London afternoon
London’s blue chip index succumbed to a mining sell-off ahead of the meeting of the world’s central bankers at Jackson Hole in Wyoming.
FTSE 100 shed 34 points to 6,824 with miners occupying the bottom seven places.
Federal Reserve chair Janet Yellen may use the meeting to indicate that US interest rates are going up, which was sufficient to knock the price of gold 0.6% while silver was down more than 2%.
Precious metals tend to move in the opposite direction to US interest rates.
Comments from vice-chairman of the Federal Reserve, Stanley Fischer, that US GDP growth would pick up in coming quarters added to the unease among gold bugs.
Gold miner Randgold Resources Ltd (LON:RRS), shed 4% to 8,020p, and Fresnillo(LON:FRES) 5.6% to 1,831.
Mining sector heavyweights BHP Billiton plc and Rio Tinto PLC both shed around 2.5%, while the situation was little better in the energy sector, where Royal Dutch Shell PLC ‘B’ shares, down 36p to 1,975p, and BP PLC (LON:BP.), 6p lower at 428p, followed a weak oil price.
UK housebuilders fared better as a survey from estate agent Countrywide (LON:CWD) suggested any Brexit-related turbulence would be relatively short-lived.
Prices will dip 1% next year but start to rise again in 2018, a forecast that helped Taylor Wimpey (LON:TW. rise 2.7% to 157.4p and Persimmon (LON:PSN) by2.1% to 1,785p.
Elsewhere, X-ray screening systems specialist Image Scan Holdings Plc (LON:IGE) shot 17% higher to 6.7p as it revealed a big order, previously announced on the last day of June, will result in the company almost breaking even at the earnings before interest and tax level this financial year.
Bioventix PLC (LON:BVXP) was wanted, climbing 20% to 1,171p, as the clinical diagnostics specialist said a strong performance during the financial year had received an extra boost from exchange rate fluctuations, which should mean revenues and profits for the year to the end of June 2016 should be ahead of market expectations.
MySQUAR Limited (LON:MYSQ), the Myanmar-language social media, entertainment and payment specialist, says MyFish, the latest game on its platform, has generated 500,000 users in the first three week since launch.
Currently players are generating revenues of US$600-$800 a day at a gross profit margin of 44%, the company revealed, prompting a rush for the shares, which were 5% higher at 3.54p.
Among the losers, news of a loan note subscription deal with Darwin Strategic undermined the share price of Premier African Minerals Ltd (LON:PREM), the multi-commodity resource and development company focused on Southern and Western Africa.
The shares were down 31% at 0.447p.
Safeland PLC (LON:SAF), down 3.9% at 61.5p, disappointed with its full-year results.
Deutsche lights up British American Tobacco https://t.co/srok2ioBqb
— Proactive News Desk (@UK_Proactive) August 22, 2016
London Open
The top-share index inched into the blue in the first hour of trading, despite the mining sector taking a bath.
The price of gold was off 0.6% this morning while silver was down more than 2%, hitting precious metals miners Randgold Resources Ltd (LON:RRS), down 3.3%, and Fresnillo (LON:FRES), down 4.5%.
Mining sector heavyweights BHP Billiton plc and Rio Tinto PLC both shed around 1.5%, while the situation is little better in the energy sector, where Royal Dutch Shell PLC ‘B’ shares and BP PLC (LON:BP.) follow the oil price lower.
Despite the heavy weighting of the resource stocks in the FTSE 100 index, the blue-chip gauge was up 18 points at 6,877 coming up to nine o’clock.
The bulls have drawn some comfort from the vice-chairman of the US Federal Reserve, Stanley Fischer, who had the following to say on Sunday at a conference at The Aspen Institute in Colorado.
“For the record, I note (a) that looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes, and (b) that I am an optimist.”
Later on this week – on Friday – Fischer’s boss, Janet Yellen, will pitch in with her views at the Jackson Hole shindig for central bankers.
With little news-flow from the big caps to get the pulses racing it was left to the growth companies to provide the sizzle.
X-ray screening systems specialist Image Scan Holdings Plc (LON:IGE) shot 13% higher as it revealed a big order, previously announced on the last day of June, will result in the company almost breaking even at the earnings before interest and tax level this financial year.
Bioventix PLC (LON:BVXP) was wanted, climbing 9% to 1,062.5p, as the clinical diagnostics specialist said a strong performance during the financial year had received an extra boost from exchange rate fluctuations, which should mean revenues and profits for the year to the end of June 2016 should be ahead of market expectations.
