Today's edition features:
• Amryt Pharma (LON:AMYT)
• Hummingbird Resources (LON:HUM)
"The outcome of the first round of the French Presidential Election provided tangible relief across all international equity markets yesterday. As far as traders are concerned, Macron is already the President-elect. A little dangerous perhaps, given the havoc that could still be wreaked should Le Pen manage to shock all on 7th May, but nobody is taking that story right now. Whether next Wednesday's live televised debate between the two contenders changes this remains to be seen but, for yesterday at least, Frexit and redomination fears dissipated, the Euro rocketed and the VIX volatility index dived, while equity gains were, not surprisingly, led strongly by European financials, which celebrated their continuing anticipation of a pro-growth, stimulus and non-protective environment. The excitement spilled over into a broadly-based rally across most sectors in both the STOXX Europe 600 and the FTSE-100, with the latter putting on its largest gain since September leaving only utilities like Centrica (CNA.L) and SSE (SSE.L) in London to retreat following weekend reports that the Conservative manifesto will include a cap on household energy bills. US equities mimicked this, with equities also moving sharply higher from the open with steel, tobacco, chemical and airline stocks are showing strong moves to the upside, along with most of the other major corporates. The rise in the three principle indices was further supported by reports from White House aides that the President has ordered an acceleration of efforts to finish drafting tax plan to cut the corporate rate to 15% (from the current 35%) and to prioritise this with a view to reducing the deficit. Treasuries meanwhile sold off, with the yield on the 10-year note rising as high as to 2.323%, from 2.234% on Friday, before settling at 2.275%. Given that today marks the 85th anniversary of the Korean People's Army, it is possible that a show of strength from Pyongyang, perhaps in the form of a nuclear detonation or a long-range missile test, could reawaken geopolitical tensions that have otherwise temporarily gone to the back of investor's minds. Concerns have been raised somewhat further by the US sending one of its submarines to join the armada that is already positioned on the Korean Peninsula. Asian stocks surprisingly ignored this to end higher for a second day, with closing gains similar to those seen in the US. Japan led the way once again, with the Nikkei up closing up over 1%, followed by with a similar move from the Hang Seng, with confidence boosted by the Shanghai Composite managing to finish in the positive after the Shanghai benchmark's 1.4% drop on Monday, its biggest hit in four months. Oil prices rebounded slightly during the Asian session, after weakness in New York sent futures to their lowest level since late March, although traders still insist that production and other signs of global oversupply will keep thwarting the widely-expected rally. The only UK macro data due this morning is the Public Sector Net Borrowing requirement for March and nothing is due from the EU. The US, however, provides a batch of statistics, including its Redbook Index, House Prices, New Home Sales, Consumer Confidence and the Richmond Fed Manufacturing number for April. UK corporates due to detail earnings or trading updates include AB Dynamics (ABDP.L), BHP Billiton (BLT.L), Carpetright (CRP.L), St. James Place (STJ.L), Whitbread (WTB.L), Circassia Pharmaceuticals (CIR.L), Amec Foster Wheeler (AMFW.L) and STV Group (STVG.L). A flood of quarterly earnings is also due from the US this afternoon. With equity party having continued overnight, London is expected to open firmer once again this morning, with the FTSE-100 seen up 15 to 20 points in early trading. Touch sensitive investors will, however, be keeping a wary eye on Kim Jong-un's military celebrations for any new signs of looming confrontation."
- Barry Gibb, Research Analyst
Markets
Europe
The FTSE-100 finished yesterday's session 2.11% higher at 7,264.68 whilst the FTSE AIM All-Share index was 0.65% up at 952.81. In continental Europe, the CAC-40 finished up 4.14% at 5,268.85 whilst the DAX was 3.37% higher at 12,454.98.
Wall Street
In New York last night, the Dow Jones rose 1.05% to 20,763.89, the S&P-500 firmed 1.08% to 2,374.15 and the Nasdaq gained 1.24% to 5,983.82.
Asia
In Asian markets this morning, the Nikkei 225 had improved 0.86% to 19,037.74, while the Hang Seng added 0.94% to 24,366.98.
Oil
In early trade today, WTI crude was up 0.47% to 49.46/bbl and Brent was up 0.47% to $51.84/bbl.
Headlines
Brexit: Worries for small businesses with EU staff
More than half of small firms employing workers from the EU are worried that Brexit will stop them recruiting sufficiently skilled staff. A report from the Federation of Small Businesses (FSB) has found that only 21% of small firms currently employ staff from an EU country. But of those, 59% are concerned they will not be able to recruit the right staff in the future. The FSB said securing the right of EU staff to remain in the UK was vital. Without that, said the FSB's chairman Mike Cherry, small firms feared they would lose skilled staff who would be difficult to replace. "EU workers are a vital part of our economy, helping to plug chronic skills gaps across a wide range of sectors, and filling jobs in an already tight labour market," he said. "From packers, to mechanics, to graphic designers, small employers need to be able to hire the right person, for the right job at the right time."
