column Proactiveinvestors column RSS feed en Fri, 01 Jul 2016 03:34:31 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) I know some of you must be hurting.... Well well. I suppose the Euro vote goes to show you always have to plan for the worst in the markets. Especially when a binary event is coming up which could mean your shares will be a lot higher or a lot lower overnight.

I know some of you must be hurting - a lot of people lost a lot of money over two days and some hedge funds were wiped out.

Losing money even on paper is a hard thing to go through.

If you are experiencing bad feelings/problems the hopefully a read of my brand new book just out this week will help. 

"Trade Like A Shark" is my book about trading psychology and how to cope with all the problems it can bring. I examine everything that affects your brain from people on bulletin boards, the problems with social media.

The 8 deadly emotions that can screw up anyone's trading. How to keep your head when everyone around you is losing theirs (like Game of Thrones). There's more about the book at the top of the diary section of the website but you can order it here for immediate delivery. (Ignore the bit about publication date of Sept 26th - that's just to fool amazon, sssh don't mention it).

Everything really comes from hundreds of traders I've met or had conversations with - whether a beginner or advanced I hope all the info there will be useful and especially in the current post-brexit crazy market. Learn how to trade like a shark, not a fish!!!

To buy Trade Like A Shark at £12.25 plus p and p use this link

Use code NTSHARK at the checkout to get it for £12.25 p and p.  If you just want the E Book at a discount tap in code NTSHARKE. The E Book is free with the print version.

If you are coming to the seminar I will have some copies there and happy to sign them if you want.

Hope you enjoy reading it and the many stories within.

As I said last time if there was a Brexit (which I never thought would happen) shares would tumble hard but maybe for only a few days till buyers came in for the bargains which so far is the way it played out. In fact I did say on a Brexit

"Wait for a couple of days and then buy the bargains" which is what I did.

If you may remember last time I sold out of a lot of stuff raising hundreds of thousands in cash in case the worst happened even though I wasn't expecting it.

After my last update I continued to do a bit more selling and took out some shorts, both etfs in my isa and spreadbets so if there was an out vote, I would still lose some money on paper  but not too much and have firepower to buy shares at discounted prices.

I really never expected an out vote though. When Nigel Farage conceded at 10pm and the polls went for remain I breathed a sigh of relief.  I then thought my Plan A was going to work nicely.

Plan A was wait for the market to go up for a few days, sell loads more stuff into the rises, and have a lovely summer holiday with no or hardly any trading needed.
So I was about to go to bed but wasn't feeling tired so stayed up to see a few of the votes. The poll expert said Sunderland was key so waited for that result.

As soon as the result was announced with Out winning convincingly I realised remain was in trouble and quickly bunged on some spreadbetting shorts.

In the next hour the ftse started to tank and so I stuck stops in.  I then went to sleep woke up two hours later and saw the ftse at 5800 and realised Out must be about to win. 

Then I woke up in the morning - the stops actually stopped me out but with a nice 400 points or so profit yielding about £8,000 profit. That wasn't going to stop me losing on longs on paper but still it was nice to get quite a bit back.

I had some short ETF's in the ISA which I knew would pay out and a lot of cash so I didn't feel too bad about it all.

So Plan A hadn't worked and I was sad about that but Plan B wasn't so bad. Always, always have a plan about what to do if things go wrong.

On a market meltdown stops are no good at all, I removed them all from my spreadbets before the start of play - the market expected a wave of sellers and the sell prices become crazy. (I don't have auto stops outside spreadbets)

I have never seen anything like it though! Some spreads were bonkers - like a share normally trading at say 980-982 was 800-1050 ! Loads of examples like that around the place. You could see panicked people actually selling at idiotically low prices that were bound to rise later in the day.

My new book "Trade like a Shark" explains this kind of thing. The "sharks" were just taking money off the scared "fishes" at silly prices.

It's always best to buy on fear when everyone is panicking, you can get some great prices, like buying in the sales.

I remember so many seminars I did when the best time to buy was when everyone was gloomy like in March 2009.

For those new to the stock market, this is probably an amazing time to get started. Because beginners probably over the next few weeks will be able to start their portfolios with shares at outstanding prices.

Of course the Euro thing is a big deal. But... nothing will happen for ages and you can bet the authorities will come up with stuff to get the market back up, whatever it takes, interest rate falls or more QE.

So while the markets will be volatile for a while things as usual will settle. And hard though it is probably better to be buying than selling!

I remember so many "fear" moments over the years. But in the end life did carry on, we didn't lose all our money and those that stuck with the markets made profits.

Overall? Quite pleased with the way I handled it. Maybe I went into a bit too much cash.

However I left my pension fund Totally as it was! And without doing anything at all that has only gone down a fraction, so it's possible after all is said and done maybe the best thing was to do nothing at all!

However I guess I am lucky as I rarely hold property shares, some of which crashed or banks or suchlike. So I didn't get hit with some of those really meaty drops - I kind of got hit on paper by 5-7% drops.

What I find harder now is I have a massive one (and my portfolio) is that is it harder to shift money - it's very expensive to liquidate most of it for example.

If you're upset about losses you sustained remember that song "I get knocked down but I get up again".

There are many times over the last 16 years of trading I felt like quitting on a bad day thinking "Sod this for a game of soldiers".

But everyone at some point is going to experience some pain in the market. Without pain there is no gain. You have to take the pain and learn from it.

You'll see stories in "Trade Like A Shark" of people who made great comebacks from gloom. Have a read of those and ideas on how to bounce back from disaster.

These days remember overall as in Naked Trader, a "Get out Quick" policy is best using a "stop loss" as just an insurance.

Anyway I just really hope some of you got through this without losing too much. One of the main things leading up to an event like this is not use too much leverage with spreadbets etc.

My suspicion is a lot of people got wiped out because they overborrowed on their accounts and those on the wrong side of it may have had positions closed out at bad prices and are now sitting looking at a bill they can't pay.

So at the risk of being an old fart that warning always holds good: Only play markets or invest with money you really can afford to lose a lot of, say half.

Because I've been out a lot this week (wimbledon and racing and suchlike see above) I am now sitting here Thursday morning looking at a long list of trades I made before and after Brexit and frankly I am sighing to myself.

Because normally I don't trade much and so all I have to do is put up one or two or three trades that I made on the website.

Looking through my account there are simply loads.

Before I finish I will do my best to get through as many as I can that match the website trades but I just haven't the time to do them all even if I sat here all afternoon without even a tea break. And that isn't going to happen... a Twix is already sitting begging me to eat it.

So here are as many as I can and will try and complete the rest next time.

Best thing I think and easiest for me is to start with the most recent buys, these are shares I bought after brexit on what I thought were bargain prices.

However, I maintain some caution so that should for some reason another massive dive happen I would consider "get out quick". But I've picked shares that I think have longevity and would hope to carry on holding for some time.

But this is the reason I went into so much cash before the vote as I said last time, wait a couple of days and bargains would appear. I should also say I have kept hold of a lot of the cash and still have more than £200,000 sitting in cash. While the whole portfolio was down 5-7% the day after Brexit, it has since recovered nicely.

I bought some Next 15 (NFC) on a rather good trading statement - it only trades a small amount in pounds so the weak pound doesn't affect it much. In fact it stands to benefit from a weaker pound.

Growth in North America is excellent and it has won more business from Google and Facebook.

This looks a lovely share to sit and hold for a couple of years for more growth to come and shouldn't be affected by further Brexit fears. So I have tucked away!

Photo Me (LON:PHTM) also benefits from a weaker pound. I had some of these tucked away and had pretty much forgotten about them, they even hit my target of 180 where I could have taken nice profits! I'd assumed them as a long-termer and taken my eye off them, mistake on my part.

A warning on some business in Japan hit the shares and they were lower before I was aware. However the business is now totally undervalued and so I've taken a further stake at what I think is a cheap price. So I guess I've had to be a bad boy and broken my own rule of averaging down.

There's a huge dividend, and a special dividend and tons of cash here. I'm in for more quite happily. This time though will not let them fall off my radar. Again, a problem when you have 60 odd positions to keep an eye on all.

Telecom Plus (LON:TEP) went down to a silly price so I picked some up again after taking a nice profit in the last update. There is a massive dividend coming up of 22p - it goes ex dividend next Thursday so anyone buying before then will pick up a lot of cash - however of course it should go down 22p at the open on Thursday.

Property shares have been hit. MCarthy and Stone (MCS) especially badly. I just had to buy some after the most enormous fall made them incredible value. I really don't think retirement homes will go out of fashion even in a brexit. Total bargain for the long term. They said in a statement Brexit brought in some problems but not enough to derail the general outlook.

Osirum Tech (OSI) has fallen to a silly price and I have gladly bought it back much lower - I wrote a lot about it in a recent update, see archive.

Tritax Big Box (BBOX) got hammered way too much and that was a very easy buy at a lovely price with its fab 6% dividend. It has major contracts with huge companies like Tescos.

NCC has also proved a nice re-entry point after selling it off previously and looking for a ride back to the 300p area.

I also bought Softcat (LON:SCT) in an attempt to repeat my previous trade in it from 300ish to 370ish - currently gone to 320 and I think at least 350 or back to 370 is possible unless the market tanks again.

IS Solutions (LON:ISL) put out a great statement this week and bought some on the back of that - starting to rise again now and looks worth a lot more. So should get back the loss I made on the original buy (see below) and more I hope. Some good upside to come.

Imimobile (LON:IMO) looks good value and not really affected by Brexit - fundamentals look strong and bought for a hopeful ride up to 200p.

I still have a whole load of cash available should the market decide to throw another wobble.

Just got time to look through some more of the stuff I sold - some of which of course as above I bought back. The reason for the sales were all the same: to raise cash and they were what I thought shares that might go down on a bad result.

Osi  (Profit £377)  Midw (profit 584  )  Motr  (Loss  £301) ISL( Loss £270)
Fxi (Profit £925) Emp (£133 profit) Countryside (Loss £260) MCS (loss £337).

The short in Emis I literally took out a few days ago worked a treat so I have something to thank Brexit for  not only did it hit target it went another 100p further down banking a marvellous profit of £2,380.

Out of time and energy so will round up others at the next update.

So there we are. Where brexit will take us who knows? But hopefully there will be time to see where it is all going,

It looks like a time to be wary of certain sectors and to possibly buy more shares that have fallen a lot.

Interesting to see the shares which either didn't fall much at all or came right back to where they were this shows strength.

They include shares like the lovely Dignity (after all people aren't going to stop dying are they?) Paysafe (people still need to pay for things safely) GB Group (raised £25m in a great placing yesterday).

There's a great quote from Benjamin Graham: " In the short-term the market is a voting machine but in the long-run is a weighing machine."

Perhaps all of us are guilty of worrying about things short-term. But while for now the market is settling caution is required over the summer so happy to have plenty of cash on the side.

I hope those of you who lost a bundle on property and banks etc are ok, maybe you held on and they are coming back.

Remember never ever let fear sink you and never ever sell stuff at silly prices on blind panic. Good luck!!

Seminar: July 11 th Heathrow, space available come and spend a day with me and live markets, mail for details at

Thu, 30 Jun 2016 15:32:00 +0100
Base Resources — Completion of Ramp-up in a Recovering Market Base Resources is a low-cost, high-margin mineral sands producer, now operating at nameplate capacity across all product lines in the Kwale county of south-eastern Kenya. The company is currently mining the high-grade Central Dune, which we expect to continue for a further 4.5 years, aligning with the revised project debt repayment schedule as of December 2015. Recent exceptional share price performance (an increase of 380% over the last six months) has been driven not only by operational outperformance, but also by the emergence of the ilmenite market from the doldrums, with a price rise of around 25% having been seen in 2Q16.
BUY recommendation, with a target price of A$0.22. Based on LT pricing estimates of US$120/t for ilmenite, US$950/t for rutile and US$1,150/t for zircon (from US$75-80/t, US$675/t and US$750/t currently), we value the Kwale Project at US$302m at a 10% discount rate. After factoring in exploration upside, G&A and net debt adjustment, we arrive at a NAV for Base of US$124m, which translates to A$0.22/share.

Thu, 30 Jun 2016 15:14:00 +0100
ASA Resource Group, Kefi Minerals, Solgold, Wolf Minerals ASA Resource Group* (LON:ASA) – Bindura Nickel results
Kefi Minerals* (LON:KEFI) – AGM update on Tulu Kapi
Solgold* (LON:SOLG) – Drilling further extends the Alpala zone
Wolf Minerals (LON:WLFE) – Drakelands mine update

Commodity prices as measured by the Bloomberg commodity index is reported to have entered a bull market this month led by gains in oil, metal and agriculture products prices.
• The index is up 13%qoq so far with three of the top five performers in the index being agricultural commodities led by soybean meal returning 47%qoq.
• Natural gas was the strongest performer in the oil and gas segment, while all precious and base metals recorded gains (except for copper which is flat on the quarter).

FTSE 100 recovered all losses incurred post the Leave vote with the pound remaining some 10% off since Thursday last week.
• European equities are generally range bound this morning as volatility brought by Brexit subsides.
• US futures are trading higher with the S&P500 index having recovered nearly two-thirds of the post-Brexit losses.
• The US$ index and the yen are little changed today with gold prices slightly off.
• Brent prices are relatively flat after having posted a 29% increase this quarter marking the largest gain since Jun/09. US crude stockpiles fell to the lowest since Mar and production dropped for a third week, according to the EIA.

Dow Jones Industrials   +1.64% at       17,695
Nikkei 225   +0.06% at       15,576
HK Hang Seng   +1.75% at       20,794
Shanghai Composite   -0.07% at        2,930
FTSE 350 Mining   +2.24% at       10,430
AIM Basic Resources   +0.57% at        1,925

Economic News
US – Apart from Deutsche Bank and Santander, 30 banks passed the Fed stress tests yesterday leading financial institutions to announce plans to pay dividends and launch stock buybacks.
• Deutsche and Santander were found to have “broad and substantial weaknesses across their capital planning processes” with banks’ assumptions and analyses remaining “not reasonable or appropriate”.
• May inflation numbers showed consumer prices’ growth was little changed compared to Apr with PCE and Core PCE indices, Fed’s preferred measures of inflation, coming in at +1.0%yoy and +1.6%yoy, respectively.
Date Index Period Actual Expected (Bloomberg) Previous
Monday Markit Services PMI Jun 51.3 52.00 51.3
  Markit Composite PMI Jun 51.2   50.9
Tuesday GDP (Terminal) Q1 1.1%qoq 1.0%qoq 0.8%qoq
  Personal Consumption (Terminal) Q1 1.5%qoq 2.0%qoq 1.9%qoq
  Core PCE (Terminal) Q1 2.0%qoq 2.1%qoq 2.1%qoq
  SP/CS 20 City Apr 0.5%mom/5.4%yoy 0.6%mom/5.4%yoy 0.8%mom/5.5%yoy
Wednesday Personal Income May 0.2%mom 0.3%mom 0.5%mom
  Personal Spending May 0.4%mom 0.4%mom 1.1%mom
  PCE May 0.2%mom/0.9%yoy 0.2%mom/1.0%yoy 0.3%mom/1.1%yoy
  Core PCE May 0.2%mom/1.6%yoy 0.2%mom/1.6%yoy 0.2%mom/1.6%yoy
Thursday Weekly Jobless Claims     267k 259k
Friday ISM Manufacturing PMI Jun   51.3 51.3
  Wards Total Vehicles Sales Jun   17.3m 17.4m
Source: Bloomberg    

Japan – Industrial production slumps in the aftermath of the Kyushu earthquake and a strong appreciation of the yen weighed on goods shipments.
• Output fell 2.3%mom in May v an 0.5%mom increase in Apr and a 0.2%mom drop forecast.
• Weak industrial output report comes on the heels of poor May trade and retail sales numbers.
• Q2 GDP growth is forecast to come in at 0.4%qoq, less than a quarter of 1.9%qoq recorded in Q1/16.

Germany – Unemployment rate kept at a record low of 6.1% with a reduction in the number of people out of work beating market forecasts in Jun.
• The number of jobless fell by 6,000 to 2.69m compared to a 5,000 reduction expected.

UK – Mark Carney is planning to face members of the press and finance industry today at 4pm in London to address investors’ concerns following days of political turmoil and market volatility.
• With no clear plan from the Leave camp over the exit programme and negotiations with the EU in early stages, nearly three quarters of economists in Bloomberg survey forecast the economy to slip into recession for the first time since 2009.

France – Inflation picked up in France but remains a far cry from the ECB target of 2%.
• Consumer prices increased 0.3%yoy in Jun, up from 0.1%yoy recorded in May.

Australia – Job vacancies dipped in the three months to May compared to the previous quarter marking the first quarterly declein since mid-2014.
• Vacancies fell 1.9%qoq during the period compared with a 2.8%qoq growth recorded in the three months to Feb.
• While unemployment rate held at 5.7%, a 29-month low, latest reports suggest employment growth was largely diven by part-time jobs implying lower earning levels compared to full time positions.

US$1.1122/eur vs 1.1062/eur yesterday.    Yen 102.81/$ vs 102.54/$.   SAr 14.760/$ vs 14.985/$.   $1.349/gbp vs $1.339/gbp.
0.744/aud vs 0.743/aud.   CNY 6.646/$ vs 6.647/$.

Commodity News
Precious metals:
Gold US$1,320/oz vs US$1,320/oz yesterday
Gold ETFs 62.6moz v 62.4moz yesterday
Platinum US$1,005/oz vs US$988/oz yesterday
Palladium US$588/oz vs US$574/oz yesterday
Silver US$18.40/oz vs US$18.24/oz yesterday  
Base metals:   
Copper US$ 4,835/t vs US$4,791/t yesterday
Aluminium US$ 1,638/t vs US$1,621/t yesterday
Nickel US$ 9,480/t vs US$9,275/t yesterday
Zinc US$ 2,092/t vs US$2,062/t yesterday
Lead US$ 1,778/t vs US$1,732/t yesterday
Tin US$ 16,975/t vs US$16,835/t yesterday

Oil US$50.1/bbl vs US$49.2/bbl yesterday
Natural Gas US$2.872/mmbtu vs US$2.878/mmbtu yesterday
Uranium US$26.45/lb vs US$26.55/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$52.0/t vs US$52.3/t
Thermal coal (1st year forward cif ARA) US$55.0/t vs US$53.5/t yesterday
Tungsten - APT European prices stood unchanged at $200-220/mtu from last week

Company News

ASA Resource Group* (LON:ASA) 0.5 pence, Mkt Cap £7.6m – Bindura Nickel results
• ASA Resources reports that its 74.7% owned subsidiary, Bindura Nickel, has released results for the year to 31st March 2016.
• Bindura has sold a total of 6613 tonnes of nickel in concentrate during the year (2015 7352 tonnes) with the 10% decline attributed to a 26% decline in the tonnage treated as the company shifted its operating strategy towards treating a greater proportion of higher grade material  (1.71% nickel head grade vs 1.46% in the previous year) enhancing recovery rates by 2.8% to 86.5%.
• A 38% decline in received nickel prices (US$6,737/t vs US$10,855/t) , combined with this reduced production, has reduced turnover by 46% to US$42.3m.
• The company attributes the weaker nickel prices to a combination of the strength of the US$, contractions in the Chinese economy and falling crude oil prices.
• Cost of sales declined by 22% to US$33.2m as a result of a decline in all-in-sustaining costs to $6818/tonne from $8558/tonne of contained nickel produced. Cost cutting measures included the retrenchment of 300 workers.
• Operations generated a net outflow of cash of US$5.2m (2015 – cash inflow of US$7.0m) and there was an increase in net debt to $25.1m from $7.4m resulting in a rise in gearing (net debt:net debt plus equity) to 39.8% from 15.9%.
• Constraints on cash have slowed the company’s capital projects, with the shaft deepening at the Trojan Mine proceeding slower than in the previous year, however the restart of the smelter is expected to be commissioning by the end of 2016. The refinery and the Shangani mine remain on “care and maintenance” although the Board is considering feasibility work on the possible restarting of the refinery. Plans to convert the smelter to process platinum group metals have been shelved due to lack of adequate platinum bearing concentrates.
• The company points to the difficult state of the international nickel market. “There have been no meaningful production cuts by nickel producers despite estimates that 60-70% of nickel producers are running at a loss” and although underlying fundamentals support a slow price increase, “Analysts estimate that there is approximately one million tonnes of refined nickel available, which is equivalent to half a year’s consumption. This large stock overhang will continue to cap the increase in nickel prices.”
Conclusion: Lower nickel prices have impacted Bindura’s revenues and profitability, however the company has achieved significant cost cutting and altered its mining strategy towards providing higher grade ore for treatment in the future. The restart of the smelter later this year should help to protect margins but with a large overhang of global nickel stocks amounting to some six months of consumption, conditions are likely to be tough for some time although the cost-cutting measures it has implemented should position Bindura to benefit from a recovery when it comes.
*SP Angel act as Nomad and broker to ASA Resources

Kefi Minerals* (LON:KEFI) 0.5 pence, Mkt Cap £16.5m – AGM update on Tulu Kapi
• Kefi Minerals has provided an update on the status of Tulu Kapi and its other projects to coincide with the Company’s AGM.
o The project is now moving towards production which has previously been targeted “to advance towards commencing construction of the processing plant in Q4-16 and production commissioning from Q4-17”.
o The project capital is now estimated at US$130m, “compared with the inherited plans for more than double that amount” and the company has secured $85m of debt facilities from “two reputable African banking organisations” and a commitment for a US$20m investment from the Ethiopian Government.
o The company is expecting all in costs of US$746/oz to place Tulu Kapi within the “lowest cost quartile of gold producers globally.”
o Forthcoming work streams for the next quarter include the finalising of the regulatory and other permitting approvals and the start of the Government’s community resettlement paln.
o In the exploration area, alongside the continuing work on the Saudi Arabian projects, the company is continuing exploration in Ethipia where “our first priority is satellite deposits within trucking distance of Tulu Kapi soa s to unfold the operational sequence to complement the planned open pit operation.” The company also suggests that it has potential underground mine exploration targets within the Tulu Kapi area.
Conclusion: Since acquiring the project Kefi Minerals has made significant and rapid progress in bringing Tulu Kapi to the brink of becoming a production company. Capital costs have been substantially reduced, financing agreements are well advanced and additional targets close to the central develooment area have been identified.
*SP Angel act as Nomad and broker to Kefi Minerals

Solgold* (LON:SOLG) 3.1p, Mkt Cap £29.3m – Drilling further extends the Alpala zone
• Solgold has reported results from its hole CSD-16-15-R2 at the Cascabel project which further extend the Alpala mineralised zone by 100m at depth and 100m to the north and north east.
• The drilling intersection reported today encountered 1338m of mineralisation averaging 0.49% copper and 0.36 g/t gold from a depth of 394m.
• The wider intersection contained two overlapping higher grade sections:
o 334 at an average grade of 0.86% copper and 0.68 g/t gold from a depth of 1294m, and
o 750m averaging 0.67% copper and 0.50g/t gold from a depth of 890m
• The company points out that “The Alpala deposit has now been intersected in 17 of 18 holes put into the project for a total of 23,700m of drilling. The deposit lies over a 700m strike extent, oriented north westerly and up to 400m wide with a drill intersected vertical extent of 1,800m.”  In our view, this is a very high rate of drilling success which has been aided by the use of sophisticated geophysical interpretation within an integrated exploration plan encompassing field geology and sampling and geochemical exploration as well as highly targeted drilling.
• The latest intersection comes from a site located approximately 100 metres north of a deep high grade zone intersected in hole 9 which intersected 1050.8m at an average grade of 0.68% copper and 0.92 g/t gold.
• Results from hole 17 (CSD-16-017), which is targeting shallow extensions of the Alpala deposit towards the west, are expected to be available within 10 days.
• Conclusion: Solgold’s exploration efforts at Cascabel continue to extend the Alpala deposit both laterally and at depth. The company has also identified a number of other targets, now numbering 14 in total, including some promising shallow targets– most recently at the Moran prospect which could ultimately give it a range of development options.
*SP Angel acts as Nomad and Broker to SolGold. An SP Angel analyst has visited the Cascabel project

Wolf Minerals (LON:WLFE) 5.8 pence, Mkt Cap £56.6m – Drakelands mine update
• Wolf Minerals has provided an update on the progress at its Drakelands tungsten mine in Devon.
• To date, over 1.6m tonnes of ore has been mined from the open pit and currently mining is proceeding at both the northern and southern ends of the pit on a number of benches.
• As the upper levels of the deposit are in weathered ground, early ore production has encountered ore with “much finer particle sizes than will be the case over the mine life, and for which the processing plant was primarily designed which has had a consequential effect on recoveries.”
• The company has completed a ten hole diamond drilling programme within “the open pit to gather additional data on particle size and distribution within the ore body. Ore samples are being analysed by both geological and metallurgical personnel and the results will be used to refine the mining plan to ensure an ore blend  that best suits the plant.”
• On the positive side, however, reconciliation of the ore grades extracted relative to the reserve grades expected has been positive with higher production grades than predicted by the reserve model.
• On the processing plant, “performance has been impacted by core equipment manufacturing faults, leading to high levels of unplanned downtime.”  Wolf Minerals and its EPC contractor, GRES are in discussion on a work programme “aimed at achieving continuous operation at capacity, enhancement of recoveries and general plant improvements. Production improvements are expected during implementation of the program, however completion of all elements of the program is required before the full impact on processing plant performance can be ascertained.”
• The difficulties with the processing plant have resulted in Wolf failing to meet “its contracted supply commitments to major customers”. This triggers price penalties and Wolf is “currently in discussions with its major customers to reduce or defer this penalty”.
Conclusion: Problems in processing weathered, fine grained tungsten ore are not unknown and these issues should lessen as the mine moves deeper into harder, un-weathered ore. Further adjustments to the plant should also help to address issues of throughput and recovery although as the company recognises, until the full programme of repairs and modifications is completed, its detailed impact will be difficult to assess. Meanwhile, the company is fortunate to have the backing of its major shareholder, RCF. Negotiations with customers could be tough, but with limited western world tungsten production available, customers will also be under pressure to reach a sensible commercial conclusion.

