Daily updates of the latest resource investment information

The Uranium Report

Uranium Sector SummaryMartin Place Securities has carried out a sector wide analysis of 60 ASX-listed companies with uranium interests and focused on 31 companies that offer capital appreciation from current depressed levels through current production, future production potential, or represent opportunities in corporation rationalisation of strategic deposits.

This report will be released tomorrow, with Greg Burns, Head of Research at Martin Place Securities, delivering two stock-specific presentations to introduce the MPS Uranium Report.

If you would like to join us for a light lunch session at 12:30pm  on Thursday 9th February, please contact Estelle, or your MPS advisor.

We have also made available for free download, the “Uranium Sector Overview

 

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Market Brief: February 23

Overnight Headlines:

  • The euro-zone preliminary services Markit PMI index fell to 49.4 in Feb’12 from 50.4 in Jan’12. Most forecasts were aiming for a rise.
  • Germany’s PMI for Feb’12 decreased to 50.1 in Feb’11, below the previous months 51, but remaining in expansion.
  • Minutes from the Bank of England’s policy meeting earlier in the month showed two officials sought a bigger Feb’12 expansion in QE.
  • Fitch lowered Greece’s credit rating to C from CCC.

 

Resources Snapshot:

  • First Uranium may be forced into a distress sale of its assets in an effort to  settle upcoming debts.
  • According to a local Peruvian newspaper, the country would need to invest US$1b a year to be able to ensure sufficient power supply for the new mines that are currently planned.

 

Markets:

  • DOW JONES: Down 0.21% (or 27.02 points) to 12,938.67. Investors in the U.S. endured another news light session with the Dow swinging between minor gains and losses throughout the session. There was minimal economic data throughout the session. The National Association of Realtors reported existing-home sales rose 4.3% in Jan’12 to a seasonally adjusted annual rate of 4.57m, below the 4.7m expected by analysts.  2 of every 3 Dow components fell, lead by Wal-Mart (-2.5%), Bank of America (-2%) and Intel (-1.6%). Gainers included Caterpillar and Pfizer.
  • FTSE 100: Down 0.20% (or 11.65 points) to 5,916.55. European markets, including U.K’s main index, fell overnight on the back of weaker than expected PMI data. Markets did consolidate some losses in afternoon trading as they tracked the U.S. markets higher. The banking sector lost ground, falling between 0.9% and 3.5% each. Heavyweight mining companies were mixed with BHP gaining 0.3% while Rio slipped 1%. Additionally, mining gainers included Fresnillo and Randgold Resources. Oil producers swung higher with BG Group and Shell rising 1.9% and 0.2% respectively. Lastly, the retail sector was largely lower.

 

Overnight Summary:

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Market Brief: February 22nd

Overnight Headlines:

  • European and U.S. markets reacted to European leaders agreeing to the terms of the second Greece bailout.
  • A report for Greece’s institutional lenders indicated it will need more help from the private sector as well as the official sector to achieve its 120% debt-to-GDP target by 2020.
  • Additionally, an analysis by European and IMF officials claimed Greece’s debt-to-GDP ratio could widen to 160% by 2020.
  • A U.K. Institute of Directors survey showed 12% of business leaders think there is a “very high risk” the euro-zone will break up this year, with another 38% believing it is at “high risk”.
  • According to FactSet, 401 of the S&P 500 companies have reported 4Q11 earnings, with 68% beating analyst expectations. The blended earnings growth for Q411 is 5.5%.

 

Resources Snapshot:

  • According to median estimates by Bloomberg analysts, India’s gold purchases could fall 7% to 900 metric tons this year.
  • An Aboriginal Elder, in conjunction with the Environmental Defenders Office, has lodged an application in the Federal Court to challenge the expansion of BHP’s Olympic Dam claiming it had been approved unlawfully under the Environment Protection and Biodiversity Conservation Act.
  • China’s Minmetals Resources succeeded in closing a US$1.3b bid for African-focused copper company Anvil Mining. This is regarded as the first major African mining play by a Chinese company.

