), Turkey (+0.3moz at 14.0moz) and Kazakhstan (+0.1moz to 8.7moz) increased holdings of gold in Apr while Chinese gold stocks remained flat(- at 59.2moz) for the sixth month.

   Gold ETFs 59.8moz vs US$59.7moz yesterday

Platinum US$950/oz vs US$942/oz yesterday

Palladium US$771/oz vs US$774/oz yesterday

Silver US$17.22/oz vs US$16.98/oz yesterday

           

Base metals:   

Copper US$ 5,702/t vs US$5,672/t yesterday

Aluminium US$ 1,956/t vs US$1,939/t yesterday

Nickel US$ 9,150/t vs US$9,180/t yesterday

Zinc US$ 2,629/t vs US$2,641/t yesterday – “Market sentiment is still bullish despite some retreat recently,” the ILZSG said.

• Market balance is expected to post a 250kt deficit this year as demand is forecast to grow 2.6%yoy on the back of strong demand from property and infrastructure in China.

Lead US$ 2,081/t vs US$2,092/t yesterday

Tin US$ 20,450/t vs US$20,345/t yesterday

           

Energy:           

Oil US$54.5/bbl vs US$54.4/bbl yesterday

Natural Gas US$3.221/mmbtu vs US$3.228/mmbtu yesterday

Uranium US$20.00/lb vs US$20.25/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$59.0/t vs US$59.5/t

Chinese steel rebar 25mm US$588.3/t vs US$588.6/t

Thermal coal (1st year forward cif ARA) US$67.0/t vs US$66.8/t yesterday

Premium hard coking coal Aus fob US$153.5/t vs US$153.5/t

 

Other:

Tungsten - APT European prices $215-225/mtu vs $212-222/mtu

 

Company News

Anglo Asian Mining* (LON:AAZ) 19p, Mkt Cap £21m – Strong earnings and FCF help reduce debt levels

• On financials, revenues totalled $79.2m (2015: $78.1m) with dore sales generating $66.9m (2015: $74.3m) and the balance attributed to copper metals concentrates sales $12.3m (2015: $3.8m).

• Bullion sales were 53.3koz of gold and 9.5koz of silver (2015: 63.9koz gold and 3.8koz silver) at average prices for $1,253/oz and $17/oz, respectively (2015: $1,161/oz and $15/oz).

• Copper concentrate (c.20% Cu) sales came in at 6.8kdmt (2015: 1.7kdmt) reflecting the full year contribution from the new flotation plant commissioned in Nov/15.

• EBITDA climbed to $33.7m with the EBITDA margin improving to 42.5% (2015: $18.7m and 23.9%) reflecting cost controls, stronger contribution from higher margin flotation operations and the currency depreciation against the US$ (AZNUSD 2016 average of 1.6863 v 2015 average of 1.2680).

• AISC (measured per ounce of gold produced) came in at $616/oz last year (2015: $858/oz).

• PAT totalled $4.0m (2015: -$7.4m) and diluted EPS stood at 3.55c (2015: -6.58c).

• Net CFO (post interest) totalled $25.6m (2015: $18.1m) covering $11.0m in capex (2015: $14.7m) and allowing to reduce Group debt levels.

• Main capex items were capitalised waste stripping ($4.1m), underground mining development at Gadir ($1.3m), new second SAG mill ($1.5m) and power substation ($1.8m).

• Net borrowings were reduced to $34.6m (YE2015: $49.0m) with $9.8m repaid to the Amsterdam Trade Bank taking outstanding loan to $17.2m (50% of the loan was transferred to Gazprombank Switzerland (GPBS) in Feb/17).

• The DSCR reduced to 1.07 as of YE16 v the covenant condition of 1.25, but the Company negotiated a waiver with the ATB and GPBS through to Jun/17.

• Regarding production guidance, 2017 output target reiterated at 64-72koz GE (comprised of 52-58koz gold and 2-2.4kt copper) compared with 72.3koz GE in 2016.

• On 2017 plans, development works at Ugur, the discovery announced in Nov/16 and conveniently located only 3km away from Gedabek processing facilities, are well underway with first production from the open pit targeted for the end of 2017 and JORC resource/reserves statement expected in Q3/17.

• At Gedabek, the management is carrying a 15,000m drilling programme to update the geological model with mining operations suspended in Q2/17 due to restart in Q1/18.

• Resource delineation drilling and channel sampling are progressing at Gadir testing the down dip and lateral extensions of ore bodies; mining operations which were temporarily suspended in Feb/17 are due to restart in Q1/18.

• On site ore stockpiles will help to minimise the affect of suspended mining operations on the production schedule with the flotation plant reconfigured to directly process crushed and milled high copper content sulphide ores.

• On operational efficiency initiatives, second SAG mill installed at the agitation leaching plant last year helped to increase plant throughput rates reducing the affect of falling processed grades.

• Gedabek operations have been connected to the Azerbaijan national power grid allowing the Company to replace diesel powered generators with cheaper electricity which is expected to translate into $1.8-2.0m in cost savings.

• Water management systems are expected to be installed 2017 reducing the amount of water stored in the tailings dam, thus, freeing up capacity for processing plant waste material.

Conclusion: A strong set of financial results with operational efficiencies and depreciation of the national currency helping the Group’s margins. EBITDA and PAT came in better than our estimates for $28.9m and $1.3m, respectively.

The management team fast tracks the development of the Ugur deposit with a maiden JORC resource/reserves statement guided for Q3/17. In the meantime, the Company is temporarily suspending operations at Gedabek and Gadir to allow for a more systematic approach to complete a number of drilling programmes and better delineate mined orebodies.

We are looking forward towards resource statements updates that would provide an estimate for the potential size of the new Ugur discovery.

*SP Angel act as Nomad and Broker to Anglo Asian Mining

 

Atalaya Mining  (LON:ATYM) 132 pence, Mkt Cap £153m – Production guidance maintained on Q1 Results

• Atalaya Mining has maintained its 2017 production guidance of 34-40,000 tonnes of copper following production from Proyecto RioTinto of 8,805 tonnes of copper in concentrate during the first quarter.

• Cash costs were reduced to US$1.83/lb during the quarter from the US$1.95/lb achieved during Q4 2016 and US$2.28/lb in the first quarter of 2016. Cash operating costs for the year are expected to lie “in the range of $1.90 -$2.10/lb” suggesting that the Q1 result is well on track at this stage.

• As a result, Atalaya generated a profit of €5.2m (4.5 €cents per share) during the quarter reversing the Q1 2016 loss of €3.3m (2.8 €cents).

• Commenting on the performance, CEO Alberto Lavandiera noted that “The first quarter of 2017 was strong both financially and operationally as Proyecto Riotinto continues to perform well.  The combination of falling operating costs and improved levels of production and recovery reflect our ongoing on-site efficiencies.”

• Atalaya processed 2.2mt of ore at RioTinto at an average grade of 0.48% copper and improved recovery rates to 84.6%. The company comments that “Mining operations continue to run according to mine plans. Blending different ore types from the Cerro Colorado pit has provided consistent feed quality to the processing plant which resulted in higher than anticipated metallurgical recoveries with good concentrate grades.”

• The company’s continuing attention to the detail at the operation is reflected in the comment that “Adjustments to geological modelling are currently under evaluation to improve mine-to-mill efficiencies. Drilling and blasting parameters have been adjusted to improve fragmentation, loading rates and crushing capacity.”

• Cash balances increased during the quarter to €10m by 31st March from €1.1m at 31st December 2016. Operating cash flow of €14.28m comfortably covered investment of €5.4m leaving €8.88m of free cash flow.

• At the Touro project in north-west Spain, “The permitting process was initiated during Q1 2017, with submission to the relevant authorities of the environmental impact study, exploitation plan and rehabilitation plan. Geological, hydrogeological and geotechnical studies have also been completed and incorporated into the project designs.”

Conclusion: Atalaya has continued to improve the performance at TioTinto and is now moving ahead with the Touro project.

 

Mkango Resources* (LON:MKA) 3.3p, Mkt Cap £2.7m – Q1 Results

• Mkango Resources reports a Q1 loss of US$414k ($0.01/share) compared to a loss of US$106k in Q1 2016.

• Mkango is working to progress its flagship Songwe Hill rare earth project in Malawi and has recently announced the identification of additional uranium targets within its licences following a re-evaluation of geophysical data and follow up sampling work.

• At Songwe Hill, “Mkango’s strategy for Songwe is to further optimise the project with a view to maximising efficiency and reducing costs, thereby providing a strong platform both for entering into partnerships, marketing and off-take arrangements.”

• The project feasibility study for Songwe Hill was updated in November 2015 and showed a project generating an after tax IRR of 37% and an NPV of US$345m from an initial capital investment of US$216m (including US$20m contingency).

o The company has cash on the balance sheet of US$671k at 31st March and a working capital surplus of US$565k.

Conclusion: Mkango continues to press ahead with Songwe Hill while adding value to its Thambani uranium/tantalum and niobium project through targeted, low cost exploration. The company has developed strategic associations with third parties on rare-earths marketing and market intelligence and in the manufacture of rare earth element alloys.

 

Rambler Metals (LON:RMM) 8.6 pence, Mkt Cap £47.4m – March quarter results

• Rambler Metals has announced an operating loss of US$3.5m for the quarter ending 31st March, this is in line with the US$3.4m loss reported in the December quarter of 2016.

• The company commented that “While grade for the quarter was below guidance, this decrease in grade during the period was anticipated as we continue to ramp up access development and to transition the blended mill feed to include more LFZ [Lower Footwall Zone] stope ore.”

• The company is expanding production into the LFZ area of the mine and “Development into the core of the LFZ is on the critical path and necessary before steady production can be maintained with ore primarily sourced from LFZ stoping areas. As multiple stoping areas come online, mine production of 1,250 tonnes per day ore can be sustained from mid-2017 onward. With this grade will then increase throughout the remainder of the year causing C1 cost to decline to the targeted $1.70 per pound of copper.”

 

Savannah Resources (LON:SAV) 5.9p, Mkt Cap £31.5m – Savannah acquires 75% of Lithium prospects in Portugal

• Savannah Resources has signed to acquire a lithium prospect in Portugal.  There is no resource on the prospect through there are some reasonable looking drill results.

• Savannah are acquiring a majority 75% stake in the four project areas covering 1,018sqkm.

• Transaction:  The cost of the acquisition is A$1m + 20m new shares to start plus a further A$1.5m and another 20m new shares on the publication of a 7.5mt resource of no less than 1% li2O, plus a final A$1.5m + 20m new shares of a further 7.5mt 1% Li2O JORC resource. 

• Number of shares:  Savannah recently approved the issue of 11.2m new shares to Al Marjan at 5.25p  and a further 1.7m new shares to senior employees taking the total number of shares to 514.4m not including the 20m just issued and the further 20m to potentially be issued.

• Transaction cost:  The transaction could therefore cost an aggregate value of A$10.1m according to the statement based on the value of the shares yesterday.

• Cash and cash burn:  Savannah had £3m as of 23 February 2017 which will be reduced to under £2m following this transaction.  The company are committed to the completion of a scoping study and other work in Mozambique (slide 14 of March presentation) plus further scoping studies and a Feasibility Study in Oman (slide 30) and follow up work in Finland (slide 36) and now the funding of work in Portugal.  This extensive work program would stretch the management and finances of many a junior company.

Plymouth Minerals (PLH AU) has a similar looking project in Spain which shows long and continuous zones of lithium mineralisation

• Exploration:  The press release quotes some rock chip samples which we tend to discount as geologists often to go for the best looking rocks thereby chipping away at the highest grade parts of the vein but has some useful drill results done in 2002 which shows relatively good lithium intersections and grades in relatively shallow drilling down to 84m in depth.

• The company plan to undertake further exploration including mapping, rock chip sampling and some drilling in around two weeks.

• Metallurgy:  The company report some preliminary metallurgical test work indicating a >6% li2O concentrate can be produced.  This would be consistent with many other spodumene pegmatites but we don’t know who has done the test work and if this was commissioned by the ‘Perth’-based sellers.  We note, spodumene pegmatites generally seem to produce better quality concentrates for lithium processors whereas lithium with mica produces a dust which hampers the processing process.

• The statement states the project has an approved 30 year mining license, mine plan and environmental impact assessment to remove 7mt of lithium, quartz and feldspar form seven pegmatites.  The mining approval is effectively for industrial minerals is the first time we have seen a mining license approving a project with no stated resource.  The statement goes on to say that approvals would needed to be modified to build a plant specific for lithium processing with the approvals process expected to take 6-8 months. 

• Local partner:  Savannah are working with a local Portugese partner, Mineralia Minas Geotechnia e Construcoes Lda which has commissioned over 11 quarries and mines in Portugal.  The Portuguese company also has a joint venture with BMR Group signed in November 2016.

• Independent valuation:  “The Company commissioned an independent valuation report utilising the Kilburn Geosciences Rating Method indicating that the value of the Covas do Barroso tenements is between USD851,000 - USD2,240,000 in their current state.” This seems a little low considering the A$10.1m consideration being paid in cash, shares and future shares.

• Savannah shall fund the operations of the joint venture up until a decision to mine is made which could cause some argument about the timing of the decision to go mining.

• Portugal:  We are a little jaundiced about Portugal due to the Portugese government vetoing the acquisition of Neves Corvo by Murchison United some years ago. 

• This highlights the risk of operating in Portugal.  Lundin Group later acquired the mine and Neves Corvo worked well in the end but there has been very little exploration or production success in the sector in Portugal since then. The company quotes the Fraser Institute with respect to Portugal’s high ranking in terms of desirability of investment though there is not much to go on from a mining perspective.

Conclusion:  Savannah has allot on at present.  It is looking to develop into a mid-tier copper and gold company in Oman, it has a large ilmenite resource in Mozambique, it has a lithium project in Finland and now a lithium project in Portugal.  The company last raised £2.24m through the placing of shares at 5.25p in February but is likely to have an annual cash burn in excess of this and will have likely blown the budget with today’s acquisition price.  The Chairman is an Australian Lawyer and a qualified solicitor so we had better watch what we say from here!

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Thu, 25 May 2017 11:10:00 +0100 http://www.proactiveinvestors.co.uk/columns/sp-angel/27846/today-s-market-view-anglo-asian-mining-plc-atalaya-mining-mkango-resources-ltd-rambler-metals-and-mining-plc-savannah-resources-plc-27846.html
Northland Capital Partners View on the City - Veltyco Group plc, Edenville Energy, Arian Silver Corp http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/27845/northland-capital-partners-view-on-the-city-veltyco-group-plc-edenville-energy-arian-silver-corp-27845.html VELTYCO GROUP (LON:VLTY)
SECTOR – LEISURE
RATING – BUY*
MARKET CAP – £38m
CURRENT PRICE – 51.5p#
TARGET PRICE – 70p (From 52p)

 

COMPANY DESCRIPTION

Veltyco is a marketing and promotions business which refers customers to online casino, sports betting, lotteries and options trading brands.

Update: Expect another year of strong growth (note attached)

NORTHLAND VIEW

  FY16A was a year of significant growth for Veltyco, both from existing brands and from new marketing agreements struck in FY16. The 2H16 was particularly strong, which resulted in the business significantly outperforming expectations. Revenue was €6.1m (€4.9m FY16E) and EBITDA was €2.1m (€1.4m FY16E).

  Current trading looks strong where revenue increased significantly in the 1Q17. Average monthly revenue was +38% above the average monthly revenue in the 2H16. We increase our forecasts for the business and include forecasts for the newly acquired businesses Bet90, which importantly will be ready for the start of the football season, and T4U. We look for revenue of €11.6m (€9.8m previously) in FY17E growing to €15.9m (€11.8m previously) in FY18E. At the EBITDA line we look for further margin improvement in FY17E to c. 43% and EBITDA of €4.9m (€4.3m previously) growing to €7.2m (€5.4m previously).

  The shares trade on 8.8x FY17E EBITDA, a discount to peers on 10.8x FY17 EBITDA. The multiple falls to 6.0x FY18E EBITDA a larger discount of 35% compared to peers. Our DCF points to 75p per fully diluted share and our price target is based on the midpoint of our DCF (75p) and peer valuation (64p), which points to 70p per fully diluted share. We reiterate our BUY rating on Veltyco.

The business outperformed expectations in FY16 and produced a strong start to FY17, the catalyst for the increase to forecasts. Management is confident and we expect another year of strong growth.

 

Edenville Energy (LON:EDL)
SECTOR – MINING
RATING – CORP*
MARKET CAP – £7.8m
CURRENT PRICE – 0.7p#

 

COMPANY DESCRIPTION

Edenville Energy is moving the Rukwa Coal Project towards near-term production alongside advancing its Coal to Power Project.

FY16 Results – coal production to ramp up to full production in Q317

NORTHLAND VIEW

  LBT reduced to £3.2m in FY16 from £4.5m in FY15, largely due to a reduction in impairments associated with historic licenses.
  Net cash decreased to £0.1m in FY16 from £0.2m in FY15.
  Wash plant to be constructed in June/July 2017 and will take six to eight weeks to become operational.
  Coal production to ramp up to full production in Q317.

Edenville Energy will shortly be commencing production of processed coal from its Rukwa Coal Project, located in Tanzania. The Company has already purchased the wash plant it is currently transporting it to Tanzania. The purchase and construction of the plant has been accomplished without the use of debt and for a cost of £2m funded from existing cash resources. Edenville is planning to generate cash flow that will allow the Company to work towards being a self-sustaining entity.

 

ARIAN SILVER CORPORATION (LON:AGQ)
SECTOR – MINING
RATING – CORP*
MARKET CAP – £1.5m
CURRENT PRICE – 0.8p#

COMPANY DESCRIPTION

Arian Silver Corporation is a Mexican focused exploration company.

Placing to raise £600,000

NORTHLAND VIEW

  Arian Silver Corporation has raised £600,000 through the issue of 120,000,000 new shares at a price of 0.5p per share and 120,000,000 warrants at a price of 0.6p. The warrants will be valid for two years.
  Following the placing there are 303,694,941 shares in issue.

Arian Silver Corporation will use these funds to advance exploration at its lithium and silver projects located in Mexico. At its lithium salar projects, the Company believes that greater lithium concentrations are present at greater depths and the initial results from the surface exploration are merely indicative of the presence of lithium

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Thu, 25 May 2017 09:05:00 +0100 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/27845/northland-capital-partners-view-on-the-city-veltyco-group-plc-edenville-energy-arian-silver-corp-27845.html
Breakfast News - AIM Breakfast : Flying Brands Ltd, Arian Silver Corp, Arix Bioscience Plc, European Metals Holdings, Ferrum Crescent Limited, Leeds Group plc, One Media IP Group, Sareum Holdings Plc, YOUNG & CO 'A' http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27844/breakfast-news-aim-breakfast-flying-brands-ltd-arian-silver-corp-arix-bioscience-plc-european-metals-holdings-ferrum-crescent-limited-leeds-group-plc-one-media-ip-group-sareum-holdings-plc-young-co-a--27844.html What’s cooking in the IPO kitchen?

AIM

I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK.  Offer TBC, 26 May admission.

Verditek — Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p.  Admission in late May.

Tiso Blackstar Group —Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June.

Main Market Premium Listing

Curzon Energy —Report on Proactive Investors of intended LSE float this year  with acquisition of  coal bed methane assets in Oregon. Looking to raise £3m plus.

NLB Group —financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June.

Flying Brands (LON:FBDU)—Prospectus approved by FCA. RTO of Stone Checker Software,  supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun.

AEW UK Long Lease REIT—Intention to Float. Up to £150m raise. Admission early June. UK specialist and alternative property

Alfa Financial Software –Intention to float. Mission-critical software platform purpose-built for asset finance enterprises. Vendor sale of 25% plus. FYDec16 rev £73.3m (CAGR of 24% from 2012). Adjusted EBIT £32.8m.

Kuwait Energy— $150m raise plus vendor offer. Admission due June.  2p reserves 810.0 mmboe

Main Market Standard Listing

ADES International — Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017.

Main Market Specialist Funds

PRS REIT—Private rental sector REIT raising up to £250m.  Admission due 31 May

 
 
Breakfast buffet

Sareum Holdings* (LON:SAR) 0.88p £23.15m

The specialist cancer drug discovery and development company, noted an announcement made by Sierra Oncology, Inc. yesterday stating that it will be presenting two Trials in Progress posters describing the innovative Phase 1 clinical designs for its Chk1 inhibitor, SRA737, at the 2017 American Society of Clinical Oncology (ASCO) Annual Meeting, being held in Chicago on June 5th. These ongoing trials were recently amended to include cohort expansions of prospectively selected patients with tumours identified to have genetic abnormalities that are thought to confer sensitivity to Chk1 therapy. This announcement does not trigger any milestone payments under the terms of the agreement. “We can expect a further update from Sierra in early 2018."

Arix Bioscience (LON:ARIX) 205p £197m

The global healthcare and life science company supporting medical innovation, today announced that Harpoon Therapeutics, a new Arix Group Business, has closed a Series B investment round raising $45 million. Harpoon created its novel, proprietary trispecific antibody platform (TriTAC™) to harness T cells to kill tumour and other cell types by recruiting T cells and other immune cells. Proceeds from the financing will be used to advance Harpoon's immuno-oncology antibody platform programmes, including moving two lead programmes into clinical trials and expanding the product pipeline through discovery and partnering initiatives. First clinical candidate to enter Phase 1 in 2018.

Arian Silver Corp (LON:AGQ) 0.8p £1.47m

£600k placing at £0.5p with 2 year warrants attached at 0.6p. The Company intends to use the net proceeds of the Placing to advance exploration of its mining concessions in Zacatecas, Mexico, and specifically to seek and assess the feasibility of additional lithium acquisitions, some of which are currently being negotiated as previously announced.

One Media IP Group(LON:OMIP) 2.88p £2.04m

The digital and technical media content provider, which consolidates, exploits and monetises intellectual property rights around music and video, has signed its first major music distributor to utilise the services of its Technical Copyright Analysis Tool (“TCAT”). The global music distributor will be using the TCAT services from June 2017 to monitor its weekly release schedules, monitor music conflicts and potential copyright infringements. “Whilst the revenues generated from this initial contract are modest, it is a significant development for the Company”. FYOct17E £2.3m rev, £0.32m PBT, Div 0.14p.

Ferrum Crescent (LON:FCR) 0.11p £2.36m

The European lead-zinc explorer, announced the start of drilling operations at its wholly-owned Toral project, located in the Leon Province of northwest Spain. Drilling will target mineralisation within 150m of the surface, located above the historic lead-zinc resource, that was originally assessed by a third party in 2011 and 2012. This Phase 1 diamond drilling programme is specifically designed to test shallow mineralisation. The planned holes are located along a two-kilometre geochemical anomaly, in zones determined by FCR's exploration team to host the most prospective mineralising characteristics. Programme expected to complete in under ten weeks.

European Metals (LON:EMH) 55.5p £71.83m

Commencement of infill drilling at Cinovec South.  Six core drillholes for a total of 2,800m planned.

·     Infill drilling in two areas where data density low and 'gaps' in the resource model occur.

·     Expected to add high grade resource at Cinovec South in critical areas where mining will start.

·     Results will be utilized during the DFS program to optimize the current mine plan.

The current PFS mine plan utilises only the Indicated Resource.  The conversion of the 'no-class' and Inferred Resource in the immediate vicinity of the current mine plan will allow optimisation of the mine plan, in particular with respect to early years of mining, thus positively impacting the overall cost structure.

Leeds Group (LON:LDSG) 40p £10.9m

Trading update from wholesaler of fabrics and haberdashery. Identified that previously announced H1 performance (below expectations) was constrained by a shortage of double folding capacity. Leeds responded to this with a significant capital expenditure programme which eliminated the need for third party double folding and warehousing, bringing them inhouse to enlarged properties owned by the Hemmers business. Trading performance in H2 has been below expectations with the restructuring taking longer than expected. The Group profit before tax for the full year is therefore expected to be lower than what was reported last year. The Board is confident that the restructured business is well positioned to deliver future growth. We could see no market forecasts.

Young & Co Brewery (LON:YNGA) 1339p £397m

Results for 53 weeks to 3 April. ‘Another very successful year's trading, continuing the consistent run of outperformance driven by our premium estate of differentiated, individual pubs and hotels’. Total managed house revenues up 7.0%, and up 4.7% like-for-like; operating profit up 9.8% to £58.4m; Investment of £38.2m in acquisitions, transformational developments and estate upgrades; Record cash generation, with op cash flow up 5.1% to £63.5m and net debt representing 1.9x of EBITDA;  Proposed 6.1% increase in final dividend to 9.62p, resulting in a total dividend of 18.5p; 20th consecutive year of divi growth;  Positive trading since the period end; managed house revenue in the first seven weeks was up 6.1% in total, and 4.7% like-for-like.

Gateley Holdings (LON:GTKY) 167p £178.49m

FY Apr 17 Trading Update. “Trading in the second half of the financial year has exceeded expectations in revenue enabling the Group to further invest in the business.  The Group is pleased to report that, subject to audit, revenue for the financial year ended 30 April 2017 will be not less than £77 million (2016: £67 million). Adjusted EBITDA” is expected to be in line with market expectations at not less than £14.7 million (2016: £12.9 million.”

“The Board expects to recommend a final dividend in line with its stated dividend policy of distributing up to 70% of the Group's after tax profits.”

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Thu, 25 May 2017 08:59:00 +0100 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27844/breakfast-news-aim-breakfast-flying-brands-ltd-arian-silver-corp-arix-bioscience-plc-european-metals-holdings-ferrum-crescent-limited-leeds-group-plc-one-media-ip-group-sareum-holdings-plc-young-co-a--27844.html
In the news: KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27843/in-the-news-kefi-minerals-27843.html FROM THE BROKING DESK

To follow up the latest release from KEFI Minerals†, Jim Taylor has put out KEFI Minerals — Tulu Kapi 2017 DFS Update, 25 May 2017. The company updated its DFS for the Tulu Kapi Gold Project in Ethiopia. Reserves and the mining schedule remain the same as our previous estimates, and cash costs are marginally lower. There were minor changes to capex too and an increased level of disclosure, plus the presentation of management’s upside case. Our target price has been revised downwards to reflect the new capex information and the latest FX rates.

We reiterated our Buy rating, with our target price going from 10.5p to 8.8p. We are adjusting our target price based on additional capex not previously captured in our model and the latest FX rates. While the upside to the current share price implied by our target price remains substantial (+61%), it is worth noting that the current share price implies a 0.2x P/NAV to our unrisked NAV. We believe the stock offers a substantial re-rating opportunity once the Ethiopian state of emergency has ended and financing is secured.

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Thu, 25 May 2017 08:56:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27843/in-the-news-kefi-minerals-27843.html
In the Papers - Fevertree, BT Sport, KPMG, Uber http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27842/in-the-papers-fevertree-bt-sport-kpmg-uber-27842.html Newspaper Summary

The Times

Fevertree co-founder Charles Rolls to sell £40 million of shares: One of the co-founders of Fevertree Drinks is to sell a £40 million tranche of shares in the posh tonic maker.

Lord Grabiner, QC, to stand down as Chairman of Taveta Investments: Lord Grabiner is to step down as Chairman of Taveta Investments, the vehicle behind Sir Philip Green’s retail empire, in the latest high-profile departure from the group.

BT Sport to cover America’s Cup: Not content with carving out a niche in land-based sports such as football, BT has now taken to the high seas to capture Sir Ben Ainslie’s bid to win the America’s Cup for Britain.

Tensions rise at Opec meeting in Vienna over ‘cheating’ on oil quotas: Opec oil Ministers will meet in Vienna amid claims that some members are cheating on production quotas, undermining efforts to drive prices higher by extending a deal to curb output.

Eon Chief attacks Theresa May’s plans for energy cap: The Chief Executive of Eon has hit out at the Tory plans for an energy price cap, saying it was “amazing” that it was even being considered in the U.K.

Adam Crozier takes Director role at Whitbread: Adam Crozier has been given his first promotion since announcing this month that he was quitting ITV. Whitbread, the hotels-to-leisure company, said he would replace Sir Ian Cheshire as its senior independent Director.

Travel firm Hogg Robinson buys eWings.com: Hogg Robinson Group is targeting up to £100 million of acquisitions to help kickstart its growth potential after buying eWings.com, a German digital travel management business.

KPMG resigns as auditor to U.K. business of Lycamobile: KPMG has said that it has resigned as auditor to the U.K. business of Lycamobile after failing to obtain appropriate audit evidence from the company.

Babcock’s profits rise after picking up defence contracts: One of the world’s biggest defence companies has posted a rise in annual profits, having picked up contracts following the U.K.’s defence and security review.

The Independent

Cutting immigration to tens of thousands would inflict £115 billion of harm: Forcing down annual levels of immigration to the tens of thousands, as promised in the Conservative manifesto, would inflict a significant cost on the economy and the public finances, according to a new report.

Africa ‘subsidises’ rest of the world by £32 billion a year, campaigners say: Africa ‘subsidises’ the rest of the world to the tune of $41 billion (£32 billion) a year, according to a new analysis of the amount of money flowing in and out of the continent.

