Market Update & Important Indicators
U.S. stocks slipped Thursday, but pared their early losses, as investors focused on negotiations over Greece's bailout and a renewed selloff in oil prices. The Dow fell 44 points, or 0.2%, to 17985 in afternoon trading. The S&P 500 index eased two points, or 0.1%, to 2097. The Nasdaq Composite gained 18 points, or 0.4%, to 4925. Investors continued to monitor developments in Europe after Germany rebuffed a request by Greece to extend its bailout, set to expire at the end of February. Greece and its creditors have been in negotiations for weeks over the broad terms of new financing for the country, though most investors expect a deal will emerge that keeps Greece in the eurozone. The US dollar edged higher against the euro and the yen on Thursday after a report showed fewer Americans filed for jobless claims, pointing to a strengthening U.S. labor market.
Negotiations over further financial aid to Greece continued to drive European markets on Thursday, but stocks edged to a fresh seven-year high with investors continuing to bet the country can reach a deal with its creditors. Stocks in Athens briefly sank into negative territory after Germany rejected a Greek request for a six-month extension to its loan agreement, saying Greece was trying to seek further funding without agreeing to stick to the conditions of its bailout. Greek bank shares were among the top risers, after the European Central Bank Wednesday approved EUR68.3 billion ($77.8 billion) of loans to Greek banks through an emergency credit facility, according to a person familiar with the matter. Energy stocks on the Stoxx 600, which had led the early declines, remained 2.0% lower amid a renewed slump in oil prices.
Stocks in Asia rose Wednesday, as fears eased over Greece leaving the eurozone while Hong Kong energy stocks rallied on hopes of a possible mega-merger in China's oil sector. The Nikkei Stock Average was up 1.2%, Australia's S&P/ASX 200 gained 1.0% and the Hang Seng ended up 0.2%, ahead of the Lunar New Year on Thursday. Hong Kong extended four consecutive days of gains in a shortened trading day while the Shanghai market was closed for a week-long holiday.
Metals on the LME closed mixed. Gold declined 0.5% to US$1207/oz following the US jobless claim report. WTI declined 1.9% to US$51.2/bbl. The AUD is buying US$0.779.
In This Issue
Matrix (MCE)
MCE’s impressive first half earnings and cash flow reflect the benefits of an efficient plant, a weaker currency and sound financial management. Unfortunately the solid result is marred by a murky outlook for offshore drillers, where supply currently outstrips demand. We expect this to pressure the entire supply chain, highlighting the importance of MCE’s diversification into offshore production support and onshore well construction.
Independence Group
Independent Group (IGO) reported December H financial (largely pre-released) and announced a 6¢/sh interim dividend (vs 3¢/sh for the corresponding period in 2013). Guidance was also increased for all three assets following strong operational performance in H1 FY15. While IGO remains a consistent high performer and is set to generate strong free cash flow over the next 18 months.
Decmil (DCG)
DCG reported a result close to our expectations but outlook commentary was more cautious than prior announcements.
Recent Contacts & Presentations
Northern Star (NST), Saracen (SAR), Doray (DRM), Resolute (RSG), Gold Road (GOR), Regis (RRL), Independence Group (IGO), Energia Minerals (EMX), OBJ Limited (OBJ), Gage Roads (GRB), Rewardle (RXH), Doray (DRM), Alexium (AJX), Orbital (OEC), IMF Bentham (IMF), Metals X (MLX), Pura Vida (PVD), Image Resources (IMA), Tangiers (TPT), ABM Resources (ABU), Centaurus (CTM), Imdex (IMD)
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