Market Update & Important Indicators
Gains in Wal-Mart Stores and other consumer staples pushed major U.S. stock indexes higher intraday. The Dow Jones Industrial Average gained 48 points, or 0.2%, to 22809. The S&P 500 rose 0.2%, while the Nasdaq Composite slipped less than 0.1%. Shares of Wal-Mart led food and other consumer-staple companies higher after executives said at an investor meeting that the retailer would keep U.S. store openings to a minimum, while focusing more on e-commerce and launching locations overseas to increase sales. Shares of Wal-Mart surged 5%. Energy companies got a lift from rising oil prices after Saudi Arabia disclosed plans to cut its monthly exports in November. Tech companies in the S&P 500 slipped 0.1%. The U.S. gold price continued its movement upward again overnight, rising 0.3% to finish at 1,287.50 US$/oz.
Lingering worries over the Catalan crisis dragged Spanish stocks down again, dampening momentum for European stocks ahead of a closely watched address by the Catalan separatist leader. The Stoxx Europe 600 index ended nearly flat, but in the red at 390.16 after a volatile session. On Monday, the pan-European index rose 0.2%, aided in part by gains for Spain-listed shares after hundreds of thousands of people demonstrated against Catalonia's secessionist push. But in Madrid, the IBEX 35 fell 0.9% to 10,142.30 and posted the biggest loss among European stock markets. France's CAC 40 index ended slightly lower, less than 0.1% down, at 5,363.65. Germany's DAX 30 index fell 0.2% to close at 12,949.25, after eking out a fresh all-time closing high on Monday. The U.K.'s FTSE 100 closed 0.4% higher at 7,538.27, even as the pound got a lift from the latest developments in the country's political drama.
For Asian markets, it was Japan and South Korea's turn to catch up to trading elsewhere after regional holidays, and they led Asian stocks broadly higher as the global rally continued. The Kospi, in its first trading day of the month, jumped 1.6% to near its record summer high. Meanwhile, an afternoon rally pushed the Nikkei up 0.6%, putting it just 45 points shy of a 21-year closing best. Hong Kong's Hang Seng notched another 10-year closing high. Meanwhile, more records were logged in the Philippines. In Japan, the Nikkei was led by auto makers, following Monday's market holiday. Hong Kong's Hang Seng Index was up 0.6% as Chinese property developers stabilized after Monday's slide. Meanwhile, Thai shares closed at a fresh 24-year high amid buying in banking and energy stocks. The SET index closed up 0.9% at 1706.95 points, taking gains this year to 10.6%.
A mid-afternoon fade resulted in Australian stocks finishing down slightly even with a late recovery. The S&P/ASX 200 fell 1.2 points to 5738.10 after spending most of the day in a narrow 15-point range, consolidating the advance of Friday and Monday. The decline came as most major indexes in the region logged further gains. Energy companies and a mixed performance by the major banks capped the index.
The London Metal Exchange’s 3-month copper contract traded higher overnight, adding 1.4% to finish at $6,760/t. The other base metals finished mostly higher. Aluminium prices lost 0.5% to 2,163/t, whilst tin prices faded 0.2% to 20,840/t. Zinc prices gained, rising 1.5% to 3,352/t. Nickel prices traded higher again, firming another 0.5% to finish at 10,981/t. Lead prices rebounded, lifting 1.8% to 2,542/t.
In this issue
Strandline Resource (STA) | Positive DFS, forging ahead | SPEC BUY
Market Cap $18m | Current Price 0.06c | Target Price 2.2c
Strandline Resources (STA) released a DFS on its Fungoni mineral sands project in Tanzania. Fungoni is a high-grade start-up project which offers near term development potential. Pre-production capex is low at US$30m and the high grade mineral assemblage will generate strong margins (Argonaut est. ~US$280/t). Argonaut estimates a post-tax NPV12 of $36m incorporating the newly imposed 16% Government free-carry interest. STA is continuing to develop its strategic portfolio of mineral sand assets despite recent changes to Tanzania’s mining law, which has the potential to increase the total cost of mining in the country. The impact of these changes is expected to be lower for mineral sands operations as they are classified as an industrial commodity (non-metalliferous).
Global Construction (GCS) | Combustible Cladding: Large-scale rectification on the cards | BUY
Market Cap $166m | Current Price $0.79 | Valuation $0.90
Combustible cladding has been the focus of media attention recently following the disastrous fire at London’s Grenfell Tower in June of this year. The aluminium cladding at the core of the fire has been installed on thousands of buildings in Australia and is now the focus of nation-wide audits and potential building code changes. Whilst any building code change will unlikely be applied retrospectively, insurance premium increases will likely force cladding replacement to occur. Global Construction Services (GCS) is one company that specialises in the installation of such facades and would likely benefit from any widespread cladding replacement.
Recent Contacts & Presentations
Meteoric Resources NL (MEI), Emmerson Resources Ltd (ERM), Gage Roads Brewing Ltd (GRB), Otto Energy Ltd (OEL), Whitebark Energy Ltd (WBE), MZI Resources Ltd (MZI), Gascoyne Resources ltd (GCY), NTM Gold Ltd (NTM), Novo Resources Ltd (NVO:TSX), Alice Queen Ltd (AQX), Melbana Energy Ltd (MAY), TOX Free Solutions Ltd (TOX), Artemis Resources Ltd (ARV), Apollo Consolidated Ltd (AOP), Vault Intelligence Ltd (VLT), Fleetwood Corp Ltd (FWD), DTI Group Ltd (DTI), Calima Energy Ltd (CE1), Austal Ltd (ASB), Indoor Skydive Australia (IDZ), OZ Minerals Ltd (OZL), NorWest Energy Ltd (NEW), Berkut Minerals Ltd (BMT), Draig Resources Ltd (DRG), Minotaur Exploration Ltd (MEP), Ausdrill Ltd (ASL), Neometals Ltd (NMT), PNX Metals Ltd (PNX)