$55 billion fund manager bets big that the pound is about to fall: The pound is heading lower whatever the outcome of the U.K. election, according to BlueBay Asset Management.

U.K. markets steady after terror threat level is raised to ‘critical’: U.K. markets largely shrugged off Theresa May’s announcement that the terror threat level across the country had been raised to its highest level in the aftermath of Monday night’s devastating Manchester attack.

Eastern European tech startups are thriving after years of stagnation: Tech entrepreneurs in central and southeastern Europe, many of whom already have experience of launching their own businesses, are now having more success at enticing global investors the second time around.

Eurostar ‘snap sale’ offers trains to Paris for just £19: Eurostar, the cross-Channel train operator, is claiming it is charging less than the Heathrow Express and Gatwick Express on trains to and from the Continent.

Uber to pay drivers back $45 million after taking too big a cut out of fares: Uber said it underpaid its New York City drivers by improperly calculating the company’s share of passenger fares, and will pay out an average of $900 (£693) per driver in compensation, costing tens of millions of dollars.

Renewable energy jobs hit 10 million mark worldwide, says new report: Renewable energy employed 9.8 million people last year, up 1.1% from 2015, led by solar photovoltaic at 3.09 million jobs, according to the International Renewable Energy Agency’s annual report on the industry.

The Daily Telegraph

Eurozone ‘still fragile’ despite growth spurt, warns European Central Bank: Europe’s sovereign debt crisis might seem like a distant memory as the eurozone economy enjoys a healthy growth spurt, but the European Central Bank fears that government finances in the currency area “remain fragile”.

Online wedding company Prezola receives Business Growth Fund backing: Online wedding company Prezola has received a multi-million-pound investment from the Business Growth Fund as it looks to branch out into mobile app technology.

George Soros is ‘nuts’, claims mining magnate Beny Steinmetz: Israeli mining magnate Beny Steinmetz has labelled George Soros “nuts” and accused him of smashing his company’s hopes of developing a giant iron ore mine in Guinea.

Bunge gives cool response to Glencore approach: U.S. grains trader Bunge has given a cool response to takeover interest from Glencore, as investors in the Swiss company expressed concern it may have to slash its special dividend to get a deal done.

Hollywood Bowl hints at extra shareholder payouts on back of strong first half: Britons are developing a stronger appetite for 10-pin bowling, sending half-year profits at Hollywood Bowl soaring.

Household debt to hit record high as credit card spluge adds up: The debt of British households will hit a record high next year, new estimates show, surpassing the pre-financial crisis peak as a surge in credit card borrowing has financed extra spending in recent months.

U.S. Fed ties rate hike to economic rebound: U.S. Federal Reserve policymakers agreed they should hold off on raising interest rates until they see evidence that a recent economic slowdown was transitory, minutes from their last policy meeting showed on Wednesday.

The Questor Column:

Hargreaves Lansdown remains a buy despite the arrival of a super cheap competitor: In February, we suggested that readers buy shares in Hargreaves Lansdown, Britain’s biggest “investment shop”, on the basis of its exceptional profitability and loyal customer base. In light of a sharp fall in the share price last week, caused by the arrival of a low-cost U.S. competitor, it’s time to see if that advice still stands. Hargreaves’ shares fell by 8.3% after Vanguard, a mutually owned American fund manager, announced that it would sell its funds, which are mainly low-cost index trackers, directly to British investors at a cost of just 0.15% a year on top of the fund fee. This compares with 0.45% at Hargreaves. There is also the question of fund choice. Hargreaves allows customers to invest in a huge range of funds, shares, investment trusts and exchange-traded funds, including index funds, and to switch between them at will. Hargreaves shares are held in certain portfolios run by the respected Edinburgh-based partnership of Baillie Gifford, which is not selling its holdings as a result of Vanguard’s arrival. Questor says ‘Buy’.

Update: Revolution Bars: Another of our holdings suffered an even sharper share price fall recently after a pessimistic trading update. Shares in Revolution Bars, tipped in November at 178p, slumped by about 45% in the wake of the update, which warned of increased costs and slowing sales growth. One highly regarded investor who owns a stake in Revolution is Keith Ashworth-Lord, manager of the SDL U.K. Buffettology fund. He is holding on to his shares, for the moment at least. He told Questor: “We have seen two changes of finance Director in the past year. As a consequence, I believe that there has been a loss of focus on cost control. Someone needs to get a grip. “If I am right, the problems should be temporary and fixable. This feels like an operational issue to me, not a strategic one. Therefore, I would not be a seller on this news.” But he pointed out that the update had included “no hard and fast numbers”, which “leaves open the possibility of a second profit warning before we get to the yearend if things deteriorate further”. Mr. Ashworth-Lord said he was “sitting on my hands”. We advise investors to do the same but will keep a close eye on this stock. Questor says ‘Hold’.

The Guardian

China’s credit rating downgraded amid fears over slowing economy: China’s credit rating has been downgraded by Moody’s for the first time in almost 30 years over fears that slowing growth and rising debts will weaken the world’s second largest economy.

Former Anglo Irish chair Seán Fitzpatrick walks free as trial collapses: The Chair of the bank that almost bankrupted Ireland has walked free from a Dublin court after being acquitted of misleading auditors about multimillion-euro loans.

Nintendo’s share price hits seven-year high as Switch sales soar: Nintendo’s share price has hit its highest point in seven years, thanks to booming sales of the new Switch, its hybrid between a traditional home console and a handheld gaming machine.

Talks to avert RBS court case to continue into June: Attempts to avert a legal battle that would force the former Royal Bank of Scotland Chief Executive Fred Goodwin to give evidence in the high court are to continue into next month.

Thousands of protesters brand McDonald’s the ‘Trump of corporations’: Thousands took to the streets of downtown Chicago on Tuesday night calling McDonald’s the “Donald Trump of corporations” and protesting low wages and sexual harassment at the world’s largest fast food chain a day before the company’s annual shareholder meeting.

Daily Mail

£2 billion takeover of two North Sea oil firms dragged into major corruption probe just 24 hours after details of deal were unveiled: The £2 billion takeover of two North Sea oil firms has been dragged into a major corruption probe just 24 hours after details of its deal were unveiled. Wood Group’s swoop for Amec Foster Wheeler could be under threat after it was revealed it had ties to a Monaco-based engineering and construction group suspected of fraud, bribery and money-laundering.

Dixons Carphone ramping up same-day mobile phone repair service to keep customers coming back to stores: Dixons Carphone is ramping up its same-day mobile phone repair service to keep customers coming back to stores. The electrical goods giant already offers the ability to fix a phone in some shops, but wants a bigger bite of the market.

Strong sales of DB11 sports car helps Aston Martin roar to record start to year: Strong sales of the DB11 sports car helped Aston Martin roar to a record start to the year. The luxury car maker saw revenues more than double in its first quarter, from £92.6 million to £188.3 million.

Owner claims more than 1.7 million homebuyers visit Zoopla, uSwitch and Prime Location each day: More than 1.7 million homebuyers visit Zoopla, uSwitch and Prime Location each day, its owner has claimed.

U.K.’s largest defence company BAE Systems hits all-time high after Donald Trump pledges to increase U.S. army spending by around £42 billion next year: The U.K.’s largest defence company hit an all-time high after Donald Trump pledged to increase U.S. army spending by around £42 billion next year. BAE Systems added £270.3 million to its value after the U.S. President’s budget suggested increasing total defence costs to £465.6 billion, which is around 10% higher than current budget caps.

Daily Express

M&S rides storm after clothing sales setback: Marks & Spencer Boss Steve Rowe insisted his plan to revive the retailer’s fortunes is on track despite a slump in clothing sales.

The future of money Cryptocurrency Ethereum’s value soars by more than bitcoin: Cryptocurency Ethereum has seen its value surge by more than Bitcoin in 2017, as investor appetite for blockchain-based systems shows no signs of waning.

Germany’s Deutsche Bank ordered to provide details on Trump’s Russia loans: Deutsche Bank has been told to hand over information about Donald Trump’s financial affairs, as part of an investigation by Congress Democrats into the U.S. President’s links to Russia during his election campaign.

Saudi Arabia plan to hike oil prices will backfire & boost U.S. shale producers, say experts: Saudi Arabia’s waning grip on oil prices could loosen further if it sticks to a plan to limit supply in a desperate bid to drive up demand, according to experts.

GBP still close to 8-month high against U.S.D: The pound might be down from its best levels of the week against the U.S. dollar but the GBP/USD pairing remains close to 8-month highs.

Tesco to trial new scheme to scrap 5p plastic bags forever: Supermarket giant Tesco is set to trial a scheme to scrap 5p plastic bags. The scheme could spell the sale of so-called ‘single use’ carriers less than two years after the law was changed to force large stores to charge for them.

The Scottish Herald

Ten Scottish breweries win new Asda supply deals: Ten Scottish breweries have secured new supply contracts with Asda worth a total of £875,000 over a year.

Recovery in European markets benefits Edinburgh Partners trust: The Manager of the European Investment Trust has said that ongoing economic recovery in the region is having a positive impact on the trust’s performance.

Anglian nets multi-million pound deals in Scotland: Anglian Water Business has secured three deals in Scotland worth £3 million a year.

Britvic Boss who came close to Barr deal exits: Gerald Corbett, the soft drinks Executive who came close to striking a merger deal between AG Barr and Britvic, is stepping down as Chairman of the Fruit Shoot and J20 producer.

Exova gets boost from the weaker pound: Exova Group, the testing specialist subject to a £620 million take-over bid by London’s Element Materials Technology, has received a currency-led boost to first quarter revenue.

Ediston to issue new shares to fund further investments: Edinburgh real estate business Ediston is preparing to issue more shares in its investment trust, the Ediston Property Investment Company, to allow it to take advantage of improved market opportunities.

Atlantis raises £4 million from sale: Atlantis Resources, the tidal power company has raised £4.05 million through a share placement equivalent to 7.1% of its capital. The placement of nine million shares at 45p represents a six% discount on Monday’s close.

The Scotsman

Employers urged to look beyond candidates’ tech skills: Employers have been urged to “keep an open mind” and look beyond candidates’ technical abilities to help close Scotland’s digital skills gap.

Tesco issue urgent recall for lipstick and lollipop pens: Tesco has issued an urgent product recall notice for a range of pens due to fears that they could cause asphyxiation if accidentally swallowed.

Start-ups the catalyst for innovation in Scottish fintech sector: There are lots of innovative products and services being developed in Scotland’s fintech sector, from the borrowing platform created by LendingCrowd to the identity and data protection provided by Payfont through to the refinement of even smarter apps by the big high street banks.

Edinburgh start-up seeks to champion part-time workers: With almost half of skilled employees looking for flexible working arrangements and only 7% of advertised jobs in Scotland offering part-time hours, an Edinburgh-based start-up has launched a service for employers to find highly-skilled people.

Edinburgh’s Exchange Place 1 offices sold for £47 million: The Exchange Place 1 office block in the centre of Edinburgh’s financial hub has been bought by a German investment fund for £47 million.

Ineos in £1 billion deal to buy Dong’s oil and gas division: Grangemouth petrochemicals giant Ineos has agreed a deal worth up to $1.3 billion (£1 billion) to buy the oil and gas business from Danish group Dong Energy.

City A.M.

Square Mile celebrates a pay boost: Financial services salaries were among the fastest rising of any British professionals during April as employers pay top dollar for the best talent.

European Central Bank President Mario Draghi reveals concerns over losing oversight of London’s euro clearing market after Brexit: European Central Bank President Mario Draghi has revealed his concerns over losing oversight of U.K.-based euro clearing.

Private equity firm Pollen Street to take over MW Eaglewood creating an asset manager with £2 billion AUM: A deal to create one of Europe’s largest investment managers focused on specialist lending is underway, as Pollen Street Capital heads for a takeover of MW Eaglewood.

Laundry and textile company Berendsen reiterates rejection of “opportunistic” takeover approach from French rival Elis: London-listed laundry and textile company Berendsen reiterated its rejection of a takeover bid from a French rival, saying it can see “no basis for discussions”.

Insure2drive owner Sabre Insurance eyes £600 million listing after private equity interest: The owner of Sabre Insurance, the firm behind Insure2drive and Go Girl, is plotting a £600 million market float.

Trinity Mirror Boss exits as commercial strategy review kicks off: Regional newspaper publisher: Trinity Mirror is waving goodbye to a key managing Director as it shakes-up its commercial strategy in a bid to boost its advertising revenues.

Vodafone crosses Malta off its list of quad play mergers with €500 million merger: Vodafone has agreed a €506 million (£436 million) tie-up with a cable, broadband and TV provider in Malta, the latest market to be shaken up by the telecoms giant.

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Thu, 25 May 2017 08:24:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27842/in-the-papers-fevertree-bt-sport-kpmg-uber-27842.html
Market Briefing - UK markets finished in positive territory yesterday, with the FTSE 100 index reaching its one-week high level boosted by a gain in easyJet http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27841/market-briefing-uk-markets-finished-in-positive-territory-yesterday-with-the-ftse-100-index-reaching-its-one-week-high-level-boosted-by-a-gain-in-easyjet-27841.html UK Market Snapshot

UK markets finished in positive territory yesterday, with the FTSE 100 index reaching its one-week high level boosted by a gain in easyJet. The company advanced 3.3%, following a broker upgrade on the stock to ‘Add’ from ‘Sell’. Marks & Spencer Group climbed 1.5%, after the retailer recorded steady growth in sales for the year ended 1 April. BAE Systems gained 1.3%, after a leading broker commented that the company’s revenue growth would be enhanced by an increase in US Army spending. Energy majors, Royal Dutch Shell and BP added 0.3% and 0.9%, respectively. On the losing side, Kingfisher plunged 7.0%, after the retailer posted downbeat comparable sales for the first quarter due to weak sales in its French business. The FTSE 100 advanced 0.4%, to close at 7,514.9, while the FTSE 250 rose 0.2%, to settle at 19,950.5.

US Market Snapshot

US markets ended higher yesterday, after the US Federal Reserve (Fed) minutes indicated that the benchmark interest rates could rise in June. Meanwhile, the S&P 500 index closed at a record high, rising for the fifth consecutive session. Container Store Group rallied 32.5%, after the company’s profit for the fourth quarter surpassed market estimates and it also announced a restructuring plan in order to improve its profitability. NVIDIA added 1.1%, after a report indicated that SoftBank Group amassed a $4.0 billion stake in the company to become its fourth-largest shareholder.  Bucking the trend, Tiffany plunged 8.7%, after the company posted lower than expected sales for the first quarter in the Americas and Europe. Peer, Signet Jewelers tumbled 6.6%. The S&P 500 gained 0.2%, to settle at 2,404.4. The DJIA rose 0.4%, to settle at 21,012.4, while the NASDAQ advanced 0.4%, to close at 6,163.0. 

Europe Market Snapshot

Other European markets closed mostly lower yesterday. Adecco Group dropped 3.7%, after a leading broker downgraded its rating on the stock to ‘Underperform’ from ‘Outperform’. Daimler declined 1.8%, after a report indicated that the automaker’s Stuttgart headquarters and other sites were raided by the prosecutors in a diesel-emissions probe. Peers, Fiat Chrysler Automobiles and Bayerische Motoren Werke slipped 0.6%, each. Deutsche Bank slid 1.6%, after Democratic lawmakers asked the lender to hand over the details of its internal reviews to know if the US President, Donald Trump, had ties with Russia. Fellow banker, Commerzbank fell 0.3%. The FTSEurofirst 300 index marginally gained to close at 1,541.4. Among other European markets, the German DAX Xetra 30 slid 0.1%, to close at 12,642.9, while the French CAC-40 shed 0.1%, to settle at 5,341.3.

Asia Market Snapshot

Markets in Asia are trading higher this morning, tracking overnight gains on Wall Street after the Fed indicated that the board agreed to start shrinking the central bank’s balance sheet and the US interest rates could be hiked in June. In Japan, East Japan Railway, Mitsubishi Estate and Chubu Electric Power have risen 0.8%, 1.1% and 1.4%, respectively. Exporters, Mazda Motor and Panasonic have gained 0.5% and 1.2%, respectively, while, Sony and Honda Motor have slid 0.2% and 1.2%, respectively. In Hong Kong, brokers, CITIC Securities and Haitong Securities have advanced 1.3% and 1.6%, respectively. In South Korea, SK Hynix has added 0.7%, after the company announced that it would spin off its chip foundry business into a separate company. The Nikkei 225 index is trading 0.5% higher at 19,849.1. The Hang Seng index is trading 0.5% up at 25,563.4, while the Kospi index is trading 0.8% higher at 2,335.9.

Key Corporate Announcements Today

AGMs

Jersey Oil And Gas, Air China Ltd., Albion Development VCT, Alliance Pharma, Amryt Pharma, Belvoir Lettings, Cambridge Cognition Holdings, Card Factory, Concurrent Technologies, EnQuest, F&C Private Equity Trust, Ferrexpo, Flowtech Fluidpower, G4S, Gama Aviation, Gocompare.com Group, Hastings Group Holdings, Headlam Group, Henry Boot, Huntsworth, Immedia Group, Inchcape, Itaconix, Kcell Joint Stock Co GDR (Reg S), Kenmare Resources, Keywords Studios, Legal & General Group, LMS Capital, Luceco, Middlefield Canadian Income PCC, NAHL Group, Nasstar, Old Mutual, Parity Group, Regional REIT Limited, Robert Walters, Sealand Capital Galaxy Limited (DI), Total Produce, TP Group, Vectura Group, Yu Group

Final Ex-Dividend Date

Action Hotels, Advanced Medical Solutions Group, Andrews Sykes Group, British American Inv Trust, Bunzl, Burford Capital, C&C Group, Capita, Cineworld Group, DCC, Downing Three VCT F Shs, Downing Three VCT H Shs, Downing Two VCT F Shs, Downing Two VCT G Shs, xova Group, FDM Group (Holdings), Hill & Smith Holdings, Huntsworth, IFG Group, Ingenta, Irish Continental Group Units, Manx Telecom, Maven Income & Growth 2 VCT, Menzies(John), Midwich Group, Mincon Group, Morrison (Wm) Supermarkets, Neptune-Calculus Income & Growth VCT, Soco International, Spectris, Tarsus Group, The Gym Group, Venture Life Group, Whitbread, Worldpay Group, Xaar

Final Dividend Payment Date

Foxtons Group, Hikma Pharmaceuticals, IndigoVision Group, Intu Properties, ITV, Reckitt Benckiser Group, UBM, Zotefoams

Interim Ex-Dividend Date

Avingtrans, Baring Emerging Europe, Brewin Dolphin Holdings, Diploma, Euromoney Institutional Investor, Gattaca, Ground Rents Income Fund, Impax Asset Management Group, Income & Growth VCT, Keystone Inv Trust,, Marston's, Mid Wynd International Inv Trust, Mitchells & Butlers, Scottish American Inv Company, Town Centre Securities

Interim Dividend Payment Date

Wetherspoon (J.D.)

Special Dividend Payment Date

ITV, United Carpets Group

Quarterly Ex-Dividend Date

Carnival, HICL Infrastructure Company Ltd, NextEnergy Solar Fund Limited Red

Trading Announcements

Card Factory, GVC Holdings, Inchcape, Mincon Group, Regional REIT Limited, PetroMaroc

Key Corporate Announcements for Tomorrow

AGMs

4D Pharma, Access Intelligence, Circassia Pharmaceuticals, Escher Group Holdings, Informa, Intertek Group, Restaurant Group, Rotala, Spectris, Spire Healthcare Group

EGMs

PJSC Novorossiysk Commercial Sea Port GDR (Reg S), Urals Energy Public Co Ltd. (DI)

Final Dividend Payment Date

Antofagasta, Cello Group, Cenkos Securities, Centaur Media, Charles Taylor, Communisis, Dunedin Income Growth Inv Trust, Ebiquity, Elementis, EP Global Opportunities Trust, esure Group, Fevertree Drinks, Frenkel Topping Group, Fresnillo, Greggs, Inmarsat, IWG, Just Group, Marshall Motor Holdings, Maven Income & Growth 4 VCT, Maven Income & Growth VCT, Microgen, Morgan Advanced Materials, Polymetal International, Randgold Resources Ltd, Senior, Servelec Group, SimiGon Ltd. (DI), Spirax-Sarco Engineering, StatPro Group, Stock Spirits Group, Total Produce, Travis Perkin, Volga Gas

Interim Dividend Payment Date

Aberdeen Asian Income Fund Ltd., BlackRock Greater Europe Inv Trust, Blackstone/GSO Loan Financing Limited, British Smaller Companies VCT, Chenavari Capital Solutions Limited Red, City Merchants High Yield Trust, City Natural Resources High Yield Trust, CVC Credit Partners European Opportunities Ltd GBP, Drum Income Plus Reit, Greencoat UK Wind, P2P Global Investments, Secure Income Reit, Swallowfield, Target Healthcare REIT Ltd

Special Dividend Payment Date

Elementis, EP Global Opportunities Trust, esure Group, Volga Gas

Quarterly Payment Date

Primary Health Properties, SQN Secured Income Fund

Trading Announcements

Intertek Group

Key Economic News

German consumer confidence index surprisingly rose in June

The consumer confidence index recorded an unexpected rise to 10.40 in Germany, in June, compared to a level of 10.20 in the previous month. Market anticipation was for the consumer confidence index to record a flat reading.

Spanish PPI climbed in April

In April, on an annual basis, the producer price index (PPI) in Spain registered a rise of 5.90%. In the prior month, the PPI had registered a revised rise of 5.80%.

Spanish PPI remained flat in April

On a monthly basis, the PPI in Spain remained flat in April. The PPI had registered a revised drop of 1.00% in the previous month.

Swiss industrial production dropped in 1Q 2017

On a YoY basis, industrial production eased 1.30% in Switzerland, in 1Q 2017. In the previous quarter, industrial production had dropped 1.20%.

FOMC Minutes: Officials forecasted rate hike “soon”, planned to trim balance sheet

Minutes from the Federal Open Market Committee’s (FOMC) May 2-3 meeting showed that most policymakers believe it would “soon” be time to raise rates again as long as the US economy continues to rebound from a surprising bout of weakness in the first quarter. The FOMC also moved towards a consensus on a plan to scale back its massive $4.50 trillion sheet.

US existing home sales declined in April

Existing home sales registered a drop of 2.30%, on MoM basis, to a level of 5.57 million in the US, in April, compared to a revised reading of 5.70 million in the prior month. Market anticipation was for existing home sales to drop to 5.65 million.

US mortgage applications rose in the last week

In the week ended 19 May 2017, on a weekly basis, mortgage applications rose 4.40% in the US. Mortgage applications had dropped 4.10% in the previous week.

US house price purchase index rose in 1Q 2017

In the US, the house price purchase index climbed 1.40% in 1Q 2017 on a QoQ basis. The house price purchase index had recorded a rise of 1.50% in the previous quarter.

US housing price index advanced more than expected in March

In the US, the housing price index rose 0.60% on a MoM basis in March, compared to an advance of 0.80% in the prior month. Market expectation was for the housing price index to climb 0.50%.

BoC left key interest rate steady at 0.50%

The Bank of Canada (BoC) held the benchmark interest rate unchanged at 0.50%. Although the central bank Governor, Stephen Poloz gave a nod to improving economic data, he once again highlighted Canada’s weak wage growth and the slowing pace of underlying inflation, indicating that the economy still has room for improvement. He further added that the current degree of monetary stimulus is appropriate at present.

Foreign investors turned net sellers of Japanese stocks in the previous week

Foreign investors turned net sellers of ¥26.40 billion worth of Japanese stocks in the week ended 19 May 2017, as compared to being net buyers of a revised ¥371.90 billion worth of Japanese stocks in the previous week.

Japanese leading economic index climbed in March

The final leading economic index recorded a rise to 105.50 in March, in Japan. The leading economic index had recorded a revised level of 104.70 in the previous month. The preliminary figures had also indicated an advance to 105.50.

Foreign investors remained net buyers of Japanese bonds in the previous week

Foreign investors remained net buyers of ¥563.10 billion worth of Japanese bonds in the week ended 19 May 2017, as compared to being net buyers of ¥395.40 billion worth of Japanese bonds in the previous week.

Japanese coincident index dropped in March

In Japan, the final coincident index registered a drop to 114.40 in March. The coincident index had recorded a revised reading of 115.20 in the prior month. The preliminary figures had recorded a fall to 114.60.

Japanese investors became net buyers of foreign bonds in the previous week

Japanese investors remained net buyers of ¥778.50 billion worth of foreign bonds in the week ended 19 May 2017, as compared to being net buyers of a revised ¥1758.30 billion worth of foreign bonds in the prior week.

Japanese investors turned net sellers of foreign stocks in the previous week

Japanese investors turned net sellers of ¥26.10 billion worth of foreign stocks in the week ended 19 May 2017, from being net buyers of a revised ¥254.10 billion worth of foreign stocks in the previous week.

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Thu, 25 May 2017 08:21:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27841/market-briefing-uk-markets-finished-in-positive-territory-yesterday-with-the-ftse-100-index-reaching-its-one-week-high-level-boosted-by-a-gain-in-easyjet-27841.html
The Big Green Bang: how renewable energy became unstoppable http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/27840/the-big-green-bang-how-renewable-energy-became-unstoppable-27840.html The Big Green Bang: how renewable energy became unstoppable

Thanks to a subscriber for this article by Pilita Clark for the FT which may be of interest. Here is a section:

“I have been early twice in financing the low carbon energy transition,” says Bruce Huber, cofounder of the Alexa Capital advisory group. “But we feel it’s third time lucky.”

One reason for his optimism is what he calls the “tectonic plateshifting” in the car industry that is driving down the cost of energy storage. Storing clean power has long been a holy green grail but prohibitive costs have put it out of reach. This has begun to change as battery production has ramped up to meet an expected boom in electric cars.

Lithium ion battery prices have halved since 2014, and many analysts think prices will fall further as a slew of large battery factories are built.

The best known is Tesla and Panasonic’s huge Nevada “gigafactory”. Tesla claims that once it reaches full capacity next year, it will produce more lithium ion batteries annually than were made worldwide in 2013.

It is only one of at least 14 megafactories being built or planned, says Benchmark Minerals, a research group. Nine are in China, where the government is backing electric cars with the zeal it has directed at the solar industry.

Could this lead to a China-led glut like the one that helped drive solar industry writeoffs and crashing prices after the global financial crisis?

“It’s something to watch,” says Francesco Starace, chief executive of Italy’s Enel, Europe’s largest power company.

The thirst for electric cars, not least in China, means “the dynamics of demand are completely different” for batteries than for solar panels, he adds.

Still, Enel’s internal forecasts show battery costs falling by about 30 per cent between 2018 and 2021 and it is among the companies already pairing batteries with solar panels to produce electricity after dark in sunny places where power is expensive, such as the Chilean desert.

 

Eoin Treacy's view

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

The main objections to renewable energy are focused on intermittency and their reliance on subsidies. However economies of scale and the application of technology represent reasons for why we should be optimistic these can be overcome over the medium term. That represents a significant challenge for both the established energy and utility sectors.

Right now we are talking about a time when solar and wind will be able to compete without subsidies on an increasing number of projects. However if we continue on that path there is potential for the sector to be a victim of its own success because the lower prices go and the more fixed prices are abandoned the greater the potential for volatility in energy pricing.

 

Global gold study: Find your 'safe place'

Thanks to a subscriber for this report from Deutsche Bank which may be of interest. Here is a section:

In a volatile macro environment, follow the cash flow & avoid the debt laden

The USD gold price has rallied +10% this year, following a sustained sell-off post the U.S. election in Nov 2016. Markets remain focused on global growth prospects (and U.S. rate hikes), but rising tensions in the Middle East and Asia, along with concerns around U.S. policy disappointment & the Chinese property market pose risks to the pro-growth trade. We believe the global gold sector presents a compelling investment thesis despite our neutral outlook on gold. Costs have fallen across the sector, lifting free cash flow (average FCF yield of 6% this year), while debt levels are falling (average net debt/EBITDA now 1.2x). The sector is trading on an undemanding 7.6x EV/EBITDA, but we believe the companies best positioned to manage price volatility are still those with the highest quality portfolios. Evolution (13% FCF yield), Barrick Gold (12%) & St. Barbara Mining (10%) are the best cash generators. Newmont (8% FCF yield) has the best balance sheet amongst the majors (0.6x net debt/EBITDA), is trading on 0.8x P/NPV, and is our top pick amongst global majors.

Divergent trends amongst the global large-cap, mid-cap and small-cap sectors

Global gold majors remain focused on reducing costs, increasing cash flow and repairing balance sheets. Gearing amongst majors remains elevated (29% average), offsetting appealing cash flow metrics; we believe the majors will continue to progress longer term growth options while retaining free cash to pay down debt. Mid-cap gold miners are in better positions, with stronger balance sheets & internal growth options. The mid caps are trading on 7.6x EV/EBITDA (8.5x for global majors), highlighting the discount applied by the market for lower reserves. Small cap golds provide compelling value opportunities, with strong cash flow (St Barbara 10% FCF yield, Regis 9%) and the best 3-year production growth prospects across the sector. OceanaGold (Hold) has a clear growth mandate, while Alacer Gold & Dacian Gold (both 0.5x P/NPV) are building new projects, are fully-funded and screen deep value.