Thu, 30 Jun 2016 10:57:00 +0100
Brokers: Henderson and Tullow Oil downgraded by brokers Thu, 30 Jun 2016 10:12:00 +0100 Oil price, Wood Group, Tullow, Independent O&G, And finally... Oil price
With a skip and a jump the oil price is almost back to pre-brexit levels, this is mainly down to better inventory stats this week where both organisations saw a draw of around 4m barrels. In the background there are a number of machinations but the rise in refinery utilisation to 93% ahead of the Independence Day celebrations is probably key. Elsewhere a fall in imports helped as did US production falling by 55/- b/d and Iraq output down by 60/- b/d last month. With the Norwegian strike still imminent pressure is on the upside.
Wood Group
A very tame update from Wood this morning, no change to EBITA guidance of a 20% fall from last years levels and that the company is benefiting from their model of an asset-light predominantly reimbursable business model combined with significant overhead cost savings.
Tullow Oil
A trading statement and operational update from Tullow this morning but not much to add here either. Production guidance is down again but the problems at Jubilee have been well telegraphed and should not be a surprise. Better news is that TEN remains on schedule and under budget and will produce first oil in 3-6 weeks time as forecast…The problems at Jubilee appear to have been at least sorted and production stabilised at 90/- b/d. Rather tongue in cheek I suspect, they say that the decision to go with two separate pipelines brings ‘clarity’ to both projects and also that they will have a new exploration well programme in Kenya in the 4th quarter. TLW was a new addition the the bucket list in January and so far is up 63% since then which ranks it in 5th place and will very much remain there.
Independent Oil & Gas
News today that IOG is to commence drilling on the much talked about Skipper well in July. Primarily an appraisal well to get the oil samples there is an element of exploration as they take a quick look a bit deeper down while they are there. Success here would lead to an FDP which would convert management estimates of 34.1 mmbbls of contingent resources on a 25% recovery rate into 2P reserves.
And finally…
Another magnificent innings by Jason Roy last night saw England chase down 300 odd in 42 overs rarely breaking a sweat which shows just how far they have come.
Tonight’s match in the Euros is Poland v Portugal  which looks tough to call, bars all over England will be heaving with vodka swilling or port drinking natives…
And some very learned acquaintances of mine have had a most interesting wager with regard to the next England manager. Ian Wright has been talking a lot of sense from the sofa and its only a matter of time before the FA swallow their pride and go with someone like him or Allan Shearer who was laughed out of court the last time he applied. The 100-1 about Wright will surely come in as these wise prophets are taken seriously…

Thu, 30 Jun 2016 09:41:00 +0100
In the papers: BT, BHS, Toyota The Times
Rivals seize on EU vote in battle to break up BT: The telecoms industry plans to use the Brexit vote as a new weapon in the fight to break up BT by telling the Chief Executive of Ofcom that she can now act without fear of an intervention from Brussels if she chooses to split up the former monopoly.
Banks fail American tests: Two of Europe’s biggest banks have suffered a setback in the United States after the Federal Reserve rejected plans for their American units to return profits to investors.
Brexit vote sparks consumer confidence slump: Consumer confidence has crashed since Britain’s vote to leave the European Union, latest polling shows.
Peer-to-peer lender runs out of funds: A peer-to-peer lender that used millions of pounds of retail investors’ money to finance small businesses has collapsed into insolvency. FundingKnight, an online platform that linked investors with small companies, property developers and green energy projects seeking loans, failed this week after running out of cash.
Morrisons cries foul over Aldi advert: Aldi’s marketing strategy has come under scrutiny after Wm Morrison and two members of the public complained that three of its adverts were ambiguous and misleading and the advertising watchdog agreed.
Monsanto plants seeds of new deal: A month after rejecting a $62 billion takeover offer from Bayer, of Germany, Monsanto said that it was in talks with its suitor and others about “alternative strategic options”.
The Independent
Frank Field accuses Sir Philip Green of ‘nicking’ from collapsed BHS: Sir Philip Green has restarted his angry war of words with Frank Field, after the chair of the House of Commons Pensions Committee accused the tycoon and former BHS Owner of “nicking” in a Parliamentary hearing into the collapse of the department store chain.
Brexit: U.K. construction sector heading for ‘brick wall’ as infrastructure projects suspended: The U.K. construction industry will slam into a “brick wall” early next year due to the massive uncertainty created by the Brexit vote, an industry source has warned.
Toyota recalls 3.37 million hybrid cars over airbag and fuel emission issues: Toyota, the Japanese car maker, said it was recalling millions of car worldwide and thousands in the U.K. over defective airbag concerns and fuel emissions control units.
Brexit top donor Peter Hargreaves says ‘no regrets’ despite losing hundreds of millions after Leave win: The top donor to the campaign for the U.K. to leave the EU has said he has no regrets about the money he spent, despite hundreds of millions being wiped off his fortune in the aftermath of the vote.
The Daily Telegraph
New Zealand offers U.K. its top trade negotiators for post-Brexit deals: New Zealand has offered its top trade negotiators to the United Kingdom, relieving the British civil service as it prepares for the strain of seeking new deals with countries across the globe.
Francois Hollande adds to chorus calling for London to lose euro clearing market: Francois Hollande, the French President, has warned London that it will no longer be the centre of euro-denominated clearing following the Brexit vote, dealing a blow to one of the City’s biggest markets and casting further doubt on the London Stock Exchange’s merger plans.
Pilots threaten to strike over fatigue concerns: Some airlines are fatiguing pilots by forcing them to work for 20 hours without an adequate break, sparking concerns about safety and raising the prospect of strike action towards the end of the summer holidays, the pilots’ union has warned.
My Local appoints administrators: Convenience store chain My Local, which emerged from Morrisons stores sold last year, has gone into administration. KPMG has been appointed to handle the process, which has already resulted in the closure of 90 of the chain’s 125 stores, with three more expected to close imminently.
Brexit makes it harder for U.K. to tackle climate change, says Amber Rudd: Brexit will make it harder for the U.K. to tackle climate change but its commitment to do so is undiminished by the EU referendum result, energy secretary Amber Rudd has said.
Cobham poaches finance Boss from rival QinetiQ: Defence and aerospace group Cobham has poached a new finance director from fellow mid-capper QinetiQ, ending the troubled company’s search for a top Executive.
Barclays is out of crisis mode as Brexit worries subside: Barclays has already scrapped its Brexit crisis plans as the situation is much less severe than Bosses had previously feared.
The Questor Column:
Buy Standard Life as shares are oversold: Shares in the insurance sector have tumbled more than 20% during the past 12 months as investment returns are crushed and Brexit uncertainty unsettles markets. But they could be entering value territory and we like the chunky dividend yields of more than 6%. It was already suffering from falling bond yields and an equity market sell-off when the Brexit vote came as the final straw. The problem for insurers is that their business model is being pushed to the limit. Investment returns are proving hard to come by. Yields on U.K. and U.S. government bonds have fallen to record lows. Insurers are struggling to drive returns to cover their long-term liabilities against such a backdrop. The Brexit result is a double whammy for insurers because government bond yields moved lower as investors chased safe havens, and stock markets also fell, which reduces the amount of assets the insurer holds to cover future liabilities. The hardest hit sector has been that of life insurance due to the compounding effect that takes place over the term of the policy. Standard Life has therefore been the hardest hit London-listed insurer due to its U.K. focus and exposure to life insurance. Standard Life shares have also suffered after it said the asset management business would not grow as quickly this year amid market uncertainty, and being Edinburgh based it is exposed to a potential vote Scotland leaving the U.K. It is clearly going to be tough for Standard Life, but we feel the negotiations to exit the EU will take time, and the reaction in the shares has been overdone. The latest update from the company last month showed it was still attracting more assets under management, while the insurance business was cutting costs and trading well. Standard Life at 288p+11.2p. Questor says “Buy”.
The Guardian
FTSE 100 now above pre-Brexit vote levels: Leading London-listed shares have recorded their biggest daily rise since October 2011, regaining all their losses and more since the Brexit vote, with nearly £60 billion added to the value of Britain’s top 100 companies.
LuxLeaks whistleblower avoids jail after guilty verdict: A former employee of PricewaterhouseCoopers has been convicted of theft by a court in Luxembourg following an unprecedented leak of controversial tax deals granted to many of the world’s largest corporations.
U.K. carmakers face skills shortage if EU workers restricted, says industry: Carmakers face a skills shortage if workers from the rest of Europe are restricted from working in the U.K., the motor industry has warned, as it credited the single market with fuelling record production and sales.
U.K. house price growth up in final set of figures before vote to leave EU: Growth in U.K. house prices picked up in June, but agents and analysts are warning that Britain’s decision to leave the EU will affect demand and prices in the coming months.
Daily Mail
Bank of England acts to keep economy moving as bank Bosses ordered to keep on lending: British banks have been told they must keep lending to drive the economy after the chaos that followed the Brexit vote.
Jamie Oliver suffers another setback after company behind his Australian restaurants collapses: Jamie Oliver has suffered another setback after the company behind his Australian restaurants collapsed.
Chinese conglomerate swoops for larger slice of Thomas Cook to take advantage of weak pound and share price fall after Brexit vote: A Chinese conglomerate has swooped for a larger slice of Thomas Cook to take advantage of the weak pound and the share price fall after the Brexit vote last week. Chinese giant Fosun upped its stake in the holiday firm to 8.2% in a vote of confidence, snapping up the shares on the cheap when they fell more than 20% between Friday and the market close on Monday.
Black hole in Britain’s struggling pension schemes widens to record £935 billion - underlining crisis affecting industry: The black hole in Britain’s struggling pension schemes has widened to a record £935 billion – underlining the crisis affecting the industry.
Daily Express
Financial markets wipe out Brexit drops and gain nearly £100 billion lost: Britain’s financial markets enjoyed a Brexit fightback as share values soared by £62billion. With traders clearly rejecting Project Fear, confidence returned and prices shot up.
Lloyds Bank announces 525 job losses but none are linked to Brexit vote: Banking giant Lloyds has announced 525 job losses, hitting its retail and group operations. The bank, 9% owned by the taxpayer, said the cuts were part of 9,000 reductions announced in 2014.
U.K. company gives £2 million vote of confidence in Britain’s Brexit future with growth plan: A homegrown British business has pledged its confidence in the U.K.’s economic future by investing £2 million in an expansion programme. Cornish ice cream maker Kelly’s is expected to grow by a fifth this year amid record high sales and turnover in excess of £23 million.
Brexit wobble not a long term crisis, says Europe Bank Chief: Britain’s vote to leave the European Union was not a ‘Lehman moment’ for financial markets, a top Chief from the European Central Bank has insisted.
The Scottish Herald
Store Twenty One Owner tables proposal for company voluntary arrangement: The Owner of budget fashion chain Store Twenty One has proposed a radical restructure of the retailer as it scrambles to avoid administration.
Dixons Carphone profits rise 17% to £447 million: Electricals and mobile phones giant Dixons Carphone has unveiled a 17% rise in an annual pretax profits to £447 million and brushed off fears surrounding the result of Britain’s EU referendum.
Spaces finds room to grow in Glasgow: Spaces, the Netherlands-based workspace specialist, has chosen Glasgow’s Bath Street for its second U.K. site. The company, which specialises in providing working environments for entrepreneurs, said the 29,223 square foot site will launch in October.
Edinburgh Indian food producer wins Asda supply deal: An Edinburgh-based South Asian food entrepreneur has won a contract valued at £150,000 to supply flavoured naan breads to Asda.
Steel fund boost for maintenance firm: Alba Facilities Services has streamlined its building maintenance business with efficiency-boosting software thanks to a third round of funding from U.K. Steel Enterprise (U.K.SE).
Shawbrook bounces back: Shawbrook Group, the challenger bank, has seen shares rebound after collapsing by more than half early this week as it announced a £9.8 million impairment charge to cover loans that had been underwritten but did not meet the business’s strict lending criteria.
Scottish technology firm wins Australian contract: Arrayjet, which makes specialised printers that can be used to speed up testing work for life sciences organisations, has won a AUS$400,000 (£220,000) contract from a flagship Australian research institute.
FirstGroup director joins Kier board: Kier Group has appointed FirstGroup director Constance Baroudel to its board. The construction to property company said Ms Baroudel, group director of strategy and operational performance at Aberdeen-based FirstGroup, will join as an indepedent director on July 1.
The Scotsman
Vodafone could move HQ out of U.K. in wake of Brexit: Telecoms giant Vodafone has warned it could move its headquarters out of the U.K. following the Brexit vote.
Son of ‘carpet king’ to roll out new Lothians store: Tapi Carpets & Floors, the retail chain created by the son of Carpetright Founder Lord Harris of Peckham, is to open its latest store in Midlothian next weekend.
Robertson lands £600,000 East Renfrewshire deal: Robertson Facilities Management has secured a key contract with East Renfrewshire Council to supply electrical maintenance services throughout the region.
‘Plastic roads’ start-up impresses Sir Richard Branson: A Dumfriesshire start-up that turns waste plastic into asphalt for roads has won a slice of a £1 million prize fund after impressing a panel of judges including Sir Richard Branson.
Law firm Gillespie Macandrew unveils jump in profits: Scots law firm Gillespie Macandrew has seen profits jump by more than 18% in its latest financial year, during which it broke through the £10 million fee level for the first time.
Amec Foster Wheeler makes waves with £75 million subs contract: Engineering group Amec Foster Wheeler has landed a £75 million contract for work on the Royal Navy’s submarine flotilla.
JP Morgan ‘expecting Scottish independence and new currency’: AMERICAN bank JP Morgan has confirmed that it expects Scotland to vote Yes in a second independence referendum as well as introducing its own currency before the U.K. leaves the European Union in 2019.
City A.M.
Edi Truell to make bid for Tata U.K. in the next two days: Leading City financier Edi Truell has confirmed he will make a bid for Tata Steel’s U.K. assets within the next 48 hours.
Trade group’s call for taskforce to safeguard U.K.’s Brexit negotiations: Business groups are mounting pressure on the government to take action following the U.K.’s vote to quit the European Union.
Infrastructure improvements needed at the heart of devolution agenda to boost growth, according to research from the Institution of Civil Engineers: Significant boosts to local growth, quality of life and environmental sustainability could all materialise if infrastructure improvements are placed at the heart of the devolution agenda, according to new research.
Royal Dutch Shell says U.K. energy demand set to fall in future: The Boss of oil major Royal Dutch Shell is set to say that energy demand in the U.K. will fall, while urging the government to help meet the world’s climate change goals.
Turkey producer on the hunt for bootiful new Owner: Turkey producer Bernard Matthews has reportedly begun searching for a new Owner. The company, best known for its ‘bootiful’ catchphrase in adverts, is currently owned by Rutland Partners.
New chair of U.K. pensions lifeboat set to be named amid BHS and Tata crises: A new Chairman is set to be named for the U.K.’s Pension Protection Fund (PPF) on Thursday. The Department for Work and Pensions is believed to have picked one of its existing board members to replace Lady Judge, who is stepping down after six years.
Lower costs and Christmas cheer up Wilko as sales swell to £1.46 billion: Hardware and household goods retailer Wilko has reported sales through to end of January of £1.46 billion, up 1.4% on the previous year.
Goldman Sachs not eyeing up Frankfurt post-Brexit vote: Banking giant Goldman Sachs has refuted claims that the wheels are in motion to move staff to Frankfurt, following the U.K.’s decision last week to leave the EU.
Buyout giant raises £5.7 billion for European fund: European private equity firm Cinven has raised €7 billion (£5.7 billion) from investors for its sixth fund. The fund was raised in four months and was oversubscribed for its original target of €5.5 billion.
Deutsche Boerse to “devote all efforts” to making London Stock Exchange merger work: Deutsche Boerse said it will “devote all our efforts” to completing its planned merger with the London Stock Exchange.
Norwegian oil workers threaten to strike as crude continues to rise: Hundreds of oil and gas workers in Norway are threatening to go on strike, halting output at five oil fields in Western Europe’s largest producer.

Thu, 30 Jun 2016 09:21:00 +0100
Market briefing: UK markets finished stronger yesterday, with the FTSE 100 index erasing all of its post-Brexit losses, led by another rally in financial sector shares UK Market Snapshot
UK markets finished stronger yesterday, with the FTSE 100 index erasing all of its post-Brexit losses, led by another rally in financial sector shares. Prudential climbed 5.5%, after a leading broker reiterated an ‘Overweight’ rating on the stock and target price of 1609.0p. HSBC Holdings, Royal Bank of Scotland Group, Barclays advanced 2.1%, 3.7% and 4.9%, respectively. Energy producers, Royal Dutch Shell and BP gained 4.1% and 5.0%, respectively, as crude oil prices jumped on reports that US crude inventories had declined more than expected last week. On the losing side, TUI dipped 3.8%, following news of a terrorist attack on Istanbul’s Ataturk airport that left 42 people dead. Dixons Carphone shed 1.9%, after it reported a drop in its pre-tax earnings for the year ended 30 April, due to merger costs and other expenses. The FTSE 100 climbed 3.6%, to close at 6,360.1, while the FTSE 250 rose 3.2%, to settle at 16,002.9.
US Market Snapshot
US markets closed in the green yesterday, as a rally in crude oil prices more than offset worries over the Brexit. TESARO soared 108.0%, after its Phase 3 trials of its treatment for ovarian cancer met its primary endpoints. PrivateBancorp surged 23.3%, after Canadian Imperial Bank of Commerce agreed to purchase the former in a cash and stock deal for about $3.8 billion. General Electric added 2.0%, after the US government cancelled its designation of GE Capital as a systemically important non-bank financial institution. Bucking the trend, Alcoa fell 2.5%, after informing that the aluminum smelting business which it is spinning off would take on $1.0 billion in new debt to help reduce the burden on the company. The S&P 500 gained 1.7%, to settle at 2,070.8. The DJIA rose 1.6%, to settle at 17,694.7, while the NASDAQ advanced 1.9%, to close at 4,779.2.
Europe Market Snapshot
Other European markets ended higher yesterday, helped by gains in commodity sector stocks amid a rise in crude oil prices. GAM Holding rallied 11.7%, after it agreed to acquire Cantab Capital Partners for $217.0 million in cash and deferred payments. Alstom jumped 6.1%, after a top broker upgraded its rating on the stock to ‘Buy’ from ‘Neutral’. Technip rose 4.8%, after it signed a MOU with GE Oil & Gas to explore digital solutions for new LNG projects. On the downside, Italian lenders, Banca Monte dei Paschi di Siena, Banco Popolare and Unione di Banche Italiane lost 2.9%, 3.2% and 5.2%, respectively, on the back of reports that German Chancellor, Angela Merkel, was not in support of Italy’s plan to cushion its banks from effects of the Brexit vote. The FTSEurofirst 300 index gained 3.1%, to close at 1,290.9. Among other European markets, the German DAX Xetra 30 rose 1.7%, to close at 9,612.3, while the French CAC-40 advanced 2.6%, to settle at 4,195.3.
Asia Market Snapshot
Markets in Asia are trading firmer this morning, mirroring a rally in their global counterparts, as anxieties over Brexit receded and crude oil prices staged a recovery. In Japan, Mitsubishi Heavy Industries has advanced 5.2%, following a broker upgrade on the stock to ‘Outperform’. Auto manufacturers, Toyota Motor, Honda Motor and Suzuki Motor have risen 0.4%, 1.2% and 2.8%, respectively, amid a weaker Japanese Yen. However, Eisai has dropped 3.9%, after its presentation in New York yesterday revealed that most of its drugs were still in the early stages of development. In Hong Kong, CNOOC and PetroChina have gained 2.5% and 2.7%, respectively. In South Korea, Samsung Electronics and SK Hynix have added 2.0% and 2.2%, respectively. The Nikkei 225 index is trading 0.8% higher at 15,694.8. The Hang Seng index is trading 1.8% up at 20,799.2, while the Kospi index is trading 0.6% higher at 1,968.0.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 1.13% or $0.57 lower at $50.04 per barrel, as fears over strike outages in Norway eased and Nigerian oil production improved. Yesterday, the contract climbed 4.18% or $2.03, to settle at $50.61 per barrel, after the Energy Information Administration reported that US crude stockpiles declined by 4.1 million barrels in the week ended 24 June 2016.
At 0330GMT today, Gold futures contract is trading 0.73% or $9.70 lower at $1317.20 per ounce. Yesterday, the contract advanced 0.68% or $9.00, to settle at $1326.90 per ounce, climbing towards a two-year high level, amid a broad weakness in the US Dollar.
At 0330GMT today, the EUR is trading 0.20% lower against the USD at $1.1103, ahead of the Euro-zone’s flash annual inflation data for June, scheduled to release today. Also, today’s German unemployment rate for June and retails sales data for May will grab a lot of market attention. Yesterday, the EUR strengthened 0.54% versus the USD, to close at $1.1125. The US Dollar lost ground against its peers, as reduced Brexit concerns dampened safe-haven demand for the currency.
At 0330GMT today, the GBP is trading 0.23% lower against the USD at $1.3398, ahead of UK’s GDP growth data for the first quarter, due in few hours. Yesterday, the GBP strengthened 0.64% versus the USD, to close at $1.3429, extending its gains from last session.
Fixed Income
In the US, long term treasury prices fell and pushed yields higher, as risk appetite improved amongst investors. Yesterday, yield on 10-year notes rose 4 basis points to 1.50%, while yield on 2-year notes gained 1 basis point to 0.62%. Meanwhile, 30-year bond yield rose 3 basis points to 2.30%.

Key Economic News
UK number of mortgage approvals for house purchases unexpectedly advanced in May

Compared to a revised level of 66.20 K in the previous month number of mortgage approvals for house purchases climbed unexpectedly to 67.00 K in the UK, in May. Markets were expecting number of mortgage approvals for house purchases to drop to a level of 65.30 K.
UK house prices surprisingly rose in June
The seasonally adjusted house prices in the UK registered an unexpected rise of 0.20% in June on a monthly basis, compared to a similar rise in the previous month. Markets were expecting house prices to record a flat reading.
UK M4 money supply rose in May
M4 money supply in the UK rose 1.20% in May on a MoM basis. In the prior month, M4 money supply had fallen 0.10%.
UK consumer credit recorded a rise in May
The seasonally adjusted consumer credit registered a rise of £21.45 billion in the UK, in May. Consumer credit had risen by a revised £21.49 billion in the prior month.
UK consumer confidence remained unchanged in June
The consumer confidence remained unchanged at -1.00 in the UK, in June, compared to market expectations of a fall to -2.00.
UK net consumer credit advanced as expected in May
Net consumer credit in the UK recorded a rise of £1.50 billion in May, at par with market expectations. Net consumer credit had registered a rise of £1.30 billion in the prior month.
UK house prices rose more than expected in June
In the UK, the non-seasonally adjusted house prices registered a rise of 5.10% on an annual basis in June, more than market expectations for a rise of 4.90%. House prices had risen 4.70% in the prior month.
UK net lending secured on dwellings rose more than expected in May
Net lending secured on dwellings advanced £2.80 billion in May, in the UK, compared to a revised rise of £0.10 billion in the previous month. Market expectation was for net lending secured on dwellings to advance £2.20 billion.
UK M4 Ex-IOFCs 3M annualised advanced more than expected in May
On a MoM basis, M4 Ex-IOFCs 3M annualised in the UK advanced 5.20% in May, higher than market expectations for an advance of 2.60%. M4 Ex-IOFCs 3M annualised had risen 4.10% in the prior month.
UK M4 money supply climbed in May
On a YoY basis, M4 money supply rose 1.80% in May, in the UK. In the previous month, M4 money supply had registered a revised rise of 1.10%.
Euro-zone services sentiment indicator dropped in June
in the Euro-zone, the services sentiment indicator recorded a drop to 10.80 in June, compared to market expectations of a drop to 11.00. In the prior month, the services sentiment indicator had registered a level of 11.30.
Euro-zone economic sentiment indicator fell unexpectedly in June
The economic sentiment indicator in the Euro-zone eased unexpectedly to 104.40 in June, compared to a revised reading of 104.60 in the previous month. Market anticipation was for the economic sentiment indicator to advance to 104.70.
Euro-zone business climate indicator slid unexpectedly in June
The business climate indicator dropped unexpectedly to a level of 0.22 in June, in the Euro-zone, compared to a level of 0.26 in the previous month. Market anticipation was for the business climate indicator to record a flat reading.
Euro-zone industrial confidence index climbed in June
The industrial confidence index in the Euro-zone climbed to -2.80 in June, compared to market expectations of an advance to a level of -3.40. In the prior month, the industrial confidence index had recorded a revised reading of -3.70.
Euro-zone consumer confidence index registered a drop in June
The final consumer confidence index recorded a drop to -7.30 in the Euro-zone, in June, compared to a level of -7.00 in the prior month. The preliminary figures had also recorded a fall to -7.30.
German consumer confidence index climbed unexpectedly in July
In July, the consumer confidence index rose unexpectedly to 10.10 in Germany, higher than market expectations of a steady reading. The consumer confidence index had registered a level of 9.80 in the previous month.
German HICP advanced as expected in June
On a MoM basis, in Germany, the preliminary harmonised consumer price index (HICP) climbed 0.10% in June, meeting market expectations. The HICP had climbed 0.40% in the previous month.
German CPI advanced as expected in June
On an annual basis in Germany, the flash consumer price index (CPI) rose 0.30% in June, at par with market expectations. The CPI had climbed 0.10% in the prior month.
German HICP advanced as expected in June
In June, the flash HICP advanced 0.20% on a YoY basis in Germany, compared to a flat reading in the prior month. Markets were expecting the HICP to climb 0.20%.
German CPI advanced less than expected in June
The flash CPI recorded a rise of 0.10% on a monthly basis in Germany, in June, compared to an advance of 0.30% in the prior month. Markets were expecting the CPI to climb 0.20%.
Spanish HICP index advanced more than expected in June
On a MoM basis, the preliminary HICP index climbed 0.40% in June, in Spain, higher than market expectations for an advance of 0.30%. The HICP index had recorded a rise of 0.50% in the prior month.
Spanish CPI fell less than expected in June
On a YoY basis in June, the flash CPI fell 0.80% in Spain, lower than market expectations for a fall of 0.90%. The CPI had dropped 1.00% in the prior month.
Spanish HICP index declined less than expected in June
On a YoY basis, the flash HICP index recorded a drop of 0.90% in June, in Spain, lower than market expectations for a fall of 1.00%. The HICP index had dropped 1.10% in the previous month.
Spanish CPI climbed in June
In Spain, the preliminary CPI rose 0.50% on a monthly basis, in June. The CPI had registered a similar rise in the prior month.
Swiss UBS consumption indicator recorded a rise in May
UBS consumption indicator rose to a level of 1.35 in Switzerland, in May, compared to a revised level of 1.24 in the previous month.
US personal consumption expenditure deflator rose as expected in May
In May, on a MoM basis, personal consumption expenditure deflator recorded a rise of 0.20% in the US, compared to a rise of 0.30% in the prior month. Market anticipation was for personal consumption expenditure deflator to climb 0.20%.
US personal consumption expenditure deflator advanced less than expected in May
In the US, personal consumption expenditure deflator climbed 0.90% on an annual basis in May, lower than market expectations for an advance of 1.00%. Personal consumption expenditure deflator had advanced 1.10% in the previous month.
US mortgage applications dropped in the last week
In the week ended 24 June 2016, on a weekly basis, mortgage applications in the US registered a drop of 2.60%. In the prior week, mortgage applications had registered a rise of 2.90%.
US personal income rose less than expected in May
Personal income climbed 0.20% on a monthly basis in May, in the US, less than market expectations for a rise of 0.30%. In the previous month, personal income had recorded a revised rise of 0.50%.
US pending home sales rose less than expected in May
On an annual basis, pending home sales climbed 2.40% in May, in the US, compared to a revised advance of 1.80% in the previous month. Market anticipation was for pending home sales to advance 4.60%.
US core personal consumption expenditure advanced as expected in May
On a MoM basis in May, core personal consumption expenditure recorded a rise of 0.20% in the US, at par with market expectations. In the previous month, core personal consumption expenditure had registered a similar rise.
US personal spending advanced as expected in May
On a MoM basis, personal spending in the US registered a rise of 0.40% in May, at par with market expectations. Personal spending had recorded a revised rise of 1.10% in the prior month.
US pending home sales declined more than expected in May
In May, on a monthly basis, pending home sales recorded a drop of 3.70% in the US, higher than market expectations for a fall of 1.10%. Pending home sales had recorded a revised rise of 3.90% in the prior month.
US core personal consumption expenditure advanced as expected in May
Core personal consumption expenditure rose 1.60% on an annual basis in the US, in May, in line with market expectations. Core personal consumption expenditure had registered a similar rise in the previous month.
Japanese vehicle production rose in May
Vehicle production in Japan rose 1.70% in May on a YoY basis. Vehicle production had dropped 9.70% in the prior month.
Japanese investors turned net buyers of foreign bonds in the previous week
Japanese investors turned net buyers of ¥394.20 billion worth of foreign bonds in the week ended 24 June 2016, as compared to being net sellers of a revised ¥457.50 billion worth of foreign bonds in the prior week.
Japanese industrial production unexpectedly slid in May
On an annual basis, the flash industrial production in Japan unexpectedly fell 0.10% in May, less than market expectations for an advance of 1.90%. In the previous month, industrial production had dropped 3.30%.
Foreign investors became net sellers of Japanese stocks in the previous week
Foreign investors remained net sellers of ¥184.20 billion worth of Japanese stocks in the week ended 24 June 2016, as compared to being net sellers of a revised ¥232.80 billion worth of Japanese stocks in the previous week.
Foreign investors became net sellers of Japanese bonds in the previous week
Foreign investors remained net sellers of ¥2157.50 billion worth of Japanese bonds in the week ended 24 June 2016, as compared to being net sellers of a revised ¥487.70 billion worth of Japanese bonds in the previous week.
Japanese small business confidence index registered a rise in June
In Japan, the small business confidence index climbed to 46.50 in June, higher than market expectations of an advance to a level of 46.10. In the prior month, the small business confidence index had registered a reading of 45.60.
Japanese industrial production declined more than expected in May
In May, the preliminary industrial production registered a drop of 2.30% in Japan on a MoM basis, compared to a rise of 0.50% in the previous month. Markets were anticipating industrial production to ease 0.20%.
Japanese corporate loans & discounts recorded a rise in May
In Japan, corporate loans & discounts rose 2.58% in May on an annual basis. In the previous month, corporate loans & discounts had climbed 3.05%.
Japanese investors became net buyers of foreign stocks in the previous week
Japanese investors remained net buyers of ¥211.60 billion worth of foreign stocks in the week ended 24 June 2016, from being net buyers of ¥72.40 billion worth of foreign stocks in the previous week.

Thu, 30 Jun 2016 09:16:00 +0100
Allister Heath: Radical Change Is Never Without Risk. But I Truly Believe That History Will Thank US for Brexit Allister Heath: Radical Change Is Never Without Risk. But I Truly Believe That History Will Thank US for Brexit
Here is the conclusion from this thoughtful column from The Telegraph:

Am I nervous? Absolutely, but I always knew what I was signing up to when I voted Leave. Self-government comes with massive potential upsides as well as huge potential downsides. Being able to choose a different path implies the possibility of doing better as well as that of doing worse.
I have been saddened beyond words by the fact that so many Remainers, including many close friends, not only cannot see any of this but are actually still refusing to accept the outcome. Such people are now explicitly post-democratic: they no longer believe in majority rule, just as they no longer accept the idea that there should be no taxation without representation or even, in the case of many younger people, that speech should be free. Their rejection of liberal democratic culture extends to no longer feeling able to give their political opponents the benefit of the doubt. They believe themselves to be part of the forces for good, and that their opponents are not just wrong but also obviously, unarguably evil. Many lead relatively gilded lives yet have allowed themselves to embrace a shameful snobbery that was supposed to have died out last century.
Apart from insulting working-class and non-urban voters, their analysis of the referendum, which pins the responsibility for Leave entirely on northern Labour voters, is deeply faulty: 61 per cent of Tories, including in the shires, voted leave, as did 40 per cent of Londoners, far more in absolute numbers than voted for Sadiq Khan.
I hope that this poison at the heart of our democratic culture hasn’t spread too far, and that political pluralism will still be able to thrive in Britain. We cannot become like America where Democrats and Republicans can no longer even be friends.
The magnitude of the challenge is the real reason why Johnson and Gove looked so sombre on Friday morning: with victory comes huge, almost unbearable responsibility. Only the greatest of men and women will be up to the task ahead. We need determination, discipline, cool under extreme pressure, grit and seriousness; we also need a national leader who can inspire the country and hopefully reunite the centre‑Right political family. Above all we need a speedy decision so that our next prime minister can begin to execute the voters’ instructions in a way that maximises our economic opportunities.

David Fuller's view
Wise words.  I wish more people could see them, and not just in the UK.
A PDF of Allister Heath’s article is posted in the Subscriber’s Area.

2016 star sectors: commodity shares and commodities, remain all but bullet proof
Here are some samples, including a number which are in my personal portfolio: 

David Fuller's view
Royal Dutch Shell B is currently short-term overextended and at initial resistance but it would have to break beneath the rising 200-day MA to indicate more than a temporary reaction and consolidation before higher levels are seen.

Janet Daley: Voters Today Are Crying Out for Sincere Opinions and Authentic Personalities
Here is the opening of this perceptive column by Janet Daley for The Sunday Telegraph:

In all the excitement you may have missed one of the more telling moments of Friday morning’s news coverage. Interviewed on the Today programme, Peter Mandelson made a particular point of praising the splendid “professionalism” of the Stronger In campaign and its director, Will Straw – as if the fact that they had lost, and utterly misjudged the feelings of the electorate, was purely incidental. It was like a television critic lauding the production values of a programme that had totally flopped with the viewing audience.
What matters in politics apparently is not the verdict of the voters but the quality of the message delivery. Suddenly it was possible to see with luminous clarity all the absurdity of modern political strategy and the terrible end to which it has come.
This defeat for Remain is about much more than the country’s dislike of the EU. When politics became a branch of the advertising industry, it was just a matter of time before it lost touch entirely with the point of the democratic process: it became at least as important to run a “professional” (slick, controlled, flawlessly manipulated) campaign as to represent the views of real people.
Or even to listen to them. Because if anybody in that sinister alliance of mainstream parties had bothered to listen they would have gathered that what had alienated the public most was precisely what political strategists call “professionalism”.
What the voters want – as they have now made stunningly clear – is unprofessionalism: genuine, spontaneous responses from people who may sometimes look amateurish and flawed but who appear to have sincere opinions and authentic, idiosyncratic personalities.(Cue Boris Johnson?)
There was a time when British political life was full of such people. Jim Callaghan, George Brown, Norman Tebbit and Ken Clarke are names that drift inevitably into memory: they had wildly differing opinions and degrees of effectiveness but they were alike in their authentic humanity, and were often popular with people who disagreed with them.
Then they were replaced by homogenised androids whose messages were honed and performances strictly managed – and now we are where we are: with a population so furious and disillusioned that it does not believe a word that its national leaders utter.
It is important to understand who it is exactly that is so angry and disgusted with the super-professional management of politics. There is a dangerous myth being reinforced in the post-mortem discussion that the result of this vote was entirely attributable to the anger of the “white working class” (code for “reactionary bigots”).
This is certainly not true. The real white working class, as opposed to the demonic one that suits the purposes of cosmopolitan liberals, is a now a shrinking minority of the population. It could not, by itself, have accounted for the fact that every single region of England apart from London, voted for Leave.
There aren’t that many white van men and disgruntled low-paid workers in Surrey and Berkshire. If affluent Home Counties and economically successful Midlands towns went for Brexit then there is something more going on here than the condescending cosmopolitans of London like to tell themselves and each other (because they speak only to each other).

