column http://www.proactiveinvestors.co.uk Proactiveinvestors column RSS feed en Thu, 08 Dec 2016 14:19:52 +0000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) Oil price, Shell, Plexus, EOG, Sundry-Faroe-Falcon-IOG- And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/26702/oil-price-shell-plexus-eog-sundry-faroe-falcon-iog-and-finally-26702.html WTI $49.77 -$1.16, Brent $53.00 -93c, Diff -$3.23 +23c, NG $3.60 -3c
Oil price
Crude oil has drifted back in the last couple of days, production is obstinately high, reports yesterday that Opec output in November was up to 34.2m b/d and that Russia was up to 11.2m b/d. Add to that news of first Saudi Arabia and then Kuwait cutting prices to Asian customers and one can be rightly accused of wondering where these cuts are going to come from and if 1.5m b/d will be enough.
The inventory figures this week have been most confusing, mainly bigger draws than expected but yesterday’s 2.4m from the EIA disguised a 3.7m build at Cushing similar to the API number on Wednesday.


Shell
Shell has signed an MOU with Iran to partner on three oil and gas fields. Not of major significance but perhaps worth noting as it rather assumes that the Donald is not going to start reimposing sanctions- if he could- and also that those who are concerned about Shell’s finances can stop panicking about imminent penury.


Plexus Holdings
Just to prove that the Chairman can also produce statements that rival war and peace for length at least, Plexus has a detailed essay for shareholders today. Basically it says that the company is ready to ‘regain the momentum’ that was being built up before the downturn. Like all other OFS companies POS has had a hard time but it should have weathered the storm better than most. With a top of the range product portfolio, the bluest of blue chip clients, excellent management and supportive shareholders who have continued to stump up I have no doubt that recovery is a when, not an if, moment.


Europa Oil & Gas
A slightly shorter AGM statement from  EOG this morning, mainly explaining the corporate activity in the onshore UK portfolio, some assets have been moved on to fund the drilling at Holmwood and Wressle, the latter will provide useful cashflow. As ever the sex and violence is in the Irish part of the portfolio or what seems to be new to me and now labelled ‘Atlantic Ireland’ where the potentially considerable upside is located. I am interviewing Hugh Mackay next Tuesday on TipTV so will have much more to say after that.


Sundry
Catching up on a couple of other items in a week busy due to a traditionally power packed Oil and Gas Council conference…
Faroe Petroleum announced that the Dong Energy deal had been completed, this will go down as one of the best for a very long time and the final price, at $26.7m  was way lower that the ticket price of $70.2m due to production and working capital adjustments.


Falcon noted that Origin have announced a major restructuring that involves an IPO of all its conventional upstream business leaving the Beetaloo on the outside. A nice word from Philip O’Quigley at Falcon explaining that the have kept the ‘crown jewels’ of APLNG and Beetaloo to themselves…


And IOG has gained an extension of another year, until December 2017, for its Blythe licence and will submit a draft FDP by the end of the year.


And finally…
The third test match against India is under way and with England winning the toss and batting a good score was necessary them being 2-0 down with two to go and that. England closed at 288-5 which at one stage was looking even better until a flurry of late wickets. Keaton Jennings made 112 on debut, his batting coming through his English mother’s side, obv…
Spurs managed to salvage something from the Champions League, winning last night to make it into the Boropa Cup where the Red Devils and the Saints are in action tonight. Already qualified as Group winners the fabulous Foxes changed 10 men and got done by 5…

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Thu, 08 Dec 2016 11:51:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/26702/oil-price-shell-plexus-eog-sundry-faroe-falcon-iog-and-finally-26702.html
Today's Market View - Dalradian Resources, Ortac Resources, Polymeta and Sula Iron and Gold http://www.proactiveinvestors.co.uk/columns/sp-angel/26701/today-s-market-view-dalradian-resources-ortac-resources-polymeta-and-sula-iron-and-gold-26701.html Dalradian Resources (LON:DALR) – Further positive test mining results from Curraghinalt
Ortac Resources* (LON:OTC) – Local ruling re: Šturec historic underground workings
Polymetal (LON:POLY) – US$0.15 special dividend
Sula Iron & Gold (LON:SULA) – Further sampling of historic drill core

US equity indices hit record high yesterday with expectations for the ECB to extend its monthly bond purchasing programme beyond the Mar/17 deadline.
• Gold and base metals are flat this morning.
• Brent prices are little changed continuing to trade around the $53/bbl level despite yesterday’s reports showing an increase in oil inventories in US storage hubs.
• Stockpiles at Cushing, Oklahoma, the biggest oil storage in the US, jumped the most since 2009 last week.
• Metal Bulletin reports iron ore prices for the 62%% Fe material delivered to the port of Qingdao climbed 3.2% to $82.3/t on Wednesday, marking the highest level since Oct/14. Prices are set to post the first annual  increase in four years with the contract up 47% kin Q4/17.
• Chinese steel prices continued to grow stronger with a rebar contract up 1.4% today.

Gas pillows make lithium batteries explode
• Scientists report using a high-power X-ray technique called tomography to see how gas pillows in lithium batteries explode.
• Gas builds up in the battery if it is overheated, overcharged or is left drained of charge for too long.  Gas can be generated under any of these conditions where the liquid components of the battery can vaporise.
• The best advice seems to be, to keep your lithium powered devices cool and to give them a break once in a while to allow the batteries to have a bit of a rest.  If you notice your battery pillowing then keep it cool and if you are on a flight drop it into a bucket of water.

US Steel looks at restoration of 10,000 jobs which it was forced to lay-off during the depressing period
• US Steel cut jobs and idled plants as it fought to lower costs to compete with cheap Chinese production
• The move reflects a more positive mood in the US following the election of Donald Trump

US Steel looks at restoration of 10,000 jobs which it was forced to lay-off during the depressing period
• US Steel cut jobs and idled plants as it fought to lower costs to compete with cheap Chinese production
• The move reflects a more positive mood in the US following the election of Donald Trump

China – coal mine explosion kills seven miners in Hubei province
• This is China’s third major mine accident in a week bringing the death toll to 60.
• 32 were killed in Chifeng on Sunday in a gas explosion in a coal mine and 21 were killed on Tudsday after being trapped underground for several days in Heilongjiang.

China – Exports and imports beat market estimates in Nov posting growth in US$ terms despite nearly a 7% depreciation over the year.
• Exports growth was relatively broad based with stronger shipments to the US (+6.9%), EU (+5.1%) and Japan (+3.2%).
• A rebound in imports point to stronger domestic demand.
• One of the most significant risks remain the future of the US/China trade policy following a change in the administration in Washington.
• Exports (%yoy, US$): 0.1 v -7.5 (revised from -7.3) in Oct and -5.0 forecast.
• Imports (%yoy, US$): 6.7 v -1.4 in Oct and -1.9 forecast.

Japan – Q3 GDP has been revised downwards significantly on the back of declines in business spending and private inventories.
• Annualised qoq growth was brought down to 1.3% compared with preliminary readings for a 2.2% increase. This compares to market forecasts for an upward revision to 2.3%.

Italy – Moody’s cut credit rating outlook to “negative”, down from “stable”, arguing that weak growth prospects on the nation’s deleveraging capacity.

Base metals:   
Copper US$ 5,816/t vs US$5,926/t yesterday – Chinese imports of refined copper accelerated in Nov bringing Total increase 4.3%yoy in the first 11 months of the year.
• Total shipments of unwrought copper and products climbed to 380kt in Nov and 44.46mt during the Jan-Nov period.
• Ore concentrate imports hit an all-time high in Nov of 1.76mt with YTD shipments up 31%yoy at 15.4mt driven by growing domestic smelting capacity.
• Jiangxi Copper, a major Chinese copper producer, is expecting demand to post a solid 4.5%yoy growth in demand in 2016 rebounding from virtually little change in 2015 (+0.4%yoy, WBMS data). Demand in 2017 is forecast to continue to grow well into 2017 climbing 3.5%yoy that year, Jiangxi said at a conference last month.

Bulk:    
Iron ore 62% Fe spot (cfr Tianjin) US$77.0/t vs US$77.3/t –
• Chinese imports surge on strong domestic steel market with iron ore shipments coming in at 92mt, the third-highest reading on record, in Nov.
• In the first 11 months of the year, total imports increased 9.2%yoy to 935mt.
Chinese steel rebar 25mm US$502.2/t vs US$495.0/t –
• An increase in Chinese steel prices lead producers to direct more sales into domestic markets with exports set to post the first annual decline since 2009.
• Steel exports dropped 1% to 100.7mt in the first 11 months of the year with sales in Nov down 15%yoy.
• Shipments hit a record high last year with 112.4mt exported.
• Chinese steel rebar prices are up 15% in Nov with a YTD increase of 87%.
Thermal coal (1st year forward cif ARA) US$59.5/t vs US$60.9/t yesterday
Premium hard coking coal Aus fob US$299.2/t vs US$299.2/t – unch

Other:
Tungsten - APT European prices $183-195/mtu vs $188-198/mtu last week and $198-203/mtu a week earlier – we know not why ???

Company News
Dalradian Resources (LON:DALR) 80 pence, Mkt Cap £193.9m – Further positive test mining results from Curraghinalt
• Dalradian Resources reports that underground test mining (stoping ) from a third area of at its Curraghinalt gold project in N Ireland has delivered 35% more gold than predicted in the company’s resource model and has incurred only 64% dilution compared with the 85% allowed for in the geotechnical model.
• The test of the longhole stoping method occurred in a relatively shallow dipping (50-55⁰) part of the V75 vein approximately 60 metres below surface in close proximity to more steeply dipping areas of previous trial mining which also showed better than expected gold recovery.
• Test stope 3 excavated 1001 tonnes of ore at an average grade of 9.41g/t gold from a stope 15m long and 14.1m high over an average width of 1.8m to recover a total of 303oz of gold.
• The test mining encountered reasonable ground conditions which the company believes can be controlled “by using simple low cost methods such as cable bracing”, although the announcement notes that after the ore had been extracted, a single 190 tonne block of ground fell into the stope.
• The test work has also provided valuable design information on the explosives and drilling requirements which can be incorporated in the feasibility study as well as an opportunity for additional training of the workforce under real mining conditions.
Conclusion: The latest phase of test mining has provided additional technical information for incorporation in the forthcoming feasibility study and planning application and has also confirmed the earlier findings that the resource model may be conservative. We look forward to the feasibility study when it becomes available.

Ortac Resources* (LON:OTC) 0.025p, mkt cap £2.0m – Local ruling re: Šturec historic underground workings
(Ortac holds a 26.99% equity interest in Andiamo)  Ortac also holds 100% of Šturec, 21.25% in CASA and an option for 19.35% in Zamsort.
• Ortac Resources report today on an amendment to the boundary of the Kremnica Mining License Area ‘KMLA’ in Slovakia.
• The ruling means that the license does not now include the historic town of Kremnica, which is quite a sensible move from the perspective of anyone living in the town.  Historic workings are said to connect the underground gold mine to the cellars of buildings in the town creating a labyrinth of tunnels which were used for gold mining and as emergency escape routes.
• A separate ruling also revoked the Central Mining Bureau’s decision to issue an underground mining permit for the historic mine.  Ortac had used the permit to extract ore for metallurgical test work which was completed last year.  Testwork using ammonium thiosulphate in a specifically designed plant gave recoveries of 90.5% for gold and 48.9% for silver over 10 samples each of around 800kg.
• The rulings mean little to Ortac in terms of its proposed plans for open cast mining of the Šturec gold mine but might make the townsfolk feel a little easier about the prospect of miners suddenly appearing in their wine cellars.
• Šturec remains Ortac’s principal asset.  A pre-feasibility study done by SRK estimates a production rate of 71,000ozpa of gold equivalent production to mine a total of 873,000oz gold equivalent grading 1.90g/t.
• Cash costs have been estimated at around US$555/oz indicating
• The project was calculated to have an IRR of around 30% at a $1,343/oz gold price.
*SP Angel acts as Nomad and broker to Ortac Resources

Polymetal (LON:POLY) 763 pence, Mkt Cap £3.268bn – US$0.15 special dividend
• Polymetal reports that it is to pay a special dividend of US$0.15/share, bringing the total dividend for the year to US$0.24/share. Payment will be made on 29th December.
• The company notes that this is the “fourth special cash dividend in the Company’s history, which follows special dividends paid in 2012, 2014 and 2015, totalling US$467 million.”
• Polymetal takes the opportunity to reaffirm that its “dividend policy remains unchanged. The target payout ratio is 30% of underlying net earnings.”
• In addition to the special dividend, “The amount of the final dividend for the year will be reviewed by the Board in due course in accordance with the dividend policy”

Sula Iron & Gold (LON:SULA) 0.24p, Mkt Cap £4.4m – Further sampling of historic drill core
• Sula have re-examined and assayed additional samples from historic drilling at the Ferensola Gold Project.
• The highlights show.
o 28.9g/t Au over 0.7m from 13.6m to 14.3m.
o 1.64g/t Au over 1m from 35.3m to 36.3m.
o 1.72g/t Au 6.45m confirmed through the re-sampling.
o 1.26g/t Au over 1m from 108.3m to 109.3m.
o The geological team are looking for new zones of mineralisation with all visible fresh sulphide zones and potential oxidised mineralisation zones were sampled.
Conclusion:  The new and confirmed assay results should help the new management of Sula with their understanding of the Ferensola gold project and to direct the new 2,400m drill program.
The team are keen to prove substantial additional gold resources at Ferensola and to firm up on the JORC exploration target of 5-7mt grading at 4-8g/t Au for 0.8moz to 1.5moz of gold.

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Thu, 08 Dec 2016 11:46:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/26701/today-s-market-view-dalradian-resources-ortac-resources-polymeta-and-sula-iron-and-gold-26701.html
In the Papers - Goldman Sachs, British Gas, Expedia http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26700/in-the-papers-goldman-sachs-british-gas-expedia-26700.html Newspaper Summary

The Times

Goldman loses faith in spread better: Goldman Sachs has cut its target valuation for CMC Markets to almost half the level at which it floated this year after the City watchdog announced a crackdown on spread betters.

Draghi’s approach stimulates market response: Stock markets in Europe were licking their lips about the prospect of more quantitative easing from the European Central Bank. Mario Draghi is expected to announce more stimulus in an attempt to calm markets in the face of mounting political uncertainty.

Storms gather over Australia as economy suddenly hits brakes: The Australian economy has shrunk unexpectedly, suffering its first quarterly contraction since March 2011 and only the fourth in 25 years.

British Gas smarting after £4.5 million fine: The nation’s biggest energy supplier is to be fined £4.5 million after missing a deadline to install tens of thousands of advanced meters for its business customers.

Ex-oligarch wins fight for $100 million in frozen cash: Mikhail Khodorkovsky, the exiled Russian former oil tycoon, has won a legal battle to recover $100 million that was frozen in the Republic of Ireland four years ago.

Small companies count the cost of disputes: Small companies are losing more than £11 billion a year to business disputes. Research from the Federation of Small Businesses has found that 70% of companies have been embroiled in at least one dispute in recent years, with most related to late or non-payment of debts.

The Independent

Donald Trump seen as ‘single largest risk’ to economy, Oxford Economics says: President-elect Donald Trump future policy stance over trade poses the single largest risk to the global economy, a survey from forecasting firm Oxford Economics has found.

Tata Steel commits to keeping Port Talbot open, saving 4,000 jobs: More than 4,000 employees at Tata’s Port Talbot steel plant have had their jobs guaranteed for five years after the company committed to invest £1 billion in its U.K. business in a landmark deal for Britain’s steel industry.

Industrial production falls at fastest pace in four years: Industrial output fell at its fastest rate in four years in October following a major oilfield shutdown, hitting hopes that the sector would help boost GDP in the final quarter of the year.

Boeing says Trump tweet that wiped $1 billion off its value wasn’t true: Boeing has responded to President-elect Donald Trump’s after he criticised the company over the cost of a new Air Force One plane, allegedly worth more than $4 billion.

Best places to work in the U.K. revealed: Travel company Expedia, has been named as the best company to work for in the U.K., beating tech giants such as Google and Apple, for the second year running.

The Daily Telegraph

AT&T and Time Warner Bosses defend merger in Senate grilling: U.S. politicians have grilled Chief Executives of the communications giants AT&T and Time Warner about whether their plans for one of the year’s biggest mergers would end up harming customers.

Sage mulls sale of North American payments business: Sage has put its North American payments business up for sale, a major move in the FTSE 100 software giant’s attempt to turn the business around.

Barclays eyes Sir Ian Cheshire for ring-fenced bank: Barclays wants to appoint a former Director of Bradford & Bingley, the mortgage lender that collapsed in the financial crisis, as chairman of the U.K. retail bank it is setting-up to meet tough new ring-fencing rules.

Spending watchdog to review UKFI’s advice on RBS share sale: The National Audit Office (NAO) plans to examine the advice the Treasury received before it sold shares in Royal Bank of Scotland last year at a £1.1 billion loss.

HSBC among three banks fined £413 million for Euribor rigging: HSBC is considering launching an appeal against the EU after it was named among three banks that were fined a total of €485 million (£413 million) by Brussels for allegedly colluding to rig a key financial benchmark.

Joules sales climb as customers splash out on winter warmers: Shares in premium British clothing brand Joules took a knock this morning despite it reporting strong sales growth in the six months to November 27.

Channel 4 board race row intensifies over Government bid to parachute in privatisation backer: The Government attempted to parachute a vocal advocate of Channel 4 privatisation onto the broadcaster’s board, as part of a battle over its future that has triggered a row over diversity in television and political interference.

The Questor Column:

RWS is unique but fully valued – so watch for a chance to buy on weakness: Many companies claim to have a unique business model, but in the case of one Aim-listed patent translator it may actually be true. RWS serves a worldwide list of blue-chip clients who file patents for new technology and need those patents to be translated into various languages. High-quality translations depend on highly able translators, so the firm has, in effect, set up its own language school. The reason this company is the world No 1 is that it takes science graduates and trains them as linguists, or sometimes the other way round. It therefore has ‘dual qualified’ people. The company has even benefited indirectly from Brexit: most of its revenues are in euros or dollars, which have appreciated, but its costs are in pounds. It does hedge some of its exposure, however. Questor takes further reassurance from the fact that Andrew Brode, the founder and chairman, owns 42% of the company, while Reinhard Ottway, the Chief Executive, has a 0.1% stake worth about £700,000. “Mr Brode runs a tight ship, he’s not going to let his wealth go up in smoke,” said Mr Ashworth-Lord. The company is clearly high quality. The only question mark is over valuation: the shares have risen from 120p in June last year to ‘s close of 300p and now stand at about 35 times 2016 earnings of 9p a share. As an Aim-listed firm, RWS shares are exempt from inheritance tax if held for at least two years. Questor says “Hold, Buy on weakness”.

The Guardian

Rio Tinto’s plan to use drones to monitor workers’ private lives: In the remote Australian outback, multinational companies are embarking on a secretive new kind of mining expedition.

Glencore buys stake in Russian state oil firm Rosneft: Glencore is among investors to have paid €10.5 billion (£8.9 billion) for an almost 20% stake in Russia’s state oil firm, Rosneft.

Tata to sell U.K. speciality steels business in £100 million deal: Tata Steel has agreed to sell its speciality steels business in northern England for £100 million to Liberty House, the metals company run by tycoon Sanjeev Gupta, ending months of uncertainty for 1,700 workers.

FTSE boosted by banks and miners but Carillion falls on Brexit order delays: Leading shares continue to shrug off worries about Italy’s banking system following the weekend referendum and subsequent resignation of prime Minister Matteo Renzi.

Mortlake brewery selling vats and all before being turned into luxury flats: A 500-year-old brewery is selling off its vats, pumps and bottling lines at auction as its billionaire Singaporean owner prepares to turn the site into luxury flats.

HMRC Chief calls for tax crackdown on Premier League footballers: Britain’s top tax inspector has called on the Chancellor, Philip Hammond, to review the tax rules for super-rich football stars who are avoiding tax by siphoning earnings from Premier League games into image rights companies based in offshore tax havens.

Daily Mail

Arcadia sales kept firmly under wraps by ‘Sir Shifty’ as billionaire tycoon breaks with years of tradition in face of backlash: Sir Philip Green said he is ‘not in the mood’ to announce Arcadia results before Christmas – breaking with years of tradition. The billionaire tycoon usually posts annual results in November, revealing sales figures in his High Street chains, which include Topshop, Wallis and Burton.

British craft beer maker Camden Town Brewery unleashes Hells in New York bars: Craft beer maker Camden Town Brewery is taking its flagship Hells lager to New York this month.

Starbucks unveils plans to open an additional 12,000 stores by 2021 as it looks to boost revenues by 10%: Starbucks plans to open another 12,000 coffee shops by 2021, marking a major expansion of its global network. The move means it will have 37,000 outlets across the world in five years’ time.

Hopes raised for a Government rescue of Italy’s crippled banks as the sector struggles with £300 billion of bad debt: Italy’s struggling banks were granted a reprieve last night as hopes grew of a government rescue. Sources said Italian Ministers were in contact with Brussels about how to give the sector, which is weighed down by £300billion of bad debt, the multi-billion-pound injection it needs.

Chelsea homeowners suffer 13% drop in property values as house prices across prime central London fall by nearly 5%: House prices in prime central London plummeted by an average of 4.8% over the year to November, property experts have revealed.

Struggling gold miner digs itself out of a hole as it sells more than 6,000 ounces of metal: Shares in Avocet Mining soared as it gave investors reason to be cheerful. The troubled gold miner has sold enough gold to cover its overHeads until the New Year.

Daily Express

Warning over workers having an ‘ostrich mentality’ when it comes to saving for retirement: Millions of workers have an ‘ostrich mentality’ when it comes to saving for their old age, one of the U.K.’s oldest building societies has warned. Nearly half (48%) are either not saving for their retirement or the savings they have fall short of the amount they need to pay the bills in retirement.

ECB to pummel even more money to save crumbling Eurozone amid Italy turmoil and Brexit: Fresh measures aimed at injecting life into the ailing Eurozone economy are expected to be unveiled by the European Central Bank (ECB). Growth and inflation in the bloc both remain worryingly low, while unemployment is still embarrassingly high.

House prices hit new record high after Brexit vote: House prices increased again in November taking the typical cost of a British home to a new record high - as buyer earnings to values reach their highest level since 2007. The average home in Britain is now worth £218,002 - a jump of £13,448 over 12 months - according to Halifax.

Pfizer fined after overcharging NHS millions of pounds for anti-epilepsy drugs: Drug giant Pfizer has been fined a record £84.2million after hitting the NHS with rip-off prices for anti-epilepsy drug. Along with distributor Flynn Pharma, drug maker Pfizer broke competition law when the cost of pills were hiked by up to 2,600% overnight, said the Competition and Markets Authority (CMA).

The Scottish Herald

Bosses delay taking on staff as Brexit uncertainty lingers: The number of people placed in permanent jobs has fallen again in Scotland as employers delay making hiring decisions amid the uncertainty caused by the Brexit vote, while pay rates continued to lag behind the rest of the U.K.

Investors in Monks toast the upside of Brexit fallout: The consequences of Brexit have been “very good news” for the Baillie Gifford-run Monks Investment Trust, which saw a transformation in its performance in the six months to the end of October.

Incremental to create 140 jobs in technology sector: A digital technology business backed by Scottish Investment Bank and Maven Capital Partners is preparing to create 140 jobs across the Central Belt after acquiring a firm in Aberdeenshire, writes Margaret Taylor.

University of Strathclyde scientists help drive for efficiency in North Sea: Scientists at the University of Strathclyde have linked up with a Dutch engineering firm to investigate ways of increasing the efficiency of work on North Sea pipelines amid the downturn in the oil and gas industry.

Allied achieves sales record: Allied Vehicles Group achieved its highest ever sales result last month, selling 712 specialist vehicles for £9.9 million – a 48% increase on the previous November. The group’s Cab Direct division sold 357 taxis, while its Allied Mobility brand contributed 285 mobility cars. Allied Fleet also achieved several new business-to-business orders.

Bidvest to stock Bellfield’s beers: Bellfield Brewery, which makes gluten-free beers, has won a contract to supply Bidvest Foodservice across the U.K.

The Scotsman

Tech services outfit launches with North-east takeover: A former Lockheed Martin Executive has launched a new digital services business with the acquisition of an Aberdeenshire company.

Stagecoach upbeat despite ‘challenging’ transport market: Transport giant Stagecoach has seen its first-half profits slide by more than a fifth amid a “challenging” political and economic environment.

Charlotte Square Georgian townhouses to undergo £2 million revamp: The Charlotte Square Collection is planning a £2 million refurbishment of two townhouses on Edinburgh’s iconic Georgian square.

John Menzies names new Boss for distribution arm: Logistics group John Menzies named Greg Michael as the new managing Director for its distribution business.

Confidence in top gear as Scots car sales motor aHead: Optimism within Scotland’s motor trade remains high after new figures revealed a steady rise in new car sales.

Sparkling full-year numbers at Laing: Laing the Jeweller has increased turnover and gross profits in its latest trading year, new figures reveal.

City A.M.

National Grid nears sale of majority stake in £11 billion gas pipeline – and the winner is expected to include a Chinese investor: The winner of a multi-billion-pound bidding war involving the National Grid’s gas pipelines could be unveiled as soon as this morning, with the victorious consortium expected to include Chinese backers.

Metro Bank’s new partnership proves the Post Office’s importance: One of Britain’s newer financial institutions has team up with one of Britain’s oldest and revered high street networks.

U.K. GDP growth stayed steady at 0.4% while fall in migration would harm economy, says Niesr: Migration controls could leave the U.K. economy up to 1.19% poorer by the end of this Parliament, says an influential think tank, as it estimates that growth in the last three months was unchanged at 0.4%.

London’s jobs market is improving for the first time in six months according to recruiters: The London jobs market is improving after six months of downturn as demand for permanent staff hits a 10-month high, a new study says.

London still top destination for future hedgies: London is set to remain a hedge fund hotspot in coming years after 21 of 50 up-and-coming hedge fund managers in Europe were found to be based in the U.K. capital.

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Thu, 08 Dec 2016 10:22:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26700/in-the-papers-goldman-sachs-british-gas-expedia-26700.html
Northland Capital Partners View on the City - Churchill Mining and Valirx http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/26698/northland-capital-partners-view-on-the-city-churchill-mining-and-valirx-26698.html Churchill Mining (LON:CHL) – CORP: Claim against Indonesia struck out
Suspended

From yesterday: ICSID Tribunal has granted Indonesia’s application to dismiss the Churchill claims for damages
  The ICSID Tribunal has granted Indonesia’s application to dismiss the Churchill claims for damages arising from the revocation of mining licenses that made up the East Kutai Coal Project.
  The tribunal’s findings include:
  Thirty four disputed documents were held not to be authentic,
  The forger was most likely person or persons acting for or on behalf of Churchill's Indonesian partner the Ridlatama Group in collusion with a person inside the East Kutai Regency,
  There was no finding that Churchill or its officers were involved in any forgery,
  Churchill’s due diligence conducted at the time the licences were acquired were insufficient,
  The claim brought by Churchill has been dismissed,
  Churchill has been ordered to pay costs and arbitration fees of US$9,446,528.

NORTHLAND CAPITAL PARTNERS VIEW: A very disappointing decision for Churchill Mining. The Company is still reviewing the Tribunals decision. The ICSID process allows Churchill to request annulment of the award on the following grounds: (i) that the Tribunal was not properly constituted; (ii) that the Tribunal has manifestly exceeded its powers; (iii) that there has been a serious departure from a fundamental rule of procedure; or (iv) that the award has failed to state the reasons on which it is based. Churchill believes there are grounds to annul this award and is working with its lawyers Clifford Chance LLP to determine which of the above grounds may be available. As part of that application, Churchill would seek a stay of the costs orders that have been made. The suspension in trading of the Company's shares on AIM will remain in place pending clarification of the Company's financial position

ValiRx Plc (LON:VAL) – CORP: Patent grant

Market Cap: £5.6m; Current Price: 6.75p

European patent granted for VAL201
  ValiRx announced that a patent ("Anti-Androgen Peptides and Uses Thereof in Cancer Therapy") covering its lead therapeutic compound VAL201 has been granted by the European Patent Office.
NORTHLAND CAPITAL PARTNERS VIEW: This patent grant further strengthens VAL201’s worldwide coverage. ValiRx now has patent protection for VAL201 in Japan, Europe and Australia, with further patents pending for the compound in significant markets across the rest of the world.

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Thu, 08 Dec 2016 10:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/26698/northland-capital-partners-view-on-the-city-churchill-mining-and-valirx-26698.html
Market Briefing - UK markets closed in the green yesterday, buoyed by gains in mining stocks. http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26699/market-briefing-uk-markets-closed-in-the-green-yesterday-buoyed-by-gains-in-mining-stocks-26699.html UK Market Snapshot

UK markets closed in the green yesterday, buoyed by gains in mining stocks. Rio Tinto jumped 6.6%, after a leading broker upgraded its rating on the stock to ‘Outperform’ from ‘Neutral’ and raised its target price to 3,600.0p from 2,750.0p. Other miners, Glencore and BHP Billiton climbed 3.8% and 3.9%, respectively. HSBC Holdings advanced 3.9%. The European Union Commission slammed lenders including the former with a fine of €485.0 million for participation in a cartel to steer the European benchmark interest rates. On the losing side, Shire tumbled 4.5%, following a broker downgrade on the stock to ‘Neutral’ from ‘Buy’. Carillion declined 3.9%, after it reported a slowdown in its new order intake for the second six months of the year. The FTSE 100 gained 1.8%, to close at 6,902.2, while the FTSE 250 added 1.0%, to settle at 17,625.5.

US Market Snapshot

US markets ended higher yesterday, with the benchmarks S&P 500 and Dow Jones registering new records, helped by gains in banking and telecom heavyweights. Verizon Communications and AT&T advanced 2.0% and 2.8%, respectively. Goldman Sachs Group and Bank of America gained 1.8% and 1.9%, respectively. Western Digital jumped 8.3%, after it boosted its guidance for the second fiscal quarter of 2017. Micron Technology climbed 7.2%, following a broker initiate coverage on the former with a ‘Buy’ rating. Bucking the trend, Vera Bradley sank 13.1%, after it missed company’s outlook range for the third quarter and slashed its guidance for the full year. Healthcare stocks, Merck, Johnson & Johnson and Pfizer slid 0.4%, 0.9% and 1.2%, respectively. The S&P 500 gained 1.3%, to settle at 2,241.4. The DJIA edged up 1.5%, to settle at 19,549.6, while the NASDAQ rose 1.1%, to close at 5,393.8.

Europe Market Snapshot

Other European markets finished in positive territory yesterday, bolstered by a rally in banking shares. Banca Monte dei Paschi di Siena jumped 10.8%, on the back of report that the Italian Government is taking actions to rescue the lender and other struggling Italian banks. Peers, UniCredit and BPER Banca climbed 9.4% and 10.4%, respectively. Credit Suisse Group advanced 7.4%, after its CEO, Tidjane Thiam, stated that its restructuring plan is on track. On the flipside, PostNL NV slumped 13.5%, after it rejected Belgian postal service, bpost’s final revised offer worth about $2.73 billion to acquire the former. The FTSEurofirst 300 index added 0.9%, to close at 1,373.6. Among other European markets, the German DAX Xetra 30 advanced 2.0%, to close at 10,986.7, while the French CAC-40 gained 1.4%, to settle at 4,694.7.

Asia Market Snapshot

Markets in Asia are trading higher this morning. In Japan, SoftBank Group, Fujitsu and Tokyo Electric Power Company Holding have climbed 4.7%, 6.0% and 12.9%, respectively. Oil heavyweights, Inpex and JX Holdings have gained 0.9% and 1.9%, respectively. Sony has edged up 1.8%, after it announced that it will launch as many as six smartphone games in the next year to accelerate mobile drive. On the contrary, Sumitomo Dainippon Pharma and Shionogi have tumbled 3.9% and 5.9%, respectively. In Hong Kong, oil stocks, CNOOC and Sinopec Oilfield Service have added 0.4% and 0.6%, respectively. In South Korea, index majors, Samsung Electronics and LG Electronics have risen 0.9% and 1.1%, respectively. The Nikkei 225 index is trading 0.9% higher at 18,656.2. The Hang Seng index is trading 0.6% up at 22,948.4, while the Kospi index is trading 1.2% higher at 2,016.6.

Key Corporate Announcements Today

AGMs

AB Dynamics, Aberdeen Latin American Income Fund Ltd, Billing Services Group Ltd., Green Reit, Gulf Keystone Petroleum Ltd.(DI), MJ Gleeson, Plexus Holdings, Softcat, Firestone Diamonds, Ceres Power, Egdon Resources, Investment Company

EGMs

Dolphin Capital Investors Ltd, Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S), Local Shopping Reit

Final Ex-Dividend Date

Aberdeen Asset Management, Aeci 5 1/2% Prf, Britvic, Daily Mail and General Trust A (Non.V), Debenhams, DFS Furniture, K3 Business Technology Group, Netcall, Northamber, Pan African Resources, Scottish Oriental Smaller Companies Trust, Waterman Group

Final Dividend Payment Date

Craneware

Interim Ex-Dividend Date

3i Group, Acorn Income Fund Ld, Albion Venture Capital Trust, Alliance Trust, Aquila Services Group, Babcock International Group, Big Yellow Group, Chelverton Small Companies Dividend Trust, Clipper Logistics, Cranswick, D4t4 Solutions, De La Rue, Ediston Property Investment Company, F&C Capital & Income Inv Trust, F&C UK Real Estate Investments Limited, Fair Oaks Income Fund Limited, Hogg Robinson Group, Homeserve, ICAP, IG Design Group, Investec, Kainos Group, LondonMetric Property, Montanaro European Smaller Companies Trust, Next, Palace Capital, Phaunos Timber Fund Ltd., Royal Mail, Telford Homes, Temple Bar Inv Trust, VP, Wincanton

Interim Dividend Payment Date

Jarvis Securities, London Security, Rotala

Special Ex-Dividend Payment Date

Netcall, Trans-Siberian Gold

Quarterly Ex-Dividend Date

F&C Commercial Property Trust Ltd., Raven Russia Ltd 6.5% Red Cnv Pref Shs NPV

Trading Announcements

Ocado, S&U, Capita

Key Corporate Announcements for Tomorrow

AGMs

Associated British Foods, Conroy Gold & Natural Resources, Petro Matad Ltd., Plant Impact, River and Mercantile Group, Volution Group (WI), Waterman Group

EGMs

PJSC Megafon GDR (Reg S)

Final Dividend Payment Date

Avingtrans, CVS Group, JPMorgan Smaller Companies Inv Trust, Jupiter European Opportunities Trust, London Finance & Investment Group, Revolution Bars Group

Interim Dividend Payment Date

Hadrian's Wall Secured Investments, Invesco Perpetual UK Small Companies Inv Trust, Maruwa Co Ltd., PCI-PAL

SThree, Young & Co's Brewery 'A' Shares

Quarterly Payment Date

Honeywell International Inc.

Trading Announcements

SThree

Commodity, Currency and Fixed Income Snapshots

Crude Oil

At 0430GMT today, Brent Crude Oil one month futures contract is trading 0.11% or $0.06 higher at $53.06 per barrel. Yesterday, the contract declined 1.72% or $0.93, to settle at $53.00 per barrel. Meanwhile, the Energy Information Administration reported that the US crude inventories fell by 2.4 million barrels for the week ended 02 December 2016.

Gold

At 0430GMT today, Gold futures contract is trading 0.33% or $3.90 higher at $1178.90 per ounce. Yesterday, the contract advanced 0.63% or $7.40, to settle at $1175.00 per ounce, reversing its losses from the prior session, following weakness in the greenback.

Currency

At 0430GMT today, the EUR is trading 0.21% higher against the USD at $1.0774, ahead of the European Central Bank’s (ECB) interest rate decision, slated to release later today. Yesterday, the EUR strengthened 0.32% versus the USD, to close at $1.0751, after German industrial production rose less than anticipated in October.

At 0430GMT today, the GBP is trading 0.25% higher against the USD at $1.2651. The US weekly initial jobless claims data is due for release later in the day. Yesterday, the GBP weakened 0.43% versus the USD, to close at $1.2620, after data showed that UK NIESR estimated GDP growth advanced in November.

Fixed Income

In the US, long term treasury prices rose and pushed yields lower, ahead of today’s highly anticipated ECB’s meeting. Yesterday, yield on 10-year notes declined 5 basis points to 2.34%, while yield on 2-year notes lost 2 basis points to 1.10%. Meanwhile, 30-year bond yield tumbled 6 basis points to 3.02%.

Key Economic News

UK house price balance rose in November

In November, house price balance in the UK climbed to 30.00 %, compared to market expectations of an advance to a level of 26.00 %. House price balance had recorded a reading of 23.00 % in the prior month.

UK manufacturing production unexpectedly eased in October

On an annual basis in the UK, manufacturing production recorded an unexpected drop of 0.40% in October, lower than market expectations for an advance of 0.70%. Manufacturing production had climbed by a revised 0.10% in the previous month.

UK manufacturing production unexpectedly eased in October

On a monthly basis, manufacturing production registered an unexpected drop of 0.90% in the UK, in October, lower than market expectations for an advance of 0.20%. Manufacturing production had recorded a rise of 0.60% in the previous month.

UK NIESR estimated GDP advanced as expected in the September-November 2016 period

On a monthly basis in the September-November 2016 period, NIESR estimated gross domestic product (GDP) advanced 0.40% in the UK, compared to a similar rise in the August-October 2016 period. Market expectation was for NIESR estimated GDP to climb 0.40%.

UK industrial production surprisingly eased in October

In October, on an annual basis, industrial production in the UK registered an unexpected drop of 1.10%, compared to a revised rise of 0.40% in the previous month. Market expectation was for industrial production to advance 0.50%.

UK Halifax house price index rose as expected in November

In November, the Halifax house price index recorded a rise of 0.20% on a MoM basis in the UK, in line with market expectations. The Halifax house price index had climbed 1.40% in the prior month.

UK Halifax house price index rose more than expected in the September-November 2016 period

The Halifax house price index rose 6.00% on an annual basis in the September-November 2016 period, in the UK, higher than market expectations for an advance of 5.90%. The Halifax house price index had risen 5.20% in the August-October 2016 period.

UK industrial production registered an unexpected drop in October

In October, on a MoM basis, industrial production unexpectedly eased 1.30% in the UK, lower than market expectations for an advance of 0.20%. Industrial production had dropped 0.40% in the prior month.

German industrial production advanced less than expected in October

In October, on a YoY basis, the non-seasonally & working day adjusted industrial production advanced 1.20% in Germany, compared to a revised rise of 1.30% in the previous month. Market expectation was for industrial production to advance 1.60%.

German industrial production rose less than expected in October

The seasonally adjusted industrial production in Germany recorded a rise of 0.30% on a monthly basis in October, less than market expectations for a rise of 0.80%. In the prior month, industrial production had dropped by a revised 1.60%.

French current account deficit dropped in October

Current account deficit in France dropped to €3.50 billion in October. France had registered a revised current account deficit of €3.70 billion in the previous month.

French trade deficit expanded in October

Trade deficit in France rose to €5.20 billion in October, compared to a revised trade deficit of €4.79 billion in the prior month. Markets were anticipating the nation to register a trade deficit of €4.35 billion.

Spanish housing price index recorded a rise in 3Q 2016

The housing price index in Spain climbed 0.80% in 3Q 2016 on a QoQ basis. The housing price index had advanced 1.80% in the prior quarter.

Swiss foreign currency reserves climbed in November

Foreign currency reserves registered a rise to CHF 648.00 billion in November, in Switzerland. In the previous month, foreign currency reserves had registered a reading of CHF 630.30 billion.

US mortgage applications eased in the last week

In the US, mortgage applications fell 0.70% in the week ended 02 December 2016 on a weekly basis. In the prior week, mortgage applications had recorded a drop of 9.40%.