 

Eoin Treacy's view

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

The lack of free cash flow yield was one of the reasons the gold mining sector was unable to perform when gold prices were closer to $1900 because they were investing so much of their revenue and indeed borrowing against it to fund new supply. That all changed when prices declined. Investment was cancelled and a major process of rationalisation ensued. The result is that the gold mining sector generally has sounder balance sheets today than when prices for their products were considerably higher.

 

China's Markets Get a Double Dose of Caution From Moody's, MSCI

This article by Chris Ansley and Enda Curran for Bloomberg may be of interest to subscribers. Here is a section:

Moody’s Investors Service unveiled a surprise downgrade of China’s sovereign credit rating, citing concerns about its continued buildup of debt. Earlier, the head of one of the world’s top stock-index compilers suggested China had more work to do to get its onshore stocks into emerging-market gauges. With a June 20 deadline looming, “there’s still a lot of issues to resolve,” MSCI Inc. Chief Executive Officer Henry Fernandez said.

Underlying the critique from both: issues stemming from the Chinese leadership’s preoccupation with control. Few analysts expect painful reforms to be unleashed ahead of the Communist Party’s leadership reshuffle due later this year. While officials preach the need to rein in credit, ensuring the economy hits a 6.5 percent growth target remains the top priority.

Moody’s highlighted that policy makers’ are fixated on economic growth targets, meaning already-high leverage will continue to build. For MSCI, concerns include authorities placing restrictions on financial products abroad that would incorporate Chinese stocks.

 

Eoin Treacy's view

Trying to lean on the shadow banking sector, while also stimulating the economy is a tough goal while also achieving an outsized growth rate. However it is also worth considering that only about 12% of China’s debt is held externally. The caveat of course is that a good portion of that has been raised by property developers recently through US Dollar bond issuance.

 

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Thu, 25 May 2017 08:18:00 +0100 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/27840/the-big-green-bang-how-renewable-energy-became-unstoppable-27840.html
Beaufort Securities Breakfast Alert: Ferrum Crescent Limited, Pennon Group plc, Premier African Minerals Ltd, Savannah Resources Plc, ValiRx Plc http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27839/beaufort-securities-breakfast-alert-ferrum-crescent-limited-pennon-group-plc-premier-african-minerals-ltd-savannah-resources-plc-valirx-plc-27839.html Today's edition features:

• Ferrum Crescent (LON:FCR)

• Mineral & Financial Investments Limited (LON:MAFL)

Prairie Mining (LON:PDZ)

• Premier African Minerals (LON:PREM)

• Savannah Resources (LON:SAV)

• ValiRx (LON:VAL)

• Pennon Group (LON:PNN)

 

FOMC Minutes point to June rate hike

"According to the FOMC minutes released overnight, the Federal Reserve is having to weigh up why inflation data isn't higher when the jobs market, with the unemployment level in April at 4.4%, is running fairly hot. Despite some hesitation ahead of the minutes' release, Wall Street indices closed slightly higher. Mixed corporate results left the FTSE 100 Index almost 30 points higher (0.4%) at 7514.90.A key commitment from the European Central Bank's President, Mario Draghi, in his speech to the Bank of Spain yesterday was that the policy of asset purchases will end before interest rates begin to be raised. He obviously feels that this will be less disruptive to his stimulus programme. Recent indications of a broadly steady improvement in the health of Eurozone economies adds conviction to his views although there are still concerns about the ability of some of the regions' banks to become profitable. Members of the ECB are to meet in the Estonian capital Tallinn in early-June to publish their latest eurozone forecasts.

Alongside yesterday's psychological blow to China's attempts to be accepted on the World's financial stage in the form of the Moody's credit downgrade, some slight encouragement may be coming towards the end of June. MSCI (the index compiler formed from the merger of Morgan Stanley and Capital International) has suggested that it may finally agree a 0.5% weighting of Mainland Chinese stocks in its Emerging Markets Index after previous rejections.

While President Trump continues on his Foreign trip, it is said that an air of almost-forgotten calm has settled on Washington. However, the Budget proposals' combination of increased Defence spending and reduced Welfare outlay smacks of straitened times. Inevitably, much as in the case of the UK Conservative Party's original social welfare reform strategy, strong resistance looks likely ahead of the US midterm elections in 2018 when a large proportion of Congressional seats are to be contested.

"

- Mike Franklin, Chief Investment Strategist

 

Markets

Europe

The FTSE-100 finished yesterday's session 0.40% higher at 7,514.90 whilst the FTSE AIM All-Share index was up 0.19% at 987.44. In continental Europe, the CAC-40 finished down 0.13% at 5,341.34 whilst the DAX was 0.13% lower at 12,642.87.

Wall Street

In New York last night, the Dow Jones rose 0.36% to 21,012.42, the S&P-500 firmed 0.25% to 2,404.39 and the Nasdaq gained 0.4% to 6,163.02.

Asia

In Asian markets this morning, the Nikkei 225 had improved 0.37% to 19,815.33, while the Hang Seng had firmed 0.58% to 25,576.6.

Oil

In early trade today, WTI crude was up 0.76% to $51.75/bbl and Brent was up 0.8% to $54.39/bbl.

 

Headlines

White House denies 'egregious' budget accounting error

The White House has denied the president's budget proposal contains an "egregious" maths error. Former US Treasury Secretary Larry Summers pointed out the spending plan double-counts $2tr (£1.5tr). But White House budget director Mick Mulvaney told reporters: "We stand by the numbers." Unveiled on Tuesday, the budget proposes deep cuts to welfare programmes. Mr Summers, also formerly chief economist of the World Bank, was one of the first to spot the apparent mistake.

Source: BBC News

 

Company news

Ferrum Crescent (LON:FCR, 0.11p) – Speculative Buy

FCR, the European lead-zinc explorer, announced today that drilling has commenced on its Toral lead-zinc project in Spain. The planned 2,100m drill programme will test for shallow lead-zinc mineralisation within 150m from surface. Eleven drill holes are planned along a two-kilometre geochemical anomaly and is expected to take less than ten weeks to complete. Currently, Toral has a combined (Indicated & Inferred) resource of 8.7Mt with a weighted average grade of 10.7% (Pb + Zn).

Our view: The above drill programme will test FCR's hypothesis that known mineralisation at depth is linked to shallow mineralised features. If proven correct, these shallow mineralised features could potentially add to the current resource base. We look forward to the drill results in the coming months. In the meantime, we maintain our Speculative Buy on the stock.

Beaufort Securities acts as a corporate broker to Ferrum Crescent plc

 

Mineral & Financial Investments Limited (LON:MAFL, 13.38p) - Speculative Buy

Mineral & Financial Investment (MAFL), the metals and mining focused investment company, yesterday announced drill results from its Lagoa Salgada project in Portugal. The project is owned and operated by TH Crestgate, a private investment company in which MAFL holds a 49% interest. Crestgate released assay results from the third of its four-hole drill programme recently completed on the zinc-copper project located in southern Portugal, 100km from Lisbon. Hole LS ST-04 was drilled perpendicular to known mineralisation and returned mineralised intervals of 20m to 40m of between 2.6% and 4.0% Zn Eq., including 8m grading 9.08% Zn Eq. Mineralisation remains open at depth and along strike.

Our view: We are encouraged with the continuity of mineralisation both within the LS ST-04 drill hole and near the existing mineralisation which forms the basis for the historical mineral resource estimate. LS ST-04 confirms historical mineralisation both in width and at depth. Furthermore, the thick intercepts suggest the potential for large tonnage with higher-grade zones. We look forward to the assay results from the remaining drill hole which, on aggregate, could increase the current historical resource estimate of 4.5Mt. In the meantime, we maintain a Speculative Buy on the stock.

Beaufort Securities acts as a corporate broker to Mineral & Financial Investments Limited

 

Prairie Mining (LON:PDZ, 33.00p) - Buy

Prairie Mining announced this morning that its Deposit Development Plan (DDP) for its Jan Karski coking coal mine has received approval. This is a very significant step forward towards getting the mining licence and starting construction. In Poland a mining licence requires submission of the DDP, an Environmental and Social Impact Assessment, and a spatial development plan (rezoning of land for mining use). Prairie expects both environmental consent and its spatial plan to be approved in 2H17 which presumably will coincide or be shortly followed by a 50 year Mining Concession. Other news is that 45MW of power for the mine has been agreed with the Polish power utility and engineering works have started - Prairie has engaged SAG Group to design and permit the 10km power line required.

Our view: We are pleasantly surprised by the DDP development and the progress made on all fronts at Jan Karski. But perhaps most important is the comments of regional governor of Lublin Province, Mr Krzysztof Grabczuk. He said "Not only will the new mine create thousands of new jobs, but also largely contribute to the economic development of the region. It is uncommon for a mining project to be as strongly supported by the local communities as this one is, hence it proves our understanding of the mining industry and recognition of its economic benefits. We are looking forward to seeing another profitable mine in our region, Jan Karski, build and run according to the best international standards." Local support for a mine is critical, especially so in Europe and other developed countries. Jan Karski now appears to be moving quickly towards the mine construction stage and we recommend buying the shares.

Beaufort Securities acts as Retail Investment Advisor to Prairie Mining plc

 

Premier African Minerals (LON:PREM, 0.60p) – Speculative Buy

Premier African Minerals, the South and Western Africa focused mineral explorer and developer, announced today an update on its RHA tungsten mine in Zimbabwe. The Company reports that the first shipment of tungsten concentrate from RHA can now commence following receipt of all necessary permits from the Zimbabwean authorities. Management can now ship wolframite (tungsten ore) concentrate from the RHA mine to Durban.

Our view: The above announcement is an important milestone for the company as it begins shipments of tungsten concentrate after its mine optimisation, refinement and development. We look forward to continuous sustained operation at RHA as well as updates on production levels and profitability. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Premier African Minerals plc Beaufort Securities acts as corporate broker to ValiRx Plc

 

Savannah Resources (LON:SAV, 5.88p) – Speculative Buy

Savannah Resources, a diversified mineral exploration and development group, announced today that it has entered into an agreement to acquire a series of highly prospective lithium projects with near-term production potential in Portugal. The Company is acquiring a 75% interest in four project areas covering 1,018km2 for consideration of A$1m (£0.58m) plus 20M ordinary shares of Savannah. Additional milestone based consideration could lead to aggregate amount of A$10.1m (£5.8m) in combination of cash and shares. One of the projects, Mina do Barroso, has an approved mining plan, a 30-year mining licence and an approved Environmental Impact Assessment (EIA) which means that it could be fast-tracked into production. Historical drill results returned mineralisation near or at surface including 32m grading 1.16% Li2O (from 20m), 12m grading 1.60% Li2O (from 1m) and 16m grading 1.35% Li2O (from surface). Preliminary metallurgical test work has indicated that a high-grade (>6% Li20) and low-iron lithium concentrate can be produced.

Our view: The above announcement provides the Company with a rare opportunity to acquire an advanced lithium project in Europe. Savannah will initially focus on defining a JORC-compliant resource at Mina do Barroso to support a potential mine development. Given that the global lithium demand is expected to double by 2025 on the back of the burgeoning battery market, Savannah is looking to capitalise on the lithium market and diversify its portfolio. We look forward to further updates as the Company works to define a JORC-compliant resource at Mina do Barroso. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as a corporate broker to Savannah Resources Plc

 

ValiRx (LON:VAL, 2.30p) – Speculative Buy

ValiRx, the life science company with a focus on cancer therapeutics and diagnostics for personalised medicine, yesterday announced that ValiSeek Limited ('ValiSeek'), the joint venture between ValiRx and Tangent Reprofiling Limited ('Tangent'), has been granted an Australian patent covering VAL401 and its use in the treatment of cancer.

Our view: This is a positive news for ValiRx. The latest patent grant means ValiSeek now has patent protection for VAL401 in New Zealand, Australia and the United States, while there are further patents pending across the rest of the world. VAL401, currently in Phase II trials, is a re-formulation of the generic anti-psychotic drug, Risperidone, in an orally-administered format, which has demonstrated anti-cancer properties in pre-clinical trials. Phase II trials are expected to complete by the end of 2017, and subsequent analysis of the data will define the clinical activity of VAL401, its effect on patient quality of life, as well as pharmacokinetic in non-small cell lung cancer (NSCLC) patients. According to GBI Research, NSCLC market is expected to grow at CAGR of +6.6% during 2013 to 2020, with a value of US$7.9bn in 2020 across the leading 8 developed nations. The Group operates a low-risk, high return model where comparisons with peer groups with similar clinical portfolios, or early stage partnership deals with big pharma seeking entrance into such therapeutic areas, suggests a significant valuation gap. ValiRx shares presently recognise none of the value created over the past 18 months, nor the depth of its therapeutic pipeline. While it is understandable that the market remains concerned regarding the Group's prospective funding needs, it should also recognise that a potentially near-term Big Pharma development collaboration for either VAL201 or VAL401 would likely be at a multiple of the Group's current capitalisation. Beaufort reiterates its Speculative Buy rating on the Shares with a price target of 6.5p.

Beaufort Securities acts as corporate broker to ValiRx plc

 

Pennon Group (LON:PNN, 919.50p) – Buy

Pennon Group, one of the largest environmental infrastructure groups in the UK for water and waste water services, yesterday announced its results for the 12 months ended 31 March 2017 ('FY2017'). During the period, on an underlying basis, revenue advanced by +0.1% to £1,353.1m, EBITDA rose +8.4% to £486.0m (adjusted EBITDA +7.4% to £546.2m), operating profit grew +16.3% to £304.6m and pre-tax profit climb +18.3% to £250.0m, against the comparative period (FY2016). Underlying earnings per share consequently jumped by +19.0% to 47.0p. Including the non-underlying items of £39.5m (FY2016: £5.0) comprised of shared services restructuring and derivatives, statutory pre-tax profit rose +2.05 to £210.5m, leading to statutory earnings per share pf 39.8p, up +7.6%. Operational cash inflows improved to £456m (FY2016: £418m) and net debt at the period end rose by £181m to £2,665m. The Group's period end cash and committed facilities are £1,383m (FY2016: £1,707m), includes cash and deposits of £598m and undrawn facilities of £785m. Looking down the key performance indicator (KPI), the Group's Water business achieved Return on Regulatory Equity ('RORE') of 12.6% during the year, comprised of; 6.0% Base Return, 3.2% (£73m) total expenditure ('Totex') outperformance, 0.3% Outcome Delivery Incentives ('ODI') outperformance (£3.6m net reward) and 3.1% financing outperformance. Viridor business had 8 operational Energy Recovery Facilities ('ERFs') with 4 currently under construction with addition of Avonmouth during the period. Pennon Group's CEO, Chris Loughlin, commented "We believe Pennon is well positioned now and for the future and our performance underpins our long established sector-leading 10 year dividend policy of 4% growth per annum above RPI inflation out to 2020". The Group declared a final dividend of 24.87p per share, bringing full year dividend to 35.96p, up +7.1%, to be paid on 1 September 2017.

Our view: Pennon delivered strong performance in the FY2017. Both businesses traded well with underlying pre-tax profit growth of +18.3% derived from increased tariff (price), strong customer demand and cost savings from South West Water business (c.41.4% of revenue), together with growth at Viridor business (c.58.6% of revenue) driven by the ERFs delivering EBITDA of £107m against guidance of £100m. Operationally, the Group delivered excellent 12.6% RORE during the year (FY2016: 11.7%). The Group added another £73m of Totex savings during FY2017, taking total cumulative savings since K6 capital programme (2015-2020) to date to £129m. Customer ODI reward of £3.6m (£5.5m cumulatively) was delivered as significant improvement was achieved in quality of bathing water, water restrictions with interruptions to supply and leakage. Financing cost remain lowest in the sector at 3.1%. ODI is a regulatory condition under which companies are incentivised to outperform the permitted regulatory return. Any outperformance in ODIs along with Totex and financing will translate into RORE, a key indicator of the underlying performance of the regulated business. The Group is well-positioned to maintain sector-leading RORE to sustain strong position for its South West Water business, while Viridor business continue to be a growth driver driven by strong ERFs portfolio with Glasgow on track for final commissioning in late 2017. The Group has also completed a Shared Services Review recently, which should result in an increase in total Group cost savings of c.£17m per annum from 2019, of which, £9m are already secured. Given Pennon maintains sector-leading dividend policy of at least +4% growth per annum above RPI inflation to 2020, its Shares are valued at FY2018E P/E multiples of 20.2x with dividend yields of 4.3%. In light of the Group's progress, Beaufort retains its Buy rating on the Shares. Pennon remains top pick in the sector.

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Thu, 25 May 2017 08:11:00 +0100 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27839/beaufort-securities-breakfast-alert-ferrum-crescent-limited-pennon-group-plc-premier-african-minerals-ltd-savannah-resources-plc-valirx-plc-27839.html
Good morning Vienna http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/27838/good-morning-vienna-27838.html FTSE 100 Index called to open +15pts at 7530, having broken above 7520 resistance overnight and made fresh record highs in the last hour. Bulls need 7520 to hold up as support if they want to see another leg higher (2-week bullish inverse Head & Shoulders pattern back on?). Bears require 7520 to give way to kick off a reversal. Watch levels: Bullish 7540, Bearish 7520.

A positive opening call after further gains on Wall St (more records) and in Asia overnight. This as oil prices remain firm ahead of the OPEC meeting and commodities (ex-iron ore) welcome a weaker USD after the latest Fed minutes supported market expectations of another US rate hike next month and welcome flexibility when it begins to shrink its QE-inflated balance sheet.

Japan’s Nikkei is higher despite a stronger Yen (after the USD sold off), with Energy buoyed by the oil price. Australia’s ASX is up to the same degree, helped by commodities and a strong rebound in Chinese equities which are shrugging off yesterday’s Moody’s credit downgrade.

US equity markets once again closed higher as the S&P 500 recorded a fresh all-time closing high. This latest move higher comes as investors welcomed the hawkish Fed minutes from May, with expectations of a June hike increasing further. The Dow Jones saw Goldman Sachs contributing the most gains for the second straight session, while the Nasdaq again outperformed, up 0.4%.

Ahead of today’s OPEC meeting in Vienna, Crude Oil prices have continued to trade around 1-month highs, with global benchmark Brent crude recovering from overnight lows to trade just short of $54.50 and US crude marginally below $52 from $51 lows overnight. While markets are expecting a 9-month extension to the group’s current agreement, a deepening of cuts would fuel bullish sentiment, whereas anything shorter than 9 months would likely see prices fall.

Despite the hawkish Fed minutes, Gold has rallied overnight to test $1260. This move comes as the US dollar weakened on account of the Fed stressing flexibility when it comes to addressing its bloated balance sheet. This helped the precious metal to rally from $1252 lows to pare half of Tuesday’s dollar rally induced losses and once again head towards a test of 15-month $1262 intersecting resistance.

In focus is an OPEC meeting from which markets expect a 9-month extension to coordinated oil production cuts. Closing press conference at 4pm, but prepare for drama throughout the day as oil ministers fill the airwaves with commentary on the day’s discussions. A 9-month cut extension has been talked up so much that anything less will likely be a disappointment. Watch Oil prices.

The second estimate for UK Q1 GDP (9.30am) is expected unchanged, suggesting a slowdown - probably echoed by the Index of Services print - while the annual pace of growth gets back above 2.0% for the first time since Q2 2015. Watch GBP. BBA Home Loans likely fell for a fourth month, to levels last seen in Oct/Nov. Watch shares in UK Housebuilders.

In the afternoon, US Wholesale Inventories (1.30pm) are forecast flat, while Jobless claims rise off last month’s lows. After this week’s Chicago Fed beat and Richmond Fed miss, the Kansas City Fed Manufacturing Index (4pm) will be looked to for its own regional assessment. Watch USD.

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Thu, 25 May 2017 08:10:00 +0100 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/27838/good-morning-vienna-27838.html
VSA Capital Market Movers - Metal Tiger http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/27837/vsa-capital-market-movers-metal-tiger-27837.html Metal Tiger (LON:MTR)

Announced yesterday, MTR plans significant exploration work in the Kalahari Copper Belt in support of MOD Resources (MOD AU) field work on the T3 area of Botswana. This work will take place over the summer and be led by the joint venture local operating company Tschukudu Metals Botswana.

Airborne geophysics over the wider T3 Dome area of the licenses will be undertaken beginning in June to identify areas where the apparent geology and mineral signature is a repeat of that which has localised the current high grade copper discovery at T3. The even larger T20 Dome feature will get its first detailed look as well.

The Botswana government has determined that it does not need a formal EIA completed for the next phase of exploration activity. This means the current drillers on break can return to punching holes to find new orebodies from July rather than having to wait for those more exhaustive environmental studies and measurements to be undertaken and completed. Targets to test in the next phase of 30 drillholes include under the current Zone 1 and Zone 2 compliant resources to give further definition to the size and grade of Zone 3 at the sandstone contact and a new geophysical target lying 800m north of the T3 mineralisation.

Further studies toward completion of a PFS on T3 will be undertaken over the next two quarters as well.

There are many, many kilometres of favourable rock stratigraphy yet to test on MTR licenses. We believe the chances of finding further high-grade copper-silver mineralisation in new near surface zones as very high.

We retain our BUY recommendation and 5.86p price target.

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Thu, 25 May 2017 08:09:00 +0100 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/27837/vsa-capital-market-movers-metal-tiger-27837.html
In the news: Mineral Sands Prices, Base Resources & KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27836/in-the-news-mineral-sands-prices-base-resources-kefi-minerals-27836.html FROM THE BROKING DESK

We’ve some more very positive news from the mineral sands space. Whenever I talk with investors about mineral sands, their primary concern is invariably related to what will happen to pricing after the strong performance seen over the over the past year and a bit. Well, Iluka Resources, the market leader, has announced that it will increase its Zircon Reference Price by US$130/t to US$1,100/t effective 1 July 2017. Most of the recent price strength has come from ilmenite, while zircon and rutile have been treading water, so this development is extremely welcome and should reassure investors that the supply-demand equation in mineral sands remains very much in our favour.

This good news follows the announcement by Base Resources*† about its Kwale Phase 2 (KP2) approval. We highlighted this in Jim Taylor’s report Base Resources — Enhanced Economics from Phase 2, 23 May 2017, where he increased his price target the company.

In summary, the KP2 Project will increase throughput and offset declining grades. This will come with slightly higher capex, but this is more than offset by efficiency gains and the NPV impact of bringing production forward. With the end of the mine life brought forward on the basis of existing reserves, the likely life extension from exploration at Kwale has become even more significant.

Increasing target price from A$0.43 to A$0.49 and maintaining our Buy rating. Project NPV10 has increased from US$377m to US$404m. This assumes long-term mineral sands prices of US$180/t for ilmenite, US$1,050/t for rutile and US$1,150/t for zircon. The NAV comprises: an NPV10 for the Kwale Project of US$404m, US$20m for exploration at Kwale and a G&A adjustment of US$(31)m, giving an operational NAV of US$393m. After adjusting for net debt, this gives an NAV for Base of US$270m (as of end-March 2017). This is equivalent to A$0.49/share.

Upside risks to our target price. Pricing continues to surprise on the upside. Higher sales volumes next quarter would provide leverage to further gains. A maiden resource from the SW Sector (due 1QFY18) may add to mine life. For reference, a one-year mine life extension would provide a 13% net increase to our target price. Furthermore, the Kenyan general election in August 2017 is expected to ease community tension and allow exploration to resume on the NE Sector.

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Wed, 24 May 2017 11:00:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27836/in-the-news-mineral-sands-prices-base-resources-kefi-minerals-27836.html
Today's Market View - KEFI Minerals plc, Mkango Resources Ltd, Metals Exploration Plc http://www.proactiveinvestors.co.uk/columns/sp-angel/27835/today-s-market-view-kefi-minerals-plc-mkango-resources-ltd-metals-exploration-plc-27835.html Kefi Minerals* (LON:KEFI) – Definitive Feasibility Study update for the Tulu Kapi Gold Project in Ethiopia

Metals Exploration (LON:MTL) – Shareholder loan

Mkango Resources* (LON:MKA) – Sampling at Thambani identifies new areas of uranium tantalum and niobium mineralisation

 

Mitsui & Co, a major trading house and part of the Japanese Mitsui Group conglomerate, is targeting to invest $5.9bn in resources projects over the next three years, CEO Tatsuo Yasanaga said.

• “While we aim to balance out portfolio, we will be strengthening our already strong resources business.”

• “We have set a hurdle to only invest in project which will turn a profit even with low oil or iron ore prices.”

 

Peru – declares mercury poison emergency due to artisanal and unregulated gold mining

• Western listed gold miners do ‘NOT’ use mercury in the recovery of gold for very obvious reasons.

• Governments need to learn that unregulated and artisanal mining can be hugely harmful for the population and for the environment.

• Peru declared an environmental emergency on Monday in 11 Amazon jungle districts where mercury poisoning is poisoning fish and people and blamed on unregulated gold mining.

• The authorities have advised local people not to eat a species of catfish common in the region that has also been contaminated by the mercury..

 

Tanzania - President of Tanzania dismissed Mineral Audit Agency Board and asked Mines Minister to resign amid reports showing cases of understatement of mineral exports from the port of Dar es Salaam.

• Previously, Tanzania Ports Authority seized 262 containers of gold mineral sands which were awaiting customs procedures.

• Assays of sands showed that containers contained 7.8-13.2t of gold instead of the 1.1t declared, the President said.

• Mineral sands were sourced from Buzwagi and Pangea gold mines, Bloomberg reported.

 

Bank Q1 commodity trading revenues fall 40%

• It’s no bad thing and after the banks expanded their commodity trading activities so much in the past 15 years.

• Lower oil and base metals prices in Q1 served to cut risk and trading activity as did the profit from storing metal.

• Tighter bank regulation and lower profit potential for bank traders also served to reduce their risk appetite.

 

 

Dow Jones Industrials  +0.21% at 20,938

Nikkei 225   +0.66% at 19,743

HK Hang Seng   -0.11% at 25,374

Shanghai Composite    +0.07% at 3,064

FTSE 350 Mining   -1.63% at 14,754

AIM Basic Resources   +0.02% at 2,639

 

Economic News

US – Private sector growth accelerated in May led by stronger expansion pace in the services sector.

• New business growth advanced to the strongest level since the start of 2017 encouraging firms to step up hiring in May.

• Employment gains are estimated to have hit the strongest level in three months.

• Cost pressures were most notably felt in services sector where input prices posted the steepest rise in two years.

• “Average prices charged for goods and services meanwhile showed one of the largest rises in the past two year… the strengthening of business activity growth and rise in prices will add to expectations of the Fed hiking interest rates again in Jun,” Markit said.

 

China – Moody’s downgraded long-term local currency rating to A1 from Aa3 yesterday morning on the back of concerns over rising debt and the slowing economic growth rate.

• “The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows,” Moody’s said.

• “While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.”

• The rating matches the A+ rating by Fitch and is one notch lower than the AA- rating by S&P.

 

Germany – Consumer confidence is “definitely on upswing”, GfK reports.

• “Neither uncertainty over the future political course of the US nor the upcoming Brexit negotiations are making any impact,” the report said.

• The index measuring the sentiment is forecast to climb to 10.4 next month, up from 10.2 in May and ahead of market estimates.

 

South Africa – The rand climbed against the US$ early on Tuesday on the back of rumours that the African National Congress is considering options to impeach the nation’s acting president.

• While an ANC spokesman denied claims, the currency continued to strengthen and is up more than 1.5% over the last two days.

 

Currencies

US$1.1178/eur vs 1.1254/eur yesterday.   Yen 111.84/$ vs 111.17/$.   SAr 13.062/$ vs 13.293/$.   $1.298/gbp vs $1.299/gbp.

0.746/aud vs 0.749/aud.   CNY 6.890/$ vs 6.890/$.

 

Commodity News

Precious metals:

Gold US$1,250/oz vs US$1,260/oz yesterday - Gold prices are flat after coming off $10/oz yesterday with the US$ index climbing ahead of the Fed meeting minutes due later today.

• Copper prices are off slightly despite the news over the extension of the labour action at Grasberg.

• Iron ore and steel prices slide on the back of the Chinese credit rating cut.

• Brent is up for a sixth consecutive day amid a drop in US crude inventories while OPEC members are due to hold a meeting tomorrow where markets expect producers would agree to extend output cuts until Mar/18.

   Gold ETFs 59.7moz vs US$59.9moz yesterday - First Trust launches active ETF trading long and short commodity futures

• The ETF that seeks to profit from either long or short positions in select exchange-listed commodity futures contracts.

Platinum US$942/oz vs US$948/oz yesterday

Palladium US$774/oz vs US$769/oz yesterday

Silver US$16.98/oz vs US$17.12/oz yesterday

           

Base metals:   

Copper US$ 5,672/t vs US$5,680/t yesterday – BHP Spence copper mine in Chile suffers new strike

• Also, what was previously envisaged a 30-day strike at Grabserg is turning into a two month labour action as unions notified the Company about the extension.

• Workers at Grasberg downed tools on May 1 protesting about furlough and layoffs.