David Fuller's view
Well said, although I wish she had included Margaret Thatcher in that list.  It has been fashionable to vilify her in recent decades but she put the UK economy back on an economically competitive course by reigning in the UK’s equivalent of the French unions.
I commend the rest of Janet Daley’s column to you; it is one of her best.
(See also Janet Daley’s prescient column: If the Era of Democracy is Over in Europe, It Is Time for Britain to Get Out, posted on September 29 2015.)
A PDF of Janet Daley’s latest article is posted in the Subscriber’s Area.

My personal portfolio
A trading profit taken

David Fuller's view
Details and charts are in the Subscriber’s Area.

The Markets Now
Monday 11th July at the East India Club, 16 St James's Square, London SW1Y 4LH

David Fuller's view
Note: Given the importance of Brexit and its influence on markets, how about a short interactive discussion on this topic before the planned presentations commence?
Here is the Brochure.  There are only a few seats left in the Seminar room.
Could we have a more interesting markets background to discuss on 11th July?  I doubt it and am looking forward to discussing market opportunities with subscribers and their friends at this post-Brexit seminar, held in the comfort of the East India Club.  David Brown will provide new material of considerable interest to long-term investors.  Iain Little will also have some new material, in addition to his review of interesting investment trusts.

Thu, 30 Jun 2016 09:12:00 +0100
Beaufort Securities Breakfast Alert: Bunzi, Dixons Carphone Group, Fox Marble, Watkins Jones Markets

The FTSE-100 finished yesterday's session 3.58% higher at 6,360.06, whilst the FTSE AIM All-Share index closed 1.27% better-off at 697.56. In continental Europe, markets ended in the green, recovering some of the loss incurred during the immediate aftershock of Brexit. A rally in oil and commodity prices led to gains in basic resource stocks. France's CAC 40 and Germany's DAX rose 2.6% and 1.7%, respectively.
Wall Street
Wall Street extended gains for the second consecutive day as concern over Brexit appeared to ease. Additionally, a rally in oil prices boosted investor sentiment. The S&P 500 increased 1.7%, with the energy sector gaining the most.
Equities are trading higher following a rally in global markets as concern surrounding Brexit subsided. The Nikkei 225 rose 0.1%, supported by a weaker yen. The Hang Seng was trading 1.6% up at 7:00 am.
Yesterday, Brent oil prices rose 4.2% to US$50.61 per barrel. WTI prices also increased 4.2% to US$49.88 per barrel.

UK consumer confidence remains steady in June
As per GfK, UK consumer confidence remained at -1.0 in June, unchanged from the previous month and better than the market expectation of -2.0. GfK conducted the survey prior to Brexit, and plans to conduct an additional mid-month survey to gauge the impact of UK's decision to leave the EU.

Company news

Bunzl (LON:BNZL, 2,230.0p) - Buy
Yesterday, Bunzl issued a trading statement for the six months ended 30th June 2016. The company expects revenues for H1 2016 to grow 9% y-o-y at actual interest rates. The revenues are expected to increase 6% at constant exchange rates due to the impact of acquisitions. Bunzl purchased two businesses in the UK and Belgium yesterday. The first one being The Classic Printed Bag Company Limited, a Christchurch-based firm, involved in the development and distribution of bespoke retail packaging for non-food retailers in the UK, Hong Kong and elsewhere in Europe. In addition, Bunzl acquired Polaris Chemicals SPRL, a distributor of cleaning and hygiene supplies based near Brussels. Bunzl completed the purchase of Mo Ha Ge and Inkozell after receiving clearance from the German competition authority. For the year to date, the company acquired five businesses at a total cost of approximately £80m.

Our view: Bunzl's performance in H1 2016 has been in line with the expectations. Bunzl continued its plan of acquiring quality firms to expand business; it completed five acquisitions during the period. The purchase of Mo Ha Ge and Inkozell is an important development for Bunzl, as they both would expand the company's healthcare-related operations in Germany. Bunzl entered the German market through its acquisition of Bäumer in 2014. Moreover, the company has an active pipeline for acquisitions and expects to complete further acquisitions in H2 2016. We expect Bunzl's strong competitive position to remain intact due to the significant acquisitions thus far. We believe more such opportunities could emerge and consolidate its fragmented markets. We remain confident that the company will continue to grow robustly in H2 2016, riding on the success of its recent acquisitions. Therefore, considering the positives, we maintain a Buy rating on the stock.

Dixons Carphone (LON:DC., 335.40p) - Buy
Yesterday, Dixons Carphone declared its preliminary results for the year ended 30th April 2016. During the period, revenues increased 3% y-o-y to £9.7bn, with like-for-like (LFL) revenue growth of 5%. Revenue from the UK and Ireland increased 2% to £6.4bn, with LFL revenue growth of 6%. Pre-tax profit for Dixons soared 17% to £447m, resulting in an EPS of 29.3p as compared with 25.5p in the previous year. Free cash flow stood at £202m (FY 2015: £89m) and the net debt remained broadly flat at £267m. On the operational front, Dixons Carphone purchased Simplifydigital, a mobile and broadband switching website. The company proposed a final dividend of 6.50p, taking the full year dividend to 9.75p, 15% higher than the last year.

Our view: Dixons Carphone delivered excellent performance in FY 2016, with positive contributions from most divisions. In the UK and Ireland, the Rugby World Cup boosted the company's sales. While, demand for fridges and freezers helped in offsetting the slowdown in the computer market. The Nordics business recorded 6% growth in revenues despite the challenging commercial environment and aggressive competitive pricing. Connected World Services, a small unit that sells its technology to other retailers, performed well after signing a deal to test its systems in Sprint stores in the US. The company plans to launch the technology in 500 Sprint stores and expects a contribution of US$40–50m to annual earnings by 2020. The acquisition of Simplifydigital would enable the company to significantly improve its Services business; Dixons Carphone would provide independent advice and allowing it to become a trusted partner in customers' homes for responsive, accessible, expert and affordable technology support. The company's solid cash position paved way for higher dividends payable to shareholders. In view of Dixons Carphone's encouraging LFL revenue growth, increasing market share and operational progress, we maintain a Buy rating on the stock.

Fox Marble (LON:FOX, 10.25p) - Speculative Buy
Fox, the AIM listed group focused on marble quarrying and finishing in Kosovo and the Balkans region, yesterday provided an update on its order book. It detailed a further €400,000 purchase order submitted by Pisani plc along with a sales agreement signed with Marble Dino Sh.p.k., a trader of marble and other commodities and is involved in the purchase, shipping and resale of the material in the Balkans. The agreement is for the supply of €1,500,000 worth of marble slabs during 2016 and 2017, of which €250,000 is expected be recognised during the 2016 year with the balance in 2017 and has received an advance payment of €25,000. Fox Marble's 2016 order book now stands at €4.6 million and its Kosovo factory is nearing completion with new equipment now installed.

Our view: Putting past disappointments behind them. Fox Marble's business opportunity always was exciting. But a run of unfortunate, hindering events together with a 2015 order book that failed to match expectations and culminated in a heavily discounted fund raise in May left CEO, Chris Gilbert, with a lot to prove. The signs are that he is starting to deliver. The order book is now building out and key strategic long-term distribution agreements are being put in place. Progress at the factory site will bring the Company closer to self-sufficiency with completion promising increased margins and direct sales opportunities across multiple distribution networks, including the Balkans locally. With major capital costs already mostly taken care of, the recently strengthened balance sheet is now focused on developing deep relationships within global distribution networks, the real prize being found in management's ambition to become a regular, premium supplier to huge markets in the Middle East, North America, India and Europe. Despite global economic uncertainty, demand for premium-quality marble continues to increase with prices remaining firm and rising. Given the size and quality of Fox's resource and operational facility, a comprehensive distribution network now appears to be the final missing piece in the Company's strategic jigsaw. Assuming management can successfully put such arrangements in place, there appears little to stand in the way of the Company delivering a quite dramatic improvement in visibility and depth of its order book in coming years. These earnings, in turn, should be capable of dropping rapidly to the bottom line, of which the management has already indicated its willingness to distribute in the form of dividends. Beaufort retains its Speculative Buy rating on Fox Marble.

IG Design (LON:IGR, 161.0p) - Speculative Buy
IG Design (formerly known as International Greetings), is a designers, manufacturers, importers and distributors of gift packaging and greetings, stationary and play products. The Group yesterday announced its preliminary results for the year ended 31 March 2016 ('FY2016'). During the period, revenue advanced +3.5% to £237m, while at like-for-like foreign exchange basis, it grew +4.4%. Overall gross margin improved by +0.8%, resulting underlying pre-tax profit (before exceptional items and long term incentive plan charges) increased by +18% to £10.8m. Adjusted fully diluted earnings per share, consequently, also expanded by +15% to 13.2p. The Group cash generated from operation rose +16% to £20.7m, while net debt reduced by -40% to £17.5m. On the operational front, the Group has made good progress expanding across all geographies, where non-UK revenue by customer destination now stood at that 66% (FY2015: 67%). Australia and USA saw +66% and +34% jump in profits, respectively, in local currency. The Group has successfully launched Star Wars licensed products in the period and said sales volume for Star Wars, Spiderman, Minions and Peppa Pig products were high. IG Design has also completed a sale of property in Aberbargoed, Wales for £1.45m. IG Design's CEO, Paul Fineman commented "I am delighted to report that the Group has delivered another year of strong growth with all metrics again exceeding our financial, commercial and operational goals. We have, once again, demonstrated our ability to turn profit into cash and successfully deliver fast payback on investments made, allowing us to increase dividends from 1p to 2.5p". As previously announced, the Group increased final dividend to 1.75p per share, bringing full year dividend to 2.5p per share (FY2015: 1.0p per share).

Our view: IG Design delivered an excellent set of results for the FY2016, having exceeded its objectives in profit generation, cash generation and earnings per share growth. The Group further strengthened its balance sheet with net debt reduced impressively by -40%, taking its leverage 1.0x (FY2015: 1.8x). The Group's ongoing investments in manufacturing efficiencies particularly bore fruit in Asia, with record levels of cracker, gift bags and cards manufacturing, while Mainland Europe saw gift wrap manufacturing volumes at their highest ever level. Having installed new wrap converting facilities for gift wrap manufacturing platform in the USA on time and on budget, with the region witnessing record sales and trading profit levels for FY2016, we think there is further upside potential for the Group. The management has clear vision for profit growth through global expansion and offering multi-category, design-focused products. The Group accordingly hiked the FY2016 dividend by +150%, which was almost 5.3x covered by underlying earnings. Management has confirmed a minimum cover of 3x, which suggests shareholders might look forward to higher dividends in future years. As such, we are encouraged by the IG Design's performance and given progress in its diversifying global portfolio activity; we see no significant impact to its finances from the BREXIT outcome. Post the period, the Group secured "flexible and competitive" global funding arrangements for all wholly owned businesses. Beaufort reiterate its Buy rating on the stock.

Watkin Jones (LON:WJG, 103.0p) - Speculative Buy
Watkin Jones, the leading UK developer and constructor of multi occupancy property assets focussed on the student accommodation sector, yesterday announced it had received planning consent to progress with its redevelopment of Duncan House in Stratford. The proposed redevelopment, which is located in Stratford High Street E15, consists of 511 beds (420 beds and 91 studios), 44 residential units and 30,000 square feet of academic space. The total gross development value of the scheme is around £100 million. Watkin Jones is in advanced negotiations with University of London, one of the world's most prestigious academic institutions and their funding partners, to forward sell the student part of the Duncan House scheme as per the Group's business model. The residential units will be sold in a separate transaction. The development is expected to be completed in 2019.

Our view: Another positive step! Coming hard on the heels of Watkin's IPO, however, investor questions are presently centering more around the Brexit outcome and its various company scenarios. But as far are Watkin Jones is concerned, the impact of separation from the EU is not expected to be significant. The number of EU students in the UK stands at around 125k (roughly 5%) and these are usually able to study on the same fees basis as our own 'home students'. Should, in a 'worse case' outcome, EU students find themselves financially disincentivised from seeking a future UK education, the net impact on Watkin Jones should not be material. Occupation of its accommodation remains significantly oversubscribed by other international students, who tend to favour the security and conditions it offers compared with more traditional options. Given also that the Group pre-sells its developments to asset managers who remain desperate to secure such high-yield collateralized income, its business opportunity very much remains intact. Indeed, this alternative asset class offers both excellent cash flow visibility and highly stable property-sector yields from operations that are well insulated from underlying economic activity. As such, it is able to forward-fund projects though a long list of hungry institutional buyers – creating an ideal high return, high visibility, capital light model that is almost unique in the world of residential development. With just 6% of the UK's total full-time student population currently occupying PBSA (purpose built student accommodation), at a time when government legislation is limiting HMO (houses in multiple occupation) supply and introduced higher stamp duty on buy-to-let property, the sector is expected to enjoy quite significant growth for years to come while capital growth continues to sharpen returns. The shares have been knocked by the Brexit outcome, which now presents investors with an important buying opportunity. The Group is set to deliver double digit earnings growth (implying a 2016E P/E of 8.8x, followed by 7.7x) for the next several years, combined with a generous progressive dividend. With significant net cash in hand at IPO, management was confident enough to project a current year yield to September 2016 of over 4% (based on second-half payment only), followed by 6.2% for full year 2016/17; beyond this, surplus generation could also find its way into shareholder's pockets through specials as well. Beaufort sees good value in Watkin Jones and now formally places a price target of 125p on the shares, which it recommends to both income and growth investors.

Thu, 30 Jun 2016 08:52:00 +0100
VSA Capital Market Movers - Independent Oil & Gas Tullow Oil Independent Oil & Gas (LON:IOG)

Independent Oil & Gas (LON:IOG) has given greater clarity on the Skipper appraisal well by confirming it will be drilled in the second half of July 2016. As a reminder the vertical well is to be drilled to 5,600ft to retrieve oil samples in order to develop a reservoir model and optimise the FDP. Once the FDP is approved IOG believe the Skipper’s independently verified 2C contingent resources of 26.2mmboe should be converted into 2P reserves, however IOG’s management believe this to be conservative and considers 34.1mmboe as its own mid case estimate. The well will also target two exploration prospects directly beneath which may contain 46mmboe providing potential for further upside on the well.

We maintain our BUY recommendation and our TP is under review as we await further information on the Vulcan satellites.

Tullow Oil (LON:TLW)

Tullow Oil (LON:TLW) has released its trading statement ahead of its H1 2016 results expected on 27 July. Operationally TLW’s working interest oil production was below guidance in West Africa averaging 51.9kboepd following issues with the FPSO turret on the Jubilee field in Ghana in February and resulted in an extended shut down period until early May. Production at Jubilee has now restarted and TLW expects net-production to the company to average 26.3kboepd. As a consequence it has revised down its West Africa guidance for the year to 62-68kboepd from 73-80kboepd, although this is significant it was expected and its business interruption insurance covers the loss of production and revenue from Jubilee.

The major TEN project remains on schedule and within budget and is now expected to deliver first oil in three to six weeks, which will be a significant milestone for TLW which estimates the average annualised production in 2016 will be 11kboepd net to the company. A gradual ramp-up in production towards the FPSO capacity of 80kboepd is expected at the end of 2016. Whilst drilling is not expected to recommence until the Ghana/Ivory Coast border dispute is resolved in late 2017.

TLW’s capex guidance remains at US$1bn as planned savings were offset by the additional capex associated with the Jubilee turret ahead of any insurance payments. TLW remains well funded after completing its reserve based lending redetermination process with debt capacity of US$3.5bn. Net debt is now estimated to be US$4.7bn and unused debt capacity and free cash is cUS$1bn. Overall we did not find anything particularly surprising about this update, it will be pleasing to see TEN come online and whilst the lower guidance is disappointing it was expected.

Thu, 30 Jun 2016 08:49:00 +0100
Northland Capital Partners View on the City: Stratex International, Petrel Resources Stratex International (LON:STI) – BUY*: Goldstone update
Market Cap: £9m; Current Price: 2p; Target Price: 6.6p

Directorate change
 Goldstone Resources a Company that Stratex International holds a 33.45% interest in has appointed interim CEO, Emma Priestley, as an Executive Director and Andrew Bell as a Non-Executive Director.
 Emma Priestley is chartered Mining Engineer and Mineral Surveyor and is currently an advisor to African Resource Capital and was previously an Executive Director of Lonrho.
 Andrew Bell was formerly a mining and oil and gas analyst before becoming a unit trust manager and pension fund manager. He is currently Executive Chairman of Regency Mines, Chairman and CEO of Red Rock Resources and Chairman of Greatland Gold. Mr Bell currently holds 1,196,834 shares in Goldstone (1.92%) and Red Rock Resources holds 6,006,587 shares (9.64%).
 No change to forecasts, rating or price target.

Petrel Resources (LON:PET) – CORP: Seismic survey commences
Market Cap: £7.7m; Current Price: 7.8p

Seismic survey underway on FEL 3/14
 Petrel Resources have been informed by joint venture partner, Woodside Energy, that the Bréanann 3D seismic programme commenced on 27/06/16 FEL 3/14 in the Porcupine Basin, Irish Atlantic. The programme is expected to take five weeks.
NORTHLAND CAPITAL PARTNERS VIEW: Positive news for Petrel Resources with the commencement of the 3D seismic on FEL 3/14 where the Company has a 15% carried interest. The seismic survey will cover an area of 2,400km2 which is around 40% of the licence area.

Thu, 30 Jun 2016 08:22:00 +0100
Brexit relief rally lost mojo on prospect of BoJo? FTSE 100 called to open +10pts at 6345, having regained pre-Brexit (and 2016) highs amid an impressive 5-day recovery rally. After a close test of 6400 overnight, the index has traded around 6350. And despite weakening back since, could be in the midst of a bullish continuation triangle that sees the index maintain its northerly push. The Bulls will be watching for a break beyond overnight falling highs at 6375, while the Bears eye any venture close to 6300 for signs that it is has peaked and could be turning over. Watch levels: Bullish 6375, Bearish 6325.
A positive opening call, and most tepid since last Tuesday, comes after another session of gains in both the US and Asia. This in response to UK blue-chips having retraced Brexit losses and markets appearing to take a reassuring look through near-term fears (political, economic, financial) on the premise that central banks will remain in low rates-and-stimulus-mode to help keep risk assets bid, even if it is at the expense of fixed income and despite the GBP still in the doldrums. Note a weaker USD and accompanying gains in commodities - notably copper and oil - helping sentiment.
Australia's ASX is outperforming as Energy and Miners advance on aforementioned commodities gains and recovery by dual-listed UK natural resources and financials. Japan's Nikkei is unable to keep up as the Yen remains close to highs on account of the easing in USD strength. China stocks flat.
US markets rallied hard yesterday amid diminished angst concerning the UK’s exit from the EU. The S&P 500 has had its best 2 days in four months, Dow Jones closed up 1.6% and the Nasdaq climbed 1.9%. Some degree of prudence might not be a bad idea in terms of trading the US indices today, after such a strong couple of days stemming from diminished rate hike expectations and bargain hunting, and with underlying medium-term global uncertainty still very much there.
Note the US arms of Deutsche Bank and Santander failed the latest round of Fed stress tests for the second and third year running respectively. This presumably has implications for their parents back home in Europe, as stress test resilience is a condition that needs to be met in order to be allowed to return capital to shareholders in the form of income and share buybacks.
Crude oil prices are well supported this morning after yesterday’s EIA data confirmed Tuesday’s API print with a 4m barrel drawdown in US inventories. While Brent looks quite solid above the crucial $50 level, note the US marker could correct to $49.2 or thereabouts before resuming its northerly march. Note also potential for a little downside in equity markets after a very strong couple of days in that space.
Gold is in trading a narrowing 2 day range as risk appetite improves. Note this could prove to be a very long, drawn out consolidation pattern ahead of more upside, with underlying uncertainty still dominant.  A bounce off $1315 could see the ceiling of falling highs revisited at $1325.
In focus today will be the fallout from the latest EU summit, the summary statement from which made it clear that if the UK wants to retain single market access it must respect ALL 4 pillars of EU free movement; goods, services, capital and, most importantly, people. With immigration being the driver for a UK Leave vote, this suggests we could be headed for an EEA-like agreement like Norway's, but not for a few years yet.
In terms of data, French CPI is seen cooling in June, but getting off flat on an annual basis similar to what we saw from Germany yesterday. The Eurozone CPI figure is forecast to have climbed out of deflation in June but the Core reading stable, while Italy remains in deflation. German unemployment is seen flat and UK Q1 GDP confirmed up 0.4% on the quarter and up 2.0% over the year.
In the afternoon, consensus for US Chicago PMI is for an improvement of almost 2 points to above 50 along with flat Jobless Claims. The Bank of England (BoE) Governor Mark Carney also speaks just before the UK close, which is sure to garner plenty of attention should it contain plans for intervention. The Fed’s Bullard also speaks this later evening.

Thu, 30 Jun 2016 08:21:00 +0100
Oil price, Circle Oil, Sundry-Amec FW- NTOG-GKP- And finally... Oil price
I should change that header bar to oil and natural gas price as at the moment the yellow jersey is being worn by the latter. I have been told a number of times in recent months by people who really do know these things that US natural gas is the place to be right now and hope that I have passed that on. The future is over 3 bucks now and if my panel at the Oil  & Gas Council last week are to be believed then it has got $5 written all over it. Think of Pantheon with all its associated gas and other to whom gas is a meaningful part of the equation.
Meanwhile, back in oil land, risk came back on as the dollar weakened and threats of Fed tightening receded again with more outages from Norway possible  due to the impending strike and of course Venezuela disappearing in a hand basket. Finally the API stats which come out after the close, showed a draw of 4m barrels, against the whisper of 2.4m b’s.
Circle Oil
A short but sweet statement from Circle Oil today, ( I ignored the results as they were not signed off) indicating that whatever happens on the strategic review front which is still progressing, ‘no value will be attributed to equity holders’. IFC seems to be somewhat supportive but then in this state it would be, wouldnt it? The shares have been suspended on grounds of uncertainty which is a nice way of putting it and I imagine the vultures are circling for want of a better word. There are  a number of African assets in the portfolio which I would expect to see being taken from the ashes although probably at distressed prices.
Amec FW has won a contract from the MOD to supply independent nuclear propulsion, safety and technical advice to the Royal Navy’s submarine flotilla. The contract is worth around £75m over five years.
NTOG has sold its stake in the Chisholm Train prospect for $2.1m, this is partly as the other, larger holder was selling and so it made sense. It probably wiped its face and gives Matt a few bucks in the skyrocket to invest in the other things he has been buying lately.
Gulf Keystone has received another part of its monthly invoice from the KRG who are certainly stringing out this process, it’s as if they are short of the money…
And finally…
There wasnt any news yesterday so didnt do a blog and therefore was unable to congratulate Iceland on their memorable victory over the English rabble. Yesterday watching the FA press conference in which the CEO of the organisation declared ‘I am not an expert on football’ gave me enormous confidence. The idea of appointing Gareth Southgate to do anything more than put out the flagposts at St Georges Park fills me with utter dejection, you might as well go back to the wally with the brolly, come to think of it, what is Iain Dowie doing at the moment?
Today sees the start of the Henley Royal Regatta where much champagne is served and toffs in stripey jackets run down the course in pink ties.
And its the next one-dayer in the cricket and thanks to a rather strange points system England have already won the overall series, good thing to really as more rain is forecast.

Wed, 29 Jun 2016 11:27:00 +0100
Brokers bearish on Aviva and Direct Line Wed, 29 Jun 2016 10:58:00 +0100 Today's Market View Including: Amur Minerals, Anglo Asian Mining, Aston Bay Holdings, Hummingbird Resources, Kenmare Resources, Ortac Resources, Rambler Metals Amur Minerals* (LON:AMC) – 2015 results: permitted, well-funded for 2016 works and launching the DFS
Anglo Asian Mining* (LON:AAZ) – 18koz hedged at the US$1,200-1,426/oz range
Aston Bay Holdings (LON:BAY) – BHP funded field season starts at Storm copper project for Aston Bay
Hummingbird Resources (LON:HUM) – Expanding exploration exposure in Mali
Kenmare Resources (LON:KMR) – update on proposed capital raising and deleveraging
Ortac Resources* (LON:OTC) – Casa Mining updated scoping study
Rambler Metals (LON:RMM) – Third Quarter earnings

Dow Jones Industrials   +1.57% at       17,410
Nikkei 225   +1.59% at       15,567
HK Hang Seng   +1.31% at       20,436
Shanghai Composite   +0.65% at        2,932
FTSE 350 Mining   +2.33% at        9,983
AIM Basic Resources   -1.23% at        1,914

Economic News
Equities are picking up for a second trading session led by gains in the financial, energy and mining stocks.
• Brent is up more than 1% today hovering around US$49.1/bbl level as US inventories are reported to have dropped by 3.86mmbbl last week, according to the API report.
• US$ index is slightly off (-0.3%) with gold prices posting a modest increase (+US$6/oz).
• Base metals are largely range bound following the biggest daily increase in three months recorded yesterday.
• Metals soared 2.3% on Tuesday as markets stabilised on speculation for global easing policies following the Brexit vote.

Date Index Period Actual Expected (Bloomberg) Previous
Monday Markit Services PMI Jun 51.3 52.00 51.3
  Markit Composite PMI Jun 51.2   50.9
Tuesday GDP (Terminal) Q1 1.1%qoq 1.0%qoq 0.8%qoq
  Personal Consumption (Terminal) Q1 1.5%qoq 2.0%qoq 1.9%qoq
  Core PCE (Terminal) Q1 2.0%qoq 2.1%qoq 2.1%qoq
  SP/CS 20 City Apr 0.5%mom/5.4%yoy 0.6%mom/5.4%yoy 0.8%mom/5.5%yoy
Wednesday Personal Income May  0.3%mom 0.4%mom
Personal Spending May  0.4%mom 1.0%mom
PCE May  0.2%mom/1.0%yoy 0.3%mom/1.1%yoy
Core PCE May  0.2%mom/1.6%yoy 0.2%mom/1.6%yoy
Thursday Weekly Jobless Claims     267k 259k
Friday ISM Manufacturing PMI Jun   51.4 51.3
  Wards Total Vehicles Sales Jun   17.3m 17.4m
Source: Bloomberg    

China – Data on corporate bond defaults suggest the government is slowly moving towards a market based approach to regulation and reducing fiscal support to troubled firms.
• The number of Chinese bond defaults YTD tripled compared to the annual 2015 number (21 v 7 last year).

Venezuela – Oil production which is currently at the weakest since 2009 is forecast to further slide back as the nation falls behind on its payments to oil services companies.
• The number of oil drill rigs fell by 10 to 58, the lowest level in over a year, in May.
• The government is preparing to take over functions of oil services providers by setting up a new state owned firm Camimpeg under the control of the military.
• Given a lack of experience Camimpeg is expected to underperform with production unlikely to be able to hold at current levels.

Russia/Mongolia – Russia is selling its stakes in Mongolian copper and gold JVs to a unit of Trade & Development Bank of Mongolia, Bloomberg reports.
• The size of the deal was not official;y disclosed while people familiar with negotiations suggested the Mongolian bank is paying c.US$500m for 49% in Erdenet Mining Corp and Mongolrostcvetmet.
• JVs were set up by the former Soviet Union and Mongolia in the 1970s with Mongolrostcvetmet producing gold and iron ore while Erdenet focused on copper with around 530kt copper con produced annually.

UK Politics – we are wondering when David Miliband will return to save the Labour Party.
• Mr Miliband currently works for International Rescue in NY – pictures below for anyone who remembers the Thunderbirds TV series and still wears the Badge of International Rescue. Beam me up Scottie

More UK Politics – The SNP have applied to replace Labour as the official Commons opposition in a move that proves that reality can be stranger than fiction
• The reason is that there are currently more SNP MPs supporting their leader than in the Labour party
• The SNP have 54 MPs supporting Nicola Sturgeon while Labour only have 40 MPs supporting Mr Corbyn
• More than 20 MPs resigned from Labour’s shadow cabinet earlier this week in an attempt to force Mr Corbyn’s resignation
• Corbyn is generally seen as unelectable in the probable event of a near-term general election

US$1.1062/eur vs 1.1060/eur last week.    Yen 102.54/$ vs 102.10/$.    SAr 14.985/$ vs 15.276/$.    $1.339/gbp vs $1.331/gbp.
0.743/aud vs 0.740/aud.    CNY 6.647/$ vs 6.651/$.