US JOLTs job openings fell in October

In October, JOLTs job openings in the US recorded a drop to 5534.00 K, compared to a revised level of 5631.00 K in the previous month. Market expectation was for JOLTs job openings to drop to 5500.00 K.

US consumer credit advanced less than expected in October

In October, consumer credit in the US climbed $16.02 billion, compared to a revised advance of $21.80 billion in the prior month. Market expectation was for consumer credit to rise $18.65 billion.

BoC holds kept key interest rate at 0.50%  

The Bank of Canada (BoC) held benchmark interest rate steady at 0.50%, stating that the Canadian economy is growing as expected, despite lingering uncertainty in the US and its other major trading partners. The central bank further added that although the nation’s growth rebounded strongly during the third quarter, the economy is expected to shift to moderate growth in the fourth quarter, as business investment and non-energy goods exports continue to disappoint.

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

Japanese investors turned net sellers of ¥72.10 billion worth of foreign stocks in the week ended 02 December 2016, as compared to being net buyers of ¥117.80 billion worth of foreign stocks in the prior week.

Japanese bank lending ex-trust advanced less than expected in November

In Japan, bank lending ex-trust climbed 2.40% in November on a YoY basis, compared to a similar rise in the prior month. Markets were anticipating bank lending ex-trust to advance 2.50%.

Japanese average office vacancies in Tokyo advanced in November

In November, on a monthly basis, average office vacancies in Tokyo in Japan climbed 3.75%. In the previous month, average office vacancies in Tokyo had climbed 3.64%.

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

Foreign investors were net buyers of ¥658.20 billion worth of Japanese bonds in the week ended 02 December 2016, from being net buyers of a revised ¥12.20 billion worth of Japanese bonds in the previous week.

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

Japanese investors turned net sellers of ¥887.60 billion worth of foreign bonds in the week ended 02 December 2016, as compared to being net buyers of a revised ¥112.20 billion worth of foreign bonds in the prior week.

Japanese leading economic index rose in October

The preliminary leading economic index registered a rise to 101.00 in October, in Japan, lower than market expectations of an advance to a level of 101.40. In the previous month, the leading economic index had recorded a reading of 100.30.

Japanese GDP advanced less than expected in 3Q 2016

In 3Q 2016, the final GDP in Japan climbed 0.30% on a quarterly basis, lower than market expectations for a rise of 0.50%. The preliminary figures had recorded a rise of 0.50%. GDP had registered a rise of 0.20% in the previous quarter.

Japanese nominal GDP advanced less than expected in 3Q 2016

The final nominal GDP recorded a rise of 0.10% on a quarterly basis in 3Q 2016, in Japan, compared to a revised similar rise in the prior quarter. Market expectation was for nominal GDP to rise 0.20%. The preliminary figures had indicated an advance of 0.20%.

Japanese adjusted (total) current account surplus widened in October

Adjusted (total) current account surplus in Japan rose to ¥1928.90 billion in October. Japan had posted an adjusted (total) current account surplus of ¥1477.30 billion in the prior month.

Foreign investors became net buyers of Japanese stocks in the previous week

Foreign investors were net buyers of ¥400.10 billion worth of Japanese stocks in the week ended 02 December 2016, from being net buyers of ¥330.50 billion worth of Japanese stocks in the previous week.

Japanese annualised GDP rose less than expected in 3Q 2016

In Japan, the final annualised GDP advanced 1.30% on a QoQ basis in 3Q 2016, less than market expectations for an advance of 2.30%. In the previous quarter, annualised GDP had advanced 0.70%. The preliminary figures had indicated an advance of 2.20%.

Japanese current account surplus dropped in October

Japan has posted the non-seasonally adjusted current account surplus of ¥1719.90 billion in October, from a current account surplus of ¥1821.00 billion in the prior month. Markets were expecting a current account surplus of ¥1545.00 billion.

Japanese coincident index advanced in October

Compared to a level of 112.70 in the previous month the flash coincident index in Japan climbed to 113.90 in October. Market anticipation was for the coincident index to climb to a level of 114.10.

Japanese (BOP basis) trade surplus fell in October

(BOP basis) trade surplus in Japan dropped to ¥587.60 billion in October, compared to market expectations of a (BOP basis) trade surplus of ¥603.00 billion. Japan had reported a (BOP basis) trade surplus of ¥642.40 billion in the prior month.

Japanese bank lending including trusts climbed in November

Bank lending including trusts climbed 2.40% on an annual basis in Japan, in November. Bank lending including trusts had registered a similar rise in the prior month.

Japanese GDP deflator fell more than expected in 3Q 2016

In 3Q 2016, the final GDP deflator eased 0.20% on an annual basis in Japan, compared to a rise of 0.70% in the prior quarter. The preliminary figures had recorded a fall of 0.10%. Markets were anticipating the GDP deflator to fall 0.10%.

Japanese corporate bankruptcies dropped in November

In Japan, corporate bankruptcies fell 2.53% in November on a YoY basis. In the previous month, corporate bankruptcies had fallen 7.95%.

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Thu, 08 Dec 2016 10:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26699/market-briefing-uk-markets-closed-in-the-green-yesterday-buoyed-by-gains-in-mining-stocks-26699.html
In The News - Burey Gold & Weatherly International http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/26697/in-the-news-burey-gold-weatherly-international-26697.html Burey Gold††
ASX:BYR | A$0.054 | US$51m | Speculative Buy

Infill Results from Kebigada ahead of January 2017 Maiden Resource
Burey Gold has announced the results of 18 RC and 1 diamond drill holes from an infill drilling programme at the Kebigada Shear Zone and 54 shallow scout RC and 5 diamond drill holes from Douze Match. Both areas are located in its 55%-owned Giro Gold Project, located in north-eastern DRC.
COMMENT: It’s all looking positive at Kebigada, where the infill drilling is part of the programme to complete a Maiden Resource estimate by the end of January 2017. Drilling has extended the width along-strike and also indicated an increase of grade with depth. Results support our previous suggestion that drilling to date may have outlined a resource of 2.0Moz of gold at a grade of around 2.0 g/t. However, at Douze Match it is proving difficult to follow up the initial spectacular RC results announced from the Tango Shear Zone in June with successful diamond drill results; results from the first diamond drill hole were announced at the end of October, with an additional five holes in the current announcement.
Mineralisation at Douze Match is proving to be more complex than expected, and the company will now focus on using results from the current work programme, and perhaps undertaking more geophysics, to get a better understanding of the structural controls on mineralisation before resuming the programme.
Work is ongoing and results are expected from drilling to the north of Tango and first drilling at the Siona prospect before the end of the year. We look forward to this newsflow and the completion of the project’s Maiden Resource statement early in 2017 and we continue to recommend the company as a Speculative Buy.

Work at Kebigada is aimed at the completion of a Maiden Resource estimate by the end of January 2017 — This is the latest in a series of announcements regarding the resource infill drilling programme at the Kebigada Shear Zone. On 19 September the company announced that the programme had commenced and published results from the first seven RC holes on 31 October. Results of preliminary metallurgical test-work were announced on 8 November, indicating that recoveries of 90-91% could be expected from oxide and fresh rock using straightforward CIL processing at a grind size of 75 microns.
Mineralisation at Kebigada has been defined over a strike length of 1,500m, widths of up to 400m and remains open at depths exceeding 200m — The latest announcement included the results of one diamond drill hole and a further 18 RC drill holes for 2,169m. Given that previous drilling had already outlined a broad mineralised envelope within which there are a multiple mineralised structures, we consider that the current infill programme is primarily confirming the previously-outlined mineralisation; it is planned to be completed by the end of the year. As we have previously suggested, we estimate that drilling to date at the Kebigada may have outlined a resource of 2.0Moz of gold at a grade of around 2.0 g/t.
Drilling along the 6km-long Douze Match soil anomaly has been concentrated around the Tango Shear Zone — Initial spectacular assay results were reported from the Tango area of the Douze Match target, in the north of the Giro Project area, in June 2016. These came from a shallow, first pass RC drill programme, with assays reported for 3m composite samples focused on an area of historic Belgian, and current artisanal, workings. Extraordinary results from this included an interval of 15m @ 256 g/t.
A total of 151 shallow RC holes have been completed in this programme, including the 54 holes reported today — Most of these holes were initially drilled in the area around the historical Belgian and artisanal workings. Subsequently, further step-out drilling was undertaken with wide-spaced drill lines covering a strike length of over 1.5km. Mineralisation is generally associated with the contact between a granite intrusive to the north and the surrounding volcano sediments.
The initial RC results from the Tango Shear Zone were followed up with a 1,000m diamond drilling programme — This was to test the true width of the mineralisation, its orientation and continuity at depth. The first two holes were drilled in early September. Results of the first diamond drill hole were announced on 31 October, with the best interval of 2m @ 2.61 g/t giving an indication that it was not going to be easy to replicate the earlier RC results.
This announcement includes the results of a further five diamond drill holes in the Douze Match area — Two of the holes were abandoned owing to poor ground conditions before reaching the prospective contact zone. Results from the other holes did not match the previous RC results, with the best hole returning 3.95m grading 2.99 g/t.
Work at Douze Match to resolve structural complexities and test the remainder of the extensive soil anomaly — Early indications are that mineralisation is focused within a narrow, high-grade zone, within a broader 30m-wide shear zone, and that it plunges to the north-east. The company will evaluate all data once the current programme has been completed, and is also considering applying further geophysics to assess structural controls and the true orientation of mineralised structures in the area. Results from RC drilling over two drill lines testing the granite contact to the north of the Tango Shear are also planned to be announced before the end of the year.
The company reports that drilling has commenced at the Siona target area, 3km SW of Tango — This is another area of extensive historical Belgian workings and recent artisanal activity. A programme of shallow, scout RC drilling totalling 48 holes over 3 drill lines has been completed and was reported to have intersected sheared volcanics and quartz veins over widths of 40-50m over a strike length of 150-200m to the south of the granite contact. Assays are expected before the end of the year.
Burey’s current market cap is US$51m — The company has 1,257m shares outstanding, with 434m options exercisable at A$0.05/share until July 2017 and 80m options exercisable at A$0.03-0.05/share from December 2016 to December 2020. The company has a further 84.5m performance rights outstanding. Fully diluted shares outstanding are therefore 1,855m. The exercise of the options, which are all currently in the money, would bring in an additional A$25.6m. Cash resources at the end of September were A$9.6m.
________________________________________

WEATHERLY INTERNATIONAL*†
LON:WTI | 0.825p | US$11m | Speculative Buy | TP : 1.2p

Logiman Announces Reduction in Shareholding
Weatherly International has announced that in mid-November Logiman reduced its shareholding in the company from 11.4% to 9.6%. As a result, its nominated board representative, Krzysztof Szymczak (Logiman’s MD), has resigned as a director. Logiman was the engineering, procurement and construction (EPC) contractor for the Tschudi Project development. As announced in July 2016, Weatherly has certain disputes with Logiman that are ongoing and which it expects to result in arbitration proceedings.
________________________________________

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Thu, 08 Dec 2016 10:10:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/26697/in-the-news-burey-gold-weatherly-international-26697.html
Breakfast News -AIM Breakfast : Armadale Capital, IMC Exploration Group,Servoca,Private & Commercial Finance, Dalradian Resources, Surface Transforms http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/26696/breakfast-news-aim-breakfast-armadale-capital-imc-exploration-groupservocaprivate-commercial-finance-dalradian-resources-surface-transforms-26696.html What’s cooking in the IPO kitchen?

Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December.

ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m.

RM Secured Direct Lending  -  The secured direct lending fund  intends to float on the Main Market on 15 December raising up to £100m


 
Breakfast buffet

Armadale Capital (LON:ACP) 4.25 p £7.1m

The investment company focused on natural resource projects, announced a maiden JORC compliant inferred mineral resource estimate of 40.9Mt @ 9.41% Total Graphitic Content (TGC) for its 100% owned Mahenge Liandu graphite project in Tanzania. At least 32Mt of this resource has an average grade of 10.47% TGC – one of the largest high-grade resources in Tanzania. Work to date has demonstrated Mahenge Liandu’s potential as a commercially viable deposit with significant tonnage, high-grade coarse flake and near surface mineralisation (implying a low strip ratio) contained within one contiguous ore body. Additional drilling, to test extensions to the current resource and to upgrade the resource classification, is scheduled for H1 2017.

IMC Exploration Group (ISDX:IMC) 1.5p £1.6m

In conjunction with its joint venture partner Koza Limited, IMC has recently commenced an extensive target generation, mapping and rock sampling programme on its Goldmines River licence PL 3857 in Co. Wicklow, and on licence PL 2551 in Co. Wexford. This work, scheduled to commence in early 2017, is in addition to the previous drilling programme, and is part of the works programme on our five precious metal Licence Areas, and is essential preparatory work for the next phase fully funded drilling programme.

Servoca (LON:SVCA) 20p £24.8m

In line FY Sep16 results from the provider of staffing solutions and outsourced services with established operations across the UK. Revenue £69.2m up 17.7%. Profit before taxation* £3.5m up 16.7%. Basic EPS of 2.25p up 17.8%. Dividend of 0.35p up 16.7%. “The Group enters the current year with positive momentum in all areas other than Education and Domiciliary Care. The scale of this positive momentum enables us to be optimistic about our financial performance in the current year and beyond. We continue to face the future with confidence.” Sub 10x PE. No 2017 forecasts in the market.

Private & Commercial Finance (LON:PCF) 30p £51.04m

18 mth results to Sep16 from the finance house. Adjusted PBT of £5.6m. 12 months underlying profit before tax was up 38% to £4.0 million. Return to the dividend list with a recommended final dividend of 0.1p per share. Over £100 million of new business volume for the 18 months period. Total portfolio growth of 13% to £122 million. “By establishing itself as a bank the Group will, for the first time, be on an equal footing with its competitors with regard to funding cost. We therefore see opportunity and do not expect the forecast lower economic growth in the UK to undermine our current strategy.” FYSep17E revs £63.4m, PBT £4.11m.

Dalradian Resources (LON:DALR) 80p £193.9m

Dalradian announced results from a third test stope at its Curraghinalt Gold Project in Northern Ireland. Stope 3 is located on the V-75 vein complementing two previous test stopes in the same area. The third stope was used to validate the long-hole mining method on a relatively shallow dipping  portion of the vein in comparison to Stopes 1 and 2. Stope 3 attained an average width of 1.80 metres, with estimated dilution to the designed stope of 64% and removal of an estimated 303 oz of gold at 9.41 g/t from 1,001 tonnes material, 35% more gold than predicted in its resource model.

Surface Transforms (LON:SCE) 23.75p £21.41m

H1Nov16 trading update from the manufacturer of next-generation carbon ceramic brake discs for the automotive and aircraft industries. Revenue for the period was £327k (2015: £782k) and whilst less than the corresponding period last year, is in line with management expectations. Whilst the Company expects FY sales and gross margins will be broadly similar to prior year, increased overheads reflecting additional costs of the new larger site, and R & D costs are expected to mean that losses will be higher than the prior year, but within the range of broker expectations.

Synectics (LON:SNX) 185p £32.9m

FYNov16 trading update from the specialist in the design, integration, control and management of advanced surveillance technology and networked security systems. Revenues approximately £71m vs £68.5m.  Underlying results are anticipated to be in line with market expectations. Oil & Gas tough but gaming exceptionally strong with wo major new-build casino projects being delivered in the Far East. FYNOV16E rev £75.2m, PBT £2.4m.

BNN Technoology (LON:BNN) 144p £295.6m

Strategic & Trading Update from the Chinese technology, content & services company. Gross sales of approximately RMB 1.3 billion Q4-to-date.  Exceeded RMB 1 bn (c£120m) in Nov 2016 after 4x increase in volumes versus October.  Business activity accelerated, supported by investment brought forward into FY2016. Entry to fast growing Chinese digital advertising market with significant new contract. Further contracts including prestigious content agreements, expected before year-end. Nasdaq process well advanced. Investing heavily in R&D.

Van Elle Holdings (LON:VANL) 115p £92m

HY Oct 16 trading update from the geotechnical contractor offering a wide range of ground engineering techniques and services to customers in a variety of UK construction end markets. Trading was in line with Board expectations, with high levels of enquiries and an order book as at 1 November 2016 ahead of the start of the period. Group well positioned for H2, which is traditionally the busier period and includes work in the Specialist Piling division scheduled over the Christmas holidays and a number of anticipated contract awards and starts in the new calendar year.

Pressure Technologies (LON:PRES) 137.5 p £19.9m

Acquisition of UK based Martract Limited, a profitable, cash generative engineering business that specialises primarily in the grinding and lapping of ball and seat assemblies and gate valves.  The business is well known to the Group and has been a key supplier over 15 years. The Acquisition is a strong strategic fit with the Precision Engineering Division. Max consideration  £4.3m. The Board expects that the Acquisition will be immediately earnings enhancing. For FYAug16 Martract had revenues of £1.2m and adjusted proforma EBITDA of £0.45m

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Thu, 08 Dec 2016 09:13:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/26696/breakfast-news-aim-breakfast-armadale-capital-imc-exploration-groupservocaprivate-commercial-finance-dalradian-resources-surface-transforms-26696.html
Dow Theory, China & QECB drive markets higher http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26695/dow-theory-china-qecb-drive-markets-higher-26695.html FTSE 100 Index called to open +15pts at 6915, having eased back from 6940 overnight highs after yesterday’s bullish break beyond 6890 was built upon to complete yet another bullish flag pattern. Extension of December’s bounce to 4.4% and the clearing of 2-month falling highs resistance bodes well for continuation of this Santa Rally towards October’s 7130 all-time highs. Bulls likely need to see overnight highs of 6940 overcome before jumping in. Bears are watchful of any signs that 6900 and yesterday’s 6890 break-out are being troubled. Watch levels: Bullish 6845, Bearish 6895.

Calls for another positive open in Europe come after Wall St extended its Trump-inspired rally to make fresh all-time highs. This was helped by a strong Buy signal for followers of Dow Theory and confidence that the ECB will extend its QE programme this afternoon to keep the accommodative policy gravy train rolling and help offset a likely Fed rate hike next week. Bullishness has been built on overnight via upbeat China trade data demonstrating a reassuring rebound in both Imports and Exports growth, suggesting both domestic and foreign demand that supports the current positive global outlook within the investment community.

Japan’s Nikkei has seen its overnight rally take it ever closer to fresh 2016 highs despite a downward revision to GDP growth forecasts, helped by persistent JPY weakness versus major currency peers. Note Samsung shares hitting fresh all-time highs in South Korea. Australia’s ASX is rallying towards August’s highs of the year as Miners are driven north by a rally in iron ore prices that has been vindicated by overnight China Trade data. China equities surprisingly flat.

Both the Dow Jones Industrial and the S&P 500 closed at record highs (+1.5% and +1.3% respectively) as a significant milestone was reached in the Trump rally. The Dow Jones Transport average reached all-time highs (for the first time since 2014) simultaneously to the Industrial average, suggesting that increased goods production is being sufficiently transported, an generally accepted bullish signal. This resulted in yesterday evening’s rally with Trump-focused sectors (Financials, Transports, Infrastructure) leading the charge, whilst the technology focused Nasdaq also rallied 1.1% however failed to reach all-time highs.

Crude Oil prices continue to slide as investors looks to Saturday’s meeting between OPEC and non-OPEC producers to confirm the group’s production cut deal. The conditional agreement made in Vienna last week hinged on the participation of non-members, however with the exception of Russia, many producers are tentative about joining the agreement. Concerns US shale producers will pick up production in the wake of the OPEC deal will only further add downward pressure to crude prices.

Gold staged a breakout from a 3 week downtrend as expectations for an extension of the ECB’s QE programme today helped alleviate downward pressure placed on the precious metal by the upcoming US central bank equivalent FOMC meeting next week, further helped by a weaker USD. However, the safe haven asset failed to maintain a break out from the $1178 mark, suggesting limited upside.

In focus today will be the ECB’s latest monetary policy update, with Draghi & co. widely expected to announce a 6-month extension to its current quantitative easing (QE) bond-buying stimulus programme whilst maintaining its €80bn monthly purchase limit. However, the meeting will be more closely watched for any mention of the tapering of QE to hint at an endgame, whether in the ECB’s economic forecasts or Draghi’s post-decision presser.

Macro-wise, a barren European slate means that the only release of note is US Weekly Jobless Claims, although these will likely go unnoticed after last Friday’s blowout unemployment figure.

The only other speaker, Draghi aside, is the Bank of Japan Governor Kuroda shortly after 9am, whilst further Brexit soundbites could arise on the final day of the UK Supreme Court hearing on Article 50. Note, the full result of the hearing won’t be made until January.

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Thu, 08 Dec 2016 08:37:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26695/dow-theory-china-qecb-drive-markets-higher-26695.html
VSA Capital Market Movers -Sula Iron & Gold http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/26694/vsa-capital-market-movers-sula-iron-gold-26694.html Sula Iron & Gold (LON:SULA)
Sula Iron & Gold  has announced the results of further analysis of the historic drill core recovered prior to the November 2015 programme. SULA has also announced the issue of equity arising from the exercise of warrants. Consequently 65,468,750 new ordinary shares were issued at a price of 0.16p/sh resulting in gross proceeds of £104,750. The warrants related to fundraisings in February and March 2016.

The highlights of new assays included 0.7m at 28.9g/t Au from 13.6m depth, 1m at 1.64g/t Au from 35.3m depth and 6.45m at 1.72g/t Au all of which were oxide samples. There was also 1m at 1.26g/t Au from 108.3m depth from a sulphide sample.

In total 25 samples were collected from historic drill holes, all of which were part of the campaign now known to have drilled sub parallel to the dip of mineralisation. Whilst the November 2015 results are likely to demonstrate more accurately the potential of the deposit these latest assays highlight the existence of shallow oxide mineralisation with strong grades.

We reiterate our Speculative Buy recommendation although our target price is reduced marginally to 1.7p/sh to reflect the dilution.

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Thu, 08 Dec 2016 08:35:00 +0000 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/26694/vsa-capital-market-movers-sula-iron-gold-26694.html
Beaufort Securities Breakfast Alert: Armadale Capital, SerVision, Carillion and Joules Group http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26693/beaufort-securities-breakfast-alert-armadale-capital-servision-carillion-and-joules-group-26693.html "Having backed Brexit with an overwhelming majority yesterday, voting in favour of triggering article 50 by 31st March 2017, MPs also supported the labour motion calling for the government to unveil its proposals ahead of this date in order to permit minister to 'properly scrutinise' the plans. Accepted the motion was Theresa May's concession to keep her timetable on track, but has it made the likely outcome any clearer? No really is the answer. The government is still awaiting the result of its appeal at the Supreme Court, which is expected in January, which will require MPs to separately approve the issue if it loses. Meanwhile, of course, the EU's lead Brexit negotiator, Michel Barnier, has conveyed three principal messages regarding the process of this divorce, namely: LON:i) that negotiations should be shorter than the prescribed two years, lasting less than 18 months; LON:ii) the EU-27 remain his overriding priority and; LON:iii) the final outcome will be financially worse for the UK than under its existing EU membership. While not mentioning the UK's outstanding financial liabilities to the EU in his recent deliberations, Mr Barnier told colleagues he estimated the British exit bill wcould be as much as EUR60bn, and settling this matter would be a necessary first step toward building a new partnership. Not that European woes will be on the minds of investors first thing this morning. US equities surged once more overnight, as the Dow Jones burst through to another record high and all other major indices surged well in excess of 1%. Traders were unable to point at a specific trigger for this buying, other than pointing at a large number of futures contracts that had been placed by automatically by program trading algorithms which, in turn, accelerated purchases in the cash markets, as strategists across New York recommended sharp increases in equity weightings while suggesting that the Trump-inspired bear market in government bonds still has some way to go. Asian equities mostly rode again on Wall Street's coat-tails, with the ASX leading the way as its commodity-heavy index continued to drive higher on spiking minerals prices and the expectation of increased global activity. The Nikkei also put in a strong performance, despite reporting growth figures quite sharply below first estimates, leaving only the Shanghai Composite to record a fractional loss. Europe today is due to make its interest rate decision, followed by a press briefing by ECB president, Mario Draghi; bond investors are already betting that he will confirm a 6-month QE extension, although they will remain sensitive to any suggestion of a future timetable beyond September 2017 to commence tapering. No significant macro data is expected from the UK today, but later this afternoon the US is due to release its jobless claims numbers. UK corporates due to report earnings or trading updates include Capita LON:CPI), DS Smith LON:SMDS), Mulberry Group LON:MUL), Ocado LON:OCDO), Servoca LON:SVCA), Sports Direct LON:SPD) and TUI LON:TUI). Traders will also remain aloof for further details regarding the overnight transaction between Russia and a consortium formed by Glencore LON:GLEN) and Qatar, in which a 19.5% stake in the state-controlled oil giant, Rosneft, was sold in a deal valued at US$11.3bn. Such a disposal of part of the country's 'crown jewels' will quite possibly be seen as a sign of financial stress from Putin's government, and lead investors to consider what other valuable assets might also be put on the auction block. London equities will again ride the bullish wave coming from across the Atlantic, with the FTSE-100 seen rising some 15 points in early trade."
- Barry Gibb, Research Analyst
 

Europe
The FTSE-100 finished yesterday's session 1.80% higher at 6,902.23, whilst the FTSE AIM All-Share index closed 0.32% up at 813.45. In continental Europe, the CAC-40 finished 1.36% higher at 4,694.725 whilst the DAX was 0.85% better-off at 10,986.69.
Wall Street
In New York last night, the Dow Jones gained 1.55% to 19,549.62, the S&P-500 added 1.32% to 2,241.35 and the Nasdaq rose 1.14% to 5,393.76.
Asia
In Asian markets this morning, the Nikkei 225 had risen 1.11% to 18,701.55, while the Hang Seng improved 0.55% to 22,927.31.
Oil
In early trade today, WTI crude was up 0.02% to $49.87/bbl and Brent was down 0.04% to $53.02/bbl.

Headlines
Sports Direct sees sharp fall in profits
Sports Direct (LON:SPD) has reported a big drop in half-year profits after being hit by the fall in the pound. The retailer, which has been heavily criticised for the treatment of some of its workers, said underlying pre-tax profits fell 57% to £71,6m. Chief executive Mike Ashley said the past six months had been "tough for our people and performance". The company said it was continuing in its efforts to become the "Selfridges" of sports retail.

Company news
Armadale Capital (LON:ACP, 3.40p) – Speculative Buy
Armadale Capital announced today a maiden JORC-compliant resource of 40.9Mt grading 9.41% total graphic content (TGC) for its Mahenge Liandu graphite project in south-east Tanzania. The highly prospective Liandu project is located in an area of proven course flake, high-grade graphite resources and is adjacent to Kibaran Resources' (KNL.A) Epanko project (23.3Mt grading 9.4% TGC) and Black Rock Mining's (BKT.A) Mahenge graphite project (162.5Mt grading 7.8% TGC). Metallurgical testwork, to determine initial purity and flake size distribution, is on-going and is expected to be finalised by Q1 2017.

Our view: Armadale's management has delivered, as promised, its maiden JORC resource on Mahenge by year end. We are encouraged by the high-grade total graphite content of 9.41%, more specifically the higher-grade zone comprising 32.2Mt grading 10.47% TGC within the ore body. We look forward to results from the metallurgical test work confirming initial purity and flake size due in Q1 2017. The company is looking to capitalise on the expected growth in the graphite market driven by increasing applications particularly in the energy storage market. Management has cleared its first hurdle with a significant maiden resource estimate, we expect these resources to expand following the 2017 drill programme which is expected to commence post wet season in Tanzania. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as a corporate broker to Armadale Capital PLC

SerVision (LON:SEV, 1.50p) – Speculative Buy
When SerVision, the AIM quoted developer and manufacturer of digital video security, announced in its interims results for the 6 months ended 30 June 2016, the Directors were cautiously optimistic of an improved result for the year when compared to 2015. This continues to be the situation. Notwithstanding this, the current cash position of the Company remains tight. The Directors are in discussions with a number of parties regarding long term future funding but, in the meantime, have decided that it would be prudent to secure short term funding for the Company. On 5 December 2016, a facility letter was entered into with CSS Alpha (BVI) Ltd to borrow US$215,000 of unsecured short term financing at an interest rate of 1% per month, repayable in instalments between January and May 2017. The short-term loan is subject to a US$15,000 arrangement fee, payable to the Lender on the draw-down of the loan by the Company. The loan has been drawn down in full.

Our view: SerVision's Chairman and CEO, Gidon Tahan, is demonstrating his confidence in his Company's future. He has provided a personal guarantee to the Lender covering the amount of the loan in the event that the Company defaults on its repayments. Mr Tahan is receiving no payment, nor any other benefit, for providing this guarantee. The provision of the guarantee by Mr Tahan is deemed to constitute a related party transaction under the AIM Rules. The Directors of the Company (with the exception or Mr Tahan), having consulted with the Company's nominated adviser consider the terms of the guarantee to be fair and reasonable insofar as the Company's shareholders are concerned. Operationally, a number of positive signs were demonstrated with release of its interim results at the end of September which recorded higher revenues and reduced losses. In particular, SerVision's decision to open an office in the UK had paid off, contributing over 50% to SerVision's revenues during the period while management also engineering a sharp fall in overall administrative costs. Having strengthened its relationship with DHL, the UK office carried out installations of SerVision's mobile video solutions for more than 100 DHL vehicles in H1 2016. The Company's R&D team also took initiatives to improve the performance of its IVG and SVCentral monitoring software by adding new features and functions to both platforms. Recently, SerVision supplied a first order of 28 IVGs for a new project in China and a further one for 70 IVGs that will be deployed on police vehicles in Tegucigalpa, Honduras. It has also started IVG pilots with a number of bus companies, both in the UK and around the world. In the light of these ongoing developments and the improved performance in H1 2016, Beaufort retains its Speculative Buy rating on the shares.

Beaufort Securities acts as a corporate broker to SerVision plc

Carillion (LON:CLLN, 246.10p) – Buy
Carillion, a leading integrated support services company, yesterday announced its full year trading update for the FY2016. The Group said it expects strong growth in total revenue and increased operating profit, primarily led by Support Services division, which is expected to generate around 66% of the Group's total operating profit (FY2015: 57%), while overall operating margin is expected to be slightly lower. The increase will more than offset the reduced contributions from the sale of equity in Public Private Partnership ('PPP') projects and from Middle East construction services, while the contribution from construction services (excluding the Middle East) is expected to be in line with FY2015. Net borrowing is expected to be below £290m due to absence of working capital outflow seen in the H1. The Group noted that following strong performance in the H1 with £2.5bn new and probable orders, the momentum for order intake has slowed in the H2 as BREXIT vote has triggered UK Government Departments to reassessed their spending priorities ahead of the Autumn Statement. Lower and volatile oil prices also resulted slower pace of contract awards in the Middle East, particularly in Oman. The Group therefore expect the total value of orders and probable orders won in the H2 to be around £2bn (H1 FY2016: £2.5bn), bringing approximately £4.5bn for the full year. The total order book and probable orders will be summed to c.£16bn (FY2015: £17.4bn) for the FY2016, with revenue visibility for FY2017 of around 70% compared to 84% this time last year. Revenue visibility for the framework contracts, which is not included in the total order book and probable orders is £1.5bn over the next 5 years. The pipeline of specific contract opportunities, which the Group currently bidding or expect to bid, is expected to be in line with last year (end-FY2015: £41.4bn). Separately, the Group announced that its Canadian subsidiary, Rokstad, has been selected by Manitoba Hydro as the preferred provider for the c.£120m next phase of its Bipole lll high-voltage transmission line project. The Group expect work to begin before the end of the year, with completion scheduled for 2018. The Group will announce its preliminary results on 1 March 2017.

Our view: Carillion reported strong trading update and said it has performed in line with expectations. Although the lower profit from equity sales in PPP projects and the challenging trading environment from Middle East construction services has reduced the underlying operating profit, strong revenue growth and operating margin in Support Services division has pushed the overall underlying operating profit higher. In order to mitigate the impact somewhat, looking ahead in FY2017, the Group will focus on part of Middle East markets where the demand remains high. For PPP, the Group sees steady flow of pipeline opportunities in the health and transport sectors in the UK and Canada. The Group also welcomed the UK Government's recent Autumn Statement in which it increased its commitment to investing in economic infrastructure, particularly in sectors such as highways, digital infrastructure and railways, where Carillion is a market leader. Considering the management's confidence in FY2017 and the Group expecting increase in activities in Support Services continue to more than offset a further reduction in operating profit in PPP projects in the FY2017, we will make no change to our recommendation. The order book, framework contracts and pipeline of contract opportunities remain strong. Beaufort reiterate its Buy rating on the shares.

Joules Group (LON:JOUL, 197.00p) – Buy
Joules Group PLC, a British premium lifestyle brand, yesterday provided its pre-close trading update for the 26 weeks ended 27 November 2016 ('H1 FY2017'). During the period, revenue advanced +16.2% to £81.4m, comprised of +15.8% increase in Retail revenue to £56.7m and +17.2% growth in Wholesale revenue to £24.5m, against the comparable period (H1 FY2016). Good performance in both stores and e-commerce led Retail revenue growth while the Group achieved Autumn/Winter 2016 Wholesale order-book across all markets. Gross margin is anticipated to have improved by c.+1% year-on-year, as higher proportion of full price sales, enhanced distribution efficiencies, and favourable product mix within international wholesale sales has benefitted. On the operational front, the Group has opened 10 net new stores and it expanded product ranges within key US wholesale accounts. The Group has also launched Kidswear in a new partnership with a leading US department store. Joules' CEO, Colin Porter commented "We look forward with confidence to the second half of the financial year and beyond, despite the uncertain macro-economic outlook". Joules will release an update on Christmas trading in early January and announce Interim results on 31 January 2017.

Our view: Joules' H1 pre-close trading update was encouraging. The Group recorded growth in revenue as it increased brand footprint, expanded customer base and both new and core ranges across product categories saw strong performance. Both Retail and Wholesale channels recorded strong growth and gross margin improvement will enhance the profitability. Looking ahead, the Group said it saw strong growth in Wholesale order book for Spring/Summer 17 and is well positioned for the Christmas trading period, with confidence for remainder of the FY2017. We believe Joules remain capable to continue its growth momentum. Beaufort reiterate its Buy rating on the Shares and look forward to the Christmas trading update.

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Thu, 08 Dec 2016 08:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26693/beaufort-securities-breakfast-alert-armadale-capital-servision-carillion-and-joules-group-26693.html
Italy Rebel Economist Hones Plan to Ditch the Euro and Restore the Medici Florin http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/26692/italy-rebel-economist-hones-plan-to-ditch-the-euro-and-restore-the-medici-florin-26692.html Italy Rebel Economist Hones Plan to Ditch the Euro and Restore the Medici Florin
Here is the opening of this informative article by Ambrose Evans-Pritchard for The Telegraph:

The once-unlikely and remote prospect of an anti-euro government in Italy is suddenly becoming a real possibility, threatening to rock the European Union to its foundations within weeks.
Events in Italy are moving with lightning speed. Key figures in the Democrat Party of premier Matteo Renzi have joined the chorus of calls for snap elections as soon as February to prevent the triumphant Five Star Movement running away with the political initiative after their victory in the referendum over the weekend.
Mr Renzi has not yet revealed his hand but close advisers say he is tempted to gamble everything on a quick vote, betting that he still has enough support to squeak ahead in a contest split multiple ways and that his opponents are not ready for the trials of an election.
It could easily spin out of his control, opening a way for a tactical alliance of Five Star, the Lega Nord, and a smattering of small groups, all critics of
The man tipped as possible finance minister of any rebel constellation is Claudio Borghi, a former broker for Merrill Lynch and Deutsche Bank, and now a professor at the Catholic University of Milan.
"We are coming to the point where Italy must make the real decision: are we for Europe or are we against it?" he told the Telegraph.
"What is emerging is a list of four parties or groups who all have one thing in common. We all agree that nothing is possible until we leave the euro."
"Europe has brought us a depression worse than 1929. It has led to entire peoples being broken and humiliated, like the Greeks, all for the sake of preserving the infernal instrument of the euro. This whole disaster has been adorned by a chain of lies, shouted ever louder because they are afraid that the colossal damage they have done will be discovered," he said.
Dr Borghi said the landslide 59:41 result in the referendum is a shock to Italy's powerful vested interests, or "poteri forti". "They are absolutely scared because none of their tools of control are working any more," he said.
"They invested huge prestige in the campaign. Confindustria [Italy's CBI], the chambers of commerce, and all of Italy's big employers were for the 'Yes' side. They said the banks would collapse, that we would lose all our savings, and that we would all go to Hell if we voted 'No', but it didn't work. It was Brexit reloaded," he said.
Professor Borghi said withdrawal from the euro would be messy but there are ways of mitigating the effects, first by creating parallel liquidity and letting it seep into daily life.
"The Italian treasury has €90 billion (£76 billion) in arrears on contracts. These could be paid with treasury bonds issued for as little as €50, €20, €10, or even €5, giving us time to create a second currency.
"When the time comes we can then switch to this new currency. It can be done electronically. We don't even need to print paper," he said.
Prof Borghi said the cleanest option is for Germany to leave the eurozone. If that is impossible Italy can pass a law to convert its debt obligations into lira overnight - or the 'florin' as he prefers to call it, harking back to the days of Florentine ascendancy under the Medici.
"The losses would shift to the national central banks through the Target2 system," he said. This means the Bank of Italy would repay €355bn on liabilities to eurozone peers (chiefly the Bundesbank) in devalued lira. The Bundesbank would face instant paper losses on its credits - effecting €700bn in the likely event that an Italian exit would lead to a general return to sovereign currencies.
The sums are in one sense an accounting fiction. The trial run was the collapse of the Swiss franc peg against the euro in January 2015. The Swiss National Bank suffered vast theoretical loses on its holdings of eurozone debt when the franc revalued, but life went on regardless.
The gamble is that large sums held by Italians in accounts in London, New York, Paris, or Munich, or held in safe-deposit boxes in Switzerland, would flow back into the system as soon as the boil is lanced, and once Italy has returned to exchange rate viability. Foreign investors would view Italy as a far more competitive prospect.
"I don't see any disaster. There is no way to smash our currency since we have a trade surplus. If we had a weaker exchange rate we would have an even bigger surplus," he said.
For Italy's eurosceptics a return to the lira would be a liberation after fifteen years of economic decay that has hollowed out the country's manufacturing core. Industrial output has fallen back to the levels of 1980. Real GDP per capita is down 13pc from its peak.
A report this week from the statistics agency ISTAT said the numbers at risk from poverty and social exclusion last year rose to 28.7pc, and a fresh high of 46.4pc in South, and 55pc in Sicily - the epicentre of the 'No' vote in the referendum.
A study by Mediobanca found that Italy's growth rate tracked that of Germany almost exactly for thirty years. The pattern changed with the advent of the euro, which precluded devaluations and led to a slow but fatal loss of labour competitiveness  - like a lobster being boiled alive.



