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Beaufort Securities Breakfast Alert - Any Brexit deal will hit UK economy - government paper

Beaufort Securities Breakfast Alert -  Any Brexit deal will hit UK economy - government paper

Markets

Europe
The FTSE-100 finished yesterday's session 0.08% higher at 7,671.53, whilst the FTSE AIM All-Share index was up 0.16% at 1,075.80. In continental Europe, the CAC-40 finished 0.14% lower at 5,521.59 whilst the DAX was down 0.12% at 13,324.48.

Wall Street
Last Friday in New York, the Dow Jones ended 177.23 points lower at 26,439.48, the S&P 500 lost 19.34 points to close at 2,853.53 and NASDAQ finished the session 39.27 points weaker at 7,466.51.

Asia
In Asian markets this morning, the Nikkei 225 was down 356.63 points at 23,272.71 heading into the close. The Hang Seng was 335.71 points lower at 32,631.18 and the Shanghai Composite was 24.89 points lower at 3,498.11.

 

Oil
In early trade today, WTI crude was 1.08% lower at $64.85 per barrel but Brent was down 0.76% at $68.93 per barrel.

 

 Headlines

Any Brexit deal will hit UK economy - government paper
The UK economy will grow more slowly outside the European Union, no matter what deal is struck with Brussels, a leaked government document suggests. The BuzzFeed News website reports the Whitehall analysis found growth over the next 15 years could be up to 8% lower than if the UK stayed in the EU. The document is said to look at the likely impact of different scenarios. Government sources say the UK will not be worse off, and its preferred bespoke trade deal option was not analysed. Meanwhile, the international trade secretary Liam Fox has said some fellow Leave campaigners must now accept that they will not achieve their vision of Brexit. Speaking to the Sun newspaper, Mr Fox said: "I know there are always disappointed individuals but they're going to have to live with disappointment." Chancellor Philip Hammond last week suggested the UK and EU economies could only move "very modestly" apart after Brexit. His remarks sparked outrage from backers of Leave and reports that the prime minister was struggling to keep her party together.

Source: BBC News

 

Company news

 

Defenx (LON:DFX) 23.00p – Update
Defenx (DFX) published its year-end trading update this morning, for the year to end December 2017. The second half of the year has clearly been very difficult for DFX, especially from a revenue and cash collection perspective, such that full year revenues will be below last year's revenues. At the Interim stage, revenues were 35% ahead of last year with organic growth at 21%, so H2-17 revenue growth must have been sharply negative. On the positive side, DFX has appointed a new CEO, Alessandro Poerio and progress has been made in developing the corporate revenue pipeline, focused particularly on DFX's Cloud product offering Cash collection has always been an issue with DFX and this problem has escalated, such that DFX may need to raise further capital towards the middle of this fiscal year if this issue does not improve. Including the Convertible bond, DFX's net debt position is currently around EUR 1.6m, but it has EUR 0.8m gross cash available to pay its near term creditors. Under Review
Click here to see Beaufort's research note on Defenx published on yesterday

Beaufort Securities acts as corporate broker to Defenx plc

 

Ferrum Crescent (LON:FCR) 0.10p – Speculative Buy
FCR, the European lead-zinc explorer and developer, announced a maiden JORC (2012) resource estimate for its 100% owned Toral lead-zinc project, located in the Province of Leon, Spain. Based on recent and historical drill programmes, Addison Mining Services (AMS) has estimated an inferred resource of 16Mt grading 6.9% Zn equivalent (including Pb credits and 7.5% Zn eq. including Pb and Ag credits). The Toral deposit now contains 670kt of Zn, 540kt of Pb and 13Moz of Ag while remaining open along strike to the east and down-dip.

Our view: The above announcement is an important milestone for FCR as it now has a significant inferred resource base from which it can launch a preliminary economic assessment. We are encouraged initial resource estimate and look forward to further updates as management continues to evaluate the economic potential of the Toral deposit. In the meantime, we maintain our Speculative Buy on the stock.

Beaufort Securities acts as a corporate broker to Ferrum Crescent Limited

 

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