The Markets
Market opening: The FTSE-100 is expected to start this morning’s session around 30-points lower.
New York: Wall Street ended in the red amid volatility across the global markets. Moreover, investors remained concerned over the slowdown in the Chinese economy. The S&P 500 fell 1.1%, with the financial sector losing the most. For the week, the markets closed 6.0% lower.
Asia: Equities are trading lower, taking negative cues from losses in the global markets. Low oil and commodity prices pressurised energy stocks. The Nikkei 225 remained closed owing to a holiday. The Hang Seng was trading 2.2% down at 7:00 am, tracking the Chinese market.
Continental Europe: Markets closed in the negative zone, as continuous decline in oil prices weighed on investor sentiment. France’s CAC 40 closed 1.6% lower. While Germany’s DAX shed 1.3% amid a fall in industrial production in November.
Crude Oil: On Friday, Brent and WTI oil prices declined 0.6% and 0.3%, respectively. The spread between the two varieties stood at US$0.4 per barrel.
UK small caps: The FTSE AIM All-Share index closed 0.06% lower on Friday at 725.62. To read our latest research click here.
Today’s breakfast menu:
– Beaufort Securities Beowulf Mining – Speculative Buy; Tiziana Life Sciences – Speculative Buy and Venn Life Sciences – Speculative Buy
– Germany industrial production; US unemployment rate; US change in nonfarm payrolls and US wholesale inventories
Today’s news
UK trade balance narrows in November
As per data from the Office for National Statistics (ONS), the UK’s trade deficit narrowed to £3.170bn in November from £3.507bn in October. The deficit contracted, as lower oil prices reduced the cost of imports, offsetting the higher goods trade deficit with other countries in the European Union.
Comapny News
Beowulf Mining (LON:BEM) – Speculative Buy
Beowulf Mining, the mineral exploration and development company focused on its Kallak iron ore project in Sweden, announced today the acquisition of Oy Fennoscndian Resources AB (Fennoscandian), a privately owned graphite exploration company with projects in Finland. Beowulf will acquire 100% of the share capital of Fennoscandian for consideration of 2.55M ordinary shares of Beowulf with an initial payment of 2.1M shares and a deferred payment of 0.45M shares. In addition, two equal tranches of shares will be issued on achievement of certain performance milestones. The total number of shares issued, should all performance milestones be met, will be 6.75M shares. In return, Beowulf has acquired four early stage exploration projects located in Finland: Viistola, Haapamaki, Piipuaki and Kolari all of which have been explored historically. During 2016, Beowulf will be ranking the projects and prioritising exploration funds with the goal of generating a maiden resource estimate. The Company will also be working with its partners FennoFlake, a collaborative group representing the entire graphite value chain, to generate sample material from each project for testwork and assessment work against applications in potential end-markets.
Our view: We are encouraged with the above acquisition and the potential for high grade graphite mineralisation, while a positive decision on the Exploitation Concession for Kallak iron ore project in northern Sweden is pending. Given the continued pressure on benchmark iron ore prices on the back of continued oversupply and slowing economic activity in China we view Beowulf’s acquisition as an strategic diversification within a well-establish mining jurisdiction. We look forward to continued updates as the Company develops its newly acquired graphite portfolio. As such, we reiterate a Speculative Buy on the stock.
Beaufort Securities acts as corporate broker to Beowulf Mining plc
Tiziana Life Sciences (LON:TILS.) – Speculative Buy
On Friday, Tiziana Life Sciences (Tiziana) announced that its joint research with Cardiff University identified a first-in-class lead clinical candidate, CB1, with strong anti-metastatic activity, along with efficient in vivo efficacy and safety profile. The company plans to file an Investigational New Drug (IND) application for CB1 in 2016, and expects to conduct clinical trials for this drug candidate before the end of 2016. Meanwhile, Tiziana expanded its research agreement with Cardiff University and included a research program focused on eradication of breast cancer stem cells through inhibition of a protein known as c-FLIP.
Our view: Tiziana is a clinical stage biotechnology company focused on the discovery and development of novel molecules that treat human diseases in oncology and immunology. The aforementioned update is encouraging for Tiziana, as it identified a clinical candidate (CB1) as part of its agreement with Cardiff University to work towards the development of Bcl-3 inhibitors as potential drugs to treat cancer. Moreover, this result validates the company’s move to partner with top research institutes for developing drugs. Additionally, the partnership has received positive media attention, along with funding from major research institutes (Life Science Research Network of Wales and Cancer Research Wales). In our opinion, the extension of Tiziana’s research program with Cardiff University to work on the eradication of breast cancer stem cells is positive. In light of the above developments, we maintain our Speculative Buy rating on the stock.
Beaufort Securities acts as corporate broker to Tiziana Life Sciences plc
Venn Life Sciences (LON:VENN) – Speculative Buy
On Friday, Venn Life Sciences (Venn) released a trading update for the year ended 31st December 2015. The company expects revenue for the full year to be at least twice as much compared to last year (2014: €4.9m). Cash at the end of period stood at €3.4m. In a separate announcement, Venn informed that David Evans, Non-Executive Chairman, resigned from the board, in line with his personal commitment to reduce his number of non-executive chairman roles currently undertaken.
Our view: In 2015, Venn experienced a sharp jump in revenue, led by some major contracts won during the period. Moreover, the addition of drug development and service capabilities has enhanced the company’s service offerings. Furthermore, Venn is seeking acquisition opportunities in Central and Eastern Europe in wake of huge opportunities in the region at minimal costs. Venn is well funded with sufficient cash to expand its international coverage. Overall, the company is well placed, with a strong balance sheet and enhanced contract base, to maintain its growth momentum in 2016. Therefore, we maintain our Speculative Buy rating on the stock.
Economic News