 

Markets:

  • DOW JONES: Up 0.12% (or 15.82 points) to 12,965.69. On a relatively news light day, U.S. markets traded cautiously after a public holiday and the announcing of a Greek debt deal. Perhaps the most notable event was the Dow briefly touching 13,000 for the first time since May’08. The Dow traded in a 75-point band throughout the session and ended marginally higher. 19 Dow components rose with Alcoa (+2.5%), Chevron (+1.6%) and Kraft Foods (+1.4%) leading the way. Fallers included Wal-Mart and Merck & Co.
  • FTSE 100: Down 0.29% (or 17.05 points) to 5,928.20. Despite agreement bring made over a debt deal for Greece, investors looked to the potential difficulties in implementing the plan as European markets tracked lower. The banking sector remained volatile with key banks (RBS, Lloyds and Barclays) falling between 0.9% and 1.6% each. The mining sector was largely mixed with BHP gaining 0.1% and Rio off 0.2%. Other risers included Vedanta, Fresnillo and Anglo American. The energy sector noted mixed results with BG Group slipping 1.9% while Shell rose 0.8%.

 

Overnight Summary:

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Market Brief: February 21st

Overnight Headlines:

  • U.S. markets were closed for the Presidents Day Public Holiday.
  • European markets rose on optimism that euro-zone finance ministers will approve a €130b bailout package for Greece at a meeting in Brussels today.
  • Oil prices continued to rise after Iran announced over the weekend it had stopped exporting to French and British companies.
  • According to media reports, Iran may extend the export ban to other European countries.
  • An IEA official stated that the EU could handle a sudden end to imports of Iranian oil because of changes already being made due to the EU’s coming ban on Iranian shipments.

 

Resources Snapshot:

  • Zimbabwe’s Chamber of Mines and stated that the newly increased mine licence fees will ultimately hurt the industry with some fees rising as much as 8,000%. According to reports, it is estimated that up to 60% of every dollar earned in revenue goes to the government.
  • According to Mineweb, the regional land and resources bureau of Northern China’s Inner Mongolia said they halted 476 illegal mining operations, ordered 887 suspend operations and permanently shutdown 73 mines last year.
  • India’s Prime Minister Economic Advisory Council has recommended the government discourage gold imports and instead channel savings into formal financial instruments.

 

Markets:

  • DOW JONES: Closed for Washington’s Birthday/Presidents Day.
  • FTSE 100: Up 0.68% (or 40.18 points) to 5,945.25. With U.S. markets closed, European markets opened higher overnight and traded in a relatively tight range to close with moderate gains. The banking sector performed well with RBS, Lloyds and Barclays all rising between 1% and 2.5% each. Heavyweight mining companies BHP and Rio rose 2.7% and 2.3% respectively. Additionally, Randgold Resources, Fresnillo and Vedanta all rallied. The energy sector was mixed with BG Group rising 1.8% while Shell lost 0.3%.

 

Overnight Summary:

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Market Brief: February 17th

Overnight Headlines:

  • Moody’s threatened to downgrade 114 financial institutions in 16 countries.
  • The Spanish stock market regulator lifted a ban on short selling that had been in place since Aug’11.
  • Tensions between Greece and Germany continued to simmer with the Greek President accusing Germany of insulting his country after the German Finance Minister likened Greece to a “bottomless pit”.
  • According to Bloomberg, reports claimed that European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the ECB to plug a new financing gap in the second bailout package.

 

Resources Snapshot:

  • Rio Verde announced that their thermophosphate product boosted yields of soybean crops in Brazil by 30%.
  • Vale stated their 4Q11 net profit fall (-21%) was due to lower prices caused by the euro-zone crisis.

