Market Update & Important Indicators:
U.S. stocks edged higher intraday as the U.S. and Mexico neared a deal to revise the North American Free Trade Agreement. The Dow Jones Industrial Average rose 0.1%, to 26064. The S&P 500 rose less than 0.1% and the NASDAQ rose 0.1%, a day after the technology-heavy index went above 8000 for the first time. The threat of what many analysts call protectionist U.S. policies has dampened global market sentiment through most of this year. The outcome of the Nafta deal is seen by some as a bellwether for President Trump's future dealings with China. The prospect of Mr. Trump successfully negotiating new trade deals is likely to be taken by investors as a hopeful sign that a major trade war will be avoided, analysts said. However, some money managers remained unconvinced after Mr. Trump said Monday that Canada would be severed from the North American trade area if necessary. The US gold price lost 0.9% to record 1200.50 US$/oz.
The Stoxx Europe 600 index ended little changed at 385.46, though U.K. stocks outperformed as traders returned from a public holiday on Monday and the pound fell on concerns over a possible no-deal Brexit. Gains for the euro against a broadly weaker dollar weighed slightly on European stocks, though easing concerns about global trade tensions limited any losses. The U.K.'s FTSE 100 index ended up 0.5%, helped by gains in heavyweight mining stocks, while Germany's DAX closed down 0.1% and France's CAC 40 was up 0.1%. Italian stocks underperformed as banking stocks fall on concern about Italy's politics and budget, with the FTSE MIB ending down 0.9%. Spain's Ibex 35 closed down 0.6%.
The bears continued to be in retreat for global equities, with broad gains across Asia except for Chinese indexes essentially flat after 2-3% jumps on Monday. The advances were widely around 0.5%, with Singapore's benchmark outpeforming at 1% following a late-day fade that ate into Monday's gain. Most stock indexes in Asia-Pacific gained. Japan's Nikkei Stock Average edged up 0.1% and Hong Kong's Hang Seng rose 0.3%. South Korea's stocks, like Japan's, also saw gains steadily erode as the trading day progressed. But a 2-point jump in the end-of-day adjustment helped the Kospi's gain look not so meagre. The index finished up 0.2% at 2303.12 in its eighth straight advance, matching the run in July 2017.
After a week of struggles, the Australian stock market found some footing while climbing for a third-straight day. Perhaps gaining some demand as New Zealand's exchange shut trading in the morning because of a data glitch, the ASX was among the region's better performers and finished up 0.5% at 6414, moving back toward last week's latest 10 1/2-year closing high. Financials finally got off the mat, rebounding 0.9%. Materials rose 1.1%. But consumer stocks finished little changed as money rotated out of that strong-of-late sector. Among individual names, vitamin specialist Blackmores jumped 12%, its best day in a year, following its fiscal year report.
Base metal prices were mostly up on the London Metal Exchange. Lead fell 0.2% to 2,065/t, Zinc gained 0.1% to 2,544/t. Nickel gained 1.9% to 13,591/t as the 3-month copper contract gained 0.7% to 6,135/t. Aluminium appreciated 1.8% to 2,110/t.
In this issue:
Valmec (VMX) | Opportunity | BUY
Market Cap $33m | Current Price $0.265 | Valuation $0.42
The negative reaction to the underlying EBITDA result of $4.9m (reported $7.5m) provides an opportunity for investors looking to gain exposure to the improving environment in gas and related infrastructure services sectors. We see VMX trading on undemanding forward multiples after having built more conservatism into our forecasts. BUY maintained on a blended valuation of $0.42 (prior $0.48).
Recent Contacts & Presentations:
Nickle Mines Limited (NIC), Carnarvon Petroleum Limited (CVN), Prodigy Gold (PRX), Ausdrill Ltd (ASL), Bionomics Ltd (BNO), Gold Road Resources (GOR), Encounter Resources Ltd. (ENR), OZ Minerals Limited (OZL), Melbana Energy (MAY), Botanix Pharmaceuticals Ltd (BOT), Novo Litio (NLI), Classic Minerals (CLZ), OZ Minerals (OZL), Saturn Metals (STN), Antipa Minerals (AZY), SRG Ltd (SRG) Bowen Coking Coal (BCB), Birimian (BGS), Breaker Resources (BRB), Galena Mining (G1A), Valmec (VMX),Bryah Resources (BYH), Calima Energy (CE1) Genesis Minerals (GMD), Agrimin (AMN), Magnetic Resources (MAU), Core Exploration (CXO), Marindi Metals (MZN), MOD Resources (MOD), Santos (STO), Adriatic Metals (ADT) Bio–Gene Technology (BGT), Walkabout Resources (WKT), Triton Minerals (TON), Calima Energy (CE1