Market Update & Important Indicators
U.S. stock markets and U.S. government bond markets were closed Monday for the Memorial Day holiday. However, the dollar edged higher on Monday as investors considered the prospect of a U.S. interest rate rise in the coming months. The moves came on a quiet day of trading, with stocks markets in the U.S. and U.K. closed for holidays. The timing of the Fed's next rate increase has been a key consideration for investors this year. Fed officials scaling back plans to raise rates by a percentage point in 2016 helped spur a rally in riskier assets and a decline in the dollar earlier this year.
European stock markets inched higher on Monday, though the absence of U.S. and London markets kept volumes thin. The Stoxx Europe 600 was barely positive at 350.14, after a 3.4% gain last week, which was probably the benchmark's strongest weekly performance since February 19, according to FactSet data. London markets are also closed for a bank holiday, which is expected to keep volumes low in Europe.
Stocks in Japan jumped to a one-month high and led most Asian shares up on Monday, as the Japanese yen weakened and investors assessed the latest comments from U.S. Federal Reserve Chairwoman Janet Yellen. The Nikkei Stock Average gained 1.4% to close at 17,068.02, and the Japanese yen weakened against the U.S. dollar to a one-month low. During Asian trade Monday, the dollar strengthened to 111.15 US$ in the early afternoon session, its highest since April 28, before falling only slightly to 111.12 US$. Elsewhere, the Hang Seng Index was up 0.3%, whilst the Shanghai Composite Index was roughly flat.
Australian shares edged to a fresh nine-month high Monday, buoyed by gains in energy stocks that offset weakness in banks and miners. Rising for a fourth straight session, the S&P/ASX 200 nudged up 2.1 points to finish at 5408.0, its highest level since August 11. For the day, the basket of energy shares advanced 0.7% despite oil prices being largely muted ahead of this week's Organization of the Petroleum Exporting Countries meeting, but the materials subindex slipped 0.7%.
The London Metal Exchange was closed for a holiday on Monday. Gold prices declined 0.5% failing to recover from earlier, sharper losses when it briefly tapped $1,199 an ounce. That was after closing down $6.60 lower to $1,213.80 an ounce on Friday.
In this Issue:
Troy Resources (TRY) | Operational update | BUY
Market cap $177m | Current price $0.52 | Valuation $0.68
Troy Resources (TRY) provided an update at its 100% owned Karouni operation in Guyana, which declared commercial production in February. Due to the recent mill performance and expected remediation work, CY16 production is likely to be at the lower end of the previous guidance range of 100-120koz. Whilst disappointing, Argonaut notes that “teething issues” during the ramp up phase are not uncommon, and the impact from this particular issue is likely to be short term. We reduce our CY16 production estimate to 105koz (was 113koz) and valuation to A$0.68 (was A$0.70). BUY maintained. Improved weather conditions, higher expected head grades and a higher percentage of fresh material should translate to materially better production in H2 CY16. Additional catalyst includes the commencement of an exploration program, targeting N-S veins and testing the underground potential at Smarts.
Recent Contacts & Presentations
Cradle Resources (CXX), Saracen (SAR), Gold Road Resources(GOR), Regis Resources (RRL), Gascoyne Resources (GCY), Botanix (BNE), Sino Gas & Energy (SEH), Altura Mining (AJM), Navitas (NVT), Gage Roads (GRB), Bionomics (BNO), Invigor Group (IVO), Marindi (MZN)