Market Update & Important Indicators:
U.S. stocks rose after a recent spate of losses triggered by investors' re-evaluation of global central-bank policy. Stocks and bonds have whipsawed for several days, in response to growing worries that global monetary policy may be less easy than anticipated. European stocks had their longest losing streak since June, following the European Central Bank's silence last week on whether it would extend bond purchases beyond March. The S&P 500 has fallen for five of the last six trading days. Tech and energy shares led Thursday's broad rally in the U.S. stock market. Apple added 3.1% and was on track for its fourth straight session of gains.
European stocks snapped a losing streak, as soft U.S. economic data underscored expectations that borrowing rates in the world's largest economy will be held at ultra-low levels a while longer. The Stoxx Europe 600 closed up 0.6% at 340.34, the first win in six sessions. All sectors except for basic materials logged gains, but the benchmark did sway between small gains and losses during the session. Stocks marched solidly higher in afternoon trade, as a reported decline in U.S. retail sales last month was more than expected.
Traders locked in positions Thursday ahead of a long weekend, with key monetary decisions in Japan and the U.S. pending early next week. Japan's Nikkei Stock Average fell 1.3%, taking its week-to-date losses to 3.3%. Hong Kong's Hang Seng Index closed 0.63% higher. Elsewhere, South Korea, China and Taiwan were closed for a public holiday. The Malaysian ringgit and South Korean won also fell Thursday, by 0.7% and 0.4% respectively, on the view that the U.S. will soon raise interest rates, or at the very least that there will be hawkish commentary from the Fed at its meeting. Elsewhere, Japanese banking and real-estate stocks extended declines amid continued uncertainty about the Bank of Japan's policy direction ahead of its meeting next week, which is set to clash with that of the Fed. Some speculate that the BOJ will cut purchases of late-dated bonds to allow the yield curve to steepen, which would raise long-term borrowing costs.
Australian shares edged higher for a second day running as the major banks were picked up after recent falls and investors bought mining stocks. After a choppy session, the S&P/ASX 200 finished Thursday 12.2 points, or 0.2%, higher near the session high at 5239.9. A recovery from early weakness initially stumbled following the release of employment data, but picked up during the day as mining stocks backed out of initial losses. That helped offset further weakness in energy stocks after another drop in oil prices. The expiry of quarterly share price index futures contracts in the morning meant a jump in trading volumes and offered an opportunity for institutional investors to take advantage of the liquidity to reshape their portfolios, Michael McCarthy, chief market strategist at CMC Markets, said.
The London Metal Exchange's three-month copper contract closed up 0.2% at $4,781/t. Other base metals were mainly lower on Thursday. Aluminium fell 0.7% to $1,559/t, zinc fell 2.0% to $2,217/t, nickel fell 1.3% at $9,663/t, tin fell 0.9% at $19,062/t, and lead was down 0.6% at $1,942/t.
In this Issue:
Finders Resources (FND) |Hedge book monetised to repay debt |BUY
Market Cap $116m | Current Price $0.18 | Target Price $0.24
Finders Resources (FND) has restructured its hedge book, releasing US$42.5m in net proceeds. 21.6kt of Cu cathode was closed out at a see through price of US$2.55/lb and 16.5kt was re-struck at an average forward price of US$2.18/lb. The proceeds will be used to repay debt, lowering the outstanding balance to US$103m. FND recently announced the 25ktpa Cu cathode plant at the Wetar project in Indonesia (72% FND) had attained 87% of nameplate capacity. The project, incorporating the smaller 3ktpa cathode plant, is guided to produce at a 28ktpa rate from Q4 CY16. Wetar is a low cost Cu operation (AISC ~US$1.50/lb) with significant potential to extend the current 8-year mine life from multiple VMS targets. BUY maintained with a revised target price of $0.24.
Threat Protect (TPS) | Strong 1Q17 needed | HOLD
Market Cap $13m | Current Price $0.018 | Valuation $0.028
The last financial year’s reported numbers were always going to be cluttered with one-off costs, yet the net loss on an underlying basis was still below initial expectations. The revenue trend over the past year does give us a reason to be more optimistic for FY17, however this is overshadowed by the weak operating cash flow to date. Caution is warranted and we downgrade to hold (despite a $0.028 valuation ahead of the current share price) pending evidence of an earnings and cash flow improvement in 1Q17.
Recent Contacts & Presentations:
Dakota Minerals Ltd (DKO), Breaker Resources NL (BRB), Bard1 Life Sciences Ltd (BD1), 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)