David Fuller's view
Eurocrats remain in isolated arrogant denial.  Since the 1990s, numerous people have pointed out that no currency union in history has ever survived without fiscal union.  Having ignored this historical evidence in the interests of ‘discipline’, they have succeed in impoverishing countries which were certainly not bankrupting themselves as members of the post WWII alliance known variously as the European Common Market and the European Free Trade Association.  In fact, they were doing rather well, managing their own currencies in line with their economic performance.
However, once they entered the European Exchange Rate Mechanism, the initial benefit of lower interest rates was eroded by the loss of control over their own currencies.  Economies known primarily for their agricultural products and tourism can be prosperous, not least Italy which has an industrial core, but their currencies seldom match those of the primarily manufacturing nations over the longer term.  
Without fiscal union, which understandably has even less appeal for the electorates in EU countries today, the currencies have to change.  Either Germany leaves the Euro returns to the Deutsche Mark, or the Southern European countries leave the Euro.  Germany will not want a stronger currency but Southern European nations would welcome an orderly return to their former currencies.  It is in everyone’s interests that this be done in a non-punitive manner, but wise leadership has not been a characteristic of Euroland. 
(Note this prescient advice from AEP nearly 6 years ago: Self-righteous Germany must accept a euro-debt union or leave EMU)

 



Like the House of Bourbon, the Euro Will Eventually be Broken on the Anvil of Popular Insurrection
Here is a middle section of this interesting article by Jeremy Warner for The Telegraph:

There have been many other things that Europe has got wrong, but the overarching one is monetary union. From this original sin flows so many of our current difficulties. We know this to be true because countries in the EU but outside the single currency, such as Britain and Sweden, have fared much better than those in it.
So how come the euro hasn’t already collapsed under the weight of its own contradictions? And with populist, nationalistic insurgency in the ascendant across western economies, are we finally approaching the end game?
The euro is virtually unique in the history of monetary economics in being a currency without a government. Rather it is a shared, or common currency, in which each member notionally has some sort of a say. Europe’s founding fathers knew that monetary union couldn’t be made to work without a high degree of accompanying fiscal and political union, but cynically regarded it as a means of achieving that end. A United States of Europe would be forged in crisis, they figured, driving through the goal of political union against the centuries old instincts of Europe’s many tribes.
And in theory it could indeed be made to work. But in a confederation of proud nation states which finds it virtually impossible to agree even common deposit insurance, let alone a proper banking or fiscal union, it seems ever less likely.
No monetary union can last for long without a unified system of deposit insurance. It would be unthinkable, for instance, for London to refuse to participate in  deposit insurance for the country as a whole because there is a bank in Yorkshire which it fears might go bankrupt.
Yet that’s precisely what happens in the eurozone; Germany refuses common deposit insurance with Italy because it fears being left on the hook for essentially insolvent banks such as Monte Dei Paschi Di Siena. Similarly, it would be unthinkable for the citizens of Edinburgh to be made wholly responsible in extremis for bailing out the whole of Royal Bank of Scotland. Fiscally, it would break them beyond redemption. But that's essentially how it works in Europe.
The eurozone pretends to be a fully fledged monetary union while behaving as if it were still a collection of siloed nation states.



David Fuller's view
In financial terms, EU officials are likely to be the last to accept that they are on the wrong side of a bad trade.  Too much uncertainty and anger are being felt right now.  Also, all those unelected and pampered EU bureaucrats in Brussels will prioritise keeping the EU show on the road, whatever the cost.
This item continues in the Subscriber’s Area where a PDF of Jeremy Warner’s article is posted.

 



Email of the day
On the Milken Institute London Summit:
Yesterday I attended the annual Milken Institute London Summit. I was invited by the organizers as a non-paying guest I am glad to say in view of the high registration fee. It was a great day, the organizers did a superb job, and  I have extensive notes  from several sessions that I am sure will be of interest to you and Eoin. I have attached a pdf containing my notes on the opening plenary which was a panel discussion on Brexit. I wrote this up first because I thought it would interest you. It was particularly thought-provoking and entertaining, as you can read! The video of the 1 hour panel is available today online at the Milken Institute website and I have added the URL within the pdf. If you think subscribers would be interested, then please feel free to post the notes in your daily update. Please feel free to name me as the contributor if you wish.
Other sessions I attended were about finance, investment, healthcare and new technologies. I will send more summaries in coming days.



David Fuller's view
Thank you, David, and I am sure subscribers would be interested to hear your further notes on topics of interest from the Milken Institute Summit.  However, having read your droll summary of the first session, which I would call the mostly anti-Brexit panel notes, I was very glad that you did not have to pay the “high registration fee”.
I hope you were able to ask questions of the panel members, or at least throw fruit.  I would have like to ask Anton Muscatelli why he thought the negative impact in loss of GDP for the UK by 2030 was going to be 2.7%-9.5%, rather than perhaps 2.8%-9.6%.
I like Niall Ferguson and find him somewhat abrasive but always interesting and generally well informed. I am sure he saved the panel as an event, although they appeared to ignore his sensible challenges.  They were frightened and rude, it seems.
Good point on the Russian chief economist of the European Bank for Reconstruction and Development, who sounds like an EU propagandist.      
Roland Rudd’s quip about “the great lesson of the referendum is you have to be mad to hold one”, is amusing but also suggests that he does not really believe in democracy.  After all, what could be more democratic than a referendum, with a straightforward In or Out vote?
I though Ferguson’s follow-up challenge was most apt and I’m not surprised that they ignored him for saying, correctly in my view, that they were condescending and patronising.
The chair’s concluding statement: “Does Democracy only work in a society of intelligent people?” – is indeed stunning.  We hear some of that from Remainers, and many Democrats have uttered very similar comments following Trump’s victory. The President-elect’s apt, unstated repost is the stunning new all-time highs on Wall Street following two or more year long trading ranges for most US stock market indices.  
(Note: the email and Brexit panel notes are from Dr David Brown who will be the guest speaker at our next Markets Now on 16th January. David’s fascinating topic will be: “Our new Industrial Revolution”.  I can’t wait.)   



The Markets Now
Here is the new brochure for the first Markets Now of 2017, on Monday evening 16th January, at London’s Caledonian Club. 




David Fuller's view
Iain Little and I will be joined by the distinguished speaker, Dr David Brown, discussing one of his favourite topics: ‘Our new Industrial Revolution’.
We will have a few political revolutions to discuss as well.  I look forward to seeing our interesting subscribers at another lively and enjoyable evening. 
Here is Iain Little’s excellent presentation, delivered on 28th November.  Unfortunately, I am unable to post Clive Burstow’s timely presentation on Global Resources for reasons of compliance, including some of the proprietary material covered.

Please note: I will be otherwise engaged on Thursday & Friday, but will resume my commentary on Monday, including an Audio.   

 



Video commentary for December 7th 2016




Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.



The Chart Seminar 2017




Eoin Treacy's view
We are currently in the planning stages for choosing venues for The Chart Seminar next year.

Right now we will certainly have a London seminar in November.
Based on positive subscriber feedback we will have a seminar in Singapore towards the end of the 2nd week of April. The CFA Institute has once more agreed to co-host this event and I will also provide certificates for continuous professional development to anyone who wants one.
I now also have some copies of the Mandarin edition of Crowd Money so please specify which version you would like to receive at the seminar when booking.
If you are interested in either of these venues or would like to suggest a venue please contact Sarah at [email protected]  I would be more than happy to plan a US based seminar next year if we have the critical mass to make it viable and I will likely be stopping off in Japan on the way back from the seminar if there is any interest for an event in Tokyo.



Chinese-Korean group to build $2 billion lithium batteries plant in Chile
This article by Cecilia Jamasmie for mining.com may be of interest to subscribers. Here is a section:
Lithium, frequently referred to as "white petroleum," drives much of the modern world, as it has become an irreplaceable component of rechargeable batteries used in high tech devices.
The market, while still relatively small — worth about $1bn a year — is expected to triple in size by 2015, according to analysts at Goldman Sachs
That should be great news for Chile, as the country contains half of the world’s most “economically extractable” reserves of the metal, according to the US Geographical Survey (USGS). It is also the world’s lowest-cost producer, thanks to an efficient process that makes the most of the country’s climate.
Chile is essentially “the Saudi Arabia of lithium,” according to Marcelo A. Awad, executive director of the Chilean brand of Wealth Minerals, Canadian company that also has interests in Mexico and Peru.
The country, he noted in a recent interview, is perfectly positioned, with ports across the Pacific from the world’s largest car market, China, which is expected to increase electric vehicles production in years to come. There, lithium is also used to manufacture rechargeable ¬batteries that power hundreds of millions of smartphones, digital cameras and laptops.
The challenge for foreign investors, particularly the Asian conglomerate, is to persuade Chilean authorities of making the leap from exporting the white metal to producing lithium batteries at the point of extraction.
Estimates from the group’s advisors believe opening the proposed plant would make the value of the product 35 times higher than what it could be obtained by just selling it as lithium carbonate



Eoin Treacy's view
Elon Musk might be one of the world’s great promotors but there is no denying that he has upended the automotive sector with just about every major auto manufacturer planning to release a range of electric vehicles within the next few years.

 



Electric Cars May Take an OPEC-Sized Bite From Oil Use
This article by Jessica Shankleman for Bloomberg may be of interest to subscribers. Here is a section:
Wood Mackenzie’s view echoes the International Energy Agency, which last month forecast global gasoline demand has all but peaked because of more efficient cars and the spread of EVs. The agency expects total oil demand to keep growing for decades, driven by shipping, trucking, aviation and petrochemical industries.

That’s more conservative than Bloomberg New Energy Finance’s forecast for EVs to displace about 8 million barrels a day of demand by 2035. That will rise to 13 million barrels a day by 2040, which amounts of about 14 percent of estimated crude oil demand in 2016, the London-based researcher said. Electric cars are displacing about 50,000 barrels a day of demand now, Wood Mackenzie said.



Eoin Treacy's view
There is the world of difference between predicting that electric vehicles will account for an increasingly large portion of the global automobile market and predicting that aggregate demand for crude oil will decline meaningfully. 

 



Outlook for 2017: Better times ahead
Thanks to a subscriber for this report from Commerzbank which may be of interest. Here is a section:
According to a joint study by Thomson Reuters GFMS and the Silver Institute, the global silver market will record a supply deficit this year for the fifth year in succession. However, at 52.2 million ounces (1,623 tons), this is less than half what it was last year (chart 7). Silver demand should have fallen by 9% to a 4-year low of 1,064.6 million ounces (33,109 tons), while silver supply should fall by “only” 3% to 1,012.4 million ounces (31,486 tons). The biggest drag on the demand side is a 24% decline in demand for coins and bars. Jewellery demand is also expected to dip by nearly 8%. Industrial demand, which accounts for around half of total demand for silver, also declines, albeit only slightly. A steeper fall has been prevented by the rise in photovoltaics which is projected to have risen by 11% to a record level.
On the supply side, 2016 should see the first – albeit slight – fall in global mining production for 13 years (chart 8, page 5). This is because, following the closure of numerous zinc and lead mines, less silver is produced as a by-product. Due to liquidation of hedging positions (dehedging) by mining producers, additional supply has been withdrawn from the market. The supply of scrap silver, however, remained virtually unchanged. Owing to a significant rise in demand for silver ETFs – GFMS assumes net inflows of 71.4 million ounces (2,220.5 tons) for 2016 – and almost as large an increase in exchange-registered stocks, the broader market deficit has increased to 185.5 million ounces (5,769 tons). This is the highest figure since 2008.

The deficit should turn out somewhat lower due to recent large ETF outflows, though.
For 2017, Thomson Reuters GFMS and the Silver Institute except silver demand to decline by a further 3% to 1,035.0 million ounces. The supply of silver on the other hand should rise by around 1% to 1,024.8 million ounces. All demand components apart from jewellery are expected to decrease, with coins and bars once again falling the most, dipping by 9%. Industrial demand should fall by 2%, as demand from the photovoltaic sector – in contrast to the previous year – is also expected to decline, meaning that it can no longer compensate for persistent weakness in other sectors. Industrial demand would thus shrink for the seventh year in a row (chart 9). The increase in the supply of silver is almost entirely due to a larger supply of scrap silver, which should rise by 11% in response to higher prices. This will largely compensate for the accelerated decline in mining production by around 2% compared with the previous year. At the same time, de-hedging by silver producers will decline next year, meaning that less supply will be withdrawn from the market. Consequently, the deficit on the physical silver market is expected shrink to only 10.2 million ounces. This would be the smallest deficit since the last surplus year of 2012. ETFs are expected to record inflows of 40 million ounces. The broader market deficit would thus amount to 50.2 million ounces, a reduction of more than 70% compared with 2016.



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

The bond market has priced in the return of some inflation, at least the kind central banks measure. However it has yet to appear in official statistics with the result that real interest rates have posted a rather large move. Precious metals tend to do best when inflation is outpacing interest rate increases (negative real interest rates) which is not currently the case. There is ample potential for inflation to pick up if fiscal stimulus is implemented next year which suggests there is scope for precious metals to regain some of their lost lustre next year.

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Thu, 08 Dec 2016 08:20:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/26692/italy-rebel-economist-hones-plan-to-ditch-the-euro-and-restore-the-medici-florin-26692.html
Small Cap Wrap: Ace Liberty & Stone, Capital for Colleagues, Crossword Cybersecurity, Digital Barriers, Physiomics Plc, TMT Investments, Toople, Warpaint London plc http://www.proactiveinvestors.co.uk/columns/hybridan-small-cap-wrap/26691/small-cap-wrap-ace-liberty-stone-capital-for-colleagues-crossword-cybersecurity-digital-barriers-physiomics-plc-tmt-investments-toople-warpaint-london-plc-26691.html Ace Liberty & Stone (ISDX:ALSP 4p/£39.3m)*

Ace Liberty and Stone, the active property investment Company, capitalising on commercial property investment opportunities across the UK, announced that the Company has drawn down a secured loan of £13.75m.  The facility is provided by Lloyds Bank Commercial Banking and has been used to complete the purchase of 1-5 Upper Market Square, Hanley (announced 5th October 2016), as well as to refinance properties owned at Marsh Mills, Plymouth; Shildon House, Gateshead; Bridge House, Dudley; Fawcett House, Sunderland and Hillcrest House, Leeds. The Company also announced that in 2016 Daniel Waylett, a shareholder, agreed to purchase the entire share capital of Ace (Sloane) Limited, the 100 percent subsidiary of the Company, which owns Colebrook Court, Sloane Avenue. The consideration totalled £1.55m for the disposal. The purchase of Colebrook Court was announced on 17 April 2016 for £1.5m in issue of new shares. The sale will release cash for further investment in new commercial properties.

Capital for Colleagues (ISDX:CFCP 62.5p/£6m)

Capital for Colleagues, the investment vehicle focused on opportunities in the Employee Owned Business sector, announced an update regarding its existing investee Company, Hire & Supplies Limited (H&S), which is engaged in tool and plant sale and rental from branches in the west of Scotland.  The £0.2m fixed term loan from Capital for Colleagues to H&S and the 100,000 Convertible Preference Shares of H&S held by the Company have been redeemed through the allotment to the Company of 'A' Ordinary Shares of £1 each in H&S with a value of £0.3m. The 'A' Ordinary Shares have preferential rights with respect to ongoing dividends and with respect to capital value in the event of the occurrence of certain exit events.

 

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

Crossword Cybersecurity, the technology commercialisation Company focusing exclusively on the cyber security sector, announced that the Company has successfully raised gross proceeds totalling £1.4m at a Placing Price of £1.90 per share. As part of the Subscription, Tom Ilube, Chief Executive Officer and Dr David Secher, Non-Executive Director, agreed to subscribe for new Ordinary Shares to raise proceeds of £260,995 as further detailed below.

 

Digital Barriers (LON:DGB 36.5p/£60.68m)

Digital Barriers, the specialist provider of visually intelligent solutions to the global surveillance, security and safety markets, announced that it has secured contracts across EMEA and APAC. The total value of these contracts is approximately £1.75m and includes: First major contract win for body-worn video surveillance, the multi-year contract, with a major Asia Pacific law enforcement agency, is valued at approximately £1.0m; €0.35m award for immediate delivery under multi-year counter terrorism framework agreement for the Group's facial recognition solution with European Ministry of Defence worth up to €3.5m and initial contract valued at £0.4m with a flagship Middle East government agency for EdgeVis Live surveillance solutions to enhance operational capabilities.

 

Physiomics (LON:PYC 0.02p/£1.23m)*

Physiomics, the Oxford based systems biology Company, announced that it has been notified of Innovate UK's intention to award the Company a grant for its proposed project "Decision Support Systems For Stratified Cancer Treatment", as part of Innovate UK's Biomedical Catalyst 2016 Feasibility Study Competition, co-funded by Scottish Enterprise and the Medical Research Council. In line with the Company's strategic objective to explore the personalised medicine market set out in the full year results RNS published on the 27th October 2016, the objective of the project is to create a prototype decision support system to improve cancer care by helping medical professionals make treatment decisions based on patient specific data. A Biomedical Catalyst Feasibility Study grant covers 70 percent of the costs of projects up to £0.2m in value.  The award of the grant, including the precise level of funding, remains subject to the submission of detailed project plans as well as a financial review by Innovate UK and the definitive award is likely to be made in Q1 2017.  Accordingly, whilst the directors are confident that the grant will be issued there can be no guarantee it will be, until the plans are approved. Further announcements will be made in due course. The Company also announced that it is now entitled to a payment from Sareum Holdings Plc for a three month modelling project conducted by the Company in 2010 in support of Sareum's cancer drug joint research program with The Institute of Cancer Research (ICR) and Cancer Research Technology Limited (CRT), as originally announced by RNS on 16th March 2010. 

 

TMT Investments (LON:TMT $1.875/$52m)*

TMT Investments, the venture capital Company investing in high-growth, internet-based companies across a variety of core specialist sectors, announced that The Climate Corporation, a subsidiary of Monsanto Company, has acquired VitalFields, one of its portfolio companies. The acquisition by Monsanto represents the ninth profitable exit by TMT from its investment portfolio since its admission to AIM in December 2010. Incorporated in Tallinn, Estonia, WeatherMe OÜ, trading as VitalFields, simplifies the many farming tasks involved with spraying, fertilising and sowing thanks to its app and web interfaces. Examples of the multiple capabilities that VitalFields offers to farmers include plant disease and growth phase modelling (tracking climatic patterns and analysing farmer's input to assess risks) and farm management functionality (from planning and managing farm activities to stock management and P&L reports). TMT originally invested €0.1m in the form of a convertible note in VitalFields in December 2013, which it subsequently converted into equity when VitalFields raised further capital in 2015.

 

Toople (LON:TOOP 5.25p/£5.62m)

Toople, a provider of bespoke telecom services to UK SMEs, announced the appointment of Mark Evans as Chief Operating Officer effective as of 21 November 2016. Mark has more than 14 years' industry experience, having previously held senior positions at 02. He joined Toople shortly after the IPO and has been leading the Company's digital omnichannel sales and contact centre strategy since launch. Mark will now lead the Toople customer engagement functions both from a people, software and channel marketing perspective, ensuring back office process is best in class and focusing on delivering a great customer experience to small businesses that is aligned to their needs. The Company also announced that having successfully delivered the integration of the Group's proprietary bespoke telecoms platform, Merlin, into the business, Dave Breith has now come to the end of his consultancy agreement with Toople. Toople owns the full Intellectual Property Rights for this platform. Dave's last day with the Company will be on 18 November 2016 .

 

Warpaint London (LON:W7L 131.75p/£83.58m)

Warpaint London, a specialist supplier of colour cosmetics and owner of the W7 brand, announced the admission of its ordinary shares to trading on the AIM of the London Stock Exchange. Dealings in the ordinary shares will commence at 8.00am under the ticker "W7L". Oversubscribed placing raising gross proceeds of £23m with institutional and other investors, including Board Directors, at a placing price of 97 pence per ordinary share. Warpaint London has a market capitalisation of approximately £62.6m at the Placing Price. The Directors believe that the Admission to AIM will raise the Company's profile, enhance W7's brand awareness and provide investment to accelerate the growth of the business, as described in the Admission Document.

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Wed, 07 Dec 2016 15:07:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-small-cap-wrap/26691/small-cap-wrap-ace-liberty-stone-capital-for-colleagues-crossword-cybersecurity-digital-barriers-physiomics-plc-tmt-investments-toople-warpaint-london-plc-26691.html
Today's Market View - Avocet Mining, Kodal Minerals, Sierra Rutile Ltd, Tertiary Minerals plc http://www.proactiveinvestors.co.uk/columns/sp-angel/26690/today-s-market-view-avocet-mining-kodal-minerals-sierra-rutile-ltd-tertiary-minerals-plc-26690.html Avocet Mining (LON:AVM) – Gold shipment from Inata
 

Kodal Minerals* (LON:KOD) – Exploration at Bougouni lithium project identifies new areas
 

Sierra Rutile (LON:SRX) SUSPENDED, – Iluka deal reinstated as independent experts confirm integrity of the dams
 

Tertiary Minerals* (LON:TYM) – Exclusive non-binding agreement to acquire Lassedalen

 

Copper at $5,914/t – expect to see copper break $6,000/t

Major miners rise as steel prices hit 2-year high with iron ore and steel prices both posting strong gains

European equities climb for a third trading session with financials leading gains and the Bloomberg World Banks Index hovering around the highest level in more than a year.

Steel prices helped higher by proposals by Chinese authorities to reduce polluting steel-scrap processing next year.

Gold and Brent are flat this morning reflecting little change in the US$ index.

Strong German data helped base metals go better yesterday supported by an underlying positive tone driven by Trump

The US dollar remains strong but with potential for further weakness should help the base metals go better in US dollar terms

Stronger US growth is firmly on the agenda as companies see Trump as a signal to take a more optimistic view of the world.

Strong US imports served to raise the US trade deficit to $42.6bn.

October imports into the US jumped 1.3% to highest level in 14 months to $229bn driven by a stronger US dollar and by a more optimistic view of US growth.

US Exports fell by 1.8% to $186.4bn due to lower shipments of farm products and lower value of petroleum products, aircraft and other industrial goods.


 

Vale – continues to miss creditor payments

Vale has now missed three bond payments since the Samarco jv tailings disaster last year.

Vale and BHP hope to restart the Samarco mine in mid-2017 once permits allow mining to resume.

The Minas Gerais state regulator in charge of Samarco’s licensing says that two public hearings to be held on December 14,15 will evaluate a plan to use an unused pit for waste storage. Vale are offering to use Vale infrastructure to resolve the issue of storing new tailings to enable a return to full capacity (Bloomberg)

 

Lithium – $2bn lithium battery plant to be built in Chile

Investors from China are reported to be in advanced talks with the Chilean government for the construction of a $2b lithium battery plant in Chile.

An initial $500m investment by a consortium of Chinese companies should prepare the way for an eventual $2bn plant employing 4,300 people.

The project sounds like a hybrid public / private partnership deal with the government to gain access to lithium brine salars in Chile for the production of 1,000t of lithium carbonate in 2018 rising to 10,000tpa in 2028.

The construction of the battery plant may be a secondary consideration promised to gain access to state held lithium salars and we are not sure why this would be built in the arid north of Chile.

Having said that, Tesla’s Giga factory is being built in the equally arid state of Nevada, though this is probably more for tax reasons.

Given renewed difficulty in getting money out of China there may be some risk to the timeline and financing of the this project.


Dow Jones Industrials  +0.18% at 19,252
Nikkei 225        +0.74% at 18,497 
HK Hang Seng   +0.55% at 22,801 
Shanghai Composite    +0.71% at   3,222
FTSE 350 Mining   +2.45% at 15,065 FTSE 350 +105% since 1st January
AIM Basic Resources   +0.67% at  2,397 AIM Basic Resources +47% since 1st January

Economic News

ECB policy meeting expected to continue to stimulate the Eurozone following Italian referendum defeat

The ECB is now suffering from a shortage of bonds to repurchase in its asset purchase program and may choose to turn to more innovative ways to better stimulate the European Union.  We have yet to hear much from talks between the ECB, Greece and the IMF held earlier this week.


US – Strong factory orders and labour productivity numbers released yesterday pointed to a solid growth momentum in H2/16.

Germany – A rebound in industrial production is pointing to stronger contribution from the sector to GDP growth in the final quarter.

Growth has been driven by stronger output of durable consumer goods and capital goods.

Industrial Production (%mom): 0.3 v -1.6 in Sep and 0.8 forecast.

Industrial Production (%yoy): 1.2 v 1.3 in Sep and 1.6 forecast.

 

UK  - October manufacturing falls

Manufacturing output fell by 0.9% after a 0.6% rise in September

Total Industrial Production fell by 1.3% in October following a fall of 0.4% in September

 

UK – Nov annual house prices change rebounded from last month’s record low, although the pickup might prove to be temporary, Halifax said.

“Despite November’s pick-up, the annual rate has been on a steady downward trend in recent months since reaching a peak of 10.0% in Mar,” the latest survey read.

“Heightened affordability pressures, resulting from a sustained period of house price growth in excess of earnings rises, appear to have dampened housing demand, contributing to the slowdown in house price inflation.”

Cheap loans and weak supply of properties is expected to support prices, although, growth in prices “may slow over the coming months”.

Halifax House Prices (%mom): 0.2 in Nov v 1.5 in Oct and 0.2 forecast.

Halfiax House Prices (%yoy): 6.0 in Nov v 5.2 in Oct and 5.9 forecast.

 

India – The RBI left rates on hold ahead of the Fed FOMC meeting later this month.

Expectations were for the benchmark rate to come down 25bp to 6.0% in a third cut of the year.

Weakening growth momentum as suggested by the latest falling manufacturing and services PMIs may lead the RBI to resume monetary easing policies next year.

 

Australia – The economy posted negative growth in Q3/16, marking the first decline since Q1/11 and matching the heaviest contraction since 2008.

On annual basis, a slowdown in growth was relatively broad based including a contraction in private investment (-9.7%yoy v -13.7%yoy in Q2/16).

Household spending (57% of total economic activity) growth dropped to 2.5%yoy, compared to 2.9% in Q2 and the 10-year average of 2.8%.

Government spending was down at 3.9%yoy from 4.3% in the previous quarter.

Imports growth accelerated to 2.3%yoy, up from 0.7% in Q2/16, while exports growth fell to 6%yoy, down from 10.1%.

GDP: -0.5%qoq v 0.6%qoq in Q2/16 and -0.1%qoq forecast.

GDP (%yoy): 1.8 v 3.1 in Q2/16 and 2.2 forecast.

 

China closes border with Mongolia due to visit by the Dalai Lama

The boarder closure is causing problems for Rio Tinto and its hauliers with trucks bearing copper from Oyu Tolgoi mine being held in freezing temperatures at the border and then rerouted into China via another crossing.

Rio Tinto is looking to expand Oyu Tolgoi to 500,000tpa by 2027 from the current target of 200,000tpa.  The closure of the border is just one of many risks of managing such a substantial investment in a politically uncertain region.

Currencies

US$1.0719/eur vs 1.0764/eur yesterday.   Yen 114.00/$ vs 114.14/$.   SAr 13.565/$ vs 13.647/$.   $1.259/gbp vs $1.275/gbp.     
0.745/aud vs 0.744/aud.   CNY 6.883/$ vs 6.880/$ 

China currency controls continue to make life difficult for China-based companies to remit dividends abroad

Potential for further renminbi devaluation likely despite recent admission of the renminbi as an IMF reserve currency.

We see gradual renminbi depreciation as more likely given that a sudden 20-25% devaluation could cause further consternation

Investors within China who do not trust the government will continue to want to move their cash abroad whatever the rate.

We can see Chinese traders and investors restocking on base metals and

The Australian dollar fell 0.7% against the US$ on the back of poor economic data before recovering some of its losses.

 

Commodity News

Precious metals:

Gold US$1,172/oz vs US$1,171/oz yesterday – The PBoC paused purchases of gold with official reserves showing unchanged amounts of gold in vaults in Nov from the previous month.

Gold reserves are reported to be standing at 59.2moz.

This is only the second time the Bank did not add to its reserves since Jun/15.

Gold ETFs 59.6moz vs 59.6moz yesterday – Precious metal ETF see fastest outflows since May 2013 with net outflows of $6.24bn through November.  Conversely, equity ETFs saw inflows of $75.81bn.  (Bloomberg)

Platinum US$933/oz vs US$943/oz yesterday 

Palladium US$730/oz vs US$752/oz yesterday 

Silver US$16.79/oz vs US$16.81/oz yesterday

 

Base metals:   

Copper US$ 5,926/t vs US$5,862/t yesterday 

Aluminium US$ 1,726/t vs US$1,712/t yesterday 

Nickel US$ 11,685/t vs US$11,610/t yesterday 

Zinc US$ 2,852/t vs US$2,748/t yesterday

Lead US$ 2,384/t vs US$2,304/t yesterday

Tin US$ 21,150/t vs US$21,130/t yesterday 

 

Energy:

Oil US$54.1/bbl vs US$54.9/bbl yesterday 

Natural Gas US$3.710/mmbtu vs US$3.671/mmbtu yesterday

Uranium US$18.00/lb vs US$18.00/lb yesterday 

 

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$77.3/t vs US$74.8/t 

Chinese steel rebar 25mm US$495.0/t vs US$489.4/t 

Thermal coal (1st year forward cif ARA) US$60.9/t vs US$62.0/t yesterday

Premium hard coking coal Aus fob US$299.2/t vs US$300.0/t – unch


 

Other:

Tungsten - APT European prices $183-195/mtu vs $188-198/mtu last week and $198-203/mtu a week earlier – we know not why ???

 

Company News

Avocet Mining (LON:AVM) 54 pence, Mkt Cap £11.3m – Gold shipment from Inata

Avocet Mining reports that it has now received payment for a shipment of over 6,000 ounces of gold from the Inata mine, although it reports that the 1400 ounces of gold seized by bailiffs acting on behalf of disaffected former employees “remains under seizure”.

The company goes on to point out that “the mine is in production and weekly shipments have now been reinstated as normal” and that as a result of the resumption of gold shipments “the Company now has working capital to cover its corporate overheads through to the anticipated completion, in early January 2017, of the Tri-K disposal announced on 29 November 2016.”

Avocet expresses hope “that a settlement will be reached with regards to the claims of the ex-workers in the coming weeks.”

Conclusion: It appears as if Avocet is now returning to normal operations and in a position to fund itself until it completes the Tri-K transaction. The original gold seizure by the former employees was ordered to be lifted by a judge last month but this does not yet appear to have happened.

 

Kodal Minerals* (LON:KOD) 0.09p, mkt cap £3.9m – Exploration at Bougouni lithium project identifies new areas

Kodal Minerals reports that reconnaissance rock chip sampling at its Bougouni lithium project in Mali has yielded high grade assay results, including 2.04% lithium oxide from the Sogola pegmatite vein.

The sampling programme has also identified new areas of lithium mineralisation within the prospect area which returned assay results up to 1.9% and 1.65% lithium oxide.

The company reports that it is still awaiting assays on a further 44 samples and that meanwhile the previously announced reverse-circulation drilling programme targeting the Sogola, Ngoualana and Kola veins is continuing and expected to be completed in mid-December.

Initial [unspecified] results, presumed to also be rock chip samples, from the recently acquired Diendio prospect “confirm presence of lithium mineralisation, maximum result of 0.03% Li2O returned from limited sampling.”

Conclusion: Although rock-chip sampling is an early stage reconnaissance exploration technique, the high grade assay results and the identification of previously undiscovered areas of mineralisation provides encouragement for future more detailed follow up work. We look forward to the results from the reverse-circulation drilling.

*SP Angel acts as Financial Advisor and Broker to the company. 

*Robert Wooldridge, a partner at SP Angel is also Chairman of Kodal Minerals.

 

Sierra Rutile (LON:SRX) SUSP, – Iluka deal reinstated as independent experts confirm integrity of the dams

Sierra Rutile’s merger with fellow mineral sands producer, Iluka, is now expected to complete this evening, Perth time, after independent geotechnical experts, Knight Piesold confirmed that “subject to the lowering of water levels in the Lanti containment ponds, the risk of immediate failure of the dams is low. Iluka confirms that the water levels in the Lanti containment ponds have been lowered to an acceptable level.”

Accordingly, the two companies have agreed that all the conditions precedent for the merger have now been satisfied.

Sierra Rutile’s announcement confirms that investigation has confirmed that “the construction of SRL’s engineered dams are considered to be compliant with the appropriate industry standards” and that the dams are operated to appropriate industry standards.

Conclusion: The possibility of the merger between Sierra Rutile and Iluka failing to complete was raised at the eleventh hour when concerns arose over the integrity of the dams. Expert inspection by independent consultants has confirmed that the dams are in fact fully compliant and the merger is now back on track.

 

Tertiary Minerals* (LON:TYM) 1.2p, Mkt £3.2m – Exclusive non-binding agreement to acquire Lassedalen

Tertiary Minerals reports that it has reached a non-binding agreement to acquire land and old mine workings at the Lassedalen fluorspar project in Norway for 1 Norwegian kroner.

The exclusive agreement, with the aluminium company, Hydro, is subject to a period of 12 months due-diligence and a period of a further 2 months for negotiation of a final purchase agreement.

Tertiary Minerals’ Managing Director, Richard Clemmey, commented “The potential land acquisition represents a significant milestone for our Lassedalen fluorspar project, as well [as] adding value to the project, the transaction strengthens the long term security of tenure and reduces future royalty exposure.”

Conclusion: Today’s announcement of the deal to acquire Lassedalen at minimal cost underlines Tertiary Minerals’ commitment to building its fluorspar business and follows an announcement earlier this week of the disposal of non-core gold exploration assets in Scandinavia.

 

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Wed, 07 Dec 2016 12:25:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/26690/today-s-market-view-avocet-mining-kodal-minerals-sierra-rutile-ltd-tertiary-minerals-plc-26690.html
Breakfast News AIM Breakfast: The Autins Group, Be Heard Group, United Cacao, Centralnic Group PLC, CAP-XX, Frontier IP Group Plc, Joules Group PLC, Kromek Group PLC, LiDCO Group plc, Private & Commercial Finance Group plc http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/26689/breakfast-news-aim-breakfast-the-autins-group-be-heard-group-united-cacao-centralnic-group-plc-cap-xx-frontier-ip-group-plc-joules-group-plc-kromek-group-plc-lidco-group-plc-private-commercial-finance-group-plc-26689.html What’s cooking in the IPO kitchen?

Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December.

ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m.

RM Secured Direct Lending  -  The secured direct lending fund  intends to float on the Main Market on 15 December raising up to £100m

Breakfast buffet

CAP-XX (LON:CPX) 6.15p £16.62m

The specialist in supercapacitors  has achieved significant production cost savings on its supercapacitor solutions for both passenger & heavy vehicle applications.  The changes, which include the development of a proprietary electrode and the incorporation of new materials/processes, have resulted in significant reductions in the costs of materials and processing, while further enhancing the ' already industry leading performance.  Consequently, once full commercialisation has been achieved, CAP-XX now expects to see the truckStart module selling to truck OEMs and aftermarket chains for less than US$500, a significant reduction from the $1,000 price that was previously envisaged.

Autins Group (LON:AUTG) 230.5p £50.94m

FYSep16 trading update from the  UK designer, manufacturer and supplier of acoustic and thermal insulation solutions for the automotive sector.   The Group continues to see progress with the integration of Autins' Swedish and German divisions which became wholly owned subsidiaries at the August IPO.  Significant development has been made with Neptune, the lightweight, high performance material. Full production capability expected by year end.  Approved by 7 automotive OEMs. Gaining interest from outside the automotive sector. Overall, the year to date has been one of positive progress. Autins is on track to deliver further growth during 2017. Keeping close eye on input costs in light of weak sterling. No forecasts in the market.

CentralNic (LON:CNIC) 46.75p £44.83m

The specialist in domain name and internet services, announced that the most popular new generic Top Level Domain ending .XYZ is one of the first domain endings to be accredited by the Chinese Ministry of Industry and Information Technology, allowing businesses and individuals in China to use .XYZ domain names to host their websites.  CentralNic, which is .XYZ's exclusive distributor, worked closely with .XYZ to put in place a customised technology platform that has been approved by both the global internet regulator ICANN and China's MIIT - succeeding in securing .XYZ a ranking among the first batch of non-Chinese "not-COM" domains approved for Chinese citizens. The web addresses will be available from the 16th December 2016. 

Joules Group (LON:JOUL) 202.5p £177.2m

The premium British lifestyle brand has provided a H1Nov trading update. Group revenue for the Period increased by 16.2% to £81.4m (H1 FY16: £70.1m), reflecting the brand's increasing footprint, growing customer base and the strong performance of both new and core ranges across product categories.  Gross margin up 100 bips. “Despite the uncertain macro-economic outlook. We have seen strong growth in our wholesale order book for Spring/Summer 17 and we are well positioned for the Christmas trading period."  FYmay17E revenues of £151.1m and PBT of £9m. 22.7x PE. 1.1% yield.

LiDCO Group (LON:LID) 7p £13.59m

The hemodynamic monitoring company  has announced a conditional placing of £3m at 6p, a 14% discount to yesterday’s close. LiDCO intends to use the net proceeds from the Placing and Subscriptions to accelerate growth into the US market, which the Directors believe has the most significant growth opportunity at present, as well as growing sales through additional resource in other international markets, whilst maintaining its market leading status in the UK .

Private & Commercial Finance Group (LON:PCF) 29p £49.34m

The finance house announced that its application for a Banking Licence has been successful and has been approved by the Prudential Regulatory Authority  and the Financial Conduct Authority. PCF is now authorised with restrictions as a bank and enters into a mobilisation period of up to 12 months. This is on a restricted basis until new policies and procedures are in place. PCF is well advanced in this process.  Expected to take its first deposits in summer 2017. Initially will support SME asset and consumer motor finance activities and then assess product expansion.

Be Heard Group  (LON:BHRD) 3.4p £23.15m

The digital marketing services group, announced the acquisition of Kameleon Worldwide Limited, the award-winning content marketing agency.  For the financial year ended 31 Dec 2015 Kameleon achieved adjusted EBITDA of £0.53m on gross revenues of £2.43m. In 2016, it is expected to generate gross revenues of £3.89m, representing 60% annual growth, with adjusted EBITDA of £0.785m.  Initial consideration of £4m. Total deal capped at £10m. Mixed cash and shares deal.

FYDec16E rev £9.1m and PBT of £0.7m

United Cacao (LON:CHOC) 122.5p £23.49m

The cacao plantation company based in Peru, has announced that the General Directorate for Agricultural Environmental Affairs (DGAAA) - a division of the Peruvian Ministry of Agriculture - has approved the Company's soil study report that was originally submitted on 30 December 2014. The DGAAA is the relevant regulatory authority for agricultural land titles in Peru.

Frontier IP Group (LON:FIPP) 32.5p £10m

The specialist in  the commercialisation of intellectual property, has received a 20% stake in Tarsis Technology Limited (Tarsis), the Group's third spin-out from the Department of Chemical Engineering and Biotechnology at the University of Cambridge.  Tarsis plans to develop and commercialise technology that allows slower and more controlled delivery of drugs using metal-organic frameworks. The pharmaceutical industry has demonstrated early interest in the technology. 

Kromek Group (LON:KMK) 353.5p £38.4m

HYOct16 results from  radiation detection technology company focusing on the medical, security and nuclear markets.  Revenue up 19% to £3.8m. Loss before tax reduced by 41% to £1.8m. Cash and cash equivalents at 31 October 2016 were £3.8m vs £7.5m. The Group already has significant visibility over revenue accounting for more than 85% of market expectations for full year 2016/17.  FYAPR17E revs of £8.9m and pre-tax loss of £3.7m.

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Wed, 07 Dec 2016 10:00:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/26689/breakfast-news-aim-breakfast-the-autins-group-be-heard-group-united-cacao-centralnic-group-plc-cap-xx-frontier-ip-group-plc-joules-group-plc-kromek-group-plc-lidco-group-plc-private-commercial-finance-group-plc-26689.html
VSA Capital Market Movers - Millennial Lithium http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/26688/vsa-capital-market-movers-millennial-lithium-26688.html Millennial Lithium (ML CN)

Millennial Lithium (ML CN) has released further results from its current drilling campaign. The previously announced first hole intercepted three brine aquifers over 94.5m to a maximum depth of 192m (the depth of the hole). The second hole drilled to a depth of 352m encountered significant presence of brine aquifers, once again. Eight samples were taken at varying depths from 92m-275m, all bar one of which encountered brine flow in excess of 0.5l/second.