Aluminium US$ 1,939/t vs US$1,928/t yesterday

Nickel US$ 9,180/t vs US$9,350/t yesterday

Zinc US$ 2,641/t vs US$2,653/t yesterday

Lead US$ 2,092/t vs US$2,107/t yesterday

Tin US$ 20,345/t vs US$20,520/t yesterday

           

Energy:           

Oil US$54.4/bbl vs US$53.4/bbl yesterday

Natural Gas US$3.228/mmbtu vs US$3.320/mmbtu yesterday

Uranium US$20.25/lb vs US$21.75/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$59.5/t vs US$63.1/t

Chinese steel rebar 25mm US$588.6/t vs US$590.7/t

Thermal coal (1st year forward cif ARA) US$66.8/t vs US$66.9/t yesterday

Premium hard coking coal Aus fob US$153.5/t vs US$153.5/t

 

Other:

Tungsten - APT European prices $215-225/mtu vs $212-222/mtu

Ferrochrome – ScienceDirect comment on the Acid resistance, sulphate resistance and strength properties of concrete containing Ferrochrome Ash and lime

• Ferrochrome Ash is a waste material of ferroalloy industry.

• Utilization of Ferrochrome Ash with lime as a substitute of cement is explored in this study.

• Use of Ferrochrome Ash and lime has positive impact on strength and durability of concrete.

• Optimum substitution of Ferrochrome Ash is 40% along with 7% lime, replacing 47% of OPC.

 

Company News

Kefi Minerals* (LON:KEFI) 5.3p, Mkt Cap £17.6m – Definitive Feasibility Study update for the Tulu Kapi Gold Project in Ethiopia

• Kefi Minerals reports results from the updated Definitive Feasibility Study ‘DFS’ for the Tulu Kapi Gold project in Ethiopia.

• The DFS has been updated from an earlier DFS completed in August 2015 and is based on proposed and warranted contracted costs.  This should make this a Bankable Study in our view.

• The new DFS was done by Lycopodium Minerals, a well-respected consulting and engineering group who are known for building mineral process plants.

• The study is being used as a base case plan for funding.  More aggressive and hopefully more numbers are to be used by Kefi for for business planning purposes.

• Kefi’s internal plan shows higher gold production and faster progress than is assumed in the DFS Update which, by definition, errs on side of caution.

o Endeavour Financial who advise mining companies on project and debt financing have prepared a detailed financial analysis to aid the financing process.

o 2017 DFS key figures:

 Throughput 1.5-1.7mtpa

 Capex - US$161m (US$145m assuming contract mining) vs US$176m in 2015 and US$289m assuming 1.2mtpa under Nyota Minerals

 The EPCM contract, eg capital costs, has contingency provisions of 10-20% on other items.

 Production 980,000oz over the first 10 years of production.

 Production rate average 115,000ozpa over first 8 years.  KEFI’s internal target is 120,000ozpa from year two of open pit production.

 AISC costs US$800/oz inc. op costs, royalties, sustaining capex and closure costs.  Excluding financing and income taxes.

 Cash Flow: the project is estimate to deliver net operating cash flow of US$55m vs US$61mpa estimated by Kefi

 

.Assumes US$1,250/oz gold price

• Kefi has refined the mine and processing plan further to squeeze out further value from the project through increasing throughput by 10% from year 2.  The model assumes the same gold price at US$1,250/oz.

 

.Conclusion:  The new Lycopodium DFS has cut the NPV valuation and IRR for the project from that seen in the 2015 DFS.  Kefi’s internal numbers are more optimistic and are closer to the previous DFS study using a slightly less conservative approach.  It feels fair to say that the Lycopodium study should be more of a base case and the use of $1,250/oz also looks fair given that a bank could finance the project based on this price and using the forward market if it was ready to do so today.  The AISC costs also look low enough to support most stress tests.  Bank finance will depend much on support from the government and the availability of credit for Ethopia which has a respectable B1 stable outlook credit rating as set by Moody’s as of last December in our view.

*SP Angel act as Nomad and broker to Kefi Minerals

 

Metals Exploration (LON:MTL) 2.9p, Mkt Cap £59.6m – Shareholder loan

• The Company continues discussions with lenders regarding a working capital financing with the facility expected to be agreed before the 30th of June.

• Meanwhile, the management approached major shareholders for a $2m loan to cover its working capital requirements and a $2m principal repayment due to existing lenders on the 31st of May.

• MTL (Luxembourg) Sarl Ltd and Runruno Holdings Ltd agreed to provide a $2m short term loan with the funding split on prorata basis to their shareholding in the Group.

 

Mkango Resources* (LON:MKA) 3.4p, Mkt Cap £2.8m – Sampling at Thambani identifies new areas of uranium tantalum and niobium mineralisation

• Mkango Resources reports that results from 85 rock grab samples within the Thambani project area in Malawi have “returned high grade uranium, tantalum and niobium values, ranging up to 3.3% U3O8, 1.9% Ta2O5 and 6.0% NbO2”.

• The results are derived from a follow up programme to “confirm previously identified high grade mineralisation at the Little Ngona target, ground-truth new geophysical targets and complete further reconnaissance sampling along the East and West Ridges.”

• The company highlights that four of the highest grade samples were taken from the foot of the West Ridge where it had identified a strong north-west trending radiometric geophysical anomaly measuring 1.5km by 0.4 km anomaly. A second 3km by 1.5km radiometric anomaly lies along the length of the East Ridge.

• “Mkango is currently evaluating strategic options for Thambani, including opportunities to joint-venture or spin-off the project”.

• Mkango’s main project is the development of its rare-earth minerals deposit at Songwe Hill in southern Malawi. The company completed an updated pre-feasibility study in November 2015 and has since worked to optimise the project from the cost and efficiency standpoint. In addition, the company has developed marketing  and market intelligence alliances for rare earths with Noble Resources and collaborated with Metalysis Limited to “jointly research, develop And commercialise novel rare earth metal alloys for use in three-dimensional (3D) printed permanent magnets.”

• Conclusion: Early stage exploration sampling of Mkango’s Thambani uranium/tantalum/niobium project in Malawi has recovered high grade grab samples from areas identified by radiometric anomalies. The company is evaluating options to realise value from Thambani as it moves ahead with its flagship Songwe Hill rare-earths project.

*SP Angel acts as Nomad and Broker to Mkango Resources

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Wed, 24 May 2017 10:50:00 +0100 http://www.proactiveinvestors.co.uk/columns/sp-angel/27835/today-s-market-view-kefi-minerals-plc-mkango-resources-ltd-metals-exploration-plc-27835.html
Northland Capital Partners View on the City - AdEPT Telecom plc http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/27834/northland-capital-partners-view-on-the-city-adept-telecom-plc-27834.html AdEPT TELECOM (LON:ADT)

SECTOR – TELECOMS

RATING – BUY*

MARKET CAP – £83.0m

CURRENT PRICE – 350p#

TARGET PRICE – 360p (From 330p)

COMPANY DESCRIPTION

AdEPT Telecom is an independent communications and IT services provider to the B2B market and public sector. AdEPT operates an efficient, award winning, services platform and has some of the highest operating margins in the sector. The Company active in acquisitions and has an experienced integration team.  It has particular strength in providing dedicated service management for multi-site businesses and public sector organisations.

FY17 Trading Update. Target Price Raised to 360p.

NORTHLAND VIEW

 In  its April 4 Trading Update for the year to 31 March 2017, AdEPT reported that FY17 EBITDA (underlying) rose 26%YoY, indicative of £7.8m, which is 6% above our outlook of £7.3m. Revenue for the year is reported up 16%, indicative of c£34.0m.  We note the dilutive effect on projected FY18 EPS of the exercise of warrants by Barclays Bank plc on March 16, resulting in the issue of 1,204,707 shares and a  cash inflow of £129,000.   The company reports that the Board has recommended a dividend for the year of 7.75p, +19%YoY, which is ahead of our outlook of 7.50p. Year-end net debt is reported at £15.8m, £1.3m below our outlook of £17.1m.   AdEPT reports that it “continues to generate consistently strong free cash flow”.  Net debt is inclusive of: £9.7m in aggregate initial consideration for the acquisitions of Comms Group UK Ltd., CAT Communications Ltd., and OurIT Department Ltd.; £3.0m in deferred consideration for the acquisition of Centrix Ltd.; and the £0.4m increase in dividends paid.  On the recent acquisition of OurIT Group we raised our FY18 revenue outlook by 16%, and FY18 EBITDA by 12%, forecasting an increase in net debt from £11.5m in FY17 to £17.1m.   The Trading Update indicates that underlying performance, and in particular cash conversion, remains strong.        Consequently, we have raised our target price from 330p to 360p.

 

 

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Wed, 24 May 2017 09:10:00 +0100 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/27834/northland-capital-partners-view-on-the-city-adept-telecom-plc-27834.html
Breakfast News - AIM Breakfast : Applied Graphene Materials, Atlantis Resources Ltd, Cellcast plc, Flying Brands Ltd, Hague and London Oil Plc, Obtala Ltd, Physiomics Plc, Trakm8 Holdings PLC, WANdisco http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27833/breakfast-news-aim-breakfast-applied-graphene-materials-atlantis-resources-ltd-cellcast-plc-flying-brands-ltd-hague-and-london-oil-plc-obtala-ltd-physiomics-plc-trakm8-holdings-plc-wandisco-27833.html What’s cooking in the IPO kitchen?

AIM

I3 Energy – Schedule 1. Independent oil and gas company with assets and operations in the UK.  Offer TBC, 26 May admission.

Verditek — Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p.  Admission in late May.

Tiso Blackstar Group —Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June.

Main Market Premium Listing

Curzon Energy —Report on Proactive Investors of intended LSE float this year  with acquisition of  coal bed methane assets in Oregon. Looking to raise £3m plus.

NLB Group —financial and banking institution based in Slovenia, with a network of 356 branches. Seeking Ljubliana Stock Exchange listing with GDRs on the LSE. Expected mid June.

Flying Brands (LON:FBDU)—Prospectus approved by FCA. RTO of Stone Checker Software,  supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun.

AEW UK Long Lease REIT—Intention to Float. Up to £150m raise. Admission early June. UK specialist and alternative property

Alfa Financial Software –Intention to float. Mission-critical software platform purpose-built for asset finance enterprises. Vendor sale of 25% plus. FYDec16 rev £73.3m (CAGR of 24% from 2012). Adjusted EBIT £32.8m.

Kuwait Energy — $150m raise plus vendor offer. Admission due June.  2p reserves 810.0 mmboe

Main Market Standard Listing

ADES International — Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017.

Main Market Specialist Funds

Tufton Oceanic Assets – Extended to 9 May on specialist funds segment of  Main Market to enable further due diligence.

PRS REIT—Private rental sector REIT raising up to £250m.  Admission due 31 May

  
 
 
Breakfast buffet

Physiomics* (LON:PYC) 1.35p £0.77m

The Oxford, UK based systems biology company, has been contracted for two further extensions to a Virtual Tumour project with a major global pharmaceutical company, first announced on 1st March 2012. These projects will be performed on a fee-for-service basis. Dr Jim Millen, CEO of Physiomics, commented:

"We are very pleased to have further extended this collaboration, showing the value of our Virtual Tumour technology in supporting the development of follow-on compounds and indications."

 

Crossword Cybersecurity* (NEX:CCS) 195p £6.1m

The technology commercialisation company focusing exclusively on the cyber security sector has raised £145.3k at £2.3 from an existing substantial shareholder. The price represents an 18% premium to yesterday’s closing mid price.

Cellcast (LON:CLTV) 4.25p £3.29m

FYDec16 results from the provider of participatory television programming and interactive telephony technology for the fast growing cross-platform digital entertainment sector. Group operating revenues of £12.1 million (2015: £11.8 million), comprising: core interactive broadcast revenue of £11.5 million (2015: £11.8 million); and first revenues from the Group's new venture, providing technical services and consulting to overseas gaming and lottery operators, of £620,000. Profit for the year increased 21.7% to £645,000 . Net cash of £1.1m. Trading during the year to date has been challenging within the Group's core business and the Group is looking to restructure its cost base in line with these challenges. We could see no market forecasts.

 

Hague and London Oil (LON:HNL) 12.13p £2.93m

FYDec16 results. Repositioned the Company to pursue a lower risk strategy in line with current market environment in proven areas and with existing infrastructure. MoU signed with ENGIE to target asset natural gas production acquisitions in Europe. Higher risk exploration assets spun off into Vermeer Exploration BV. Loss greatly reduced to £0.7m. Cash £0.05m. G&A down to £0.68m. Conditional agreement regarding the acquisition of a portfolio of non-operated natural gas production assets from Tullow Oil in the Netherlands. Started funding discussions. ‘Whilst this potential acquisition is significant progress within HALO's corporate plan, we see it as just the initial step on our path to building a substantial and sustainable E&P business .’

WANdisco (LON:WAND) 445p £167.3m

AGM Statement from the specialist in Active Data Replication™. WANdisco Fusion product now generating significant sales momentum. WANdisco Fusion is the only solution available in the world that enables the replication of continuously changing data with guaranteed data consistency and no down-time.  "Alongside our strong sales traction, we have realigned our cost base, which we now believe is at an appropriate level to deliver a positive EBITDA.  In April of this year we reported that WANdisco delivered a cashflow neutral performance in Q1 2017, ending the quarter with $7.6 million of cash.” Record order in Q1 of $4.1m. FYDec17E rev £12.3m and £7.7m loss.

TrakM8 Holdings (LON:TRAK) 101p £36.05m

The telematics and data provider has been awarded an initial contract by a roadside assistance technology company, to supply devices and data. The initial contract includes a number of devices for the initial launch, along with integration engineering fees. The contract is for launch in July 2017 to the customer's roadside assistance partners in Europe.  The initial focus will be in the UK and Holland. It is expected that the solution will be extended to other European markets in due course. Trakm8 will provide its latest generation Connect 300 plug in telematics device. Data supplied will be from the Trakm8connectedcare solution to monitor the vehicle health and usage. FYMar17E £27m. PBT £1m.

Obtala (LON:OBT) 19p £56.5m

Acquisition of WoodBois, a leading global trader and producer of sawn timber. Profitable for past 5 years and immediately cash accretive to the Group. Historic trading revenues c$15m, profits invested in production assets. 102,000 acre concession in Gabon with fully operational 24,000m3 sawn capacity sawmill, 18,000m cubed veneer plant opening in 2017. Consideration of $14.8m over 3 tranches and including c$4m Obtala equity. Deferred consideration over 5 years tied to management retention.

Atlantis Resources (LON:ARL) 49.5p £57.89m

Completion of conditional £4.05m placing at 45p from vertically integrated project developer and power generation equipment supplier in the marine power industry.  The net proceeds of the placing will contribute to the identification and development of new opportunities, the progression of existing projects including MeyGen, general working capital and the repayment of certain debt facilities.

Applied Graphene Materials (LON:AGM) 200p £44.58m

Applied Graphene Materials has registered a patent having developed a highly innovative, new technology, Structural InkTM, that once fully commercialised will be targeted at the advanced composites industry. By adopting Structural InkTM technology, end users will have the ability to increase mechanical toughness, which can be derived through the addition of graphene. “Taking the latest forecast into consideration our expectation is that LBITDA for the year ending 31st July 2017 will be in line with earlier estimates at a loss of £(4m) based on revenues for the current year of £0.3m.” Cash expected to be significantly ahead of expectation at £4.5m.

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Wed, 24 May 2017 08:48:00 +0100 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27833/breakfast-news-aim-breakfast-applied-graphene-materials-atlantis-resources-ltd-cellcast-plc-flying-brands-ltd-hague-and-london-oil-plc-obtala-ltd-physiomics-plc-trakm8-holdings-plc-wandisco-27833.html
VSA Capital Market Movers - Millennial Lithium, Vedanta Resources http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/27832/vsa-capital-market-movers-millennial-lithium-vedanta-resources-27832.html Millennial Lithium (CVE:ML)

Late yesterday, ML announced the entry into a JV with TSX-V junior Liberty One Lithium (LBY CN) upon its Pocitos West property. LBY may acquire a 70% stake in the property for US$5.5m in staged cash payments over 36 months and completion of work commitments of US$1m. It may increase its interest a further 10% to 80% by completing a bankable feasibility study within 42 months of the closing date of the transaction.

This transaction monetises Pocitos West to the benefit of ML by covering underlying property payments on Pocitos West while it incurs drilling costs in firming up the resources on its primary project of Pastos Grandes to the east. ML only acquired 100% of Pocitos West in February for US$4.5m and these JV payment terms and sums are in excess of those in the underlying agreement for a net gain in current valuation of the Pocitos West property to ML of US$2.1m if all thresholds are met by LBY.

ML is simultaneously advancing, profiting from, and de-risking the Pocitos West ground, a sound capital management strategy. This transaction also shows that well positioned, early stage ground within the Lithium Triangle continues to change hands for a premium on acquisition costs.

We retain our SPEC BUY recommendation.

Vedanta Resources (LON:VED)

A final dividend of US$0.35 is declared by Vedanta Resources (VED) as it discloses an underlying full year profit of US$0.011 vs a loss last year. Revenues rose 7% to US$11.5b while EBITDA rose a strong 37% to US$3.2b on the back of better commodity prices. Gross debt however worsened as a result of paying a special dividend during the year and now stands at US$18.2b. Prices in copper, aluminium, zinc, iron ore, oil and gas have all shown a strong recovery last year.

The chairman, Anil Agarwal, states a dedication this year to deleveraging the balance sheet. We hope he is serious as prior expressions of intent have not been forthcoming in large measure in prior years; lagging other integrated metal miners in that regard. Stronger commodity prices will help out, therefore, now is the time if at all.

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Wed, 24 May 2017 08:45:00 +0100 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/27832/vsa-capital-market-movers-millennial-lithium-vedanta-resources-27832.html
VSA Morning Agri Comment http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/27831/vsa-morning-agri-comment-27831.html Obtala# Acquires Forestry Business

African forestry and agriculture business Obtala Limited (LON:OBT) has conditionally acquired (subject to due diligence) the forestry business WoodBois International ApS (WBI) for US$14.8m.

• WBI consists of three operations – a wood trading business in Côte d’Ivoire, a sawmill operation in Gabon with 41,300ha of concessions and an under construction veneer factory in Gabon, which is due to be completed in H2 and should contribute to earnings from 2018 onwards. The group employs c150 people.

• The US$14.8m consideration will be paid in three tranches. OBT will pay US$3m cash and US$3.8m in new OBT ordinary shares on completion of due diligence (target: 30 June), US$3m 120 days after completion (or on 30 September 2017, whichever is earliest) and US$5m over five years in quarterly payments starting 30 September 2017 (conditional on the continued employment of the two founders).

• In FY 2015, WBI generated revenues of DKK 106.8m (then £10.4m), an EBIT of DKK 2.54m (then £0.25m).

VSA Comment

This acquisition represents OBT’s first major move since raising cUS$27m in 2016 and early 2017 as it looks to build a leading African forestry and agriculture business.

WBI has been starved of working capital in recent years and as such OBT will look to secure export finance to significantly expand WBI’s trading operations as well as investing cUS$500k to increase the output of its sawmill (current annual capacity 24,000m3 sawn timber) and complete construction of the veneer factory in H2 (planned annual capacity of 18,000m3 veneer).

This deal also provides OBT with an established trading operation for its existing hardwood operation in Mozambique to gain greater access to international markets, with WBI currently selling wood into more than 40 separate countries. Importantly for a trading business that relies on personal networks, the two founders of the business have agreed to remain with the company for a minimum of five years.

Management believe that with additional capital WBI could rapidly improve its financial performance, contributing an operating profit of more than cUS$12m to the group by 2019 under its base case scenario.

We maintain our BUY recommendation but place our target price under review while we assess the likely impact of this significant acquisition on the wider OBT business.

Wynnstay H1 2017 Trading Update

Wynnstay Group (LON:WYN), a UK manufacturer and supplier of agricultural inputs and retail group, has updated on trading for the six months to 30 April 2017.

• WYN’s pet business, Just for Pets (JfP), has produced a loss in H1, which will result in a non-cash goodwill impairment charge being booked. Excluding JfP, H1 group performance is ahead YoY. JfP restructuring plans to be announced in H2

• Group H1 reported profits will therefore be materially below those reported last year with its adjusted PBT (before the impairment) marginally below last year, due to the loss in JfP

• Interim results will be announced on 21 June 2017

VSA Comment

Following on from UK-listed agricultural peer Carr’s Group (CARR LN)# earlier in the year, WYN has delivered its own profit warning, despite generally improving conditions in its core UK agricultural business.

WYN has long discussed the challenging trading conditions in its pet business, as well as the below expectations performance of newly opened stores. WYN had been trying to address this through the launch of new concept stores and a focus on service sales (in-store vaccinations etc…), which has been the strongest performing sub-sector in the industry. (Earlier this year, industry leader Pets at Home (PETS LN) highlighted ‘Merchandise’ like-for-like revenue growth slowing to -0.5% YoY in its Q3 (14 Oct – 5 Jan) but ‘Services’ revenue growth continuing to show decent strength, +7.0% YoY).

The 25 JfP stores contribute a proportion of group profit in the low single digits and given the challenges and seemingly unrelated nature of the business have long been seen by investors as a potential target for disposal. We would expect this to be at least considered as part of its upcoming strategic review for this division.

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Wed, 24 May 2017 08:43:00 +0100 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/27831/vsa-morning-agri-comment-27831.html
In the Papers - Ryanair, Jaguar Land Rover, RBS, Apple http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27830/in-the-papers-ryanair-jaguar-land-rover-rbs-apple-27830.html Newspaper Summary

The Times

German boardrooms can toast champagne moment: German business confidence has hit its highest level since the reunification of the country more than a quarter of a century ago.

Conflict of interest fear in tech merger: Two technology commercialisation companies backed by Neil Woodford have held talks over a potential £1.48 billion merger, triggering complaints of a potential conflict of interest.

Severn Trent splashes out on an inflation-busting dividend: Days after the Labour Party committed to renationalising the water industry because of the billions of pounds seeping into the pockets of shareholders, Severn Trent has unfurled an inflation-busting £200 million dividend payout to investors.

Cranswick fattens profits amid surge in export demand: The British pork and poultry supplier which makes own-label sausages for Sainsbury’s Taste the Difference range and Tesco’s Finest has reported a 17% rise in profits after a jump in demand from China.

Women sue Lloyds over pension cuts: Thousands of female employees at Lloyds are taking the bank to the High Court in a landmark case over claims that their pensions are less generous than those of male staff members.

Lone Star to put 42 hotels up for sale: A package of 42 city centre hotels, including the Jurys Inn chain, is to be put up for sale with a price tag of well over £1 billion, The Times has learnt.

Drill in Arctic to cut debt, says Trump: America’s emergency oil reserve should be halved and the country’s largest wildlife sanctuary opened for drilling to raise billions of dollars to help cut the national debt, President Trump has proposed in his first budget.

Seabirds’ foul game is foiled by £15,000 scarecrows: They are the unwitting victims of Britain’s drive for renewable energy: birds chopped to their deaths by wind turbine blades. Now it has emerged that the avian population has been fighting back — with poo.

Eurozone at six-year high as economy turns corner: Business activity is growing at a fast pace across the eurozone in the latest sign that the bloc is rebounding sharply from years of lacklustre performance.

The Independent

Ryanair accused of assigning middle seats to passengers who don’t pay: Ryanair has been accused of deliberately assigning passengers who choose not to pay for reserved seating to middle seats – and separating couples and groups. Travellers say the budget airline has abruptly changed its policy.

VAT receipt slowdown in April points to weakening consumers: A sharp slowdown in VAT receipts growth contributed to considerably weaker than expected public borrowing figures for April and renewed concerns about the resilience of the British consumer in the face of higher inflation.

Apple named world’s most valuable company in tech-dominated ranking: Tech behemoth Apple has been named the most valuable brand in the world for a seventh consecutive year.

Retail sales slows as households ‘feel the pinch’ of rising inflation: High street sales slowed in May as British households started to feel the pinch of rising inflation and slowing wage growth, according to the latest data from the Confederation of British Industry (CBI).

Nearly 94% of Shell shareholders reject Paris Agreement climate target: Royal Dutch Shell has been rapped over its climate change commitments, with shareholders criticising its rejection of emissions targets that would bring it in line with the Paris climate accord.

Oil prices fall as Donald Trump plans to sell off reserves: Oil prices fell on Tuesday, pressured by Donald Trump’s plans to sell off half the U.S.’ oil stockpile over the next decade.

Apple and Nokia settle patent dispute and sign new deal: Nokia has settled its legal battle with Apple with a new patent licence agreement and also signed a business deal with the U.S. giant, surprising investors who had expected the dispute to drag on.

Pound Dollar exchange rate: Sterling slips after Manchester Arena bombing: The pound briefly slipped on Tuesday following a suicide bombing attack at an Ariana Grande concert at Manchester Arena, the most deadly attack in the U.K. in a decade.

The Daily Telegraph

Glencore makes takeover approach to grain trader Bunge: Glencore has made an “informal” takeover approach for Bunge, a U.S. grain trader with a market value of around $15 billion (£11.6 billion), including debt.

U.K. set to become third global hub for biosciences as investment booms: The U.K. is the world’s third largest global hub for innovation and development in the biosciences sector, new research has found.

Barclays facing £1.6 billion High Court lawsuit: Barclays is being sued for £1.6 billion in damages by a U.S. credit card services firm which filed a High Court claim against the British bank for mis-selling a payment protection product at subprime credit card business Monument.

Euronext pushes into $5.1 trillion FX market amid drive to diversify: Euronext has stepped into the $5.1 trillion (£3.9 trillion) daily foreign exchange market, fulfilling Chief Executive Stéphane Boujnah’s promise to expand with or without the London Stock Exchange’s French clearing business.

Entertainment One goes west to capitalise on Peppa Pig: The Peppa Pig maker Entertainment One is courting U.S. investors in an attempt to win a higher valuation following ITV’s failed takeover bid last year.

U.S. pharma giant Merck & Co. accused of blocking cheaper arthritis drugs for the NHS: The U.S. pharmaceuticals giant Merck & Co is accused of abusing its dominance of the market for an arthritis drug to block the NHS from using cheaper alternatives.

The Questor Column:

Buy CVS, a fast-expanding business that’s immune from the economic cycle: Veterinary services group CVS is the leading player in its field in Britain, generates good earnings and copious cashflow and is busily consolidating its position in its home territory while it starts to build a presence in the Netherlands with carefully chosen and priced acquisitions. The only cloud is a lofty valuation at around 31 times this year’s earnings and 29 times next. But earnings momentum is strong and those multiples could drop sharply as the company expands. The business is underpinned by dependable demand for veterinary services, which are generally not too affected by the ups and downs of the economic cycle. On top of that come the acquisitions. CVS has already added 33 surgeries during the fiscal year that ends in June, including initial forays into both Holland and Northern Ireland, taking the total to 394. More deals, and more new countries, are likely and an equity fund raising just before Christmas of almost £30 million, plus the company’s own free cashflow, gives it plenty of firepower. Questor says ‘Buy’.

Update: TalkTalk Telecom: Even after a deeper-than-expected dividend cut, a gloomier-than-expected profit forecast and a thumping share price fall on the day of the full-year results, shares in TalkTalk Telecom have gained 10% since our analysis of the stock in February. As we suggested at the time, TalkTalk’s 8pc-plus dividend yield four months ago was in “too good to be true” territory, especially as earnings failed to cover the pay-out. That said, the cut in the 2018 dividend to 7.5p (from 10.29p in the year just ended and 15.87p before that) was dramatic. Nevertheless, the new planned pay-out still offers a yield of 4.1% and the reduction frees up cash to allow Dunstone and Harrison to invest in the business and rejuvenate its service and brand, as well as tackle its debts. Any profits recovery will be hard fought, given the competitive nature of the telecoms industry, but the new management’s plan appears to be the right one. Questor says ‘Buy’.

The Guardian

London economy subsidises rest of U.K., ONS figures show: London’s thriving economy generates a £26.5 billion surplus that is recycled by the government to provide financial help to Britain’s less well-off regions, according to an official breakdown of the public finances.

Jaguar Land Rover posts record sales thanks to demand in China and U.S.: Jaguar Land Rover has delivered a record year of sales bolstered by demand for luxury cars in China and North America.

Bank of England Governor falls for email prank but maintains his composure: The Bank of England Governor, Mark Carney, has fallen victim to an online prankster who got him to joke about one of his predecessor’s supposed drinking habits.

John Lewis-backed credit union bids to fend off payday lenders: John Lewis and Debenhams are among the high-street names backing a new credit union for the retail sector, officially launching, which aims to help shop workers “avoid the clutches” of payday lenders. Another supporter is former Dragons’ Den star Theo Paphitis, who once again got to say, “I’m in”, after revealing that he and his companies have invested a six-figure sum in the not-for-profit enterprise.

Unions say Tories’ zero-hours workers’ review doesn’t go far enough: Unions have Expressed anger at the proposal that workers on zero-hours contracts should be the given the right to request guaranteed hours, saying it does not go far enough.