Commodity News
Precious metals:
Gold US$1,320/oz vs US$1,314/oz last week
Gold ETFs 62.4moz v 62.2moz last week
Platinum US$988/oz vs US$981/oz last week
Palladium US$574/oz vs US$553/oz last week
Silver US$18.24/oz vs US$17.65/oz last week
Base metals:   
Copper US$ 4,791/t vs US$4,780/t last week
Aluminium US$ 1,621/t vs US$1,607/t last week– US Midwest aluminium premiums fells to the lowest in 8 months, Harbor reports.
• Premiums dropped to US$143-153/t from US$149-160/t on Monday.
Nickel US$ 9,275/t vs US$9,185/t last week
Zinc US$ 2,062/t vs US$2,040/t last week
Lead US$ 1,732/t vs US$1,721/t last week
Tin US$ 16,835/t vs US$16,870/t last week

Oil US$49.2/bbl vs US$48.2/bbl last week
Natural Gas US$2.878/mmbtu vs US$2.750/mmbtu last week
Uranium US$26.55/lb vs US$27.00/lb last week

Iron ore 62% Fe spot (cfr Tianjin) US$52.3/t vs US$52.2/t
Thermal coal (1st year forward cif ARA) US$53.5/t vs US$54.5/t last week

Tungsten - APT European prices stood unchanged at $200-220/mtu from last week

Company News

Amur Minerals* (LON:AMC) 3.8p, mKT cAP £19.3m – 2015 results: permitted, well-funded for 2016 works and launching the DFS
• Operations update: By far the most important achievement in the Company’s history was securing the Production License from the Ministry of natural Resources in May/15.
• 5,821m of infill and step out drilling have been completed through the 2015 field season with major focus on the Flangovy deposit and additional drillholes driven in the Maly Kurumkon area.
• Two step out holes in the Flangovy area extended the the mineralisation by 400m with the resource remaining eastward open.
• The Maly Kurumkon/Flangovy (MKF) drilling programme allowed the Company to expand the resource to 90.6mt containing 367kt Ni and 110kt Cu with c.75% hosted by the Indicated category.
• This compares to 52.9mt containing 294kt Ni and 85kt with c.40% in the Indicated category estimated before.
• Additionally, the Company traced a high grade (+0.75% Ni) extension over 1,700m which is expected to supply better grade material early in the project life.
• In Jun/15, an updated in-house PEA showed attractive economics of the development of a captive smelter for production of an intermediate Low Grade Matte for export to China, India and South Korea.
• Post 2015, the Company updated resources at Ikenskoye (IKEN) and Kubuk to account for a potential for open pit and underground operations.
• The latest resource stands at 164.8mt containing 740kt Ni and 213kt Cu, up from 121kt and 651kt Ni and 178kt Cu calculated before.
• In Aug/15, the Company signed an agreement with the sovereign Far East and Baikal Development Fund in providing assistance in finding financing in Russia, India and China.
• Outlook: The management targets a completion of the DFS by the end of 2017.
• Before that, Amur Minerals is planning to complete a 15,000 drilling programme this year with a primary focus on generating a large sample for met tests from the MKF deposit, the largest across the Kun Manie project, and further infill drill the area to expand the Indicated category and a potential reserve base.
• Financials: The Company remains debt free and well-funded for future exploration and appraisal works with US$9.6m in the bank and an outstanding £12.5m capital commitment from a private fund as of Dec/15.
• The Company incurred a $0.7m loss (2014: -US$1.4m) as higher admin costs reflecting a non-cash charge for options grant were compensated by financial gains on Lanstead equity swap facilities.
• FCF totalled -US$5.8m (2014: -US$2.7m) including -US$3.1m balance in cash flow from operations (2014: -US$2.0m) and -US$2.7m spent on exploration and additional equipment (2014: -US$0.7m).
*SP Angel act as Nomad and Broker to Amur Minerals

Anglo Asian Mining* (LON:AAZ) 16.4p, Mkt Cap £18.4m – 18koz hedged at the US$1,200-1,426/oz range
• The Company entered into a series of net zero cost options locking in a gold price range for 18koz of its sales for H2/16 at US$1,200-1,426/oz.
• Options expire in 1.5koz lots every two weeks with the last one maturing on 13 Dec/16.
• Should gold price remain within the range during the period, gold sales will be completed at spot.
Conclusion: The decision to hedge c.25% of annual production is a good strategic move to take advantage of a recent pick up in gold prices and taking into consideration the Company’s outstanding debt repayment schedule. A wide gold price range locked in by the hedge leaves a potential to capture an upside should the precious metal surge towards the US$1,426/oz level and protect from a possible correction in the gold market.
*SP Angel act as Nomad and Broker to Anglo Asian Mining

Aston Bay Holdings (CVE:BAY) C$0.40c/s, Mkt cap $22m – BHP funded field season starts at Storm copper project for Aston Bay
(75% BHP Billiton, 25% Aston Bay after option exercise)
• Aston Bay Holdings have announced their joint venture field season at the Storm copper property in Nunavut Canada.
• Drilling and other activities are due to start in early July
• Aston Bay is currently the operator of the project with a C$4m budget for the current field season.
• Thomas Ullrich, ex chief geologist for Antofagasta in North America is coo of Aston Bay and is running the field program.
• The idea is to better understand the processes and controls which formed exceptionally high-grade copper mineralisation within this sedimentary hosted property in Canada.
• Copper appears to have replaced hydrocarbons within the sedimentary package at the Storm property creating what looks like Congolese style high-grade copper mineralisation.
• If the thesis proves correct then the Storm property could provide a new front for copper exploration for BHP and no doubt other majors.
• Aston Bay’s project is effectively referred to three times in the following document:
• BHP can earn a 75% interest in Storm by spending a minimum of C$40m on qualifying exploration expenditures over a period of up to nine years.
• Aston Bay is the operator for this upcoming field season but BHP can assume operatorship at any time.
• Previous results Include:
o 110m @ 2.45% Cu
o 56.3m @ 3.07% Cu
o 53.2m @ 1.34% Cu
o 51.3m @ 1.16% Cu
See for more information on the Storm project.
Conclusion:   If you want to follow BHP’s investment thesis you could do worse than buy into Aston Bay.

Hummingbird Resources (LON:HUM) 22.75 pence, Mkt Cap £ 75.6m – Expanding exploration exposure in Mali
• Hummingbird Resources has announced plans to amalgamate “certain of its non-core gold exploration permits in Mali” with Kola Gold’s permits in Mali and Senegal giving a portfolio of “10 highly prospective gold exploration  properties” totalling over 1600 square kilometres in area within the prospective Kenieba Window of Mali and Senegal and the Yanfolila Gold Belt in Mali.
• The assets are to be held in a new vehicle, Cora Gold, in which Hummingbird will hold a 43% interest. The transaction is conditional, amongst other terms, on “Cora Gold raising at least US$4 million from third parties, due diligence and final documentation by 30 September 2016.”
• Hummingbird will retain buy-back and royalty rights over the four properties closest to its flagship Yanfolila gold project “which could add significant upside to Hummingbird’s +100,000 oz per year production commencing in 2017”.
• Placing the non-core exploration properties into Cora Gold should enable Hummingbird to concentrate on advancing its two main projects at Yanfolila in Mali and Dugbe in Liberia while retaining significant exposure to any exploration success achieved by Cora Gold.
Conclusion: The creation of Cora Gold provides an independently financed exploration focussed vehicle, working within two of the most promising gold exploration areas of west Africa. Hummingbird retains exposure to any new discoveries generated but liberates its management to focus on the key mine development at Yanfolila and to advancing the Dugbe project.

Kenmare Resources (LON:KMR) 0.75 pence, Mkt Cap £20.9m – update on proposed capital raising and deleveraging
• Kenmare Resources have updated details on how they plan to raise a minimum of $275m by way of new equity.
• The offer could also raise up to $368m through the addition of a proposed open offer.
• The State General Reserve Fund of the Sultanate of Oman is very kindly subscribing for $100m of equity investments through its ‘Sarl’ African subsidiary which is making the scale of this deal possible and gives the fund significant leverage to the fortunes of the company and to ilmenite prices
• The statement states that every $3 in cash will discharge $4 in debt through a lender underwriting where $200m will repay $269m in debt and accrued interest under the terms of the Amendment, Repayment and Equitisation Agreement leaving no more than $100m of residual group debt. – sounds like magic to us.  Also sounds like the lenders are very keen to get their cash back.
• The company discloses that “Three major shareholders have indicated their indication to participate in the Firm Placing for at least US$115m in aggregate, incluging M&G which has indicated that it intends to retain its existing percentage interest of 19.97%.”
•  “Certain Lenders will underwrite up to a maximum of US$40.8m of the capital raise by agreeing to equitise a matching amount of debt, in the event that cash proceeds are less than US$275 million.”
• Operationally, the company reports that improved power quality and reliability is being seen as a result of additional transmission capacity commissioned by the supplier, Electricidade de Mozambique, in December 20145.
• Production tonnages for heavy mineral concentrates are rising as a result of increased head grades. Ilmenite production is up by 17% to 145,500 tonnes during April/May and zircon volumes have risen by 49% to 11,600 tonnes.
• The company previously reported that “Chinese ilmenite production reduced by an estimated 500,000 tonnes in 2015, as iron ore production in China, of which ilmenite is a by-product, continued to decline through the year. Chinese ilmenite production has continued to reduce during 2016 as a structural oversupply in the iron ore industry persists.”
• The deal is unusual and very interesting and suggests to us that the debt holders see Kenmare’s debt position as unsustainable and are keen to get their cash back.
• We note the sterling exchange rate used in the announcement is now looking a little out of date.
Conclusion:  Forecast returns for ilmenite miners at lower ilmenite prices indicate to us that cutting Kenmare’s debt may be the best way to ensure the longer-term future of the company and provide a return to investors and shareholders.
We congratulate the genius who put this deal together.  Maybe you could come round and equitise my mortgage?
*An SP Angel analyst has previously visited Kenmare’s mineral sands mining operations at Moma in Mozambique

Ortac Resources* (LON:OTC) 0.03p, mkt cap £1.6m – Casa Mining updated scoping study
(Ortac holds CASA Mining, 25% of Andiamo and 20% in Zamsort on conversion)
CASA is a private, Mauritian registered company holding 71.25% of the Misisi Gold Project located in South Kivu, eastern DRC.
• Ortac  Resources reports on progress at the Akyanga gold deposit in the DRC owned by its 12% associate, Casa Mining.
• CASA have received an updated study on the Stage 1 gravity process and have started a further study into the Stage 2 carbon-in-leach process.
• The total capital cost for Stage 1 is “currently expected to be circa $7.3 million with $15million estimated for stage 2”. Using mining contractors, operating costs are expected to be $12.14/t delivering gold at a unit cost of  $628/oz.
• The Akyanga deposit currently has an inferred resource of 5.5mt at an average grade of 1.5g/t gold (272 koz) within the oxide zone, and is planning an infill drilling programme “over a portion of the Akyanga deposit where the first couple of years’ production is proposed to be mined, along with targeting known prospects where there is a higher possibility of adding additional resource”.
• Additional inferred resources within the transition zone, which we suspect may be metallurgical more complex, amount to 16.2mt at an average grade of 1.8g/t (927 koz).
• Ortac reports that the scoping study completed in 2014 by MDM Engineering projects in conjunction with SRK Consulting delivered an NPV, discounted at 8%, of US$171m and an an IRR of 35% using a gold price of US$1300/oz.
• Stage 1, gravity-only production of around 250,000tpa  with recoveries of 40-50%
• Stage 2, 960,000tpa, including the CIP plant should recover >90% of contained gold.  Stage 2 study work is expected to cost another $4m
• CASA is also looking at a plan for a reduced rate gravity-only circuit with a lower capital requirement of around US$5m.
• Some $30m has been spent on the project to date.
Conclusion: The company does not give a gold production forecast but if we assume 250,000tpa with potentially higher-grade ore at 2g/t and a 50% recovery then we could be looking at round 8,000oz pa worth some $10m in sales at around current gold prices.  Upgrading the process plant should approximately double the gold output with payback within one-two years
*SP Angel acts as Nomad and broker to Ortac Resources

Rambler Metals (LON:RMM) 3.4 pence, Mkt Cap £14m – Third Quarter earnings
• Rambler Metals reports earnings for the third quarter, ending 30th April 2016, of C$1.63m bringing YTD losses to C$49,000.
• Quarterly revenues increased by approximately C$2.2m to C$10.5m (Q2 revenues C$8.3m) based on a 25% quarter-on-quarter increase in copper concentrate production to 4,530 tonnes as a result of improved head grades.
• Cash costs (net) for the quarter were C$1.90 (US$1.42) per pound of copper production. (Q2 C$2.48/lb or US$1.80/lb).
• Cash flows from operations  for the quarter amounted to  C$3.4m (Q2 C$1.8m)
• The company is working to increase its daily throughput to 1,250 tpd over the next year. The company is also continuing engineering studies on ore pre-cocentration using dense media separation and at shaft rehabilitation aimed at further increasing production to 2000 tpd.
• Rambler is maintaining its production target which envisages treating 235-250,000 tonnes of ore to produce 17-21,000 tonnes of mineral concentrate containing 4,500-6,000 tonnes of copper, 5,500-6,000 oz of gold and 42-57,000 oz of silver.

Wed, 29 Jun 2016 10:29:00 +0100
In the papers: The Bank of England, Virgin, Fastjet The Times
Truell puts together bid to save Port Talbot: Edmund Truell, the pension scheme rescuer and private equity investor, has emerged as the latest potential saviour of the British steel industry.
Big banks ‘will not have to quit the U.K.’: International banks will not have to move thousands of jobs away from London and will still be able to do business with the rest of Europe despite Brexit, according to legal experts.
Jamie’s recipe goes awry Down Under: Jamie Oliver’s overseas ambitions suffered a setback when the Australian restaurant company that holds the franchise for his Jamie’s Italian brand collapsed into receivership.
Heathrow ‘British jobs’ role for Blunkett: Lord Blunkett has been appointed Heathrow’s new “employment tsar” as the airport pledges to create thousands of “British jobs for British workers”.
Dow Chemical cuts 2,500 jobs for silicone-enhanced future: One of America’s oldest materials producers is set to cut 2,500 jobs after completing a deal to acquire full Ownership of a joint venture that makes silicone.
Redrow takes cue from keen buyers: Redrow has shaken off worries about the possible impact of the vote to leave the EU and has told investors that it expects to beat profit expectations.
Carpetright gets down to brass tacks and cites Leave concerns: Businesses have long been warning about the impact of leaving the European Union, but Carpetright became the first retailer to do so since the referendum.
Gambling Chiefs take a punt on float: Two of Britain’s most experienced gambling Executives are taking over at Intertain as the Toronto-listed online bingo group considers a listing on the London Stock Exchange.
U.S. economy ‘exposed to Brexit wake’: The American economy grew faster than initially thought in the first quarter of the year but it remains vulnerable to the repercussions of the Brexit vote, economists said.
Ride-hailing firm seeks another lift: A boutique investment bank founded by Frank Quattrone has been hired by the biggest rival to Uber in the United States to explore its options, according to reports.
The Independent
London property snapped up by overseas investors as domestic buyers pull out after Brexit: Overseas property buyers are snapping up London property after the shock decision for the U.K. to leave the EU, even as domestic buyers, spooked by uncertainty, pull out.
Bank of England injects U.K. banking system with £3.1 billion of funding after Brexit: The Bank of England has injected £3.1 billion into the U.K. banking system. Three special auctions, where the Bank of England makes extra funds available to banks, were planned around the EU referendum to shore up the financial system.
Uber offers passengers boat and hot air balloon travel in China: Chinese customers travelling with Uber will soon have the option to request a boat or a hot air balloon as the company takes on the travel industry.
Richard Branson: Virgin lost a third of its value, cancelled contract worth 3,000 jobs because of leave victory: Richard Branson, Founder of the Virgin group, has said that his company has lost about a third of its value because of the plunging stock market caused by the Brexit vote on Friday.
Euro 2016 boosts supermarket sales as football fans stock up on booze: Euro 2016 helped supermarkets to their first sales increase in over a year, new monthly data shows. Sales of beers, wines and spirits jumped 6.2% for the four weeks to 18 June, whilst crisps & snacks rose 4.2%, according to June figures from retail analysts Nielsen.
The Daily Telegraph
New bank set up for armed forces and veterans: A new bank for armed forces personnel, veterans and their families is set to launch by the end of this year. The Services Family is in talks with regulators to acquire a licence to offer savings accounts and give out loans.
China’s banks show signs of weakness as profits dip: Profits at China’s banks have fallen for the first time in 12 years, highlighting fears that the country’s economy is slowing.
EasyJet Boss says it ‘remains to be seen’ if airline moves HQ after Brexit: The easyJet Boss has suggested the FTSE 100 airline could move its headquarters from Luton in the aftermath of Britain’s decision to leave the European Union.
Lloyds Chief buys 100,000 shares in show of strength: Lloyds Banking Group’s Boss has bought another 100,000 shares in the bank in a show of confidence that the lender’s share price tumble is a short-term hit rather than a sign of long-term problems.
Fastjet to raise more funds as cash dwindles: Troubled Africa-focused airline Fastjet, which defeated a shareholder revolt by Sir Stelios Haji-Ioannou, is to raise more cash to keep itself in the air, just 15 months after tapping its long-suffering investors for £50 million.
BT shares hit as Brexit renews fears over £10.6 billion pension black hole: Shares in BT have plunged 10% following Britain’s decision to leave the European Union as Brexit re-ignited fears over the company’s gaping £10.6 billion pension deficit.
Government ‘committed’ to airport expansion despite Brexit turmoil: The Government is “committed” to expanding airport capacity in the south east, despite the political turmoil caused by Brexit, the transport secretary has said, signalling a decision on a controversial £17.6 billion third runway at Heathrow could still be on the cards.
Sir Philip Green in BHS talks with Pensions Regulator: Sir Philip Green has been in secret negotiations this week with the Pensions Regulator about plugging BHS’s £571 million pension shortfall, Frank Field, chair of the Work and Pensions select committee has revealed.
Ocado brushes off Amazon Fresh and Brexit fears: Ocado’s Chief Executive has downplayed the threat of Amazon Fresh and said that Brexit could actually boost its chances of securing an international tie-up.
The Questor Column:
Carpetright share plunge is not a buying opportunity: Carpetright, the U.K.’s largest flooring retailer, is making progress on a turnaround and the profits jumped 33% higher in the full-year results announced , but the uncertainty of the vote to leave the EU sent the shares tumbling 20%. Carpetright’s retail model is facing serious challenges. The strategy of pile it high and sell it cheap through vast warehouses never really recovered from the 2008 recession. The Founder Lord Harris of Peckham left the business two years ago and was replaced by Wilf Walsh, the former Coral betting group Boss. The company closed 43 stores and opened 18 new sites, leaving 572 for the financial year to the end of April. Another 20 are expected to shut in the year ahead, with 12 closures underway. This causes short-term pain from ending the leases early, which along with other costs came to £4.5 million last year. Sales were down 1.3% to £456.8 million as the store footprint shrank. However, underlying pretax profits moved 33% higher to £17.3 million as loss-making stores shut and higher margin products were sold. The reported pretax profits are lumpier as they include those one-off lease costs, but still improved to £12.8 million, up from £5.4 million a year earlier. Mr Walsh said the start to the new financial year had been “challenging” with last week’s referendum adding further complications. Like-for-like sales were down 7.6% in May, before bouncing back in June to rise 6.3%, leaving the first eight weeks to June 25 down 1% overall. Market expectations are for underlying pretax profits to rise from £17.3 million to £22 million. The U.K. housing recovery looks likely to pause and we think shares in Carpetright will struggle. Sell. Carpetright at 219¼p-55¾p. Questor says “Sell”.
The Guardian
Expect fall in U.K. living standards and foreign investment, MPs hear: Living standards are expected to fall as a result of the vote to quit the EU and foreign companies will be deterred from investing in Britain, according to economists appearing before a parliamentary committee.
U.K. firms say it’s business as usual but Branson warns on recession: British companies are lining up to reassure staff and shareholders following the market turmoil sparked by the U.K.’s vote to leave the European Union, although Sir Richard Branson is warning that “thousands of jobs” have been put at risk.
Brexit: Bank of Japan urged to free up cash for Japanese companies in U.K.: Shinzo Abe has urged Japan’s central bank to ensure ample funds are available to help Japanese companies operating in Britain and shore up business at home after the U.K.’s shock vote to exit the European Union.
U.K.’s major supermarkets decline for first time this year: The U.K. grocery market has fallen into decline for the first time this year as the performance of all four major supermarkets worsened.
Daily Mail
Sir Shifty Philip Green ‘must pay £400 million’ into BHS pension blackhole, says City grandee: Sir Philip Green could be forced to pay as much as £400 million to fill the BHS pension black hole, a City grandee has claimed.
Markets see 17 years of share deals in one day: Savvy investors use the Brexit roller-coaster to cash in: Savvy investors have used the recent stock market roller-coaster to cash in on shares and funds – causing 17 years’ worth of trades in just one day.
Daily Express
Lidl and Aldi claim record slice of British grocery spend: Lidl and Aldi have claimed a record slice of Britain’s grocery spending as the big four supermarkets saw takings fall.
FTSE 100 soars in great post-Brexit stock market fightback: Fears that the U.K. stock market would go into complete meltdown following last Thursday’s Brexit result eased as the FTSE 100 staged a major rally.
Barclays Boss in new rallying cry for business leaders: The head of an influential lobbying group has issued a rallying cry for business leaders and politicians to use Britain’s exit from the European Union as a springboard to bolstering its status as a financial services powerhouse.
Rolls-Royce reaffirms U.K. commitment post-Brexit: Rolls-Royce has reaffirmed its commitment to the U.K. in the wake of the country’s decision to exit the European Union, but warned that longer term assurances would depend on a post-Brexit deal.
The Scottish Herald
Shopping projects face referendum headwinds: Shopping and leisure development in Scotland has been held back since September 2014 and faces a renewed threat to growth from Brexit turmoil and the prospect of a second referendum, property analysts have warned.
Norwegian oil fund sells Cairn Energy shares in protest at Morroccan activity: Cairn Energy has suffered a reverse after the giant Norwegian Oil fund sold shares in the company on ethical grounds following a stinging attack on its activity in the contested Western Sahara area.
Banking veteran Entwistle becomes is new Chairman of Bonhams Scotland: Ray Entwistle, the veteran banker who opened the doors on Scotland’s newest bank last summer, has become Chairman of auctioneer Bonhams Scotland.
Albion invests £1 million on machinery as order book swells: Stirling-based Albion Drilling Group has purchased machinery worth over £1 million to service its growing order book with funding support from Clydesdale Bank.
Fee boost for lawyers but profits flat: Improved fee income has been reported in the legal profession, however this has not led to an increase in profits. The findings have emerged in in the annual legal benchmarking review from Henderson Loggie, in conjunction with the firm’s U.K. accountancy association MHA.
The Scotsman
RBS Chief warns bank staff over Brexit ‘unknowns’: Royal Bank of Scotland Chief Executive Ross McEwan has issued a memo to staff, warning that the vote to leave the EU has created “short, medium and long-term” economic uncertainties.
Shawbrook finds breaches in asset finance arm, CFO resigns: Challenger bank Shawbrook disclosed that it expected to book an additional £9 million impairment charge in the second trading quarter due to “irregularities” in its asset finance business, and that Chief financial officer (CFO) Tom Wood has resigned.
Wood Group wins multi-million Statoil deal in Brazil: Oil and gas services giant Wood Group said it has won a multi-million dollar contract for an offshore platform in Brazil.
Evans rides into Aberdeen with fourth Scots store: Evans Cycles has opened a fourth Scottish store after taking a unit in Aberdeen’s Great Northern Road, property consultancy CBRE said.
Glasgow creative agency looks to make a big impact: Glasgow creative agency Digital Impact is looking to double its headcount and turnover, having won its first English client while looking to broaden its work U.K.-wide and internationally.
City A.M.
London HQ of merged stock exchange in doubt after Brexit: London’s position as the world’s leading financial hub could be dealt a symbolic blow, with doubts being cast over the location of its stock exchange’s merged headquarters with Deutsche Boerse.
Moody’s downgrades outlook for eight U.K. banks to negative after Brexit: Moody’s has downgraded its outlook for eight U.K. banks and building societies after last week’s Brexit vote. The ratings agency has also changed its outlook for the U.K. banking system from stable to negative.
Business leaders lash out at government’s lack of Brexit plans: Business leaders and industry groups turned on the government over its apparent lack of contingency plans in the aftermath of the Brexit vote.
Pharma giant AstraZeneca has won approval for new antibiotic in fight against drug resistance, sending its share price higher for the eighth straight day: The European Commission has granted marketing authorisation for pharmaceutical giant AstraZeneca for a new antibiotic.
Hundreds of U.K. jobs at Visa could be moved after Brexit: Visa could be pushed into relocating hundreds of U.K. jobs to other European countries following last week’s Brexit vote.
Oil baron Algy Cluff warns Brexit could squeeze lending to distressed North Sea firms: U.K. oil baron Algy Cluff has warned Britain’s vote to leave the European Union could make life harder for distressed oil and gas firms in the North Sea.

Wed, 29 Jun 2016 08:36:00 +0100
Market briefing: UK markets ended higher yesterday, recovering from their recent sell-off, amid a rally in financial sector stocks UK Market Snapshot
UK markets ended higher yesterday, recovering from their recent sell-off, amid a rally in financial sector stocks. HSBC Holdings, Barclays, Lloyds Banking Group and Hargreaves Lansdown jumped 1.3%, 3.4%, 7.4% and 8.9%, respectively. Legal & General Group climbed 7.9%, after it appointed Whitehall veteran, John Kingman, as the new group Chairman. Peer, Prudential gained 7.7%. Ocado Group advanced 8.6%, following a rise in its revenue and profit in the first half of the year. Homebuilders, Berkeley Group Holdings, Persimmon, Taylor Wimpey and Barratt Developments rose 1.5%, 2.6%, 5.4% and 7.5%, respectively. On the downside, gold miners, Randgold Resources and Fresnillo fell 0.9% and 2.3%, respectively, tracking losses in gold prices. Carnival shed 0.2%, after it projected downbeat earnings for the current quarter. The FTSE 100 gained 2.6%, to close at 6,140.4, while the FTSE 250 rose 3.6%, to settle at 15,503.1.
US Market Snapshot
US markets closed in the green yesterday, recuperating from their losses, led by gains in financial, energy and technology companies. Meanwhile, the US annualised GDP growth was revised higher at 1.1% in the first quarter of 2016. Exxon Mobil, Marathon Petroleum and Southwestern Energy surged 2.3%, 8.4% and 11.8%, respectively, amid a recovery in crude oil prices. Wells Fargo, JPMorgan Chase and Comerica gained 2.4%, 3.2% and 5.1%, respectively. Xencor rallied 32.1%, after it announced a deal with Novartis to collaborate on developing cancer therapies. Endo International soared 18.3%, after the US Patent and Trademark Office issued a patent for Vasostrict, its treatment for patients suffering from vasodilatory shock. Gilead Sciences added 5.2%, after its new Hepatitis C drug was approved by the US regulators. The S&P 500 gained 1.8%, to settle at 2,036.1. The DJIA rose 1.6%, to settle at 17,409.7, while the NASDAQ advanced 2.1%, to close at 4,691.9.
Europe Market Snapshot
Other European markets finished in positive territory yesterday, amid speculation that government officials would take necessary measures to prop up financial markets following Brexit-led rout. Italian lenders, Banca Popolare di Milano Scarl, Mediobanca and Unione di Banche Italiane jumped 5.6%, 5.8% and 9.0%, respectively, on the back of reports that the nation’s government is considering injecting €40.0 billion to its financial system. Nestle advanced 3.3%, after it announced that Ulf Mark Schneider would succeed its current Chief Executive Officer, Paul Bulcke. Total added 2.6%, after Qatar Petroleum selected the oil giant to develop the Al-Shaheen field for 25 years. Peers, Repsol and Subsea 7 gained 2.9% and 4.3%, respectively, on higher crude oil prices. The FTSEurofirst 300 index gained 2.4%, to close at 1,252.5. Among other European markets, the German DAX Xetra 30 rose 1.9%, to close at 9,447.3, while the French CAC-40 advanced 2.6%, to settle at 4,088.9.
Asia Market Snapshot
Markets in Asia are trading higher this morning, tracking overnight gains on Wall Street. In Japan, export-oriented stocks, Honda Motor, Toyota Motor and Sony have advanced 2.3%, 3.7% and 4.3%, respectively, amid weakness in the Japanese Yen. However, Idemitsu Kosan has plunged 8.3%, after news emerged that its founding family is opposing the company’s merger with Showa Shell Sekiyu, down 3.6%. Seven & i Holdings has slid 0.3%, following disappointing retail sales data from Japan in May. In Hong Kong, Dalian Wanda Commercial Properties has declined 4.9%, as its proposed buyout by Wang Jianlin can face obstacles after an asset management company stated that Wang’s offer is too low. In South Korea, Samsung Electronics and Lotte Shopping have gained 0.7% and 3.0%, respectively. The Nikkei 225 index is trading 1.4% higher at 15,543.7. The Hang Seng index is trading 0.6% up at 20,299.2, while the Kospi index is trading 1.4% higher at 1,963.5.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.54% or $0.26 higher at $48.84 per barrel, ahead of the Energy Information Administration’s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 3.01% or $1.42, to settle at $48.58 per barrel, after the American Petroleum Institute disclosed that US crude oil inventories dropped more than anticipated by 3.9 million barrels for the week ended 24 June 2016.
At 0330GMT today, Gold futures contract is trading 0.25% or $3.30 higher at $1321.20 per ounce. Yesterday, the contract declined 0.35% or $4.60, to settle at $1317.90 per ounce, amid a rebound in global equity markets.
At 0330GMT today, the EUR is trading marginally lower against the USD at $1.1062, ahead of the German consumer prices for June, due to release today. Also, GfK consumer confidence data in Germany for July along with Euro-zone’s business climate indicator and consumer confidence for June will attract a lot of market attention. Yesterday, the EUR strengthened 0.36% versus the USD, to close at $1.1065.
At 0330GMT today, the GBP is trading 0.24% lower against the USD at $1.3312. Investors will also closely monitor the release of today’s core annual Personal Consumption Expenditure (PCE) figures for May in the US. Yesterday, the GBP strengthened 0.90% versus the USD, to close at $1.3344, reversing its losses from previous session.        
Fixed Income
In the US, treasury yields ended mostly unchanged. Yesterday, yield on 10-year notes remained unchanged at 1.46%, while yield on 2-year notes also remained flat at 0.61%. Meanwhile, 30-year bond yield fell 1 basis point to 2.27%.