As a result of the drilling results and flow rates obtained, ML is proceeding with the installation of a production scale pumping test well. A larger drill has been mobilised for this and will enable a 24 hour pumping test to be completed. Further work is required to determine precipitation sequencing and lithium recovery

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Wed, 07 Dec 2016 09:12:00 +0000 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/26688/vsa-capital-market-movers-millennial-lithium-26688.html
Beaufort Securities Breakfast Alert: Ashtead Group, Easyjet, MySQUAR Limited, Wolseley, Mineral & Financial Investment Limited http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26687/beaufort-securities-breakfast-alert-ashtead-group-easyjet-mysquar-limited-wolseley-mineral-financial-investment-limited-26687.html Today's edition features:

Mineral & Financial Investment Limited (LON:MAFL)

MySQUAR Limited (LON:MYSQ)

Ashtead Group (LON:AHT)

easyJet (LON:EZJ)

Wolseley (LON:WOS)

"The US bull continues to drive international equity sentiment. And the sell-off in global bond markets probably still has further to go, with investors now awaiting details of Trump’s fiscal expansion which, assuming it is just half as rigorous as suggested during his presidential campaign, will power US growth potentially enough to take the 10-year yield back to 3% or more by this time next year - a level last seen back at the start of 2014. The fact that UK Prime Minister, Theresa May, was seemingly forced yesterday to accept Labour’s demands that she sets out her ultra-sensitive Brexit plans to Parliament, while the resignation of Italian leader, Matteo Renzi, a couple of days ago appears to signal the wave of populism has now landed in the heart of the EU with New Year elections in France and Germany potentially threatening the very foundation of the Euro, quite staggeringly appears to be passing by unnoticed. Indeed, the FTSEMib on Tuesday managed to post its best levels since the Brexit vote in June, with bad-debt laden Italian banks put in the strongest performances. Financials also powered the Dow Jones to yet another record high last night, with strong technology stocks boosting the NASDAQ sufficiently for it to record the best performance amongst the principal US indices. Asia followed suit, with the Nikkei performing strongly as the Yen weakened against the US$, although the ASX enjoyed the biggest upward move amongst the regional indices despite official data confirming the Australian economy contracted during the third quarter, its first fall in five years, apparently due to a reluctance by businesses to invest. Today, the UK is due to provide Industrial Production figures along with release of the Halifax House Price Index and NIESR monthly GDP estimates, while consumer credit data is due from the US. UK corporates expected to detail earnings or trading updates include Autins Group (AUTG.L), Carillion (CLLN.L), Kromek Group (KMK.L), Numis (NUM.L) and Stagecoach (SGC.L). Meanwhile, traders will be keeping an eye out for further media reports regarding tomorrow’s policy-setting ECB meeting, which is now expected to extend its bond-purchase programme but just might signal a time by which tapering could get underway. London is expected to take its lead from the US in today’s opening trade, with the FTSE-100 seen rising some 40 points. "

- Barry Gibb, Research Analyst

Markets

Europe

The FTSE-100 finished yesterday's session 0.49% higher at 6,779.84, whilst the FTSE AIM All-Share index closed 0.55% down at 810.83. In continental Europe, the CAC-40 finished 1.26% higher at 4,631.94 whilst the DAX was 0.85% better-off at 10,775.32.

Wall Street

In New York last night, the Dow Jones added 0.18% to 19,251.78, the S&P-500 firmed 0.34% to 2,212.23 and the Nasdaq was up 0.45% to 5,333.0.

Asia

In Asian markets this morning, the Nikkei 225 had risen 0.57% to 18,464.70, while the Hang Seng firmed 0.41% to 22,768.85.

Oil

In early trade today, WTI crude was down 0.69% to $50.58/bbl and Brent was down 0.57% to $53.62/bbl.

Headlines

Housing crisis 'creates in-work poverty'

Poverty among people who are working has risen despite a recovery in the UK economy, a study has suggested. High rental housing costs mean an estimated 3.8 million workers - one in eight - are in poverty, according to the Joseph Rowntree Foundation (JRF). It said in-work poverty was up by 1.1 million since 2010-11, and 55% of those in poverty were in working families. People with less than 60% of median income are classified as poor. Overall poverty was down, the government said. Its figures suggested poverty numbers had been falling compared to six years ago. "Since 2010, the number of people living in poverty has fallen by 300,000 but we know there is more to do. We are increasing the National Living Wage and taking millions of people out of income tax, to make sure it always pays to be in work," a government spokesman said.

Company news

Mineral & Financial Investment Limited (LON:MAFL, 5.16p) – Update
Mineral & Financial Investment, the metals and mining focused investment company, announced today results from re-testing of historical holes on its 49% owned Lagoa Salgada in Portugal. The project is owned and operated by TH Crestgate, a private investment company in which MAFL holds a 49% interest. Crestgate has completed a geological re-interpretation of four historical drill holes at Lagoa Salgada. The re-work programme comprised re-logging, re-assaying, analysis and modelling of the previously unsampled intervals from the four historical drill holes. These new results have yielded high-grade copper content with the best intercept from LS-20 that returned 93m grading 0.94% Cu (2.85% Cu eq.) including 21.3m grading 2.84% Cu (6.35% Cu eq.). The 13,400ha Lagoa Salgada project has a preliminary resource (see RNS 27 August 2015) for the LS-1 Zone which is located c 1km NW of the current re-interpretation area referred to the Central Sector where the four historical holes were drilled by a previous operator.

Our view: The re-interpretation of historical drill holes has returned some decent high-grade copper intercepts. These higher-grade zones are associated with stock-works in altered zones within sub-volcanic intrusions. We are encouraged with the high-grade copper results and the re-interpretation of the style and type of mineralisation. We look forward to additional results as Crestgate tests its hypothesis that the Central Sector zone may host a late intrusive of alteration event that overprints the normal volcano-sedimentary system.

MySQUAR Limited (LON:MYSQ, 3.5p) – Speculative Buy
MySQUAR, the Myanmar-language social media, entertainment and payments platform whose principal activity is to design, develop and commercialise Myanmar-focused internet-based mobile applications, yesterday announced that it has entered into a VoIP technology licensing agreement with M800 Limited, the Hong Kong-based communication service and technology provider. Under the agreement, M800 will license its VoIP technology to MySQUAR which will be integrated into MySQUAR's VoIP services business. Under the terms of the agreement MySQUAR will pay up front license fees followed by a monthly license fee per active user. MySQUAR plans to release VoIP services, which will offer both on-net calls (app to app) and off-net calls (app to mobile phones and landlines), by the end of December 2016. The services will target the Myanmar market and also South East Asia countries, such as Thailand, Singapore, and Malaysia, to where many people from Myanmar have migrated. To support the VoIP business as well as other MySQUAR services, such as the gaming business, in engaging with Myanmar people living overseas, MySQUAR has also entered into an agreement for payment services with Fortumo OÜ, the global payment service provider of direct carrier billing. Fortumo's services will allow users of MySQUAR's apps, based anywhere in the 96 markets where Fortumo has operations, to make payment via carrier billing. The agreement with Fortumo will operate on a revenue share basis.

Our view: VoIP is the next obvious step for MySQUAR to take, as it secures its position as Myanmar’s trusted, branded and only local language offering of social media, communications and entertainment in what is effectively the world’s last major telecom frontier. Nearing release, management plans to offer bundle-pricing for the on-net and off-net calls, which should offer Myanmar people a very economic means for their daily communication, particularly for international access. The partnership with Fortumo will help MySQUAR's services expand beyond just Myanmar, using its carrier billing solutions, games, VoIP services, etc. to tap into the extensive Myanmar diaspora living overseas. Elsewhere, Fastsell, the mobile marketplace app, was soft-launched yesterday, which is being followed by a direct marketing campaign aimed at retailers who want to list their products for sale. This marketing tool is already established in Vietnam and is now targeting Myanmar through a new application which allows sellers to list their products while buyers can use the application to identify potential purchases, negotiate prices and identify geographic locations. Monetisation will come from advertising, subscription and handling fees under a perpetual agreement, for which MySQUAR's share of revenues with the developer will be 60%. This, along with continuing dramatic expansion of its user account numbers – which considering it will now be a collective number comprising all apps, games, Fastsell, VoiP and, of course, MyChat, is likely to significantly exceed the 6m suggested back in October - and further portfolio expansion in coming months, all means MySQUAR is positioned to more than deliver on its promises. Based on recent progress, MySQUAR has the very real potential to be achieving monthly break-even or better before the end of the current financial year (ended-June 2017). This is something that is unlikely to have been missed by its numerous and very cash-rich global peer group, who remain determined to continue ensnaring players in virgin territories that have successfully participated in an online user ‘landgrab’. In this respect, MySQUAR now appears quite dramatically undervalued; Beaufort retains a price target of 21.0p/share and repeats its Speculative Buy recommendation.

Ashtead Group (LON:AHT, 1,568.79p) – Buy
Ashtead Group, an international equipment rental company with national networks in the US and the UK, yesterday announced its half-year results for the 6 months ended 31 October 2016 (H1 FY2017). During the period, on a statutory and constant currency basis, revenue advanced by +8% to £1,551.7m, pre-tax profit rose +9% to £413.3m including £13m of amortisation leading earnings per share grew by +9% to 54.3p, against comparable period (H1 FY2016). On an underlying constant currency basis, both rental revenue and EBITDA rose +13% to £1,444.6m and £757.4m, respectively, pre-tax profit increased by +9% to £425.9m and earnings per share also grew by +9% to 56p. Net debt at the period-end stood at £2,694.5m (end-H1 FY2016: £1,981.6m) while net debt to EBITDA ratio declined to 1.8x from 1.9x. Return on investment in the 12 months to 31 October 2016 was 18%, down -1%. On the operational front, the Group invested £683m (£631m net of disposal proceeds) by way of capital expenditure, and invested £142m, including acquired debt, (H1 FY2016: £25m) on 11 bolt-on acquisitions during the period. Ashtead spent £48m to date under the share buyback programme (of up to £200m for FY2017) and declared an interim dividend of 4.75p per share, up +19%, to be paid on 8 February 2017.

Our view: Ashtead delivered a strong performance in H1 FY2017, with both Sunbelt (US and Canada) and A-Plant (UK) divisions performing at the top end of expectations. The Group’s reported revenues expanded by +28% due to weaker Sterling following BREXIT, resulting in reported pre-tax profit jumping by +25%. The underlying performance was also in good shape, supported by both organic and bolt-on acquisitions, with both divisions delivering encouraging rental-only revenue growth, driven by increased hire fleet. A strong balance sheet, together with improved Group EBITDA margin of +2% (to 49%) has paved the way for share buyback and +19% increase in the interim dividend. Looking ahead, the Group increased its full year capital expenditure guidance to £1.0-1.2bn at current exchange rates. With strong performance from all divisions, along with favourable foreign exchange rates, the Group said it expect full year results to be ahead of expectations. Ashtead’s strategy remains unchanged, with growth being driven by strong same-store growth, greenfield openings, and bolt-on acquisitions. We are encouraged by the Group’s progress and its Board’s medium-term confidence. Beaufort reiterates its Buy rating on the Shares.

easyJet (LON:EZJ, 970.94p) – Buy
easyJet, a low-cost European short-haul airline company, yesterday released its passenger statistics for November 2016. During the month, passenger traffic increased by +2.9% y-o-y to 4,947,060, while load factor fell -0.6% to 89.7%. On a rolling basis for the past 12 months, passenger traffic rose +5.9% to 73.7 million customers and the load factor declined by -0.5% to 91.3%. Passenger traffic represents the number of earned seats flown while load factor represents the number of passengers as a proportion of the number of seats available for passengers.

Our view: easyJet delivered good y-o-y passenger growth in November but recorded another month with a falling load factor. Although the statistics were not great, we see the load factor recovering compared to the month before (October 2016: -3.1%). In November, easyJet announced resilient preliminary results for the FY2016 in which it delivered -0.4% declined in revenue, -27.9% fall in pre-tax profit and -21.9% drop in basic earnings per share, in line with guidance during a period that was a significantly disruptive for the whole industry. The Group registering record passenger numbers and load factor for the year, while delivering a strong balance sheet at the period-end, despite increasing its dividend pay-out ratio to 50%. While keeping one careful eye on the oil price and economic/political uncertainties, Beaufort retains its Buy rating on the shares based on a FY2017E earnings multiple of 12.2x and 4.1% yield.

Wolseley (LON:WOS, 4,715.68p) – Hold
The world's number one distributor of heating and plumbing products and a leading supplier of builders' products to the professional market, yesterday provided shareholders with an Interim management statement for the 3 months to end-October 2016. Highlights for the period included revenues 5.2% ahead of last year at constant exchange rates, including like-for-like growth of 1.8% gross margin of 28.3%, being 0.3% ahead of last year. Trading profit of £303 million, or 1.4% ahead of last year at constant exchange rates, while movements in foreign exchange rates increased revenue by £599 million and trading profit by £48 million; commodity price deflation reduced revenue by 1.3%. Net debt at 31 October 2016 of £1,169 million, 1.0x EBITDA, having completed four acquisitions in the quarter, and one since the quarter end, for total consideration of £216 million.

Our view: US like-for-like revenue growth was 4.2% with commercial and residential markets continuing to grow well and industrial markets steadying. Good volume growth was partly offset by the ongoing impact of commodity price deflation which reduced the US revenue growth rate by 2.4%. Other international markets were more challenging, with a weak UK heating market and deteriorating conditions in Nordic construction markets. While revenue growth trends have improved slightly, management’s focus remains on managing costs and productivity very carefully while continuing to drive customer service and strong cash conversion. Like-for-like revenue growth to date in the current quarter has been in line with the first quarter results, with mixed markets across its regions coming with heightened uncertainty regarding economic outlook. The Board, however, continues to be confident that Wolseley will make further progress in the year ahead and expect trading profit to be in line with analyst expectations at current exchange rates. While it may be realistic to anticipate a minor New Year boost to UK RMI spend along with signs of life in Nordic activity as seasonal conditions improve, Wolseley is expected to do well under the Trump administration. While enjoying a continuing boost from US$ translation, reduced regulatory burden plus higher rates of infrastructure and non-residential spending, increased public optimism means that the effects of a raised 30-year mortgage are unlikely to be significantly noticed in a buoyant homebuilding market for some time. This provides scope for earnings per share to be lifted by a couple of percent for both 2017E and 2018E to 295p and 332p post-exceptionals respectively. And there’s the problem! Wolseley shares continue to look fully valued on 15.9x and 14.1x forward P/E multiples, particularly when you consider many (smaller) sector peers offer much more income than the 2.6% and 2.9% dividend yields anticipated. Beaufort retains Wolseley on a Hold recommendation noting its outperformance relative to the FTSE100 since October.

 

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Wed, 07 Dec 2016 08:56:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26687/beaufort-securities-breakfast-alert-ashtead-group-easyjet-mysquar-limited-wolseley-mineral-financial-investment-limited-26687.html
In the Papers - BT, EasyJet, Thomas Cook, Asda http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26686/in-the-papers-bt-easyjet-thomas-cook-asda-26686.html Newspaper Summary

The Times

Plus500 placed firmly in investors’ minus column: The near-40% slide in Plus500’s share price at one point suggested that investors were shocked by the City regulator’s clampdown on contracts-for-difference firms.

Apple Watch is doing great, says Cook after falling sales claim: Tim Cook has gone on the attack after IDC, the technology research firm, claimed that sales of the Apple watch dropped 71% in the third quarter to 1.1 million.

Big business ‘next to face migrant anger’: Public anger about immigration will turn into a backlash against big business and the owners of capital unless a new deal is struck with “shafted and abandoned” workers, the general secretary of the TUC has warned.

Founders cash in on their magnum Opus: Two of the founders of Opus Energy are set to scoop an estimated £136 million after the sale of the business to Drax Group, Britain’s biggest coal power producer.

BT must share with its rivals, warns Ofcom: BT could be forced to share its telegraph poles and underground ducts more readily with rivals under plans to accelerate the introduction of fibre-optic broadband, Ofcom said.

Rigging Euribor interest rate to result in multimillion-euro fines: Brussels is expected to impose multimillion-euro fines on HSBC, JP Morgan and Crédit Agricole for rigging the Euribor interest rate benchmark, bringing to a close a five-year cartel investigation.

Falling profits ‘not a result of Brexit’: Two bellwethers of the real economy are insisting that post-referendum business remains good, despite reporting a downturn in U.K. profits.

EasyJet is left behind as rival airline sales take off: In stark contrast to its soaring rivals, easyJet has reported slowing passenger growth and aircraft flying with fewer travellers on board.

The Independent

Samsung does not have to pay Apple $399 million in patent dispute, U.S. Supreme Court rules: The U.S. Supreme Court told a lower court to take another look at a $399 million award won by Apple from rival Samsung for copying the design of the iPhone.

Pound hits two-month high after Hammond hints at single market access: The pound has climbed to its highest level in more than two months as expectations of a soft Brexit deal which could keep the U.K. within the single market took root.

Lego appoints first British Boss in surprise shake-up: Lego, the plastic brick giant, is to appoint its first British Chief Executive as it embarks on a wide-ranging management shake-up.

Euro is ‘under increased threat following Italy referendum result’: The political turmoil set off by the Italian referendum result could endanger the euro, a German business group has warned.

The Daily Telegraph

Foreign firms spend £100 billion buying British businesses so far in 2016: Foreign companies spent more than £100 billion acquiring firms in the U.K. in the first nine months of the year, according to official figures - the highest level on record.

Drugs reimbursement top of the agenda for new ABPI president: The new president of the trade body that represents the U.K. pharmaceutical industry says she will make access to breakthrough medicines a key focus of her tenure.

Standard Chartered considering Dublin and Frankfurt for EU subsidiary: Standard Chartered, the FTSE 100 emerging markets-focused bank, is looking at setting up a legal base in either Dublin or Frankfurt to ensure it can continue doing business in the European Union following Brexit.

Rio Tinto Boss insists Mongolia dispute is ‘bump in the road’: The Boss of FTSE 100 mining group Rio Tinto has insisted a dispute with China over copper exports from Mongolia will be resolved shortly.

Digital challenger Atom Bank starts mortgage lending: Digital-only challenger bank Atom has started to offer residential mortgages, in the latest attempt by Britain’s first smartphone-based lender to take on the high street banking giants.

Ashtead hikes expectations thanks to weakened pound: Favourable conditions in the construction market and the impact of the weakened pound have boosted equipment hire company Ashtead’s outlook for the year.

The Questor Column:

Drop out of Pearson while you have the chance, despite 50% share price fall: Autumn’s rally in the dollar gave shares in Pearson a lift but longer-term investors may decide to use this as a chance to get out while the going is vaguely good. Management has already acknowledged that a great run of increased dividends is coming to an end and trends in the U.S. higher education market in particular suggest that life can only get tougher for the academic publisher. A £350 million cost-saving programme is a key plank here but the problem is the sinking top line. First-half sales fell by 7% on an underlying basis, handicapped by a slowdown in the number of students enrolling for higher education in the U.S. and lower book sales and rentals. The latter issue is perhaps the biggest threat to Pearson, along with “open educational resources” that allow universities to make best-of-breed educational materials freely available. Pearson has already issued a couple of profit warnings, and rivals have followed suit. Earnings cover for the dividend is already thin, at just over one (when two is ideal), and any further profit slips could put the 6.7% yield at risk. The autumn rally provides a chance to get out of what could be a structurally challenged company. Questor says “Sell”.

Interserve: A bounce in the oil price may offer some succour to Interserve’s construction industry clients in the Middle East but the FTSE Small Cap stock faces many other challenges and this share is one to avoid, even after heavy falls over the past 12 months. Judging by the forward price-to-earnings ratio of just 4.7 and the prospective dividend yield of more than 8%, the market clearly does not believe analysts’ current consensus forecasts – potentially with good reason. The company issued a profit warning in March, the Chief Executive resigned in November and then Interserve was sacked by Viridor from a £154 million energy-to-waste project.  Net debts of £276 million are by no means unmanageable, even with a further £26 million in pension liabilities on top, but the experiences of Mitie, G4S and Serco show that support services firms can start to soak up an awful lot of cash if things start to go awry. Questor says “Sell”.

The Guardian

Andrew Tyrie questions RBS over compensation for small businesses: Royal Bank of Scotland is being forced to justify if the £400 million it has set aside to compensate small business customers will be large enough to meet the claims from those who argue they have been mistreated by the bailed-out bank.

Italian banks damaged by referendum result, says Fitch: Plans by leading Italian banks to raise billions of euros from investors to boost their financial strength have been damaged by the outcome of Sunday’s referendum, a leading ratings agency said on Tuesday as it downgraded its outlook for the sector.

U.K. office construction forecast to plunge after Brexit vote: The Brexit vote will lead to a slump in office construction, with up to half of planned developments in central London likely to be postponed or scrapped in coming years, according to estate agent Savills.

U.K. investment shows signs of slowing, says ONS: British businesses are becoming more reluctant to spend, according to the Office for National Statistics, as the U.K. relies heavily on consumers to prop up the post-Brexit vote economy.

U.K.’s trade deficit before Brexit vote narrower than first calculated: Britain’s trade deficit in the months before the Brexit vote was narrower than first calculated after the government’s statistics agency uncovered a major mistake in monthly import and export data going back to 2015.

Daily Mail

Sun shining for online travel agent On The Beach’s investors after it stormed into the black: The online travel agent said it made pre-tax profits of £16.9 million in the year to September 30, having made a loss of £2.5 million the previous year. While much of the holiday industry has been struggling amid terrorism fears and a weaker pound, the group has seen revenue climb 13% to £71.3 million, with U.K. business accounting for around 36% of that.

Thomas Cook snaps up remaining stake in its joint-owned travel shop business, wiping Co-operative Travel off High Street: Thomas Cook has snapped up the remaining stake in its joint-owned travel shop business, wiping Co-operative Travel off the High Street. The package holiday giant is spending £55.8 million to take full ownership of the 764 stores, 202 of which are under the Co-op brand. Thomas Cook said it wanted to have full control over its travel agent.

Troubled lender Monte dei Paschi di Siena looks set to be rescued by Italian government as hopes of private investment evaporate: Troubled lender Monte dei Paschi di Siena looks set to be rescued by the Italian government as hopes of private investment evaporate. The basket-case bank – which was founded in 1472 and is the oldest in the world – needs £4.2 billion to save it from collapse as it buckles under the strain of £25.5 billion of toxic debt.

Imagination Technologies shares climb almost 10% as it reveals turnaround beginning to bear fruit: Share in Imagination Technologies climbed almost 10%, as it revealed its turnaround was beginning to bear fruit. The struggling firm, which provides the graphics processor for the iPhone 7, was once the darling of Britain’s burgeoning technology scene. But it has struggled to adapt to a slowdown in the smartphone market, with shares just half what they were five years ago.

Daily Express

City meltdown as over £1 billion was wiped from listed trading companies following FCA crackdown: Britain’s share spread-betting industry was in meltdown after the City regulator proposed stricter rules to protect inexperienced investors against losses on complex trades. More than £1billion was wiped from the value of listed trading companies as the crackdown by the Financial Conduct Authority shocked the City.

Old People warned that nest eggs are main target for scammers: Older people have been warned to be on the alert as they are now the number one target for scammers. They should be particularly wary when buying investment and pension products, as many are duped into fraudulent schemes designed to steal their lifetime savings.

Investors ready for the festive stock market ‘Santa rally’: Investors are getting ready for a “Santa rally” as stock markets prepare to put on their traditional pre-Christmas show. This would bring yet more good cheer to the U.K. economy, which continues to defy Project Fear’s warnings that a crash would punish Britons for voting in June to quit the EU.

Trump sends Boeing shares plunging after ‘cancelling’ Air Force One order: Aerospace giant Boeing saw its shares plunge in pre-market trading on Tuesday, after President-elect Donald Trump threatened to cancel an order for a new Air Force One airplane from the company amid a row over costs. Mr Trump said the manufacturing firm has quoted more than $4billion to build a brand new plane, which would be used by future presidents’ travel.

The Scottish Herald

Wood Group targets work off Norway amid downturn: Wood Group has teamed up with a Dutch firm that specialises in building the giant offshore production platforms used by oil and gas firms to tout for business in the Norwegian market.

Lanarkshire metal firm wins oil and gas orders: The new Boss of a Lanarkshire-based steel supplier has said there is still money to be made in the hard pressed oil and gas sector after it won £500,000 orders in his first month in charge.

Meygen turbine reaches full power: The first turbine installed at Atlantis Resources’ Meygen project in the Pentland Firth is now operating at full power, marking another milestone for the group after it began generating power last month.

Farmers ramp up demands for unfettered access to single market: Farming’s fate outside the European Union (EU) will be the ‘litmus-test’ of the Government’s Brexit negotiations – because if the sector most affected by the decision to leave can get the right deal, it will raise hopes that the country as a whole can succeed.

Food firm hit by volatile pricing: Real Good Food, the company behind Carluke jam maker R&W Scott, has seen its share price fall by nearly seven% after reporting an underlying loss of £200,000 in the six months to September 30.

Aberdeen likely to cut its dividend: Banking group Jefferies is the latest analyst to predict that Aberdeen Asset Management will cut its dividend next year after Barclays made the same prediction last month.

Innis & Gunn set for Ashton Lane move: Innis & Gunn has chosen a famous location in Glasgow’s west end to open its first beer-focused bar and restaurant in the city.

Iomart has the ‘firepower’ to fund further acquisitions: The Chief Executive of cloud storage and web solutions group Iomart has said the company has more than £40 million at hand to invest in further acquisitions.

Exova buys English testing firm: Exova, the materials testing specialist which has been battling tough times in the key oil and gas market, has continued its acquisition programme with the takeover of a firm in England in what looks like a bolt on deal.

Faroe Petroleum reaps rewards of expansion: Faroe Petroleum Chief Executive Graham Stewart has underlined his confidence in its decision to expand amid the crude price plunge following a strong performance from the latest assets it acquired.

Revamp of legal services legislation is long overdue: For Lorna Jack, Chief Executive of the Law Society of Scotland, the outcome of the Scottish Government’s review into how the legal profession is regulated cannot come quickly enough.

Financial stocks boost London market as fears about Italian banks ease: Financial stocks led the charge on the London market as concerns eased over the state of Italy’s beleaguered banking industry.

Foundation next step in opening up profession: The Law Society of Scotland’s Lawscot Foundation is one of Chief Executive Lorna Jack’s proudest achievements. Established this year, the charity will provide financial assistance and mentoring to law students from socially disadvantaged backgrounds, with between eight and ten people set to benefit from September next year.

Office move puts Glasgow firm at forefront of healthcare analytics: The Chief Executive of Scottish healthcare firm Aridhia has said a recent move to its new office at the Queen Elizabeth University Hospital put the company at “the forefront of the precision medicine frontier”.

The Scotsman

Growth on menu as Bar Soba lands £3 million funding deal: A bar and restaurant chain that began life as a pop-up venture at the Edinburgh Festival Fringe is embarking on a major expansion after securing a multi-million-pound investment.

Energy efficiency drive could help create 9,000 jobs: Boosting investment in energy efficiency could create up to 9,000 jobs a year, business leaders have told the Scottish Government.

Asda strikes festive deal with Scots snack maker: Asda has signed a deal with Scottish crisp maker Mackie’s at Taypack to stock a new collection of festive snacks.

Lovell plans 112 affordable homes for South Lanarkshire: Housing developer Lovell has started work on the first of three developments for Clyde Valley Housing Association aimed at tackling the shortage of affordable homes in South Lanarkshire.

Clothing retailer Quiz broadens store network: Womenswear retailer Quiz has opened 40 outlets in the U.K. and Ireland over the last year, the latest of which include a site in Ayr covering 2,500 square feet and marking the firm’s 20th standalone store in Scotland in addition to concessions.

Doosan Babcock to close Renfrew plant with 470 jobs at risk: Engineering group Doosan Babcock is to cut almost 500 jobs across its U.K. sites.

City A.M.

ONS revises down U.K. current account deficit after admitting a “processing error” inflated the data: The Office for National Statistics (ONS) has narrowed the U.K.’s current account deficit after admitting a “processing error” overestimated the gap by billions of pounds.

Brexit vote hits deal numbers in third quarter: The total number of mergers and acquisitions (M&A) involving U.K. companies in the three months to September almost halved from the previous quarter.

These are the countries that will thrive in the post-Trump, post-Brexit era according to the new Indigo Index: The U.K. is the fifth-best equipped country to thrive in the post-Trump, post-Brexit era, according to a new global ranking of states’ “entrepreneurial eco-systems” and future potential.

The Brexit vote will scare workers into saving for retirement: Britain’s decision to leave the EU will boost pension savings as concerns over future financial uncertainty provide a catalyst for workers to put more money aside for their retirement.

Digital challenger bank N26 has pulled back from its U.K. launch plans: The German digital challenger bank N26 has pulled back on its plans to launch in the U.K. as it pushes forward with expansion elsewhere in Europe, City A.M. can exclusively reveal.

Widening U.S. trade deficit gives Donald Trump a challenge to fulfil campaign reduction promise: Rising imports pushed up the U.S. trade deficit by over $6 billion in October and factory orders increased faster than expected, as domestic demand continues to stay strong in the world’s biggest economy before the arrival of Donald Trump in the White House.

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Wed, 07 Dec 2016 08:32:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26686/in-the-papers-bt-easyjet-thomas-cook-asda-26686.html
Wall Street as Landlord: Blackstone Going Public with a $10 Billion Bet on Foreclosed Homes http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/26684/wall-street-as-landlord-blackstone-going-public-with-a-10-billion-bet-on-foreclosed-homes-26684.html Wall Street as Landlord: Blackstone Going Public with a $10 Billion Bet on Foreclosed Homes

This article by Ryan Dezember may be of interest to subscribers. Here is a section:

“We’re no longer trying to convince the investment world this is a legitimate business,” Fred Tuomi, Colony Starwood’s chief executive, said in an interview. “We’re not in this to simply fix and flip. We’re in this for the long-term, steady and growing income stream.”

Though the chance has passed to acquire thousands of houses at steep discounts, Colony and its competitors are still buying individual homes here and there as well as groups of homes bundled by other investors during the crisis, Mr. Tuomi said. Colony, he said, could manage about 100,000 homes without having to invest much more in the systems it built to manage them.

Economic factors have helped the stocks in the sector. Home prices have risen above their 2006 peaks in much of the country, boosting the value of these firms’ holdings. That and rising interest rates have pushed homeownership out of reach for many. Lately, the homeownership rate has hovered around its lowest level in at least 50 years, according to U.S. Census data.

Meanwhile, rental vacancies, including apartments, are at their lowest level in at least a decade at 6.8% in the third quarter. Rents are up, particularly in single-family homes, where rents are growing faster than at apartments, according to Green Street Advisors LLC.

Eoin Treacy's view

Large funds are betting big on the inability of a large demographic that will never be able or inclined to afford a home. Record student debt, underemployment of highly educated workers and rising living costs have all fed into the conclusion that millions of Americans will not be able to save enough to pay for a down payment.

"Serenity Now"

Thanks to a subscriber for this report by Jeffrey D.Saut for Raymond James which may be of interest. Here is a section:

To be sure, all of this fits with our thesis the equity markets are transitioning from an interest rate-driven to an earnings driven secular bull market. To that point, many of y’all know we are on an email “string” with folks like Arthur Cashin, David Kotok, Dennis Gartman, Bob Pisani, etc. It is a freewheeling exchange of thoughts that provides very interesting insights. Last Thursday, the savvy Bob Pisani wrote this:

President-elect Trump's proposed nominee for U.S. Treasury Secretary, Steven Mnuchin, said on our air yesterday that the administration was still targeting a reduction in the corporate tax rate from 35% to 15%. The current 2017 estimate for the entire S&P 500 is roughly $131 per share. Thompson estimates that every 1 percentage point reduction in the corporate tax rate could "hypothetically" add $1.31 to 2017 earnings. So do the math: if there is a full 20 percentage point reduction in the tax rate (from 35% to 15%), that's $1.31 x 20 = $26.20. That implies an increase in earnings of close to 20%, or $157. What does that mean for stock prices? The S&P is currently trading at a multiple (PE ratio) of 17, high by historical standards. Applying that 17 multiple to earnings of $157, we get a price on the S&P 500 of roughly 2,669 for 2017. That is 469 points or roughly 20% above where it is today.

Our sense is the new administration will not be able to get the corporate tax rate down to 15%, but even at a 25% rate, it implies an additional $13.10 to the S&P 500’s bottom up operating earnings number ($1.31 x 10 = $13.10). Using Bob’s same math produces an earnings estimate of $144.10, and at 17 times earnings, it renders a price objective of roughly 2450 for the S&P 500.


Eoin Treacy's view
 

A successful transition from an almost total reliance on easy monetary policy to an expansion predicated on improving profitability can be considering the best possible scenario. With corporate margins at record highs cuts to corporate taxes could well be what is required to lend an additional boost to justify higher equity prices.

Email of the day on sell the rumour, buy the news

I am intrigued by the move in the Euro, moving stronger when all sense says the Italian referendum vote is a negative and the Austrian Presidential vote is an escape (the winner is still a fringe candidate). I have copied a quote from Reuters report this evening. The bounce was chiefly down to over-extended bets against the euro, traders said, with investors choosing to cash in gains and lighten their short positions ahead of Thursday's European Central Bank policy meeting. "I think the euro is going to strengthen a lot now. I think it is way oversold," said Nick D'Onofrio, chief executive at London-based hedge fund North Asset Management. My question, did the charts show an over extension or is this reverse logic to explain the unexplainable reaction? With uncertainty one might expect the dollar to continue to strengthen and gold to go with it for the risk haven, first reaction to the Italian vote followed this path then as Europe opened, then US, all changed. Is this "go figure" or was it all in the charts! Yours Confused

Eoin Treacy's view

Thank you for this question which may be of interest to other subscribers. As a veteran subscriber you will have seen us comment about bear markets before and may recall this maxim: A crisis needs to be seen to be getting worse for it to continue to have an increasingly bearish impact on prices. The Italian referendum highlights the disaffection of the Italian electorate with Mario Renzi but since there is not going to be an election that is about all we can say. That was already priced in with the Euro falling from $1.10 to $1.05 over the last month and the situation did not get worse immediately after the vote.

Parkinson's May Actually Originate From Microbes in the Gut

Mice bred to develop Parkinson’s were put in cages that were either sterile or non-sterile. The mice in the germ-free cages manifested less motor degeneration, and their brains had reduced tangling of the protein a-synuclein. They had “almost normal performance” in motor tasks. The researchers injected gut bacteria from human Parkinson’s patients into these mice, and they deteriorated quickly. This effect did not occur with bacteria taken from healthy humans.

The mice in the normal, non-sterile cages developed the expected symptoms of Parkinson’s. When treated with antibiotics, their symptoms were reduced, suggesting effectiveness in a microbial approach to the disease.

Gut bacteria taken from healthy people didn’t have the same effect.

Eoin Treacy's view

There are more nerve endings in your gut than your brain so in one sense you gut is smarter than you think. That makes intuitive sense considering the work that goes into breaking down everything we put into our mouths into useable fuel and waste. The microbiome living in each of our gut’s has an inordinate effect on both health and mood. With advances in genetics it represents a rapidly evolving field of study we are sure to hear more about in 2017. The more I read about the subject the better my diet has become, you really are what you eat.

 

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Wed, 07 Dec 2016 08:20:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/26684/wall-street-as-landlord-blackstone-going-public-with-a-10-billion-bet-on-foreclosed-homes-26684.html
Euro solution for Italian Banks? http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26683/euro-solution-for-italian-banks-26683.html FTSE 100 Index called to open +40pts at 6820, in the midst of a bullish test of 2-week falling highs. Overnight support at 6800 (bullish flag?) bodes well for yesterday’s rally to continue towards mid-month highs of 6900, perhaps even Nov highs of 7000. Bulls need a meaningful break beyond 6820 to open the door for another leg higher. Bears require a breach of 6800 to cap the current rally and increase the chances of a retrace from 2-month falling resistance. Watch levels: Bullish 6830, Bearish 6790.

Calls for further Equity gains in Europe come courtesy of another record Wall St close helped by a bank-led rally and even stronger advances in Asia overnight. This is in spite of lower oil prices and disappointing Aussie GDP, with metals prices back pointing north in spite of a stronger US dollar, something which should help the FTSE via a weaker GBP and DAX via weaker EUR.

Optimism remains rife within financials that the ECB is set to extend its bond-buying QE programme tomorrow and that a recapitalisation solution for troubled Italian bank Monte dei Paschi di Siena (MPS) is in the pipeline. However, this could be via Italy applying for a €15bn loan from Europe’s ESM to help recapitalise several troubled banks and not just MPS which would avoid the issue of illegal state aid/bailout.

Note Australia’s ASX outperforming overnight despite poor GDP (government spending linked aberration?), with financials outperforming, while Japan’s Nikkei is fuelled by a weaker Yen and a $50bn 4-year US investment pledge from Softbank to US President elect Donald Trump.

Once again, the Dow Jones closed at a record high, the 11th time it has done so since Trump’s election, however the index closed just 0.2% higher as the President-elect’s tweeting habits continue to influence markets, this time taking aim at Dow constituent Boeing. A 1.5% rally from the Telecom sector helped see the S&P 500 gain 0.3% despite Energy names weighing, whilst the Nasdaq finished the day trading almost 0.5% higher.
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Crude Oil prices are once again trading slightly weaker as concerns arise over the potential for an increase in US oil production to bridge the gap left by OPEC after last week’s production cut, which itself is still in question before this weekend’s meeting with non-OPEC producers. This brings even more focus on today’s DOE EIA Crude Oil Inventories to discern whether this uptick could have already started. Could this be the start of the shale comeback?

Gold continues its downtrend started on Monday, breaking back below $1170, as Italian risk sentiment falls and the US Fed FOMC meeting edges closer. Investors are still coming around to pricing in a rate hike next week, despite Fed fund futures pointing to 100% certainty of an increase, while tomorrow’s ECB meeting will also be closely watched for any changes to its QE programme.

In focus today will be UK Halifax House Prices given its potential knock-on for shares in the UK Housebuilders. The gauge is seen showing a slowing in November, but accelerating on an annual basis over the last 3 months. Thereafter, October UK Industrial Production is seen rebounding but Manufacturing Production slowing, while the latest NIESR GDP estimate will be of interest especially in light of Brexit.

Keep an ear open also for further developments regarding Italy and its Banks rescue plan as well as further commentary from the UK Supreme Court Hearing on Article 50.

Stateside, US JOLTS Job Openings will be looked to given the importance of jobs data on investor sentiment, although the print is unlikely to have any bearing on the Fed policy decision next week. US Crude Oil inventories always have potential to add spice to the sector, especially after the post-OPEC rally and ahead of Saturday’s production-cut meeting between OPEC and Russia. Note that Japanese GDP data could move markets overnight.

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Wed, 07 Dec 2016 08:18:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26683/euro-solution-for-italian-banks-26683.html
In the news - Peak Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/26681/in-the-news-peak-resources-26681.html COMPANIES

Peak Resources

PEK : AU | A¢6.7 | US$22m

Selects UK Location for Rare Earth Refinery

Peak Resources has announced that it has selected a site in the north-east of the UK as the location for its proposed rare earth refinery. The selected site in the Tees Valley (in the same area as that proposed by Sirius Minerals) benefits from access to global shipping, cheap and reliable reagent supplies, skilled labour, readily available supplies of power and water and environmentally sustainable options to dispose of tailings materials.

COMMENT: The selection of the Tees Valley adds a number of downstream advantages to those that the company’s project already has on account of the quality of its Ngualla deposit in Tanzania, which has a large, high-grade, near-surface, weathered zone of mineralisation that can be upgraded before downstream processing.

Project revenues are heavily weighted towards neodymium and praseodymium, which are used in the rapidly growing permanent magnet market, the outlook for which is positive due to growth in demand for electric cars and bikes, and also wind power generation.

Prices for neodymium and praseodymium, like those for rare earths in general, have suffered since the 2011 boom, which resulted from threats to supply from the dominant supplier, China. However, the widespread losses being reported from producers, along with structural reforms in China to limit illegal production, suggest that we are at a cyclical low and that improved prices can be expected. We looked at the outlook for neodymium and praseodymium in our last issue of The Alchemist. This can be viewed here.

Peak Resources is focused on delivering an integrated rare earths project — The company’s 75%-owned project combines the Ngualla rare earth deposit in western Tanzania with downstream processing in a solvent extraction separation plant in the UK producing a range of rare earth products.

