Market Update & Important Indicators
U.S. stocks slipped slightly Thursday as oil prices fell and investors sold safe haven assets they had accumulated after the U.K.'s decision to leave the European Union. Energy companies in the S&P 500 recently fell 1.4%, making the group one of the worst-performing sectors in the index. Stocks that pay high dividends in the utilities and telecommunications sectors of the S&P 500 also fell as investors shed assets they bought to protect themselves in the aftermath of the U.K.'s vote to leave the EU. Last month's jobs report showed the fewest jobs gains in nearly six years. On Thursday, the Labor Department said the number of Americans who filed for jobless benefits for the first time fell last week, suggesting the job market could be rebounding.
European stocks climbed to help the benchmark index to break a three-session losing streak. The Stoxx Europe 600 rose 1.1% to close at 322.12, with all sectors gaining ground. The benchmark on Wednesday fell 1.7%, rocked lower as bank and asset manager stocks fell in the wake of the Brexit vote.
Asian shares generally rose on Thursday, as data indicating a strengthening U.S. economy offered some respite from the recent market turmoil. South Korea's Kospi closed up 1%, Hong Kong's Hang Seng Index gained 1% and China's Shanghai Composite Index closed flat. In Japan, the yen's continued strengthening against the U.S. dollar pared the Nikkei Stock Average's early gains, sending the index to end down 0.7%. Asia's relative calm on Thursday followed promising U.S. economic data released overnight. Service-sector activity there showed an increase in new orders and employment.
Australian shares recovered Thursday from two days of selling, notching broad gains despite some nervousness after Standard & Poor's lowered its outlook for the country's prized triple-A credit rating to negative. Resources stocks drove the market, buoyed by an overnight rebound in crude-oil prices. Still, before recovering the market wobbled after S&P issued its report on the outlook for Australia's sovereign rating. It then was hit by some selling in the final minutes of trading when the ratings firm extended the negative outlook to the nation's four major banks. In its first advance since Monday, the S&P/ASX closed 30.4 points, or 0.6%, higher at 5227.9. That narrowed its fall so far this week to 0.4%. The energy sector led with a jump of 1.6% as oil prices continued to rise in Asia trade on the prospect of a drawdown in U.S. crude inventories last week,
Copper closed lower in London Thursday for the third session due to rising Asian stock piles. The London Metal Exchange's three-month copper contract was down 1.4% at $4,685/t at the PM kerb close. Other base metals were down. Aluminium closed down 0.7% at $1,630/t, zinc was down 0.4% at $2,092/t, nickel was down 2.3% at $9,706/t, and lead was down 1.1% at $1,808/t.
In this Issue
Vault Intelligence (VLT) | Over-arching EHS – Initiation | SPEC BUY
Market Cap $18m | Current Price $0.032 | Valuation $0.055
We initiate coverage of Vault (VLT) with a speculative buy recommendation and a valuation of $0.055. VLT is well funded to take advantage of the growing opportunity to sell its cloud-based, end-to-end Environmental Health & Safety (EHS) software into a market that is increasingly focused on governance, risk and compliance.
Metro Mining (MMI) | SPEC BUY | $0.22 Target Price (previously $0.20)
Market cap $29m | Current Price $0.07 | Valuation $0.22
Since our last note on Metro Mining (MMI), the Company has been busy and achieved key milestones through the development of its 100% owned Bauxite Hills DSO bauxite project in Cape York, Australia. MMI has secured Native Title and Land Access, delivered a Revised Positive Feasibility Study (PFS) with expanded production plan, attained a transhipment contract, submitted its Environmental Impact Statement (EIS), and via its now closed takeover offer, acquired a strategic 22% stake in its neighbour Gulf Alumina (public unlisted). Off-take agreements are continuing to progress well and a Definitive Feasibility Study (DFS) for a 4-5Mtpa production scenario is due for release shortly. MMI is targeting first bauxite production in Q3 2017. SPEC BUY maintained with a $0.22 target price.
Recent Contacts & Presentations
Peet Limited (PPC), Parmelia Resources (PML), Venturex (VXR), Dacian Gold (DCN), Cudeco (CDU), Resolute Mining (RSG), Echo Resources (EAR), Altech Chemicals (ATC), TFS Corporation Limited (TFC), Noxopharm (NOX), OBJ Limited (OBJ), Kibaran (KNL), Department 13 (D13), Peak Resources (PEK), Fortescue Metals (FMG), Paradigm Biopharma (PAR), Botanix (BOT), Peel Mining (PEX)
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