Key Economic News
UK CBI distributive trade survey's retail sales balance declined in June

The CBI distributive trade survey's retail sales balance in the UK registered a drop to 4.00% in June, compared to a level of 7.00% in the prior month.
Draghi calls for global policy alignment
At the European Central Bank (ECB) conference in Portugal, the ECB President, Mario Draghi, urged major central banks to better coordinate their policies to tackle the shared problem of ultralow inflation, as global economies become more integrated.
German import price index advanced more than expected in May
In Germany, the import price index advanced 0.90% on a MoM basis in May, higher than market expectations for an advance of 0.60%. The import price index had registered a drop of 0.10% in the previous month.
German import price index fell less than expected in May
In May, on an annual basis, the import price index recorded a drop of 5.50% in Germany, compared to a fall of 6.60% in the prior month. Markets were expecting the import price index to drop 5.80%.
French consumer confidence registered a drop in June
Consumer confidence recorded a drop to 97.00 in France, in June, compared to a level of 98.00 in the previous month.
Italian consumer confidence index dropped unexpectedly in June
The consumer confidence index in Italy fell unexpectedly to 110.20 in June, compared to market expectations of a steady reading. In the previous month, the consumer confidence index had registered a revised reading of 112.50.
Spanish retail sales advanced in May
In Spain, retail sales rose 2.30% in May on an annual basis. Retail sales had risen by a revised 4.00% in the previous month.
US GDP price index rose less than expected in 1Q 2016
In the US, the final gross domestic product price (GDP) index registered a rise of 0.40% in 1Q 2016 on a QoQ basis, compared to an advance of 0.90% in the previous quarter. Markets were anticipating the GDP price index to advance 0.60%. The preliminary figures had indicated a rise of 0.60%.
US annualised GDP advanced more than expected in 1Q 2016
On a quarterly basis, the final annualised GDP in the US, advanced 1.10% in 1Q 2016, higher than market expectations for a rise of 1.00%. The preliminary figures had indicated a rise of 0.80%. In the prior quarter, the annualised GDP had recorded a rise of 1.40%.
US Redbook index rose in the last week
On an annual basis, the Redbook index in the US advanced 0.50% in the week ended 24 June 2016. The Redbook index had registered a rise of 0.90% in the prior week.
US personal consumption rose less than expected in 1Q 2016
In 1Q 2016, on a QoQ basis, the final personal consumption in the US recorded a rise of 1.50%, compared to an advance of 2.40% in the prior quarter. The preliminary figures had recorded an advance of 1.90%. Markets were expecting personal consumption to climb 2.00%.
US S&P/Case-Shiller composite index of 20 metropolitan areas rose less than expected in April
On a monthly basis, in April, the seasonally adjusted S&P/Case-Shiller composite index of 20 metropolitan areas advanced 0.45% in the US, compared to a revised rise of 0.81% in the prior month. Markets were anticipating the S&P/Case-Shiller composite index of 20 metropolitan areas to advance 0.58%.
US S&P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas rose more than expected in April
In April, the S&P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas in the US, registered a rise of 5.44% on an annual basis, higher than market expectations for an advance of 5.41%. The S&P/Case-Shiller composite home price index (HPI) of 20 metropolitan areas had advanced by a revised 5.48% in the prior month.
US CB consumer confidence index climbed in June
In June, the CB consumer confidence index registered a rise to 98.00 in the US, higher than market expectations of a rise to a level of 93.50. In the previous month, the CB consumer confidence index had registered a revised level of 92.40.
US S&P/Case-Shiller home price index advanced in April
In April, the S&P/Case-Shiller home price index rose to a level of 186.63 in the US, compared to a revised level of 184.58 in the previous month. Markets were expecting the S&P/Case-Shiller home price index to advance to a level of 186.71.
US Richmond Fed manufacturing index declined unexpectedly in June
The Richmond Fed manufacturing index registered an unexpected drop to -7.00 in June, in the US. The Richmond Fed manufacturing index had registered a reading of -1.00 in the previous month.
US core personal consumption expenditure advanced less than expected in 1Q 2016
In 1Q 2016, the final core personal consumption expenditure in the US registered a rise of 2.00% on a QoQ basis, lower than market expectations for an advance of 2.10%. In the prior quarter, core personal consumption expenditure had risen 1.30%. The preliminary figures had indicated an advance of 2.10%.
US Redbook index eased in the last week
On a MoM basis, the seasonally adjusted Redbook index dropped 0.90% in the week ended 24 June 2016, in the US. The Redbook index had registered a similar fall in the previous week.
Japanese large retailer's sales declined in May
On a MoM basis, large retailer's sales eased 2.20% in Japan, in May. In the previous month, large retailer's sales had fallen 0.80%.
Japanese retail trade remained flat in May
Retail trade in Japan remained unchanged on a MoM basis in May, compared to a revised fall of 0.10% in the previous month. Markets were anticipating retail trade to remain flat.
Japanese retail trade fell more than expected in May
In May, on an annual basis, retail trade dropped 1.90% in Japan, higher than market expectations for a fall of 1.60%. In the prior month, retail trade had dropped by a revised 0.90%.


Wed, 29 Jun 2016 08:29:00 +0100
VSA Capital Market Movers - Wynnstay Wynnstay: H1 2016 Results

Wynnstay Group (LON:WYN), a UK manufacturer and supplier of agricultural inputs, has released interim results covering the six-month period to 30 April 2016 (H1 2016).
• Revenue: £193.2m, -3.6% YoY (H1 2015: £200.6m); FY 2016 (Y/E Oct) FactSet consensus revenue is currently £395.1m, +4.7% YoY
• PBT: £4.1m, -15.4% YoY (H1 2015: £4.8m); FY 2016 (Y/E Oct) FactSet consensus PBT is currently £7.3m, -18.9% YoY
• Net debt of £3.9m at 30 April 2016 (30 April 2015: £8.1m)
• Agricultural Division: Revenue: £135.2m, -8.2% YoY (H1 2015: £147.3m); Operating Profit: £1.8m, -18.4% YoY (H1 2015: £2.2m)
• Specialist Retail Division: Revenue: £58.0m, +9.0% YoY (H1 2015: £53.2m); Operating Profit: £2.4m, -15.8% YoY (H1 2015: £2.85m)
• Interim dividend: 4.0p, +8.1% YoY (H1 2015: 3.7p)

VSA Comment
WYN have delivered H1 results in-line with expectations, although it is important to note that FactSet consensus currently points to a fall of almost 20% YoY in PBT for the full-year.

In agriculture, as expected WYN’s arable input operations (seeds & fertiliser) have experienced a pick-up in Q2, after a slow Q1, given the recent shift in farmer buying patterns. However, WYN have added that this shift has increased its distribution costs.

In grain trading, volumes were reported higher, again as expected given the large UK wheat harvest in 2015 (16.4 million tonnes), but prices remain low. WYN expects volumes to remain elevated with “reasonable” on-farm grains and a large harvest expected this year (planted area similar to last year, final size dependent on yield/weather). We would note that after the recent deluge of rain, the UK crop certainly requires sunshine if it wishes to boost yields to a level to compete with the 2015 harvest.

WYN estimates that reduced commodity prices hit its revenues by c£20m, with lower volumes of manufactured feed products, particularly in the dairy sector impacting profits. Sheep and poultry feed performed better. Lower commodity prices and feed volumes led to lower working capital usage and thus a much reduced net debt figure.

UK animal feed production figures from DEFRA show that for WYN’s H1 period (Nov – Apr), overall UK ruminant feed production fell 3.6% YoY (sheep +0.6%, cattle & calf -4.6%). However, when you include feed production for the poultry sector, an area where WYN has a unique focus compared to its peers, overall production actually increased 4.1% YoY, with UK poultry feed production increasing 17.6% over the period.

Despite the mildest winter on record and good silage conditions in summer 2015, the traditional winter spikes in demand were repeated once more at reasonable levels. However, cattle and calf feed production did fall somewhat from the levels seen in the previous three years. Overall though, we feel that the mild winter did not impact animal feed volumes as much as might have been expected.

In specialist retail, WYN’s recent Agricentre acquisition delivered a £6.0m revenue contribution (contribution to profit expected in 2017) so like-for-likes sales in retail actually fell slightly YoY as farmers reduced spending during the period.

WYN states that last week’s EU referendum results are not expected to have an immediate impact on the sector, as we also said in our latest Agri Monthly publication, released yesterday. However, as discussions for the UK’s exit progress we would highlight the following areas for WYN, and other agricultural input stocks, to contend with:
• EU subsidy replacement: What will be put in place by the government to support UK farmers? How supportive will it be compared to the existing European system?
• General business uncertainty for the next two years, which will impact both share prices and underlying customer decisions.
• Imports of some animal feed raw materials will become more expensive with a weaker pound. However, these costs will largely be passed on to customers. Should the pound strengthen (perhaps as the EU started to unravel further), this would of course be reversed.

Wed, 29 Jun 2016 08:26:00 +0100
Now the Vote Is Over, Let Us Move On With Six Steps to a Bright Future Now the Vote Is Over, Let Us Move On With Six Steps to a Bright Future
Here is a middle section of this upbeat column by Matthew Lynn for The Telegraph:

It is easy to see what a messy, bad Brexit looks like. The UK gets shut out of a huge market. Inward investment gets put on hold amid months of uncertainty. The trade deficit starts to blow out, the pound keeps sinking, and joblessness rises as the economy tanks. But what does a good Brexit look like? Here are six key demands business should make of new prime minister as he or she negotiates with Brussels, Berlin and Paris.
First, don't obsess about access to the Europe market. In the first instance, Britain should go for the Norwegian model, with full access to the single market, in return for accepting most of its rules, and paying a more modest financial contribution to Brussels. But if Angela Merkel and François Hollande want to be difficult about that, then forget it. Our trade with the EU has been sinking like a stone for the last decade - down from 55pc of our exports to 44pc over the last 10 years. The very worst that can happen is the EU imposes tariffs of roughly 4pc on our goods. But since the pound has just devalued by around 8pc, companies exporting to Europe can easily absorb that and still cut prices. The most important move is to get the new trading arrangement sorted quickly and to start focusing on the rest of the world.
Two, let's prepare our application to join other trade blocs. We are on the North Atlantic, so there is no reason we shouldn't join the United States, Canada and Mexico in Nafta (its combined GDP is $3 trillion more than the EU, by the way). There is no reason why the rules shouldn't be tweaked to allow us to join the new Trans Pacific Partnership as well. Switzerland has signed a free trade agreement with China, and why shouldn't we - surprise, surprise, but Swiss exports to that country have quadrupled in a decade. The sooner we build alternatives to the EU market and forge our own trade agreements with economies that are growing far faster, the quicker the world will be convinced Brexit doesn't matter much.
Thirdly, push through a wave of deregulation. The Left will hate it, but Britain's economic future is now clear. We will be a free-wheeling offshore state that acts as a bridge between Europe and the rest of the world. Think Singapore, except bigger and with worse weather.
We should scrap EU-mandated labour market regulations and social protections as fast as possible. There is no reason why we should accept European limits on how many hours people do in the office - so long as we have a minimum wage in place, which we do, then it is up to every individual how long a shift he or she wants to put in. Issues such as parental leave can be freely agreed between companies and staff. Employers who want to hire lots of young women, the best educated, most skilled part of the workforce, will be generous; others less so. But business can decide for itself.
Fourthly, drop specific taxes. The City faces a huge challenge in adjusting to Brexit. There is no point denying that a lot of mainstream corporate business will start to move to Frankfurt. One move that would help it a lot would be scrapping the bank levy - it is currently forecast to bring in more than £900m a year, cash the industry could use to get it through a difficult period. Next, we should scrap energy taxes and rules that have made power more than twice as expensive in Europe as it is in the United States. That will help the manufacturing industry as it battles with the potential loss of some orders from Europe. The more help we can give to specific sectors of the economy, the faster it will recover.
Fifthly, upgrade our infrastructure. The cost of government borrowing has dropped to record lows and the Bank of England may need to print more money to stimulate the economy. We should relax on austerity and spend some money on better transport links and rebuilding roads, water and power systems. A flash new London airport would make us far more open to the world than anything the EU has done in the last decade - and send out a great signal that the UK was still open to international business.

David Fuller's view
These are positive suggestions for not only economic recovery but also prosperity.  Matthew Lynn is correct to start with saying we should not be obsessing over access to the EU market.  Some EU leaders may be difficult to negotiate with, not least Jean-Claude Juncker whose appointment as European Commission President was opposed by David Cameron.  Junker strongly favours ‘more Europe’, if only to deter member countries from pushing for their own versions of Brexit.  However, the EU has far more to gain from keeping trade terms open with the UK, given the trade imbalance.  Germany’s automobile manufacturers would be among the most aggrieved if they did not.

Parliament Must Decide What Brexit Means in the Interests of the Whole Kingdom
Here is a latter section of this topical column by Ambrose Evans-Pritchard for The Telegraph:

The cacophany of voices from EU capitals is hard to filter.  A joint paper by the French and German foreign ministers is calling for a great leap forward to "political union", but neither have the support of their own leaders - let alone the Dutch, Nordics, Poles, Czechs, and others. The proposal seems surreal at a time of rising eurosceptic revolt everywhere.
Jean-Claude Juncker, the Commission's president, is clearly bitter. "Brexit is not a friendly divorce, but then it was never a roaring love affair," he said.
"Whatever Juncker and a few federalist diehards in Brussels may think, most EU governments have woken up to the reality that the more Europe the push, the more euroscepticism they get," said Charles Grant from the Centre for European Reform.
"The knee-jerk reaction of the Commission is always to try to seize on any crisis to try to push for more Europe and closer integration, but they can dream on this time," he said.
German Chancellor Angela Merkel matters most and she has held out an olive branch to London, calling for patience - within limits - and talks conducted in a civil manner. "There is no need to be nasty," she said.
In essence, EU policy will be forged by an emerging "directorate" of Mrs Merkel, French leader Francois Hollande, and Italy's Matteo Renzi. But they are at odds with each other. The French and Italians want a radical shift in economic policy in response to Brexit, calling for a reflation blitz to break out of the low-growth trap. Germany will hear none of it.
What is clear is that two cardinal objectives of post-Brexit policy are hard to reconcile: the EU cannot impose a harsh settlement on the UK, to prevent a "domino effect", while at the same time nursing the eurozone economy back to health.
Failure to mend fences with London risks an economic crisis that would expose the long-festering pathologies of monetary union.  "There is a cocktail of factors that could lead to disintegration," said Pier Carlo Padoan, Italy's finance minister. "We face a double reaction from Brexit: financial and political."

David Fuller's view
David Cameron, in discussions with the leaders of 27 other EU countries, has attributed his inability to lead Remain to victory in the referendum, to Europe’s failure to control the migrant crisis. Cameron may have felt that was the most tactful criticism.  However, Brexit was the eventual response to myriad EU policies which stealthily removed national sovereignty over several decades.

The European Elite Forgot That Democracy Is the One Thing Britain Holds Most Dear
Here is the opening of this thoughful column by Charles Moore of The Telegraph, posted without further comment:
A friend in Oxford was puzzled to receive a last-minute leaflet which said: “Don’t let someone else decide your future: Vote Remain.” He obeyed the first demand, and not the second, since it flatly contradicted the first. He voted Leave.
If, like me, you feel a bit numb this morning, it is because we British actually have decided our own future. We have not been allowed to do this since 1975. It is a slightly frightening, wonderful feeling – that the people can, through the ballot box, set their country free.
More people – 17,410,742 – voted Leave on Thursday than have ever voted for anything in British history. As David Cameron wisely and firmly acknowledged in his resignation speech yesterday, the result, with its very high turnout, is decisive: our decision must be enacted.
The Leave campaign was assailed for scorning the advice of experts. Experts should, of course, be respected for their expertise. But no one is an expert where democracy is concerned. Each of us is worth only one vote. It took enormous courage for the majority to refuse to be cowed by bankers and archbishops, prime ministers and presidents, scientists and economists, the BBC and the CBI, Richard Branson, Peter Mandelson and David Beckham, but it was not rash to do so. It was the mass assertion of a right which, over the years, we had been losing.
Democratic self-government – parliamentary democracy – is what the modern British nation is founded on. As Boris Johnson put it yesterday, in his restrained and generous speech, it is also “the most precious thing” we offer to the world. It was slipping away from us. Now we have reclaimed it. The Vote Leave campaign began and ended with the slogan “Take Back Control”. This – not “the economy versus immigration” – is what our decision is about.

David Fuller's view
A PDF of this article by Charles Moore is posted in the Subscriber’s Area.

Email of the day
On keeping in touch:
I've been on a global walkabout with my wife for the past three and a bit years, and just trying to settle down, not easy!
Throughout, I've kept in touch with the world via your fine service, for instance, albeit a staunch Brexiteer (my out vote was my first UK vote in 11 years of being expat, but I felt compelled to vote for change in Europe and my duty to participate), FullerTreacy publication of balanced Articles and comment helped me to understand more, think a little deeper and placed a solid scaffold around my existing uneducated beliefs.
So thanks for that.
Long may you continue.

David Fuller's view
Thank you for this thoughtful email.
I imagine that your “global walkabout” has been an interesting further education, increasing your global perspective.  I am sure that if you ever wrote about your travels, or just recalled a few memorable experiences and locations, I would not be the only person interested in your views. 


A Not So Cheery Cheerio as the UK Votes to Leave the EU, Yet the Outcome a Marked Positive for our Precious Metal Co's
Thanks to a subscriber for this report from National Bank which may be of interest. Here is a section:
…While the S&P/TSX Gold Index closed up 7.3%... with upside. Importantly, the repercussions of the LEAVE vote present a notable benefit for our Au and Ag co’s beyond a higher gold price. That is, a further improvement in the outlook for operating costs on currency weakness (CAD -2%; MXN -4% and poised to weaken further per the updated forecasts of NBF’s Economics and Strategy team) and on weaker pricing for key input such as steel and oil. With operating margins, FCF, and balance sheets poised to get a lift, the net effect should broaden consideration and application of multiples more typical of tailwind periods rather than inappropriate comparison to the last four years where the industry was mired in persistent headwinds. Consistent with prior benchmarking exercises, we point to the 2007 to 2011 period and corresponding valuations as a guide to the upside. We do not subscribe to the idea that all companies warrant valuations typical of this period since the complexion of the industry is now one of unavoidable production declines for many whereas before the majority of co’s offered production growth or the impression thereof. That being said, for the time being and until cost pressures trigger heightened differentiation we expect even our growth-challenged producers to benefit from heightened interest in the space. This will likely continue until cost pressures start to bite or valuations approach benchmark levels. Bottom line, the benchmarking exercise highlights that most of our Au co’s (less so Ag equities) offer significant upside to 2007 to 2011-type valuations even with scaling back benchmarks to capture scenarios with production declines.

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

The response of gold prices to the Brexit vote was knee-jerk but understandable considering the desire for safe haven assets that have a history of performing during times of market stress. Of course Brexit is not the only reason gold prices have been rallying. The intensification of the negative yield environment that resulted from the vote is perhaps a better explanation of the surge that took place last week but the relative lack of supply is also important.

UK homebuilders

Eoin Treacy's view
The homebuilders sector has reacted more violently to the UK’s referendum result than just about any other sector. The conclusion many have jumped to is that with the decline of the Pound and, seeming inevitability of recession, demand for UK housing will plummet and may in fact act as a catalyst to high priced London property finally rolling over.

Everything Just Changed
Thanks to a subscriber for this report by Anatole Kaletsky for Gavekal Research which may be of interest. Here is a section:
Finally, and perhaps most disturbingly, the British referendum has produced an extremely fractured and polarized society—with huge majorities for Brexit among elderly and poor voters and in relatively under-developed rural regions vehemently opposed by almost equal majorities that supported EU membership among young and highly educated voters and in the prosperous cities—not only London, but also Manchester, Bristol, Newcastle and the whole of Scotland. This extreme polarization on a national issue of existential importance would raise risks of social and political tension even in benign economic conditions. If, as is likely, Britain now suffers some kind of financial crisis and recession, the people who voted for Brexit will discover that leaving the EU has not resolved any of the economic problems and social grievances that provoked their protest against the political establishment. If this happens, public anger will presumably intensify, rather than calm down. A similar disillusionment is likely in other countries whose voters decide simply to overthrow political elites and dismiss the analysis of economic “experts”, without having any serious alternatives to put in their place. 

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

Populist nationalism is a theme which is gaining adherents all over the world. Xi Jinping’s appeal to nationalism in order to inspire support for economic reform and to sustain the Communist Party’s monopoly on power is an example in China. While I personally support the UK’s decision to leave the EU, because of the democratic deficit evident within the political union, there is no doubt that there was a populist tone to the rhetoric that presaged the decision. The growth of similar movements in the Netherlands, Finland, Denmark, France, Italy and Spain suggests this is not simply a UK phenomenon. The surprisingly large support base both Donald Trump and Bernie Sanders appealed to in their respective campaigns for Presidential nominations are also evidence of populist nationalism in the USA.

Wed, 29 Jun 2016 08:23:00 +0100
Northland Capital Partners View on the City: Active Energy, Premier African Minerals, Savannah Resources, Stratex International, Arian SIlver, Connemara Mining, Red Leopard Holdings Ultimate Sports Group plc (LON:USG) – CORP: Placing
Market Cap: £2.8m; Current Price: 18.5p

(From yesterday): Placing to raise £0.5m
 Ultimate Sports Group Plc, announced yesterday that it had raised £0.5m via the placing of 5.0m new shares at 10p.
 The new capital will be used to support the roll-out of its new online sporting platform for children called Ultimate The platform promotes the engagement in sports and encourages children to improve their fitness levels and sporting skills. The platform includes a website shop which offers players virtual products and branded merchandise. Ultimate Player covers thirteen different sports and the programme became fully operational in the first few months of 2016.

NORTHLAND CAPITAL PARTNERS VIEW: The recent outlook statement in the final results was positive where management showed a confident outlook in both the Sports in Schools (ESS) business and New government initiatives in the 2016 Budget  also provides for longer term support of the business in our view.

Active Energy Group (LON:AEG) – CORP*: Appointment of Nobro
Market Cap: £22.2m; Current Price: 3.8p

Active Energy appoints Northland Capital as Nomad and Broker
 Active Energy Group has appointed Northland Capital Partners as its Nominated Advisor and Broker.

NORTHLAND CAPITAL PARTNERS VIEW: Active Energy Group has three pillars to its current business. The first is its AEG WoodFibre division, an industrial wood fibre production business that is used in the construction of medium-density fibreboard (MDF) manufacture. The second, AEG Timberland, is a Forestry Asset Management and Development business with exclusivity to commercialise c. 750,000 acres of forestry with the Métis Settlements of Alberta, Western Canada. The third is AEG CoalSwitch, an advanced technology business that uses biomass coal replacement fuels and a fuel producing system to replace coal in conventional coal fired power plants.

Premier African Minerals (LON:PREM) – SPECULATIVE BUY*: RHA Update
Market Cap: £12.7m; Current Price: 0.68p

Plant modifications expected to be completed by 6th July
 Fabrication of the plant modifications at RHA have been completed and are being transported to site. Civil construction work has commenced and the Company is targeting 06/07/16 for completion.
 Bulk test-work on the tailings indicates the potential to supplement ROM ore during the underground mining ramp up phase.
 Early XRT results on a low-grade bulk sample from the open pit confirm the potential for the upgrading of the ore.

NORTHLAND CAPITAL PARTNERS VIEW: Positive update from Premier African Minerals with the modifications to the plant remaining on schedule for the 6th July. The Company is looking to ramp up production levels to 9,000t per month from the underground mine.

Savannah Resources (LON:SAV) – CORP: Mutamba/Jangamo update
Market Cap: £10.8m; Current Price: 2.8p

Savannah Resources and Rio Tinto agree to extend the long stop date
Rio Tinto and Savannah Resources have agreed to extend the long stop date for fulfilment of the conditions precedent of the joint venture from 30/06/16 to 30/09/16, or a later date as may be agreed by the parties.

NORTHLAND CAPITAL PARTNERS VIEW: The continued delay in approval for the Mutamba/Jangamo joint venture from the Ministry of Mineral Resources and Energy of the Republic of Mozambique is frustrating but it is positive that Savannah Resources that joint venture partner, Rio Tinto, remains committed. In the interim Savannah has maintained its focus and continued to advance its copper projects, located in Oman, toward production and also acquired new lithium exploration projects in Finland.

Stratex International (LON:STI) – CORP: Goldstone FY15 results
Market Cap: £9.7m; Current Price: 2.1p; Target Price: 6.6p

RC drill programmed planned at Homase-Akrokerri
 Goldstone Resources a Company that Stratex International holds a 33.45% interest in has reported its FY15 results.
 LBT increased to US$1.3m in FY15 from US$1.2m in FY14.
 Net cash totalled US$0.2m in FY15 down from US$1.5m in FY14.
 RC drill programme planed at Homase-Akrokerri.

Arian Silver Corporation (LON:AGQ) – CORP*: FY15 results
Market Cap: £1.7m; Current Price: 0.95p

2015 figures reflect Quintana settlement and disposal of San Jose
 LBT in FY15 totalled US$15.5m up from US$5.9m in FY15, largely due to the US$12.7m loss resulting from the disposal of the Arian Silver de Mexico SA de CV and its assets, including the San Jose project.
 Net debt reduced to US$54k in FY15 compared to US$21.7m in FY14, following the disposal of Arian’s subsidiary.

NORTHLAND CAPITAL PARTNERS VIEW: 2015 was a difficult year for Arian Silver Corporation with the development issues at San Jose combined with the low silver prices meant that it was unable to make its debt repayments to Quintana. As a result of these issues, the Company had an orderly foreclosure and concluded a settlement deed with Quintana that resulted in the disposal of the San Jose Project, removal of the Quintana debt and associated finance, along with a cash injection in to Arian of US$700,000 from Quintana. Since this period the Company has reduced its corporate overheads by two-thirds and secured an exclusive option on the Noche Buena gold and silver tailings project. This project has a historic NI 43-101 mineral resource estimate of 100,000oz Au at a grade of 3g/t Au and 1.7moz Ag at a grade of 55g/t Ag and represents an attractive low cost near-term production opportunity.

Connemara Mining Company (LON:CON) – CORP: FY15 results
Market Cap: £1.4m; Current Price: 2.5p

From yesterday: LBT reduces as Company focus on Inishowen
 LBT in FY15 reduced to €202,961 from €308,292 in FY14.
 Net debt in FY15 increased to €306,010 from €72,524 in FY14.
 Drilling is ongoing at the Inishowen Gold Project, located in Donegal and results are expected in Q316.
 Connemara has been informed by its joint venture partner in the Wicklow/Wexford area ,Hendrick, that it has raised sufficient funds to enable some drilling in 2016.
 At the Stonepark zinc-lead project, joint venture partner - Teck, has indicated that they may have an exploration budget for the project in 2016.
 Connemara is expected to surrender three licences located around the now closed Lisheen zinc mine.
 The Company has applied for additional licences prospective for zinc.

NORTHLAND CAPITAL PARTNERS VIEW: Connemara Mining Company continues to be conservatively run. The Company’s focus is on the Inishowen Gold Project and drill results are expected in the next quarter. There is also the potential for additional advancement at the Company’s joint venture interests and for new zinc projects to be brought in.

Red Leopard Holdings (LON:RLH) – CORP: FY15 results
Market Cap: £0.4m; Current Price: 0.08p

LBT widens in FY15
 LBT in FY15 increased to £230,921 from £170,113 in FY14, largely due to an increase in finance cost.
 Net debt in FY15 totalled £83,460 down from £158,326 in FY14
 The Company is in discussions with engineers regarding the revaluation of the cost of reassessing the tunnel continue.
 The Company is continuing to evaluate other complementary resource assets.

Wed, 29 Jun 2016 08:14:00 +0100
The Brecovery continues FTSE 100 called to open +85pts at 6225, maintaining its upward march from the post-Brexit lows plumbed last Friday. A solid trend of rising lows since Monday gives hopes to Bulls that pre-Brexit and 2016 highs of 6450 can be revisited. Bears watching for any test of supportive rising lows at 6200. It’s still unclear whether this is a dead-cat bounce or the real thing in terms of recovery, but with little signs of appetite for lows to be revisited, and for the bounce to have endured a third full session and put on 500pts, bodes well in terms of the worst being behind us. Watch levels: Bullish 6240, Bearish 6185.
A positive opening call comes after US and Asian equities extended the global recovery rally helped by positive data overnight as Chinese and German Consumer sentiment rose and UK House Price data showed the nation’s precious property further delivering gains in June, albeit the data likely being pre-Brexit. Asian stocks have bounced further thanks to buoyancy in UK Sterling on hopes that Brexit uncertainty will ease and in spite of terrorism rearing its ugly head in the form of a bombing in Istanbul and ratings agency Moody's downgrading the UK's banking sector.
Australia’s ASX is advancing on weak-USD inspired strength in raw materials and energy-focused names (oil  above $48; copper testing 6-week highs), and assisted by a rebound in some UK-exposed and dual-listed stocks hit hardest by Brexit fears. Japan's Nikkei higher in spite of unwelcome Yen strength which is at odds with disappointing Retail data and expectations for more BoJ intervention and/or stimulus to help an ailing economy and tame currency strength.
US bourses were buoyed by the energy and financial sectors which staged somewhat of a rebound (oversold following the preceding two sessions?). Support for sentiment is also stemming from the oil price which rose overnight with US supplies seen falling (API drawdown so last night ahead of EIA today) and suspected outages in Norway due to strike action. Balancing things out in the US, we heard from the Fed’s Powell who said he saw Brexit headwinds for economies the world over, including the US. Dow Jones futures are looking strong this morning, having climbed back above their 200-day moving average, however note potential for resistance to be encountered between 17450 and 17600.
Support for Gold at $1304 held yesterday and sees the yellow safe haven back up around $1320 this morning. Note the positive opening call for equities could well keep the pressure up though - Gold is still contending with 3 days of falling highs. Nonetheless, the longer term outlook seems pretty bullish given the multitude of uncertainties on the menu.
In focus today will be day-two of the EU Leaders Summit on Brexit (the one without PM Cameron) from which comments will again be sought, such as those encouraging the UK to get on with activating Article 50 of the Lisbon Treaty and commence divorce proceedings ASAP .
In terms of data, watch out for UK Consumer Borrowing data which has shown a pattern of up one month, down the next which suggests that April’s plunge could be followed by a bounce back in May although Brexit headwinds may complicate things. Eurozone Confidence figures (Consumer, Econ, Ind, Business) are likely unchanged in June.
In the afternoon, German inflation is forecast slightly slower in June, but continuing its improvement and escape from April’s flirt with deflation when looked at on an annual basis. June US Personal Income, Spending and Inflation are expected to have eased in May but Pending Home Sales growth may have gone negative before US Oil Inventories give us the latest Crude picture.
Note ECB President Draghi speaks again this afternoon, likely continuing with soothing words regarding the Eurozone and Brexit while this evening we have part two of this year’s US Federal Reserve annual Bank Street Tests. All are seen passing on account of post-crisis measures to bolster balance sheets and avoid instances of ‘too-big-to-fail’, but whether capital-return plans will be approved after all these years is what will be most in focus, potentially helping sector sentiment this side of the pond.