Project mainly produces neodymium and praseodymium oxide — Approximately 85% of the value of the final product is associated with a high-purity neodymium and praseodymium oxide, with the remaining value split between a heavy rare earth (samarium, europium and gadolinium) carbonate product and mixed lanthanum and cerium carbonate.

Targeting completion of bankable feasibility study (BFS) for early 2Q17 — Having completed a pre-feasibility study on the project in March 2014, the company undertook an updated study of the results which it announced in March 2016. The company is fully funded for the completion of the BFS following the completion of a placement and entitlement offer and the draw-down of A$4.1m of debt from Appian. In its September quarterly, progress towards the completion of the BFS was reported to be good. A draft Environmental and Social Impact Assessment was lodged with the National Environmental Council during 3Q16 and the company expects to receive an Environmental Certificate by the end of the year and the Mining Licence in early 2017.

Ngualla deposit one of the world’s largest Nd/Pr deposits — Ngualla is one of the world’s largest neodymium and praseodymium (Nd/Pr) deposits, with total resources containing 4.6Mt of REO at a grade of 2.15%. The deposit is host to a thick blanket of weathered, high-grade mineralisation from surface. This weathered bastnaesite zone at a cut-off of 1.0% REO comprises total resources of 21.3Mt grading 4.75% REO, containing 1.01Mt of REO, of which 90% is in the Measured category.

Tanzanian operations to produce 27,900tpa of beneficiated REO concentrate grading 45% REO — The study of March 2016 updated the parameters from the PFS two years earlier, and showed a mining inventory for the project of 18.4Mt grading 4.89% REO, containing 900,000t REO. Mining is expected to benefit from a low waste-to-ore ratio of 1.68:1 and, owing to the weathered nature of the material, is not expected to require blasting. The company plans to process 556,000tpa of dry ore through a beneficiation plant to produce 27,900tpa of high-value, 45% REO concentrate containing 12,555tpa of REO, for overall REO recovery of 46%. Upgrading is achieved by crushing, grinding and flotation, with re-grinding and a second stage of flotation to produce a rare earth bastnaesite concentrate. The concentrate has a very low uranium and thorium content, resulting in no requirement for additional transport permitting.

UK-based rare earth leach recovery and separation processing to produce final products — Having investigated a number of different leach recovery flowsheets and following positive trials on concentrate from the project, the BFS will use an alkali roast processing route to produce a rare earth solution that will be fed to a solvent extraction-based separation process. In this, the material is firstly roasted with alkali, then washed and filtered before being leached using a low-strength hydrochloric acid, a process that selectively targets Nd and Pr. The project benefits from the relatively low rate of acid consumption, owing to the low levels of acid consuming carbonate and phosphate in the gangue minerals and relatively low levels of iron in the concentrate. Lime slurry is then planned to be used to precipitate residual impurities, leaving a filtrate for treatment in the final stage solvent extraction separation circuit. Final products from project are planned to be:

• 2,300tpa of neodymium and praseodymium rare earth oxides;

• 250tpa of mixed samarium, europium and gadolinium rare earth oxide; and

• 5,900tpa of cerium/lanthanum carbonate (equivalent to 4,240tpa of contained REO).

Key project parameters — Capex for the project was estimated at US$330m (including a 25% contingency). This comprised US$194m and US$120m for the Tanzanian- and EU-based operations respectively, and US$16m owners’ costs. The project was planned to operate for a total of 31 years and to have operating costs of US$97m pa. The updated study did not present NPVs or IRRs for the project; however, we estimate that at current prices of around US$39/kg for a Nd/Pr mixed oxide, the project would be around breakeven at the operating level.

Neodymium and praseodymium exposed to high-growth permanent magnet demand — Nd/Pr are used in combination to create high-power magnets that are notable for their strength and durability. Prices of rare earths, including those for Nd/Pr oxides, peaked in 2011 and have since fallen back to pre-bubble levels. Owing to the increased use of high-power magnets in electrical motors and generators, particularly in electric cars and bikes, the outlook for demand for Nd/Pr is very positive, suggesting that current price levels could represent a cyclical low.

Appian and IFC own direct stakes in the Ngualla Project and are also significant shareholders in Peak — Peak owns 75% of the project and Appian owns 20%, with the IFC owning the remaining 5%. Appian and the IFC also own 16.1% and 6.7% of Peak. The company had A$4.7m in cash and debt of A$4.1m (a three-year term loan from Appian) at the end of September 2016. It raised a further A$0.8m in equity in October 2016, as a result of which it has stated that it is fully funded for the completion of the BFS.

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Tue, 06 Dec 2016 09:29:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/26681/in-the-news-peak-resources-26681.html
Today's Oil and Gas Update: Exillon Energy and Independent Resources plc http://www.proactiveinvestors.co.uk/columns/sp-angel/26680/today-s-oil-and-gas-update-exillon-energy-and-independent-resources-plc-26680.html Headlines

In Brief:

Independent Resources (LON:IRG – 0.08p) – Debt Control put it on a Better Footing

Exillon Energy (LON:EXI – 121p) – Applaud the Transparency, But Where is it Going?

In Brief

Independent Resources (LON:IRG – 0.08p) – Debt Control put it on a Better Footing: Today’s announcement from the Company that it has restructured its debt is a step change as it now reduces one of the weightier pressures on the balance sheet. That it has been combined with additional cash resources means that IRG should be able to spend more time looking forwards than over its shoulder. One of the first places it should start is a root and branch review of its operation in East Ghazalat, where we suspect that the operator is over egging the cost pudding significantly, especially when you look at the simplicity of the operation, cost and number of barrels produced. Still, this is all to come for the management team, who are now free to be more aggressive in pursuit of value.

Exillon Energy (LON:EXI – 121p) – Applaud the Transparency, But Where is it Going?: The positive thing is the fact that the Company maintain clear communication with the market regarding its operations, which has been a hallmark of the start that David Sturt provided. Which is why it is all the more stark that there appears to be no wider plan for the Company, i.e., where is it going, what will it do, will it seek new fields to replace lost production and diversify its production base, or will it be run for dividends for the shareholders, etc. At the moment, the Company appears to be drifting, we just don’t know where to.

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Tue, 06 Dec 2016 09:15:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/26680/today-s-oil-and-gas-update-exillon-energy-and-independent-resources-plc-26680.html
Beaufort Securities Breakfast Alert: Armadale Capital PLC, Amryt Pharmaceuticals, Cyan Holdings PLC, Evgen Pharma, Hummingbird Resources Ltd, Ryanair, Solo Oil PLC, Tertiary Minerals plc http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26679/beaufort-securities-breakfast-alert-armadale-capital-plc-amryt-pharmaceuticals-cyan-holdings-plc-evgen-pharma-hummingbird-resources-ltd-ryanair-solo-oil-plc-tertiary-minerals-plc-26679.html Today's edition features:

Armadale Capital (LON:ACP)

CyanConnode (LON:CYAN)

Hummingbird Resources (LON:HUM)

Solo Oil (LON:SOLO)

Tertiary Minerals (LON:TYM)

Amryt Pharma (LON:AMYT)

Evgen Pharma (LON:EVG)

Ryanair Holdings (LON:RYA)

"Markets quickly recovered their composure following the Prime Minister of Italy's shock resignation yesterday, with all major global indices closing in the positive. Near-term focus remains on the impact of international reflation, with investors asking whether the ECB's meeting on Thursday will be brave enough to conclude that the European economy is now sufficiently strong to propose cutting back the amount of bonds it stockpiles from the EUR80bn it has been buying every month since March. While such a possibility was signalled by Mario Draghi in an interview with Spanish newspaper El Pais last week, any tapering of its purchases would likely accelerate further the current sell-off in government bond markets, spiking yields and threatening stability of highly-indebted countries, like Italy, while also stunting growth in the region's more prosperous regions. Whatever, the expectation that Trump may oblige the Federal Reserve to effectively 'look the other way' as let the economy 'run hot' despite rising inflation continues to boost equities at the expense of Treasuries, as the Dow Jones hit yet another record high yesterday and technology stocks returned to favour sufficiently to push the NASDAQ up over 1%. Riding on the back of Wall Street, Asia was also firmer across the board, although the Shanghai Composite ended only just in the positive, as the traders considered Trump's latest criticisms of Chinese policy on social media to be a sign of tough trade and tariff negotiations to come. Almost adopting a 'if you can't beat them, join them' approach, the Bank of England's Mark Carney yesterday also entered the debate, calling on policy makers to pursue a better mix of fiscal, structural and monetary policies, noting that for too long central banks have been "the only game in town"; he also repeated earlier guidance provided by his officials that the Bank will be prepared to let annual inflation drift above its 2% target in order to support economic growth. Having seen this morning's BRC November same-store retail sales post 0.6% growth year-on-year, with the overall figure up 1.3%, no further significant macro data is expected from the UK today, although the US will release Factory Orders this afternoon. UK Corporates due to provide earnings or trading updates include Ashstead (AHT.L), Imagination Technologies (IMG.L), Northgate (NTG.L), On the Beach (OTB.L), Ultra Electronics (ULE.L), Vianet Group (VNET.L) and Wolseley (WOS.L). London is seen opening nervously this morning, with the FTSE-100 seen down 12 points in opening trade."

- Barry Gibb, Research Analyst

Markets

Europe

The FTSE-100 finished yesterday's session 0.24% higher at 6,746.83, whilst the FTSE AIM All-Share index closed 0.17% up at 815.32. In continental Europe, the CAC-40 finished 1.00% higher at 4,574.32 whilst the DAX was 1.63% better-off at 10,684.83.

Wall Street

In New York last night, the Dow Jones added 0.24% to 19,216.24, the S&P-500 gained 0.58% to 2,204.71 and the Nasdaq was up 1.01% to 5,308.89.

Asia

In Asian markets this morning, the Nikkei 225 had risen 0.42% to 18,351.17, while the Hang Seng firmed 0.75% to 22,673.44.

Oil

In early trade today, WTI crude was down 1% to $51.27/bbl and Brent was down 0.78% to $54.51/bbl.

Headlines

Carney warns about popular disillusion with capitalism

The Bank of England Governor Mark Carney has warned that people will turn their backs on free and open markets unless something is done to help those left behind by the financial crisis. In a speech, he said: "Globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities." In many advanced economies there are "staggering wealth inequalities," he added. Mr Carney was speaking in Liverpool. He told his audience that politicians and central bankers must act to ensure people do not lose faith in the current system. "Turning our backs on open markets would be a tragedy, but it is a possibility," he said. "It can only be averted by confronting the underlying reasons for this risk upfront."

Company news

Armadale Capital (LON:ACP, 3.75p) – Speculative Buy
Armadale Capital announced yesterday that KMP Mining (fomerly AMS) has completed its due diligence and exercised its option to form a Joint Venture with Armadale to develop and operate the Mpokoto gold project in the DRC. On 28 September, Armadale entered into a binding Heads of Agreement (HoA) with KMP. Following successful completion of its due diligence KMP will proceed with Phase I of the joint venture agreement and earn an initial 25% interest through spending US$1.25m on the project. Upon completion of Phase I, KMP will have 30 days to decide to proceed with Phase II, which entails arranging 100% funding of Mpokoto in return for an additional 60% interest. The Mpokoto project comprises four mining licences and has a combined mineral resource estimate of 678,000oz grading 1.45g/t Au.

Our view: We are encouraged with KMP's decision to proceed with the JV agreement following its due diligence. Armadale's management can now focus on development of its Mahenge Liandu graphite project in Tanzania. We look forward to the revised Definitive Feasibility Study and other work that will potentially drive KMP into Phase II of the JV agreement and ultimately bring Mpokoto into commercial production. In the meantime, we maintain a Speculative Buy rating on the stock.

CyanConnode (LON:CYAN, 0.21p) – Speculative Buy
CyanConnode, the world leader in narrowband RF networks for Omni Internet of Things communications, yesterday announced a further purchase order from Larsen & Toubro to expand the deployment of CyanConnode's smart metering solution at Tata Power Mumbai with an additional 4,700 smart meters. This third purchase order from L&T, for CyanConnode's Advanced Metering Infrastructure ('AMI') solution, is part of a larger framework agreement between Tata Power and L&T and follows previous orders of 10,000 consumer meters in Mumbai. The framework agreement will enable Tata Power to 'call off' further deliveries quickly over the next 12 months, without going through a full procurement process. The purchase order is to provide hardware for the implementation of CyanConnode's narrowband RF mesh AMI solution, providing bidirectional communication between Tata Power's meter data management system and its consumers' meters. CyanConnode's communication platform enables automated meter reading, regular and accurate billing as well as providing customers with energy consumption information. The order is for the deployment of both single phase and three phase smart meters. Tata Power continues to grow and now has over 2.6 million consume, including over 660,000 in Mumbai. They have recently been awarded the distribution franchise for Jamshedpur circle from the Jharkhand State Electricity Board.

Our view: Smart metering is on the cusp of dramatic global expansion. Given the scale of such significant, long-term installations, major groups adopting such technologies generally chose to limit their dependence on a single supplier by sourcing alternative providers of equivalent, usually wholly compatible, equipment from other independent producers. In placing a third such order with CyanConnode, however, in order to expand deployment at Tata Power Mumbai, L&T is effectively recognising that no peer is capable of matching CyanConnode's cost-optimised narrowband RF mesh solution. This is particularly relevant, given the fact that the Group also offers effective 'future proofing' through its standards-based solution, which permits rapid integration of converged networks in order to facilitate applications in smart cities and IoT, into which India expects to evolve in coming years. As such, the country continues to be a focus market for the Group and is now in a leading position with an established in-country team as well as a large partner eco-system. Indeed, this was validated earlier this month, as members of the management team attended the UK Department of International Trade's delegation to India, led by Prime Minister May and participated in a Federation of Indian Chamber of Commerce and Industry held in Sweden, where Indian Power Minister, Piyush Goyal, discussed his vision to make India 100% smart in the next 5-6 years. The global opportunity in provision of such a benchmark standard for the evolving industry was detailed in a major report from Beaufort earlier this year, which provided a comprehensive review of CyanConnode's vision. The note points out the World Bank's extraordinary demonstration that it is three-times cheaper for utilities to save 1kWh of electrical energy by improving network efficiencies than investing in new generating capacity. Such losses in developing regions, along with the need for much better demand response in developed territories, are now the single most pressing issue for utility groups worldwide. The note goes on to show that a comprehensive and cost effective solution can be found through the implementation of sophisticated smart metering programmes, such as that offered by CyanConnode. As such, the report concluded this now represents a giant, unfulfilled, scalable and truly global growth opportunity with the potential to attract large, long-term and exceptionally sticky customers. Recent equity issuance has build-up working capital that will be required by the Group in the coming months as it captures and facilitates larger contracts, such as the £10m initial order from Iran, with much of the new capital taken up by into firm, long-term related and supportive partners. Beaufort's assessment of the enlarged, post-raise, post-acquisition Group now suggests a valuation of some £125.3m. Accordingly, it keeps the shares on a Speculative Buy recommendation with a price target of 0.6p/share.

Hummingbird Resources (LON:HUM, 19.25p) – Speculative Buy
Hummingbird Resources, the gold exploration and development company with assets in Mali and Liberia, announced today that it has secured a US$55m debt facility with Taurus Funds. The facility comprises a US$45m Senior Secured Term facility (with an interest rate of 7.75%) and a US$10m Cost Overrun facility (with an interest rate of 11%) and will be used to finance Hummingbird's Yanfolila gold project in Mali. The existing bridge loan facility of US$15m also with Taurus, has been increase to US$25m and extended to 8 April 2017. With the project funding risk now removed management can focus on construction of Yanfolila with its estimated capex of US$88m. Hummingbird states that the project remains on schedule and within budget for first gold pour by the end of 2017.

Our view: This is a major milestone for Hummingbird, the company has significantly de-risked Yanfolila by securing 100% funding following the recent US$71m equity raise combined with the above announcement. The company can now focus on mine construction and continues to target its first gold pour by end of 2017 and 132,000oz of gold production within the first full year of operation. Christmas has apparently come early for Hummingbird shareholders and we look forward to further developments as the construction phase proceeds. In the meantime, we maintain a Speculative Buy rating on the stock.

Solo Oil (LON:SOLO, 0.26p) - Buy
Solo has published an operational update for Tanzania. The Ntorya-2 well, where Solo has a 25% fully funded interest and which is the main catalyst for the stock, is on track and expected to be spudded mid-December. The drilling pad has been prepared (by Aminex, operator with 75%) and the rig has been independently inspected and passed. Also news is that the Kiliwani North operation is now receiving regular gas payments from TPDC. Solo has a 7.125% working interest in Kiliwani North and we expect its share of gas sales to cover Tanzanian operating costs and contribute very significantly to corporate G&A.

Our view: The imminent spudding of NT-2 is very positive, albeit expected, news. As a reminder, NT-2 follows the NT-1 discovery well in 2012 which flow tested 20mmcf per day gas and 139 barrels per day of condensate with very good pressure. NT-2 is the first of two high impact appraisal wells planned over the next 6 months which together are targeting c.1.5TCF. We can now look forward to regular newsflow as NT-2 progresses.

Tertiary Minerals (LON:TYM, 1.15p) - Speculative Buy
Tertiary Minerals announced it has sold its under the radar gold projects in Finland. Consideration is £15k in cash and £85k in shares, plus an additional cash component which depends on the number of ounces discovered. $1 per ounce of inferred resources defined, $2 per indicated ounce and $3 per measured ounce. Tertiary also retains a 2% royalty. The acquirer, whose shares Tertiary will own, is Aurion Resources a TSX-V company focused on gold in Finland. The transaction is conditional on the licences being successfully transferred, although we imagine this is simply a process.

Our view: This looks like a decent deal for Tertiary, especially since it gets paid for any gold ounces discovered, and any gold produced. Tertiary is now a pure play fluorspar company with a strategic portfolio of projects, all in sound mining jurisdictions.

Amryt Pharma (LON:AMYT, 18.5p) – Speculative Buy
Amryt Pharma plc, the clinical stage specialty pharmaceutical company focused on best in class treatments for orphan diseases, yesterday announced that it has secured an agreement with Aegerion Pharmaceuticals, Inc. ('Aegerion'), the NASDAQ-listed biopharmaceutical company, for the exclusive rights to sell Aegerion's drug, LOJUXTA (lomitapide), across the European Economic Area, Middle East and North Africa, Turkey and Israel. Under the Licence Agreement, Amryt will make royalty payments to Aegerion, paid quarterly, based on a percentage of sales, and once-off commercial milestone payments, subject to achieving certain sales targets. The Licence Agreement has an initial term until 1 January 2024, and upon expiry, Amryt has option to extend the Agreement for a further 5 years with the right to extend in further 5 year periods, subject to certain conditions. Amryt will also take on the ongoing regulatory and post-marketing obligations and commitments in support of LOJUXTA. LOJUXTA was approved in the EU since 2013 for the treatment for Homozygous Familial Hypercholesterolemia ('HoFH'), a very rare life-threatening genetic disorder that impairs the body's ability to remove LDL cholesterol ("bad" cholesterol) from the blood. This typically results in extremely high blood LDL cholesterol levels leading to aggressive and premature narrowing and blocking of arterial blood vessels manifesting as cardiovascular disease. If left untreated, heart attacks, strokes or sudden death may occur in childhood or early adulthood (mean life expectancy of 18 years, while with current treatment options including statin drugs, PCSK9 inhibitors and apheresis (a blood filtration technique similar to dialysis), life expectancy increase to average 45-48 years but there are not adequate to control LDL cholesterol levels in some patients, particularly those with the most severe genetic mutations. Amryt's CEO, Joe Wiley commented "We are delighted to announce this landmark licensing deal. It transforms Amryt into a fully-fledged commercial orphan pharma company and comes only eight months after Amryt's IPO in April. This agreement is tremendously exciting and underlines our clear focus on building our portfolio of medicines to treat rare and orphan diseases, where there is large unmet medical need. We look forward providing a further update in due course".

Our view: Another significant announcement from Amryt, following last Friday's €20m Facility Agreement reached with the European Investment Bank. Yesterday's Licence Agreement will add to the Group's growing portfolio of orphan products and has effectively transformed Amryt into fully-integrated sustainable, commercial pharmaceutical Group. Management said LOJUXTA is expected to be immediately cash generative and its ongoing regulatory and post-marketing commitments will all be funded from the own cashflow, rather than at Group level given that it requires relatively limited additional commercial, medical and regulatory infrastructure. Royalties on net sales are "not single digit but not substantial" said Rory Nealon (CFO/COO) during analyst meeting, while noting EBITDA margin to be expected should be around 20% of revenue, although "much higher than 40%" at the gross level. HoFH is a very rare, genetic disorder which starts in utero and causes premature cardiovascular disease. Historically, HoFH was estimated to occur in about 1 in 1 million people worldwide, but more recent studies suggest it may affect up to 1 in 300,000 people. The total market for LOJUXTA for HoFH indication is estimated at €50m and in Q3 2016, Aegerion generated US$22m in net product sales of lomitapide, of which, 15% was from prescriptions written outside of the US. Of this, 30% comes from Brazil and 70% was from the territories now being licensed to Amryt. With currently available treatment showing limited efficacy for some patients in controlling their LDL cholesterol levels, there is significant potential for the LOJUXTA to become a mainstay treatment for patients, having showed a 40-50% reduction in LDL cholesterol at 26 weeks after dosage during Phase 3 clinical trial, following which it remained stable at 126 weeks. The Licence Agreement for LOJUXTA will be cash generative from the day one and has significantly de-risked the Group. With Amryt's impressive Board of Directors, we believe the Group is proceeding in its plan to replicating Shire Pharmaceutical's original model. Following the €20m Facility Agreement from EIB announced on Friday, the Group is fully funded, and yesterday's announcement marks the start of a new stream of announcements going forward. The Phase III clinical trial for Episalvan in Epidermolysis Bullosa is expected to commence in Q1 FY2017 and we look forward to further updates in due course. We are excited by the Group's recent progress and reiterate our Speculative Buy rating on the shares.

Evgen Pharma (LON:EVG, 23.50p) – Speculative Buy
Evgen, the clinical stage drug development company focused on cancer and neurological conditions, announced its unaudited interim results for the six months ended 30 September 2016. Operational highlights during the period included (i) First patient dosing (April 2016) in the Group's Phase II clinical trial SAS (SFX-01 after subarachnoid haemorrhage) and patient recruitment rates in-line with expectations; (ii) US Food & Drug Administration granting the Group orphan drug designation (August 2016) for the use of stabilised sulforaphane in subarachnoid haemorrhage; (iii) First clinical site is opened for patient recruitment for the Group's Phase II clinical trial STEM (SFX-01 in the Treatment and Evaluation of Metastatic Breast Cancer), with further sites due to open across Europe in H1 CY 2017 and (iv) Further preclinical data to be presented at the San Antonio Breast Cancer Symposium (December 2016), while positive data from preclinical studies of SFX-01 in various models of the relapsing remitting form of multiple sclerosis presented (September 2016) at leading MS conference. As part of its ongoing strategic review, the Board also continues to assess all options (including MS and a number of orphan indications within neurology) for a potential third clinical programme based on SFX-01. Financial highlights include a total comprehensive loss for the period was £1.7m (30 September 2015: total comprehensive loss £1.2m), with a cash position (including short-term deposits) at 30 September 2016 was £5.5m (30 September 2015: £1.8m); having raise £7.0m gross in the IPO placing of October 2015, the Group remains fully funded to complete its two Phase II studies and to support further preclinical work.

Our view: Quite a year! A number of important milestones have now been passed! The SAS trial is recruiting patients as planned and the STEM trial has now opened for recruitment at it first site in Europe. Both trials are projected to report in-line with expectations in the first half of calendar year 2018. Furthermore, Evgen has secured orphan designation for its lead product in the treatment of subarachnoid haemorrhage, a type of stroke for which there has been no material advance in treatment for over 20 years. In addition to the clinical programmes, the Group presented positive preclinical data for SFX-01 at this year's ECTRIMS, the largest annual conference dedicated to basic and clinical research in multiple sclerosis; the data demonstrated that SFX-01 was superior to the active principle in Biogen's Tecfidera, particularly in the way that it improved neurological recovery in the chronic stage after relapse. Having achieved this for a total loss of just £1.7m is impressive but, more importantly for shareholders, is the fact that management still holds a reserve of £5.5m which is sufficient to complete its current clinical programmes and lay the foundations for the follow-on Phase III trials where required. Given an estimated monthly burn of around £330k during 2017, this should ensure investors have quite a bit of new data to chew over before being asked to dip their hands in their pockets once again, by which time a positive outcome from one or both of the trials should be seen to further lower the risk profile of SFX-01. Orphan status for SAH offers a prospective route to commercialisation valued at US$1.7bn just 12 or so months following Phase II data, while STEM could develop as foundation drug to be used in combination therapy for an indication valued at a multiple of this. Both have high unmet need and offer strategic entry portals to further therapeutic opportunities in oncology and neurology, For a company presently valued at just £17.5m, investors appear not to have fully recognised the value Evgen might deliver over the coming 18 months or so. Beaufort moves its recommendation on the shares from Hold to Speculative Buy.

Ryanair Holdings (RYA.L, EUR14.18) – Buy
Ryanair, a low-cost European short-haul airline company, yesterday provided traffic update for November 2016. During the month, passenger traffic increased by +15% y-o-y to 8.8 million customers, while the load factor improved +2% y-o-y to 95%. The rolling annual traffic to November rose +16% to 115.5 million customers.

Our view: Ryanair reported strong passenger traffic and load factor for November, driven by lower fares and the continuing success of its 'Always Getting Better' customer experience programme. Last month, Ryanair reported a strong H1 results with profit after tax jumping by +7%, helped by reduced cost, improved margin and an increased number of customers travelling along with an improved load factor. This was despite the Group having lowered average fares by -10%, as it also delivered reduced unit costs by -10%, of which, -5% was excluding fuel as the Group took delivery of new lower cost aircraft, cheaper financing and more competitive growth incentives from airports. Looking ahead, the Group said at the interim result, it remains comfortable with its full year net profit guidance of €1.30bn-€1.35bn and the Board also approved a further share buyback of up to €550m from November 2016 to February 2017. Ryanair said it expect passenger traffic of just over 119 million customers for FY2016 (FY2015: 106 million customers) and raised its long-term traffic forecast from 180 million to over 200 million customers per year by March 2024. We believe Ryanair has momentum and remains well-positioned for growth. Beaufort therefore retains its Buy rating on Ryanair.

 

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Tue, 06 Dec 2016 09:03:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26679/beaufort-securities-breakfast-alert-armadale-capital-plc-amryt-pharmaceuticals-cyan-holdings-plc-evgen-pharma-hummingbird-resources-ltd-ryanair-solo-oil-plc-tertiary-minerals-plc-26679.html
In the Papers - Deloitte. BP, Amazon, HMRC http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26678/in-the-papers-deloitte-bp-amazon-hmrc-26678.html Newspaper Summary

The Times

Tata ready to keep Port Talbot open: Tata Steel says it has made significant commitments to more than 4,000 workers at the Port Talbot steelworks in south Wales, which has spent the past eight months under threat of closure.

World still has taste for best of British: The Queen’s grocer, which claims to have invented the scotch egg nearly 300 years ago, has had a stellar year, with strong sales of jams, teas, hampers and spirits lifting it to record profits.

Green means go as car sales get a battery-powered boost: Motorists appear to have shrugged off fears of an economic slowdown, with the latest figures showing that new car sales are continuing to grow. In an accelerating trend in the industry, more than a quarter of the year-on-year growth is attributed to sales of electric and hybrid vehicles.

Nuclear reactors pass French safety test: The French state electricity group at the head of the project to build Britain’s new nuclear power station received a welcome boost when it was authorised to restart seven reactors in France closed after safety fears. However, EDF was told that four other reactors would stay shut while tests continue.

Deloitte fined $8 million for ‘serious misconduct’: America’s audit watchdog has fined Deloitte’s Brazilian division a record $8 million for falsifying audit reports, altering documents and providing false testimony.

Drop in the ocean is enough to secure Gulf of Mexico contract: BHP Billiton has narrowly edged out BP to win the right to develop a potentially lucrative deepwater oil project in Mexico.

BP digs deep to refuel industry in North Sea: BP has begun experimental drilling in a group of potential gasfields in the North Sea.

Smoke signals suggest BAT will up offer for rival Reynolds American: British American Tobacco’s takeover of Reynolds American is poised to move a step closer when the FTSE 100 cigarette maker sweetens its $47 billion offer for the maker of Camel and Newport cigarettes.

Buyer takes bite out of Rhubarb: A luxury catering group with contracts including the Goodwood Estate, the Royal Albert Hall and the Sky Garden in the City’s Walkie Talkie tower, has changed hands in a deal valuing the business at an estimated £70 million to £75 million.

The Independent

Mark Carney rounds on critics for avoiding ‘hard truths’ about economy: The Governor of the Bank of England, Mark Carney, has accused critics of the Bank’s low interest rates of avoiding “hard truths” about the state of the economy in the wake of the global financial crisis.

Iceland has hit back at Iceland: The supermarket Iceland has hit back at the Icelandic government after it shunned the retailer’s attempt to settle their trademark dispute.

Euro value bounces back after Italy referendum to reach two-week high: The euro jumped back to its highest level since mid-November, as markets shrugged off the outcome of the Italian constitutional referendum.

Thousands of U.K. restaurants could go out of business because of Brexit: Thousands of U.K. restaurants could be at risk of going out of business as the sharp fall in the value of the pound since the Brexit vote raises costs for imported food and threatens to squeeze consumer spending.

Amazon Go launches, letting people walk into shops and take things: Amazon has launched a real-life shop where people can just pick things up and leave.

The Daily Telegraph

Rolls-Royce’s Chief critic relents on troubled engineer - with a miserly 1p upgrade: One of Rolls-Royce’s harshest critics has eased his negative stance on the troubled engineer - giving a miserly 1p upgrade on his predictions for the company’s shares.

GW Pharma pledges commitment to U.K. growth as it cancels London listing: GW Pharmaceuticals plans to expand manufacturing in the U.K. and boost cultivation of the cannabis plants it uses to make a treatment for severe epilepsy, its Chief Executive has said.

City Pub undaunted by industry cost hikes ahead of Aim float: A surge in sales at City Pub Company has helped dampen fears of a slowdown in the pub sector ahead of its planned listing on London’s junior market next year.

St Modwen pushes ahead with sale of New Covent Garden plot: Property company St Modwen is pushing ahead with the sale of part of its valuable New Covent Garden Market site in south London, despite fears that the capital’s property market has peaked.

Norwegian Air’s U.S. expansion cleared for take-off: Norwegian Air’s expansion into the U.S. has received a boost after travel authorities cleared the low-cost carrier’s trans-Atlantic permits.

No special Brexit deal for the City of London, warn Hammond and Davis: The City of London will not get any special treatment in the upcoming Brexit negotiations, senior members of Theresa May’s Cabinet have told a group of high-profile banking and insurance Chiefs. 

The Guardian

Mark Carney: we must tackle isolation and detachment caused by globalisation: The Governor of the Bank of England has issued a rallying cry to policymakers across advanced economies to tackle the causes of a growing sense of “isolation and detachment” among people who feel left behind by globalisation.

Mark Carney’s history lesson shows we haven’t learned on globalisation: History repeats itself. That was the message from Mark Carney as the Governor of the Bank of England sought to draw some conclusions about the future of globalisation at the end of a turbulent year.

Mark Carney: European economies face hit if cut off from City of London: The Governor of the Bank of England has warned that European economies could be damaged if their access to the City of London is disrupted after Britain leaves the EU.

Hard Brexit would damage ‘almost every sector’ of U.K. economy: Leaving the single market would be damaging to almost every sector of the British economy, from manufacturing and energy to retail and financial services, according to a report commissioned by an alliance of Conservative, Labour and Liberal Democrat politicians trying to stop a hard Brexit.

Chris Grayling to unveil plans for new fully privatised railway line: The government is to unveil plans for a fully privatised railway line, with track and trains operated by the same company.

U.S. bank quit Sports Direct role over share deal concerns, court filing claims: A top U.S. investment bank resigned as a key adviser to Mike Ashley’s Sports Direct because of concerns that the retail company had manipulated its share price, according to claims made in a high court document.

Hammond and Davis meet Bank Chiefs to talk Brexit ‘opportunities’: Banking leaders from Goldman Sachs and HSBC were among those who met the Chancellor and the Brexit secretary to discuss how to keep financial services in the U.K. after leaving the European Union.

Daily Mail

Online estate agent Purplebricks sees shares soar after it delivers its maiden U.K. profit: Purplebricks shares soared after it delivered its maiden U.K. profit. The online estate agent, which was set up in 2014 by brothers Michael and Kenny Bruce and is backed by fund Manager Neil Woodford, posted underlying profits of £300,000 in the U.K. for the six months to the end of October.

Tata Steel and unions close to agreeing rescue plan for Port Talbot plant: Tata Steel and unions are close to agreeing a rescue plan for the Port Talbot plant. An announcement is expected this week on a plan that could save up to 4,500 jobs at the South Wales site.

Ferrari shares race to record high as investors bet on Italian companies that export goods beyond the Eurozone: Ferrari shares raced to a record high as investors bet on Italian companies that export goods beyond the Eurozone following the resignation of prime minister Matteo Renzi. The luxury car maker, which sells 95% of its cars outside its home country, gained nearly 3% in early trading in Milan to give it a value of £8.5 billion.

Burberry shares jump after reports it has shrugged off a string of takeover offers from U.S. accessories brand Coach: Burberry shares jumped after reports it had shrugged off a string of takeover offers from U.S. accessories brand Coach. A deal would have created a luxury fashion giant worth £16 billion, combining Burberry’s flair for coats with Coach’s strength in handbags.

Italy’s finance Chiefs scramble to secure rescue of world’s oldest lender: More than £700 million was wiped off Italy’s largest banks  as finance Chiefs scrambled to secure a rescue of the world’s oldest lender. As markets swung wildly following Sunday’s referendum vote, senior bankers held emergency talks to save Monte dei Paschi di Siena, which is crippled with £25.5 billion of bad debt.

Topps Tiles slips after flooring retailer admits error in last week’s full-year results: Topps Tiles slipped after the flooring retailer admitted an error in last week’s full-year results. The firm had climbed after announcing like-for-like sales had leapt 0.8% in the first eight weeks of its new financial year.

Daily Express

Services sector grows at fastest rate for 10 months: The economy is on course to see out 2016 in good shape after Britain’s powerhouse services sector grew at its fastest rate for 10 months in November.

Italy vote is ‘harbinger’ of doom: Deutsche Bank Boss warns of more turbulence after No: Deutsche Bank’s Chief Executive warned staff of more Eurozone turmoil after Italian Prime Minister Matteo Renzi’s resignation over a referendum on constitutional reform.

Italy’s banks at recession lows: Monte Dei Paschi stocks tumble amid No vote uncertainty: Fears are rising for Italy’s troubled banks after Italian Prime Minister Matteo Renzi resigned over a humiliating defeat in a national referendum.

Now pushy European Union angers the U.S. as it tries to control American banks: Furious American banks are fighting back against burdensome Brussels plans, which would allow European regulators to exert more control over foreign lenders.

The Scottish Herald

Fund drops Europe focus after Brexit: The Standard Life European Private Equity Trust is abandoning its geographic focus due to ongoing uncertainty in European markets limiting the potential investments it can make.

Cloud Global aims for the skies with first acquisition: Aviation firm Cloud Global has demonstrated its growth ambitions with the acquisition of ACS Aviation – a flight training specialist that is also the operator of Perth Airport.

Whisky water firm makes first deal in Russia: A Scottish company that sells water sourced from private springs near whisky distilleries has secured its first deal in Russia, marking its 15th export market.

Bargain-hungry shoppers send non-food sales soaring: Bargain-hungry shoppers bolstered retail takings last month, with non-food sales jumping 40% during the week including Black Friday.

Diageo hailed as stronger than Pernod: Diageo has stolen a march over Pernod Ricard after a leading ratings agency declared that it has a stronger credit quality than its Scotch whisky rival.

Asbestos removal firm changes hands in deal backed by U.K.SE: A Wishaw-based asbestos removal business has changed hands in a management buyout backed by U.K. Steel Enterprise (U.K.SE).

Scots pay drops as postings rise: Pay rates went into reverse as the number of new job postings increased in Scotland in November, figures reveal.

Air compressor available on Earth: The VERT.04 technology, said to be the first new air compressor design for three decades, was unveiled as prototype satellite cooling system for the Ministry of Defence’s Centre for Defence Enterprise, which aims to improve significantly the quality of infrared imaging.

Edinburgh Gin heads for duty free at capital airport: Edinburgh Gin has entered the travel retail market for the first time with a listing at Edinburgh Airport. The gin, which is owned by Ian Macleod Distillers after its September acquisition of the Spencerfield Spirts Company, will be available at Dufry-owned World Duty Free.

The Scotsman

RBS reaches £800 million settlement over 2008 rights issue: Royal Bank of Scotland  said it has agreed to pay up to £800 million to settle claims dating back to its £12 billion rights issue in 2008.

Car sales accelerate in November, says trade body: New car sales grew by 2.9% in November compared with the same month last year, according to the latest industry figures.

Scottish economy to slow sharply in 2017, warns think-tank: Scotland’s economy is forecast to grow a meagre 0.4% next year, half the rate for the U.K. as a whole and slashed from a 2% prediction last June, a think-tank says in a report.

Online backlash as English chemists bans Scottish banknotes: It’s a familiar issue to generations of Scots when shopping south of the border. Banknotes accepted as a matter of course in Dundee can prompt confusion if used in Dunstable.

City A.M.

Financial sector’s tax contribution hits a record £71.4 billion: The tax take from Britain’s financial sector has hit record levels, underscoring its economic importance as talks between the government and the City enter a new phase in the run up to Brexit.

Brexit prompts a “tsunami” of British solicitors to register in Ireland, according to the Law Society of Ireland: A “tsunami” of British lawyers have flocked to register on the Irish roll of solicitors this year following the U.K.’s vote to leave the EU.

Institutional West End property sales sizzle to record high as investors capitalise on weaker pound and foreign interest: Institutional sales of commercial property in the West End have topped £2.7 billion in the year-to-date, the highest volume ever recorded, according to estate agent Savills.

Hefty bill from counterfeiting and piracy costs EU £71 billion and 790,000 jobs each year: Counterfeit goods and piracy cost the EU economy a whopping £71 billion every year, according to research from the European Union’s intellectual property office.

HMRC told to hurry up and produce “tangible results” by Treasury Committee chairman: A Tory heavy-hitter said workers with life-threatening diseases could miss out on compensation pay-outs because of failings by the taxman and urged authorities to speed up the process.

 

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Tue, 06 Dec 2016 08:46:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26678/in-the-papers-deloitte-bp-amazon-hmrc-26678.html
Market Briefing - UK markets finished in positive territory yesterday, buoyed by gains in banking shares. http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26677/market-briefing-uk-markets-finished-in-positive-territory-yesterday-buoyed-by-gains-in-banking-shares-26677.html UK Market Snapshot

UK markets finished in positive territory yesterday, buoyed by gains in banking shares. Royal Bank of Scotland Group advanced 2.3%, after it agreed to pay up to £800.0 million to settle claims from shareholders over rights issue in 2008. Other lenders, Lloyds Banking Group and Barclays added 1.2% and 1.8%, respectively. BHP Billiton gained 2.7%, after a leading broker upgraded its rating on the stock to ‘Buy’ from ‘Sell’ and raised its target price to 1,500.0p from 1,100.0p. Rio Tinto edged up 1.6%, following a broker upgrade on the stock to ‘Neutral’ from ‘Sell’ and as it lifted its target price to 3,300.0p from 2,550.0p. On the contrary, precious metal miners, Polymetal International, Randgold Resources and Fresnillo declined 2.0%, 3.2% and 4.0%, respectively, tracking losses in gold prices. The FTSE 100 gained 0.2%, to close at 6,746.8, while the FTSE 250 rose 0.2%, to settle at 17,461.9.