 

Markets:

  • DOW JONES: Up 0.96% (or 123.13 points) to 12,904.08. Markets in the U.S, a day after some of the largest falls for 2012, recouped losses on the back of positive economic data. The key driving point was jobless claims. Claims for the previous week fell 13,000 to 348,000, the lowest since Mar’08. The four-week moving average fell to 365,250, close to a four year low. The Philadelphia Federal Reserve’s manufacturing index rose to 10.2 in Feb’12, the highest since Oct’11 and better than predicted. Core PPI for Jan’12 climbed 0.4%, the largest increase since Jul’11 while headline PPI increased 0.1%. Additionally, housing starts were better than expected with the annualised rate rising to 699,000. 29 Dow components rose with Microsoft (+4.1%), Bank of America (+4.1%) and HP (+2.6%) leading the gains.
  • FTSE 100: Down 0.12% (or 6.78 points) to 5,885.38. European markets, including the FTSE 100, opened substantially lower overnight and ended another session in the red. However, the FTSE 100, after being down 60 points, consolidates its losses and ended close to flat. The banking sector remained volatile with RBS falling 0.9%, while Barclays and Lloyds rose 1.3% each. The mining sector was mostly lower with heavyweights BHP and Rio ending lower. Additionally, Randgold Resources, Anglo American and Fresnillo all ended down. Lastly, energy companies followed the miners lower with BG Group and Shell falling 0.1% and 0.3% respectively.

 

Overnight Summary:

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Market Brief: February 16th

Overnight Headlines:

  • 4Q11 Euro-zone GDP contracted by 0.3% with economists expecting a 0.4% decline.
  • 4Q11 French GDP grew by 0.2%, beating expectations of a 0.1% contraction.
  • News reports claimed that European officials may delay part of the second Greek bailout package until after expected Apr’12 elections while taking steps to avoid a default in Mar’12.
  • The Bank of England released their quarterly inflation report, stating inflation is likely to fall sharply in coming months and would likely be below its 2% target for much of the two-year forecast.
  • According to minutes from the last FOMC meeting, few members favoured another round of QE or bond purchases. Additionally, a majority thought that sales of assets on the balance sheet would start “no earlier” than 2015.

 

Resources Snapshot:

  • Vale expects to resume all Sudbury mining operations by the end of the month.

 

Markets:

  • DOW JONES: Down 0.76% (or 97.33 points) to 12,780.95. Despite reasonably upbeat European GDP figures, U.S. markets opened lower on news that Greece may not get the second bailout package on time. Additionally, a host of economic data was released throughout the session. The National Association of Home Builders/Wells Fargo housing market index rose to 29 in Feb’12, up from 25 in Jan’12 and above expectations. U.S. Industrial Production for Jan’12 was flat and missed expectations of a 0.8% gain. Additionally, the New York Fed’s Empire State manufacturing survey rose 6 points to 19.5 in Feb’12. The gain beat expectations. The Dow extended losses after the release of FOMC minutes. Only five Dow companies managed minor gains with the biggest fallers losing over 1.8%. They included United Technologies and Bank of America.
  • FTSE 100: Down 0.13% (or 7.71 points) to 5,892.16. In a very similar pattern to sessions earlier in the week, European markets climbed higher early before turning down when U.S. markets opened. The losses were attributed to uncertainty over the next tranche of aid for Greece. The banking sector was mixed with Barclays and RBS gaining 2.9% and 1.3% respectively, while Lloyds fell 1%. Miners were mostly lower with heavyweights BHP and Rio losing over 0.8% each. Randgold Resources and Fresnillo also fell, while Vedanta was a rare gainer. Oil producers were mixed with BG Group rising 0.6% and Shell falling 1.3%.

 

Overnight Summary:

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Market Brief: February 15th

Overnight Headlines:

  • Germany’s ZEW Index, a measure of investor sentiment, rose to 5.4 in Feb’12, the highest reading since Apr’11.
  • Britain’s CPI for Jan’11 fell to 3.6%, down from 4.2% the previous month, as predicted by economists.
  • Moody’s put Britain, France and Austria on negative outlook.
  • Moody’s also cut Spain’s rating by two-notches, and Italy’s and Portugal’s by one-notch.
  • The FT reported late Monday that Germany and other European countries may not fully approve the €130b Greek aid package, due to concerns over whether Greece can complete its austerity program.
  • The monthly Bank of America – Merrill Lynch survey found a net 26% of respondents are now overweight equities, up from 12% the previous month. Overweight cash has reduced from 27% to 13%.

