Market Update & Important Indicators:
U.S. stocks crept lower Wednesday, with the Dow Jones Industrial Average hovering right below 20000. The Dow industrials have gained roughly 9% since Election Day, buoyed by investors' bets that President-elect Donald Trump's administration will pursue policies such as tax cuts, regulatory rollbacks and infrastructure spending that could improve the outlook for U.S. companies. That has spurred a flood of money into stocks, particularly banks and industrial companies, pushing Goldman Sachs Group up 34% and Caterpillar up 11% since Nov. 8. If the Dow gets to 20000 before Christmas, it will be the shortest amount of time between 1,000-point thresholds in the index's history, according to Bespoke Investment Group. The Dow first settled above 19000 less than a month ago. The total value of the global equity market has climbed by roughly $3 trillion since the Nov. 8 election, while the value of global bond markets has declined by roughly the same amount, according to Deutsche Bank research.
An apparent bond breakthrough in China and record high U.S. stocks led Asian equities higher Wednesday. Singapore's FTSE Straits index gained 0.1%. The Shanghai Composite ended up 1.1%, its biggest gain in a little over a month. This after a Chinese brokerage took responsibility for unauthorized bond transactions. Earlier in the trading session, Asian markets rose on positive cues from record highs set by U.S. markets. Oil prices climbed in Asia trade Wednesday on data from industry group American Petroleum Institute that showed a 4.1-million barrel decrease in U.S. crude stockpiles. The amount, if confirmed by the U.S. Energy Information Administration later Wednesday, would exceed expectations. Stocks of Japanese exporters continued to gain following a statement of support for yen weakening by Japan's central bank. Bank of Japan Gov. Haruhiko Kuroda said Tuesday that he saw no problem with the yen's recent declines against the dollar, saying the currency had merely returned to the level it stood at early this year.
A third straight day of gains has lifted Australia's equities market to a fresh 16-month high, buoyed by further gains in bank stocks and a recovery in the resources sector. The S&P/ASX 200 advanced 22.4 points, or 0.4%, at 5613.5–the highest finish since August 2015. During the session, the index touched 5628, topping the previous intraday high hit in August. The market has been rising steadily since the U.S. election, tracking gains on Wall Street in anticipation a Trump presidency will mean higher inflation and increased infrastructure spending, which in turn will lift demand for commodities. U.S. stocks made a further push overnight, with the Dow Jones Industrial Average hovering just below the symbolic 20000 level. Typically, Australian shares notch up a strong finish to the year and the ASX 200 has risen in each of the last four Decembers. For the session, 2.06 billion shares were traded worth 5.07 billion Australian dollars (US$3.68 billion), Commonwealth Securities said.
The London Metal Exchange's three-month copper contract settled up 0.24% at $5,515/t. The other base metals were mixed on Wednesday, lead prices fell 0.8% at 2,160/t, nickel prices fell 0.9% at 10.772/t and zinc prices fell 0.6% at 2,600/t. Aluminium prices rose 0.5% at 1,738/t whilst the tin price was flat at 21,034/t.
In this Issue:
Dacian Gold (DCN) | Debt funding Received | BUY
Market Cap $298m | Current Price $2.04 |Price Target $3.35
Dacian Gold (DCN) has secured A$150m of debt funding for development of the Mt Morgans Gold Project. The facility has been provided by a syndicate of three banks with an undisclosed interest rate, no hedging, no cash sweeping and typical conditions precedent to draw-down. In addition, the Company has attained vegetation clearing permits with all other requisite approvals for the commencement of project development expected early-2017. DCN is aiming to commence construction in Q1 2017 and believes first production can be achieved in Q1 2018. BUY maintained with a $3.35 target price.
Sino Gas and Energy (SEH) | Sino Gas and Energy (SEH) – Back on track | BUY
Market Cap $218m | Current Price $0.10 | Target Price $0.23
Sino Gas and Energy (SEH) has received Chinese Reserve Report (CRR) endorsement from Production Sharing Contract (PSC) partners for both Sanjiaobei (SJB) and Linxing (LX). SJB has also attained CRR endorsement by the National Centre of Coal Bed Methane, the regulatory body that oversees CRR and Overall Development Plan (ODP) reports. ODP’s for both assets have now commenced, with SJB approval expected late-2017 to early-2018 followed by LX in mid-2018. Operations continue to ramp-up with gross production currently at 16MMscf/d. The Company expects to reach total installed capacity of 25MMscf/d in the coming weeks. BUY maintained with a $0.23 target price.
Recent Contacts & Presentations:
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), Acacia Coal Ltd (AJC), Troy Resources Ltd (TRY), Hazer Group Ltd (HZR), Berkeley Energia Ltd (BKY)
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