Market Update & Important Indicators:
U.S. stocks rose as a fresh climb in oil prices spurred gains in shares of energy companies. Energy shares in the S&P 500 rose 1.4%. Analysts said trading volumes were thin due to holidays in Japan, Hong Kong and Canada, as well as Columbus Day in the U.S., with the Treasury market closed. Wall Street had ended a touch lower Friday following a slightly softer-than-expected monthly jobs report. Still, the jobs figures ultimately did little to shift investors' expectations for the course of U.S. interest rate rises. U.S. Federal Reserve Vice Chairman Stanley Fischer said Sunday that the most recent jobs report was "solid, showing continued improvement" and that the decision to hold rates steady in September was a "close call." Investors were also looking ahead to the start of the third-quarter earnings season, which gets under way later this week.
Stocks in Europe recovered from an early fall in the banking sector. The Stoxx Europe 600 rose 0.7%. The euro fell 0.6% against the dollar to $1.1140. Investors in the region also continued to focus on negotiations between the U.K. and the European Union. European Central Bank President Mario Draghi said Saturday that the U.K.'s vote to leave the EU was very significant. Despite a recovery in the currency, investors said Friday's steep fall highlighted continued concerns about the U.K.'s vote to leave the European Union and its implications for sterling.
China returned to the spotlight Monday after a weeklong holiday, as shares in Shanghai rallied on hopes that Beijing's latest move to cool an overheated housing sector could renew appetite for a lacklustre stock market. Stock markets in the rest of Asia were mixed in a quiet session as both Japan and Hong Kong were closed for a holiday. The only exception was Bangkok, where concerns about the Thai King's health spurred a heavy selloff. The Shanghai Composite Index ended Monday's trading up 1.5%, its biggest single-day gain since Aug. 15. The Shenzhen Composite Index rose 1.9%. Chinese financial markets were closed last week for the National Day holiday. Buoying investors' mood were recent moves by over 20 Chinese cities-including Shanghai, Beijing and Zhengzhou in central China-to impose fresh purchase restrictions on a red-hot property sector. Chinese stocks shrugged off a move by the Chinese central bank earlier Monday to set the yuan's reference exchange at a six-year low against the U.S. dollar. The People's Bank of China set its "central parity" for the yuan at 6.7008 against the dollar, a depreciation of 0.3% from its last fixing on Sept. 30. Monday's fixing was the weakest level for the currency since September 2010.
Australian shares managed slight gains Monday as a drop in energy stocks offset modest advances by banks and miners. Despite a weak lead with a slip in U.S. stocks on Friday following a weak-than-expected jobs report, the local market surged in the initial minutes of the session. That was steadily eroded through the day, largely shrugging off the rancorous U.S. presidential debate, and the S&P/ASX 200 finished 8 points, or 0.2%, higher at 5475.4. Oil prices remained under pressure after Russia's energy minister on Friday said he wasn't committed to signing a deal to collectively curb production with Organization of the Petroleum Exporting Countries at this week's World Energy Conference.
On the London Metal Exchange, copper for delivery in three months was up 1.48% at $4,849/t. Aluminium was up 1.0% at $1,687/t, zinc was flat at $2,313/t, lead was up 1.1% at $2,087/t, tin was up 0.5% at $20,175/t, and nickel was up 3.2% at $10,474/t.
In this Issue:
Gold Road Resources (GOR) | YAM & Cheese | BUY
Market Cap $478m | Current Price $0.55 | Target Price $0.93
GOR announced that it has completed initial resource drilling at the YAM-14 prospect 8km to the south of Gruyere. The YAM-14 resource development is part of GOR’s regional exploration push aimed at adding near mine supplemental mill feed to the Gruyere mine plan to maintain a +300kozpa production over the life of mine. Best results included 4m @ 5.07g/t Au from 18m with mineralisation evident 300-500m along strike. GOR trades at a discount to its NAV despite its tier 1 project size and near term time-line to production. Significant gold endowment at Yamana could translate to a longer mine life at Gruyere. We maintain our BUY recommendation and $0.93ps target price.
Recent Contacts & Presentations:
Alto Metals Ltd (AME), Birimian Limited (BGS), Antipa Minerals Ltd (AZY), Vault Intelligence Ltd (VLT), Noxopharm Ltd (NOX), Gage Roads Brewing Co. (GRB), West African Resources (WAF), Cedar Woods Properties Ltd (CWP), Sino Gas & Energy Holdings Ltd (SEH), Salt Lake Potash Ltd (SO4), Kalina Power Ltd (KPO), Austal Limited (ASB), Agrimin Ltd (AMN), Stavely Minerals Ltd (SVY), MGC Pharmaceuticals Ltd (MXC), Vital Metals Ltd (VML), Tox Free Solutions Ltd (TOX), Swick Mining Services Ltd (SWK), Davenport Resources Ltd (DAV), Orthocell Ltd (OCC), BC Iron Limited (BCI), ALT Resources Ltd (ARS), Gascoyne Resources Ltd (GCY), Dacian Gold (DCN)