 

Resources Snapshot:

  • Legislation to allow uranium exploration in NSW will be introduced to Parliament after the state cabinet agreed to overturn the long held ban.
  • The proposed Obama budget includes a 5% gross mining royalty on federal lands and a hardrock abandoned mined land fee on all lands.

 

Markets:

  • DOW JONES: Up 0.03% (or 4.24 points) to 12,878.28. U.S. markets took mostly negative leads from Europe and spent the session trading lower on poor economic data. Impressively, the Dow consolidated losses late in the session to end relatively flat. The key U.S. headline pointed to retail sales. Sales for Jan’12 rose a seasonally-adjusted 0.4%, lower than the forecast 1%, due largely to poor automobile sales. Just over half of the Dow components rose with HP (+1.1%), Boeing (+1%) and Caterpillar (+0.7%) leading the way. The largest fallers included Bank of America (-3.2%), Disney (-1.8%) and Alcoa (-1.1%).
  • FTSE 100: Down 0.10% (or 5.83 points) to 5,899.87. European markets, including the FTSE 100, spent local trading hours in the green before turning lower on weaker than expected U.S. data. The banking sector outperformed the index with Lloyds and Barclays gaining 2.3% and 1.2% respectively. However, RBS fell over 5%. Additionally, most miners gave back previous gains with BHP and Rio falling 0.5% and 3.1% respectively. Gainers included Fresnillo and Randgold Resources. The energy sector was mixed with BG Group falling 0.1% while Shell gained 1.5%.

 

Overnight Summary:

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Market Brief: February 14th

Overnight Headlines:

  • With Greek lawmakers approving austerity measures, Greece is now expected to receive their next tranche of aid.
  • Euro-zone finance ministers are likely to approve the Greek package when they meet again on Wednesday.
  • The Confederation of British Industry stated it doesn’t expect Britain to fall into recession in 2012.
  • French and Belgium market regulators lifted a ban on short selling of financial stocks that had been imposed since Aug’11.
  • U.S. President Barrack Obama sent Congress a US$3.8t budget that includes tax increases for the wealthiest individuals.

 

Resources Snapshot:

  • Barrick Gold plans to sell its 20% stake in Russia’s Highland Gold.

 

Markets:

  • DOW JONES: Up 0.57% (or 72.81 points) to 12,874.04. Coming off its first weekly loss of the year, the Dow Jones and other U.S. markets were buoyed overnight on the back of Greek approval of austerity measures. News throughout the session included Obama sending a new budget to Congress that outlines his re-election campaign. 25 Dow components rose with Bank of America (+2.2%), JP Morgan (+1.8%), Caterpillar (+1.7%) and United Technologies (+1.7%) leading the way. Major fallers included Travelers Co and Kraft Foods.
  • FTSE 100: Up 0.91% (or 53.31 points) to 5,905.70. The FTSE 100, along with other European markets, rallied overnight as Greece ratified additional austerity measures that will ensure it receives its next tranche of aid. The banking and mining sectors lead the index higher. RBS and Lloyds rose 0.7% and 2.3% respectively, while Barclays gained 1.2%. Heavyweight mining companies BHP and Rio rose 1.2% and 2% respectively, while companies such as Vedanta and Fresnillo also gained. Energy companies were mixed with BG Group losing 0.7% and Shell gaining 0.6%.

 

Overnight Summary:

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Market Brief: February 10th

Overnight Headlines:

  • The Greek government and the troika agreed on austerity measures overnight.
  • However, the European Council President Jean-Claude Juncker said there will be no “final decision” on the package today.
  • Greek political leaders reached an agreement on austerity measures needed for the country to receive their next tranche of aid.
  • Greece continues to worsen with the unemployment rate rising to 20.9% in Nov’11, from 18.2 % in Oct’11.
  • The ECB kept its benchmark interest rate unchanged at 1%.
  • The Bank of England boosted the size of its asset-purchase program by £50b and left its key lending rate unchanged at 0.5%.
  • Italian PM Mario Monti claimed Europe needs to break down structural barriers and not just focus on austerity.