Daily Mail

Emergency home repair giant Homeserve hits a record high after revenues surge 24%: Emergency repairs firm Homeserve hit an all-time high after beating expectations with a 24% surge in revenues for the year ended March 31.

Bankers in £2 billion oil takeover scoop £68 million fees jackpot: Wood Group’s bid to snap up Amec Foster Wheeler will create giant worth £5 billion: A £2.2 billion oil takeover will hand bankers a £68million windfall – while putting 4,000 jobs at risk in the North Sea.

PPG Boss wants a fourth crack at Dulux owner Akzo Nobel: Michael McGarry, the Boss of U.S. predator PPG which is trying to take over Dulux’s owner Akzo Nobel, said he remains interested in negotiating a ‘consensual’ deal – despite having three takeover bids rebuffed.

Legal spat threatens Jaeger deal: Suppliers are owed millions of pounds: Suppliers owed millions of pounds are threatening legal action over the sale of Jaeger. Jaeger sold its lucrative trademark licence before calling in the administrators – leaving just bricks and mortar shops available for bidders.

Stamp duty go-slow hurting tile shops: Topps blames disappointing sales on ‘challenging’ economic environment: Changes to stamp duty caused sales and profits to drop for Topps Tiles. The retailer said its sales in the first half of the year were hit by the ‘challenging’ economic environment and tough year-on-year comparisons following a hike in stamp duty for second-home owners.

Daily Express

U.K.’s building society’s profits hit by record low interest rates: Nationwide saw its annual profit fall by more than 17% last year as it sought to protect savers from record low interest rates.

U.K. makers in triumphant return to the market amid new concerns of capacity shortages: Meet the Manufacturer’s annual trade event for the fashion, accessories and homeware industries is the biggest yet, so binning the fake cliché that Britain doesn’t make things anymore is long overdue, says Maisha Frost.

Investors ditch almost $9 billion of equities as political turmoil builds: Investors ditched almost $9 billion of U.S. equities as political turmoil in Washington built up in the past week, Bank of America Merrill Lynch figures showed.

RBS double settlement offer in last minute bid to stay out of court: Royal Bank of Scotland has dug deeper in a bid to reach a settlement and avert a high-profile court case with thousands of investors who claim they were mis-sold shares before its £45.5billion taxpayer bailout.

Greece default looms as Eurozone and IMF clash over debt measures: Eurozone countries are at loggerheads with the International Monetary Fund (IMF) over Greece’s debt programme, as time runs out to stop Athens crashing into bankruptcy and out of the bloc.

Britain’s borrowing falls to lowest level since 2008 - but debt soars to £1.7 trillion: Britain’s debt pile hit an eye-watering £1.7 trillion last month, in a blow to Chancellor Philip Hammond ahead of the election.

The Scottish Herald

Builder flags up rewards of apprentice campaign: Scottish housebuilder Springfield Properties has announced apprentices now make up around one-fifth of its 477 staff – about double its 10% target set less than three years ago.

Deal maker leads private equity firm on expansion drive in Scotland: Neil McGill, who used to head accountancy firm BDO’s mergers and acquisitions team in Scotland, has joined the Cairngorm Capital private equity business and will lead its hunt for more deals in the country.

Household squeeze fuels Government borrowing: U.K. public sector borrowing was much greater than expected in April, as value-added tax receipts grew only marginally amid a softer consumer backdrop, official figures have shown.

Masters steps down from Murgitroyd Group board: Chris Masters has resigned from the board of intellectual property attorney Murgitroyd after serving less than two years.

Middle East success for Aberdeen oil services firm: Oil services company Proserv has been awarded a series of contracts worth more than $11million (£8.5 million) in the Middle East where it has been investing in growth amid the downturn in the North Sea.

The Scotsman

Fintech revolution will ‘create’ more jobs than it cuts: Any technological revolution or industrial change brings with it an element of fear for workers. When the Luddites smashed up weaving machines in the 19th century, they did it out of fear for their livelihoods. And for a crash course in how Scotland has felt the ill effects of the winds of change in industry, you only need to hear the closing refrain of The Proclaimers’ song “Letter From America”.

Biscuit-flavoured pints face crunch test at new craft beer festival: It has a biscuit-making heritage going back more than two centuries - when William Crawford started a baking business in a small shop in Leith which grew to become a household name throughout Britain.

Johnston Carmichael lifts partner count to 57: Accountancy and advisory firm Johnston Carmichael has expanded its leadership team with a string of appointments that takes its partner count to 57.

Tech firms on cloud nine with government contracts: A number of Scottish technology companies have secured places on the latest U.K. government framework to provide cloud computing services to the public sector.

IndigoVision aims to return £850,000 to shareholders: Video security group IndigoVision announced plans to return about £850,000 to investors through a share buyback programme.

City A.M.

Euronext buys into currency trading with acquisition of FastMatch: Euronext, the pan-European stock exchange, has made a move into the world of currency trading with the acquisition of FastMatch.

BT and TalkTalk compensation row threatens Openreach plans for faster broadband: A row brewing between TalkTalk and BT is threatening to undermine a key consultation to boost the U.K.’s broadband infrastructure.

Stock Spirits slammed by top investor after 30% shareholders vote against Chairman at its annual general meeting: Vodka maker Stock Spirits got a slap on the wrist after over 25% shareholders voted against the London-listed firm’s Directors’ remuneration report.

Shell shareholders approve CEO Ben van Beurden’s pay but reject emissions target proposal at annual general meeting: A 60% increase in Royal Dutch Shell Boss Ben van Beurden’s pay received little opposition at the oil and gas giant’s annual general meeting.

Pharmaceuticals giant MSD accused by the CMA of breaching competition law for discounting Remicade drug: Pharmaceuticals conglomerate Merck Sharp & Dohme (MSD) has been accused of breaching competition law by operating a discount scheme.

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Wed, 24 May 2017 08:30:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27830/in-the-papers-ryanair-jaguar-land-rover-rbs-apple-27830.html
Market Briefing - US markets closed in positive territory yesterday, buoyed by gains in financial and healthcare sector stocks http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27829/market-briefing-us-markets-closed-in-positive-territory-yesterday-buoyed-by-gains-in-financial-and-healthcare-sector-stocks-27829.html UK Market Snapshot

UK markets finished mixed yesterday, with the FTSE 100 index closing in negative territory as investors’ sentiment was hurt by the terror attack in Manchester. Meanwhile, UK general election campaigning was suspended and the Cobra emergency committee meeting was held. Topps Tiles tumbled 6.6%, after the company posted a drop in its first-half sales and revenue and warned a tough trading for the remaining 2017. Retailers, Burberry Group, Tesco and Marks & Spencer Group slipped 0.9%, 1.1% and 2.0%, respectively.  Bucking the trend, easyJet climbed 2.5%, following a broker upgrade on the stock to ‘Sector Perform’ from ‘Underperform’. Severn Trent advanced 1.8%, after the company reported an upbeat underlying pre-tax profit for the year ended 31 March due to newer price regulations and higher savings and upgraded its dividend policy. The FTSE 100 declined 0.1%, to close at 7,485.3, while the FTSE 250 marginally rose to settle at 19,920.1.

US Market Snapshot

US markets closed in positive territory yesterday, buoyed by gains in financial and healthcare sector stocks. Additionally, the White House released its 2018 budget proposal stating that the US gross domestic product (GDP) would attain an annual 3.0% growth in 2021 and would further continue to grow at this pace. Banking stocks, JPMorgan Chase, Bank of America and Goldman Sachs Group advanced 1.3%, 1.5% and 1.7%, respectively. Bunge surged 16.6%, after Glencore made an “informal” takeover approach for the former. On the losing side, AutoZone plunged 11.8%, after company’s earnings and revenue for the third quarter came in lower than the market estimates. Alexion Pharmaceuticals plummeted 9.3%, after the company’s CFO, Chief Commercial Officer and two executive Vice Presidents stepped down from their roles. The S&P 500 gained 0.2%, to settle at 2,398.4. The DJIA rose 0.2%, to settle at 20,937.9, while the NASDAQ advanced 0.1%, to close at 6,138.7.

Europe Market Snapshot

Other European markets ended in the green yesterday, boosted by a rally in technology and banking sector stocks. Meanwhile, data showed that the Euro-zone’s economic activity reached a six-year high level in May, along with Germany’s flash manufacturing PMI marking its 73-month high level in the same month. Nokia jumped 6.4%, after the company reached a settlement agreement with Apple over a patent dispute with the latter. Banco BPM climbed 5.9%, following a broker upgrade on the stock to ‘Overweight’ from ‘Equal weight’. Banco Bilbao Vizcaya Argentaria, Banco de Sabadell and Banco Santander rose 2.1%, 2.2% and 2.3%, respectively. On the flipside, energy giants, TOTAL and Statoil slid 0.4% and 0.5%, respectively. The FTSEurofirst 300 index gained 0.3%, to close at 1,541.3. Among other European markets, the German DAX Xetra 30 rose 0.3%, to close at 12,659.2, while the French CAC-40 advanced 0.5%, to settle at 5,348.2.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning, ahead of the minutes of the US Federal Reserve (Fed) due to release later today. In Japan, financial stocks, Mizuho Financial Group, Sumitomo Mitsui Financial Group and T&D Holdings have risen 1.1%, 1.2% and 1.7%, respectively. On the contrary, Shimamura has plunged 9.7%, after the company reported weak monthly sales in May. In Hong Kong, oil majors, China Petroleum & Chemical and CNOOC have slid 0.3% and 0.4%, respectively. Geely Automobile Holdings has slipped 0.2%, after the company’s parent, Zhejiang Geely Holding Group, agreed to acquire Proton from DRB-Hicom.  In South Korea, LG Electronics and SK Hynix have gained 1.0% and 1.3%, respectively. The Nikkei 225 index is trading 0.5% higher at 19,707.9. The Hang Seng index is trading 0.1% down at 25,380.0, while the Kospi index is trading 0.2% up at 2,317.0.

Key Corporate Announcements Today

AGMs

Antofagasta, Arrow Global Group, Camper & Nicholsons Marina Investments Ltd., Exova Group, French Connection Group, Fundsmith Emerging Equities Trust, Glencore, Harworth Group, Hilton Food Group, Ibstock, JSC Kazkommertsbank GDR (Reg S), Mercantile Investment Trust (The), Mortgage Advice Bureau (Holdings), Northern Petroleum, Polypipe Group, Providence Resources, Sherborne Investors (Guernsey) 'B' Limited, Sportech, QS Software Quality Systems AG, STM Group, Travis Perkins, WANdisco, XLMedia

EGMs

Sportech, Toople

Final Dividend Payment Date

Aggreko, Chesnara, Churchill China, Elecosoft, Eurocell, Hunters Property, McColl's Retail Group, Paddy Power Betfair

Interim Dividend Payment Date

Sequoia Economic Infrastructure Income Fund Limited

Special Dividend Payment Date

Paddy Power Betfair

Quarterly Payment Date

APQ Global Limited, Tetragon Financial Group Limited

Trading Announcements

Dixons Carphone, Dixons Carphone, Exova Group, Kingfisher, Softcat, Tungsten Corporation

Key Corporate Announcements for Tomorrow

AGMs

Jersey Oil And Gas, Air China Ltd., Albion Development VCT, Alliance Pharma, Amryt Pharma, Belvoir Lettings, Cambridge Cognition Holdings, Card Factory, Concurrent Technologies, EnQuest, F&C Private Equity Trust, Ferrexpo, Flowtech Fluidpower, G4S, Gama Aviation, Gocompare.com Group, Hastings Group Holdings, Headlam Group, Henry Boot, Huntsworth, Immedia Group, Inchcape, Itaconix, Kcell Joint Stock Co GDR (Reg S), Kenmare Resources, Keywords Studios, Legal & General Group, LMS Capital, Luceco, Middlefield Canadian Income PCC, NAHL Group, Nasstar, Old Mutual, Parity Group, Regional REIT Limited, Robert Walters, Sealand Capital Galaxy Limited (DI), Total Produce, TP Group, Vectura Group, Yu Group

Final Ex-Dividend Date

Action Hotels, Advanced Medical Solutions Group, Andrews Sykes Group, British American Inv Trust, Bunzl, Burford Capital, C&C Group, Capita, Cineworld Group, DCC, Downing Three VCT F Shs, Downing Three VCT H Shs, Downing Two VCT F Shs, Downing Two VCT G Shs, xova Group, FDM Group (Holdings), Hill & Smith Holdings, Huntsworth, IFG Group, Ingenta, Irish Continental Group Units, Manx Telecom, Maven Income & Growth 2 VCT, Menzies(John), Midwich Group, Mincon Group, Morrison (Wm) Supermarkets, Neptune-Calculus Income & Growth VCT, Soco International, Spectris, Tarsus Group, The Gym Group, Venture Life Group, Whitbread, Worldpay Group, Xaar

Final Dividend Payment Date

Foxtons Group, Hikma Pharmaceuticals, IndigoVision Group, Intu Properties, ITV, Reckitt Benckiser Group, UBM, Zotefoams

Interim Ex-Dividend Date

Avingtrans, Baring Emerging Europe, Brewin Dolphin Holdings, Diploma, Euromoney Institutional Investor, Gattaca, Ground Rents Income Fund, Impax Asset Management Group, Income & Growth VCT, Keystone Inv Trust,, Marston's, Mid Wynd International Inv Trust, Mitchells & Butlers, Scottish American Inv Company, Town Centre Securities

Interim Dividend Payment Date

Wetherspoon (J.D.)

Special Dividend Payment Date

ITV, United Carpets Group

Quarterly Ex-Dividend Date

Carnival, HICL Infrastructure Company Ltd, NextEnergy Solar Fund Limited Red

Trading Announcements

Card Factory, GVC Holdings, Inchcape, Mincon Group, Regional REIT Limited, PetroMaroc

Key Economic News

UK public sector net cash requirement posted a surplus in April

In the UK, in April, public finances (public sector net cash requirement) has posted a surplus £15.21 billion, following a revised deficit of £27.68 billion in the prior month.

UK public sector net borrowing posted a deficit in April

In the UK, in April, the public sector net borrowing has reported a deficit £9.60 billion, as compared to a revised deficit of £2.30 billion in the prior month. Market anticipation was for public sector net borrowing to report a deficit of £8.00 billion.

UK public sector net borrowing posted a deficit in April

In the UK, the public sector net borrowing (excluding temporary effects of financial interventions) has reported a deficit £10.40 billion in April, following a revised deficit of £3.10 billion in the prior month. Market anticipation was for public sector net borrowing to report a deficit of £8.70 billion.

UK CBI distributive trade survey's retail sales balance dropped in May

In May, the CBI distributive trade survey's retail sales balance fell to a level of 2.00% in the UK, lower than market expectations of a fall to a level of 10.00%. The CBI distributive trade survey's retail sales balance had recorded a level of 38.00% in the prior month.

Euro-zone manufacturing PMI unexpectedly climbed in May

The flash manufacturing PMI in the Euro-zone recorded an unexpected rise to a level of 57.00 in May, compared to a level of 56.70 in the previous month. Market expectation was for the manufacturing PMI to ease to a level of 56.50.

Euro-zone services PMI surprisingly slid in May

The flash services PMI in the Euro-zone registered an unexpected drop to a level of 56.20 in May, compared to a level of 56.40 in the prior month. Market expectation was for services PMI to record a steady reading.

Euro-zone composite PMI steadied in May

In May, the preliminary composite PMI remained flat at 56.80 in the Euro-zone. Markets were anticipating composite PMI to ease to a level of 56.70.

German services PMI unexpectedly dropped in May

The flash services PMI recorded an unexpected drop to a level of 55.20 in Germany, in May, compared to market expectations of a rise to 55.50. Services PMI had registered a reading of 55.40 in the previous month.

German manufacturing PMI surprisingly rose in May

In May, the flash manufacturing PMI in Germany recorded an unexpected rise to 59.40, compared to a reading of 58.20 in the prior month. Markets were anticipating manufacturing PMI to drop to a level of 58.00.

German Ifo business expectations index rose in May

In Germany, the Ifo business expectations index rose to a level of 106.50 in May, compared to market expectations of a rise to a level of 105.40. The Ifo business expectations index had registered a level of 105.20 in the previous month.

German construction investment advanced less than expected in 1Q 2017

In 1Q 2017, construction investment climbed 2.30% in Germany on a quarterly basis, compared to a revised advance of 0.80% in the prior quarter. Market expectation was for construction investment to rise 2.50%.

German capital investment advanced as expected in 1Q 2017

On a QoQ basis, capital investment in Germany recorded a rise of 1.70% in 1Q 2017, meeting market expectations. In the prior quarter, capital investment had risen by a revised 0.40%.

German domestic demand advanced less than expected in 1Q 2017

Domestic demand registered a rise of 0.20% on a quarterly basis in Germany, in 1Q 2017, lower than market expectations for an advance of 0.50%. Domestic demand had registered a revised rise of 0.70% in the previous quarter.

German Ifo business climate index advanced in May

In May, the Ifo business climate index advanced to 114.60 in Germany, higher than market expectations of a rise to a level of 113.10. In the prior month, the Ifo business climate index had registered a level of 112.90.

German GDP advanced as expected in 1Q 2017

In Germany, the working day adjusted final gross domestic product (GDP) climbed 1.70% in 1Q 2017, on a YoY basis, in line with market expectations. The preliminary figures had also recorded a rise of 1.70%. In the prior quarter, GDP had registered a revised rise of 1.80%.

German GDP advanced as expected in 1Q 2017

The non-seasonally adjusted final GDP climbed 2.90% in Germany on an annual basis in 1Q 2017, at par with market expectations. The preliminary figures had also indicated a rise of 2.90%. In the previous quarter, GDP had registered a revised rise of 1.30%.

German GDP advanced as expected in 1Q 2017

The seasonally adjusted final GDP in Germany registered a rise of 0.60% in 1Q 2017 on a quarterly basis, meeting market expectations. GDP had registered a rise of 0.40% in the prior quarter. The preliminary figures had also indicated a rise of 0.60%.

German imports rose less than expected in 1Q 2017

In 1Q 2017, on a QoQ basis, imports in Germany advanced 0.40%, less than market expectations for an advance of 1.00%. In the prior quarter, imports had risen by a revised 2.50%.

German private consumption advanced as expected in 1Q 2017

In Germany, private consumption rose 0.30% on a quarterly basis in 1Q 2017, compared to a revised advance of 0.20% in the prior quarter. Market anticipation was for private consumption to advance 0.30%.

German exports advanced less than expected in 1Q 2017

On a quarterly basis, exports in Germany registered a rise of 1.30% in 1Q 2017, lower than market expectations for an advance of 1.50%. Exports had recorded a revised rise of 1.70% in the previous quarter.

German government spending rose more than expected in 1Q 2017

Government spending in Germany climbed 0.40% on a quarterly basis in 1Q 2017, more than market expectations for an advance of 0.30%. In the previous quarter, government spending had recorded a revised rise of 0.30%.

German Ifo current assessment index surprisingly rose in May

In May, the Ifo current assessment index unexpectedly advanced to a level of 123.20 in Germany, compared to market expectations of a fall to 121.00. The Ifo current assessment index had registered a level of 121.10 in the previous month.

French services PMI surprisingly advanced in May

In May, the flash services PMI unexpectedly climbed to 58.00 in France, compared to a reading of 56.70 in the previous month. Markets were anticipating services PMI to remain unchanged.

French production outlook indicator advanced in May

The production outlook indicator advanced to 7.00 in France, in May. The production outlook indicator had registered a reading of 1.00 in the prior month.

French own-company production outlook climbed in May

Compared to a revised level of 13.00 in the previous month own-company production outlook in France recorded a rise to 14.00 in May.

French manufacturing PMI unexpectedly dropped in May

The preliminary manufacturing PMI recorded an unexpected drop to a level of 54.00 in France, in May, lower than market expectations of an advance to a level of 55.20. In the prior month, manufacturing PMI had registered a reading of 55.10.

French industrial business climate index rose in May

The industrial business climate index climbed to 105.00 in France, in May, in line with market expectations. The industrial business climate index had recorded a reading of 104.00 in the prior month.

Spanish trade deficit declined in *No frequency defined*

In *No frequency defined*, trade deficit in Spain fell to €1.46 billion. Spain had posted a trade deficit of €2.61 billion in the previous month.

Swiss exports dropped in April

In April, on a monthly basis, exports in Switzerland dropped 2.50%. In the previous month, exports had registered a revised rise of 1.80%.

Swiss trade surplus dropped in April

Switzerland has registered trade surplus of CHF 1.97 billion in April, from a revised trade surplus of CHF 3.04 billion in the prior month.

Swiss imports climbed in April

Imports climbed 2.60% in Switzerland on a MoM basis, in April. Imports had climbed by a revised 0.60% in the prior month.

US Markit services PMI rose in May

The flash Markit services PMI in the US rose to a level of 54.00 in May, compared to a reading of 53.10 in the prior month. Markets were anticipating Markit services PMI to rise to 53.30.

US Markit manufacturing PMI unexpectedly eased in May

The preliminary Markit manufacturing PMI in the US dropped unexpectedly to 52.50 in May, compared to market expectations of an advance to 53.00. The Markit manufacturing PMI had registered a reading of 52.80 in the previous month.

US new home sales fell in April

In April, new home sales recorded a drop of 11.40%, on monthly basis, to a level of 569.00 K in the US, compared to a reading of 642.00 K in the previous month. Market expectation was for new home sales to drop to 610.00 K.

US Markit composite PMI advanced in May

The preliminary Markit composite PMI in the US rose to a level of 53.90 in May, compared to a level of 53.20 in the prior month.

US Richmond Fed manufacturing index dropped in May

The Richmond Fed manufacturing index in the US eased to 1.00 in May, lower than market expectations of a fall to a level of 15.00. The Richmond Fed manufacturing index had recorded a reading of 20.00 in the prior month.

US Redbook index advanced in the last week

The Redbook index recorded a rise of 2.00% on an annual basis, in the week ended 19 May 2017, in the US. In the prior week, the Redbook index had advanced 2.40%.

US Redbook index fell in the last week

The seasonally adjusted Redbook index dropped 1.10% on a monthly basis in the US, in the week ended 19 May 2017. In the prior week, the Redbook index had registered a similar fall.

Canadian wholesale sales advanced more than expected in March

Wholesale sales registered a rise of 0.90% in Canada on a MoM basis in March, more than market expectations for an advance of 0.80%. In the prior month, wholesale sales had registered a revised rise of 0.30%.

Japanese machine tool orders climbed in April

On an annual basis, the final machine tool orders in Japan advanced 34.70% in April. Machine tool orders had advanced 22.80% in the prior month. The preliminary figures had also indicated a rise of 34.70%.

Japanese nationwide department store sales rose in April

In Japan, nationwide department store sales advanced 0.70% on an annual basis, in April. In the prior month, nationwide department store sales had dropped 0.90%.

Japanese Tokyo department store sales slid in April

Tokyo department store sales in Japan registered a drop of 0.80% on an annual basis, in April. In the previous month, Tokyo department store sales had dropped 0.20%.

Japanese supermarket sales rose in April

In April, on a YoY basis, supermarket sales in Japan rose 0.60%. Supermarket sales had fallen 1.80% in the previous month.

Japanese manufacturing PMI dropped in May

Compared to a reading of 52.70 in the previous month the preliminary manufacturing PMI fell to a level of 52.00 in Japan, in May.

Japanese all industry activity index declined more than expected in March

In March, the all industry activity index recorded a drop of 0.60% in Japan on a MoM basis, higher than market expectations for a drop of 0.50%. In the previous month, the all industry activity index had advanced 0.70%.

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Wed, 24 May 2017 08:24:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27829/market-briefing-us-markets-closed-in-positive-territory-yesterday-buoyed-by-gains-in-financial-and-healthcare-sector-stocks-27829.html
Beaufort Securities Breakfast Alert: Katoro Gold, KEFI Minerals plc, Obtala Ltd, Severn Trent, Tiziana Life Sciences http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27828/beaufort-securities-breakfast-alert-katoro-gold-kefi-minerals-plc-obtala-ltd-severn-trent-tiziana-life-sciences-27828.html Today's edition features:

Katoro Gold (KAT.L)

• KEFI Minerals (KEFI.L)

• Obtala Limited (OBT.L)

Tiziana Life Sciences (TILS.L)

Severn Trent (SVT.L)

 

"A lack of new drivers amongst US stocks resulted in a virtually unchanged close across all three of the principal indices yesterday evening, with some pointing to today’s scheduled release of FOMC Minutes for their lack of activity. They may still be seeking further insight into whether or not the Fed will indeed hike rates at its June meeting, but Money Market Futures suggest most have already made up their minds with probability put at 78.5% for an additional 25bp, albeit down from the 83% indicated before turmoil broke out in Washington last week. With this in mind, there was relief that President Trump’s first full budget plan details were largely as expected, although his plans in favouring defence and border security at the expense of welfare, foreign aid and government spending appear wildly optimistic, while a report from the Commerce Department showing a substantial pullback in new home sales in the month of April provided another excuse for traders to pause for breath; elsewhere the latest set of PMIs were seen to effectively cancelled one-another with the manufacturing reading unexpectedly dropping while the services figure jumped higher than consensus. There were few features amongst the individual shares, although strength reflected in the steel sector, with the NYSE Arca Index spiking by 2.3%, while bears sold off various of the auto-components quotes as Autozone missed quarterly expectations. The biggest news from Asia was Moody's decision to cut China's sovereign credit rating, from A1 to Aa3, citing expectations that the country's financial strength will deteriorate in coming years as debt keeps rising and the economy slows. Its principal indices were punished accordingly, while the S&P/ASX 200 and Nikkei remained positive. The major European markets also turned in a mixed performance yesterday. The UK's FTSE-100 dipped by 0.15% in the wake of the terrorist attack in Manchester, although the FTSE-250 still achieved a new intraday high. Amongst the different shares, easyJet, Babcock and Severn Trent led the way, while M&S was amongst the worst performers ahead of this morning’s earnings release. The pan-European STOXX 600 by contrast rose by 0.22% on a strong Composite PMI number, as Germany’s Xetra DAX lifted 0.3% having been boosted by data confirming the country enjoying record high business sentiment, a one-year high economic growth and a six-year high growth in the private sector signal strong positive momentum, while the French CAC 40 Index climbed by 0.5% on news its private sector expanded at its sharpest pace in six years. The Spanish IBEX 35, however was easily the Bloc’s strongest country performer, led by a strong banking sector. Brightening growth statistics will add further pressure on the ECB to use its June policy meeting to signal a reduction to its existing monetary stimulus measures – something market watchers will be listening out for in the President’s speech due later today. No UK macro releases are scheduled for this morning, although the EU provides its Financial Stability Review which will be followed by statements from Mario Draghi. The US details its March Housing Price Index along with Existing Homes Sales and the EIA Crude Oil Stocks change numbers; the FOMC Minutes will be released and Member Robert Kaplan is also due to make a speech. UK corporates due to publish earning or trading updates include Babcock International (BAB.L), Pennon Group (PNN.L), Kingfisher (KGF.L), Marks & Spencer (MKS.L), Hogg Robinson (HRG.L), Dixons Carphone (DC..L), Great Portland Estates (GPOR.L), HSS Hire (HSS.L) and Vedanta Resources (VED.L). London trading will remain nervous in response to Theresa May raising the threat level to ‘critical’ Tuesday evening, following a meeting of the government's crisis response committee; in the absence of any particular stimulus from the overnight markets, the FTSE-100 is seen edging lower, falling between 5 and 10 points in early trade."

- Barry Gibb, Research Analyst

 

Markets

Europe

The FTSE-100 finished yesterday's session 0.15% lower at 7,485.29 whilst the FTSE AIM All-Share index was up 0.50% at 985.56. In continental Europe, the CAC-40 finished up 0.47% at 5,348.16 whilst the DAX was 0.31% higher at 12,659.15.

Wall Street

In New York last night, the Dow Jones Industrial Average rose 0.21% to 20,937.91, the S&P 500 firmed 0.18% to 2398.42 and the Nasdaq gained 0.08% to 6138.71.

Asia

In Asian markets this morning, the Nikkei 225 had risen 0.46% to 19,703.25, while the Hang Seng lost 0.15% to 25,365.26.

Oil

In early trade today, WTI crude was up 0.02% to $51.48/bbl and Brent was up 0.06% to $54.18/bbl.

 

Headlines

Moody's downgrades China's credit rating

China has received a downgrade on its credit score, on worries about the future state of the economy. Moody's Investors Services brought down China's long-term local currency and foreign currency issuer ratings by one notch to A1 from Aa3. But China's finance ministry said Moody's was exaggerating the mainland's economic difficulties and underestimating reform efforts. The downgrade could raise the cost of borrowing for the Chinese government. The ratings agency also changed its outlook for China to stable from negative. Moody's said in a statement that the downgrade reflected expectations that China's financial strength would "erode somewhat over the coming years, with the economy-wide debt continuing to rise as potential growth slows". The Chinese economy expanded by 6.7% in 2016 compared with 6.9% the previous year, the slowest growth since 1990.

