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"In the wake of the presumed terrorist attack in Manchester, stock markets across Asia ended mixed in early morning trading. Haven investments, like Gold and the Yen, were just marginally firmer. Korea’s Kospi gained 0.9% to a fresh intraday record and Singapore’s Straits Times Index gained 0.5% having been lower for each of the past five sessions, while the Nikkei, S&P/ASX 200 and Shanghai Composite all closed marginally weaker. US stocks by contrast sustained the trend set on Thursday and Friday with a further upward move yesterday evening. The three principal indices have now recovered nearly all of last Wednesday’s setback, with traders celebrating the President’s successful visit to Saudi Arabia. Various individual stocks shone on the back of major contract news including, not surprisingly, defence stocks like General Dynamics, Raytheon and Lockheed Martin and others, such as Blackstone Group, which moved sharply higher after the private equity firm and the Arab state’s Public Investment Fund announced the joint launch of a USD40 billion investment vehicle to finance infrastructure renovation in the US. Beyond this, however, a lack of major US economic data kept many traders on the sidelines, although what focus there was centred on technology shares with Networking, Telecom, Semiconductor and Software sectors dominating the gains and ensuring the NASDAQ chalked up Wall Street’s largest advance. US government bonds pulled back overnight with the benchmark 10-year Treasury note settling at 2.254%, compared with 2.243% Friday, following its biggest weekly price gains in more than a month, as Libor hit an 8-Year high on resumed confidence of a June Fed-rate hike. Ahead of Thursday’s OPEC meeting in Vienna, oil prices dipped slightly in Asia, having hit their highest level in a month during the U.S. session. While the FTSE-100 Index climbed by 0.3% yesterday, supported by firmer minerals prices, the war of words on Brexit continues; in an interview with the Sunday Times, for example, Brexit Minister David Davis reiterated the UK government’s willingness to walk away from negotiations without any deal, while rejecting the demand of EUR100 billion in settlement for the UK’s exit from the European Union. The Euro, however, had been boosted by comments from German Chancellor Angela Merkel and speculation that the ECB’s Mario Draghi may shortly be forced to take decisive action; the Xetra DAX Index accordingly edged down by 0.2% and the French CAC 40 Index closed just below the unchanged line, leaving the pan-European Stoxx Europe 600 index unchanged on the day. Not that tension will be relieved any time soon; the EU has now completed preparations to begin talks over Britain’s exit from the bloc, after the remaining 27 EU member states signed off on the final details of the bloc’s negotiating mandate during Monday’s ministerial meeting. While they are now ready to begin talks, negotiations are expected to commence only during the week of June 19, having stated it would wait for the outcome of Britain’s General Election on June 8. Meanwhile, Eurozone finance ministers, the International Monetary Fund and the Greek government failed to hammer out a final deal on Greece’s debt relief and decided to postpone a decision for their next meeting in mid-June. A reasonable batch of international macro data is anticipated today. The UK releases its Public Sector Net Borrowing figures for April, and its CBI Distributive Trades Survey for May as well as publishing its Inflation report Hearings. The EU offers Markit Manufacturing, Services and Composite PMI for May, while the US releases similar PMI data, along with its Redbook, New Homes Sales Change, the Richmond Fed Manufacturing Index for May and API Crude Stocks. Speeches are also due from the FOMC’s Neel Kashkari and Patrick Harker. UK corporates due to publish earning or trading updates include Severn Trent (SVT.L), Entertainment One (ETO.L), Shaftesbury (SHB.L), Electrocomponents (ECM.L), Aveva Group (AVV.L), De La Rue (DLAR.L), Paragon Group (PAG.L) and Topps Tiles (TPT.L). Trying to understand the ramifications of the deadly attack in Manchester this morning, London equities are expected to simply tread water from the opening awaiting further updates; the FTSE-100 is seen 5 points either side of unchanged in early trading."
– Barry Gibb, Research Analyst
Markets
Europe
The FTSE-100 finished yesterday’s session 0.34% higher at 7,496.34 whilst the FTSE AIM All-Share index was up 0.39% at 980.71. In continental Europe, the CAC-40 finished down 0.03% at 5,322.88 whilst the DAX was 0.39% higher at 12,619.46.
Wall Street
In New York last night, the Dow Jones rose 0.43% to 20,894.83, the S&P-500 firmed 0.52% to 2,394.02 and the Nasdaq Composite gained 0.82% to stand at 6,133.62.
Asia
In Asian markets this morning, the Nikkei 225 had fallen 0.06% to 19,666.69, while the Hang Seng firmed 0.28% to 25,461.43.
Oil
In early trade today, WTI crude was up 0.79% to $50.73/bbl and Brent was down 0.45% to $53.63/bbl.
Headlines
Manchester Arena blast: 22 dead and 59 hurt
Twenty-two people, including children, are now known to have been killed and 59 injured in a suspected terror attack at Manchester Arena. The blast happened at 22:35 BST on Monday following a pop concert by the US singer Ariana Grande. Greater Manchester Police said the lone male attacker, who died in the blast, was carrying an improvised explosive device which he detonated. Relatives are using social media to hunt for missing loved ones. Home Secretary Amber Rudd said it was “a barbaric attack, deliberately targeting some of the most vulnerable”.
Source: BBC News
Company news
Thor Mining (THR.L, 0.88p) – Speculative Buy
Thor Mining, the exploration and development company with tungsten assets in Australia and USA announced yesterday an update on the mineral resource estimate for its wholly owned Pilot Mountain tungsten deposit in Nevada. The Pilot Mountain project consists of four deposits: Desert Scheelite, Gunmetal, Garnet and Good Hope. Yesterday’s announcement included a maiden resource for Garnet comprising 1.83Mt grading 0.36% WO3 and an updated resource for Desert Scheelite to 9.9Mt grading 0.26% WO3 plus 19.39g/t Ag and 0.14% Cu. The total combined resource now stands at 11.73Mt grading 0.28% WO3 representing, on aggregate, a 55% increase.
Our view: The above announcement is positive news for Thor and development of the Pilot Mountain project. We note that there is considerable exploration upside on both Desert Scheelite and Garnet as well as the potential for additional resources when considering the Gunmetal and Good Hope deposits. Whilst the overall grade for Desert Scheelite fell by 19% the combined tonnage offset this with a 46% increase. We are encouraged with the relatively high-grade Inferred resources from the Garnet deposit at 0.36% WO3 as well as the aggregate grade of 0.28% WO3 for the project. We also note the potential for zinc, copper and silver mineralisation in the system. We look forward to further updates on Pilot Mountain including the potential for zinc mineralisation at the Garnet deposit. As such, we recommend a Speculative Buy rating on the stock.
Beaufort Securities acts as a corporate broker to Thor Mining plc
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Compiled by:
Barry Gibb, Kazunaga Senga, Sheldon Modeland, Charles Long & Ben Maitland
(t) +44 (0) 207 382 8384
(e) [email protected]
Weekly diary
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Recommendations
During the three months to end-April 2017, the number of stocks on which Beaufort Securities published recommendations was 216, and the recommendations were as follows: Buy – 73; Speculative Buy – 118; Hold – 22; Sell – 3.
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