Wed, 29 Jun 2016 08:13:00 +0100
Beaufort Securities Breakfast Alert: Dignity, Legal & General, Redrow  Markets

The FTSE-100 finished yesterday's session 2.64% higher at 6,140.39, whilst the FTSE AIM All-Share index closed 3.82% better-off at 688.83. In continental Europe, markets ended sharply higher, breaking a massive sell-off ignited by Brexit. Speculation that policymakers would introduce stimulus measures to stabilize the market lifted investor sentiment. France’s CAC 40 and Germany’s DAX rose 2.6% and 1.9%, respectively.
Wall Street
Wall Street ended in the green as investors bought cheap assets and recovered some of the losses due to negative impact of Brexit. In addition, an increase in oil prices and positive US economic data fuelled buying. The S&P 500 advanced 1.8%, led by the energy sector.
Equities are trading higher tracking the global markets as the immediate impact of Brexit begins to wane. The Nikkei 225 gained 1.6% as a weaker yen supported export-driven stocks. The Hang Seng was trading 0.6% up at 7:00 am.
Yesterday, WTI prices rose 3.3% to US$47.85 per barrel, while Brent oil prices increased 3.0% to US$48.58 per barrel.

UK would have to increase taxes : Osborne
Chancellor George Osborne has said that Britain would have to increase taxes and cut spending this year to stabilize public finances in the wake of the country’s exit from the EU. Furthermore, he ruled out succeeding Prime Minister David Cameron.
UK retail sales balance dips in June: CBI
As per the Confederation of British Industry (CBI), the UK’s retail sales balance slipped to +5 in June from +7 in May. The decline in sales was primarily due to uncertainty surrounding Brexit.

Company news

Dignity (LON:DTY, 2,400.0p) - Buy
Dignity, the UK provider of funeral related services, yesterday announced that it has completed acquisition of three crematoria locations from Funeral Services Limited (trading as Co-op Funeralcare). Further to this, the Group also said its two sites are on track for completion, now pending consent of the relevant Local Authority and transfer of the trade and assets of the location to a new entity.

Our view: Acquisition of these five additional crematoria is a significant and encouraging move, extending the Group’s reach to areas and site locations not currently served. As such, the acquisition will improve the Group’s brand awareness while winning market share. Dignity’s Q1 performance, released on 9 May 2016, was in line with the Board’s expectations for the full year, while the number of mortalities in 2016 is expected to be broadly comparable with more normalised 2014. By comparison, the exceptional surge seen during 2015, in which in accrued numbers were driven higher by a vicious bout of influenza and associated respiratory conditions among older people together with an unusual spike in dementia and Alzheimer-related deaths, is not expected to be seen again. Contrasting Q1 2016 figures with the more comparable period of Q1 2014, the revenue and underlying profit has expanded by +18% and +21% respectively, at a time when the death count increased by just +6%. We expect Dignity to deliver earnings per share of around +10% per year, in line with its medium-term target. The Company is due to announce its interim results for the 26 week period to the 24 June 2016 on 27 July 2016. Beaufort retains its Buy recommendation on the stock.

Legal & General (LON:LGEN, 178.0p) - Buy
Yesterday, Legal & General announced a balance sheet update in the wake of ongoing market volatility after Brexit. Legal & General runs an A minus-rated credit portfolio of £44.8bn. Based on the closing on 27th June 2016, Legal & General’s solvency II coverage ratio stood at 156%, with £13.7bn in eligible owned funds, £8.8bn in SCR and £4.9bn in surplus. In H1 2016, the company paid a dividend of £592m and reduced coverage ratio by 7%. Legal & General acquired a £2.9bn UK annuity portfolio from Aegon, reducing its surplus by £50m and coverage ratio by about around 3%. As at 31st May 2016, bank holdings represented about 4.9% of the Legal & General Retirement (LGR) bond portfolio, with limited exposure to either Tier 1 or sub-investment grade. Legal & General expects net cash to increase 15% to £720m and operational cash generation to rise 5% to £655m at the end of H1 2016. Separately, Legal & General appointed Sir John Kingman as chairman. He succeeds Rudy Markham, who was appointed interim chairman after John Stewart's retirement from the board on 1st June. The appointment has been approved by financial regulators, the Prudential Regulation Authority and the Financial Conduct Authority, and is subject to the advice of the Cabinet Office Advisory Committee on Business Appointments.

Our view: The update underpins Legal & General’s strong position to face the consequences of Brexit. Its solvency II coverage ratio, a key metric in the insurance sector, remains healthy. Legal & General has a diversified portfolio. Moreover, its global credit team is continuously monitoring the portfolio and de-risking the credit portion of eligible owned funds. The company has a solid balance sheet, with cash and cash equivalents within eligible owned funds standing at £3.3bn. It is executing its strategy structured around five long-term drivers: ageing population, globalisation of asset markets, creation of new real assets, welfare reform and digital. Furthermore, Legal & General would benefit from the appointment of Sir John Kingman, who has impressive track record and in-depth knowledge of the financial market. We believe the company is comfortably placed with adequate funds and portfolios to mitigate economic downturn after Brexit. Therefore, we maintain a Buy rating on the stock.

Redrow (LON:RDW, 300.50p) - Buy
Yesterday, Redrow issued a trading statement, ahead of the release of its annual results on 6th September 2016. Redrow registered a 20% rise in turnover to £1.38bn for FY 2016. It reported a 17% increase in the number of homes legally completed to 4,716 for FY 2016, with private completions expanding 12% to 3,882. The average selling price of a private home rose to £328,500 in FY 2016 from £297,300 in FY 2015. Its pre-tax profit remains above the top end of analyst expectations at £240m. Private reservations increased in value by 46% y-o-y to £1.56bn during the period. At the end of June 2016, Redrow’s private order book stood at £807m, 50% higher than on June 2015. In FY 2016, the sales rate stood at 0.68 per week (in line with that in the previous year). The number of active outlets increased to 128 from 117 in 2015. Meanwhile, net debt declined to £139m from £154m in 2015.

Our view: Redrow expects to deliver a strong performance in FY 2016 on account of favourable housing market conditions. Its sales remain solid, supported by an increase in completions and a rise in the average selling price of a private home. The value of private reservations remained strong, largely due to strong regional growth. Redrow has made good progress on the operational front, given it completed developments at Commercial Street and Amberley Waterfront. Its London developments, including the Croydon joint venture, have either sold in line with or beat management expectations. Redrow’s debt declined owing to higher turnover and better payment terms on land purchases. The initial impact of Brexit on the company has been minimal, with underlying demand for its homes appearing at this time capable of delivering long-term growth. Therefore, we maintain a Buy rating on the stock.

Economic news
The US Commerce Department revised GDP growth in Q1 2016 to 1.1% from the earlier estimate of 0.8%. The markets expected a 1.0% growth in the economy.
US consumer confidence index
As per the Conference Board, US consumer confidence index jumped to 98.0 in June from a downwardly revised 92.4 in May. The reading was better than the market estimates of a reading of 93.3.

Wed, 29 Jun 2016 08:00:00 +0100
Brokers: Land Securities, British Land Co and Intu moved down Tue, 28 Jun 2016 11:11:00 +0100 Is calm returning after the Britstorm? FTSE 100 called to open +90pts at 6070, holding its uptrend from yesterday’s lows. Well off Friday’s worst levels and having registered a breakout beyond short-term falling highs resistance, markets appear to have calmed into 6000: the mid-point of pre and post-Brexit best and worst. Bulls are looking for a break above yesterday’s 6130 highs to keep recovery alive. Bears are eyeing any break of rising lows and 6000 in the hope of further downside. Watch levels: Bullish 6075, Bearish 5990.
A positive opening call comes in spite of a mixed Asian session and negative US close after ratings agencies S&P and Fitch joined Moody’s in downgrading the UK’s credit rating post Brexit. This and political woes sent GBP to fresh lows overnight but it has since bounced, strengthening for the first time since Friday’s surprise referendum result on hopes policymakers are working to limit the economic fallout. An easing in USD strength is serving to buoy the all-important commodities space while some cautious optimism is creeping back into the new trading week.
In Asia, Japanese equities are trading around breakeven benefiting from bets of more stimulus and USD/JPY holding around 102, with the overnight GBP bounce giving a breather to Nikkei exporters via a weaker Yen, having been under pressure for several days on account of global FX moves post Brexit. Note Australia’s ASX not benefiting from the weaker USD's help for commodities due to the equally important financials sector being troubled by Brexit contagion fears.
US markets closed yesterday’s session in the red once more, nursing heavy losses in risk sectors such as commodities and financials. Note, however, Dow Jones futures currently indicate a positive open for today’s session as markets consolidate. While the general outlook remains bleak, profit taking and bargain hunting are likely to keep things moving in both directions.
Crude prices ticked up overnights with the USD Basket off its high point, in an area of resistance at 2016 falling highs, helping to boost demand. Expect economists’ outlooks over the coming days and weeks to dictate the direction of oil, however a longer term slowdown in demand is seen as unlikely.
Gold came back slightly from its highs overnight as Sterling stabilised - briefly no doubt - to return an air of calm to the markets. However, note support likely to remain for the yellow metal on continued safe haven demand amid all the uncertainty around the surprise Brexit vote.
In focus today will be the EU Leaders Summit on Brexit from which all soundbites will be listened to carefully for any hints of pressure from Brussels or that we are set for an even longer and more drawn out process than we have been preparing for. What ECB President Draghi has to say may also be of interest in terms of keeping market calm.
Data-wise, UK CBI Sales may show a surprise improvement like CBI orders data did last week. In the afternoon, US Q1 GDP Growth (3rd estimate) is seen a touch faster along with Personal Consumption, although inflationary prints are seen unchanged from the 2nd estimate. Thereafter, US S&P House Prices are likely to have made solid gains in April, along with improvements in Consumer Confidence and the Richmond Fed Manufacturing although we note that the Kansas City Fed improved last week while the Chicago Fed disappointed .

Tue, 28 Jun 2016 07:59:00 +0100
Northland Capital Partners View on the City: Keras Resources Keras Resources (LON:KRS) – CORP: Interim results
Market Cap: £15m; Current Price: 1.1p

Interims reflect transition from developer to  miner

  LBT increased to £1,052k in H116 from £659k in H115, due to an increase in administrative costs and finance costs associated with the transition from a development company to a mining company.

 Net debt increased to £2,235k in H116 from £261k in H115.

Post-period end completed £1,250,000 equity placing.

Northland Capital partners view: Keras Resources interim result reflects the Company’s transition from developer to miner. The Company began to haul ore to the Paddington Mill in early-April, after the period covered by the interim results, and as a result, no revenues were received in these results. The next set of results from Keras will reflect that the Company has moved into generating cash flow.

Tue, 28 Jun 2016 07:47:00 +0100
In the papers: Aston Martin, Morrisons, KPMG The Times
Markets braced for further panic after debt downgrade: Britain has been hit with a two-notch downgrade to its sovereign credit rating in a move that is likely to send another wave of panic through markets. Standard & Poor’s said the decision to leave the EU could relegate sterling from the world’s exclusive reserve currencies.
Housebuilders crash as Leave vote spooks investors: The U.K.’s housebuilders have lost nearly 40% of their value since the referendum result, having been hit hard by investors who believe there is likely to be a drop in demand for new homes if the economy suffers.
Aston Martin says road to new plant is now smoother: Aston Martin is to stick to its plan to build a carmaking plant in south Wales, even arguing that the vote for Brexit has made the project more viable.
Morrisons ‘treats suppliers the worst’: Morrisons has the worst record among major supermarkets for mistreating suppliers, according to a report by the industry watchdog. A fifth of respondents to a survey of more than 1,000 suppliers and trade associations said that Morrisons “rarely” or “never” complied with industry rules governing supply chain relations.
Soldier victims of ‘forex fraud’ sought: Gurkhas caught up in an alleged £50 million City fraud have been urged to come forward by lawyers leading the fight for compensation.
Khan demands London has a seat at table for EU talks: Sadiq Khan demands that a representative for London is appointed to the U.K.’s team for negotiations over its departure from the European Union.
Javid meets business to assess future ‘challenges’: Sajid Javid insisted that the U.K. “remains open for business” after Brexit, before a hastily arranged roundtable meeting with corporate leaders and trade bodies.
The Independent
Brexit may be Scotland’s chance to steal London’s finance crown: For all the uncertainty Scotland faces with the cloud of Britain’s exit from the European Union, there could yet be a silver lining, according to U.K. Lawmaker Mark Garnier.
Foxtons share price slides 20% after it warns Brexit will hit profits: Shares in estate agent Foxtons suffered a massive 20% slide on the stock market on Monday morning after the company released a trading update saying that the results of the EU referendum would likely weigh on profits.
Brexit vote sees U.K. credit rating downgraded to AA negative by Fitch: Fitch has downgraded the U.K.’s credit rating to AA negative, after similar moves by Moody’s and S&P, following Britain’s vote to leave the EU.
Volkswagen agrees $15 billion settlement over vehicle emissions cheating scandal: Volkswagen has said it will settle claims from a lawsuit over its emissions cheating scandal to the tune of almost $15 billion (£11.35 billion), the largest U.S. civil settlement ever agreed by a car manufacturer.
 of gentle wisdom. The real world often works another way. For a recent example, consider Kazakhstan’s national oil company KazMunaiGas (NC).
The Daily Telegraph
Italy eyes €40 billion bank rescue as first Brexit domino falls: Italy is preparing a €40 billion rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets.
KPMG faces full probe into HBOS audit – eight years after the bank crashed: KPMG’s role in assessing HBOS’ finances in the year ahead of its collapse in the financial crisis will at long last come under scrutiny, the U.K.’s audit watchdog has decided.
Brexit: Norway-style deal with EU would help U.K. avoid damaging recession, says Morgan Stanley: Britain must pursue a Norway-style agreement with the EU if it is to avoid a damaging recession, according to Morgan Stanley.
GW pharma shares flying high after stellar results for epilepsy drug: A British biotech that develops drugs derived from the cannabis plant has unveiled stellar results from late-stage trials testing its key mediation on children with severe, untreatable epilepsy, sending shares in the company soaring by 25%.
Steel industry could ‘crumble’ in wake of Brexit vote, warns union: Britain’s steel industry could “crumble” because of the Brexit referendum, according to union leaders, who are now demanding an urgent meeting with the Government over their concerns.
Insurance shares hit after Brexit vote: Shares in London-listed insurance firms have taken another tumble as analysts try to judge the damage that Brexit could inflict on their customer base and investment portfolios.
The Questor Column:
Foxtons: Foxtons’ profit warning meant the estate agent was also in the dumps on the market, losing 22.6% and leaving the firm at its lowest ever closing price. The heady days when the stock was pushing £4 less than a year after the initial public offering in September 2013 seem like a distant memory. Peel Hunt analysts were particularly gloomy about the firm, saying its annual profit forecast of £42 million could be halved, and that even a recovery in the London market would not be enough to revive the estate agent when its competitors are eager to undercut it on commission. The Questor column advised selling in March, after Foxton posted a 2.6% fall in annual profits as cheaper rivals sprang up across its London heartland. The firm has previously managed to balance falling sales with the growing lettings market, but this equation no longer works if there is a broader draining of activity from the capital city. We see no reason to take the plunge, even at the current rock-bottom price. Sell. Foxtons at £1.04-30.5p. Questor says “Sell”.
The Guardian
Brexit: Asian financial markets remain tentative after Britain’s vote to leave EU: Britain’s decision to leave the EU continued to reverberate around the Asia-Pacific financial markets on Tuesday as some analysts warned that global markets were bracing for a full-blown recession in the U.K.
RBS slumps 25% as Brexit puts bank shares under severe strain: Bank shares are under severe pressure after the Brexit vote, with bailed-out Royal Bank of Scotland shedding a quarter of its stock market value at one point.
U.S. stock markets sink again following Brexit vote: U.S. stock markets were rocked again on Monday by the aftershocks of the U.K.’s referendum decision to quit the European Union.
Chaos ahead after Brexit vote, says U.K.’s food and drink industry body: The U.K. food and drink industry is facing a period of uncertainty and chaos following the vote to leave the EU as more than a quarter of its workforce come from Eastern Europe, according to the sector’s trade body.
Big investment houses warn of inequality risk after Brexit: Britain’s historic vote to leave the EU has prompted some of the world’s most powerful investment houses to turn their focus to inequality.
Trust in charities at record low after scandals: Public trust in charities in England and Wales has fallen to the lowest recorded level since monitoring began in 2005, in the wake of a series of high-profile scandals.
Daily Mail
Probe into collapse of BHS and its £571 million pension deficit widens with investigation into its auditor: The probe into the collapse of BHS and its £571 million pension deficit widened with an investigation into its auditor.
Hedge fund Boss George Soros who made £760 million betting against pound on Black Wednesday fails to repeat feat following Brexit vote: Hedge fund Boss George Soros who made £760 million betting against the pound on Black Wednesday failed to repeat the feat following the Brexit vote.
Investigators to probe accountancy firm employed by Halifax/Bank of Scotland - eight years after bailout helped trigger financial crisis: Investigators will at last probe the accountancy firm employed by Halifax/Bank of Scotland – eight years after its bailout helped trigger the financial crisis.
Aston Martin sees losses almost triple over past year due to major expansion drive aimed at transforming fortunes: Aston Martin saw losses almost triple over the past year due to a major expansion drive aimed at transforming its fortunes.
Shares in airline easyJet nosedive as it warns Brexit uncertainty, strikes and bad weather will bring lower profits: Airline easyJet has warned on profits after it said that economic uncertainty stemming from Britain’s decision to leave the EU will add to its existing woes caused by recent strikes and bad weather.
Daily Express
Brexit will not trigger recession and U.K. economy will grow, says Moody’s ratings Boss: Britain’s decision to leave the EU will not trigger a recession, a top ratings agency has said. Alastair Wilson, the head of the sovereign ratings at Moody’s said Britain is “not looking at a recession,” despite fear-mongering from other businesses in the City.
EU Bosses reject informal talks with Britain & demand the U.K. formally triggers Brexit now: Senior EU Chiefs have refused to start informal negotiations with Britain – demanding that the U.K. begins divorce proceedings before any talks can take place.
The Scottish Herald
Forrest makes big profit after Glasgow showroom sale: Forrest Furnishing has reported a huge leap in profits after selling its Macdonald Furniture Galleries showroom on Glasgow’s Cathedral Street.
Lanark haulage firm JHP on the up after bank funding boost: A Lanark-based haulage and logistics firm as acquired news premises to accommodate its expanding fleet, growing workforce after securing a £300,000 funding package from Bank of Scotland.
Scottish dairy brand launched to boost U.S. exports: A new Scottish dairy brand is being launched at a New York food show to help meet the increasing U.S. demand for products with Scottish provenance.
Large business tax supplement raises more than expected: Tax revenue generated from the Scottish Government doubling the supplement rate applicable to large businesses is expected to be £62.4 million.
U.K. strong enough to weather the storm, says Cameron and Osborne: David Cameron and George Osborne have moved to calm nerves over Britain’s withdrawal from the EU, as the financial markets responded with continued volatility after Thursday’s Brexit vote.
The Scotsman
Omega aims to ‘under-promise and over-deliver’: Life sciences firm Omega Diagnostics said it remained confident on the prospects for its “revolutionary” product that checks the immune systems of HIV patients.
New Chief Executive for smart antennas firm Sofant: Smart antenna specialist Sofant Technologies announced its appointment of David Wither as Chief Executive.
SECC profits boosted by record conference haul: The company behind the Scottish Exhibition and Conference Centre (SECC) and the SSE Hydro has reported a steady rise in turnover and underlying earnings after enjoying a record year for conference events.
Edinburgh and Glasgow retail sites go under hammer: Three commercial properties across the Central Belt are being sold over the internet this week by the capital markets division of consultancy Lambert Smith Hampton (LSH).
City A.M.
The U.K. can afford no more delays on airport expansion, the Boss of Gatwick Airport has said: The Boss of Gatwick Airport is to renew calls for a new runway, arguing it is the only option suitable for expansion.
HS2 completion timetable “unrealistic”, says National Audit Office: The Department for Transport set an “unrealistic timetable” for the completion of High Speed 2 (HS2), the National Audit Office (NAO) has said.
Parliaments across Europe intensify calls for more corporation tax transparency, as Public Accounts Committee unveils open letter asking for just that: Parliaments across Europe are urging their respective governments to do more to make tax transparent.
Boutique investment bank shares suffer in U.S. as Brexit dampens M&A prospects: Boutique investment bank share prices are tumbling in the U.S. with the U.K.’s Brexit expected to slow mergers and acquisitions (M&A) activity.
JJB Boss flexes muscles to snap up Fitness First’s U.K. operations: JJB Sports Founder Dave Whelan is in talks to buy the British operations of gym chain Fitness First. The multi-millionaire business tycoon’s DW Sports is set to fork out £70 million for a takeover of the business, Sky News reported.
Brexit fallout: McLaren’s Chief Executive has urged the government to find a way to create stability, fast: The Boss of one of the world’s elite supercar manufacturers might be expected to prize speed above anything. So it’s hardly surprising that McLaren Chief Executive Mike Flewitt has urged the government to find a way to create stability as fast as possible after Thursday’s vote in favour of Brexit.
Italians worry the U.K. might buy less prosecco in the wake of Brexit vote and the fall in Sterling: Italian prosecco producers have been spooked by the U.K.’s vote to leave the EU last week, worrying that the hit to the pound could “upset” trade and send sales flat.
Miner BHP Billiton swims against the tide with spending boost: The battered mining sector could be on the tip of a pick up after BHP Billiton unveiled plans to boost how much it spends on finding oil and copper. Speaking during a presentation to Citxigroup investors, BHP said it will raise exploration spending by nearly 30% over this financial year, from $700 million (£530 million) to $900 million.

Tue, 28 Jun 2016 07:44:00 +0100
Market briefing: US markets closed in negative territory yesterday, with concerns over ‘Brexit’ still weighing on investor sentiment. UK Market Snapshot
UK markets ended in the red yesterday, extending their rout from previous session, amid weakness in banking, housing and airline sector stocks. easyJet sank 22.3%, after it issued a profit warning, citing Brexit referendum would hurt its revenue. Lenders, Lloyds Banking Group, Royal Bank of Scotland Group and Barclays tanked 10.3%, 15.1%, 17.4%, respectively. Homebuilders, Berkeley Group Holdings, Persimmon, Taylor Wimpey and Barratt Developments plunged 9.7%, 13.8%, 14.9% and 19.4%, respectively, on concerns that demand for home purchase would decrease in light of last week’s vote. On the flipside, gold miners, Fresnillo, Centamin and Randgold Resources surged 7.0%, 8.7% and 9.0%, respectively, as investors continued buying safe-haven assets following the Brexit outcome. Defensive stocks, Shire and AstraZeneca advanced 1.1% and 2.3%, respectively. The FTSE 100 declined 2.5%, to close at 5,982.2, while the FTSE 250 plummeted 7.0%, to settle at 14,967.9.
US Market Snapshot
US markets closed in negative territory yesterday, with concerns over ‘Brexit’ still weighing on investor sentiment. Investment banks, Evercore Partners and Lazard tanked 13.0% and 13.5%, amid uncertainty over merger deals due to Brexit. Technology behemoths, Apple, Microsoft and Western Digital dropped 1.5%, 2.8% and 11.8% down, respectively. Materials sector shares, Dow Chemical, Freeport-McMoRan and Owens-Illinois dipped 3.1%, 4.3% and 9.1%, respectively. Airline firms, Delta Air Lines, American Airlines Group and United Continental Holdings lost 5.2%, 6.6% and 8.1%, respectively. Banking shares, JPMorgan Chase, Citigroup and Bank of America declined 3.3%, 4.5% and 6.3%, respectively. Oil majors, Chevron, Schlumberger and ConocoPhillips fell 1.5%, 2.1% and 5.5%, respectively, tracking losses in crude oil prices. The S&P 500 slipped 1.8%, to settle at 2,000.5. The DJIA shed 1.5%, to settle at 17,140.2, while the NASDAQ slid 2.4%, to close at 4,594.4.
Europe Market Snapshot
Other European markets finished lower yesterday, as UK’s decision to leave the European Union continued to send jitters across the global stock markets. Volvo tanked 14.5%, after it increased its provision for a possible European Commission fine for a suspected trucks cartel. K+S plunged 11.4%, after it warned that its earnings in the second quarter would fall sharply compared to same period last year due to price pressures, production outages and lower sales. Financial firms, Deutsche Bank, Societe Generale and Credit Suisse Group dipped 4.6%, 8.4% and 9.2%, respectively. On the gaining side, Vonovia added 2.6%, after a leading broker upgraded its rating on the share to ‘Buy’ from ‘Hold’. Its peer, Deutsche Wohnen gained 1.8%. The FTSEurofirst 300 index fell 3.7%, to close at 1,223.2. Among other European markets, the German DAX Xetra 30 declined 3.0%, to close at 9,268.7, while the French CAC-40 lost 3.0%, to settle at 3,984.7.
Asia Market Snapshot
Markets in Asia are trading mostly lower this morning. In Japan, the benchmark Nikkei 225 index has rebounded from its earlier loss amid speculation of additional monetary stimulus by the Bank of Japan. Auto firms, Honda Motor, Nissan Motor and Toyota Motor have declined 0.1%, 0.9% and 3.8%, respectively, amid strength in the Japanese Yen. Banks, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group have fallen 0.9% and 1.1%, respectively. In Hong Kong, HSBC Holdings and CK Hutchison Holdings have eased 1.3% and 2.8%, respectively, amid high exposure to the European markets. In South Korea, index majors, Samsung Electronics and POSCO have advanced 0.2% and 1.3%, respectively. The Nikkei 225 index is trading 0.3% lower at 15,259.0. The Hang Seng index is trading 0.7% down at 20,084.9, while the Kospi index is trading 0.5% higher at 1,936.3.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 1.34% or $0.63 higher at $47.79 per barrel, ahead of the American Petroleum Institute’s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract declined 2.58% or $1.25, to settle at $47.16 per barrel, slipping to a seven-week low, amid demand concerns for crude oil following UK’s vote to leave the EU last week. Also, a stronger US Dollar weighed on the commodity prices.
At 0330GMT today, Gold futures contract is trading 0.14% or $1.80 lower at $1320.70 per ounce. Yesterday, the contract advanced 0.19% or $2.50, to settle at $1322.50 per ounce, continuing with its gains from prior session, amid a decline in global equity markets.
At 0330GMT today, the EUR is trading 0.20% higher against the USD at $1.1047, ahead of the European Central Bank Head, Mario Draghi’s speech and EU Parliament resolution vote on the UK referendum, due today. Market participants will also closely assess the US consumer confidence data for June, scheduled to release later in the day. Yesterday, the EUR weakened 0.83% versus the USD, to close at $1.1025, extending its losses from last session. Meanwhile, data showed that the US services PMI remained unchanged in June.
At 0330GMT today, the GBP is trading 0.65% higher against the USD at $1.3311. Yesterday, the GBP slumped 3.32% versus the USD, to close at $1.3225, declining to 31-year lows, amid rising uncertainty following last week’s EU referendum.
Fixed Income
In the US, long term treasury prices rose and pushed yields sharply lower, amid huge safe-haven buying among investors. Also, yields plunged after a leading rating agency downgraded UK’s credit rating to ‘AA’ from ‘AAA’. Yesterday, yield on 10-year notes plummeted 11 basis points to 1.46%, while yield on 2-year notes lost 3 basis points to 0.61%. Meanwhile, 30-year bond yield tumbled 14 basis points to 2.28%.

Key Economic News
S&P downgraded UK’s credit rating to “AA” from “AAA”

Standard & Poor (S&P) reduced UK’s credit rating by two steps to “AA” from “AAA”, citing the risk of a less predictable, stable, and effective policy framework in the UK. Additionally, Fitch cut the nation’s credit rank from “AA+” to “AA”, in response to the Brexit vote.
Euro-zone three-month average of M3 money supply rose in the March-May 2016 period
On a YoY basis, the three-month average of M3 money supply registered a rise of 4.80% in the Euro-zone, in the March-May 2016 period. The three-month average of M3 money supply had climbed 4.90% in the February-April 2016 period.
Euro-zone private sector loans rose in May
On an annual basis, private sector loans in the Euro-zone advanced 1.60% in May. In the prior month, private sector loans had climbed 1.50%.
Euro-zone M3 money supply rose more than expected in May
In May, M3 money supply recorded a rise of 4.90% on an annual basis in the Euro-zone, compared to an advance of 4.60% in the prior month. Markets were anticipating M3 money supply to rise 4.80%.
US Markit composite PMI recorded a rise in June
The flash Markit composite PMI rose to a level of 51.20 in June, in the US. In the prior month, Markit composite PMI had recorded a level of 50.90.
US Markit services PMI remained flat in June
In June, the flash Markit services PMI remained steady at a level of 51.30 in the US, compared to market expectations of an advance to a level of 51.90.
US Dallas Fed manufacturing business index recorded a rise in June
The Dallas Fed manufacturing business index rose to a level of -18.30 in June, in the US, compared to a level of -20.80 in the prior month. Market anticipation was for the Dallas Fed manufacturing business index to rise to a level of -15.00.

Tue, 28 Jun 2016 07:39:00 +0100
Beaufort Securities Breakfast Alert: Aviva, easyJet, Foxtons Markets

The FTSE-100 finished yesterday's session 2.55% lower at 5,982.20, whilst the FTSE AIM All-Share index closed 3.82% worse-off at 676.96. In continental Europe, markets ended in the red on uncertainty surrounding Brexit, which continued to dampen investor sentiment. France's CAC 40 and Germany's DAX slid 3.0% each.
Wall Street
Wall Street extended losses for the second consecutive day in the wake of negative implications following Brexit last week. Additionally, a fall in oil prices resulted in losses in energy stocks. The S&P 500 fell 1.8%, with the material sector losing the most.
Equities are trading mixed as investors remained concerned over Brexit and its impact on the global economy. The Nikkei 225 gained 0.1% amid speculation that the Bank of Japan might boost stimulus measures. The Hang Seng was trading 0.8% down at 7:00 am.
Yesterday, WTI prices fell 2.7% to US$46.33 per barrel, while Brent oil prices dropped 2.6% to US$47.16 per barrel.