Source: BBC News

 

Company news

Katoro Gold (LON:KAT, 5.25p) – Speculative Buy

Katoro Gold (formerly Opera Investments), the Tanzania focused gold exploration and development company, was admitted to the AIM market yesterday after completing a reverse takeover of Kibo Gold, a subsidiary of Kibo Mining (KIBO.L). As part of the transaction, the Imweru and Lubando gold projects were transferred to Katoro Gold for a total consideration of £3.7m satisfied by the issuance of 61M new ordinary shares to Kibo Mining at a price of 6p per share. On aggregate, the Imweru and Lubando gold deposits have a compliant resource estimate of 754,980oz of gold.

Our view: The newly formed Katoro Gold began trading yesterday following the reverse takeover of Kibo Gold. As part of the transaction, Katoro raised gross proceeds of £1.5m and plans to develop the Imweru gold project through additional drilling, completion of a pre-feasibility study and application of a mining licence before the end of 2017. We look forward to further announcements regarding the development of the Imweru project and have initiated coverage on Katoro Gold (view note) with a 11.7p target price and a Speculative Buy recommendation.

Beaufort Securities acts as a corporate broker to Katoro Gold plc

 

KEFI Minerals (LON:KEFI, 5.23p) – Speculative Buy

KEFI has published an update to its 2015 DFS using numbers from proposed or contracted (engineering, construction, mining, support service, consumables etc.) agreements. This Updated 2017 DFS is therefore more accurate although importantly delivers very similar numbers to the 2015 DFS. Key numbers include capex of $161m although after contract deferrals it falls to $145m, AISC of $777/oz and $933/oz including capex. The NPV8 from the start of production using flat $1250/oz is $272m and gold production averages 115koz over the first 8 years. Below the headline numbers a few important changes have been made including higher throughput, coarser grind size, and design changes to access roads and the tailings facility. Construction is targeted to start end 2017 or early 2018 with first gold end 2019. Mining will be circa 80% bulk mining and 20% selective.

Our view: The major change to the 2015 DFS is throughput increase from 1.2mt to 1.5mt and higher average production. Capex is slightly higher than the 2015 DFS but in line with KEFI's estimate from 2016. Its worth noting that under Nyota, capex was $289m and even KEFI's first feasibility study which was owner operated (with its own mining fleet) had capex of $176m. This is a positive DFS, a slight improvement with no nasty surprises and doesn't include upside from the higher grade underground mine which is likely to be an important aspect of Tulu Kapi's life. We look forward to KEFI completing financing and breaking ground and maintain our Speculative Buy recommendation.

Beaufort Securities acts as a corporate broker to KEFI Minerals plc

 

Obtala Limited (LON:OBT, 19.00p) – Speculative Buy

The African focused agricultural and forestry company, this morning announced the acquisition, through Argento Limited (its 75% owned forestry subsidiary) of WoodBois International ApS (‘WBI’), a global trader and producer of sawn timber, for a total consideration of US$14.8 million (approximately £11.4 million). Argento will acquire 100% of the share capital of WBI, including all land, fixed assets, inventory and the forestry concessions in Gabon. Founded in 2004, WBI is engaged in the global trading of sawn timber sourced from 100s of exclusive timber producers throughout Africa, as well as the production of sawn timber planks and veneer from its concessions in Gabon. It is headquartered in Copenhagen, Denmark, with African trading operations based in Abidjan, Ivory Coast, where the company leases warehouse space for inventory. Importantly, WBI has an existing diverse buyer base with no pronounced customer or regional concentration with sales into the Middle East (33%), Europe (17%), USA & Canada (15%) as well as into Africa (14%), South America (13%) and Asia (9%). WBI’s concessions in Gabon total 102,000 acres (41,278 hectares) with an annual permitted cut of 70,000m3, the primary species of which is Okoume. The concession rights have no expiration and are all located within 70km of WBI’s sawmill and veneer facility in Mouila, Gabon. WBI, like Obtala, is committed to sustainable forestry management and intends to seek FSC (or similar) certification in the near future.

Obtala will acquire the entire issued share capital of WBI, for a total consideration of approximately US$14.8 million to be satisfied by a mixture of cash and new Obtala ordinary shares payable in three tranches, subject to satisfactory completion of Obtala’s due diligence:

• Tranche 1: Initial cash consideration of US$3 million (approximately £2.31 million); and the issue of 15,641,499 new Obtala ordinary shares within five business days of completion of the due diligence period (“Completion”);

• Tranche 2: Further cash consideration of US$3 million (approximately £2.31 million) on the earlier of 30 September 2017 and 120 days after Completion; and

• Tranche3: Deferred cash consideration of US$5 million (approximately £3.85 million) payable over five years in equal quarterly payments commencing 30 September 2017.

The consideration shares to be issued as part of the Tranche 1 consideration, with a value at 19.00p per share of £2.97 million (approximately US$3.84 million), are subject to a 24 month lock up period, with any disposal subject to Obtala’s consent and orderly market provisions. They represent approximately 5.63% of Obtala’s current issued ordinary share capital. Any shortfall (or excess) in working capital relative to debt assumed on completion, though not expected to be material, will be offset by a purchase price adjustment to Tranche 2 and Tranche 3 payments. Tranche 2 and 3 payments are conditional on the continued employment of WBI’s two founder directors, Zahid Abbas and Jacob Hansen.

Our view: Africa is pending a giant green revolution. The extent of its premium land resources, across a continent that is rapidly urbanising, makes it the obvious candidate to become a world powerhouse for cash crops. Recognising the potential, its Governments have become increasingly willing to think of farming and harvesting as a business, rather than a means for subsistence. This story has, of course, been told countless times before; realisation for most is measured in terms of decades, but Obtala’s FSC-certified forestry and agricultural divisions are genuine and significant near-term commercial opportunities. Obtala brings with it a highly experienced operational and financial management team with a vision on how to capitalised on sustainable forestry assets by building-out concessions and rising up the value chain. Having finally begun to recognise the true extent of the Group’s opportunity, investors have nevertheless remained concerned regarding the likely time and resource required to secure a truly visible and hard-currency international customer base, rather than simply supplying local and regional needs as has been the case until recently. In this respect, the acquisition of WBI provides an ideal solution, with its distribution arm already supplying a broad spread of foreign buyers, through which it has capacity to secure premium prices for a much larger volume of value-added product. Reassuringly also, an elementary discounted assessment of WBI’s Gabon concessions, on parameters similar to Honour Capital’s own 2014 review of Obtala’s forestry assets suggests these alone hold value well in excess of today’s acquisition price, in which case, everything else appears to come for free! Operationally, the Board’s immediate plan is to accelerate the expansion of WBI’s sawmill (current annual capacity of 24,000m3 sawn timber) and complete the upgrade of their veneer facility (planned annual capacity of 18,000m3 veneer) within 2017. Expansion of both business lines is estimated to have a capital cost of some US$500,000 and will generate cost savings and support entry into higher margin product lines, in line with Argento’s existing strategy in Mozambique. Gross margins in the range of 60% to 70% (largely weighted by transportation costs) can be achieved for global demand that appears insatiable. As such, the acquisition of WBI marks a step-up the value chain as management looks to position the enlarged-Group to capture long-term sustainable growth and synergies. The fact that the existing management has agreed to a substantial deferred consideration and committed to remaining with Obtala for at least 5 years, underlines their confidence that with the access to capital through the enlarged Group there is substantial opportunity for value-creation. During the year to 2015, WBI recorded earnings before interest and tax in Danish Krone of DKK2.54 million (then equivalent to approximately £247,000) on turnover of DKK 106.8 million (then approximately £10.40 million), and as at 31 December 2015 had total assets of DKK 56.92 million (then approximately £5.61 million). On this basis, Obtala will have secure have assets that fit ‘hand-in-glove’ with its existing operations at around 1x 2016E revenues. Even after factoring in all the normal risks and concerns associated with labour-intensive operations on the Continent, that remains something of a bargain. Beaufort initiates its coverage on Obtala Limited with a Speculative Buy recommendation.

Beaufort Securities acts as a corporate broker to Obtala Limited plc

 

Tiziana Life Sciences (LON:TILS, 190.00p) – Speculative Buy

The clinical stage biotechnology company developing targeted drugs for cancer and autoimmune diseases, yesterday announced its financial results for the year ended 31 December 2016. R&D highlights during the period included the achievement of a key milestone foralumab as new data demonstrated oral efficacy in humanised mouse models and the outlining of its clinical development plan with initial focus in two clinical indications: graft vs host disease and non-alcoholic steatohepatitis (NASH). Milciclib also continued to progress through phase II trials for thymic carcinoma (thymoma) in patients previously treated with chemotherapy. A research agreement with Cardiff University for TZLS-101, focused on developing Bcl-3 inhibitors as potential drugs to treat cancer, has led to the identification of a first-in-class lead clinical candidate, CB1, with potent anti-metastatic activity, and with an impressive in vivo efficacy and safety profile, while TZLS-214 / c-FLIP remains under analysis to identify a lead candidate. Very much in line with expectations, For the 12-month period, the consolidated Group made a loss of £7.21m (2015: £8.63m), ending the period with £4.70m cash as at 31 December 2016 (2015: £8.90m) after having raised £0.71m (gross) raised through a convertible loan note in January 2016 and following exercise of warrants £0.29m in total. During the period, the Board was also strengthened with the appointment of Tiziano Lazzaretti was appointed as Chief Financial Officer while Dr. Kevan Herold, Professor of Immunobiology and of Medicine (Endocrinology) as well as Deputy Director, Yale Center for Clinical Investigation, and Dr. Howard Weiner, the Robert L. Kroc Professor of Neurology at the Harvard Medical School, were added to the Group’s Scientific Advisory Board.

Our view: Tiziana’s major development programmes are well positioned to progress to their next respective value inflection points. Liver diseases today list amongst the therapeutic industry’s fastest growth areas, with NASH and PBC seen expanding at double-digits for the next decade, potentially creating a market opportunity in excess of US$25bn by 2026. Oral bioavailability of foralumab (TZLS-401), a fully human anti-CD3 monoclonal antibody, is key to addressing this, significantly broadening use and dosing options which, when combined with best-in-class effectivity, suggests potential to become one of the world’s largest selling antibodies. The Group’s other clinical-stage asset is a small molecule drug, milciclib, which targets Hepatic Cellular Carcinoma (‘HCC’). Now de-risked for safety and tolerability, a valuation based on risk-based DCF methodology to arrive at a Net Present Value (NPV) for these two molecules can be derived. Ignoring the Group’s remaining pipeline of products and opportunities, while applying a relatively aggressive 18% discount to the remaining model, creates a Group valuation more than twice the current level based on anticipated milestone fees & royalties. Beaufort reiterates its Speculative Buy rating on the shares together with a price target of 400p/share.

Beaufort Securities acts as a corporate broker to Tiziana Life Sciences plc

 

Severn Trent (LON:SVT, 2,491.00p) – Buy

Severn Trent, a leading UK water company provides clean water and waste water services, yesterday announced preliminary results for the 12 months ended 31 March 2017 (‘FY2017’). During the period, turnover advanced by +3.7% to £1,819m, comprised of +1.5% growth in Regulated Water and Waste Water division and +11.9% growth in Business Services division, against the comparative period (FY2016). Underlying profit before interest and tax grew by +4.3% to £525.1m, supported by operating cost savings, while on a reported basis, it increased by +7.8% to £543.7m. Underlying basic earnings per share increased by +19.9% to 122.4p, and basic earnings per share (from continuing operations) rose +4.9% to 140.1p. Cash from operations improved by +6.7% to £53.5m. Net debt at the period end stood at £5,082.4m (end-FY2016: £4,823.4m) while cash and cash equivalents was £44.6m (FY2016: £55.2m). On the operational front, the Group spent c.£680m in network investments. The Group delivered most of its Final Determination performance commitment ahead of its target, reducing sewer floodings, supply interruptions and leakages. Looking down the key performance indicator (KPI), the Group achieved Return on Regulatory Equity (‘RORE’) of 11% during the year, comprised of; 5.6% Base Return, 2.1% (£138m) total expenditure (‘Totex’) outperformance, 1.3% Outcome Delivery Incentives (‘ODI’) outperformance (£47.6m net reward) and 1.8% financing outperformance. Severn Trent’s CEO, Liv Garfield commented “We are delivering both strong customer-focused and financial outperformance this regulatory period, and we feel it is now appropriate to share this with our investors. The Board is therefore pleased to announce an upgrade to our ordinary dividend policy, to growth of at least RPI +4%”. The Group declared a final dividend of 48.9p per share, bringing total dividend for the full year to 81.50p, up +1.0%, to be paid on 21 July 2017.

Our view: Severn Trent delivered strong results, both financially and operationally, for the FY2017. The growth of +3.7% in turnover was supported by +1.5% increase in price for Regulated Water and Waste Water division (83.2% of turnover) and +11.9% growth in Business Services division (16.8% of turnover), boosted by favourable exchange rate movement from its US contracts. Operationally, the Group delivered exceptional 11% RORE during the year (FY2016: 8.4%), resulted cumulative RORE during AMP6 (Asset Management Plan regulatory period 2015 to 2020) to date of 9.7%. The Group continued to work to improve this, with identifying an additional Totex savings of £100m during the year, taking total forecasted savings of £770m (of which, £610m are locked in) during AMP6. Customer ODI reward of £47.6m was helped by strong operational outperformance as well as mild winter, while financing cost reduced by -0.1% to 4.4% despite rising Retail Price Index (‘RPI’). ODI is a regulatory condition under which companies are incentivised to outperform the permitted regulatory return. Any outperformance in ODIs along with Totex and financing will translate into RORE, a key indicator of the underlying performance of the regulated business. Looking ahead, for the FY2018, the Group expect revenue from Regulated Water and Waste Water division to be in the range of £1.57bn to £1.60bn, Customer ODI at c.£23m with wholesale Totex of £1.2bn-£1.3bn. Division’s operating cost is expected to be higher than this year. For Business Services division, revenue is expected to be flat due to exit of Italian business, while profit before interest and tax to improve year-on-year. As per its enhanced dividend policy of at least +4% growth per annum above RPI inflation to 2020, dividend for FY2018 will be 86.55p per share, up +6.2%. The shares are valued at FY2018E and FY2019E P/E multiple of 23.0x and 21.6x along with dividend yield of 3.4% and 3.5%, respectively. Given positive progress, improved Totex savings potentials, with enhanced dividend policy, Beaufort reiterates its Buy rating on the Shares, although our top pick in the sector remains Pennon Group (FY2017E P/E 20.9x, yield 4.0%).

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Wed, 24 May 2017 08:20:00 +0100 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27828/beaufort-securities-breakfast-alert-katoro-gold-kefi-minerals-plc-obtala-ltd-severn-trent-tiziana-life-sciences-27828.html
China in a mood after rating cut http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/27827/china-in-a-mood-after-rating-cut-27827.html FTSE 100 Index called to open flat at 7495, having traded sideways around 7500 overnight, as high as 7515 and with a 7490 floor. This keeps the bullish inverse Head & Shoulders in play although falling FTSE 100 Index called to open +5pts at 7490, holding close to the key 7500 mark, well off its overnight lows of 7480, and thus still offering potential for completion of a 2-week bullish inverse Head & Shoulders to 7570. Bulls still need a break above 7500; Bears are eyeing a breach of 7485. Watch levels: Bullish 7500, Bearish 7485.

A mildly positive opening call comes as investors weigh up Moody’s credit downgrade for China on debt sustainability concerns, a lukewarm reception for Trump’s first budget (does it all add up?) as well as rising optimism ahead of tomorrow’s OPEC meeting (especially after more favourable US inventory data) and news of potential M&A in the soft commodity sector.

Japan’s Nikkei outperforms on a weaker Yen as safe haven seeking abates, the USD bounces from recent lows and oil rallies on US inventory data ahead of OPEC. Australia’s ASX posts only small gains with the oil price and Energy rally offset by Moody’s China downgrade (biggest trading partner) hurting metals and Miners. Watch dual-listed FTSE miners on lower metals prices.

In UK corporate news: Marks & Spencer (net profits slump on weak clothing and non-food), Kingfisher (Q1 sales weak but on track for 2yr strategic milestones), MediClinic (keeps div, expect gradual Middle East improvement), Babcock (profits up, raises div, £19bn order book, £10.5bn pipeline) and Vedanta (Looks to FY18 with more confidence than ever) and Pennon (well positioned, raises div).

In M&A: Glencore has made an informal offer for grain rival Bunge. Berendsen reconfirms its 2017 profit forecast, offers a 2018 forecast and continues to believe Elis' proposal very significantly undervalues it. Vodafone plans a €500m merger of its Malta unit with domestic Melita.

US equity markets finished Tuesday in positive territory, marking a 4-day win streak, with the S&P 500 closing only a handful of points from a fresh record closing high. Financials led both the S&P and the Dow Jones as Goldman Sachs outperformed, while the Nasdaq gained despite Apple falling. Note, hawkish talk from Philly Fed President Harker after market close, stating ‘a June rate hike is definitely on the cards’.

Crude Oil prices have continued to edge higher overnight after API inventory data noted drawdowns across all categories, helping both Brent and US benchmarks to overcome yesterday’s resistance at $54 and $51 respectively. Today, investors will remain on the lookout for further OPEC commitments to extending production cuts ahead of tomorrow’s OPEC meeting, while official US government inventory data (3:30pm) looks to confirmation drawdowns, as 18-month intersecting resistance at $54.50 (Brent) and $51.80 (US) is eyed.

Gold has fallen back from resistance at $1262 as the US dollar recovers from Tuesday’s fresh 6-month lows. With safe haven demand retreating after Monday’s UK terror attack, markets will anticipate Fed minutes this evening (7pm) and multiple Fed speakers today for any indication that a June rate hike is on the cards, with rising interest rates hampering demand for the non-yielding asset.

In focus today we have Fed Minutes this evening (7pm) which could offer more clarity on June’s widely anticipated second US rate hike of 2017, third in six months and fourth in 18. Note, FOMC members Kaplan (cautious hawk) and Kashkari (dove) speak after the US close, the former urging cautious and and gradual and the latter looking set to dissent next month.

Spanish PPI may provide read cross for Eurozone pricing pressures and the ECB’s next move in terms of policy normalisation. ECB Chief Economist Praet (9.30am) gives a keynote speech on banks in Sofia while ECB President Mario Draghi (1.45pm) does so on “Financial stability” in Madrid.

This afternoon, US House Price Inflation is expected to fall back from February’s 11-month high reading, while Existing Home Sales will look to avoid the disappointment that were provided by yesterday’s New Home Sales Figure. US Crude Oil Inventories will be watched for whether official government data can replicate another bullish report from API overnight to keep oil prices buoyed into tomorrow’s OPEC meeting.

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Wed, 24 May 2017 08:18:00 +0100 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/27827/china-in-a-mood-after-rating-cut-27827.html
Brussels Prepares 'Grand Bargain' to Save Broken EU Project http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/27826/brussels-prepares-grand-bargain-to-save-broken-eu-project-27826.html Brussels Prepares 'Grand Bargain' to Save Broken EU Project

Here is the opening of this topical article by Ambrose Evans-Pritchard for The Telegraph:

The European Commission is to unveil radical plans for a eurozone fiscal union, pushing for an embryonic treasury with powers to fight economic recessions and to cope with shocks in hard-hit regions.

The EU budget authority will be backed by a joint eurozone unemployment fund, akin to social security in the US. The proposal entails an unprecedented level of shared risk among the EU eurozone states and marks a profound shift in thinking after years of rigid austerity and lack of investment.

Valdis Dombrovskis, the EU commissioner for the euro, said there would be a 'stabilisation fund' with resources to help blighted areas escape downturns. "We will give a bigger role to the aggregate fiscal stance of the whole eurozone in setting policy," he said at the European Business Summit in Brussels.

It is a belated admission that the narrow focus on debt-reduction during the eurozone debt crisis led to a contractionary bias, drawing the whole currency bloc into a deflationary vortex that ended in a 'Lost Decade' and proved counter-productive even in its stated goal of controlling the debt trajectory.

"This is something that will set alarm bells ringing in Northern Europe," said Guntram Wolff, director of the Bruegel think-tank in Brussels.

"However you design this, it will lead to fiscal transfers. All forms of insurance lead to moral hazard and then you have to deal with it," he said.

The Commission's long-awaited 'Reflection Paper' on how to relaunch monetary union on a better footing - due in early June - will call for a “fund for the protection of public investment during recessionary phases”, according to leaked papers obtained by the Frankfurter Allgemeine.

It would come under the "democratic oversight" of the European Parliament, giving it crucial legitimacy at federal level. This would rein in the over-mighty Eurogroup that effectively runs the eurozone today and acts as a law unto itself, operating in total secrecy and answering to no elected body.

While the new fund would not exactly be an EU treasury or finance ministry, it would be a major step in that direction if ever accepted by Germany and the northern creditor powers. 

Mr Dombrovskis was careful to stress that the 'grand bargain' is not a fiscal give-away to improvident high-debt states. "Every member state is responsible for guaranteeing the stability of its public finances. Where there is risk sharing, there must also be risk reduction," he said.

Yet the plan is a major shift in policy. It is similar to proposals made by French president Emmanuel Macron during France's election campaign and suggests that the policy elites in Brussels are lining up behind him, as are the Italians and Spanish.

German Chancellor Angela Merkel must now move with care. She has refused to countenance 'eurobonds' or shared liability for legacy debt - and once said they would only happen over her dead body - but has now opened the door slightly to some sort of joint issuance for future debt.

 

David Fuller's view

A visionary 39 year old President of France has shocked Angela Merkel and other senior EU politicians by attempting to open the door to fiscal union.  It is a logical step, assuming Germany actually wants the EU to become a Federal State.

Theoretically, it may have at some early stage of thinking. However, judging from Angela Merkel’s ‘over her dead body’ comment immediately above, she would sooner hold hands with Donald Trump than her European neighbours. 

A PDF  of AE-P's article is posted in the Subscriber's Area.

 

Email of the day 1

On Quants:

I thought about your move to London and starting CAL nearly 50 (!) years ago...as I read this article from Varchev Financial Services about Quants. In my mind Chart was a forerunner to the latest craze, and, again, the computer has transformed yet another industry

 

David Fuller's view

Well remembered! Chart Analysis Limited helped to popularise the use of price charts, if only to see what was actually going on in markets, and to also make behavioural assumptions based on the price action. We received plenty of leg pulling 50 years ago but the efficiency and weight of money logic behind price trends soon made Technical Analysis indispensable for traders.

However, it is certainly a quantum leap (pun intended) to compare Behavioural Technical Analysis (BTA) to Quants.  They have little in common. BTA monitors crowd action.  Quants try to manipulate crowd action, which they can do with sufficient funds in leveraged markets.

This makes leveraged trading more dangerous for everyone else. Within a decade or two, I think artificial intelligence will wipe out Quants, because it will know so much more about market action than the teenage Russian-born software engineer mentioned by Varchev.

 

 

Email of the day 2

On India’s uptrend:

Is the following trend likely to reduce the regularity of 20% market corrections?

 

David Fuller's view

Thanks for your question and also the Bloomberg article.

Following Narendra Modi’s landslide victory in the May 2014 General Election India’s Mumbai Sensex Index has only experienced one significant correction of approximately 26%, falling throughout 2014 before bottoming with a decisive Type 1 of three endings as taught at The Chart Seminar in 1Q 2016.

This item continues in the Subscriber’s Area.

 

Global cyberattack 'highly likely' linked to North Korea group

This article by Sherisse Pham for CNN may be of interest to subscribers. Here is a section:

But here's the puzzling thing -- Symantec says that despite the links to Lazarus, "the WannaCry attacks do not bear the hallmarks of a nation-state campaign."

Cyberattacks backed by governments "are usually impeccable, they don't make rookie mistakes," said Thakur. "In the case of WannaCry, we saw some of those mistakes."

For example, early versions of WannaCry had a bug in the code that prevented victims from paying the ransom.

While it's possible Lazarus thought they could make a lot of money with WannaCry, "they totally botched it up and got almost nothing," Thakur said.

The ransomware has so far collected about $108,000 in ransom. Security researchers and government agencies advised businesses not to pay the ransom.

 

 

Eoin Treacy's view

The latest global ransomware attack might have been botched but that didn’t stop it from causing a great deal of inconvenience for consumers not least in the UK where trains didn’t run and hospital appointments were cancelled. The problem of course is that even if this attempt was not as successful as the originators hoped if will act as inspiration for ambitious criminal organisations to get it right next time.

 

Euro Area Warned That Shock-Proof Markets Won't Be Forever

This article by Alessandro Speciale for Bloomberg may be of interest to subscribers. Here is a section:

For a start, Britain’s Brexit vote prompted a quick response from the nation’s central bank, which cut the key interest rate, revived asset purchases and pledged to act again if needed.

“In the U.K., the Bank of England responded strongly to the outcome of the referendum, averting a tightening in financial conditions.”

In the U.S., the financial shock stemming from Trump’s election came amid an economic upturn that cushioned the blow, and the expectation that however uncertain his policies might be, they would probably be good for companies.

“The rally in U.S. risky asset prices reflected the strong situation of the U.S. business cycle, reinforced by expectations about business and financial sector-friendly policies from the new administration.”

The study follows other theories over why volatility is so low, and concludes with a look at what this might mean for the euro area, should an avowed opponent of the single currency gain power, or should the debt crisis in a member country heat up again.

“The main lesson to be learned from a euro-area financial stability perspective is that similarly large economic-policy uncertainty shocks could, in the absence of offsetting shocks, seriously tighten domestic financial conditions and raise risk premia.”

So far this year, the currency bloc has managed to avoid anti-euro politicians coming to power in the Netherlands and France. If anything though, the region’s history has shown that the next crisis is always just around the corner. The next focal point could come as early as Monday, when euro-area finance ministers meet in Brussels to try yet again to break an impasse on lightening Greece’s debt burden.

 

 

Eoin Treacy's view

“Monetary policy beats most other factors most of the time” is an adage David developed decades ago and it is no less true today. Negotiations about how to grant Greece’s next tranche of bailout funds without losing face, the Dutch election, French Election (presidential and parliamentary), the German election and Brexit negotiations all represent considerable sources of political and market uncertainty for the Eurozone. 

 

 

Noble Group 'Fighting for Its Life' as S&P Sees Default Risk

This article by Jasmine Ng and Denise Wee for Bloomberg may be of interest to subscribers. Here is a section:

The Hong-Kong based trader’s troubles are deepening after two turbulent years that have been marked by losses, asset sales, and accusations of improper accounting that it has denied. Since surprising investors two weeks ago with a quarterly loss, the shares have tumbled to multiyear lows and the price of its bonds has fallen by more than half. S&P’s warning follows downgrades from Moody’s Investors Service and Fitch Ratings Ltd. in recent days.

There’s “potential that the company will face distress and a nonpayment of its debt obligations over the next 12 months,” S&P said in a statement late Monday as it cut the company’s ratings by three steps to CCC+. “The company’s capital structure is not sustainable,” S&P said.

The shares plunged as much as 32 percent to 40 Singapore cents, and were at 42 cents as the halt kicked in after just 36 minutes of trade on Tuesday Morning. The stock has lost 75 percent this year, following a 44 percent drop in 2016 and 65 percent plunge the year before. The company’s 2020 bonds sank to an unprecedented 39.4 cents on the dollar.

 

 

Eoin Treacy's view

Investment banks concluded the commodity bull market is over a few years ago as they shuttered or sold-off trading operations en masse and largely exited the business. Noble Group is a major commodity trader, at least for the moment. Its current difficulties beg the question whether market participants are taking positions at odds to the company’s best interests in an effort to initiate a forced sale.

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Wed, 24 May 2017 08:14:00 +0100 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/27826/brussels-prepares-grand-bargain-to-save-broken-eu-project-27826.html
Horse Hill stakeholder Primorus Investments PLC joins the recovery stocks virtual portfolio http://www.proactiveinvestors.co.uk/columns/stockpot/27825/horse-hill-stakeholder-primorus-investments-plc-joins-the-recovery-stocks-virtual-portfolio-27825.html Tue, 23 May 2017 14:20:00 +0100 http://www.proactiveinvestors.co.uk/columns/stockpot/27825/horse-hill-stakeholder-primorus-investments-plc-joins-the-recovery-stocks-virtual-portfolio-27825.html Today's Market View - Base Resources, Gem Diamonds, Georgian Mining Corporation, Ironridge Resources Limited, Shanta Gold Limited http://www.proactiveinvestors.co.uk/columns/sp-angel/27824/today-s-market-view-base-resources-gem-diamonds-georgian-mining-corporation-ironridge-resources-limited-shanta-gold-limited-27824.html Base Resources (LON:BSE) – Kwale mine Phase 2 optimisation

Gem Diamonds (LON:GEMD) – Letseng prices move up 13% during the quarter to 31st March

Georgian Mining* (LON:GEO) – Strong Buy – Placing raises £5.46m (US$7m) for development and resource drilling

IronRidge Resources* (LON:IRR) – Lithium Pegmatite assay results

Shanta Gold (LON:SHG) – BUY – Commercial production at Bauhinia Creek commenced

 

Miners are off slightly today with the FTSE 350 Mining Index holding at close to the strongest level over the last month on the back of a recovery in gold, copper and iron ore prices.

• Gold is flat this morning with the US$ index little changed hovering around the lowest level since Nov/16.

