Market Update & Important Indicators:
The Dow Jones Industrial Average posted its sixth consecutive week of gains, even as the postelection rally lost some steam after the Federal Reserve's latest signals on interest rates. Bond yields and the dollar rose to their highest levels in years during the week as the Fed raised interest rates for the first time in a year and signalled a quicker-than-expected pace of increases in 2017. The Dow industrials, which entered the week on a seemingly quick trajectory toward closing above 20000 for the first time, slowed their ascent. The blue-chip index fell 8.83 points, or less than 0.1%, to 19843.41 Friday, ending the week up 0.4%. The Dow industrials are up 8.2% from Election Day, and those gains have helped put them around 14% for the year. Some analysts have questioned whether the run-up has been overdone. On Friday, the S&P 500 lost 3.96 points, or 0.2%, to 2258.07. The Nasdaq Composite shed 19.69 points, or 0.4%, to 5437.16 as technology shares slumped. Both stock indexes were down roughly 0.1% on the week.
European stocks gained Friday, with drug maker shares showing strength, as the Stoxx Europe 600 notched its highest close of the year. The Stoxx Europe 600 rose 0.3% to finish at 360.02, topping its prior 2016 closing high of 358.88 set on Jan. 5. The pan-European benchmark, which was up 1.3% for the week, ended at its best level since Dec. 31.
Asian shares steadied Friday, tracking U.S. gains, with financials leading the Japan stock market to a fresh high for the year. Japan's Nikkei Stock Average closed up 0.7%, having hit its highest level since last December at 19439.97 points earlier in the session. Elsewhere, Korea's Kospi finished up 0.3% and Hong Kong's Hang Seng Index closed down 0.2%. On Thursday, the U.S. Federal Reserve raised interest rates for the second time in a decade. Stocks across the region declined sharply on the decision, as rising U.S. rates typically increase funding costs for Asian companies in dollars and trigger capital flight from regional markets to the States. Chinese stock markets managed to eke out gains Friday after early losses, with the Shanghai Composite Index closing up 0.2%, the Shenzhen Composite Index adding 1.0% and the smaller ChiNext Price Index ending 1.1% higher.
Australia's equities market edged lower Friday, pulled down by selling in mining and energy shares following a surge in the U.S. dollar. Shrugging off a rebound in U.S. shares, the S&P/ASX 200 slipped 5.7 points, or 0.1%, at 5532.9. A bounce in the final minutes of trade took back a swift drop that briefly saw the index down as much as 0.5%. The materials sector led declines for the day, losing 1.2% as gold stocks in particular lost ground following a drop in the precious metal to its lowest since early February after the dollar jumped in the wake of the Federal Reserve's more hawkish tone and first interest rate increase in a year. The basket of energy stocks was down 0.5%, offsetting a mixed session for financial shares and gains among industrials and consumer stocks. Commonwealth Securities said 4.23 billion shares were traded with a value of 8.1 billion Australian dollars. For the week, the ASX 200 lost 0.5%.
The LME's three-month copper contract closed down 2.7% at $5,635/t. Other base metals also fell on Friday. Aluminium lost 1.0% to $1,724/t, zinc dropped 3.2% to $2,711/t, nickel fell 1.2% at $11,120/t, lead fell 4.5% to $2,231/t, and tin closed down 0.2% at $21,312/t.
In this Issue:
Sino Gas and Energy (SEH) | Gas price up, turning the taps on | BUY
Market Cap $218 | Current Price $0.105 | Target Price $0.23
Sino Gas and Energy (SEH) has achieved a 20% increase in wellhead gas prices to US$6.80/mcf. Negotiating prices was a precursor to recommencing production at the Sanjiaobei (SJB) Central Gathering Station (CGS) and turning on the second compressor at the Linxing (LX) CGS. A key milestone for the Company will be achieving combined nameplate production of the two CGSs of 25MMscf/d by the end of CY16. Despite the limited timeframe, SEH is confident that 20-25MMscf/d can be reached by year’s end.
Argonaut maintains a BUY recommendation with a revised target price of $0.23 (50% risk weighted, previously $0.25). This price revision reflects further delays to ODP approval and subsequent production ramp-up delays. As the SJB Chinese Reserve Report (CRR) has not been received to date, we now forecast ODP in early CY18 (previously late CY17).
Recent Contacts & Presentations:
Stavely Minerals Ltd (SVY), Australis Oil & Gas Ltd (ATS), Davenport Resources Ltd (DAV), TFS Corporation Limited (TFC), Emmerson Resources Ltd (ERM), Syntonic Ltd (SYT), MZI Resources Ltd (MZI), Resolute Mining Ltd (RSG), Capricorn Metals Ltd (CMM), Eve Investments Ltd (EVE), Australian Mines Ltd (AUZ), Heron Resources Ltd (HRR), St George Mining Ltd (SGQ), Threat Protect Australia Ltd (TPS), Paringa Resources Ltd (PNL), The Gruden Group Ltd (GGL), Primary Gold Ltd (PGO), Vault Intelligence Ltd (VLT), Botanix Pharmaceuticals Ltd (BOT) Orthocell Ltd (OCC), Strandline Resources Ltd (STA) Dragontail Systems Ltd (DTS), ABM Resources Ltd (ABU)
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