Source: BBC News
Company news
Amryt Pharma (LON:AMYT, 23.38p) – Speculative Buy
Amryt, the pharmaceutical company focused on best-in-class treatments for rare and orphan diseases, yesterday announced that it has enrolled first patient for its Phase III clinical trial (EASE study) of AP101 for Epidermolysis Bullosa ('EB'). EB is a rare, genetic skin disorder, which causes exceptionally fragile skin with currently no approved therapy. Amryt expects to conduct these trials in approximately 15 countries at over 30 sites to enrol a total of 164 evaluable patients. Patients will be randomised in a double-blind fashion to AP101 or placebo, and the proportion of patients with completely healed target wounds within 45 days will be evaluated as the primary efficacy endpoint. An interim analysis will be conducted when 50% of the study patients have completed 45 days of treatment. The results from this interim analysis of this trial are expected in the Q1 2018. Amryt's Chief Medical Officer, Mark Sumeray, commented "The trial will evaluate the efficacy and safety of our lead drug candidate, AP101, as a potential treatment for Epidermolysis Bullosa, a distressing and rare skin disorder. We look forward to further patients joining the study, which we expect to be one of the largest studies of its kind in this rare disease".
Our view: Amryt has now passed an important milestone, the first patient first visit, for its lead drug candidate, AP101. AP101 (Episalvan), is a prospective treatment for EB, a rare and distressing genetic skin disorder which has achieved Orphan Drug Designation in both the US and EU. There is currently no treatment available for EB, which affects approximately 500,000 people worldwide, with global market for a treatment estimated to be in excess of €1.3bn. Very importantly, the Group has funding and facility sufficient to carry AP101's development through to expected release of its key Topline Data during Q3 FY2018, while also supporting more modest on-going spend for AP102 (Pre-clinical stage for Acromegaly and Cushing's Disease). On top of this, the Group is already generating revenues from the excellent Lojuxta licensing deal struck back in December 2016. This has created a diversified pipeline of therapies ranging from earlier to later stage development along with a commercial offering which together target multiple Rare (or Orphan) Diseases. Such products do not just benefit from extended market exclusivity and reduced R&D costs right across the globe, but also enjoy a major pricing advantages which average five-times that of traditional prescriptive products. While its business plan is just about unique in Europe, there is large NASDAQ-listed sub-sector of comparables which command a significant valuation premium to Amryt, despite most being pre-revenue and somewhat earlier in their development. The fact that a discounted-NPV for Lojuxta, its low-risk, high margin licensed treatment for HoFH (Homozygous Familial Hypercholesterolemia) alone, significantly exceeds the Group's market capitalisation, still need to be recognised in the share price. Such anomalies, of course, can and do correct. For Amryt this cannot be long away. Significant upside potential. Beaufort reiterates its Speculative Buy rating on Amryt Pharma.
Beaufort Securities provides Investor Relations services to Amryt Pharma plc
Hummingbird Resources (LON:HUM, 24.57p) – Speculative Buy
Hummingbird Resources, the gold exploration and development company with assets in Mali and Liberia, announced yesterday a review of the Company's activities during Q1 2017. During the period, construction of the Yanfolila mine in Mali continued to progress on schedule and on budget with initial mining targeted for Q3 2017 and first gold pour by end of 2017. Construction is 36% complete with 63% of the estimated capex spend committed. During Q1 2017, construction of the Tailings Storage Facility (TSF) commenced. While on the corporate side during the quarter under review, the Government of Mali has increased its stake in the project by 10% for US$11m and management has secured a new debt facility up to US$60m with Coris Bank International Group, one of the largest banks in West Africa. As at 31 March 2017, Hummingbird had US$54m in cash prior to repayment of the Taurus bridge loan facility of US$25m.
Our view: We continue to be encouraged with the progress being made at the Yanfolila site with approximately 60% of the overall project now completed. We look forward to updates on the construction of the TSF and subsequent pre-production mining. We also note that once Yanfolila is in production management will be in active exploration mode with the aim to increase the life of mine reserve beyond 10 years through further work on the more than 1Moz of gold not yet included in the current reserves. In the meantime, we maintain a Speculative Buy rating on the stock.
Beaufort Securities acts as corporate broker to Hummingbird Resources plc
Mineral & Financial Investments (LON:MAFL, 15.88p) – Speculative Buy
Mineral & Financial Investment (MAFL), the metals and mining focused investment company, yesterday announced drill results from its Lagoa Salgada project in Portugal. The project is owned and operated by TH Crestgate, a private investment company in which MAFL holds a 49% interest. Crestgate released assay results from the second of its four hole drill programme recently completed on the zinc-copper project located in southern Portugal, 100km from Lisbon. Hole LS ST-02 intersected a continuous mineralised zone 0f 211m grading 2.31% Zn equivalent, including 9m grading 9.92% Zn equivalent. This mineralisation is a new discovery adjacent to the current historical LS-1 resource. Assay results also indicate the presence of four corridors of higher grade mineralisation with intervals of 24 to 33m grading >3% Zn equivalent.
Our view: We are encouraged with the continuity of mineralisation both within the LS ST-02 drill hole and near the existing mineralisation which forms the basis for the historical mineral resource estimate. We look forward to the assay results from the remaining two drill holes which, on aggregate, could increase the current historical resource estimate of 4.5Mt. In the meantime, we maintain a Speculative Buy on the stock.
Beaufort Securities acts as corporate broker to Mineral & Financial Investments plc