• Euro is up marginally against the US$ on the back of positive Eurozone PMI numbers.

• Brent is down a little more than 1% as OPEC members are set to meet in Vienna this Thursday.

• Iron ore futures came off today following a week long recovery with reports showing inventories are building up at Chinese ports and currently standing at record high levels.

• Iron ore stockpiles increased for a fourth week climbing to 136mt.

 

Zinc and nickel prices rise as China cracks down on polluting industry

• The crackdown on zinc and nickel mining comes as part of a broader restrictions on steel and other polluting industries

• Moves to improve air quality in Tangshan City also hit steel mills which are failing to meet new air quality standards

 

Lithium – Daimler start €500m expansion of lithium-ion plant in Germany.

• Daimler are following through with plans to aggressively develop 10 new electric vehicles to market by 2020.

• The investment is planned to quadruple existing battery capacity at the site with is run by Accumotive, a subsidiary of Daimler.

• Daimler have also pledged to spend another €500m worldwide if all goes well at the Kamenz site.

• Other lithium-ion battery plants are planned around Europe with new plants destined for Sweden, Hungary, Poland.

• Battery costs are likely to continue to fall with increased competition and as manufacturing techniques improve.  

• Battery chemistries continue to evolve to better suit the demands of automotive use. 

o Tesla use Ni Co cathodes with added Al for stability

o Some others are using Ni, Mn, Co cathodes

o Future cathodes may incorporate graphene for stability

o The key is to raise energy density while improving cycle life, charging times and safety.

o Safety should improve with better design, manufacturing processes and chemistries to avoid the development of lithium dendrites which short circuit the internal workings of a battery causing thermal runaway.  A recent fire / explosion on a train carrying used automotive batteries indicates to us that old batteries need to be carefully handled, particularly if physically damaged.

 

Noble Group – debt downgraded by Moodys to Caa1 outlook negative from B2 previously

• Noble Group shares fell heavily yesterday following last week’s downgrade of Moody’s debt rating on the company.

• Noble reported a loss in Q1 highlighting some uncertainty over the operational turnaround and raising the risk on Noble’s elevated debt levels.

• Moody’s sees Noble’s credit headroom at $1.2bn as potentially insufficient to cover the $2.1bn in debt due through the rest of 2017 and H1 2018.

 

UKIP political candidate pledges to invest >£1bn in asteroid mining

• Aidan Powlesland is reported to want to set aside £100m for "an interstellar colony ship design", £30m for an "interstellar nano-probe fleet design" designed to attract the attention of Russian investor Yuri Milner, and will provide a £1billion prize to any private company that can mine the asteroid belt by 2026.

• Will need to do more than that to secure our vote.

 

Scientists claim to have discovered remains of early man in Bulgaria and Greece

• The discoveries appear to have discovered the ‘missing link’ in human history between chimpanzees and humans.

• Climate change had turned Eastern Europe into savannah forcing apes to fund new food sources and forcing the shift towards bipedalism.

• We reckon relatives of early man are still prevalent in Brussels, within the protected and unchanging ecosystem of the European Parliament.

 

Dow Jones Industrials  +0.43% at 20,895

Nikkei 225   -0.33% at 19,613

HK Hang Seng   +0.07% at 25,408

Shanghai Composite    -0.45% at 3,062

FTSE 350 Mining   -0.66% at 15,065

AIM Basic Resources   -0.18% at 2,638

 

Economic News

China - economy likely to expand by ~6.8% in Q2 according to the State Information Centre in the state-owned China Securities Journal.

 

Eurozone – Strong PMI numbers are expected to filter into higher GDP growth rates, Markit suggests.

• “Business activity is expanding at its fastest rate for six years so far in the second quarter, consistent with 0.6-0.7% GDP growth… the consensus forecast of 0.4% second quarter growth could well prove overly pessimistic if the PMI holds its elevated level in June.”

• Markit Manufacturing PMI: 57.0 v 56.7 in Apr and 56.5 forecast.

• Markit Services PMI: 56.2 v 56.4 in Apr and 56.4 forecast.

 

Germany – Private sector activity continued strong through May with growth recorded across both services and manufacturing.

• New business expanded with export orders climbing at the sharpest pace in seven years.

• Employment continued to expand at the second strongest pace in almost six years in May.

• While input cost pressures abated slightly in Mar on the back of a stronger euro exchange rate, the rate of output price inflation in the private sector accelerated for the third time in the last four months and was the third highest in nearly  six years.

• Markit reported concluded: “PMI data for the first two months of the second quarter are signalling continued positive momentum… growth in the coming quarters remaining strong at around 0.6% on average, and our full-year forecast for 2017 has been raised to 2.0% in calendar-adjusted terms.”

• Final GDP numbers released this morning showed economic growth accelerating to 0.6%qoq in Q1/17, up from 0.4%qoq in Q4/16, with major contributors to growth being net exports (+0.4pp), business investments (+0.3pp).

• Private consumption and government spending added 0.2pp and 0.1pp, respectively, while a drawdown in inventories subtracted 0.4pp.

• Markit Manufacturing PMI: 59.4 v 58.2 in Apr and 58.0 forecast.

• Markit Services PMI: 55.2 v 55.4 in Apr and 55.5 forecast.

 

France – Output growth accelerated to six year high as new orders continued to increase and companies raised hiring led by strong client demand.

• Final goods prices climbed for a second successive month as firms are passing on higher costs onto consumers.

• “The acceleration was driven by the dominant service sector, buoyed by strong client demand and the sharpest round of job creation since Aug/11.”

• “The numbers continue to paint a positive picture of the French private sector economy… with May’s conclusion to the presidential elections, the road looks set fair for future growth.”

• Markit Manufacturing PMI: 54.0 v 55.1 in Apr and 55.2 forecast.

• Markit Services PMI: 58.0 v 56.7 in Apr and 56.7 forecast.

 

Greece – Two year bond yields jumped more than 25bp climbing to the highest level this month as talks between Greek creditors broke down.

• The IMF continued to push other creditors to agree to debt relief programmes for Greece suggesting the Fund will not be taking part in the latest bailout package, otherwise.

 

Currencies

US$1.1254/eur vs 1.1176/eur yesterday.   Yen 111.17/$ vs 111.46/$.   SAr 13.293/$ vs 13.193/$.   $1.299/gbp vs $1.297/gbp.  

0.749/aud vs 0.745/aud.   CNY 6.890/$ vs 6.892/$.

 

Commodity News

Precious metals:

Gold US$1,260/oz vs US$1,256/oz yesterday

   Gold ETFs 59.9moz vs US$59.7moz yesterday

Platinum US$948/oz vs US$939/oz yesterday

Palladium US$769/oz vs US$762/oz yesterday

Silver US$17.12/oz vs US$16.96/oz yesterday

           

Base metals:   

Copper US$ 5,680/t vs US$5,692/t yesterday

Aluminium US$ 1,928/t vs US$1,942/t yesterday

Nickel US$ 9,350/t vs US$9,430/t yesterday

Zinc US$ 2,653/t vs US$2,642/t yesterday – Chinese refined metal imports climbed to the highest level in 13 months in April amid falling inventories and dwindling output.

• April imports of refined zinc stood at 47.5kt compared to 52.6kt in March and 39.1kt Apr/16.

• Despite a pick-up in April, inbound shipments for the first four months were down 52%yoy.

• Inventories in the SHFE decline last week to 91.7kt, the weakest since Jan/15 and about a third of LME stockpiles.

• LME drawdowns led outstanding stockpiles to drop to 339kt, the lowest since 2009.

• Concentrates imports were up 16%yoy in the first four months of the year coming in at 913.3kt.

Lead US$ 2,107/t vs US$2,117/t yesterday

Tin US$ 20,520/t vs US$20,500/t yesterday

           

Energy:           

Oil US$53.4/bbl vs US$54.0/bbl yesterday

Natural Gas US$3.320/mmbtu vs US$3.306/mmbtu yesterday

Uranium US$21.75/lb vs US$21.75/lb yesterday

           

Bulk:   

Iron ore 62% Fe spot (cfr Tianjin) US$63.1/t vs US$63.7/t

Chinese steel rebar 25mm US$590.7/t vs US$587.3/t

Thermal coal (1st year forward cif ARA) US$66.9/t vs US$65.9/t yesterday

Premium hard coking coal Aus fob US$153.5/t vs US$154.7/t

 

Other:

Tungsten - APT European prices $215-225/mtu vs $212-222/mtu

 

Company News

Base Resources (LON:BSE) 17 pence, Mkt Cap £126.2m –Kwale mine Phase 2 optimisation

• Base Resources reports that its internal Definitive Feasibility Study (DFS) for the Phase 2 operations at its Kwale mineral sands operation in Kenya and that the Board has approved its implementation.

• The DFS optimisation is aimed at maintaining “maximum concentrate feed to the Mineral Separation Plant (MSP) and therefore final production volumes, in the face of declining ore grades expected from mid-2018 onwards.” This is achieved by increasing the maximum mining rate to 2400tph from the 1800tph in Phase 1, thereby reducing the mine life by two years to November 2022.

• The company highlights that “Faster mining and processing of Ore Reserves over a 24 month shorter period eliminates approximately US$60 million in fixed costs with a commensurate reduction in average operating costs per tonne produced, significantly enhancing project economics compared with the current mine plan.”

• The incremental capital expenditure to bring in “Kwale Phase 2 is a modest US$13.1 million, which will be fully funded from operating cash flows.” and the construction is expected to be completed during the June quarter 2018.

• The major element of the capital programme is a US$7.5m increase in the expenditure on plant modifications to the wet-concentrator plant, to US$10.5m, to add additional spirals and install equipment upgrades. Additional water, tailings pumping systems and piping account for a further US$2.9m of the increased capital.

Conclusion: The implementation of the higher mining and treatment rate under Kwale Phase 2 seeks to address the impact of declining grades as mining shifts from the Central Dune area  to the South Dune area in the second half of 2019.

 

Gem Diamonds (LON:GEMD) 91.5p, Mkt Cap £126.7m –Letseng prices move up 13% during the quarter to 31st March

• Gem Diamonds reports that sales of 39,950 carats of diamonds from its Letseng mine in Lesotho in three sales during the three months to 31st March realised an average price of US$1,636 per carat representing a 13% increase on the average US$1,444 per carat achieved during the previous quarter ending 31st December 2016.

• During the quarter the company sold an 8.65 carat pink diamond for the sixth highest price per carat achieved by a Letseng rough diamond at US$164,855 per carat.

• The company has also announced this morning the recovery of a 98.42 carat high quality D-colour Type II diamond which is due to be sold in June at which time the previously announced 80.58 carat D-colour type II will also be offered for sale.

• Commenting on the results, CEO, Clifford Elphick said “Letseng has recovered larger better quality diamonds during the quarter and it is encouraging that during April and May, there has been a notable improvement in the size and quality of diamonds recovered at Letseng with the US$ per carat achieved trending positively.”

• Mr. Elphick went on to say that “The market for Letseng’s high-quality diamonds has remained firm over the Period and this is anticipated to continue into H2 of this year.”

• Operationally, the Letseng plant experienced lower than planned plant availability resulting in a shortfall in planned throughput at approximately 76,000 tonnes. The issues are being addressed and the company is maintaining its guidance and the Ghaghoo mine was placed on care and maintenance ahead of schedule on 31st March.

Conclusion: Letseng is continuing to discover large high value diamonds at a time when prices for its production are on an upward trend.

 

Georgian Mining* (LON:GEO) 17.8p, Mkt Cap £20.4m – Placing raises £5.46m (US$7m) for development and resource drilling

Strong Buy

(Kvemo Bolnisi 50:50 jv with CMG)

• Georgian Mining have raised £5.46m (US$7m) through the placing of 34.15m new shares to investors at 16p/s.  The company now has 114,574,491 ordinary shares.

• The placing is reported to have been heavily oversubscribed.

• Georgian stock is in demand following the discovery of significant copper and gold grades at Kvemo Bolnisi and the realisation that the Kvemo Bolnisi project looks set to become a much larger mineral resource and may in time prove to be similar to the much larger mine at Madneuli.

• Management have a three phase resource development program targeting a 50mt resource at just one of the 14 target areas identified.

• The funds will allow the team to continue to drill the resource while they work toward delivering ‘proof of concept copper and gold production’ using the jv partner’s processing infrastructure which is located just 7km away and has excess processing capacity.  Use of these facilities will hugely de-risk and refine the project in terms of processing routes and ore characteristics.

• The ability to remove the gold oxide cap to expose the sulphide (copper, gold) orebody underneath and to process the gold oxide ore for gold production is a useful and important step for the company and will help with future mining and mine planning.  Further gold oxide mineralisation is also seen to the side of the known oxide deposit at GZ1.

• Re-examination of the geology of the Bolnisi area indicates ore is from epithermal sources indicating the presence of a number of larger mineralised mineral systems than previously considered.

• Chalcocite:  Drilling at Kvemo Bolnisi recently showed:

o 16m @ 15.4% Cu from 47m, inc. 4.95m@ 40.50% Cu.

• This highlights the presence of chalcocite (a high-grade copper mineral) which will form part of a more substantial resource upgrade later this year.

• Chalcocite is normally created in secondary enrichment in a supergene zone often with elevated copper grades (pure 100% chalcocite carries >79.9% copper theoretically) though this is likely to be slightly reduced with other gangue minerals.  The orebody is likely to have a number of zones of chalcocite enriched mineralisation giving rich, high grade lenses around which we would expect to see lower-grade but still economic copper and gold ores.

• The company have previously report a modest JORC resource of 2.2mt grading 0.8% copper and 0.1g/t gold at a 0.3% copper cut-off grade.

Conclusion:  Georgian’s exploration success and proximity to initial ‘proof-of-concept’ production cash flow has created substantial interest in the shares from new and existing institutional shareholders.  The new funds should ensure the company is able to accelerate its resource development and definition program as well as adding to the exploration of some more regional targets.  Today’s placing does not alter our recommendation or fundamental view of the value to be generated going forward by the company.

*SP Angel acts as Nomad and Broker to Georgian Mining.

 

IronRidge Resources* (LON:IRR) price 39p, Mkt Cap £93.2m – Lithium Pegmatite assay results

(Cape Coast Project - Saltpond, Apam and Winneba licenses in partnership with Barari Developments, Obotan Minerals and Merlink Resources)

• IronRidge Resources report high-grade lithium assays over broad intersections at their Cape Coast project in the South of Ghana.

• IronRidge now has exclusive rights to the three key exploration licenses through agreement with Barari, Obotan and Merlink.

• The license area includes rights to the historic Egyasimanku Hill spodumene rich lithium resource.

• This was drilled by the Ghana Geological Survey in 1962 giving a resource estimate of 1.48mt grading 1,66% Li2O.  This is a long way before JORC and NI 43101 standards.

• As such the resource estimate should be simply seen as a guide, though the work may have been well done back then.

• Among the results reported today is a 40m wide trench intersection at an average grade of 1.93% lithium oxide which includes a higher grade section of 15m at an average grade of 2.18%.

• The company notes that “Additional mapped pegmatites remain untested with significant lithium exploration upside within the Barari licence area and across the Cape Coast project portfolio.”

• IronRidge Resources also reports that its previously announced partnership with Barari Developments, Obotan Minerals and Merlink Resources has now become unconditional. The agreement “provides the Company with over 45km strike of prospective ground with highly anomalous due-diligence sampling results and exciting exploration targets along rediscovered lithium bearing pegmatite trends that hosts the historic Egyasimanku Hill resource”.

• The partnership agreement with Obotan and with Merlink provides IronRidge the opportunity to acquire 100% of the projects through a staged earn-in agreement and expenditure to complete a Feasibility Study within 4 years. The partners retain a right to a 2.5% NSR, of which 50% may be acquired for US$3m at any stage.

• The agreement with Barari is structured along similar lines with a 2% NSR, capped at US$2m of which 50% may be acquired for US$2m at any stage.

• The company points to “Global demand for lithium … increasing at an unprecedented rate …” and publishes estimates of future lithium carbonate price performance from a number of sources showing prices ranging between US$10,000-US$12,000 per tonne by 2025.

Conclusion: IronRidge Resources is building its lithium exposure in Ghana. Initial sampling and trenching work has identified wide outcrops of lithium bearing pegmatites with grades in excess of 1.5% lithium oxide.

 

Shanta Gold (LON:SHG) 8.4p, Mkt Cap £48.8m – Commercial production at Bauhinia Creek commenced

BUY

• First stope ore has been produced from the Bauhinia Creek orebody (BC) at the New Luika Gold Mine underground operation, in line with the management guidance.

• The Company completed 3,000m of underground development works from the portal at the 960m level since Jun/16.

• The main decline is approaching the 865m level with development of the orebody at 915m, 900m and 880m completed.

• Development of the Luika orebody is progressing in parallel with the mineralisation intersected at the 937m level, ahead of the schedule, last week.

• Underground Luika production is due in Q4/17.

• The management has further reiterated its 2017 gold production target for 80-85koz.

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Tue, 23 May 2017 10:59:00 +0100 http://www.proactiveinvestors.co.uk/columns/sp-angel/27824/today-s-market-view-base-resources-gem-diamonds-georgian-mining-corporation-ironridge-resources-limited-shanta-gold-limited-27824.html
In the news: Base Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27823/in-the-news-base-resources-27823.html COMPANIES

Base Resources*†

ASX:BSE | A$0.31 | US$169m | Buy | TP : A$0.43

Approves Kwale Phase 2, Optimising the Project and Enhancing Value

Base Resources has approved the ‘Kwale Phase 2’ (KP2) Project to expand the front-end of its operations in order to offset declining grades and maintain final product output. The company plans to increase the mining rate (and concentrator feed rate) by 50% during 2HCY18. This will allow the tonnage of heavy mineral concentrate product from the concentrator and the Mineral Separation Plant throughout and output to be maintained. As a result of bringing forward production, the current reserve is sufficient to support output until November 2022 (previously November 2024). Compared with its previous plans, the incremental capex to complete KP2 is estimated at US$13.1m.

COMMENT: There are a number of significant benefits expected as a result of the KP2 Project. In addition to bringing forward production, the expansion is expected to result in a 20% reduction in unit mining costs as a result of moving exclusively to hydraulic mining over dozer trap mining. It also implies an expected saving of US$60m in fixed costs.

The KP2 Project as described here is based on the ore reserve statement of June 2016 (103Mt grading 4.6% HM) and does not benefit from the addition of the material that has been outlined in the company’s exploration update of 10 May. An updated resource and reserve statement is planned to be completed in the September quarter. The KP2 Project would also increase the value of any reserve additions by bringing production forward by two years.

We should have a full report on this to follow.

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Tue, 23 May 2017 10:02:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/27823/in-the-news-base-resources-27823.html
Today's Oil and Gas Update: Mosman Oil And Gas http://www.proactiveinvestors.co.uk/columns/sp-angel/27822/today-s-oil-and-gas-update-mosman-oil-and-gas-27822.html Headlines

• In Brief:

o Mosman Oil And Gas*** (LON:MSMN – 0.975p) – ($9.80mm – 3.20p) – Arkoma Acquisition

In Brief

Mosman Oil And Gas*** (MSMN LN – 0.975p) – ($9.80mm – 3.20p) – Arkoma Acquisition: Today the Company has disclosed that it has completed the first stage of the acquisition of a 10% interest in Island Oil & Gas’ participation in the Arkoma Stacked Pay Project in Oklahoma; the first stage will be met from available resources. Two further stages will be undertaken to increase its interest to 55%. While the Company must complete its due diligence process to satisfy its risk control and resolve any outstanding conditions precedent, with a reported ~8.5mm boe of Reserves and Resources, a 55% interest would represent a step forwards and take the Company closer to being self-sufficient. Once more details are known, we will undertake a valuation of the asset base to better understand the structure and uplift in value that could result from its acquisition. Currently, we are reiterating our current valuation.

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Tue, 23 May 2017 09:27:00 +0100 http://www.proactiveinvestors.co.uk/columns/sp-angel/27822/today-s-oil-and-gas-update-mosman-oil-and-gas-27822.html
Northland Capital Partners View on the City - Venture Life Group, Keras Resources, Sunrise Resources Plc http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/27821/northland-capital-partners-view-on-the-city-venture-life-group-keras-resources-sunrise-resources-plc-27821.html Venture Life Group (LON:VLG)

SECTOR – HEALTHCARE

RATING – CORP*

MARKET CAP – £30m

CURRENT PRICE – 83p#

 

COMPANY DESCRIPTION

Venture Life Group plc is a consumer healthcare company. The group develops, manufactures, and commercialises self-care products which target the ageing population.

Patent Grants and Distribution Update

NORTHLAND VIEW

 Venture Life announced that it was granted patents in Japan, Indonesia, Australia and Mexico for its UltraDEX Sensitive range.

 The new patent grants add to the existing patents already granted for this product range in the USA, UK, South Africa and New Zealand. Patent applications are pending in many other jurisdictions, including the EU.

 Venture Life also announced that it agreed with Boots Chemists (Boots) to list two new additional UltraDEX products in the UK, increasing the range of UltraDEX products stocked in store from eight to ten. Also, shelf space presence will further increase from July onwards.

Venture Life continues to extend its patent portfolio for its leading UltraDEX product range. Also, the listing of two additional UltraDEX products by Boots provides further validation of the range’s strength. Significant opportunities exist to continue expanding the range’s reach both domestically and internationally.

 

Keras Resources (LON:KRS)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £7m

CURRENT PRICE – 0.38p#

COMPANY DESCRIPTION

Keras Resources is an exploration company with interests in gold projects, located in Australia, a manganese project and a cobalt-nickel project, located in Togo.

From Yesterday: H117 results – Calidus to relist on the ASX in June

NORTHLAND VIEW

 During H117 the company generated revenue of £0.9m but with a cost of sales of £1.0m, the Company made a gross loss of £0.1m from its operations at the Wycheproof open pit project. 

 LBT was up to £1.1m during H117 from £1.0m in H116

 Net debt increased to £3.0m in H117 from £2.2m in H116.

Keras Resources’ current focus is ensuring the successful spin out of its Australian gold subsidiary onto the ASX through its RTO with Pharmanet Group. Pharmanet is expected to relist on the ASX in June as Calidus Resources. Once this transaction is completed Keras Resources will focus on its exposure to the potential market that may develop from advanced battery technology through its Togolese cobalt-nickel, and manganese projects.

 

Sunrise Resources (LON:SRES)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £1.7m

CURRENT PRICE – 0.12p# 

 

COMPANY DESCRIPTION

Sunrise Resources is an exploration company focused on its 100%-owned CS Pozzolan-Perlite Project, located in Nevada

From yesterday: H117 results – Refocusing on Pozzolan and Perlite

NORTHLAND VIEW

 LBT increased to £0.16m in H117 from £0.15m in H116, despite a reduction in administrative expenses, largely due to impairments associated with a available for sale investment.

 Net cash was up to £0.1m during H117 compared to £0.04m in H116.

 Sunrise now plans to focus management and financial resources on development of CS Pozzolan and Perlite Project and other natural pozzolan opportunities.

 The Company will seek progressive valorisation of its existing precious metal and other industrial mineral projects through joint venture, sale or other arrangements.

Following the completion of a concept study at the CS Project, Sunrise Resources refocused its activities from a wide ranging exploration portfolio in several jurisdictions to concentrating on the CS Pozzolan and Perlite Project, located in Nevada. The Company is also seeking to divest or reduce its financial exposure to its other assets and any funds that the Company raises will be focused on advancing its pozzolan and perlite project.

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Tue, 23 May 2017 09:10:00 +0100 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/27821/northland-capital-partners-view-on-the-city-venture-life-group-keras-resources-sunrise-resources-plc-27821.html
Breakfast News - AIM Breakfast : Base Resources, Flying Brands Ltd, IP Group Plc, IP2IPO, EasyHotel, MedaPhor, Tiziana Life Sciences, Venture Life Group http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27820/breakfast-news-aim-breakfast-base-resources-flying-brands-ltd-ip-group-plc-ip2ipo-easyhotel-medaphor-tiziana-life-sciences-venture-life-group-27820.html What’s cooking in the IPO kitchen?

AIM

I3 Energy –Schedule 1. Independent oil and gas company with assets and operations in the UK.  Offer TBC, 26 May admission.

Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p.  Admission in late May.

Tiso Blackstar Group—Schedule 1 update. Media, entertainment and marketing solutions group/ £160m mkt cap. Admission only. Expected late June.

Main Market Premium Listing

Flying Brands (LON:FBDU)—Prospectus approved by FCA. RTO of Stone Checker Software,  supplier of technology solutions in the field of kidney stone analysis and prevention. Has raised £550k at 3p. Subject to GM on 15 Jun.

AEW UK Long Lease REIT—Intention to Float. Up to £150m raise. Admission early June. UK specialist and alternative property

Alfa Financial Software –Intention to float. Mission-critical software platform purpose-built for asset finance enterprises. Vendor sale of 25% plus. FYDec16 rev £73.3m (CAGR of 24% from 2012). Adjusted EBIT £32.8m.

Kuwait Energy— $150m raise plus vendor offer. Admission due June.  2p reserves 810.0 mmboe

Main Market Standard Listing

ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017.

Main Market Specialist Funds

Tufton Oceanic Assets– Extended to 9 May on specialist funds segment of  Main Market to enable further due diligence.

PRS REIT—Private rental sector REIT raising up to £250m.  Admission due 31 May

 
  
Breakfast buffet

Premier Veterinary Group (LON:PVG) 165p £25.3m

HYMar17 results. 38% increase in total number of pets on fee-generating pet care plans under PVG's preventative healthcare programme to 161k.  35% increase in PVG's total continuing revenues to £1.2m. Co-operation agreement signed in February 2017 with Midwest Veterinary Supply, Inc, a major veterinary distributor based out of Minnesota, US. Loss after tax from continuing operations to 31 March 2017 £2.1m (31 March 2016: £1.5m). Cash £0.7m. Post period disposal for net cash proceeds of £4.8m. Following the disposal of the PBG, the Board remains confident in the Group's prospects and in its ability to deliver the expansion strategy. FYSep17E £4.2m and £3.45m loss. Forecasted to reach profitability in 2018.

Integrated Diagnostic Holdings (LON:IDHC) 340p £525m

Q1 update from the largest fully integrated private-sector provider of medical diagnostics services in Egypt, Jordan and Sudan. Unaudited net profit of 89 million Egyptian pounds (EGP) on total unaudited revenues of EGP 346 million.1 Unaudited EBITDA stood at EGP 136 million in 1Q2017, representing period-on-period growth of 9%. "Strong fundamentals continue to support our growth outlook for diagnostic services in Egypt.” “Accordingly, we reaffirm our 2017 guidance that targets revenue growth in excess of 20% and EBITDA margins at or above 40% given our expectation that the negative currency translation impact on our costs will be less pronounced as the year progresses." FYDec16E $74m Rev and $37.38m PBT.

Andalas Energy and  Power (LON:ADL) 0.08p £1.93m

The Indonesian focused energy company, has conditionally raised £600,000 via a placing at a price of 0.1 pence per share. Certain Directors are participating in the Placing by way of a subscription for a total of 168,000,000 Placing Shares. The Placing Price represents a premium of 29% to the mid-market price at the time of the suspension of trading in the Company’s ordinary shares on AIM. Following today’s announcement, the Company has requested a restoration of trading in the Company’s ordinary shares, which will recommence trading on AIM from 7.30 a.m. on 23 May 2017.   The proceeds of the Placing will be used to provide additional working capital, as Andalas focuses on advancing its first Wellhead IPP project with Pertamina, Indonesia’s national energy company.  

IP Group (LON:IPO) 143p £806.6m

IP Group announces that it recently made an approach to the Board of Touchstone regarding a possible combination with Touchstone. The Board of Touchstone rejected the proposed Combination. IP Group also  intends to raise gross proceeds of up to £200m 140 pence. Nav/Share 125p. IP Group has received support for the Possible Offer from Touchstone shareholders representing, in aggregate, 51.8 per cent of Touchstone's issued share capital. The terms of the Possible Offer would comprise the issue of 2.1490 IP Group shares for each Touchstone share. The IP Group Directors consider that the Combination would create an international leader in IP commercialisation and an enlarged business with substantial capabilities that would be greater than the sum of the two parts. 

Base Resources (LON:BSE) 17p £126.18m

Board approves Kwale Phase 2 mine optimisation project to deliver enhanced economics. Brings fwd revenue by maintaining current production levels for the remainder of the mine life, overcoming declining ore grades in the current Ore Reserve. Faster mining/processing of Ore Reserves over a 24 mth shorter period eliminates approximately US$60 million in fixed costs,. Increases  leverage from, potential mine life extensions emerging from the exploration program that is underway. Incremental capital requirement to implement Kwale Phase is a modest US$13.1 million, which will be fully funded from operating cashflows. FYJun17E A$206.3m, PBT A$42.15m.

