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Beaufort Securities Breakfast Alert - HSBC to pay $101.5m to settle currency rigging probe

Beaufort Securities Breakfast Alert - HSBC to pay $101.5m to settle currency rigging probe

Markets

Europe
The FTSE-100 finished yesterday's session 0.32% lower at 7,700.96, whilst the FTSE AIM All-Share index was up 0.29% at 1,063.87. In continental Europe, the CAC-40 finished 0.02% higher at 5,494.83 whilst the DAX was up 0.74% at 13,281.43.

Wall Street
Last night in New York, the Dow Jones fell 97.84 points to end the session at 26,017.81, the S&P-500 eased by 4.53 points to close at 2,798.03 and the Nasdaq fell 2.23 points to stand at 7,296.05.

Asia
In Asian markets this morning, the Nikkei was 31.66 points higher, at 23,795.03, heading into the close and the Hang Seng was up 75.21 points at 32,197.15. The Shanghai Composite was up 15.76 points, or 0.45%, at 3,490.51. 

Oil
In early trade today, WTI crude was 1.22% lower at $63.17 per barrel and Brent was off by 1.01% at $68.61 per barrel.

 Headlines

HSBC to pay $101.5m to settle currency rigging probe
HSBC has agreed to pay $101.1m (£72.7m) to settle a US criminal investigation into rigged currency transactions. The bank has admitted its traders twice misused confidential information provided to them by clients for its own profit. HSBC, which is Europe's biggest bank, saw one of its former bankers convicted last year in connection with the probe. A US jury found Mark Johnson guilty of defrauding client Cairn Energy in a 2011 currency trade. The HSBC settlement is made up of a $63.1m criminal penalty and $38.4m in restitution to an unnamed corporate client. Separately it had already settled with Cairn Energy for approximately $8m. As part of the US deal, HSBC has entered into a three-year deferred prosecution agreement (DPA) with the US Department of Justice. The DPA, which would allow HSBC to avoid criminal charges, is pending a review by a US court. The bank said it had agreed to boost its compliance programme and internal controls, as well as to cooperate fully with regulatory and law enforcement authorities.

Source: BBC News

Company news

 

Altus Strategies (LON:ALS) 7.75p – Speculative Buy
Altus announced the definitive agreement with Legend Gold Corp (LGN.V) has received 100% approval of Legend shareholders who voted on the resolution to approve the agreement. Legend will now seek approval of the Supreme Court of British Columbia on 23 January 2018. Subject to court approval, closing of the agreement should occur on or about 25 January 2018. The basic terms are an all shares transaction where Legend shareholders end up owning 27.6% of the enlarged share capital of Altus. Legend has six gold licences in Mali that cover nearly 400km2 of prospective exploration ground and contain c 900koz of discovered gold resources.

Beaufort Securities acts as corporate broker to Altus Strategies plc

 Great Western Mining Corporation (LON:GWMO 0.98p - Update

Great Western Mining Corporation provided an update yesterday on its copper-gold prospects located in Mineral County, Nevada. The Company announced that its 2018 drill programme has now commenced. Drilling will begin at the M2 target, which is logistically simpler, and then move on to the M4 target where most of the 2017 drilling occurred. In addition, drilling at the Sharktooth target is expected to commence in Q1 2018.

Beaufort Securities acts as corporate broker to Great Western Mining Corporation PLC

 Prospex Oil & Gas (LON:PXOG0.57p– Speculative Buy

Prospex has published very good initial flow rate results from its recently drilled gas development well in the Po Valley, on shore Italy. Prospex has a 17% interest. Two sands were flow tested and both were ahead of management’s expectations in terms of flow rate and reservoir pressure. One sand flowed at 5.2mmcf per day the other at 4.6. The combination of better flow rates and reservoir pressure = a potential increase to the 17bcf (2P) original estimate. We would also expect higher flow rates when on production, and therefore larger annual cash flows all round.

Our view: In summary, these are excellent initial results, better than expected, but it’s too early to put an NPV number on Prospex’s 17% interest (reservoir engineers will take some time to calculate the new estimate). Worth noting however is that this investment cost PXOG 1.3m euros, tieing in will cost 0.5m euros, and cashflow could be in excess of 2.0m euros per year, net to PXOG’s 17% after tax. i.e. payback in less than 1 year. In addition these results suggest a larger reserve than the current 17bcf estimate plus there are several other high impact targets including East Selva within the license. Elsewhere in Prospex’s portfolio Bainet is going into production, currently planned for end 2Q or early 3Q. We reiterate our Speculative Buy recommendation.

Beaufort Securities acts as corporate broker to Prospex Oil & Gas Plc

 

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