MySQUAR Limited (LON:MYSQ), the Myanmar-language social media, entertainment and payment specialist, says MyFish, the latest game on its platform, has generated 500,000 users in the first three week since launch.
Currently players are generating revenues of US$600-$800 a day at a gross profit margin of 44%, the company revealed, prompting a rush for the shares, which were 7.4% higher at 3.625p.
Among the losers, news of a loan note subscription deal with Darwin Strategic undermined the share price of Premier African Minerals Ltd (LON:PREM), the multi-commodity resource and development company focused on Southern and Western Africa.
Premier’s chief executive George Roach said the £3.5mln facility, at an interest rate of 16% a year, “removes any short term funding issues the company may have faced”.
The shares were down 18% at 0.532p.
Safeland PLC (LON:SAF), down 3.9% at 61.5p, disappointed with its full-year results.
The opportunistic trading and investment company said total shareholder returns decreased from 150.2% in the year ended 31 March 2015 to 16.0% in the year to 31 March 2016, albeit largely as a result of the previous year included the benefit from the sale of the Chandos Tennis Club.
Risers & Fallers: Image Scan, Stratmin, Mysquar, Premier African, Work Group, TomCo https://t.co/N9TTCic1SU
— Proactive News Desk (@UK_Proactive) August 22, 2016
Snapshot at 8.15am
The FTSE 100 was down 17 points to 6,841.
The top winner was Persimmon PLC (LON:PSN) up 0.6% to 1,759. The house builder reported a strong first half to the year, shrugging off Brexit.
Fresnillo PLC (LON:FRES) was the biggest loser, down more than 2% to 1,893p.
News:
Alecto agrees farm out of third Mali gold property
MySQUAR's new game already making a financial impact
Chagala upbeat on prospects after sharp rise in profits
Preview at 6.55am
The FTSE 100 is set for a quiet start, with little direction set by Asia overnight and a meeting of central bankers later this week likely to set the tone for world equity markets.
The spread betting firms are predicting a 14 point decline of the index of blue-chip shares to 6,844.95 on opening – a precursor to what looks likely to be another lacklustre summer trading session.
The Jackson Hole symposium in Wyoming, which kicks off on Thursday, is likely to be the focus for economists and traders trying to get a fix on future interest rate policy.
“The Federal Reserve’s policy committee is divided over when to move rates, at loggerheads about how to read the strength of the US economy, and uncertain about what threats are still lurking in Europe and elsewhere overseas,” said the Financial Times’ Washington correspondent, Sam Fleming, previewing the event.
“That, at least, was the impression given by the minutes to its latest rate-setting meeting, which was held on July 26-27.
“The upshot for markets is uncertainty and confusion over policy prognosis heading into 2017. There will accordingly be intense attention this coming week on the annual gathering of central bankers in Jackson Hole, Wyoming.”
In Asia overnight the markets were mixed. The weaker yen boosted Japanese export stocks on the Nikkei 225, which advanced 0.3%, while the Australia’s ASX moved ahead 0.2%.
Shanghai and Hong Kong indexes lost 0.4% and 0.2% respectively.
Back here in the UK, house builder Persimmon, advertising giant WPP and bookie Paddy Power Betfair have results out this week.
*Brent crude down 1.45% at US$50.14 a barrel.
*Gold off 0.25% at US$1,337.10.
*Pound worth US$1.3045.
City Headlines
*Pfizer is nearing a deal worth about $14 billion to acquire California biotechnology company Medivation, beating out a handful of its biggest rivals to win the auction for the sought-after cancer drug maker – FT.
*One of the most prominent figures in the City has taken the unprecedented step of permanently abolishing all staff bonuses at his firm. Neil Woodford, the star stock-picker and Founder of Woodford Investment Management, has rejected the conventional wisdom that bonuses are essential to motivate and retain staff and has put everyone on a flat salary – Times.
*Warren Buffett’s sister Doris has put out an appeal for volunteers to help with an unusual task: giving away her billionaire brother’s money to those who have fallen on hard times – Times.
*Tata’s giant Port Talbot steel plant has clawed itself back into profit as staff strain to boost efficiency despite having no idea whether their jobs are safe – Telegraph.
*The owner of London’s Coq d’Argent and Quaglino’s restaurants is eyeing expansion in Europe as at shrugs off the impact of the Brexit vote on its exclusive London eateries – Telegraph.