Medaphor Group (LON:MED) 15.5p £4.94m

AGM Statement from  he global provider of advanced ultrasound training simulators for medical professionals. “There are welcome signs that the Group is regaining traction in North America and the Board is encouraged about prospects for the Group in the year ahead. As we announced in our Final Results statement, we are currently pursuing fund raising options to take the Group through the next stage of growth.” There are no market forecasts.

easyHotel (LON:EZH) 95.5p £95.98m

HY Mar 17 results. From the owner, developer, operator and franchisor of "super budget" branded hotels. Trading slightly ahead of the Board's expectations. Total system sales1 up 24.7% to £12.05m (31 March 2016: £9.66m)   Total revenue up 21.2% to £3.14m (31 March 2016: £2.59m). Adjusted EBITDA2 up 13.2% to £0.65m (31 March 2016: £0.58m). Profit before tax down to £0.06m (31 March 2016: £0.14m), reflecting increased costs associated with the expanding development pipeline. Interim dividend of 0.11p per share (31 March 2016: 0.11p) on the enlarged share base. Three hotels opened during the period with occupancy of 85%. Two new hotels opened in the last four weeks. FYSep17E £7.9m rev and £0.9m of  PBT.

Epwin Group (LON:EPWN) 113.5p £165.2m

AGM Statement from  the vertically integrated manufacturer of low maintenance building products. "The Group continues to make progress with its strategy, focussed on operational improvement, broadening the product portfolio, selective acquisitions, cross selling and market share growth in key sectors.  Trading for the first four months of the year has been in line with expectations. As highlighted in the final results announcement for the year ended 31 December 2016, input costs increased as a result of the weakening of sterling since June 2016 following the vote to leave the European Union and the Group is continuing its efforts to mitigate the increase in these costs." FYDec17E rev £304.8m and PBT of £25.1m. Sub 9x PE. 5.5% yield.

 

Tiziana Life Sciences (LON:TILS) 190p £187m

FYDec16 results from the clinical stage biotechnology company developing targeted drugs for cancer and autoimmune diseases. £7.21m loss. Cash of £4.7m. Leadership team strengthened over period. Formulab showed efficacy in pre-clinical studies with development plan for graft vs host disease and non-alcoholic steatohepatitis (NASH).  Milciclib—Continuing to progress through phase II trials for thymic carcinoma (thymoma) in patients previously treated with chemotherapy. Research agreement with Cardiff University on TZLS-101.  More in the pipeline including LonGevia studying longevity amongst the Sardinian population.

Venture Life Group (LON:VLG) 83p £30.57m

The international consumer self-care group focused on developing, manufacturing and commercialising products for the ageing population, has been granted patents in Japan, Indonesia, Australia and Mexico for its UltraDEX Sensitive range. These new recent patent grants add to the existing patents already granted in the USA, UK, South Africa and New Zealan. The UltraDEX Sensitive range contains a multicomponent composition and includes specific ingredients to reduce sensitivity and provide 12 hours of fresh breath. The UltraDEX range of products is manufactured at Venture Life's development facility in Italy. Ten products in “Boots” from eight. FYDec17E £16.6m rev and £0.48m PBT.

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Tue, 23 May 2017 09:03:00 +0100 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/27820/breakfast-news-aim-breakfast-base-resources-flying-brands-ltd-ip-group-plc-ip2ipo-easyhotel-medaphor-tiziana-life-sciences-venture-life-group-27820.html
In the Papers - Uber, Heathrow, Amazon, RBS http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27819/in-the-papers-uber-heathrow-amazon-rbs-27819.html Newspaper Summary

The Times

Billionaire brothers secure racecourses for £10 million: The billionaire Reuben brothers are going to the dogs. Arena Racing Company, their racecourse operation, announced that it had agreed a deal to acquire Newcastle and Sunderland greyhound stadiums from William Hill.

Euro jumps as Merkel pins surplus on ‘weak’ currency: The euro reached a six-month high after Angela Merkel said that the “too weak” currency was behind her country’s massive trade surplus.

Börse Boss seeks deal with prosecutor: The Boss of Deutsche Börse is looking to cut a deal with prosecutors over allegations of insider trading related to the failed merger with the London Stock Exchange.

Portugal hailed by EU for slashing deficit: Portugal has cleared the last remnants of its emergency bailout six years ago after the European Commission declared that the country had finally met the eurozone’s budgetary rules.

Tool supplier hires third Boss since float: Just 27 months into its life as a stock market-quoted company during which its share price has collapsed 75%, HSS has taken another shot at redemption with the appointment of its third Chief executive since flotation.

Uber is the pits, says trial city: When Uber brought its self-driving taxis to Pittsburgh last year it was hailed as the start of a transport revolution. To thank them for being the first guinea pigs of their kind, Uber let residents ride in its taxis for free.

Cheaper Chinese brands catching up with iPhone: Apple and Samsung are fast losing share in the smartphone market to a group of Chinese upstart rivals that now account for nearly a quarter of all global sales.

Chemical brothers in $14 billion merger: The American chemicals manufacturer Huntsman is to combine with its Swiss counterpart Clariant to create a $14 billion company after years of on-off merger discussions.

Barclays will urge more to go private: Barclays is set to boost the size of its international private banking workforce by about 10% as the lender looks to expand its offshore network.

The Independent

Female entrepreneurs are leading a work revolution: Female entrepreneurs are leading a revolution in the world of work as an upsurge in small creative businesses has seen more people than ever shun the humdrum of a ‘9-to-5’ routine, according to a report released on Tuesday.

Graduate employment retention in sharp decline: Ambitious young workers are proving ever more difficult to retain, according to new research that shows graduates are increasingly willing to ditch their first-time employers at the earliest opportunity.

Long commutes ‘increase risk of depression, obesity and money worries’: Hours of commuting may be mind-numbingly dull, but new research shows that it might also be having an adverse effect on both your health and performance at work.

Heathrow expansion plans threatened by Crossrail row: Plans to build a third runway at Heathrow could be jeopardised by a row between the airport’s owners and Transport for London (TfL).

Brexit ‘opportunity’ for eurozone says French Minister: Brexit can be an “opportunity” for the eurozone’s financial system, France’s new finance Minister, Bruno Le Maire, has said.

U.K. workers do not feel rich ‘unless they earn £370,000 a year’: Shadow Chancellor John McDonnell’s definition of “the rich” as those earning “£70,000 to £80,000” a year ignited a fierce debate last month over how much you have to earn to feel wealthy. But if a new survey is anything to go by, he may have been far off the mark.

Nearly half U.K. consumers abandon brands due to poor corporate behaviour, finds study: Consumers are taking an increasing interest in the ethical practices of the companies they buy from, with almost half saying that they have abandoned brands due to poor corporate behaviour.

The Daily Telegraph

EU Ministers fail to reach Greek debt deal, delaying release of fresh bailout cash: Eurozone finance Ministers failed to agree on a deal which would have released vital rescue funds for Athens on Monday night, after Greece’s creditors rejected calls for an upfront commitment to reduce the country’s debt burden.

Amazon launches U.K. pay-TV service: Amazon is attempting to challenge Sky, Virgin Media and BT by adding pay-TV channels to its streaming service.

BSGR attacks ‘unlawful’ activities of Rio Tinto in Guinea as Simandou hearing opens: Israeli mining company BSG Resources has attacked the “unlawful” activities of its bigger rival Rio Tinto in the impoverished nation of Guinea, as a new arbitration hearing got under way in Paris.

BP gives new hope to North Sea oil revival as extraction begins from one of largest projects in recent years: BP has started extracting oil from one of the largest new North Sea projects in recent years in a revival for the declining oil basin.

Britain leads Europe as investment magnet - for now: Foreign investors poured more money into the U.K. than any other European nation last year as healthy economic growth helped the country maintain its image as an attractive business destination.

The Guardian

RBS offers £200 million to avert court case brought by 9,000 investors: Royal Bank of Scotland is racing to avert a high-profile court case by offering £200 million in compensation to thousands of investors who claim they were misled into buying the bank’s shares in the run-up to its taxpayer bailout.

Big energy firms lobby Theresa May to water down price cap pledge: Energy companies are lobbying the Conservative party to water down its policy of a price cap on bills, with proposals that would protect millions fewer U.K. households from tariff rises.

Ford names Jim Hackett as new CEO in push to build self-driving cars: Ford has named the head of its driverless cars division as its Chief executive in a sudden regime change, as the company that pioneered the assembly line looks to the next stage of the industry’s evolution.

Average asking price for homes in U.K. hits record high of £317,000: Asking prices for U.K. homes hit a new record high over the past month as families in search of bigger properties brushed aside uncertainty caused by Brexit and June’s general election.

Daily Mail

Barclays analysts say traders should splash out on British stock as threat of Brexit recession fades: Traders should splash out on British stock as the threat of a Brexit recession fades, Barclays analysts have said.

Shoppers facing spike in olive oil prices after crops hit by droughts in Mediterranean: Shoppers are facing a spike in olive oil prices after crops were hit by droughts in the Mediterranean. Falling production in Greece, Italy and Tunisia is likely to drive up prices on supermarket shelves, and cause grocers to cut down on the number of bottles they sell on promotion.

Warming Saudi-U.S. ties likely to cause concern in London as battle heats up for Saudi oil giant Aramco: Warming Saudi-U.S. ties are likely to cause concern in London as the battle heats up for Saudi oil giant Aramco. The London Stock Exchange is hoping the £1.6 trillion state-owned business will choose it for what will be the biggest public float in history.

Fraud squad opens investigation after more than a thousand investors lost millions in alleged pension fraud: The fraud squad has opened an investigation after more than 1,000 investors lost millions in an alleged pension fraud. Police officers and civil servants are among the inexperienced investors who allegedly piled more than £120 million into so-called storage pod schemes.

Daily Express

Saudi Arabia to cut off oil supply to create shortage in desperate bid to raise prices: Saudi Arabia is looking to cut off its oil supply in a desperate bid to raise prices and boost its slowing economy.

Brussels warned stripping London of euro clearing could cost investors £77 billion: THE Boss of London’s stock market has issued a stark warning to Europe that moving euro clearing away from London after Brexit could backfire - and could cost investors a hefty €100billion (£77 billion).

Bitcoin hits record high: 10,000 pieces of cryptocurrency in 2010 now worth £15 million: Bitcoin has hit a record high seven years after what is thought to be the first ever transaction using the crypto currency.

Sterling set to plunge as Tory’s drop in polls ahead of Election: The pound has taken a dramatic tumble against both the euro and the dollar after a series of polls over the weekend showed the Conservatives have lost their huge lead in the polls against Labour, ahead of the general election next month.

German Ministers clash over Greece debt as crisis cracks Angela Merkel’s government: Germany’s top Ministers are publicly disagreeing over Greece’s debt crisis, as cracks widen through the heart of Angela Merkel’s government.

Italy faces ‘urgent’ challenges over shocking public debt, warns Brussels: Italy has been told it faces “urgent” challenges over its huge public debt in the latest assessment over troubled eurozone nations’ economies.

The Scottish Herald

Inward investment hits record high in Scotland: Scotland won a record number of foreign direct investment projects last year, building even further on the surge achieved in 2015, amid signs it is increasingly attracting technology, software and life sciences players, a survey reveals.

Minoan acquires capital travel agency: Travel group Minoan has acquired independent Edinburgh business Morningside Travel through the issuing of new shares, which have also allowed it to raise working capital.

Johnston hit by protest vote as pay resolution carried: Nearly one-third of investors in Johnston Press have voted against the newspaper publisher’s revamped remuneration policy, writes Scott Wright.

Russian contract win for Wood Group: Wood Group has won a contract to help maximise oil and gas production from the giant Sakhalin-II development off eastern Russia.

Roy lecture will highlight opportunities for economy: Scotland’s comparative advantage in areas such as tackling climate change will be highlighted alongside the challenges its economy faces after a year of major political and economic shocks in a key lecture this evening.

FrontRow makes first move since BGF investment: FrontRow Energy Technology Group has acquired a 50% stake in ClearWELL Oilfield Solutions, its first deal since receiving £10 million backing from the Business Growth Fund.

Expansion for Wood Mackenzie: Edinburgh-based Wood Mackenzie is expanding its renewable energy consultancy business helped by the acquisition of a Danish wind power specialist, MAKE.

Change had gone under before sale: Change Recruitment went into administration before its assets were sold on the same day to venture capitalist Paul Atkinson’s Head Group, it has emerged.

Ardnamurchan gets hands on rare spirit: A Glasgow bar and restaurant which launched with a mission to highlight food and drink sourced on the west coast of Scotland has become one of only two in the world to stock the inaugural spirit from the Ardnamurchan Distillery.

The Scotsman

Watchdog probing proposed Standard Life-Aberdeen Asset deal: The U.K.’s competition watchdog has launched an investigation into the potential £11 billion tie-up between Standard Life and Aberdeen Asset Management.

Latest cross-border legal merger set to complete: It may not grab the headlines like Pippa Middleton’s wedding did over the weekend, but the senior partners who have thrashed out next Thursday’s official tie-up between Scotland’s HBJ Gateley and England’s Addleshaw Goddard argue it will be a good marriage for all.

Former oil exec invests £1 million in Stonehaven luxury lodges: A former oil and gas executive has launched a new luxury tourism business in Aberdeenshire after his family unveiled plans to invest more than £1 million in the development.

Blockchain consortium seeks to tackle cybercrime: A €5 million (£4.3 million) project, funded by the European Union, has been launched in a bid to prevent criminals and hackers from using blockchain technology to avoid the prying eyes of law agencies.

Offshore support firm adds 24 jobs with fleet expansion: A business that owns and operates offshore support vessels for the oil and gas industry has boosted its fleet in a move that will create 24 jobs in its North Sea operation.

Gin venture’s first round of profits to help the poor: A social enterprise gin based in Edinburgh that launched in November has given away its first funding from sales proceeds to help disadvantaged young adults help tackle poverty in developing countries.

City A.M.

Opec still the greatest show on earth for oil investors: The Opec circus is back in Vienna this week for its bi-annual performance. One of the highlights, as usual, will be the somewhat desperate press pack in their usual role of clowns poring over every syllable from the ringmasters, led by the Saudi energy Minister Khalid al-Falih.

Rental prices for new builds south of the river slipped due to oversupply: Renters are ditching swanky new builds in favour of quality older homes, according to property advisors London Central Portfolio (LCP).

Airbus assembles independent compliance panel after bribery probe by Britain’s Serious Fraud Office and French authorities: Airbus has appointed an independent panel to monitor its anti-corruption practices, following the launch of a bribery investigation at its jet business.

CHI&Partners Chief executive Sarah Golding talks taking up the IPA presidency: I got rather lost in Fitzrovia searching for the CHI&Partners office; I thought I’d been there before, forgetting that in fact, the business and its affiliates are slowly but surely colonising the area around Rathbone Street, and I was at the wrong building.

Embattled construction materials company LafargeHolcim finds replacement CEO: Shares in LafargeHolcim were trading up 6.25% at 5780p after the company announced the appointment of a new CEO.

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Tue, 23 May 2017 08:19:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/27819/in-the-papers-uber-heathrow-amazon-rbs-27819.html
Market Briefing - UK markets finished mixed yesterdayUK markets finished in positive territory yesterday, boosted by a rally in retail sector stocks and a weaker Pound http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27818/market-briefing-uk-markets-finished-mixed-yesterdayuk-markets-finished-in-positive-territory-yesterday-boosted-by-a-rally-in-retail-sector-stocks-and-a-weaker-pound-27818.html UK Market Snapshot

UK markets finished in positive territory yesterday, boosted by a rally in retail sector stocks and a weaker Pound. Retailers, Next, J Sainsbury and Burberry Group advanced 1.3%, 1.6% and 2.5%, respectively. Intertek Group climbed 2.1%, following a broker upgrade on the stock to ‘Buy’ from ‘Hold’ who also raised its price target to 4,600p from 3,935p. Energy stocks, BP and Tullow Oil increased 0.4% and 1.6%, respectively, tracking gains in crude prices. Rio Tinto gained 1.4%, after the miner launched a bond buyback plan for up to $2.5 billion in order to shrink its balance sheet. AstraZeneca edged 0.2% up, after the company agreed to sell its European rights of a hypertension and angina treatment to Recordati for about $300.0 million, royalties and a percentage of sales. The FTSE 100 advanced 0.3%, to close at 7,496.3, while the FTSE 250 rose 0.5%, to settle at 19,912.6.

US Market Snapshot

US markets ended in the green yesterday, with the major indices closing on a stronger footing for the third consecutive session buoyed by gains in technology and industrial sector stocks. NVIDIA, QUALCOMM and Autodesk advanced 2.1%, 2.8% and 3.1%, respectively. Blackstone Group jumped 6.7%, after the company secured a $20.0 billion as an investment fund from Saudi Arabia’s Public Investment Fund for its infrastructure projects mainly in the US. Ford Motor climbed 2.1%, after a report indicated that the automaker would replace CEO, Mark Fields with Jim Hackett. Raytheon, General Dynamics and Lockheed Martin added 0.6%, 1.0% and 1.6%, respectively, after the US President, Donald Trump, inked an armed deal worth around $350.0 billion with Saudi Arabia and other Gulf states. The S&P 500 gained 0.5%, to settle at 2,394.0. The DJIA rose 0.4%, to settle at 20,894.8, while the NASDAQ advanced 0.8%, to close at 6,133.6.

Europe Market Snapshot

Other European markets closed lower yesterday, as the Euro surged after the German Chancellor, Angela Merkel, commented that Germany’s trade surplus was due to a “too weak” Euro. UCB plunged 18.0%, after the company stated that it did not expect to win US approval this year for its Osteoporosis treatment, that it was developing with Amgen as its late-stage clinical trial showed serious heart-related side effects. Banks, Banco Santander and Banco Popular Espanol declined 2.1% and 3.2%, respectively. Bucking the trend, Aegon jumped 6.5%, after the insurer agreed to sell its two largest US life insurance businesses to Wilton Re. Clariant climbed 3.5%, after Huntsman agreed to merge with the former in an all-stock deal. The FTSEurofirst 300 index declined 0.1%, to close at 1,537.4. Among other European markets, the German DAX Xetra 30 slid 0.2%, to close at 12,619.5, while the French CAC-40 marginally fell to settle at 5,322.9.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning, tracking overnight gains on Wall Street. In Japan, airline stocks, ANA Holdings and Japan Airlines have fallen 0.8% and 1.6%, respectively, amid worries that a blast at a concert in Manchester could hit the overseas travel badly. FUJIFILM Holdings has slid 1.0%, after the company announced that it would report its last fiscal year's earnings after June which it had postponed last month. In Hong Kong, gaming stocks, Sands China, Galaxy Entertainment Group and Melco International Development have jumped 1.3%, 2.6% and 8.1%, respectively. In South Korea, energy stocks, SK Innovation and S-Oil have climbed 2.1% and 2.9%, respectively. The Nikkei 225 index is trading 0.1% lower at 19,654.0. The Hang Seng index is trading 0.3% up at 25,463.9, while the Kospi index is trading 0.9% higher at 2,324.5.

Key Corporate Announcements Today

AGMs

Afarak Group (DI), Candover Investments, ClearStar Inc. (DI / REG S), Datang International Power Generation Co Ltd., Dunedin Income Growth Inv Trust, EG Solutions, Epwin Group, Foresight VCT, Foresight VCT Infrastructure Shares, Foresight VCT Planned Exit Shares, Fresnillo, GCP Asset Backed Income Fund Limited, Golden Prospect Precious Metals Ltd., Inch Kenneth Kajang Rubber, InterQuest Group, JSC KazMunaiGaz Exploration Production GDR (Reg S), Marshall Motor Holdings, Medaphor Group, Metminco Ltd., NMC Health, Oxford Biomedica, Princess Private Equity Holding Ltd., Riverstone Energy Limited, Royal Dutch Shell 'A', Sound Energy, Stock Spirits Group, Time Out Group, Zoltav Resources Inc (DI), Accesso Technology

EGMs

Public Power GDR SA (Reg S), Evraz, Wolseley

Final Dividend Payment Date

Holders Technology, Impax Environmental Markets, Pendragon, SafeCharge International Group Limited (DI), Sanne Group, Standard Life, Stilo International

Interim Dividend Payment Date

NB Global Floating Rate Income Fund Ltd GBP

Quarterly Payment Date

SQN Asset Finance Income Fund Limited

Trading Announcements

Gem Diamonds Ltd. (DI)

Key Corporate Announcements for Tomorrow

AGMs

Antofagasta, Arrow Global Group, Camper & Nicholsons Marina Investments Ltd., Exova Group, French Connection Group, Fundsmith Emerging Equities Trust, Glencore, Harworth Group, Hilton Food Group, Ibstock, JSC Kazkommertsbank GDR (Reg S), Mercantile Investment Trust (The), Mortgage Advice Bureau (Holdings), Northern Petroleum, Polypipe Group, Providence Resources, Sherborne Investors (Guernsey) 'B' Limited, Sportech, QS Software Quality Systems AG, STM Group, Travis Perkins, WANdisco, XLMedia

EGMs

Sportech, Toople

Final Dividend Payment Date

Aggreko, Chesnara, Churchill China, Elecosoft, Eurocell, Hunters Property, McColl's Retail Group, Paddy Power Betfair

Interim Dividend Payment Date

Sequoia Economic Infrastructure Income Fund Limited

Special Dividend Payment Date

Paddy Power Betfair

Quarterly Payment Date

APQ Global Limited, Tetragon Financial Group Limited

Trading Announcements

Dixons Carphone, Dixons Carphone, Exova Group, Kingfisher, Softcat, Tungsten Corporation

Key Economic News

Swiss M3 money supply climbed in April

M3 money supply registered a rise of 3.00% on a YoY basis, in April, in Switzerland. M3 money supply had registered a revised similar rise in the prior month.

US Chicago Fed national activity index rose in April

Compared to a revised reading of 0.07 in the previous month the Chicago Fed national activity index rose to a level of 0.49 in April, in the US. Market expectation was for the Chicago Fed national activity index to advance to a level of 0.11.

Japanese convenience store sales rose in April

Convenience store sales in Japan advanced 0.30% on a YoY basis, in April. Convenience store sales had registered an unchanged reading in the prior month.

Chinese leading economic index advanced in April

On a MoM basis, the leading economic index rose 1.20% in April, in China. In the prior month, the leading economic index had advanced 0.70%.

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Tue, 23 May 2017 08:17:00 +0100 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/27818/market-briefing-uk-markets-finished-mixed-yesterdayuk-markets-finished-in-positive-territory-yesterday-boosted-by-a-rally-in-retail-sector-stocks-and-a-weaker-pound-27818.html
Beaufort Securities Breakfast Alert: Thor Mining PLC http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27817/beaufort-securities-breakfast-alert-thor-mining-plc-27817.html Today's edition features:

• Thor Mining (LON:THR)

 

"In the wake of the presumed terrorist attack in Manchester, stock markets across Asia ended mixed in early morning trading. Haven investments, like Gold and the Yen, were just marginally firmer. Korea's Kospi gained 0.9% to a fresh intraday record and Singapore's Straits Times Index gained 0.5% having been lower for each of the past five sessions, while the Nikkei, S&P/ASX 200 and Shanghai Composite all closed marginally weaker. US stocks by contrast sustained the trend set on Thursday and Friday with a further upward move yesterday evening. The three principal indices have now recovered nearly all of last Wednesday's setback, with traders celebrating the President's successful visit to Saudi Arabia. Various individual stocks shone on the back of major contract news including, not surprisingly, defence stocks like General Dynamics, Raytheon and Lockheed Martin and others, such as Blackstone Group, which moved sharply higher after the private equity firm and the Arab state's Public Investment Fund announced the joint launch of a USD40 billion investment vehicle to finance infrastructure renovation in the US. Beyond this, however, a lack of major US economic data kept many traders on the sidelines, although what focus there was centred on technology shares with Networking, Telecom, Semiconductor and Software sectors dominating the gains and ensuring the NASDAQ chalked up Wall Street's largest advance. US government bonds pulled back overnight with the benchmark 10-year Treasury note settling at 2.254%, compared with 2.243% Friday, following its biggest weekly price gains in more than a month, as Libor hit an 8-Year high on resumed confidence of a June Fed-rate hike. Ahead of Thursday's OPEC meeting in Vienna, oil prices dipped slightly in Asia, having hit their highest level in a month during the U.S. session. While the FTSE-100 Index climbed by 0.3% yesterday, supported by firmer minerals prices, the war of words on Brexit continues; in an interview with the Sunday Times, for example, Brexit Minister David Davis reiterated the UK government's willingness to walk away from negotiations without any deal, while rejecting the demand of EUR100 billion in settlement for the UK's exit from the European Union. The Euro, however, had been boosted by comments from German Chancellor Angela Merkel and speculation that the ECB's Mario Draghi may shortly be forced to take decisive action; the Xetra DAX Index accordingly edged down by 0.2% and the French CAC 40 Index closed just below the unchanged line, leaving the pan-European Stoxx Europe 600 index unchanged on the day. Not that tension will be relieved any time soon; the EU has now completed preparations to begin talks over Britain's exit from the bloc, after the remaining 27 EU member states signed off on the final details of the bloc's negotiating mandate during Monday's ministerial meeting. While they are now ready to begin talks, negotiations are expected to commence only during the week of June 19, having stated it would wait for the outcome of Britain's General Election on June 8. Meanwhile, Eurozone finance ministers, the International Monetary Fund and the Greek government failed to hammer out a final deal on Greece's debt relief and decided to postpone a decision for their next meeting in mid-June. A reasonable batch of international macro data is anticipated today. The UK releases its Public Sector Net Borrowing figures for April, and its CBI Distributive Trades Survey for May as well as publishing its Inflation report Hearings. The EU offers Markit Manufacturing, Services and Composite PMI for May, while the US releases similar PMI data, along with its Redbook, New Homes Sales Change, the Richmond Fed Manufacturing Index for May and API Crude Stocks. Speeches are also due from the FOMC's Neel Kashkari and Patrick Harker. UK corporates due to publish earning or trading updates include Severn Trent (SVT.L), Entertainment One (ETO.L), Shaftesbury (SHB.L), Electrocomponents (ECM.L), Aveva Group (AVV.L), De La Rue (DLAR.L), Paragon Group (PAG.L) and Topps Tiles (TPT.L). Trying to understand the ramifications of the deadly attack in Manchester this morning, London equities are expected to simply tread water from the opening awaiting further updates; the FTSE-100 is seen 5 points either side of unchanged in early trading."

- Barry Gibb, Research Analyst

 

Markets

Europe

The FTSE-100 finished yesterday's session 0.34% higher at 7,496.34 whilst the FTSE AIM All-Share index was up 0.39% at 980.71. In continental Europe, the CAC-40 finished down 0.03% at 5,322.88 whilst the DAX was 0.39% higher at 12,619.46.

Wall Street

In New York last night, the Dow Jones  rose 0.43% to 20,894.83, the S&P-500 firmed 0.52% to 2,394.02 and the Nasdaq Composite gained 0.82% to stand at 6,133.62.

Asia

In Asian markets this morning, the Nikkei 225 had fallen 0.06% to 19,666.69, while the Hang Seng firmed 0.28% to 25,461.43.

Oil

In early trade today, WTI crude was up 0.79% to $50.73/bbl and Brent was down 0.45% to $53.63/bbl.

 

Headlines

Manchester Arena blast: 22 dead and 59 hurt

Twenty-two people, including children, are now known to have been killed and 59 injured in a suspected terror attack at Manchester Arena. The blast happened at 22:35 BST on Monday following a pop concert by the US singer Ariana Grande. Greater Manchester Police said the lone male attacker, who died in the blast, was carrying an improvised explosive device which he detonated. Relatives are using social media to hunt for missing loved ones. Home Secretary Amber Rudd said it was "a barbaric attack, deliberately targeting some of the most vulnerable".

Source: BBC News

 

Company news

Thor Mining (LON:THR, 0.88p) – Speculative Buy

Thor Mining, the exploration and development company with tungsten assets in Australia and USA announced yesterday an update on the mineral resource estimate for its wholly owned Pilot Mountain tungsten deposit in Nevada. The Pilot Mountain project consists of four deposits: Desert Scheelite, Gunmetal, Garnet and Good Hope. Yesterday's announcement included a maiden resource for Garnet comprising 1.83Mt grading 0.36% WO3 and an updated resource for Desert Scheelite to 9.9Mt grading 0.26% WO3 plus 19.39g/t Ag and 0.14% Cu. The total combined resource now stands at 11.73Mt grading 0.28% WO3 representing, on aggregate, a 55% increase.

Our view: The above announcement is positive news for Thor and development of the Pilot Mountain project. We note that there is considerable exploration upside on both Desert Scheelite and Garnet as well as the potential for additional resources when considering the Gunmetal and Good Hope deposits. Whilst the overall grade for Desert Scheelite fell by 19% the combined tonnage offset this with a 46% increase. We are encouraged with the relatively high-grade Inferred resources from the Garnet deposit at 0.36% WO3 as well as the aggregate grade of 0.28% WO3 for the project. We also note the potential for zinc, copper and silver mineralisation in the system. We look forward to further updates on Pilot Mountain including the potential for zinc mineralisation at the Garnet deposit. As such, we recommend a Speculative Buy rating on the stock.

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Tue, 23 May 2017 08:14:00 +0100 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/27817/beaufort-securities-breakfast-alert-thor-mining-plc-27817.html