Market Update & Important Indicators:
U.S. stocks and oil prices held on to modest losses intraday as President Donald Trump said the U.S. will withdraw from the Iran nuclear deal. The president had long criticized the agreement, calling it "the worst deal ever," and his decision was largely expected by investors. Oil prices had run higher in recent weeks on expectations that a withdrawal would hurt Iranian exports and further reduce global supply. The Dow Jones Industrial Average slipped 3 points, to 24360, on track to break a three-day winning streak. The S&P 500 dropped 1 point, and Nasdaq Composite fell 0.4%. The U.S gold price remained largely constant, only gaining 60c to record 1,314.2 US$/Oz.
European stock indexes closed mostly lower. The Stoxx Europe 600 closed up 0.1% at 390.00, but Germany's DAX index fell 0.3%, France's CAC 40 ended down 0.2% and the U.K.'s FTSE 100 index ended flat. Concerns about the possibility of U.S. President Donald Trump pulling out of an agreement to curb Iran's nuclear program sparked risk aversion, as did the prospect of Italian elections, causing Italy's FTSE MIB to slide 1.6%.
In Asia, stock markets were broadly higher, with Hong Kong's Hang Seng up 1.4%, thanks to a rebound in technology and life insurance shares. Japan's Nikkei Stock Average closed up 0.2%, even as the latest economic data showed a surprise 0.7% fall in household spending in March from a year earlier suggesting that the country's economy contracted slightly in the first quarter, economists said. Japan's gross domestic product has risen for eight straight quarters, the longest streak in nearly 30 years. The S&P BSE Sensex closed 0.02% higher at 35216.32, after seesawing between a 0.5% rise and a 0.2% decline.
A bounce by the big banks helped keep Australia's stock benchmark in positive territory, countering weakness in energy companies after oil prices pulled back ahead of U.S. President Donald Trump's announcement regarding continued U.S. participation in the Iran nuclear deal. With a late tick higher, the S&P/ASX 200 finished up 0.1% at 6091.9, edging closer to January's 10-year high. The index has risen in seven of the last eight sessions and 14 of the past 17. Westpac led the Big Four banks with a 1.3% gain as analysts chimed in on Monday's solid fiscal first half report, while Macquarie moved deeper into record territory with a 1.7% advance. But CYBG slipped 2.3% after approaching Virgin Money about a takeover. And in energy, Woodside, Santos and Origin fell more than 1%.
Overnight, base metals were mixed on the London Metal Exchange. Aluminium gained 0.5% to 2,382/t, while zinc remained constant at 3,047/t. Other base metals fell overnight. The 3-month copper contract lost 1.2% to 6,708/t, while the price of nickel fell 1.1% to finish at 13,826/t. Lead finished 1.4% lower at 2,283/t, while tin slipped 1.5% to close at 21,030/t.
In This Issue:
Botanix Pharmaceuticals (BOT) | BUY
Market Cap $73.5m | Current Price $0.142 | Valuation $0.20
BOT’s Investigational New Drug (IND) application for BTX 1503 Acne treatment has been approved by the US FDA. This will allow BOT to commence its Phase 2 clinical trial of its cannabidiol (CBD) based acne treatment. BOT application to approve the use of cannabidiol (CBD) is only the second drug application using CBD as an API and the first in the dermatological space. The end-points of the Phase 2 study are similar to the end-points of the Phase 1b trial and have been developed to allow BOT to explore licensing and other corporate opportunities on completion of the trial which is expected at the end of Q2 CY2019.
Valmec (VMX) | Initiation | BUY
Market Cap $45m | Current Price $0.36 | Valuation $0.48
We initiate with a BUY call and a $0.48 valuation. We expect companies servicing gas and related infrastructure sectors to experience an improving operating environment. VMX, already demonstrating this thesis via its order book and top line performance, provides an attractive investment option from a limited ASX-listed opportunity set.
Recent Contacts & Presentations:
Nexus Minerals (NXM), Great Boulder Resources (GBR), Orthocell (OCC), Northern Minerals (NTU), ABM Resources Ltd (ABU), Vital Metals Ltd (VML), Todd River Resources Ltd (TRT), Pacific Energy Ltd (PEA), Carnarvon Petroleum Ltd (CVN), Australian Mines Ltd (AUZ), Australian Finance Group (AFG), Paladin Energy Ltd (PDN), Cooper Energy Ltd (COE), Medibio Ltd (MEB), Botanix Pharmaceuticals Ltd (BOT), Salt Lake Potash Ltd (SO4), Golden Mile Resources Ltd (G88), NTM Gold Ltd (NTM), Ausmex Mining Group Ltd (AMG), Matrix C&E Ltd (MCE), Austal Ltd (ASB), Decmil Group Ltd (DCG), Ventnor Resources Ltd, Ausdrill Ltd (ASL), Alice Queen Ltd (AQX), PNX Metals Ltd (PNX), Alliance Resources Ltd (AGS), Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH)