Market Update & Important Indicators
US stocks have risen sharply, ending a two-day slide with a rally led by Apple and other tech stocks and extending to most industrial sectors. The tech-rich Nasdaq posted the biggest gain on Friday, rising 63.97 points (1.29 per cent) to 5,005.39. The Dow Jones Industrial Average advanced 183.54 (1.03 per cent) to 18,024.06, while the broad-based S&P 500 rose 22.78 (1.09 per cent) to 2,108.29. All but four companies in the 30-stock Dow finished higher. Apple, which had lost 5.7 per cent in the prior three sessions, shot up 3.0 per cent.
Britain's stock market edged up Friday in subdued deals ahead of a general election next week, with the majority of Europe shut for the May Day holiday long weekend. London's benchmark FTSE 100 was up 0.36 per cent at 6,985.95 points at the close. "With Europe mostly out of action for May Day, it was a quiet day in London, but at least the traditionally weak period for equities has started off on the right foot," said an analyst. The mining companies showing the biggest gains were Anglo American, which was up 5.43 per cent at 1,165 pence, Rio Tinto (+3.88 per cent at 2,997 pence) and BHP Billiton (+2.98 per cent at 1,607.5 pence).
Tokyo stocks have reversed early losses to end slightly higher thanks to a weaker yen while the euro pushes on following an upbeat eurozone inflation reading. The Nikkei 225 index at the Tokyo Stock Exchange edged up 11.62 per cent to 1,9531.63. All other major Asian markets were closed for public holidays. New York's three main indexes provided a weak lead, falling sharply on Thursday as a dive in unemployment claims was overshadowed by a weak round of earnings reports and data showing only slim growth in consumer spending.
In Australia, the market finished higher on Friday on the back of positive news around iron ore and the banks' profit results due next week. The benchmark S&P/ASX200 index was up 24.4 points, or 0.42 per cent, at 5,814.4. The broader All Ordinaries index was up 25.1 points, or 0.43 per cent, at 5,798.8.The Australian market looks set to open higher, following gains on Wall Street on Friday. Locally, the Australian Bureau of Statistics releases building approvals figures for March, the TD Securities-Melbourne Institute inflation gauge is due out, as are ANZ job ads figures. In equities news, Westpac releases its first half results and MYOB to relists on the ASX
Brent remained flat at US$66.45/bbl. Metals on the LME were down across the board with exception of Copper, up 0.7%. Gold was down, falling 0.5% to US$1178/oz. Iron ore fines fell 1.7% to US$56.18/t.
In This Issue
Troy | BUY
Argonaut maintains a BUY recommendation and revises its valuation to A$0.70 (was A$0.95) incorporating updated share structure from the announced capital raising. The additional funding will enable more aggressive exploration (A$12m budget in Guyana) and alleviate pressure on working capital. The high grade Karouni Project, under steady state, will become one of the lowest cost open pit operations on the ASX and generate ~A$60m FCF per annum (compared to TRY’s EV of ~A$140m). Given the robust margins, each additional year of mine life adds ~20c to our valuation. The Company delivered 31koz Au Eq @ AISC US$1,092/oz during the March Q, in-line with Argonaut’s forecast of 32koz @ AISC US$1,100/oz. Whilst near term headwinds at Casposo is acknowledged, the stock trades at a significant discount to our valuation.
Recent Contacts & Presentations
Dacian (DCN), Saracen (SAR), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Buru Energy (BRU), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), Migme (MIG), Vmoto (VMT), Pioneer Credit (PNC), Minemakers (MAK), MZI Resources (MZI), High Peak Royalties (HPR), Leaf Resources (LER), Austin Engineering (ANG), Ausdrill (ASL), Matrix (MCE), Austal (ASB), MMA Offshore (MRM), CTI Logistics (CLX), 99 Wuxian (NNW)
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