Volkswagen reaches settlement with US car owners

German carmaker Volkswagen has reached a settlement of US$15bn with US car owners after admitting to cheating on emission tests. As per the deal, Volkswagen would offer to repair or buy back the affected diesel vehicles and pay owners compensation. According to news sources, the legal settlement reserves US$10bn to repair or buy back around 475,000 affected vehicles with 2-litre diesel engines and compensate owners with a payment of up to US$10,000.

Company news

Aviva (LON:AV., 346.20p) - Buy
Yesterday, Aviva informed it has conducted extensive research on the possible implications of Brexit and concluded that the company expects no substantial operational impact. The company estimates as of the closing on 24th June 2016, the solvency II coverage ratio remained 150–180%.

Our view: The UK exiting the EU has negatively impacted financial companies, including insurance firms. However, Aviva's update is an assurance to the company's fundamentally strong position, and its solvency ratio is well within the working range. The company boasts of a solid balance sheet, with low sensitivity to market stress, and has tripled the economic capital surplus over the past four years. As per Aviva's preliminary results, it had a solvency II ratio of 180% and surplus of £9.7bn. The company would continue to monitor the effects of Brexit. Overall, Aviva is well placed in both financial and operational aspects to deliver long-term growth. Therefore, we maintain a Buy rating on the stock.

easyJet (LON:EZJ, 1,020.0p) - Hold
easyJet, a low-cost European airline company, yesterday provided an updates on the impact of a significant number of disruption events in the third quarter ('Q3'). The Group said due to the impact of continued French Air Traffic Controllers ('ATC') strike, runway and congestion issues at Gatwick airport, severe weather, together with knock-on cancellations across the easyJet network, it has experienced 1,061 cancellations in the Q3 up to yesterday. In June alone, there was over 700 cancelations (June 2015: 487 cancellations), of which, over 300 flights were cancelled in the last seven days to 27 June 2016. The Group said these events have impacted Q3 pre-tax profit by c.-£28m, revenue per seat by c.-8.6% (previously guided c.-7%). Following the BREXIT victory on the EU Referendum, for the H2 FY2016, easyJet now expect revenue per seat to decline by at least a mid-single digit percentage points compared to the H2 FY2015 at constant currency basis. Moreover, recent movements in fuel prices and exchange rates is anticipated to add +£25m to the total fuel cost for the year to 30 September 2016. easyJet will provide a further update on current trading at its third quarter results on 21 July 2016.

Our view: A disappointing update punctuated with warnings and uncertainties. The operating environment in Q3 has been extremely challenging for all European airlines, being impacted by timing of an early Easter, the terrorist attack in the Brussels, the crash of EgyptAir, a series of ATC strikes (mainly French) and severe weather conditions. Such events have a direct impact on airlines as they forced flights cancellations plus addition costs as well as discouraging prospective travellers. These disruptions were not totally new news from easyJet, but the outcome of the Brexit 'Leave' vote was. The short term impact from this latest shock, the movement in fuel prices and foreign exchange rates, has added an estimated £25m to total direct cost, while economic uncertainties, consumer confidence, and depreciation of sterling is unlikely to recover at least for the FY2016 as summer tend to contain higher levels of discretionary leisure travel. Competition within the European short-haul market remain intense with its rival, Ryanair, having proposed a -7% reduction in average air fares in Q4, which will keep squeeze its margins as the fight for market share continues. One might anticipate lower consumer demand from the British nationals due to the weakened sterling, which could be somewhat offset by an increased number of foreign travellers. Beaufort has reviewed prospective disruption and uncertainty, which results in an aggregate adverse hit amounting to over-£100m on pre-tax profit for the FY2016. Long-term the outlook for easyJet has also become less certain, as its ability to fly without restriction across the Europe with no additional charges or access delays may now be restricted. Beaufort accordingly downgrades its recommendation on easyJet to HOLD until there is greater visibility for the sector.

Foxtons (LON:FOXT, 104.50p) - Hold
Yesterday, Foxtons issued a trading update ahead of interim results on 29th July 2016. The company warned its revenues and adjusted EBITDA for 2016 would be significantly lower than the previous year due to uncertainty in the London property market following Brexit. Foxtons expects revenues for H1 2016 to be lower than those for H1 2015, with lower adjusted EBITDA margins of around 20%, chiefly due to subdued sales volumes and cost associated with recent investments in its branch network.

Our view: The aforementioned update issued by Foxtons is a disappointing one. The company has lowered its revenue and profit margins for 2016 on uncertainty in the market following the UK's decision to leave the EU. Post Q1 2016, Foxtons witnessed a drop in sales volumes, dragged by a higher stamp duty and uncertainty surrounding Brexit. Although Foxtons' expansion strategy remains on track, and it has significant opportunity to expand its network across London, we are concerned about the company's reduced sales pipeline entering into Q2 2016. We remain confident of the company's long-term prospects, given its strong balance sheet and low debt. However, recent uncertainty in the property market is likely to depress growth and profitability in the near-to-medium term. Thus, in view of the factors above, we maintain a Hold rating on the stock.

Tue, 28 Jun 2016 07:34:00 +0100
Brexit Shock May Have Silver Lining for Bruised Asian Investors Brexit Shock May Have Silver Lining for Bruised Asian Investors
This article by Kana Nishizawa, Jonathan Burgos and Justina Lee for Bloomberg may be of interest to subscribers. Here is a section:
The victory of the “Leave” campaign stunned many investors who’d put wagers on riskier assets over the past week as bookmakers’ odds suggested the chance of a so-called Brexit was less than one in four. MSCI’s Asian measure dropped 3.7 percent on Friday, led by losses in Japan, South Korea, Australia and Hong Kong. A gauge of Asian currencies weakened the most since China devalued the yuan in August.

“This is just a knee-jerk reaction,” said Tony Chu, a Hong Kong-based money manager at RS Investment Management, which oversees about $17 billion. “Most stocks we look at in Greater China have little to do with the U.K. or the European economies.

We still like Internet-related stocks, consumption and health- care stocks. That’s where we see relatively better earnings prospects.”

The Shanghai Composite Index slid 1.3 percent on Friday, while volume increased less than other major Asian benchmark gauges. Foreign investors are limited by quotas from buying and selling mainland Chinese equities, with local individuals accounting for about 80 percent of trading.

Most Asian markets advanced on Monday. The Topix index rebounded 1.8 percent at the close, as the Shanghai gauge climbed 1.5 percent. Australia’s S&P/ASX 200 Index added 0.5 percent. Hong Kong’s Hang Seng Index dropped 0.2 percent, trimming an earlier loss of 1.4 percent.

To be sure, in the short term, fund managers are girding for higher volatility and a flight out of all but the safest assets. Asia can’t escape a global deterioration in risk sentiment, Harvest Global Investments Ltd. says.

Eoin Treacy's view
Europe, and most particularly the Eurozone, represent the epicentre of global risk. The UK certainly represents a lightning rod for bearish sentiment and that pressure is falling primarily on the Pound. However, potential future issues reside with how the EU will deal with what is an existential threat.

Email of the day two different perspectives on Brexit

The Financial Times publishes this [“Five consequences of the UK’s exit from the EU”], living up to its highest "standards" of political elitism. Let's just take a moment to review a few key points in this article:

(1) "they [EU countries] will be in no mood to offer generous post-Brexit [trade] deals for Britain" - complete bullshit; they will fall all over themselves to get the best possible deals with Britain, because it is in their economic best interest to do so.

(2) “The outlook for Portugal, which is ruled by a shaky coalition of the moderate and radical left, is unsettling investors. The deep-seated troubles of Greece have never gone away. In Spain, which holds a general election on Sunday, the prospects for stable government and economic reform are clouded by a fragmented political party system and Catalan separatism.” – And this has exactly what to do with Brexit? As a global investor, I am not one whit more worried about these (very real) issues than I was before – I was worried before, and still am, not more or less so because of Brexit. On the other hand, I am now far more optimistic about British business, especially the British-based autonomies.

(3) “What does this mean for populist insurgents?” – since when are VOTERS who do not share the current-government-approved point of view “insurgents”? This is the poorest standard of journalism I have yet to see from the FT. I’m guessing new lows will be set shortly.

(4) “the EU will be under pressure to develop proposals for closer integration” – I’d say the EU will be under pressure to reform the unelected bureaucratic nightmare it has morphed into. Not that we should expect such a miracle. If anything, Brexit will invigorate those voters across the EU who believe that it is time to throw off the yoke of the unelected super-government. Power to them!

(5) “Brexit will disrupt the EU’s internal equilibrium.” As if the EU had internal equilibrium to start with. Unless of course one imagines that equilibrium can be achieved while the EU Empire is crumbling.

Brexit is not the cause of the failure of the EU – the EU has been failing since at least 2008. The EU is failing because it is a ruinous socialist (and ultimately totalitarian) experiment. Huzzah for the British voters. Huzzah for democracy in action.


Let's have a look at what we have achieved with the Referendum results this week:
1/ The GBP fell sharply; and this has been one of its sharpest losses ever;
2/ The reputational damage to the UK has been crystallised and is very material;
3/ The most immediately threatened Union now is not the EU, but the UK;
4/ Great political uncertainty, and an almost newly elected parliament is being deprived of its powers and significance;
5/ Great economic uncertainty;
6/ Great geopolitical uncertainty;
7/ Reduced influence in the EU;
8/ Alienated EU citizens.

The GBP?
The reaction of the GBP on Friday is a clear indication that the Brexiteers must still get the financial markets on their side, and a great deal of explanation is very urgent indeed.

This devaluation is a shock-absorber for the short term only, but will not help the country to increase productivity, will not revert the promise of increased minimum wages (the final nail in the coffin of the economy of the north?), will do nothing to improve the budget deficit, nor the high level of leverage, and it definitely won't help the still part-nationalized banking system. Hopefully the UK government bonds will continue to function as a safe haven, but can we rule out that we may see the knee jerk reaction of Friday undone? Stocks in domestically operating companies in the meanwhile tumbled (see e.g. the banks and the homebuilders, in EUR or USD).

Last: a weaker pound will also mean that people will have fewer opportunities for travelling, which is bad for an already inward looking population.

Reputational damage
Hopefully it is now clear to everyone why a referendum was the wrong way to go, and how dilettantishly the whole process has been managed: 51.9% is not the qualified majority you would expect to see to take such an important decision for so many people. Especially if out of a 72.2% turnout, and with a significant part of resident/taxpayers/stakeholders not being given the opportunity to vote. This is the reason why there will not be - and there have not historically been - similar referenda in Europe, whatever some uninformed and/or intellectually dishonest press is suggesting in these hours.

All this comes on top of the exorbitant number of lies which have been used to manipulate the public, and that are now already emerging (this is tragicomic, but on all media in Europe and worth watching

The referendum had also a divisive effect as - generally speaking - the old voted the young out of the EU; as a result, not only young people are thrown in economic uncertainty, but also their opportunities have been restricted as presumably the job market of nearby Europe will not be as easily accessible going forward.

On the other hand all those that "rotated" into the UK as it was regarded a safe haven guaranteeing good governance, a careful management of the economy and of its currency will now reconsider their stance. A simple example: all those Southern Europeans which sustained the property market during the Euro crisis may now realise this country is no safe heaven.

The Union?
Nicola Sturgeon has clearly signalled a new referendum for Scotland independence is possible, so we are back to square one on that front. Given that Scotland has shown it is generally in favour of remaining in the EU, we can assume the SNP may be successful this time. An alternative and a lot more benign scenario is that the Scottish government may also completely bloc the Brexit process, although this is unclear at the time of writing.

As for the EU, as many were ready to predict its immediate demise:
1/ Within the EU, no other country is planning to leave;
2/ it is clear and logical to expect that ruling parties across Europe will be keen to make an example of the UK.

Also: the situation in which pro-Brexit movements managed to put this country is that of a trader being forced to unwind a leveraged position - and a complex one, built over 40 intense years - with a counterparty only (the EU), which means that inevitably the unwind will be expensive.

Political uncertainty?
The general feeling I think any observer has had over the last 48 hours or so is of most political parties across being caught off-guard and unprepared, as if they had discounted Brexit never to happen. This is alarming, as we need the best this country can offer to sit down with the EU and sort out what could otherwise become a "pasticcio", a mess. Hopefully Boris Johnson, Micheal Gove and Nigel Farage planned this is detail, they are great statists and Machiavellian geniuses and know exactly what they're doing. A 1-year old parliament in the meanwhile - at least until now - has been defrauded of its function, an absolutely extraordinary and alarming scenario which has taken to a debate and a vote that have absolutely nothing to do with democracy. A bad experiment never to be repeated again.

Geopolitical uncertainty
I have this image of Putin rolling on the floor and laughing that I just cannot get away from my head. A nuclear power, permanent member of the UN security council, significantly weakened its and its partners' position. The front of liberal democracies in the world is substantially weakened.

Reduced Influence
Reduced influence and a greatly impoverished EU. The resignations of the Commissioner for Financial Services Jonathan Hill means that the UK loses influence - traditionally overwhelmingly high - in the definition of financial services regulation. Presumably UK representative in the European parliament will lose credibility and influence too. Disastrous for the UK and for the EU, and a material change in the balance of powers within the continent.

Alienated EU citizens
Rarely in my life I have seen so many people so upset and feeling let down as over the last few hours talking to friends and family members.

I have been blessed to be part of an EU, and never felt - never once - like an immigrant, here, in Stockholm where I have spent some of my time studying, in Baden Wuttenberg which I have many times visited for personal reasons, nor anywhere else within Europe. Free movement has always been a given; protection of my rights of EU citizen as well.

In London, more than 60% of the population voted to remain in the EU. The truth is that the population of this great city includes many EU citizens who could not vote. Hence the percentage of residents in favour on the EU is much much higher.

I still think this situation can be somehow fixed, but a much better prepared, morally stronger, more humble and less opportunistic political class is a pre-requisite for considering the UK again the place to invest and make plans for the future.

Eoin Treacy's view
These two emails are representative of the wide differences between the Remain and Leave camps and while one might argue that a first past the post allotment is not the best way to decide such a momentous event the reality is that the people have spoken and it is now up to the ruling class to follow through on it.

Musing from the Oil Patch June 27th 2016
Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB. Here is a section:
This inverse relationship between the value of the U.S. dollar and the price of crude oil has been very clear for most of this century. Will it continue in the future? More than likely it will, partly because, while the relationship is logical, it has become a short-term trading indicator. In the past several weeks, after WTI reached and surpassed the $50 a barrel threshold, one could virtually answer the question of what happened to oil prices each day if you were told what happened to the value of the U.S. dollar that day.

After watching this ying and yang of oil price movements and the value of the U.S. dollar, we were interested in the two-page chart on the profits of the Fortune 500 companies by sector over the past 20 years. We cut out the pages and scanned the chart (Exhibit 7 below), shrinking it to fit on one page. Unfortunately, we lost the 1995-1996 part of the chart, but the visual impact of the chart remains relevant.

What struck us while looking at the chart was the huge bulge in energy profits during 2005-2012 before they started contracting and then collapsed after oil prices dropped at the end of 2014. The Energy sector profits during that period were driven by high oil prices - $80-$100+ per barrel, even after adjusting for the 2008-2009 financial crisis and recession. As Energy profits mushroomed during the era of high oil prices and the shale revolution, it was easy for Wall Street to convince investors to throw money at exploration and production and oilfield service companies who were leading America to the promised land of energy independence. The Energy stocks were soaring as analysts and investors fell in love with the shale revolution that married horizontal drilling with massive hydraulic fracturing to produce huge volume of natural gas, natural gas liquids and tight oil. Remember that it was during this era that we were assured that we had hundreds of years of cheap natural gas supply. One Wall Street firm even wrote a report explaining how this revolution was turning us into ‘Saudi America.”
The chart shows clearly what happens when an ill-founded boom collapses. As you scan the lower right hand corner of the chart, it is very difficult to see the thin black line reflecting current Energy sector profits, or what is left of the thick line that existed throughout most of the 2000s. In fact, if oil prices hadn’t climbed back to $50 recently, it is possible that the thin line would become impossible to see as there wouldn’t be any profits. Many investing in Energy today are hopeful that one day in the foreseeable future that thin black line will once again become a thick black line. We are comfortable is saying the line will be thicker, we just don’t know how thick it will eventually grow and when that will be.

Eoin Treacy's view

The Dollar Index failed to sustain the move below 92.5 in May and has now bounced back above the 200-day MA. Considering the size of the upward dynamic a retest of the upper side of the 18-month range, near the psychological 100 is now looking more likely than not.

Tue, 28 Jun 2016 07:25:00 +0100
Brokers: RBS, Lloyds and Barclays all downgraded Mon, 27 Jun 2016 12:11:00 +0100 Oil price, Aminex/Solo, Sundry-Cape-GKP-Europa/Egdon/Union Jack- And finally... Oil price
The early prices for crude oil on Friday after the Brexit news came through never really got worse, maybe investors had more worrying exposure elsewhere…? Although there are worries about growth, particularly in Europe we mustn’t get too full of our own importance and the world will carry on regardless. Interestingly it may cause the Fed to ease back on the tightening policy and thus slow the rise in the dollar if they think OECD growth might be hit. With news beginning to get a bit better regarding  the call on Opec in the second half of this year, and the underlying move in the oil price recently this particular shake-out may be short lived. Finally the three weeks of rising rig counts came to an end on Friday with a fall of 3 overall and 7 in oil.
More good news today from Aminex who are slowly but surely proving the pessimists wrong and building a decent business in Tanzania. They have announced a one year extension of the Mtwara licence in the Ruvuma PSC which was due to expire in December this year. Secondly, the company have, with the support of the TPDC, transferred drilling obligations in North Lindi to the southern Mtwara licence which contains the Ntorya discovery. After drilling the Ntorya-2 appraisal well and depending on success, the company plan to apply for a 25 year development licence. Finally the company has received an 18 month loan extension with no change to its terms.
Cape has announced a three year contract renewal with Dow Chemical for its plant in Barry, South Wales…
Gulf Keystone has announced that it has received $8m from the KRG and expect the rest of the invoice to be paid shortly as per Genel’s announcements.
Europa has announced that it and its partners, Egdon and Union Jack have received an extension to PEDL 143 for another 2 years. This will enable them to drill the ever increasingly hyped Holmwood well either later this year or next subject to permitting and moolah.
And finally…
Michael Cheika might choose to choose his words more carefully next time, after accusing the English rugby team of being dull they then went and put 44 points on his Wallabies to conclude the white wash on Saturday night. Elsewhere The All Blacks thumped the Welsh, Ireland lost to the Springboks and Scotland just beat Japan who scored a wonder try.
In the football the derby game was very close and Northern Ireland can consider themselves unlucky to lose by one own goal but it puts Wales in with Belgium in the next round. (Friday at 8pm)  The ROI also only lost by one goal to hosts France who are some peoples favourites. Tonight England play Iceland,  where Sterling is being given yet another chance by Woy, winner plays France but the better game will be at 5, Italy v Spain….
And of course it’s all eyes on SW19 as the Wimbledon tennis gets under way, the next fortnight will be wall to wall tennis with a bit of footy thrown in plus some cricket oh and of course Henley starts on Wednesday…

Mon, 27 Jun 2016 12:06:00 +0100
Today's Market View Including: Anglo Asian Mining, Mariana Resources, Metals Exploration, Shanta Gold Anglo Asian Mining* (LON:AAZ) – Second mill in place and annual production guidance reiterated
Mariana Resources (LON:MARL) – Preliminary Economic Assessment underway
Metals Exploration* (LON:MLT) – Runruno commissioning update
Shanta Gold (LON:SHG) – Permits for underground mining

Results released and all votes counted, however, consequences of the UK decision to leave the EU are far from well known.
• The ruling party is in search of a new leader while the nation is heading into lengthy negotiations on terms of the withdrawal agreement (although, given the mutually beneficial nature of trade agreements we expect it would in both parties’ interests to expedite talks).
• UK equities fell less than their European peers on Friday helped by the BoE comments to provide additional liquidity to the market as well as by a sharp decline in the pound against the euro and the US$.
• US equities closed more than 3% down on Friday with futures trading lower suggesting markets are likely to continue their downwards move once opened.
• It is currently unclear what would be the breadth of adverse economic effects of the vote on the UK including a slowdown in business investments and productivity.
• Will a weaker growth lead to Budget revisions and a potential fiscal tightening to meet previous debt level forecasts?
• Will years of negotiations between the UK and the EU and potential effects on GDP growth lead businesses to slow down on hiring?
• While initial reaction to results was a fall in UK government yields and markets currently assigning a more than 50% chance for a rate cut by the BoE before year end, a medium term effect of a weaker currency on an acceleration in inflation rates leading to a monetary tightening and a squeeze on after-interest disposable income remains to be seen.
• These are early days to address those questions with certainty, but one thing that most economists seem to agree on is that there will be costs to the leave vote.
• EU comments demanding an immediate 'notification of exit' indicate that certain politicians prefer the UK out of Europe.
• This indicates to us that certain nation states may be manipulating the environment toward excluding the UK from the European Common Market as quickly as possible as they see the UK is a major competitor.  
• Perhaps this is why the EU offered so very little in the way of negotiation or reconciliation?

Dow Jones Industrials   -3.39% at       17,401
Nikkei 225   +2.39% at       15,309
HK Hang Seng   -0.16% at       20,227
Shanghai Composite   +1.45% at        2,896
FTSE 350 Mining   +0.61% at        9,627
AIM Basic Resources   +1.75% at        1,916

Economic News
US – Weak May durable goods orders point to a soft contribution from the manufacturing sector in Q2/16.
Date Index Period Actual Expected (Bloomberg) Previous
Friday Durable Goods Orders/Core May -2.2%mom/-0.3%mom -0.5%mom/0.1%mom 3.3%mom/0.5%mom
  Capital Goods Orders May -0.7%mom 0.4%mom -0.4%mom
Monday Markit Services PMI Jun   51.9 51.3
  Markit Composite PMI Jun     50.9
Tuesday GDP (Terminal) Q1   1.0%qoq 0.8%qoq
Personal Consumption (Terminal) Q1  2.0%qoq 1.9%qoq
Core PCE (Terminal) Q1  2.1%qoq 2.1%qoq
  SP/CS 20 City Apr   0.6%mom/5.5%yoy 0.9%mom/5.4%yoy
Wednesday Personal Income May  0.3%mom 0.4%mom
Personal Spending May  0.4%mom 1.0%mom
PCE May  0.2%mom/1.0%yoy 0.3%mom/1.1%yoy
Core PCE May  0.2%mom/1.6%yoy 0.2%mom/1.6%yoy
Thursday Weekly Jobless Claims     267k 259k
Friday ISM Manufacturing PMI Jun   51.4 51.3
  Wards Total Vehicles Sales Jun   17.3m 17.4m
Source: Bloomberg    

China – Industrial profits growth slowed in in the first five months of the year to 6.4%yoy from 6.5%yoy recorded during the Jan-Apr period.
• A slight decline in the growth pace was led by a weaker growth rate in manufacturing profits which more than offset a slowdown in the mining sector declines.

UK – Chancellor of the Exchequer George Osborne provided assurances this morning that the government is looking at previously shortlisted contingency plans to minimize economic stress of the Leave vote.
• Previously, Osborne argued Brexit will cost £4,300 per household by 2030 with a potential for emergency tax increases and spending cuts required to close a £30bn budget gap that would open.

US$1.1037/eur vs 1.1117/eur last week. Yen 102.04/$ vs 102.82/$. SAr 15.178/$ vs 15.035/$. $1.335/gbp vs $1.390/gbp.
0.738/aud vs 0.756/aud. CNY 6.617/$ vs 6.580/$.

Commodity News
Precious metals:
Gold US$1,326/oz vs US$1,310/oz last week
Gold ETFs 61.8moz v 61.2moz last week
Platinum US$992/oz vs US$977/oz last week
Palladium US$553/oz vs US$550/oz last week
Silver US$17.77/oz vs US$17.76/oz last week
Base metals:   
Copper US$ 4,720/t vs US$4,682/t last week
Aluminium US$ 1,617/t vs US$1,605/t last week
Nickel US$ 9,070/t vs US$8,970/t last week
Zinc US$ 2,006/t vs US$1,991/t last week
Lead US$ 1,712/t vs US$1,695/t last week
Tin US$ 17,075/t vs US$16,880/t last week

Oil US$48.6/bbl vs US$48.9/bbl last week
Natural Gas US$2.684/mmbtu vs US$2.683/mmbtu last week
Uranium US$27.25/lb vs US$26.40/lb last week

Iron ore 62% Fe spot (cfr Tianjin) US$49.6/t vs US$49.6/t
Thermal coal (1st year forward cif ARA) US$55.1/t vs US$55.4/t last week

Tungsten - APT European prices stood unchanged at $200-220/mtu from last week
last week – tungsten prices slide

Company News

Anglo Asian Mining* (LON:AAZ) 15.5p, Mkt Cap £17.5m – Second mill in place and annual production guidance reiterated
• The Company has reiterated its annual production target of 73-77koz gold and 1.7-2.1kt copper for 2016 today.
• Second SAG mill has arrived at the site, installed and is going through commissioning.
*SP Angel act as Nomad and Broker to Anglo Asian Mining

Mariana Resources (LON:MARL) 3.2p, Mkt Cap £38.1m – Preliminary Economic Assessment underway
• Mariana Resources has announced the appointment of the consulting firm, Runge Pincock Minarco (RPM) to prepare an NI43-101 compliant Preliminary Economic Assessment (PEA) for the Hot Maden Project in Turkey.
• The company expects the report to be completed in late Q3 or early Q4, 2016 and will include an updated mineral resource estimate which is expected to be completed by early July 2016.
• The preparation of the PEA should define a plan to move the deposit trough development and give an initial indication of the value of the project, the likely capital and operating costs and details of the planned mining and processing.
• The company indicates that it  is looking at a low footprint and the incorporation of sustainable methods to deliver a project with “first class international technical and environmental standards specific and appropriate for the Hot Maden Project”.
Conclusion: The PEA will give investors an insight into the key variables driving the value of Hot Maden: we look forward to the delivery of the study later this year.

Metals Exploration* (LON:MLT) 6.6p, Mkt Cap £114.7m – Runruno commissioning update
• Milling operations were temporarily suspended after having encountered issues with the feed end bearing on the mill.
• Representatives of the mill manufacturers CITIC are on site working on resolving the issue.
• A separate announcement to be released once assessment works are completed.
• The Company has recently produced first gold from the gravity circuit and moved into commissioning of the CIL and BIOX circuits.
• The leaching and BIOX operations are expected to take three months to ramp up to full 1.75mt capacity and 90-92% gold recoveries yielding low cost ounces.
*SP Angel act as Broker to Metals Exploration

Shanta Gold (LON:SHG) 7.1p, Mkt Cap £41.5m – Permits for underground mining
• Shanta Gold reports that it has received the required approvals for its underground development at the New Luika mine in Tanzania and that consequently it has started decline development to access the deposit.
• The underground project is “fully resourced in terms of employees and equipment”.
• The move into underground mining “provides on-going long term access to high grade resources in the Bauhinia Creek and Luika deposits for at least the next five years.”
• Shanta Gold reports that current production and operating and capital costs remain on target.
• The company also acknowledges “the constructive and timely assistance of the Tanzanian authorities in the processing of the Company's permits”.
Conclusion: Shanta Gold’s New Luika operation is moving to underground mining of higher grades and should be able to plan ahead for at least five years. We believe that exploration of near surface open pit deposits in the vicinity of the plant, such as the Elizabeth Hill deposit, continues and should provide opportunities to supplement ore feed from underground mining in the years ahead

Mon, 27 Jun 2016 10:26:00 +0100
In the news: Burey Gold, Base Resources & Peninsula Energy We are marketing Klaus Eckhof, Burey Gold’s†† Chairman, in London today and tomorrow. Interest is high given that the company announced some quite stunning results from its first assays at Douze Match, part of its 55%-owned Giro Gold Project in the north-eastern DRC. Jim Taylor and Imogen Whiteside covered this in a piece we put out last week: Burey Gold — Stellar Assays from Douze Match, 24 June 2016.
The first assays from Douze Match included 15m at 256 g/t, an extraordinary result. This comes from just the first ten RC holes drilled and the results also included extremely high grades that attest to the real potential Giro offers. We expect this to generate significant interest.
Also hoving into view on our marketing radar is Tim Carstens of Base Resources*†. We’ll have him in London on Tuesday 12 July till Friday 15 July. This will follow preliminary 4QFY16 results, and — again — interest will be high given the company’s hugely impressive share price performance YTD. Get back to us soon!
Finally a reminder that Jim and Imogen also put out Peninsula Energy†† — Valuation and Lance Timeline Update, 23 June 2016, last week. They updated their valuation to reflect the revised ramp-up timeline at Lance, the recent Stage 2 funding arrangements and our revised LT uranium price deck. They reiterated their Buy rating, with a revised target price of A$0.95.