US Market Snapshot

US markets ended higher yesterday, bolstered by gains in financial and technology shares. Wells Fargo, Goldman Sachs Group and Bank of America advanced 1.4%, 2.3% and 2.9%, respectively. Microsoft and Facebook gained 1.6% and 1.8%, respectively. FairPoint Communications jumped 10.9%, after its competitor, Consolidated Communications Holdings, down 4.1%, agreed to acquire the former in an all-stock deal valued at $1.5 billion.  Hilton Worldwide Holdings edged up 3.3%, on the back of news that its board approved the spinoff of Park Hotels & Resorts and the timeshare business of Hilton Grand Vacations. On the flipside, Apple slid 0.7%, after data showed that the company’s watch shipments plummeted in the third quarter. The S&P 500 advanced 0.6%, to settle at 2,204.7. The DJIA rose 0.2%, to settle at 19,216.2, while the NASDAQ gained 1.0%, to close at 5,308.9.

Europe Market Snapshot

Other European markets closed in the green yesterday, as investors shrugged off worries from the resignation of the Italian Prime Minister, Matteo Renzi, following a heavy defeat in a referendum over constitutional reforms. Car makers, Renault, Bayerische Motoren Werke and Fiat Chrysler Automobiles climbed 2.7%, 3.4% and 6.3%, respectively. Novartis rose 1.1%, after it presented positive results of CAR-T drug CTL019 in an experimental cancer therapy. Bucking the trend, Italian lenders, Intesa Sanpaolo, Banca Monte dei Paschi di Siena and Banca Popolare di Milano Scarl plunged 1.0%, 4.2% and 7.9%, respectively. UniCredit declined 3.4%. It is in talks with Amundi, up 3.2%, for the sale of Pioneer Investments. The FTSEurofirst 300 index edged up 0.6%, to close at 1,347.0. Among other European markets, the German DAX Xetra 30 advanced 1.6%, to close at 10,684.8, while the French CAC-40 gained 1.0%, to settle at 4,574.3.

Asia Market Snapshot

Markets in Asia are trading higher this morning. In Japan, Sumco, Mitsui Mining and Smelting and Teijin have climbed 4.5%, 4.8% and 5.0%, respectively. Exporters, Sony, Panasonic and Toshiba have advanced 1.0%, 2.3% and 2.5%, respectively. Oil heavyweights, Japan Petroleum Exploration and JX Holdings have risen 0.3% and 0.8%, respectively. In Hong Kong, lenders, Industrial and Commercial Bank of China and Bank of East Asia have added 0.6% and 1.6%, respectively. In South Korea, Hyundai Motor and Samsung Electronics have edged up 1.1% and 1.9%, respectively. The index majors were investigated whether they were pressured by nation’s President, Park Geun-hye or a friend to give money to two non-profit foundations backing Park’s policies in exchange for special treatment. The Nikkei 225 index is trading 0.5% higher at 18,368.7. The Hang Seng index is trading 0.8% up at 22,691.2, while the Kospi index is trading 1.4% higher at 1,990.9.

Key Corporate Announcements Today

AGMs

DX (Group), Jubilee Platinum, Kalibrate Technologies, Mila Resources, Trading Emissions, Graphene Nanochem, London & St lawrence Inv Co.

EGMs

Transocean Partners

Final Dividend Payment Date

Fidelity Asian Values

Interim Dividend Payment Date

HSBC Holdings, London & St lawrence Inv Co.

Special Dividend Payment Date

Playtech

Quarterly Ex-Dividend Date

Schlumberger Ltd.

Trading Announcements

EasyJet, Ultra Electronics, Wolseley

Key Corporate Announcements for Tomorrow

AGMs

Bioventix, Gattaca, Greatland Gold, Octagonal, UK Mortgages Limited, Vietnam Enterprise Investments (DI), YouGov, Eastern European Property Fund Ltd.

EGMs

JRP

Final Dividend Payment Date

Blancco Technology Group

Interim Dividend Payment Date

Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 1 E Shares, Ingenious Entertainment VCT 1 F Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Entertainment VCT 2 E Shares, Ingenious Entertainment VCT 2 F Shares

Quarterly Payment Date

Unilever

Trading Announcements

Carillion

Commodity, Currency and Fixed Income Snapshots

Crude Oil

At 0430GMT today, Brent Crude Oil one month futures contract is trading 0.73% or $0.40 lower at $54.54 per barrel, ahead of the American Petroleum Institute’s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 0.88% or $0.48, to settle at $54.94 per barrel, extending its rally after last week's OPEC deal to limit crude oil production.

Gold

At 0430GMT today, Gold futures contract is trading marginally or $0.40 higher at $1174.40 per ounce. Yesterday, the contract declined 0.09% or $1.10, to settle at $1174.00 per ounce, amid mounting prospects for an interest rate hike later in the month.

Currency

At 0430GMT today, the EUR is trading 0.08% lower against the USD at $1.0753, ahead of Euro-zone GDP growth for the third quarter, slated to release in a few hours. Yesterday, the EUR strengthened 0.86% versus the USD, to close at $1.0762, as investors shrugged off jitters from the result of Italian constitutional referendum which led to resignation of the Italian Prime Minister, Matteo Renzi.

At 0430GMT today, the GBP is trading 0.07% higher against the USD at $1.2741. The US trade balance figures and factory orders, both for October, are due for release later today. Yesterday, the GBP strengthened 0.10% versus the USD, to close at $1.2732, after data showed that UK Markit services PMI rose more than expected in November.

Fixed Income

In the US, long term treasury prices mostly rose and pushed yields lower. On the macro front, the US ISM services PMI advanced more than anticipated in November. Yesterday, yield on 10-year notes fell 1 basis point to 2.39%, while yield on 2-year notes gained 2 basis points to 1.13%. Meanwhile, 30-year bond yield lost 3 basis points to 3.05%.

Key Economic News

UK services PMI recorded an unexpected rise in November

The services PMI rose unexpectedly to 55.20 in November, in the UK, compared to market expectations of a fall to 54.00. In the previous month, the services PMI had registered a level of 54.50.

UK retail sales across all sectors rose less than expected in November

In November, retail sales across all sectors registered a rise of 0.60% on an annual basis in the UK, lower than market expectations for a rise of 1.70%. Retail sales across all sectors had advanced 1.70% in the previous month.

UK official reserves registered a drop in November

In November, official reserves eased $1826.00 million in the UK. Official reserves had recorded a drop of $1156.00 million in the prior month.

UK new car registrations recorded a rise in November

On a YoY basis, new car registrations in the UK rose 2.90% in November. In the prior month, new car registrations had risen 1.40%.

Euro-zone investor confidence index declined unexpectedly in December

In December, the investor confidence index recorded an unexpected drop to 10.00 in the Euro-zone, compared to a reading of 13.10 in the previous month. Markets were anticipating the investor confidence index to climb to 14.30.

Euro-zone composite PMI climbed in November

In November, the final composite PMI climbed to 55.00 in the Euro-zone, compared to a reading of 53.30 in the previous month. Market expectation was for composite PMI to rise to a level of 54.10. The preliminary figures had indicated a rise to 54.10.

Euro-zone retail sales rose more than expected in October

On a monthly basis in October, the seasonally adjusted retail sales advanced 1.10% in the Euro-zone, more than market expectations for a rise of 0.80%. Retail sales had recorded a revised drop of 0.40% in the previous month.

Euro-zone services PMI climbed in November

In November, the final services PMI in the Euro-zone advanced to 53.80, compared to market expectations of a rise to 54.10. Services PMI had registered a reading of 52.80 in the prior month. The preliminary figures had recorded an advance to 54.10.

German services PMI advanced in November

Compared to a reading of 54.20 in the prior month the final services PMI registered a rise to 55.10 in November, in Germany. Market anticipation was for services PMI to climb to 55.00. The preliminary figures had indicated an advance to 55.00.

French services PMI rose in November

In November, the final services PMI advanced to 51.60 in France, compared to market expectations of a rise to a level of 52.60. The preliminary figures had recorded a rise to 52.60. In the prior month, services PMI had registered a reading of 51.40.

Italian services PMI recorded a rise in November

The services PMI in Italy climbed to 53.30 in November, compared to a reading of 51.00 in the prior month. Markets were anticipating the services PMI to advance to a level of 51.60.

Spanish services PMI advanced in November

In November, the services PMI in Spain registered a rise to 55.10, compared to a reading of 54.60 in the prior month. Markets were anticipating the services PMI to rise to 55.00.

Spanish calendar adjusted industrial output advanced less than expected in October

On an annual basis, the calendar adjusted industrial output climbed 0.50% in October, in Spain, less than market expectations for a rise of 1.40%. In the previous month, the calendar adjusted industrial output had climbed by a revised 0.60%.

US Markit composite PMI steadied in November

In November, the final Markit composite PMI remained flat at 54.90 in the US. The preliminary figures had also indicated a steady reading.

US Markit services PMI fell unexpectedly in November

The final Markit services PMI dropped unexpectedly to 54.60 in the US, in November, lower than market expectations of an advance to 54.90. In the previous month, Markit services PMI had registered a reading of 54.80. The preliminary figures had indicated a fall to 54.70.

US ISM non-manufacturing PMI recorded a rise in November

The non-manufacturing PMI in the US registered a rise to 57.20 in November, compared to a reading of 54.80 in the prior month. Market expectation was for the non-manufacturing PMI to climb to a level of 55.50.

Japanese consumer confidence index eased surprisingly in November

The consumer confidence index registered an unexpected drop to 40.90 in Japan, in November, compared to market expectations of a rise to a level of 42.80. The consumer confidence index had registered a reading of 42.30 in the previous month.

Japanese labour cash earnings advanced less than expected in October

In October, labour cash earnings in Japan climbed 0.10% on an annual basis, lower than market expectations for a rise of 0.20%. In the previous month, labour cash earnings had registered a revised flat reading.

 

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Tue, 06 Dec 2016 08:33:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26677/market-briefing-uk-markets-finished-in-positive-territory-yesterday-buoyed-by-gains-in-banking-shares-26677.html
Mo Monte, mo problems http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26676/mo-monte-mo-problems-26676.html FTSE 100 Index called to open +5pts at 6750, sideways 6740-6760 overnight to keep the recovery from yesterday’s 6650 4-week lows intact. Another up-leg is thus possible but falling highs since early October remains a hurdle at 6800. Bulls need a breakout beyond 6760 overnight highs. Bears require a breach of rising lows at 6740. Watch levels: Bullish 6770, Bearish 6730.

A lacklustre European open comes in spite of a positive Asian session which echoes gains on Wall St. Advances by big Bank and commodity names are derived from relief at the absence of post-referendum turmoil in Europe (so far) coupled with a weaker USD giving a boost to metals prices and Brent Crude Oil, the latter testing $55 for the first time since July 2015.

Italian Prime Minister Renzi has agreed to put off his resignation until the nation’s 2017 budget has been approved, reducing the risk of snap election and another populist backlash. Contagion fears also eased by suggestions of a weekend state bailout of Banca Monte dei Paschi di Siena due to concerns that a €5bn recapitalisation is at risk by the withdrawal of a key participant.

While the USD Basket is off its worst levels, we note GBP/USD holding around 2-month highs which represents a drag on the foreign profits of FTSE stocks. A EUR/USD off its best levels, however, may provide continued support to Germany’s DAX exporters, especially after surprisingly strong Factory Orders data this morning.

While Japan’s Nikkei and Australia’s ASX are posting gains of 0.5% (JPY flat versus USD, RBA left rates at lows ahead of GDP data tomorrow), note China in the red after the PBOC fixed the currency higher following recent USD weakness while regulators are stepping up efforts to curb an insurance sector binge on equities.

It was another record close for the Dow Jones, despite uncertainty in Europe, whilst the Nasdaq outperformed its peers up 1% as the Tech sector finished near the top of the pile. A strong performance from Financials helped the Dow offset losses from Healthcare names, as the S&P also benefitted closing higher by 0.6%.

Crude Oil prices have edged lower as an element of profit taking surfaced following the first $55+ reading of Brent Crude since July 2015. The confirmation of a meeting with non-OPEC producers on Saturday will see all eyes back on Vienna as the production cut deal negotiated last week is expected to be finalised, however reports that the group once again increased output in November will raise fresh scepticism.

Gold, despite posting fresh 10 month lows yesterday afternoon, has since rallied back above $1170, suggesting fears of the rejection of Italy’s constitutional referendum have not yet completely disappeared despite yesterday’s relief rally, helped by a weakening USD. That said, a break below $1170 could see prices fall to $1162 and beyond before the Fed’s FOMC meeting next week.

In focus today, away from any developments in Italy post-referendum, especially with regards to its banks and prime-minister, will be Eurozone Q3 GDP which is seen confirmed (3rd reading) at 0.3% QoQ and 1.6% YoY.

Any further commentary from the UK Supreme Court hearing on Article 50 (day 2 of 4) would also be of interest given its significance and potential for a Tory rebellion regarding the government’s excessive secrecy about the UK’s negotiating position on Brexit.

This afternoon, US Non-Farm Productivity is forecast to have rebounded even more than thought in Q3 while Unit Labour Costs growth likely slowed. Later, US Factory Orders growth is expected to have accelerated in October after a quiet Aug-Sept, although the ex-transport figure may be more closely watched, excluding the more chunky and less regular contracts.

The Eurogroup of finance ministers continue its meet in Brussels and we also hear from EU President Juncker this morning just after the European open. Fed speakers fall silent on account of the FOMC blackout ahead of next key week’s monetary policy meeting.

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Tue, 06 Dec 2016 08:29:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26676/mo-monte-mo-problems-26676.html
Stakes Are High In Showdown for British Future Energy Strategy http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/26675/stakes-are-high-in-showdown-for-british-future-energy-strategy-26675.html Here is the opening of this topical article from The Telegraph:

It is high noon for Britain’s fledgling energy policy. Years of failed interventions, arbitrary green targets and damaging subsidies will come to a head in this week’s capacity auction, when we will either see investors commit to building desperately needed new power plants or simply walk away.

The stakes could not be higher, for the Government and for those policymakers who believed they had designed a credible strategy to keep the lights on.

How have we got here and why does so much in this sector now hang on a complicated and little-known auction process?

The overriding issue remains the urgent need to replace old coal-fired power stations, which have served the UK since the 1960s, with new plants that burn natural gas to generate electricity. At this stage, we can forget Hinkley C, as it will not be ready in time.

These gas-fired power stations,  known as CCGTs, can be built relatively quickly, are much cheaper than new nuclear plants, and are 50pc cleaner than coal; however, they are years behind schedule, because of a failure by government to deliver the right investment landscape.

David Fuller's view

Very few economies are relatively strong without competitive energy costs.  The UK has not been in this position since North Sea oil revenues from approximately 1981 through 2003 went into significant decline thereafter, leading to increased energy import dependency from 2004 onwards (see graph which Telegraph subscribers can access via the link above). 

Thereafter, inadequate long-term planning by successive UK governments, combined with EU group think on leadership in emissions control.  Unfortunately, this was achieved at the cost of future energy supplies.  Until this problem is adequately addressed by the government, commencing with extensive fracking, UK energy costs will remain higher than necessary and supplies will be barely adequate.

Ailing Banks in Italy Now Have to Wade Through the Referendum Quagmire to Secure a Rescue

Here is the opening of another topical article by Ambrose Evans-Pritchard for The Telegraph:

Italy's Matteo Renzi thought the "silent majority" would save him, if only he could chivvy enough of them to polls. The prime minister misjudged disastrously.

The voters certainly turned out. They smashed through the 60pc threshold that Mr Renzi thought would secure him victory in the constitutional referendum, but only to register their silent anger  - with him, with his government, with Brussels, and with an Italo-European establishment that has run the Italian economy into the ground.

"I didn't realise they hated me so much," he confessed before his resignation, the wunderkind of European politics no more.

Markets have reacted with insouciance to the epic scale of Mr Renzi's defeat, betting that the Italian political class will somehow put together a new caretaker government and that business will carry on as usual.  "It's not a psycho-drama," said the EU economics commissioner, Pierre Moscovici.

The reflex of traders after Brexit and the Trump shock is to "buy the dip" on political upsets, but it is far from clear whether the tumultuous events unfolding in Italy have anything in common with Anglo-Saxon episodes, or indeed with any other episode in modern Italian history.

The European Central Bank has bought calm for now by intervening in the bond markets, holding down yields on 10-Italian debt to 2pc. This in turn has steadied the currency markets. The euro has risen slightly against the dollar.

But the ECB is effectively "front-loading" purchases of Italian bonds on a short-term basis, which means it will have to buy less early next year since it cannot alter the total volume under its €80bn programme of quantitative easing each month.

"I am worried about what is going to happen in February when the Italian treasury has to redeem €49bn of bonds. The ECB may not be able to remain aggressively in the markets that long," said Professor Erik Jones, director of European studies at Johns Hopkins University in Bologna.

The ECB cannot legally step in as a lender-of-last resort for Italian bonds unless Rome requests a formal bail-out under the European Stability Mechanism (ESM), and this requires votes in the German and Dutch parliaments, among others.

The terms would be draconian. Italy would lose even more control over its budget. It would amount to a Troika-style take-over of the economy, or a "commissariato" in the horror parlance of Italian politics. "If Europe humiliates Italy and puts the government under a tight rein, then you really will see a popular insurrection," said Professor Jones.

Belying the apparent calm, the Italian authorities are scrambling to prevent the collapse of their intricate rescue plan for banks, knowing that failure would set off a dangerous chain-reaction.

David Fuller's view

Mario Draghi calmed the markets by purchasing more Italian Government bonds with his £80bn a month programme.  However, troubles lie ahead, from Italy’s need to redeem €49bn of bonds in February to a possible request from Rome for a formal bail-out, as AEP points out above.

Matteo Renzi would still be in office, for better or worse, had he not made a tactical error in thinking a referendum was similar to a general election.  In the referendum, he was on his own and lost with approximately 40% of the vote.  As one of several candidates in a general election, he would have won with the same 40%.  His age is only 41 and he has some charisma, so we may see him run again at some stage.  However, unless Brussels and Germany tread softly in dealing with Italy’s financial problems, which they may not, Beppe Grillo’s Five-Star Movement could succeed with an anti-Euro campaign.

Email of the day

On Tony Blair’s ‘logic’:

Following Tony Blair's 'logic', this is what should have happened when he was elected in 1997. The losers in the general election should have demanded another vote until voters 'get it right', when of course no more voting would be allowed. What a pity we did not do that to the man who inherited the best economy the UK had in a century and who then proceeded to make the country bankrupt - while stuffing his own pockets.

Sorry if this is blunt, but the dishonesty and deviousness of the man is shocking. I guess he still aches to lead the EU, and is so full of himself that he cannot see they will never consider him.

David Fuller's view

"Blunt", yes but I am glad you said it and I think many subscribers will agree with you.

The build-up to Blair was also depressing because the Conservatives had lost their way. After forcing out Margaret Thatcher - the best Prime Minister I have ever seen - the Tories were divided and had a weak government led by John Major who unwisely joined the EU's Exchange Rate Mechanism.

In 1997 Labour's Tony Blair appealed as a fresh-face and politically middle-of-the-road candidate. Following 9/11 in 2001, he became much closer to George W Bush (perhaps to escape from power-hungry Gordon "big clunking fist" Brown?). When Blair was eventually pushed aside by Brown in mid-2007, the new Prime Minister opened the financial taps even wider, encouraging more leveraged borrowing and a bigger house price bubble, heading into the Crash of 2008.

Euro Gains With Stocks as Italy Vote Absorbed in 'Three Minutes"

This article by Eddie Van Der Walt  and Aleksandra Gjorgievska for Bloomberg may be of interest to subscribers. Here is a section:

The common European currency rose against the dollar even as Italy slid into political limbo after Italian Prime Minister Matteo Renzi’s resignation opened the door to fresh elections. The euro earlier fell to its weakest in 20 months. European shares headed for the biggest gain three weeks, while the cost of insuring Italian bank bonds against default jumped. Gold headed for the lowest close since February, Treasury 10-year yields rose to 2.42 percent and a gauge of equity-market volatility slid.

Political risk from Italy hasn’t spread beyond its borders as markets were correctly positioned for the anti-establishment mood sweeping around the world. This was a departure from the Brexit referendum and Donald Trump’s surprise election, when traders were caught out by populist votes.

“After Brexit, it took three days for markets to shake it off, with Trump it took three hours, with Italy it took three minutes,” said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. His firm oversees $260 million. “The outcome was not as much of a surprise as many expected it to be -- markets learned their lesson.”

Let’s hope those mistakes are not repeated in the next few years.

Eoin Treacy's view

The Italian decision to vote No on the referendum was widely anticipated with the risk residing in whether a snap election would be called. With that option being swept aside soon after the decision, some of the shorts on the Euro were closed in what is a classic example of “sell the rumour, buy the news”.

Information Gaps and Shadow Banking

This article by Kathryn Judge from Columbia University School of Law may be of interest to subscribers. Here is a section:

This article argues that information gaps—pockets of information that are pertinent and knowable but not currently known—are a byproduct of shadow banking and a meaningful source of systemic risk. It lays the foundation for this claim by juxtaposing the regulatory regime governing the shadow banking system with the incentives of the market participants who populate that system. Like banks, shadow banks rely heavily on short-term debt claims designed to obviate the need for the holder to engage in any meaningful information gathering and analysis. The securities laws that prevail in the capital markets, however, both presume and depend on providers of capital playing the lead role performing these functions. In synthesizing insights from diverse bodies of literature and situating those understandings against the regulatory architecture, this article provides one of the first comprehensive accounts of how the information related incentives of equity and money claimants explain many core features of both securities and banking regulation.

The article’s main theoretical contribution is to provide a new explanation for the inherent fragility of institutional arrangements that rely on money claims. The literature on bank runs typically focuses on either coordination problems among depositors or information asymmetries between depositors and bank managers to explain bank runs. This article provides a third explanation, one which complements the established paradigms. It shows how information gaps increase the probability of panic by increasing the range of signals that can cast doubt on whether short-term debt that market participants had been treading like money remain sufficiently information insensitive to merit such treatment. It further examines how information gaps also impede the market and regulatory responses required to dampen the effects of a shock once panic takes hold. Evidence from the 2007-2009 financial crisis is consistent both with the article’s claims regarding the ways shadow banking creates information gaps and how those gaps contribute to fragility.

Eoin Treacy's view

The shadow banking sector has benefitted inordinately from quantitative easing because the cost of leverage has been so low and access to the sea of liquidity issued by central banks has been limited to a relatively small number of market participants. That fact alone has contributed to the rise of populist movements, but the prospect of rising interest rates in response to proposed fiscal stimulus represents a challenge for the shadow banking sector.

New efficiency record for large perovskite solar cell

This article by Eric Mack for Gizmag may be of interest to subscribers. Here is a section:

"Perovskites came out of nowhere in 2009, with an efficiency rating of 3.8 percent, and have since grown in leaps and bounds," said Anita Ho-Baillie, a Senior Research Fellow at the UNSW's Australian Centre for Advanced Photovoltaics. "I think we can get to 24 percent within a year or so."

The solar cells are made from crystals grown into a particular structure called perovskite. Smooth layers of perovskite with large crystal grain sizes allow the cells to absorb more light. The technology has been advancing fast and attracting plenty of attention thanks to its ease of production and low cost compared to silicon cells.
 

"The diversity of chemical compositions also allows cells be transparent, or made of different colors," said Ho-Baillie. "Imagine being able to cover every surface of buildings, devices and cars with solar cells."
 

Perovskite cells do have downsides like much less durability, something Ho-Baillie and her team say they're confident they can improve, while also shooting for higher levels of efficiency.

Eoin Treacy's view

Perovskite is a development stage technology that is likely to play an important role in the future of solar cells but it could be a decade before it reaches commercial utility. The primary argument supporting perovskite is the relative cost of producing the crystals versus the panels used today. That enhances the technology’s competitiveness so that cells do not need to be as efficient because they are so much cheaper. However what do need to be overcome are the issues described above regarding durability which are non-trivial.

Singapore must remain open, even as rest of world turns inwards: PM Lee

This article from ChannelNewsAsia.com may be of interest to subscribers. Here is a section:

The changes around the world will have major consequences especially for small, open countries like Singapore, said Mr Lee.

“We have always depended on open trade, making friends around the world, looking for opportunities to cooperate with others,” he said. “We have relied on a secure, peaceful Asia, an international order where countries big and small cooperate and compete according to rules which are fair to all; where small countries have a right to their place in the sun.”

“That is how we have prospered these last 50 years.”

He added: “Yes, we worked very hard, and earned our success. But we were also very lucky to enjoy this international environment. We attracted foreign investments, negotiated FTAs, worked with other countries, expanded our exports, traded, prospered.”

But now, said Mr Lee, other countries are flexing their muscles and becoming increasingly assertive.

“Nobody can tell how relations between the big powers will develop,” he admitted. “If US-China relations grow tense, Singapore is going to be in a very difficult spot, because we regard both as our friends and do not want to have to choose between them.

Eoin Treacy's view

As a major centre for asset management and private banking Singapore has no choice but to remain open and neutral, as competition between much larger countries increases. There has been a great deal of internal debate about the role of foreigners in pushing up the price of real estate and the rising cost of living and it is probably these points the PM is referring to in his statement. Negotiating a path forward during what is likely to be a time plagued by higher political uncertainty all over the world is going to take a deft hand and strong governance. Against that background Singapore is in a positive position.

 

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Tue, 06 Dec 2016 08:19:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/26675/stakes-are-high-in-showdown-for-british-future-energy-strategy-26675.html
Today's Market View - Edenville Energy, Horizonte Minerals Plc, Petropavlovsk PLC, Sula Iron and Gold PLC, Tertiary Minerals plc http://www.proactiveinvestors.co.uk/columns/sp-angel/26674/today-s-market-view-edenville-energy-horizonte-minerals-plc-petropavlovsk-plc-sula-iron-and-gold-plc-tertiary-minerals-plc-26674.html Edenville Energy (LON:EDL) -  Initial bulk test results confirm coal suitability for power generation

Horizonte Minerals (LON:HZM) – Completion of fundraising

Petropavlovsk* (LON:POG) – Amur Zoloto acquisition update

Sula Iron & Gold (LON:SULA) – Drilling to start at flagship Ferensola gold project in January

Tertiary Minerals* (LON:TYM) – Disposal of non-core gold exploration assets

 

Bulk commodities and base metals miners are trading higher this morning with most precious metals producers falling following weaker gold prices.

Gold prices are off 1% trading around the $1,165/oz level as all early gains were given up. Base metals are broadly up.

US$ index is flat this morning following a volatile early morning session jumping on the Italy’s referendum results only to give up its gains later.

Iron ore futures were up slightly on stronger steel prices.

 

Italian Prime Minister loses referendum as EU stands on brink of oblivion

The European Union has proudly announced a victory in Austria as a minority group left wing politician defeated the far right candidate.

How this was a victory for the EU we don’t know but it seems the EU PR people have woken up to the crisis of confidence in the Berger’s of Brussels.

Sadly for the EU, the Italian Prime Minister lost his referendum causing some uncertainty in the region.

Today Greece starts negotiations with Eurozone finance ministers and the IMF over its extraordinary debt burden.  It’s difficult to see how Greece is ever going to repay this debt and to restore the nation to its rightful place.

If the EU is not able to forgive Greece on a significant portion of its debt and if the ECB can not a bit more forgiving on the pain inflicted on the equity holders of Italian banks then the ECB risks alienating and collapsing a substantial part of the Eurozone on a longer term basis.

 

An observation

Some stupid things are fun to watch.  Like daring your kids to run up the stairs at a tube station while you travel the escalator alongside encouraging them along while their little legs tire as they realise how far it really is.

Another is to tell people holding tickets in a queue that they are eligible for a prize if their ticket is called out.  They are always so disappointed when they discover there is no prize at the end of it.

Some geologists do something similar where they love getting analysts and investors to do a lot of running round but quite often there is no hope of anything tangible happening.

A couple of companies spring to mine such as Anglesey Mining, Conroy Gold, Chaarat Gold and Sirius Minerals where there’s an awful lot of running around going on but we suspect there may be little reward for long suffering equity investors at the end of it all. 

Fortunately most of the projects we write about do have good merit and while most projects will take longer and cost more than first envisaged many should get there in the end.


Dow Jones Industrials  -0.11% at 19,170
Nikkei 225        -0.82% at 18,275 
HK Hang Seng   -0.26% at 22,506 
Shanghai Composite    -1.21% at   3,205
FTSE 350 Mining   +1.26% at 14,759 FTSE 350 +101% since 1st January
AIM Basic Resources   +0.93% at  2,370 AIM Basic Resources +45% since 1st January

Economic News

US – Nov employment numbers showed the labour market remained strong with an unemployment rate posting a new post-recession low.

While hourly earnings growth slowed slightly in Nov a less volatile 3m average remained on an increasing trajectory posting a post-recession high.

China – Composite economic activity index remained at a three-year high in Nov as growth in services sector accelerated while manufacturing output gains slowed.

New projects and stronger new orders are reported to have contributed to solid services sector PMI numbers.

At the same time “optimism towards future growth prospects moderated to a13-motnh low at services companies”, the report said.

“While some panellists expect company expansion plans and further increases in new orders to support future activity, others commented on relatively subdued market conditions.”

Price pressures were relatively subdued in services sector, as opposed to manufacturing firms that reported stronger input costs driven inflation.

Manufacturing PMI (released on Thursday): 50.9 v 51.0 in Oct and 51.2 forecast.

Services PMI (released today): 53.1 v 52.4 in Oct.

Composite PMI: 52.9 v 52.9 in Oct.

 

Eurozone – Economic growth accelerated to the highest pace this year in Nov with relatively broad based gains as measured by Markit Output index.

“The improvement is enough to signal an acceleration of GDP growth to 0.4% in Q4,” the report said.

“With growth broadly stable in Germany, the PMI remains consistent with a 0.5% GDP increase in the fourth quarter, while growth in France is running to a more modest 0.2-0.3%.”

“Faster rates of expansion were especially welcome in Spain and Italy, where the surveys point to fourth quarter GDP growth of 0.7% and 0.2% respectively.”

Both employment and inflation increased last month.

“Price pressures continued to intensify… input costs rose to the greatest extent since May/15.”

Markit Eurozone Services PMI: 53.8 v 54.1 in Oct and 54.1 forecast.

Markit Eurozone Composite PMI: 53.9 v 54.1 in Oct and 54.1 forecast.

 

Italy – Matteo Renzi will be filing his resignation as the nation’s prime minister this afternoon following a “no” vote win in the referendum.

The proposed constitutional change was rejected by 59% of people voted with a high turnout of nearly 69%.

Sergio Mattarella, the nation’s president, will be appointing a temporary government until the next elections, due in 2018.

Euro dipped in last night on exit poll results but has recovered all its losses this morning.

                                                                                              

Currencies
US$1.0636/eur vs 1.0665/eur yesterday.   Yen 114.38/$ vs 113.97/$.   SAr 13.863/$ vs 14.062/$.   $1.272/gbp vs $1.262/gbp.     
0.742/aud vs 0.742/aud.   CNY 6.887/$ vs 6.882/$ –

Commodity News

Precious metals:

Gold US$1,165/oz vs US$1,175/oz yesterday 
Gold ETFs 59.8moz vs 59.8moz yesterday 
Platinum US$927/oz vs US$918/oz yesterday 
Palladium US$729/oz vs US$748/oz yesterday 
Silver US$16.57/oz vs US$16.55/oz yesterday

Base metals:   

Copper US$ 5,851/t vs US$5,745/t yesterday 
Aluminium US$ 1,719/t vs US$1,712/t yesterday 
Nickel US$ 11,625/t vs US$11,160/t yesterday 
Zinc US$ 2,718/t vs US$2,698/t yesterday
Lead US$ 2,293/t vs US$2,306/t yesterday
Tin US$ 21,045/t vs US$21,925/t yesterday 

Energy:

Oil US$55.0/bbl vs US$53.9/bbl yesterday 
Natural Gas US$3.522/mmbtu vs US$3.508/mmbtu yesterday
Uranium US$18.00/lb vs US$18.00/lb yesterday 

Bulk:    

Iron ore 62% Fe spot (cfr Tianjin) US$73.0/t vs US$70.3/t 
Chinese steel rebar 25mm US$483.1/t vs US$471.6/t 
Thermal coal (1st year forward cif ARA) US$65.3/t vs US$66.5/t yesterday
Premium hard coking coal Aus fob US$305.0/t vs US$308.0/t – unch

Company News

Edenville Energy (LON:EDL) 0.5 pence, Mkt Cap £3.6m -  Initial bulk test results confirm coal suitability for power generation

Edenville Energy has reported the second tranche of test results from the recent bulk sampling programme at the Mkomolo and Namwele coal deposits in western Tanzania.

The results, which come from a sample taken in the MK1 seam in the southern part of the Mkomolo deposit have confirmed that the coal is suitable “to provide a sustained and reliable fuel supply to a power plant project.”

As with the earlier results from the MK2 seam, the results indicate that “only moderate washing would be needed to produce a coal suitable for use in the power generation process.”

The company indicates that “The sample from MK1 included a significant proportion of friable and weathered material, distinguishable from the main seam below.”

Testing of this friable material “demonstrated lower energy values and would probably not be used as power plant feedstock.”, though the company indicates that it believes that this poorer quality material could be mined selectively in the process of accessing the better quality coal underlying it and therefore not increasing the washing requirements for the plant.

Conclusion: The second positive set of bulk sample results supports the suitability of the coal for the proposed integrated coal-to-power project. The ability to selectively mine the poorer quality material close to the surface should help to contain the costs of washing, though we wonder how much of the overall resource within the MK1 seam may need to be discarded as a result.

 

Horizonte Minerals (LON:HZM) 2.5 pence, Mkt Cap £28.7m – Completion of fundraising

The company reports that it has completed the second and final tranche of a £9m fund-raising. The company has placed a further 76m shares to raise gross proceeds of approximately C$2.48m.

The funds are to be used to fund a feasibility study at the wholly owned Araguaia nickel project in Brazil.

In a separate announcement issued  by JP Morgan Asset Management, it has been disclosed that they now hold an 8.98% interest (approximately 98.4m shares) in Horizonte Minerals.

Conclusion: The additional funding provides Horizonte with the means to advance its feasibility work at Araguaia while the support of a respected institutional investor should help to raise the profile of the company.

 

Petropavlovsk* (LON:POG) 7.3p, Mkt Cap £238m – Amur Zoloto acquisition update

Amur Zoloto shareholders indicated willingness to accept a reduction in the acquisition price and proposing to fund the 2017-18 production plan with its own cash.

“Following our several discussion, the shareholders of Amur Zoloto are prepared to financially support the AZ’s current production plan in order to avoid any recourse to the Petropavlovsk cash flow in 2017-18,” Petropavlovsk reports Amur Zoloto saying.

“Furthermore, we do propose to improve terms of the Contribution Agreement in favour of Petropavlovsk and reduce the number of shares of Petropavlovsk to be issued to AZ’s shareholders to 20%$ after completion of the transaction.”

Previous terms of the deal involved the issuance of 1,434m shares at 6.89p and 1.45USDGBP exchange rate amounting to $144m.

Adjusting for the lower number of shares, new exchange rate and using same reference price, the consideration is expected to come down to $100m (excluding $16m in net debt to be assumed by Petropavlovsk).

Discussions between parties are ongoing with further announcement expected to be released in due course.

*SP Angel analysts have visited the Pioneer, Malomir and Albyn gold mines in Russia

 

Sula Iron & Gold (LON:SULA) 0.2p, Mkt Cap £4.5m – Drilling to start at flagship Ferensola gold project in January

Sula have contracted Equity Drilling Ltd to start a new 2,400m drilling program on their key Ferensola gold project in Sierra Leone.

The company, now led by Roger Murphy, Iain Macpherson are building on the work done by Nick Warrell who is an honorary Paramount Chief in Sierra Leone.

The drill program is to go towards the definition of a new resource at Ferensola where eight out of 10 of the last holes drilled hit gold mineralisation.  The aim is to extend the Ferensola JORC Exploration Target’ of 5-7mt grading at 4-8g/t Au for 0.8moz to 1.5moz Au and to upgrade this to a more certain JORC resource when sufficient drilling is done.

A 40 hole program done by trailblazers, Mano River many years earlier was done with drilling sub parallel to the main structural shear missing the main mineralisation of the deposit. While this drilling missed the best part of the deposit the data should still be of some value.

Interestingly the drilling contact is being partly paid for with new equity in Sula, which is not a bad way of funding a drilling program and is somewhat better than using one of those death spiral facilities being offered by various groups in the market.

Conclusion:  The team are excited by the high-grade gold prospects offered at Ferensola and we look forward to seeing the results in the new year.

 

Tertiary Minerals* (LON:TYM) 1.2p, Mkt £3.1m – Disposal of non-core gold exploration assets

Tertiary Minerals reports that it has sold two non-core gold assets in Finland, Kaaresselka and Kiekeromaa, to Canadian listed exploration company, Aurion Resources.

The sale, which is conditional on the successful transfer of the exploration licences and the approval of the TSX-V, involves an initial consideration of £100,000, of which £15,000 will be in cash with the balance in Aurion shares, followed by a p[re-production royalty on the definition of a resource compliant with Canadian NI-43-101 standard or equivalent. The royalty is payable at the rate of US$1/oz of inferred resource, US$2/oz for indicated resources and US$3/oz for measured resources.

There is also a 2% net-smelter-returns (NSR) royalty on all future gold production from the properties. Aurion will, however, have the right to purchase 50% of the NSR for US$1m “at any time prior to commencement of commercial production on either project.

Conclusion: The disposal of non-core gold exploration projects should reduce Tertiary Minerals’ administrative overhead in maintaining the licences as the company progresses its fluorspar projects in the US and Scandinavia.

*SP Angel act as Nomad and broker to Tertiary Minerals

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Mon, 05 Dec 2016 10:49:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/26674/today-s-market-view-edenville-energy-horizonte-minerals-plc-petropavlovsk-plc-sula-iron-and-gold-plc-tertiary-minerals-plc-26674.html
In the news - White Rock Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/26673/in-the-news-white-rock-minerals-26673.html COMPANIES

WHITE ROCK MINERALS

WRM : AU | A¢1.6 | US$8.4m

Secures Funding for Completion of DFS on Mount Carrington Gold/Silver Project

White Rock Minerals has announced today that it has received commitments to place 168.2m shares at a price of A$0.015/share, raising A$2.5m. This represents the majority of the shortfall from the recent entitlement offer, which closed in mid-November.

COMMENT: This placement of shortfall shares will take the total gross amount raised in the placement and entitlement offer since the end of September to A$4.9m before costs. The primary use of funds is the completion of a definitive feasibility study (DFS) on the Mount Carrington gold/silver project in New South Wales, on which the company completed a positive updated scoping study in March 2016. The placement also provides funding for the continuation of exploration at the prospective Red Mountain zinc/silver/lead/gold project in Alaska.

 

The Placement and Entitlement Offer raised a total of A$4.9m (gross) in 4Q16 — In late September the company announced that it was to raise up to A$5.7m at a price of A$0.015/share through a placement and entitlement offer. The proceeds were to be used to fund a DFS and Environmental Impact Statement (EIS) at the company’s Mount Carrington Project, exploration at its Red Mountain Project and for general capital purposes:

On 6 October the company announced that it had completed the placement of 110m shares to raise A$1.7m, before costs — On 18 November the company said that a further 48m shares (for A$0.7m) had been issued under the 1 for 2 entitlement offer, increasing the shares outstanding to 599m.

The latest announcement on commitments to place 168m shares represents the majority of the shortfall — This will raise a further A$2.5m, taking the total raised to A$4.9m and the total number of shares outstanding to 768m. The remaining 60m shortfall shares can be placed within three months of the closing date of the Entitlement Offer.

DFS for the Mt Carrington Au-Ag project now funded — The company owns 100% of the Mount Carrington gold/silver project in New South Wales, for which the results of an updated scoping study were announced at the end of March 2016. This is a relatively small but high-return project comprising two gold-rich open pits and three silver-rich pits together with a flotation/CIL processing route. Capex was low at A$24m, with a capital payback of <1 year. A total of 111,000oz of gold and 6.7Moz of silver were planned to be produced over a mine life of seven years. Project C1 cash costs were estimated to be A$754/oz (~US$550/oz). At a gold price of A$1,600/oz and a silver price of A$22/oz, the project had a pre-tax NPV10 of A$61m and an IRR of 103%. The company believes that a feasibility study and EIS can be completed by late 2017. Allowing 12 months for construction suggests that the project could potentially be in production by the beginning of 2019.

Proposed construction funding from Cartesian Royalty Holdings — In late July 2016 the company entered a binding, conditional Term Sheet under which Cartesian Royalty Holdings was to provide A$1.0m under a two-tranche placement and a gold and silver streaming-based financing to provide A$19m for the development of the project, in return for 40,000oz of gold equivalent production over a seven-year period.

Red Mountain Project polymetallic exploration project has historical resources of 5.7Mt at 5% Zn, 2% Pb and 120 g/t Ag — Historical estimates are sourced from prior owner Grayd Resource Corp, based on drilling completed between 1996 and 1998. Drilling highlights to date include grades of 26% Zn and 12% Pb over 5.5m at Dry Creek, and 7% Zn and 4% Pb over 3m at West Tundra Flats. Preliminary metallurgical test-work has indicated recoveries of over 90% Zn, >80% Au and >70% Pb & Ag. Statistical analysis of VMS clustering patterns indicates that, further to Dry Creek and West Tundra Flats, the Red Mountain camp has the potential to host a sizeable 10-15Mt deposit with similar Zn, Ag and Pb grades. The company is undertaking a programme of data compilation, geochemistry and geophysics that it expects to lead to target identification and drilling during the 2H17.

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Mon, 05 Dec 2016 10:38:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/26673/in-the-news-white-rock-minerals-26673.html
Breakfast News AIM Breakfast: Action Hotels PLC, 21st Century, Cyan Holdings PLC, Eco Animal Health Group Plc, Hampden Underwriting Plc, Newmark Security PLC, Physiomics Plc, Range Resources Ltd, Rex Bionics PLC http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/26672/breakfast-news-aim-breakfast-action-hotels-plc-21st-century-cyan-holdings-plc-eco-animal-health-group-plc-hampden-underwriting-plc-newmark-security-plc-physiomics-plc-range-resources-ltd-rex-bionics-plc-26672.html What’s cooking in the IPO kitchen?

Big Sofa Technologies— Schedule 1 from the b2b technology company providing video analytics at an enterprise level. Seeking to complete RTO of unlisted HubCo investments. Raising £6.1m. Target date 19 December.

ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m.

RM Secured Direct Lending  -  The secured direct lending fund  intends to float on the Main Market on 15 December raising up to £100m

Creo Medical Group - UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. £20m to be raised on Admission with anticipated market cap of £61.2m

Breakfast buffet

Physiomics* (LON:PYC) 0.0214p £1.17m

The UK based systems biology company, announced it is now entitled to a payment from Sareum Holdings Plc (SAR.L)* for a modelling project conducted  in 2010 in support of Sareum's cancer drug joint research program with The Institute of Cancer Research & Cancer Research Technology Ltd, as announced in 2010, reflecting the contribution made to studying the optimal combination regime of a Chk1 inhibitor & chemotherapy. This follows the ProNAi license deal announced by Sareum in September. While not substantial, the payment will make a welcome contribution to Physiomics' finances for the year.

Newmark Security (LON:NWT) 1.2p £5.62m

The  provider of electronic and physical security systems, has launched its Sateon Advance access control system and GT-10 Android based terminal for workforce management, under subsidiary Grosvenor Technology's brand. Additionally, Newmark has announced the launch of Alliance, a programme to provide opportunities for Newmark's partners to mutually benefit.  FYAPR17E revenues of £22.2m and PBT of £0.6m. Div 0.1p. 11.5x PE.

Eco Animal Health (LON:EAH) 507.5p £325.95m

EAH’s subsidiary ECO Animal Health do Brasil, has received a marketing authorisation from the Brazilian Ministry of Agriculture, Livestock and Supply (MAPA) for the use of Aivlosin® 625 mg/g water soluble granules in swine.  Aivlosin®, ECO’s patented antimicrobial, is used under veterinary prescription for the treatment of a variety of economically important respiratory and enteric (gut) diseases in poultry and pigs. Brazil is one of the world’s leading producers and exporters of pork. FYMaR17E revs £52.54m, PBT £10.63m. Div 6.29p.

Range Resources (LON:RRL) 0.35p £26.59m
The QUN 160 development well in Trinidad that spudded on 9 November 2016 was successfully drilled to a total depth of 2,140ft on 22 November 2016. The well was originally planned to be drilled to 2,600ft, however it was decided not to drill below 2,140ft as the main target  had been encountered at this depth and further drilling would have contributed to an increase in cost with little to no benefit. During drilling, hydrocarbon sands and oil shows were encountered between 1084 & 2045ft. Production testing is expected to commence at the beginning of December.  Well GY 681 has also been spudded.

Action hotels (LON:AHCG) 52.5p £77.5m

The owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia, has announced the formal opening of its third hotel in Oman, Mercure Sohar. The 151-bedroom freehold hotel, located in the heart of Sohar, is Action's ninth collaboration with AccorHotels and the first Mercure-branded property in the portfolio. Early business enquiries have been encouraging. This brings the portfolio to 12 operational hotels and 2,181 rooms in six countries with the total pipeline set to take Action to 3,000 rooms by 2017.

Helios Underwriting (LON:HUW) 160p £23.37m

In line with its strategy of increasing underwriting capacity through acquisition, on 2 December 2016 Helios acquired Salviscoint Limited Liability Partnership, a limited liability member of Lloyd's, for a consideration of £0.8m in cash.  The 2016 underwriting capacity of Salviscount is £1.0 million (this compares with Helios's 2016 capacity of £32.7 million prior to this acquisition).  Salviscount participates in a spread of Lloyd's syndicates broadly similar to Helios's own participation.

21st Century Technologies(LON:C21) 2.75p £2.56m

The specialist provider of tailored solutions to the transport community, solving complex operational requirements both on and off vehicle, announced that it has been selected by a large Antipodean bus operator, to provide training, engineering services and equipment for an important fleet upgrade which includes CCTV & wireless video download systems. The agreement, denominated in Sterling, has a value of c. £1 million. The work is scheduled to complete during 2017.  There are no forecasts in the market.

OneView  Group* (LON:ONEV) 4p £14.07m

H1 Sep 16 results from one of the retail industry's leading digital transformation software providers for in-store customer sales and service. Revenue of  $1.02m (H115: $4.0m). Loss before tax of  $2.4m (H115: loss of $0.4m). Cash and cash equivalents of $0.2m at period end ($0.2m at 30 September 2015) . Long lead times affected the results but the Company’s  confidence in achieving significant revenue growth in the next financial year and beyond remains undiminished.  Additional $1m convertible loan facility agreed with Lane Capital, owned by NED Gary Lane.

CyanConnode Holdings  (LON:CYAN) 0.21p £32.98m

The specialist in narrowband RF networks for Omni Internet of Things  communications, announced a further purchase order from Larsen & Toubro to expand the deployment of CyanConnode's smart metering solution at Tata Power Mumbai with an additional 4,700 smart meters. This third order is part of a larger framework that will enable Tata Power to 'call off' further deliveries quickly over the next 12 months, without going through a full procurement process.

Rex Bionics (LON:RXB) 20p £5.1m

H1 Sep16 results from he pioneer of the REXTM Robot technology that enhances the mobility of wheelchair users. Pre tax loss of £2.64m vs £2.18m. Cash of £2.13m. Strong clinical data (post yr end) & collaboration with  US Army represent good progress. Cash runway extended to Q2 2017. Additional funding will continue to be required before the yr end, but  Board remains confident this will be forthcoming if progress achieved in the development of the business over the period can be maintained.  EIS qualification expected but not yet confirmed by HMRC.

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Mon, 05 Dec 2016 09:54:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/26672/breakfast-news-aim-breakfast-action-hotels-plc-21st-century-cyan-holdings-plc-eco-animal-health-group-plc-hampden-underwriting-plc-newmark-security-plc-physiomics-plc-range-resources-ltd-rex-bionics-plc-26672.html
Oil price, Range Resources, Aminex/Solo, And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/26671/oil-price-range-resources-aminexsolo-and-finally-26671.html Oil price

Whilst many commentators remain unconvinced, the oil price is tracking upwards and for the moment giving the deal the benefit of the doubt. A decent spin from the 1oth December non-Opec meeting should cement, at least for the time being the situation.

Range Resources

Range has announced that the QUN 160 development well encountered the Upper Cruse Formation at a shallower depth than expected (2140′) which is good. They found hydrocarbon sands and oil shows and production testing is expected soon. The GY 681 well spudded on the 1st of December on the Beach Marcelle water-flood and is expected to show results in around four weeks.

Aminex

Aminex has announced that the Ntorya-2 appraisal well will be spudded mid-December and test the up-dip part of the Ntorya-1 discovery. Hopefully it will find a thicker gas resource section, if so the site is ready for Ntorya-3 and may drill back to back. Aminex has 75% of this and Solo, which I wrote about ironically on Friday, has 25%. Finally, it is good news to see Aminex saying that it has started receiving cash in which is modest but very positive news.

World Oil & Gas Week

This week the Oil & Gas Council hosts what is undoubtedly the best week of meetings, speakers and seminars, not to mention off-site catch ups anywhere in the industry. I hope to be able to report back a little of the occasion although a lot is held under Chatham House rules.

And finally…

Briefly as I run to the above….

The football was fast and furious at the weekend and both the Noisy Neighbours and the HubCap Stealers had ‘interesting’ ends to their games….

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Mon, 05 Dec 2016 09:33:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/26671/oil-price-range-resources-aminexsolo-and-finally-26671.html
Northland Capital Partners View on the City - Edenville Energy and Evgen Pharma http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/26670/northland-capital-partners-view-on-the-city-edenville-energy-and-evgen-pharma-26670.html Evgen Pharma plc (LON:EVG) – BUY*: Interim results in line
Market Cap: £17m; Current Price: 23.5p; Target Price: 97p

Results in line with expectations: good cost controls and strong balance sheet

Evgen issued interim results for the six months ended 30 September 2016. The group continues to manage strict cost controls with a Total comprehensive loss for the period of £1.7m (30 September 2015: total comprehensive loss £1.2m), which was in line with our expectations. 

With a reported cash position at 30 September 2016 of £5.5m (30 September 2015: £1.8m), the group’s balance sheet is strong.

The Company is fully funded to complete its two ongoing Phase II studies and to conduct further preclinical work.

Principle achievements in the year-to-date included:

The first patient being dosed (April 2016) in the Company's first Phase II clinical trial (SAS) testing SFX-01 in subarachnoid haemorrhage. (Moreover, patient recruitment rates for this trial are reported to be in-line with expectations.)

The US Food & Drug Administration (FDA) granting the Company orphan drug designation (August 2016) for the use of stabilised sulforaphane in subarachnoid haemorrhage (SAH).

The first clinical site opening for patient recruitment for the Company's second Phase II clinical trial STEM (SFX-01 in the Treatment and Evaluation of Metastatic Breast Cancer), with further sites due to open across Europe in H1-2017 (calendar year).

The reporting of positive data from preclinical studies of SFX-01 in various models of the relapsing remitting form of multiple sclerosis (MS) presented (September 2016) at a leading MS conference.

NORTHLAND CAPITAL PARTNERS VIEW: Evgen’s results were in line with our expectations. The group remains a good custodian of investor capital, managing a lean but productive operation. With £5.5m of cash on account (Sept. 30/2016), the Company has a strong balance sheet and is funded to complete its current clinical programmes. The group’s two Phase II clinical trials are progressing to plan, with both studies expected to report in H1-2018 (calendar year). Of note, over the period the group secured orphan designation for its lead product in the treatment of subarachnoid haemorrhage, representing a major milestone for the business. Also, the group recently presented very encouraging preclinical MS data.

Edenville Energy (LON:EDL) – CORP: Rukwa update
Market Cap: £3.4m; Current Price: 0.45p

Positive bulk sample result from MK1

Edenville Energy has now received the second set of sampling results from its bulk sampling programme at the Mkomolo and Namwele deposits, located in Tanzania.

These results come from the MK1 coal seam, whereas the previous results come from the MK2 coal seam. The results demonstrate that only moderate to no washing will be required for the MK1 seam for it to be used in coal fired thermal power plants. Where washing is required, high-yields of c. 60% are achievable to produce a high-quality power plant feed.

Applying an increased wash to seam MK1 results in a product above 20MJ/kg that opens the potential for supply into the local and regional markets.

Edenville is now working with potential customers to assess the options for establishing mining operations in 2017.

NORTHLAND CAPITAL PARTNERS VIEW: Another positive bulk sample result for Edenville Energy with both the M1 and M2 coal seams demonstrating the potential for the production of coal that with moderate to no washing can be used in coal fired power plants. The Company has received interest in its product from a number of power plants that are planned in East Africa and is in discussions regarding pricing and supply. The Company is also in advanced discussion with local and regional parties with regards to the sale of higher energy value coal, contained within the seams for use in industrial applications. These results now open up the northern area of Mkomolo for initial production and Edenville is seeking to commence production in 2017.

 

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Mon, 05 Dec 2016 09:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/northland-capital-partners-view-on-the-city/26670/northland-capital-partners-view-on-the-city-edenville-energy-and-evgen-pharma-26670.html
Today's Oil and Gas Update: Aminex and Volga Gas http://www.proactiveinvestors.co.uk/columns/sp-angel/26669/today-s-oil-and-gas-update-aminex-and-volga-gas-26669.html Headlines

In Brief:

Aminex (LON:AEX – 2.10p) – Revenues Delivered

Volga Gas (LON:VGAS – 48p) – Production Update

In Brief

Aminex (LON:AEX – 2.10p) – Revenues Delivered: While today's news was mostly about the appraisal wells Ntorya-2 ("NT2") and NT3, the snippet that caught our eye was the confirmation that the cash flows from Kiliwani North are now reaching the Company. While there has been much time and pain to get to this point, and no small dilution to shareholders, this is a milestone and one that should be rightly welcomed by the Company's owners. We believe that as long as the cash flow is managed in an appropriate manner, that the Company has a great opportunity to become a regional consolidator. The next 6 - 12 months will now be key.

Volga Gas (LON:VGAS – 48p) – Production Update: Today's production update highlights the impact of the commissioning of the desulphurisation facility at the Vostochny Makarovskoye (“VM”) gas plant, although at its Karpenskiy field, the Company's deliverability was significantly up. We continue to believe that the way in which Volga Gas is arranged corporately and operates, both at field level and corporately, significantly derisks investing in Russia for the Company's owners.

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Mon, 05 Dec 2016 08:57:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/26669/today-s-oil-and-gas-update-aminex-and-volga-gas-26669.html
In the Papers - Goldman Sachs, EE, Ikea, RBS http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26668/in-the-papers-goldman-sachs-ee-ikea-rbs-26668.html Newspaper Summary

The Times

Prudential opens door to £45 billion pensions sale: Prudential has begun a review of its £45 billion pension liabilities business in a move that could lead to the sale of the division and a potential restructuring of the entire company.

China’s anger at Dalai Lama visit triggers copper blockade: Rio Tinto has been caught up in a political row between China and Mongolia fuelled by the Dalai Lama. The commodities group owns a controlling stake in a copper and gold mine that is Mongolia’s biggest taxpayer. The Oyu Tolgoi mine exports all of its production south but after a visit to Mongolia by Tibet’s spiritual leader, who is not acknowledged by China, border access was restricted. Authorities insisted that copper consignments must use the same border crossing as exports of coal.

Upheaval in Italy keeps Europe addicted to QE: The European Central Bank is expected to extend its huge bond-buying programme this week after Italy’s referendum cast further uncertainty over the Eurozone.

Portugal promises sunshine for expats: Portugal has told British ex-pats that they should not fear reprisals after Brexit. Margarida Marques, Portuguese secretary of state for Europe, said that Lisbon did not want to jeopardise relations with Britain whatever the outcome of its negotiations with the European Union.

Goldman’s grand takeover: bankers fill the White House: With three Goldman Sachs bankers now destined for top jobs under Donald Trump, the Wall Street giant is getting back into the political game on both sides of the Atlantic.

EE given hostile reception after network campaign: EE has stirred up unrest among its rivals with the launch of its campaign on how to measure mobile coverage. BT’s mobile operator has seized the initiative by calling on rivals to follow suit — but competitors say that the company is just jumping on the regulator’s bandwagon.

Manufacturers hiring again as pound’s slide lifts demand: Britain’s manufacturers have ended the year on a high after enjoying a better than expected recovery. With further gains from a weak pound to come, investment and recruitment is on the rise as the industry looks to fulfil increasing demand, according to a poll of nearly 400 companies by EEF, the manufacturers organisation, and BDO.

U.K.’s slowdown likely to hit London hardest: London will experience the greatest slowdown in economic growth of any region in the U.K. over the next three years as the impact of the Brexit vote, higher inflation and an expected slowdown in the services sector hits the capital hardest.

Jobs growth ‘puts productivity at risk’: Supporting fast-growing businesses is at odds with improving productivity, academics warn. The government’s drive to tackle productivity may clash with other goals, including boosting employment and encouraging high-growth companies, according to the Enterprise Research Centre (ERC).

The Independent

Theresa May says human rights abuses shouldn’t affect Gulf trade policy: The controversial human rights record of Gulf states should not be a bar to increased post-Brexit trade with them, Theresa May has said ahead of a high-profile visit to the Middle East.

Agency staff near a million as charity launches investigation into ‘forgotten face’ of insecure work: The number of agency workers is set to reach one million, according to a new study, which revealed they earn hundreds of pounds less than those in staff jobs.

RBS Chiefs ‘knew investment bank’s head wasn’t up to the job’ in run-up to near collapse: Royal Bank of Scotland Chiefs knew the head of its investment bank during the run up to its near collapse wasn’t up to the job, court filings have alleged.

Ikea is giving every member of its staff £1,200: Ikea staff will receive a £1,200 gift from the company this Christmas. Around the world, workers will receive a share of a €108 million pot as part of the company loyalty scheme. The money will be added to worker’s pensions.

The Daily Telegraph

Formula One still seeking £41 million in fees for Indian Grand Prix: Formula One is locked in a dispute with authorities in India over £41.1 million ($51.4m) of unpaid Grand Prix fees dating back to 2012, according to company documents.

Accountants urge May to keep pledge to put workers on boards: One of the key business groups in British corporate governance has urged the Government to stick to its guns on putting workers on company boards, despite the signal last week that it would row back from this plan.

British cyber security firm ECSC targets £15 million Aim float: British cyber security business ECSC, which counts 10% of the FTSE 100 as its clients, has announced its intention to float on London’s junior market.

Redrow Chief complains wildlife regulations are beastly: The Boss of house builder Redrow has lashed out at wildlife red tape, which is causing delays to crucial projects.

TUI shrugs off travel woes as long-haul holidays boom: The lure of exotic destinations has rejuvenated bookings for Anglo-German travel giant TUI after holiday spots closer to home were wracked by the threat of terror in a difficult year for the travel sector.

The Guardian

Britain’s agency workers underpaid and exploited, thinktank says: Britain’s rapidly growing army of agency workers is as serious an issue as zero-hours contracts, with full-time agency staff earning hundreds of pounds a year less than employees doing the same jobs, according to a new report into the issue.

Thousands of U.K. restaurants could go bust, accountancy firm warns: Thousands of restaurant businesses in Britain could go bust because the fall in sterling since the Brexit vote has sharply raised the cost of imported food and wine, an accountancy firm has warned.

Greece must reform or leave Eurozone, says German minister: Greece must implement economic reforms if it is to keep its place in the Eurozone, Germany’s finance minister has insisted, ruling out debt relief for the country ahead of a crucial euro group meeting on Monday.

British arms companies buck global trend with increase in sales: Arms companies in the U.K. and elsewhere in western Europe bucked the downward trend in sales in much of the rest of the world by recording a 6.6% rise last year, according to data compiled by the Stockholm International Peace Research Institute (SIPRI).

U.K. manufacturing enjoying ‘delayed recovery’, but inflation pressures grow: Manufacturers are enjoying a “delayed recovery” with increased output and orders and optimism for jobs, according to a report published on Monday.

Information commissioner reopens file on construction industry blacklisting: Britain’s information commissioner has reopened the file on construction industry blacklisting amid fears that the malpractice is still taking place.

Venezuela to issue new bolivar banknotes after dramatic fall in value: Venezuela will introduce six new notes and three new coins from mid-December to help alleviate practical problems in doing business with the world’s most inflationary currency, according to the central bank.

Opec doesn’t hold all the cards, even after its oil price agreement: Two years of wrangling were needed before Saudi Arabia and the rest of the Opec oil cartel could agree a cut in production at its meeting in Vienna last week.

Daily Mail

Row over fees breaks out between fund responsible for saving BHS pensioners and one of store’s administrators: A row over fees has broken out between the fund responsible for saving BHS pensioners and one of the store’s administrators. The Pension Protection Fund has vetoed an invoice for £4.1 million submitted by Duff & Phelps, which was responsible for realising cash from the assets of BHS.

Entrepreneur Alastair Mills set to make millions when his telecoms group Six Degrees lists next year in £200 million flotation: Alastair Mills has come a long way from the days when he sold stolen bicycles bought at police auctions to fellow students. The 44-year-old entrepreneur is set to make millions when his telecoms group Six Degrees lists next year in a £200 million flotation.

Daily Express

Trump defence plans to bolster U.K. security firm: Donald Trump’s plans to ramp up military spending are expected to provide a boost for British maritime security firm MAST, its Chief Executive has said.

Businesses face surge in loan defaults: Loan default rates could rise dramatically among small businesses because lenders have “forgotten how to price risk”, according to Hitachi Capital Business Finance managing director Gavin Wraith-Carter.

Markets braced as Italians and Austrians go to the polls: European equity and bond markets, as well as the euro, are poised for volatile trading on Monday depending on the outcome of ‘s Italian referendum.

The Scottish Herald

Growth to slow sharply in Scotland: Growth in Scotland will slow to a near standstill next year as political uncertainties compound the challenges posed by the downturn in the North Sea according to leading economists who have slashed their forecast for the current year.

CGC sees turnover soar after English expansion: Citygate Construction is on track to add £4 million to its turnover this year after winning a number of contracts south of the Border.

Williams takes over at Pinsents in Aberdeen: Pinsent Masons has appointed employment partner Katie Williams as head of its ten-partner Aberdeen office, the first woman to hold the post.

Sports Direct and Ocado to update on trading amid sterling fall and price war: Scandal-hit retailer Sports Direct and online grocer Ocado are set to update the City on trading next week as the fall in sterling and the supermarket price war continue to dominate.

Scots households will feel the heat as oil prices rise: One recent development of note has been the - not over dramatic - increase in the oil price, as a result of the OPEC nations at last agreeing to reduce production quotas. For Scotland, this price increase could have two repercussions. First it just might provide some mild support for our beleaguered oil and gas sector. Second it will add a further ratchet to consumer inflation.

Pension deficits may be set to rise: Total private sector pension fund deficits have eased to around £450 billion from a record £500 billion in August amid the recovery in markets from the slump that followed the Brexit vote in June, JLT Employee Benefits has calculated. But experts at the firm found total deficits on schemes which make payments based on members’ final salaries were up around 50% on 30 November compared with the same date last year.

The Scotsman

New Scots property tax has been ‘operationally successful’: The introduction of a new property tax has been “operationally successful” but it is “too early to draw any definitive conclusions” on the change, MSPs on a key Holyrood committee said.

More Scottish council cuts will have ‘severe consequences’: The Convention of Scottish Local Authorities (Cosla) has said that any more cuts to local government funding will result in “severe consequences” for jobs across the country.

City A.M.

Atalaya Mining transforms the original Rio Tinto mine from tarnished site into a polished moneyspinner: Restoring the original Rio Tinto mine may have been a “pain in the ass”, according to Atalaya Mining’s Chief Executive Alberto Lavandeira, but it hasn’t put the plucky, Aim-listed firm off plans to expand elsewhere.

Ownership of over 40,000 London properties shrouded in secrecy: Thousands of London’s properties are held by overseas companies registered in so-called secrecy havens, obscuring the details of their true ownership, a report out has found.

Business growth remains steady as high street has a rosy month, Confederation of British Industry (CBI) data shows: British businesses enjoyed modest growth in the three months to November, and are expected to maintain the pace into 2017, according to a survey published.

Retail shareholders hold out for better deal in RBS lawsuit: A subset of shareholders suing RBS over how it handled a financial crisis fundraising are holding out for a better deal, despite other investors closing in on an out of court offer.

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Mon, 05 Dec 2016 08:42:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-newspaper-briefing/26668/in-the-papers-goldman-sachs-ee-ikea-rbs-26668.html
Market Briefing - US markets ended mostly higher on Friday http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26667/market-briefing-us-markets-ended-mostly-higher-on-friday-26667.html UK Market Snapshot

UK markets finished in negative territory on Friday, with the FTSE 100 index closing at a three-week low, following a plunge in commodity related stocks. Miners, Rio Tinto, Antofagasta and BHP Billiton declined 0.7%, 1.7% and 2.6%, respectively, amid lower metal prices. Oil heavyweights, BP and Royal Dutch Shell slid 0.7% and 1.2%, respectively. easyJet dropped 2.6%, after a leading broker downgraded its stance on the stock to ‘Underperform’ from ‘Sector perform’. Bucking the trend, Berkeley Group Holdings jumped 8.5%, after it reported a rise in its profit for the six months ended 31 October 2016 and set new earnings targets for five years. Other housebuilders, British Land, Barratt Developments and Land Securities Group advanced 1.3%, 1.7% and 2.2%, respectively. The FTSE 100 slipped 0.3%, to close at 6,730.7, while the FTSE 250 fell 0.4%, to settle at 17,435.3.

US Market Snapshot

US markets ended mostly higher on Friday, as investors digested a slightly weaker than anticipated jobs report for November. Pandora Media rallied 16.1%, on the back of report that the company is in talks to sell itself to Sirius XM Holdings, down 5.6%. Vascular Solutions edged up 1.6%, after news emerged that the former will be bought by Teleflex, up 4.5%, in a deal valued at $1.0 billion. On the contrary, Starbucks shed 2.2%, after the coffee company stated that its CEO, Howard Schultz, will resign in April next year. Ulta Salon Cosmetics & Fragrance slid 1.6%, even though the beauty stores operator raised its outlook for the full year. The S&P 500 rose marginally, to settle at 2,192.0. The DJIA lost 0.1%, to settle at 19,170.4, while the NASDAQ added 0.1%, to close at 5,255.7.

Europe Market Snapshot

Other European markets ended lower on Friday, weighed down by a slump in banking shares. Over the weekend, Italy rejected constitutional reforms supported by the Government, prompting resignation from Italian Prime Minister, Matteo Renzi. Italian lenders, Banco Popular Espanol, Unione di Banche Italiane and Banca Monte dei Paschi di Siena tumbled 4.6%, 4.7% and 5.4%, respectively. Other peers, Deutsche Bank, Commerzbank and BNP Paribas dropped 2.0%, 2.2% and 2.3%, respectively. Barry Callebaut lost 2.4%, after a leading broker downgraded its rating on the stock to ‘Sell’. Clariant, Dufry and Schindler Holding slid 0.8%, 1.0% and 1.1%, respectively. The FTSEurofirst 300 index eased 0.3%, to close at 1,339.2. Among other European markets, the German DAX Xetra 30 fell 0.2%, to close at 10,513.4, while the French CAC-40 dipped 0.7%, to settle at 4,528.8.

Asia Market Snapshot

Markets in Asia are trading lower this morning, following the Italian referendum result. In Japan, Tokuyama, Sumitomo Mitsui Trust Holdings and DeNA have declined 3.0%, 3.2% and 5.0%, respectively. On the flipside, Yahoo Japan, Sumco and Toho Zinc have climbed 2.0%, 3.1% and 7.0%, respectively. Panasonic has added 0.8%, on the back of news that the former is in final stages of negotiations to acquire European automotive lighting company, ZKW for about $1.0 billion. In Hong Kong, brokers, Haitong Securities and CITIC Securities have shed 1.4% and 1.8%, respectively. In South Korea, index majors, Samsung Electronics and POSCO have edged down 0.6% and 1.2%, respectively. The Nikkei 225 index is trading 0.9% lower at 18,262.5. The Hang Seng index is trading 0.4% down at 22,484.2, while the Kospi index is trading 0.2% lower at 1,966.3.

Key Corporate Announcements Today

AGMs

Sanditon Investment Trust, Universal Coal

EGMs

PJSC Lukoil ADR

Final Dividend Payment Date

BlackRock Greater Europe Inv Trust, NWF Group, TR European Growth Trust

Interim Dividend Payment Date

Balfour Beatty, First Derivatives, GCP Student Living, International Consolidated Airlines Group SA

Special Dividend Payment Date

TR European Growth Trust

Trading Announcements

International Consolidated Airlines Group SA, St Modwen Properties

Key Corporate Announcements for Tomorrow

AGMs

DX (Group), Jubilee Platinum, Kalibrate Technologies, Mila Resources, Trading Emissions, Graphene Nanochem, London & St lawrence Inv Co.

EGMs

Transocean Partners

Final Dividend Payment Date

Fidelity Asian Values

Interim Dividend Payment Date

HSBC Holdings, London & St lawrence Inv Co.

Special Dividend Payment Date

Playtech

Quarterly Ex-Dividend Date

Schlumberger Ltd.

Trading Announcements

EasyJet, Ultra Electronics, Wolseley

Commodity, Currency and Fixed Income Snapshots

Crude Oil

At 0430GMT today, Brent Crude Oil one month futures contract is trading 0.92% or $0.50 lower at $53.96 per barrel. On Friday, the contract climbed 0.96% or $0.52, to settle at $54.46 per barrel. Meanwhile, the Baker Hughes indicated that the US crude oil rig count rose by 3 to 477 for the week ended 02 December 2016.

Gold

At 0430GMT today, Gold futures contract is trading 0.22% or $2.60 higher at $1177.70 per ounce. On Friday, the contract advanced 0.70% or $8.20, to settle at $1175.10 per ounce, as the US Dollar weakened against its major peers.

Currency

At 0430GMT today, the EUR is trading 1.19% lower against the USD at $1.0543, after Italian Prime Minister Matteo Renzi suffered a heavy defeat in referendum, triggering his resignation. Traders also await Euro-zone Markit services PMI for November, slated to release in a few hours. On Friday, the EUR strengthened 0.09% versus the USD, to close at $1.0670, after the Euro-zone producer price index advanced at its highest pace in more than four years on a monthly basis in October.

At 0430GMT today, the GBP is trading 0.29% lower against the USD at $1.2682, ahead of UK Markit services PMI for November, due to release in some time. The US Markit services PMI for November, set to release later today, will be assessed by traders. On Friday, the GBP strengthened 1.02% versus the USD, to close at $1.2719, after data showed that UK construction PMI rose more than anticipated in November.

Fixed Income

In the US, long term treasury prices rose and pushed yields lower, after economic data showed slightly weaker than expected jobs report for November. On Friday, yield on 10-year notes declined 5 basis points to 2.40%, while yield on 2-year notes lost 3 basis points to 1.11%. Meanwhile, 30-year bond yield fell 2 basis points to 3.08%.

Key Economic News

UK construction PMI recorded an unexpected rise in November

In the UK, the construction PMI climbed unexpectedly to a level of 52.80 in November, compared to a reading of 52.60 in the prior month. Market anticipation was for the construction PMI to fall to a level of 52.20.

Euro-zone PPI advanced more than expected in October

In October, the producer price index (PPI) rose 0.80% in the Euro-zone on a MoM basis, more than market expectations for a rise of 0.40%. The PPI had recorded a rise of 0.10% in the previous month.

Number of people unemployed in Spain increased unexpectedly in November

Number of people unemployed in Spain climbed unexpectedly by 24.80 K in November, compared to an increase of 44.70 K in the previous month. Market anticipation was for number of people unemployed to decline 25.60 K.

Swiss GDP advanced less than expected in 3Q 2016

On a YoY basis, gross domestic product (GDP) advanced 1.30% in 3Q 2016, in Switzerland, compared to a rise of 2.00% in the prior quarter. Market anticipation was for GDP to climb 1.80%.

Swiss GDP remained flat in 3Q 2016

On a QoQ basis in 3Q 2016, the seasonally adjusted GDP remained steady in Switzerland, compared to a rise of 0.60% in the prior quarter. Market expectation was for GDP to advance 0.30%.

US underemployment rate fell in November

Underemployment rate recorded a drop to 9.30% in November, in the US. In the prior month, underemployment rate had registered a reading of 9.50%.

Private payrolls in the US registered a rise in November

Private payrolls advanced by 156.00 K in the US, in November, lower than market expectations of an advance of 175.00 K. Private payrolls had recorded a revised increase of 135.00 K in the prior month.

US unemployment rate fell surprisingly in November

In the US, unemployment rate fell unexpectedly to 4.60% in November, lower than market expectations of a steady reading. Unemployment rate had registered a reading of 4.90% in the prior month.

US average weekly hours of all employees remained flat in November

In November, average weekly hours of all employees remained steady at 34.40 in the US, at par with market expectations.

US New York City current business condition index advanced in November

The New York City current business condition index in the US recorded a rise to 52.50 in November, compared to a level of 49.20 in the prior month.

Household employment in the US advanced in November

Household employment rose by 160.00 K in the US, in November, compared to a decline of 43.00 K in the previous month.

Non-farm payrolls in the US advanced in November

Non-farm payrolls in the US climbed by 178.00 K in November, lower than market anticipations of an advance of 180.00 K. Non-farm payrolls had recorded a revised gain of 142.00 K in the previous month.

US average hourly earnings of all employees rose less than expected in November

On an annual basis, in the US, average hourly earnings of all employees rose 2.50% in November, less than market expectations for an advance of 2.80%. In the prior month, average hourly earnings of all employees had climbed 2.80%.

Manufacturing payrolls in the US declined in November

Manufacturing payrolls fell by 4.00 K in the US, in November, higher than market expectations of a decline of 2.00 K. Manufacturing payrolls had registered a revised decline of 5.00 K in the previous month.

US average hourly earnings of all employees surprisingly dropped in November

Average hourly earnings of all employees in the US unexpectedly fell 0.10% on a monthly basis in November, lower than market expectations for a rise of 0.20%. In the prior month, average hourly earnings of all employees had registered a rise of 0.40%.

Canadian labour productivity advanced more than expected in 3Q 2016

On a QoQ basis, labour productivity registered a rise of 1.20% in 3Q 2016, in Canada, compared to a revised drop of 0.20% in the previous quarter. Markets were anticipating labour productivity to rise 1.00%.

Net number of people employed in Canada increased unexpectedly in November

The net number of people employed recorded an unexpected increase of 10.70 K in Canada, in November, higher than market anticipations of a decline of 15.00 K. The net number of people employed had registered an increase of 43.90 K in the previous month.

Part time employment in Canada rose in November

Part time employment in Canada climbed by 19.40 K in November. Part time employment had recorded a gain of 67.10 K in the prior month.

Canadian participation rate dropped in November

In November, the participation rate registered a drop to 65.60% in Canada. In the previous month, the participation rate had recorded a level of 65.80%.

Canadian unemployment rate fell surprisingly in November

The unemployment rate registered an unexpected drop to 6.80% in November, in Canada, compared to market expectations of an unchanged reading. In the previous month, the unemployment rate had registered a level of 7.00%.

Number of full time employment in Canada eased in November

In Canada, the number of full time employment dropped by 8.70 K in November. The number of full time employment had recorded a loss of 23.10 K in the prior month.

Japanese corporate loans & discounts advanced in October

On a YoY basis, corporate loans & discounts in Japan recorded a rise of 2.29% in October. Corporate loans & discounts had climbed 2.11% in the previous month.

Japanese Markit composite PMI rose in November

Markit composite PMI advanced to 52.00 in Japan, in November. In the previous month, Markit composite PMI had recorded a level of 51.30.

Chinese Caixin/Markit services PMI index advanced in November

In November, the Caixin/Markit services PMI index in China recorded a rise to 53.10, compared to a reading of 52.40 in the prior month.

Chinese Caixin composite PMI steadied in November

In November, Caixin composite PMI in China remained steady at 52.90.

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Mon, 05 Dec 2016 08:35:00 +0000 http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26667/market-briefing-us-markets-ended-mostly-higher-on-friday-26667.html
Beaufort Securities Breakfast Alert: Amryt Pharmaceuticals, Berkeley Group, GlaxoSmithKline plc, Prospex Oil & Gas, Quadrise Fuels International http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26666/beaufort-securities-breakfast-alert-amryt-pharmaceuticals-berkeley-group-glaxosmithkline-plc-prospex-oil-gas-quadrise-fuels-international-26666.html Prospex Oil & Gas (LON:PXOG)

Amryt Pharma (LON:AMYT)

Berkeley Group Holdings (LON:BKG)

GlaxoSmithKline (LON:GSK)

Quadrise Fuels International (LON:QFI)

"Ciao Matteo! Does Italy's decisive 'No' vote against Prime Minister Renzi's constitutional reform mean that European populists have now picked up the revolutionary baton? A tremor was certainly felt by the Euro as it became clear that around 60% of voters rejected the referendum, in a poll that had become more of a confidence vote on the Italian establishment which had only been seen to deliver low growth, falling standards of living, a banking crisis and 40% youth unemployment. Such an obvious rebuke suggests the caretaker government that will now be put in place, possibly let by the current Finance Minister Pier Carlo Padoan, will necessarily have a short tenure, leading to new parliamentary elections early next year, rather than running through to its scheduled February 2018. Whether that sets the scene for Beppe Grillo's anti-Euro Five Star Movement to go to the polls around that same time as France's own Presidential Election in May 2017, where current favourite Conservative Francois Fillon will be facing the National Front's Marine Le Pen, remains to be seen. Eitherway, the Euro is likely to become the principal casualty, as the markets look to Angela Merkel as the only leader capable of putting up a fight, as she herself heads to Germany's own Federal Election for a fourth term in the fall. Such fears were enough to unhinge Trump's bull run in the US last week, with the S&P-500 posting its first weekly decline since his election, with the Dow seeing profit taking amongst financials while other indices made just fractional gains as investors tried to judge whether the President-elect's overtures to Taiwan and Pakistan, to the apparent offence to major trading partners China and India, are in fact part of a sophisticated plan to strengthen the US's negotiating position or whether he is simply blind to the potential collateral damage being created. Asia meanwhile appeared to take fright from the Italian vote, fearing that without a strong government in place, the US$400bn of bad debt in its banking system could result in the collapse of as many as eight of the country's major banks, which could in turn to lead to systematic contagion around the globe. All principal indices in the region ended down, with the Shanghai Composite the biggest faller, although it was closely followed by the Nikkei as investors reverted to safe-haven buying of the Yen once again. Against this background, the UK is due to release Services PMI data and car registration figures this morning, while later this afternoon the Fed's William Dudley is due to speak followed by release of the ISM non-Manufacturing index. UK corporates due to report earnings or trading updates today include Evgen Pharma (EVG.L), Rex Bionics (RXB.L) and St Modwen Properties (SMP.L), while Ryanair (RYA.L) and International Consolidated Airlines (IAG.L) release November traffic data. European futures are, not surprisingly, all pointed down this morning, with the FTSE-100 expected to fall around 20 points in early trading."

- Barry Gibb, Research Analyst

Markets

Europe

The FTSE-100 finished Friday's session 0.33% lower at 6,730.72, whilst the FTSE AIM All-Share index closed 0.08% up at 813.97. In continental Europe, the CAC-40 finished 0.70% lower at 4,528.82 whilst the DAX was 0.20% off at 10,513.35.