Mon, 27 Jun 2016 10:01:00 +0100
In the papers: Goldman Sachs, Tata Steel, Merrill Lynch The Times
Hedge funds ‘wiped out’ by vote to leave Europe: The decision to leave the European Union is expected to claim its first victims, when hedge funds and other financial institutions reveal deep losses suffered in the volatile markets on Friday.
Big hitters assemble after Javid’s rallying cry: Sajid Javid will meet business Chiefs in London for a crisis summit to discuss the consequences of Brexit.
Goldman Sachs Boss to appear before MPs over BHS: The Chief of Goldman Sachs in London will appear before a committee of MPs on Wednesday, when he may be forced to give evidence against Sir Philip Green, one of his closest business clients.
‘Risky trinity threatens global economy’: Global economic policy needs an urgent overhaul to cope with a world of persistently high debt and weak productivity and in which monetary policy is out of ammunition, the Bank for International Settlements believes.
City banks face block from services market: London-based banks could be blocked from selling services to the European Union’s 500 million consumers if Britain fails to secure access to the single market in exit talks, the governor of the French central bank has warned.
Decide on runway now, Cameron is urged: David Cameron has been urged to make a swift decision on a new runway in the southeast amid fears over a collapse in economic confidence triggered by the Brexit vote.
Major Tim answers call to arms from fearful Farnborough: Thunderclouds are forming over Farnborough ahead of the world’s largest international air show as services and industry leaders await news on two of Britain’s most important military aircraft orders.
Councils flex their muscles over minimum wage: Local authorities have been redrawing care contracts amid concerns that a FTSE 250 public sector outsourcer led by Baroness McGregor-Smith, the Conservative peer and Whitehall adviser, was not paying the minimum wage, The Times has learnt.
Infrastructure spending stuck in the slow lane: Britain has been warned that it is spending less on infrastructure than the nation needs to secure future economic growth, even before leaving the European Union.
Hot property drove pre-poll recovery: Economic recovery was accelerating before Britain’s decision to leave the European Union, according to research into medium-sized businesses by Investec.
The Independent
Boris Johnson says U.K. will ‘still have access to single market’ despite Brexit: Boris Johnson has said the U.K. there will be “still have access to the single market”, despite Britain’s historic vote to leave the EU.
Brexit will cause U.K. food prices to rise, farmers warn: Food prices are set to rise as a result of the U.K. voting for Brexit, the National Farmers Union has warned.
The Daily Telegraph
U.K. must look ‘beyond Europe’ after Brexit, says CBI Boss: Britain must look “beyond Europe” if it is to thrive in a post-Brexit world, according to the Confederation of British Industry (CBI).
Farmers’ leader seeks government subsidy ‘equal to support given by European Union’: Farmers are demanding that the victorious Leave campaign honours its promise to provide them with financial support to replace the EU’s Common Agricultural Policy, which currently provides 55% of their income.
Brexit the ‘tip of the iceberg’ as vote risks EU’s destruction: Brexit is just the “tip of the iceberg” of popular resentment against the EU that could destroy the entire bloc, economists have warned.
Monarch seeks fresh funding despite flying back into profit: Monarch Airlines is seeking tens of millions of pounds in short-term financing, underlining the still-fragile nature of the company’s finances despite a recent return to profit.
Bagel Thins help Warburtons to revenue rise despite falling sliced bread sales: Skinny bagels and gluten-free bread helped the family-owned bakery business Warburtons to a slight rise in sales last year, despite U.K. shoppers spending less on sliced bread.
Record sales for bus-maker Alexander Dennis: Strong foreign sales offset demand for rival “Boris Buses” for vehicle manufacturer Alexander Dennis, which has reported a jump in sales and profits.
Balancing demand ‘could cost National Grid £2 billion’: The costs of managing the U.K.’s electricity supplies could double to £2 billion a year within five years due to the growth of renewable technologies, a senior National Grid official has forecast.
The Guardian
Firms plan to quit U.K. as City braces for more post-Brexit losses: British businesses have warned that Brexit will trigger investment cuts, hiring freezes and redundancies as the consequences of leaving the European Union threaten to destabilise markets further this week.
Market turmoil fears likely to force Mark Carney to abandon ECB meeting: Bank of England governor Mark Carney is expected to abandon plans to fly to Portugal for a summit of central bankers, amid fears of further turmoil when markets open on Monday.
Tata Steel near deal to save Port Talbot plant despite Brexit vote: Tata Steel is close to a deal to save its Port Talbot plant despite Britain’s vote to leave the EU, as sterling’s slump potentially boosts the industry’s survival prospects.
Debt-fuelled growth could trigger financial crash, governments told: The Bank for International Settlements has warned that governments need to abandon debt-fuelled growth and shift to more sustainable expansion plans as a “risky trinity” of low productivity, high debt and lack of central bank firepower stalks the global economy.
Jack Wills may seek further investment as backer looks to pull out: Jack Wills, the British fashion brand, could bring in new investors after it was reported that its private equity backer is keen to sell its minority shareholding.
Daily Mail
Watchdog to end Government deals in which energy companies are paid well above market prices in return for building power stations: A watchdog is to end Government deals in which energy companies are paid well above market prices in return for building power stations.
Brexit vote will plunge U.K. into a new recession, warn City economists as they slash growth figures for next two years: Britain’s economy will be plunged into recession as a result of the decision to leave the EU, according to City economists who slashed their predictions for economic growth this weekend in the wake of last week’s shock Brexit vote.
Daily Express
Heathrow Boss claims Brexit boosted chance of airport expansion: The Boss of Heathrow claims the result of the EU referendum has strengthened the case for expansion at the airport.
Dixons Carphone expected to unveil record breaking profits: Electricals and mobile phones giant Dixons Carphone is expected to unveil surging profits when it publishes its annual results this week.
Military Mutual targets insurance for small businesses: Military Mutual is set to offer commercial insurance packages to small to medium-sized companies owned by former members of the Armed Forces and their families.
The Scottish Herald
Drygate to help homebrewers commercialise among ambitious expansion plans: Glasgow brewery Drygate has plans to produce beer on a larger, and smaller, scale as it expands into its third year.
First signs that Brexit will cost jobs recorded by business group: The Institute of Directors has said it has detected the first signs that the Brexit vote will cost jobs in the U.K. as businesses prepare to cut investment and move activity overseas in response.
East Lothian-based Brightwater aims to recruit thousands of SME customers: A successful cleaning entrepreneur has joined the battle to win business customers from Scottish Water with a focus on small and medium sized enterprises.
Metal dealer records one third fall in profits amid North Sea downturn: John Lawrie (Aberdeen), the scrap metal and steel trader which supplies products such as tubing to the oil and gas industry, has suffered a one third fall in profits amid the crude price plunge.
Property firm to hold online auction: Three properties in Scotland, with values ranging between £1.4 million and £7 million, are to be sold via an online bidding process this Thursday, by Lambert Smith Hampton (LSH)’s capital markets division.
The Scotsman
U.K.’s IPO market to slow to ‘near standstill’: U.K. IPO activity is expected to almost grind to a halt over the next 12 months as the slowdown seen this year intensifies amid uncertainty over the economic outlook after the Brexit vote, according to research published.
Ocado’s interim figures to shine spotlight on future: Online grocer Ocado is set to deliver its half-year results on Tuesday, amid speculation over its future, and providing investors with the chance to see how the vote to exit the EU could hit consumer confidence.
City A.M.
The Bank of England could cut its rates after vote for Brexit, according to Bank of America Merrill Lynch as it warns of imminent recession: The Bank of England could be about to cut interest rates following the vote for the U.K. to quit the European Union.
Accounting watchdog set to announce verdict of probe into KPMG’s HBOS audit: The accounting watchdog is set to announce the verdict of its probe into KPMG’s audit of collapsed bank HBOS on Monday.
Curzon Cinemas targets expansion around the world: Curzon Cinemas, a chain that began in London in 1934 and has since opened 10 more cinemas across the country, is now targeting international growth through its digital offering.
EU referendum: London Chamber of Commerce renews calls for London business visa: London needs to make it easier for foreign skilled workers to come to the capital, the London Chamber of Commerce and Industry has warned.
Brexit creates fresh wave of uncertainty for Hinkley Point: EDF’s plans to build an £18 billion nuclear power plant at Hinkley Point in Somerset will be subject to a fresh wave of uncertainty following Brexit.
George Osborne to break Brexit silence and try to reassure U.K. on economy: George Osborne is to break his post-EU referendum silence on Monday morning. The Chancellor will seek to provide reassurance about financial and economic stability following the U.K.’s vote for a Brexit.

Mon, 27 Jun 2016 08:49:00 +0100
Market briefing: UK markets ended sharply lower on Friday, with the banks and homebuilders taking a huge hit UK Market Snapshot
UK markets ended sharply lower on Friday, with the banks and homebuilders taking a huge hit, after Britain voted to leave the European Union in a historic referendum. The benchmark FTSE 100 index pared its earlier loss after the Bank of England Governor, Mark Carney, assured that the central bank would inject £250.0 billion to support the ailing markets. Barratt Developments, Persimmon and Taylor Wimpey sank 23.8%, 27.6% and 29.3%, respectively. Barclays, Royal Bank of Scotland Group and Lloyds Banking Group tanked 17.7%, 18.0% and 21.0%, respectively. Real estate firms, Land Securities Group and British Land Co dived 15.6% and 19.5%, respectively. On the brighter side, precious metal miners, Fresnillo and Randgold Resources soared 11.9% and 14.2%, respectively, as gold prices surged in the aftermath of ‘Brexit’. The FTSE 100 declined 3.1%, to close at 6,138.7, while the FTSE 250 plunged 7.2%, to settle at 16,088.1.
US Market Snapshot
US markets closed in the red on Friday, following a global rout in equities after the ‘Brexit’ vote. Meanwhile, the US durable goods orders fell more than anticipated in May, indicating a drag on the nation’s economy. Investment banking firms, Goldman Sachs Group, Citigroup and Morgan Stanley plunged 7.1%, 9.4% and 10.2%, respectively. Multinational bank, Bank of America, dropped 7.4%. On the contrary, Finish Line rallied 21.8%, after it reported upbeat results for the first quarter and offered a new outlook for the full year for comparable-store sales, improving between 3.0% and 5.0%. Kinross Gold, Newmont Mining and Barrick Gold rose 4.3%, 5.1% and 5.8%, respectively, amid a jump in bullion prices. The S&P 500 slipped 3.6%, to settle at 2,037.4. The DJIA dropped 3.4%, to settle at 17,400.8, while the NASDAQ lost 4.1%, to close at 4,708.0.
Europe Market Snapshot
Other European markets were hammered on Friday, after the ‘Brexit’ became a reality. Also, uncertainty over the results of Spanish elections added to the bearish sentiment among investors. Germany’s better than expected Ifo survey data for June was the sole bright spot. Spanish bank, Banco Santander slumped 19.9%, while Greek banks, Alpha Bank and Eurobank Ergasias sank 29.7% and 30.0%, respectively. Global banking and financial services companies, Commerzbank, Deutsche Bank and UniCredit tumbled 13.6%, 15.9% 23.8%, respectively. Carmakers, Bayerische Motoren Werke, Daimler and Renault declined 7.8%, 8.6% and 13.6%, respectively. Energy producers, Subsea 7, Technip and Total fell 4.3%, 5.1% and 7.0%, respectively, tracking losses in crude oil prices. Swiss insurer, Zurich Insurance Group, lost 5.7%. The FTSEurofirst 300 index plummeted 6.6%, to close at 1,269.5. Among other European markets, the German DAX Xetra 30 tumbled 6.8%, to close at 9,557.2, while the French CAC-40 plunged 8.0%, to settle at 4,106.7.
Asia Market Snapshot
Markets in Asia are trading mostly lower this morning, as Britain’s vote to leave the EU continued to affect investor sentiment. In Japan, pharmaceutical companies, Takeda Pharmaceutical, Sosei Group, Astellas Pharma and Sumitomo Dainippon Pharma have gained 4.8%, 6.5%, 6.8% and 7.3%, respectively. Telecom firms, NTT Docomo and Nippon Telegraph & Telephone have climbed 5.4% and 5.6%, respectively. However, auto exporters, Toyota Motor, Suzuki Motor and Mazda Motor have declined 2.6%, 5.2% and 10.9%, respectively, amid strength in the Japanese Yen. In Hong Kong, Cathay Pacific Airways has eased 4.2%, following a broker downgrade on its shares. In South Korea, Samsung Electronics have dropped 0.6%, while Hyundai Motor has added 1.1%. The Nikkei 225 index is trading 1.4% higher at 15,159.2. The Hang Seng index is trading 0.8% down at 20,100.8, while the Kospi index is trading 0.2% lower at 1,922.1.

Commodity, Currency and Fixed Income Snapshots
Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.29% or $0.14 lower at $48.27 per barrel. On Friday, the contract declined 4.91% or $2.50, to settle at $48.41 per barrel, after the Brexit vote rattled financial markets and raised concerns about economic slowdown which could result in lower oil demand. Meanwhile, Baker Hughes reported that US oil drilling rigs declined by 7 to 330 in last week.
At 0330GMT today, Gold futures contract is trading 0.67% or $8.90 higher at $1328.90 per ounce, benefitting from the Brexit vote. On Friday, the contract advanced 4.66% or $58.80, to settle at $1320.00 per ounce, after UK voted to exit from the EU raised demand for the precious yellow metal.
At 0330GMT today, the EUR is trading 0.94% lower against the USD at $1.1013, with all eyes on ECB Head Mario Draghi’s speech at the central bank’s 'Forum on Central Banking', which starts today, as he is likely to seek to calm markets. Investors would also keep an eye on the US services PMI data for June, due later in the day. On Friday, the EUR weakened 2.35% versus the USD, to close at $1.1117, following Brexit vote.
At 0330GMT today, the GBP is trading 2.13% lower against the USD at $1.3388. On Friday, the GBP plunged 8.05% versus the USD, to close at $1.3679, hitting its lowest level in more than 30 years, after the UK voters decided to leave the European Union. However, BoE Governor, Mark Carney, reassured investors that the central bank is “well prepared” to prop up UK's financial system and that the bank BoE is ready to provide £250 billion of additional funds to support financial markets and would also consider taking additional policy responses in the coming weeks.
Fixed Income
In the US, long term treasury prices rose and pushed yields sharply lower, as investors shifted to safe-haven treasuries amid a global sell-off in stock markets following UK’s decision to leave the EU. On Friday, yield on 10-year notes lost 17 basis points to 1.57%, while yield on 2-year notes plummeted 14 basis points to 0.64%. Meanwhile, 30-year bond yield plunged 13 basis points to 2.42%.

Key Economic News
BoE announced £250 billion of support for UK economy following Brexit

The Bank of England (BoE) Governor, Mark Carney, tried to restore calm and soothe financial markets by reassuring investors and UK citizens that the central bank is “well prepared” to prop up Britain’s financial system in order to protect it from the direct impacts of Brexit. He stated that the BoE is ready to provide £250 billion of additional funds to support financial markets. He also said the central bank will consider whether to take additional policy responses in the coming weeks.
UK BBA mortgage approvals advanced surprisingly in May
In May, BBA mortgage approvals in the UK registered an unexpected rise to a level of 42.19 K, compared to market expectations of a fall to a level of 37.85 K. In the previous month, BBA mortgage approvals had registered a revised level of 39.97 K.
German Ifo current assessment index climbed unexpectedly in June
The Ifo current assessment index recorded an unexpected rise to 114.50 in June, in Germany, higher than market expectations of a fall to a level of 114.00. The Ifo current assessment index had recorded a level of 114.20 in the prior month.
German Ifo business climate index surprisingly climbed in June
In June, the Ifo business climate index in Germany registered an unexpected rise to 108.70, compared to a revised level of 107.80 in the prior month. Markets were expecting the Ifo business climate index to fall to 107.40.
German Ifo business expectations index unexpectedly climbed in June
In Germany, the Ifo business expectations index climbed unexpectedly to 103.10 in June, compared to market expectations of a fall to a level of 101.20. In the prior month, the Ifo business expectations index had registered a revised reading of 101.70.
French GDP rose as expected in 1Q 2016
On a QoQ basis, the final gross domestic product (GDP) in France advanced 0.60% in 1Q 2016, compared to a rise of 0.30% in the previous quarter. The preliminary figures had also recorded a rise of 0.60%. Market expectation was for GDP to rise 0.60%.
French GDP rose less than expected in 1Q 2016
The final gross GDP in France registered a rise of 1.30% on a YoY basis in 1Q 2016, less than market expectations for an advance of 1.40%. In the previous quarter, GDP had advanced 1.40%. The preliminary figures had recorded a rise of 1.40%.
Italian retail sales rose less than expected in April
On a monthly basis, the seasonally adjusted retail sales in Italy rose 0.10% in April, less than market expectations for an advance of 0.40%. In the prior month, retail sales had registered a drop of 0.60%.
Italian retail sales slid in April
The non-seasonally adjusted retail sales in Italy eased 0.50% on a YoY basis, in April. In the previous month, retail sales had registered a revised rise of 2.10%.
Italian wage inflation steadied in May
In May, the wage inflation remained steady at a level of 0.00% in Italy.
Italian annual wage inflation remained steady in May
The annual wage inflation remained flat at a level of 0.60% in May, in Italy.
Spanish PPI slid in May
On a YoY basis, the producer price index (PPI) slid 5.50% in May, in Spain. In the previous month, the PPI had registered a revised drop of 5.90%.
Spanish PPI rose in May
In May, on a monthly basis, the PPI in Spain rose 0.80%. The PPI had recorded a drop of 0.10% in the prior month.
US non-defense capital goods orders (ex aircraft) surprisingly eased in May
In May, on a monthly basis, the flash non-defense capital goods orders (ex aircraft) in the US recorded an unexpected drop of 0.70%, compared to a fall of 0.60% in the prior month. Markets were expecting the non-defense capital goods orders (ex aircraft) to rise 0.40%.
US Reuters/Michigan consumer sentiment index recorded a drop in June
The final Reuters/Michigan consumer sentiment index in the US recorded a drop to 93.50 in June, compared to market expectations of a drop to 94.10. In the prior month, the Reuters/Michigan consumer sentiment index had registered a reading of 94.70. The preliminary figures had recorded a fall to 94.30.
US durable goods orders (ex transportation) unexpectedly dropped in May
On a monthly basis, the flash durable goods orders (ex transportation) in the US recorded an unexpected drop of 0.30% in May, less than market expectations for an advance of 0.10%. In the previous month, durable goods orders (ex transportation) had advanced 0.50%.
US durable goods orders fell more than expected in May
In May, the flash durable goods orders slid 2.20% in the US on a MoM basis, higher than market expectations for a fall of 0.50%. In the previous month, durable goods orders had registered a rise of 3.40%.
US non-defense capital goods shipments (ex aircraft) unexpectedly fell in May
US Census Bureau has reported that, on a monthly basis in May, the preliminary non-defense capital goods shipments (ex aircraft) unexpectedly eased 0.50% in the US, lower than market expectations for an advance of 0.30%. In the previous month, the non-defense capital goods shipments (ex aircraft) had recorded a rise of 0.40%.


Mon, 27 Jun 2016 08:41:00 +0100
Today's Oil & Gas Update: Union Jack Oil Headlines
• In Brief:
 Union Jack Oil* (LON:UJO - 0.14p) - (BUY - 0.67p) - Extension Gives Flexibility

In Brief
• Union Jack Oil* (LON:UJO - 0.14p) - (BUY - 0.67p) - Extension Gives Flexibility: Today's news that the Oil & Gas Authority has provided an extension to PEDL143, which contains the Holmwood Prospect. More importantly, the time allows the Company, and its partners, to adequately design a well that will allow for the testing of the conventional and non-conventional prospectivity within the block. the non-conventiona prospectivity is potentially the larger as Holmwood is inside the BGS' window deemed mature for oil in all the shale horizons (Corallian, Kimmeridge, Oxford, etc.). We have not yet quanti fied our assessment for the shale prospectivity, but the conventional Holmwood accumulation added ~$1.8mm to the risk adjusted value (0.04p) when it was first announced. We are reiterating our 0.67p Target Price and BUY Recommendation.

Mon, 27 Jun 2016 08:37:00 +0100
VSA Capital Market Movers - Egdon Resources Europa Oil and Gas (EOG) has extended the PEDL 143 licence, where Egdon Resources (EDR)# holds a 18.4% interest, by two years until October 2018. The licence is located in the Weald Basin, Surrey and the extension will allow EOG as the operator to drill the conventional Holmwood prospect which has estimated gross mean unrisked prospective resources of 5.6mmboe.

To date 30mmboe has been produced from 14 oil and gas fields in the Weald Basin and the Holmwood prospect lies 12km to the west of the Horse Hill-1 well. Planning permission is in place for a deviated exploration well at Holmwood and will test similar stratigraphy to that at Horse Hill.

In 2015 EDR farmed out a 20% interest in respect of the Holmwood-1 well to UK Oil & Gas Investments (UKOG) in return for 40% of the costs up to a cap of £1.2m net to UKOG. We value the Holmwood prospect at 0.5p/sh and maintain our BUY recommendation and 38p TP.

Mon, 27 Jun 2016 08:31:00 +0100
GBP sucked lower on political vacuum FTSE 100 called to open -65pts at 6075, having fallen back considerably from Friday’s post-Brexit 6220 recovery highs to re-test lows of 5900. The Bulls will be watching for a break above 6100 to inspire hopes that the overnight rebound has legs and that Friday’s highs can be matched. Bears will be eyeing any turn back that takes us back below 6000. Watch levels: Bullish 6105, Bearish 5990.
Calls for another negative open comes in spite of a largely positive Asian session after the UK Pound had a tough start to the new trading week, slumping again last night as the aftershock of a Brexit vote continues to ripple through financial markets which  are still trying to find their feet.
Japan’s Nikkei is higher despite a strong Yen after PM Abe said that finance minister Aso has been instructed to take necessary steps in FX markets (prevent Yen getting too strong? 100 USD/JPY floor?) while China is higher as the PBOC fixed the Renminbi lower in response to USD strength; a product of safe haven seeking and Brexit-inspired GBP weakness. Australia’s ASX is underperforming on account of the stronger USD hindering the commodities space, oil back down at $48 and financial being held back by contagion from Brexit.
US bourses understandably failed to hold up around their YTD highs after the UK voted to leave the EU. Materials (i.e. risk) stocks and financials led declines there, as they did back in Britain with investors heading for safe havens. Note the head of the US house panel that oversees trade deals is keen to open dialogue with the UK, while the EU’s Juncker is equally keen to start a different conversation.
Crude prices still under pressure, even if up off Friday’s lows, as global growth concerns surface following the Brexit vote to eclipse what should’ve been a price-positive Baker Hughes Rig Count. Gold potentially set for another leg higher today on still-buoyant safe haven demand and with rising support over the weekend maintaining the uptrend. Note also the USD Basket trading near 2016 falling highs which should provide additional support to commodities, though risk sentiment likely to trump that.
In focus today will be the continued fallout from Friday’s Brexit vote and the uncertainty that has resulted from an economic, financial and political sense. And the latter looks like proving the biggest near-term hurdle given the weekend’s party in-fighting (on both sides) and current leadership vacuum.
In terms of data, watch out for US PMI Services for June seen improving slightly while the US Dallas Fed may improve on its negative read.  While data and speakers are rather limited today, comments from PBOC Governor Zhou are sure to garner attention after the European close along with any other world leaders and central bankers in light of the Brexit vote.

Mon, 27 Jun 2016 08:29:00 +0100
Beaufort Securities Breakfast Alert: Orogen Gold, Sirius Minerals Markets

The FTSE-100 finished Friday's session 3.15% lower at 6,138.69, whilst the FTSE AIM All-Share index closed 3.18% worse-off at 703.81. In continental Europe, markets ended sharply lower amid growing uncertainty over the future of the UK following its exit from the EU. Investors sold riskier assets and sought investments in safe assets. France's CAC 40 and Germany's DAX declined 8.0% and 6.8%, respectively.
Wall Street
Wall Street ended in the red, as investors remained concerned about implications of Brexit and its impact on the US economy. The S&P 500 fell 3.6%, with the financial sector leading the laggards. For the week, the markets closed 1.6% lower.
Equities are trading mixed, as investor sentiment remained weak after the UK's unanticipated decision to leave the EU. The Nikkei 225 gained 2.4% after Japanese Prime Minister Shinzo Abe asked the Bank of Japan to provide funds for supporting the financial system. The Hang Seng was trading 0.7% down at 7:00 am.
On Friday, Brent prices fell 4.9% to US$48.41 per barrel, while WTI oil prices dropped 4.9% to US$47.64 per barrel.

UK's credit outlook changed to negative: Moody's
Credit rating agency Moody's changed the UK's credit rating outlook to negative after the country voted to leave the EU. The agency stated that moving out of the EU would have negative impact on the UK's medium-term growth outlook. The lower rating would lead to higher borrowing costs, which would hamper the government, businesses and households.

Company news

Orogen Gold (LON:ORE, 0.02p) – Speculative Buy
Orogen Gold announced today that it has completed its due diligence and executed a full Earn-in Agreement with Galileo Resources covering the Silverton gold-silver property in Nevada, USA (see RNS 21 April 2016). Under terms of the agreement, Orogen will have the right to earn-in to an initial 51% interest in Galileo's Silverton gold-silver property by way of exploration expenditure of US$0.4m within 18 months and earn an additional 24% interest with a further US$1.5m over a subsequent 30 month period. Galileo retains the right to participate pro-rata after Orogen's initial 51% earn-in. The Silverton property covers a 6km2 area comprising 72 lode claims in Nevada where historical exploration has discovered widespread gold mineralisation within highly a prospective geological and structural setting.

Our view: Whilst still an early exploration play, the Silverton property is located within a mining friendly jurisdiction that has a history of prolific gold production. Orogen will initially focus on geological mapping and a sampling programme to confirm sites initial for diamond drilling. The Silverton property complements Orogen's existing Mutsk gold project in Armenia by proving investors with a diversified country exploration portfolio. We look forward to updates from the mapping and sampling programme and are encouraged with the recent identification of additional targets within a cross-cutting structure not highlighted in historical reports. In the meantime, we maintain a Speculative Buy on the stock.

Beaufort Securities acts as corporate broker to Orogen Gold plc

Sirius Minerals (LON:SXX, 19p) – Hold
On Friday Sirius Minerals announced it has identified an 18% reduction in overall capex from $3.6bn to $2.91bn which includes a 33% reduction in the stage 1 requirement. With input from its chosen engineering contractors, Sirius now estimates Stage 1 will cost $1.09b as opposed to the previous estimate of $1.63bn. The biggest saving is from optimisation of the shaft design, how the shaft is constructed and reducing the amount of temporary equipment (e.g. temporary winding towers) used in its construction. Stage 2 will cost $1.82bn.

Our view: This is a very significant capital cost reduction and clearly good news for Sirius shareholders, although $2.91b is still a massive funding requirement for a company of Sirius' size. Management hopes that by splitting the capex into two stages the quantum is somehow reduced, but the fact is, it needs $2.91bn of funding to get the mine to profitability in year 7. That said management is planning to fund Stage 1 with 50% equity and 50% junior debt plus other instruments (e.g. royalty), and to fund Stage 2 with 100% senior debt. So splitting the funding into 2 parts is a valid approach, at least with regards its negotiations with potential funders. As things currently stand, 50% of $1.09bn is c £0.39bn (1.4 GBP:USD), not far off Sirius' current market value, but not an impossible feat. Management can reasonably argue that with an NPV10 of $15.3bn (£11.0bn) and EBITDA in year 9 of $1.8bn, £0.39bn for 50% of the company is a very attractive investment. Given management's desire to fund the project through equity, we maintain a Hold recommendation

Mon, 27 Jun 2016 08:25:00 +0100
Northland Capital Partners View on the City: Mariana Resources, Fishing Republic, SalvaRx Mariana Resources (LON:MARL) – BUY*: PEA by Q416
Market Cap: £47m; Current Price: 3.95p; Target Price: 5.4p

RPM to complete updated resource estimate by July and updated  PEA by Q416
Mariana Resources has appointed RungePincockMinarco to complete a NI 43-101 compliant preliminary economic assessment (PEA) for the Hot Maden gold-copper project, located in Turkey.
The updated mineral resource estimate expected to be completed in late-June/early-July.
The PEA is expected to be completed in late-Q316/early-Q416.
No change to forecasts, price target or rating.

NORTHLAND CAPITAL PARTNERS VIEW: Mariana Resources has two major milestones on the horizon at its 30%-owned Hot Maden gold-copper project. The first will be the completion of the updated mineral resource estimate that is expected to see the mineral resource estimate increase beyond the 3moz Au eq. at an ultra-high grade of 11.2g/t Au eq. The second will be the preliminary economic assessment (PEA) that will give us the first impression of the projects economics and metrics.

Fishing Republic plc (LON:FISH) – BUY*: Placing
Market Cap: £11.5m; Current Price: 42.5p; Target Price: 42p

£3.75m to support expansion
Fishing Republic has raised £3.75m, through a placing of 10,714.288 shares at 35p, in a heavily oversubscribed capital raise.
The additional capital will support the company’s expansion plans as the business looks to increase scale in a highly fragmented fishing tackle industry. The capital will not only support the business shop expansion plans, through acquisition and organic roll out, but also provide significant funding to increase sales in the online business where returns on investment in online have been highly encouraging.
Management published a positive outlook statement at the time of announcing FY15 results in April 2016, where the business has made a good start to FY16 with the additional stores fully operational. Trading in the first few month of FY16 was in line with expectations, so no changes to our current forecasts for FY16 where we look for revenue of £6.5m and EBITDA of c. £0.7m. 
Our EPS forecast for 2016E reduces to 1.6p (from 1.9p) on the back of issuing the new shares. However, there is a significant strengthening of the balance sheet as net cash increases from £0.8m to £4.3m.

NORTHLAND CAPITAL PARTNERS VIEW: The additional capital not only strengthens Fishing Republic’s balance sheet but provides the impetus for a significant scaling of the business both online and via retail/shop estate expansion. This significantly de-risks the business and we increase our target price from 36p to 42p, which is the top end of our previous valuation range and we maintain our BUY rating on the Company.

SalvaRx Group plc (LON:SALV) – BUY*: Results
Market Cap: £10m; Current Price: 28p; Target Price: 149p

Transformational year-to-date
SalvaRx announced Final Results for the year ended 31 December 2015. 
On 22 March 2016, SalvaRx began trading on AIM following completion of the reverse takeover of 3Legs Resources plc and concurrent name change to SalvaRx Group plc.
As such, the results to Dec. 2015 pertain to the period before the transaction completed. 
The year to date (post period end) has been transformational for SalvaRx. 
Over and above completing the RTO, SalvaRx recently completed its second investment: the group bought a 9.2% stake in US-based Intensity Therapeutics Inc., a private biotechnology company developing novel approaches to treating cancer. Also, iOx (SalvaRx’s first portfolio company) announced that one of its programmes received substantial grant financing (€8.3 million), as part of a research consortium.

NORTHLAND CAPITAL PARTNERS VIEW: SalvaRx now has exposure to three cancer immunotherapy programmes which are funded through early clinical trials. As such, we believe that the company is grossly undervalued. The market for cancer immunotherapies is forecast to expand to over $80bn by 2020. Our DCF analysis indicates a 149p Target Price. BUY.

Mon, 27 Jun 2016 08:10:00 +0100