Wall Street

In New York on Friday, the Dow Jones fell 0.11% to 19,170.42, the S&P-500 gained 0.04% to 2,191.95 and the Nasdaq added 0.09% to 5,255.65.

Asia

In Asian markets this morning, the Nikkei 225 had fallen 0.92% to 18,257.4, while the Hang Seng lost 0.28% to 22,501.34.

Oil

In early trade today, WTI crude was down 0.77% to $51.28/bbl and Brent was down 0.72% to $54.07/bbl.

Headlines

Euro wobbles after Italian referendum

The euro fell sharply against the dollar after Italian Prime Minister Matteo Renzi suffered a heavy defeat in Sunday's referendum. The fall continued after Mr Renzi announced his intention to resign. At one stage the euro hit $1.0507, its lowest level since March 2015. But it rebounded from that low and a short while ago was at $1.0563, still down 0.96% from Friday's close. Analysts say that there is caution among investors but not panic. "While the markets are likely to remain nervous as we start a new week, they haven't fallen off a cliff, so far," said Kathleen Brooks, research director at City Index Direct. "Either markets are becoming immune to political risk, or they are taking the view that the Italian issue will be a slow-burner, even if the president can't form a government, he still has 70 days to try, and that seems quite far away at this stage," she said. However, the Italian economy is in a fragile state and a period of political uncertainty could do it further damage.
 

Company news

Prospex Oil & Gas (LON:PXOG, 2.62p) – Speculative Buy

Prospex announced on Friday it has received drilling approval for its high impact Boleslaw-1 gas well on the Kolo License. The drilling plan or "Plan Ruchu" was the last of the approvals required and we now expect spudding mid December as per the original target. Prospex has 49% of the Boleslaw-1 well while Hutton Poland, the operator, has 51%.

Our view: 2016 has been a successful year for Prospex. It started the year as an E&P investment vehicle with no investments yet will end with a drill turning on its first prospect. Management has delivered to its strategy and we look forward to (hopefully) positive well results in 1Q17. Our valuation for Prospex included a 75% risk factor which we planned to reduce to 70% when the Plan Ruchu was approved. As a result we increase our target price from 3.0p to 3.4p and reiterate a Speculative Buy recommendation.

Amryt Pharma (LON:AMYT, 16.50p) – Speculative Buy

Amryt Pharma plc, the clinical stage specialty pharmaceutical company focused on best in class treatments for orphan diseases, on Friday, announced that it has entered into a €20m Facility Agreement with the European Investment Bank ('EIB'), a leading European investment body. The Facility has an interest rate of 3% over the Euro Interbank Offered Rate to be paid periodically, with a further 10% accruing and payable in a bullet together with the outstanding principal amount on expiry of the Facility. The Facility has a 5-year term from drawdown and the associated repayment schedule is expected to present a minimal cash burden to the Group during the term, ahead of repayment. The Facility is split into three tranches; €10m available immediately and two further tranches of €5m available upon the achievement of certain milestones in relation to the Group's lead product, Episalvan. The Group has already submitted its protocol for the pivotal Phase III study for Episalvan, to test its safety and efficacy profile for the treatment of Epidermolysis Bullosa ('EB'), which has been granted US and EU orphan drug designation. The Phase III clinical trial in EB is expected to be commence in Q1 FY2017 with top-line data anticipated to be available in mid-2018 and commercial launch expected in 2019. European Investment Bank's Vice President, Andrew McDowell commented "Continued investment in innovation is crucial to improve lives and build on European strengths to develop world-leading pharmaceutical products. The European Investment Bank is pleased to support innovation and development of new treatment of painful skin disorders by Amryt Pharma. This represents the EIB's first-ever direct support for investment by an Irish pharma company and I am pleased to confirm the EIB's intention to increase support for private sector innovation in Ireland in the years ahead".

Our view: This is a significant milestone for Amryt. The Facility fully funds the pivotal Phase III study for Episalvan at an attractive rate without the need for dilution to shareholders. Episalvan received marketing approval for the treatment of partial-thickness wounds from the European Commission in January 2016 and Amryt is developing Episalvan as a new treatment for EB, a rare and inherited skin disorder that causes the skin to become very fragile, affecting c.500,000 patients worldwide, for which, there is currently no available treatment. The EB market in the US and Europe alone is estimated to be worth c.US$1.5bn per annum. The Group has patent for the use of Episalvan in the treatment of EB in US and Europe for the treatment of all partial thickness wounds, including those derived from EB. The Facility also provides the funding required to progress its earlier stage AP102, a US orphan designated acromegaly drug compound through pre-clinical development and into the clinic. AP102 focuses on somatostatin analogue peptide medicines for patients with rare neuroendocrine diseases, where there is a high unmet medical need, including acromegaly and Cushing's disease. Shareholders cheered on Friday as Amryt showed its ability to secure Facility Agreement with EIB, a high profile long-term lending institution owned by the Member States of the European Union, demonstrating their confidence in management's capability to progress it pipelines of products, particularly the Episalvan. The Group has acted in shareholder's best interests and we look forward to further updates in due course. Beaufort reiterate a Speculative Buy rating on the Shares.

Berkeley Group Holdings (LON:BKG, 2,760.00p) – Buy

On Friday, the Berkeley Group announced its unaudited interim results for the six months ended 31 October 2016, together with an evolution of its shareholder returns programme. Highlights included profit before tax for the period of £392.7 million, up 33.9% from £293.3 million and NAV up 7.9% to 1,418 pence/share. The Group's net cash position was £207.9 million (April 2016: £107.4 million) after dividend payments of £137.0 million and £20.1 million of share purchases. Forward sales stood at £2.90 billion (April 2016: £3.25 billion) and landbank containing £5.9 billion of estimated future gross margin (April 2016: £6.1 billion) across 42,125 plots (April 2016: 42,858 plots). Management summarised market conditions by noting that for the London-heavy group excluding "the hiatus around Brexit, reservations are 20% down on the same period last year, as a result of the market adjusting to increased stamp duty and the economic uncertainty arising from the result of the EU Referendum". The Board also reviewed its mechanism for making the remaining £10.00 per share payments under the Shareholder Returns Programme that was put in place in 2011, and enhanced this time last year from £13.00 per share to £16.34 per share. Within this, it noted that the current heightened macro uncertainty has led to significant market volatility and that there is a dislocation between this and both underlying strength of Berkeley's operating model. As a consequence, the Board is proposing to introduce flexibility such that the remaining £10.00 per share payments can be made through a combination of share buy-backs and dividends, as opposed to solely dividends. This recognises that, at certain price points, the Board is of the opinion that the Group is materially undervalued and share buy-backs will be in the best interests of all shareholders. In making this change, the Board is also proposing that the payments should be re-characterised from being a value per share, to be an absolute value per annum. This ensures that the same quantum of cash will be returned as previously anticipated, but on a smaller number of shares, to the extent share buy-backs occur. This absolute value will be increased appropriately for any new shares issued.

Our view: That did the shares a power of good! And a jolly good job too, considering the undervaluation of Berkeley, whose forward 2017E multiple and dividend yield crossed over months ago! Its forward guidance, coming by targeting delivery of 3-year pre-tax profit of £2.0 billion from 1 May 2015 and the announcement of a new 5-year target to deliver at least £3.0 billion of pre-tax profit in five years beginning 1 May 2016, should provide comfort to those considering that UK housebuilders are standing on the precipice of another violent cyclical downturn. Most certainly recent mortgage data suggests this is far from the truth and the Bank of England is very unlikely to being hasty with prospective tightening, which still appears some way away. All positive housing market dynamics from structural shortage of supply, funding availability, government incentives and even the Chancellor enlarging his contribution to fund new affordable housing, all works in favour of the UK's major housebuilders while small jobbing builders continue to be squeezed out by banks unwilling to lend. Berkeley, having been the UK-quoted sector's main casualty of higher stamp duties on premium house purchases has, in fact, become a beneficiary of Sterling's Brexit-inspired tumble, as international buyers suddenly find their purchasing power magnified. Reservations, which remain consistent both with the group's previous announcement and the current experience of its peer group, provides shareholders with no sign of a slowdown on the horizon, while its estimated future gross margin on the landbank represents a highly prudent risk-adjusted assessment of future potential for each site. The shares trade on a 1.55x price/NAV, a 2017E P/E multiple of 6.2x and a yield of 7.5%. Too cheap on anybody's book! Beaufort retains its Buy rating on the shares.

GlaxoSmithKline (LON:GSK, 1,467.00p) – Buy

GlaxoSmithKline plc, one of the world's leading research-based pharmaceutical and healthcare companies, and its partner, Innoviva, on Friday announced that their Relvar Ellipta for the treatment for Chronic Obstructive Pulmonary Disease ('COPD') has been approved in Japan. Relvar is a combination of the inhaled corticosteroid ('ICS'), fluticasone furoate ('FF'), and the long-acting beta2 agonist ('LABA'), vilanterol ('VI'). GSK Global Respiratory Franchise's SVP & Head, Eric Dube, commented "COPD affects people in different ways, and a range of treatments are needed so that physicians can determine the right treatment for the right patient. We are delighted with this approval of Relvar Ellipta, our third COPD treatment to gain marketing authorisation in Japan in under three years, and believe it will be an important new option for appropriate patients with COPD, as well as those with asthma".

Our view: Positive progress for GlaxoSmithKline. The announcement follows approval of Relvar Ellipta in Japan for the treatment of bronchial asthma since 2013 in 2 different strengths, namely 100/25 mcg and 200/25 mcg. This time, the treatment is for COPD and the approved dose of FF/VI is 100/25 mcg, which is administered once a day. COPD is a disease of the lungs that includes chronic bronchitis, emphysema or both, interfering with normal breathing by obstructing the airflow, caused by cigarette smoke, breathing in second hand smoke, air pollution, chemical fumes or dust from the environment or workplace. It is estimated that c.8.6% of the people aged over 40 in Japan are affected, according to Yoshinosuke Fukuchi from Juntendo University. In light of the on-going developments, Beaufort maintain a Buy rating on the Shares.

Quadrise Fuels International (LON:QFI, 11.25p) – Speculative Buy

Quadrise Fuels, the emerging supplier of MSAR emulsion technology and fuel, enabling a low-cost alternative to heavy fuel oil (one of the world's largest fuel markets, comprising over 450 million tonnes per annum) in the global shipping, refining and power generation markets, on Friday provided an update on its key projects and operational developments ahead of its AGM meeting. Management confirmed its marine project continues to make excellent progress. MSAR fuel is produced in regular campaigns and transferred to the nominated Maersk vessel by a bunker barge in the Bay of Algeciras. The Maersk vessel has been continuing to burn MSAR successfully on its regular scheduled route, whilst outside of the European Emission Control Area. Also since the Memorandum of Understanding with the Kingdom of Saudi Arabia in August 2016, Quadrise has been working collaboratively with all parties to move this large-scale production to combustion trial forward. In September, the Group also extended its current agreements until November 2018 with its technology partner, Akzo Nobel, for the exclusive purchase and supply of chemicals for the production of MSAR and the exclusive joint development of emulsion fuels. These agreements underpin Quadrise's ability to migrate the business to long-term commercial revenues.

Our view: The first half of 2017 is going to be 'make-or-break' for Quadrise. The outcome of two very important trials are now pending, both of which offer the potential to create genuine bonanza returns for the Group. A 'thumbs up' from Maersk in their interim assessment, which management expects to receive in the Spring of next year, ahead of completion of current trials in the early Summer, could schedule a route to large scale adoption of MSAR for fuelling its ocean going fleet and potentially generate a huge, ongoing, stream of royalties. Having also dedicated significant management resource to move Saudi Aramco's large-scale production-to-combustion project forward, most recent discussions suggest contracts will be formally entered during the first half of 2017, with volume trials then likely to commence during the second half. Having raised gross proceeds of £5.25 million from October's Placing and Open Offer, Quadrise is now finds itself adequately funded to build on this progress and, potentially, take its first steps toward commercial operations, before needing to tap shareholders for additional funding once again. The upbeat nature of the Board's announcement, particularly given that landmark events are anticipated within a brief six months might normally have been expected to push the share price back to the top of its established trading range between 9.0p and 15.0p. In the event, however, the shares were under pressure from the start, as shorter-term traders to profits on the new equity allocated five weeks back, which was priced at 10.0p/share. Once this supply tails off, this level perhaps identifies a new support at which investors confident of positive news might consider entering the equity. Clearly investment in Quadrise carries a lot of risk, although it needs to be recognised that giant institutions like Maersk and Saudi Aramco would never dream of dirtying their hands with a minnow like Quadrise unless it genuinely has the potential to bring value for their operations. Taking this on board, Beaufort retains its Speculative Buy recommendation on the shares.

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Mon, 05 Dec 2016 08:24:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/26666/beaufort-securities-breakfast-alert-amryt-pharmaceuticals-berkeley-group-glaxosmithkline-plc-prospex-oil-gas-quadrise-fuels-international-26666.html
VSA Morning Agri Comment http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/26665/vsa-morning-agri-comment-26665.html Anglo African Agriculture Trading Update

On Friday Anglo African Agriculture plc (LON:AAAP), the London-listed food manufacturing and processing company with its main operations in Cape Town, South Africa, published a trading update ahead of its results for the year ended 31 October 2016 (FY 2016).

AAA expects to report FY 2016 sales in its spice manufacturing business of more than ZAR 34m (c£2.0m), +44% YoY (FY 2015: ZAR 23.6m (c£1.1m))

In November 2016 (first month of FY 2017) revenues have increased to ZAR 4.4m (c£0.26m), +16% YoY (November 2015: ZAR 3.8m (c£0.18m))

Volumes in November also increased to 150t, up from an average of 90t per month over FY 2016

VSA Comment

Although it is difficult to forecast a full-year trend off just one month’s trading, if AAA can sustain its current YoY growth rate across the rest of FY 2017 revenues are on track for c£2.2m (assuming current FX rate). However, given volumes are likely to increase in-line with planned capacity expansion (to 250t per month), this figure is likely to be significantly exceeded.

On the bottom line, profitable contribution should also be provided by the soon-to-be-acquired 46.8% stake in Dynamic Intertrade Agri (Pty) Ltd, which delivered revenues of ZAR 2.3m (c£0.13m) in November 2016 and recently secured a 1,000t fertiliser order for December 2016 worth ZAR 5.75m (c£0.33m) with an expectation of a 10,000t follow-on order to be spread over 2017.

Initial signs for FY 2017 appear positive and the new management team are clearly making significant operational improvements as the company seeks the scale it needs to reach profitability. With November being the last month before the holiday season, we wait to see whether AAAP can sustain this growth through the quiet December to January period and beyond. If it can, then FY 2017 could represent a significant turning point for the business.
 

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Mon, 05 Dec 2016 08:19:00 +0000 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/26665/vsa-morning-agri-comment-26665.html
Renzi referendum rejection roils markets http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26664/renzi-referendum-rejection-roils-markets-26664.html FTSE 100 Index called to open -30pts at 6700, having recovered from overnight lows of 6647 to re-join a one month 6670-6850 trading channel, however remains in a downtrend that began on Wednesday last week. Bulls will be hoping that a rally to challenge the trend’s falling highs resistance at 6720 will take place whilst Bears will be looking for 6670 support to be broken for the downtrend to continue. Watch levels: Bullish 6730, Bearish 6665.

A negative European open comes as Matteo Renzi confirmed he will resign after Italians yesterday voted overwhelmingly to reject his proposed constitutional reforms. The Euro was placed in the firing immediately, hitting a 20-month low against the USD, whilst wider concern surrounding the health of the country’s banking sector may end up being the biggest concern in the coming days and weeks as recapitalisation plans for the country’s embattled financial institutions (most notably its 3rd largest lender Monte dei Paschi) come into question.

Elsewhere in Europe, a rejection of far-right politics in the Austrian Presidential election may mark a decided change in sentiment of voters after Brexit and Trump’s election in the US, however the overshadowing of the Italian referendum is likely to gain the headlines as the country’s Five Star Movement celebrates its victory.

All eyes will now be on the Eurogroup meeting in Brussels this morning for reaction to Italy’s referendum result, whilst the ECB’s latest monetary policy update on Wednesday (widely expected to result in an extension of its QE policy) will provide an insight into the central bank’s management of the political and economic uncertainty that Renzi’s removal will raise.

Asian markets are sharply lower after the result of the Italian referendum was announced, whilst a series of scathing tweets from US President-elect Donald Trump spurred further declines in the Chinese Yuan. Japan’s Nikkei was 0.6% lower whilst Australia’s ASX (viewed as a  Chinese proxy by many) was the biggest loser, down 1%.

US equity markets finished the week in a lacklustre mood, the European political risk hampering investor sentiment going into the weekend. The Dow Jones shed 0.1% whilst the S&P 500 closed marginally higher as mixed US jobs data failed to buoy markets significantly.

Crude Oil prices are trading sideways having opened lower at the start of Asian market trading, marking the apparent end of the post-OPEC production cut deal rally. Both Brent and US crude retain one-week support however have been unable to break out from respective resistance of $54.60 and $51.80.

Gold, having spiked at the opening of Asian markets overnight, has since pared gains to trade at the lower end of December’s rising $1172-$1180 trading channel as the US Fed’s December FOMC meeting looms large in investors’ minds, especially after Friday’s impressive headline unemployment reading.

In focus today will be the continued fallout from the Italian constitutional referendum yesterday as Italians rejected PM Matteo Renzi’s proposed constitutional reforms. He will tender his resignation this afternoon, however the process of the Italian President confirming his resignation and beginning the process of forming a technocratic government (or even the possibility of calling a snap election) may take some time.

Macro-wise, throughout the morning we see a range of European Services PMI readings, with figures from the majority of countries (Spain, Italy, France, Germany and the headline Eurozone) seen expanding or unchanged, with the UK’s figure the solitary figure to decrease, although it remain expansionary. Eurozone Retail Sales are released shortly after at 10am, with both the monthly and yearly figures seen increasing, the former moving from negative to positive territory.

This afternoon’s US data is rather light, with the stateside reading of Services PMI seen improving slightly, while Non-ISM Manufacturing Composite and Labour Market Conditions data is released shortly afterwards.

The Eurogroup meets in Brussels this morning, no doubt with the Italian referendum result undoubtedly being the topic under the spotlight, whilst a trifecta of Fed speakers - Dudley, Evans and Bullard - all take to the stand this afternoon. What will be their reaction to Friday’s blowout unemployment reading?

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Mon, 05 Dec 2016 08:17:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/26664/renzi-referendum-rejection-roils-markets-26664.html
Mines & Money showcased a sector coming back to life, if you looked hard enough http://www.proactiveinvestors.co.uk/columns/jackhammer/26663/mines-money-showcased-a-sector-coming-back-to-life-if-you-looked-hard-enough-26663.html Fri, 02 Dec 2016 14:59:00 +0000 http://www.proactiveinvestors.co.uk/columns/jackhammer/26663/mines-money-showcased-a-sector-coming-back-to-life-if-you-looked-hard-enough-26663.html Oil price, BP, I Solo Oil, And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/26662/oil-price-bp-i-solo-oil-and-finally-26662.html Oil price

I always think that it is rather nice when the market appears to be thinking with one voice, particularly if G Sucks is on the other side. The feedback from the Opec meeting is overwhelming cynical with most so called experts writing the obituary of the whole organisation let alone this agreement. Indeed everyone from Zak Mir to a visiting professor and chair of the Kings Policy Institute in London has written it off. The missing piece in the jigsaw is what GS has to say but as ongoing bears of the oil price they are coming from a position of weakness.

Disregarding all that, it seems that the telephone conversation that I mentioned earlier in the week between Presidents Putin and Rouhani may have swung things towards an agreement. Apparently this call took the heat out of the Saudi-Iran negotiations and may have sealed the deal, who knows, I have a healthy degree of cynicism myself but can believe anything on the right day. Recording of exports and production is better and more transparent than it used to be so I guess that come the new year we shall see who is and who isnt playing ball.

In the meantime if the agreement lasts only a while we shall see the inevitable continued rise in the rig count and something that will be welcomed by the US service companies as well as the likes of Hunting…

Finally in his first piece of policy in the energy sector it seems that President elect Trump has formally the Dakota Access pipeline as mentioned here after his election.

BP

It’s almost as if BP were  waiting for the meeting to finish as they have announced that they have approved the spend of $9bn on the new platform for Mad Dog 2 in the Gulf of Mexico. The platform will produce 140/- b/d and will come onstream in 2021, oil price wise this is the interesting bit as I have been banging on for a long time about capex reductions causing a degree of tightness in the oil market, an approval now still means a five year wait by which time anything might have  happened. Reasons for being more positive between then and now are summed up by the $1.5tn loss of capex projects worldwide which, cannot be magicked back on to the market. Finally back to my point about costs, this platform which is budgeted at around $9bn would have been $20bn two years ago.

Solo Oil

I was fortunate to meet up the other day with CEO of Solo Neil Ritson and new FD Dan Maling. I have historically only had exposure in that part of Tanzania through Aminex but meetings with Solo and Wentworth in recent days is fast expanding my database. For Solo, Tanzania is the primary source of value, as they prepare to spud Ntorya-2 in the Ruvuma basin swiftly followed by the Ntorya-3 well should this well be a success. With 1-1.5 TCF of gas it would dwarf Kiliwani North but if my maths are correct they have enough cash to spare to drill this well, the N-3 well might need some funding. Kiliwani North pays the day to day G&A spend but at 15-20 scuffs a day looks disappointing, I’m sure I saw numbers nearer 30 doing the rounds.

One cant talk about Solo with mentioning Horse Hill where the company are awaiting planning approval which might get through early next year, any further success here would be relatively modest to the share price but no less welcome. Finally, I would expect more corporate activity from Solo who are a small but interesting team working in a specifically value enhancing area, Ntorya-2 when it spuds very shortly will be most important to the company.

And finally…

The autumn season of rugby internationals comes to a halt with England hosting the Wallabies at Twickenham, get the shopping done early tomorrow…

In the football it might be the winner takes it all game as the Noisy Neighbours host Chelski in the top of the table clash. With Spurs hosting the Swans and the HubCap Stealers at the Cherries it leaves the London derby at the London stadium where the happy Hammers take on the Gooners. In mid-table misery there is the sight of the Red Devils going to the Toffees.

And more great NH racing with the Welsh Grand National at Chepstow and a great card at Aintree featuring the Becher Chase.

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Fri, 02 Dec 2016 12:03:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/26662/oil-price-bp-i-solo-oil-and-finally-26662.html
In the Papers - British Gas to freeze energy prices for 6 million customers http://www.proactiveinvestors.co.uk/columns/guardian-cfds-pre-market-briefing/26660/in-the-papers-british-gas-to-freeze-energy-prices-for-6-million-customers-26660.html Newspaper Summary

The Times

Hunt to find white knight for mutual at risk of failing: The financial regulator has been seeking a rescuer for Manchester Building Society but has been turned down by Nationwide, Britain’s largest society.

Japanese give Branson a no-frills rival in space race: When Sir Richard Branson gets round to conquering his final frontier with the promise to boldly go where no man (or woman) has gone before on a passenger aircraft and pop into space, he may not be alone.

Manufacturers raise prices at fastest rate in five years: Sterling’s sharp fall since Brexit is driving up factory prices at the second fastest pace in more than five years in a sign of creeping inflation.

‘No sacred cows’ as Daily Mail group ponders sale of assets: The Boss of DMGT refused to rule out a sale of any of its businesses as the owner of the Daily Mail reported a rise in annual revenues to £1.9 billion despite a double-digit decline in print advertising.

Fifteen Amsterdam files for bankruptcy: Only four weeks after stepping in to rescue his Australian restaurant franchise from receivership, Jamie Oliver has suffered a bankruptcy in another part of his overseas restaurant empire.

Fallen Iceland bank comes in from cold: One of the most prominent Icelandic victims of the financial crisis is due to return to the stock market within months after preparing for a flotation that could value it at €1.5 billion.

Stimulus plan proves to be China’s trump card: Large state-owned companies, bolstered by a credit and construction boom, have helped China to post better-than-expected factory activity figures for November.

Landlords take company route to dodge tax change: Hundreds of thousands of landlords have set themselves up as corporate entities to avoid the government’s tougher buy-to-let tax rules that come into force in April.

VAT rate cut is good news for online publishers: The European Commission has moved to scrap a tax disadvantage for e-books and digital publications in a boon for online news organisations and other internet-based media businesses.

Jobless rise a lousy Thanksgiving gift: New claims for unemployment benefits in the U.S. climbed more sharply than expected to hit a five-month high last week, before the publication of closely watched jobs figures.

Derivative traders cry foul over tighter regulation in Cyprus: A renewed clampdown on light-touch financial regulation in Cyprus hit shares in London-listed derivative brokers, raising the prospect of “contagion” across other European markets.

Oil company challenges SFO raid in court: Unaoil, an oil and gas services company, accused of international corruption is challenging the Serious Fraud Office at the High Court, claiming the agency is abusing its power by requesting a raid on its Monaco office.

Vodafone’s Indian rival extends free calls offer to customers: India’s richest man has extended an offer of free data and voice services to millions of the country’s mobile phone users to win customers from rival providers, including Britain’s Vodafone.

The Independent

British Gas to freeze energy prices for 6 million customers: British Gas has announced it will freeze gas and electricity prices for more than six million customers this winter. Those on standard tariffs will benefit from the move, with prices being held at current rates until March.

House prices ‘could fall in 2017 as Brexit hits spending power’: House price growth slowed in November, prompting experts to warn that prices could fall in 2017 as higher inflation hits spending power. Nationwide Building Society recorded a 4.4% rise in the year to November, the slowest rate since January.

U.K. finance firms have started applying for Irish licences: Ireland’s central bank has been receiving applications for licences from U.K. authorised financial firms seeking to relocate from London in the wake of the U.K. vote to leave the EU, a top official said on Thursday.

Citigroup in talks to move London banking jobs to Germany after Brexit: Citigroup is considering moving some of its London-based equity and interest-rate derivatives traders to Frankfurt after Brexit is triggered, according to people with knowledge of the matter.

Tougher immigration system could harm economy, CBI Chief warns: Theresa May risks harming Britain’s businesses if her government implements a new immigration system that is too bureaucratic, Carolyn Fairbairn, Director of the Confederation of British Industry (CBI) has warned.

Financial Times

Scottish Mortgage just misses out on FTSE 100 spot: Scottish Mortgage Investment Trust has just missed out on becoming the third investment trust to enter the FTSE 100 index, but is now on a reserve list and could be promoted later in the year.

Serco wins £600 million contract to manage Barts hospitals: Serco has landed a £600 million contract to manage facilities for Barts Health NHS Trust in London, the largest deal the company has won since 2014 and a sign that its recovery is on track.

Brazil’s Odebrecht admits to ‘improper practices’: Odebrecht, Brazil’s biggest construction company, said on Thursday it had “erred” and acted “improperly” amid local media reports that the group had signed a plea bargain with investigators probing corruption at state oil company Petrobras.

Glencore to restart dividend payments after meeting debt target: Glencore has said it is close to completing its wide-ranging debt reduction programme and plans to pay shareholders a dividend of $1 billion in 2017, buoyed by a rebound in commodity prices.

Wells Fargo splits chairman and CEO roles after investor pressure: Wells Fargo has changed its boardroom rules to require the roles of Chief Executive and chairman be kept separate, adding to pressure on other U.S. banks to end the contentious practice of combining the top jobs.

Airbnb agrees to enforce rental limits in London and Amsterdam: Airbnb, the online accommodation service, has agreed to restrict the number of nights that hosts can rent out their homes in London and Amsterdam — bowing to pressure from regulators in two key European markets.

Parker Hannifin to buy filtration group Clarcor for $4.3 billion: U.S. industrial conglomerate Parker Hannifin on Thursday agreed to buy Clarcor for about $4.3 billion, including net debt, in a move to grow its filtration business.

Smurfit Kappa ticks the right box to join FTSE 100: Dublin-based packaging group Smurfit Kappa is set to join the FTSE 100 index later this month, thanks to a long-term turnround plan that has helped its market capitalisation rise fivefold in just five years.

Fears ebb of Trump blocking AT&T’s $85 billion Time Warner deal: Donald Trump’s transition team has reassured AT&T that its $85.4 billion acquisition of Time Warner will be scrutinised without prejudice despite the President-elect vowing to block the deal because it concentrated too much “power in the hands of too few”.

Archer Daniels Midland to sell stake in Australia’s GrainCorp: Archer Daniels Midland, the U.S.-based agricultural commodities merchant, is selling its 19.9% stake in Australian counterpart GrainCorp, abandoning a company it once sought to own in full.

U.S. developer plans $2.2 billion resort outside Madrid: The Cordish Companies, a privately held U.S. leisure and real estate business, has unveiled plans to build a $2.2 billion resort outside Madrid, sending a strong vote of confidence in Spain’s three-year old economic recovery.

Maersk Line to buy smaller rival Hamburg Süd: Maersk Line moved to shore up its position as the world’s largest container shipping group by agreeing to buy Hamburg Süd, the seventh-biggest operator.

To Read More Click Here <http://trading.guardianstockbrokers.com/e/124122/a9-11e6-ba85-95d1533d9a62-html/36fx69/867917168>

Lex:

Dollar General: be cents-ible: Dollar General, the chain from Tennessee, reported its second consecutive quarter of earnings below analysts’ expectations. It also said that it expected full-year profits to rise only at the low end of its target range. The company needs to balance its growth ambitions with the pressure on its profitability.

Maersk/Hamburg Süd: ship shifting: On Thursday, container line Maersk said it would buy Hamburg Süd from Oetker, the privately held German conglomerate. The transaction will expand its container fleet, already the world’s biggest, by a fifth.

Glencore: end zone: After a year of selling assets, the Chief Executive of London-listed Glencore can point to how net debt has tumbled. A muted share price reaction suggests the market got what it expected. After more than $6 billion of disposals, much in (then) higher priced gold and silver, perhaps so. A restored dividend should please shareholders.

The Daily Telegraph

BP to invest in first major Gulf of Mexico project since disaster: BP is investing in its biggest project in the Gulf of Mexico since it suffered the worst ever oil spill in its history in the region, after giving the go-ahead to spend $9 billion building a new platform in the Mad Dog oil field.

Nissan deal’s deal with the government should be audited, says senior MP: The deal that has kept Nissan building cars in Britain should be examined by the National Audit Office, over concerns that the assurances could add to the public debts without proper scrutiny, a senior MP has said.

UBS picks Frankfurt over London for wealth management business: Swiss bank UBS has merged most of its wealth management operations into a new business in Frankfurt, in a significant boost to the German city as it seeks to establish itself as a rival financial hub to London following Brexit.

AB-Inbev taps craft beer boom by opening first London pub under Goose Island brand: The brewing giant behind Budweiser is to roll out its first European chain of pubs based on its popular U.S. craft beer brand Goose Island.

Ofcom Chief backs new powers to block takeovers after Brexit: Britain should assume new powers after Brexit to impose conditions on takeovers that boost the Government’s developing industrial strategy, the Chief Executive of Ofcom has suggested.

Just Eat delivery robot to replace human drivers: Just Eat has delivered its first take away with a delivery robot to a customer in Greenwich, launching a pilot project that will involve transporting food in the city using autonomous vehicles.

The Questor Column:

What awaits infrastructure funds as inflation and higher rates return?: Government bond prices invariably fall when interest rates and inflation rise - because of competition from cash savings and the diminished value of future interest in real terms. Another type of asset that pays a reliable income, and has therefore been a popular choice among income seekers in the low interest rate environment, is infrastructure investment trusts. These listed funds, which are relatively new to the stock market, invest in a variety of assets, including public sector buildings, wind and solar farms and toll roads. Questor feels nervous about high premiums on funds whose assets are likely to appreciate only slowly, if at all. We therefore see the sector as no more than a hold for income seekers, with the best bets being John Laing Environmental Assets and Greencoat U.K. Wind (U.K.W), which has a 9.8% premium and a yield of 5.3%. Questor says “Hold”.

The Guardian

Opec deal pushes oil price up to $54 a barrel: Oil prices have reached their highest level in a year amid hopes in financial markets that the Opec cartel will make a deal to curb crude production stick.

Manufacturing growth slows as weak pound pushes up prices: Growth in the U.K.’s manufacturing sector has eased and the weak pound is further driving up firms’ prices, according to an industry survey.

Asos accused of underpaying new warehouse staff: The online fashion retailer Asos has been accused of breaching “the spirit if not the letter” of employment law designed to prevent the exploitation of low-paid temporary workers.

European free trade area could be U.K.’s best Brexit option, says judge: Britain could retain access to the European single market and considerably more national sovereignty if it joins the European Free Trade Association (Efta), the President of the body’s court has said.

Coutts managed tax haven firms for controversial clients: Coutts, the taxpayer-owned bank, provided offshore services to controversial clients including a member of the Brunei royal family accused of stealing billions from his own country, and a banker charged with assisting the sons of Egypt’s deposed President, Hosni Mubarak, in financial crime.

Daily Mail

Nokia phoenix firm set up by former employees to release new smartphone early next year: At one time, almost everybody had a Nokia mobile phone. Its tell-tale ringtone and snake game were part of popular culture, and it dominated the market until the iPhone was released in 2007.

Oil stocks rally again as crude price hits a 2016 high to over $54 a barrel after historic Opec deal: Oil soared to its highest level of the year last night following this week’s historic deal to cut production. The price of crude rose more than 5% to above $54 a barrel – a level not seen since summer 2015 – taking gains in the past two days to around 17%.

Brummie poster seller faces ten years in U.S. jail after being raided by police in FBI operation: An online poster salesman has become the first person in the U.K. to be banned as a Director for price-fixing – and could face ten years in a U.S. prison.

Ding Dong! Avon lady prepares to open HQ in Britain for the first time in its 130-year history: For the first time in its 130-year history, beauty giant Avon is set to be run from the U.K. The firm has recruited a finance Chief as it prepares to move into a new headquarters in Northampton. It will see the firm being run on these shores for the first time since it was founded in New York in the 1880s.

TalkTalk dives as JP Morgan sparks fears customers are quitting after it was hacked in 2015: Investors hung up on TalkTalk after JP Morgan delivered a downbeat forecast on the stock. The broker said the prospects for the business were uncertain as the telecoms provider attempts to stem the outflow of customers since it was hacked in 2015.

Daily Express

More than 15 million workers now automatically enrolled into a pension scheme: More than 15 million workers are now saving into a pension after being automatically enrolled into a scheme, official figures show.

British house prices forecast to grow everywhere in 2017 - except this one area: House prices are set to rise across Britain next year, with the exception of one major city where values are on course for a fall, according to forecasts by estate agent Knight Frank.

Energy supplier warning: Fears dozens of firms could go bust amid perfect winter storm: A perfect storm of plunging temperatures and soaring wholesale prices has left up to 30 small energy firms in a vulnerable position, experts have warned. It is feared more providers could fall under the knife after GB Energy collapsed over the weekend - leaving around 160,000 homes without a supplier.

Pound jumps to 12-week high against euro amid hopes Britain will stay in single market: The pound has jumped to the highest level since September against the euro and a three-week high against the dollar, amid rising expectations Britain could remain in the single market after Brexit.

Petrol warning: Prices to soar at pumps this winter to two-year high, drivers told: Drivers have been warned petrol is set to soar to two-year highs this winter after a surge in oil prices.

The Scottish Herald

Scots engineering sector turns corner: Scottish engineering firms have reported their first increase in orders in two years driven by growth in sales within the U.K. a study has found.

Growth is Fierce for Aberdeen craft beer maker: Fierce beer, the fledgling Scottish microbrewer, has revealed plans to ramp up production capacity and expand its Aberdeen premises, just seven months after opening for business.

Six candidates will stand in NFU.S.’ Presidential elections: Six candidates have now confirmed they will stand in NFU Scotland’s Presidential elections in February - three for the President post, and three for the two Vice President posts.

Business must use Brexit to deepen global ties: Scottish businesses need to be “more ambitious, think bigger and adopt a much more international mindset” in the wake of the Brexit vote, according to the outgoing chair of the Scottish Chambers of Commerce.

Graham wins NHS contract: Graham Construction has landed a contract to develop two new health facilities for NHS Grampian in Aberdeen. The £134 million scheme, at the Foresterhill Health Campus, is the largest project to be procured through the Health Facilities Scotland Framework to date.

Wood Mackenzie maintains sales amid uncertain times: Wood Mackenzie has said it achieved a solid underlying financial performance last year, when America’s Verisk Analytics bought the oil and gas consultancy for £1.85 billion.

Algy Cluff highlights appeal of North Sea: North Sea-focused Cluff Natural Resources has increased its estimate of the amount of oil and gas there may be on one licence by 300% after completing further analytical work.

Ulster Chief highlights RBS role: The Boss of Ulster Bank has declared the Irish lender will have an important strategic role to play for Royal Bank of Scotland following the U.K.’s decision to exit the EU.

Semefab plans technology investment and export growth after grant boost: Semefab, the Glenrothes- based electronics company has secured a six-figure grant from Scottish Enterprise as it looks to stay at the forefront of the U.K.’s micro and nano technology network (MNT).

Ferguson joins Wood board: Jacqui Ferguson has joined Wood Group as a non-Executive Director, and will sit on the board’s nomination and audit committees.

The Scotsman

Property firms Shepherd and Hardies build new partnership: Shepherd Chartered Surveyors has tied the knot with property and construction consultancy Hardies in a deal that will see the pair retain their own identities.

Rolls-Royce looks to offload 800 jobs: Around 800 jobs are being axed worldwide at Rolls-Royce as the group announced plans to slash costs in its embattled marine business.

St Andrews Links tees up clothing deal with Japan’s TSI: The trust responsible for the seven links courses at the home of golf has signed a global clothing agreement with a Japanese clothing group.

RBS to close half its Edinburgh branches: Royal Bank of Scotland is to close half its Edinburgh branches in the latest round of cost-cutting - with more misery to come.

Five Edinburgh start-ups heading for London showcase: Edinburgh’s start-up community will be represented by five entrepreneurs at a technology showcase being held in London next week.

Retailer McColl’s racks up sixth year of sales growth: Retail chain McColl’s notched up its sixth year in a row of rising sales as it hit its target for 1,000 convenience stores across the U.K.

Contactless payments are the future, says Qpal Founder: Mobile payments will soon become the norm across the U.K. with chip and pin viewed as painfully slow in comparison.

City A.M.

London is home to nearly a fifth of the U.K.’s rental accommodation: London is now home to almost a fifth of the rental properties in the U.K., but it accounts for nearly half of the total value of these households.

CHI & Partners Boss named as advertising trade group leader: The Chief Executive and partner of advertising agency CHI & Partners has been named as the new President of trade body the Institute of Practitioners in Advertising (IPA).

Starbucks’ Chief Executive Howard Schultz is stepping down: Starbucks’ chairman and Chief Executive Howard Schultz is stepping down from his job as Chief Executive.

BrewDog brings roulette pop-ups and “Casino Rye Ale” beer to its U.K. bars and opens a new site in Hackney: Scottish craft beer maker BrewDog has launched a Casino-themed beer and roulette pop-ups to stir up excitement for its new brewery in America.

KPMG Boss Simon Collins won’t be seeking re-election after five-year tenure: KPMG’s U.K. Boss will step down in March after five years at the helm of the accountancy giant. Simon Collins told fellow partners of his plans on Thursday and is expected to put his hat in the ring to step up and lead the global network of the firm, according to reports by Sky News.

CBRE completes property fund merger creating new £1.47 billion fund: The CBRE U.K. Property Fund (U.K.PF) is merging with the Electricity Supply Pension Scheme (ESPS) U.K. property portfolio to create a new £1.47 billion fund.

The editor of the Daily Mail has resigned from a press committee in the most Daily Mail way possible: Paul Dacre, the editor of the Daily Mail, has announced he is stepping down from a committee that sets out regulatory rules for the press.

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