 

Resources Snapshot:

  • Rio’s earnings result was tainted by a US$8.9b write-down of its aluminium business. Greg Burns (Head of Research) will go through the result in more detail at a later stage.
  • U.S. company Southern Co won approval from the Nuclear Regulatory Commission to begin full construction of two new reactors in Georgia. This is the first new nuclear power facility to be built in the U.S. in 30 years.
    • Two reactors (1,100MWe gross capacity each), costing US$14b.
    • Possible litigation. Nine groups have asked the NRC to delay a decision until a challenge could be filed in federal court.
  • Chesapeake Energy told investors it will cut production until “what is hopefully a higher gas price environment”.
  • The Honduras government is taking active steps to encourage mining in the nation, including a new mining law and a cooperation agreement with Chile.

 

Markets:

  • DOW JONES: Up 0.05% (or 6.51 points) to 12,890.46. On the back of agreement over Greek austerity measures, U.S. markets took positive leads from Europe and opened higher overnight. Positive economic data helped buoy the indices throughout the session. The Dow gradually pulled back in the afternoon to end with marginal gains. Domestically, initial jobless claims dropped by 15,000 last week to 358,000, pushing the four-week moving average to 366,250, the lowest since Apr’08. United Technologies (+2.5%), American Express (1.3%) and DuPont (0.8%) were the top three Dow movers. Cisco, HP, JP Morgan and Caterpillar all lingered at the tail end, losing over 1% each.
  • FTSE 100: Up 0.33% (or 19.54 points) to 5,895.47. The announcing of Greek austerity measures, coupled with further QE by the Bank of England helped push the FTSE 100 higher. Other European markets also rose. The ever volatile U.K. banking sector suffered a rough night with Barclays and Lloyds falling 0.2% and 0.5% respectively, while RBS lost 0.10%. The mining sector was also largely lower with Rio falling 1.5% on the back of an earnings announcement and BHP slipping 0.7%. Companies such as Randgold Resources and Vedanta managed gains of less than 1%. Additionally, the energy sector rose with BG Group and Shell gaining 3.2% and 0.1% respectively.

 

Overnight Summary:

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Market Brief: February 9th

Overnight Headlines:

  • Greece continued to dominate headlines overnight. Reports suggested that a deal was close overnight, but talks were again delayed another day.
  • Late in U.S. trading, Bloomberg reported that they obtained a draft of an agreement involving the IMF, EU and ECG regarding the Greek debt deal. The draft claimed:
    • Greece will cut 15,000 state jobs this year
    • Minimum wage will be cut by 20%
    • Medical spending will be cut, and
    • Auxiliary pension funds will be merged
    • According to reports, the ECB agreed to exchange Greek government bonds at less than face value in an effort to further reduce the nation’s debt load.
      • The U.S. Treasury Department sold US$24b in 10-year notes at a yield of 2.02% with bidders offering to buy 3.05 times the amount of debt sold.

 

Resources Snapshot:

  • The Zambian government has announced plans to audit all mining companies in a bid to retrieve up to US$1b in back taxes.
  • China’s imports of gold through Hong Kong for 2011 reached ~428t, 260% higher than 2010 and a clear record. This is despite Dec’11 imports being down 60% from a year earlier to 38.6t.
    • Japan is aiming to cut dysprosium (a heavy rare earth) consumption by 30% over the next two years to around 200tpa.
      • FYI: Dysprosium trades at US$1,420/kg (FOB China) and has risen over 1,100% since 2009.
      • FYI: ARU’s Nolans Bore REE resource includes 0.33% Dy, equalling 4.3% of their potential revenue.

 

Markets:

  • DOW JONES: Up 0.04% (or 5.75 points) to 12,883.95. Markets in the U.S. took negative leads from Europe on the back of a further delay in the Greek government formulating a new debt deal. However, major indexes, including the Dow, clawed back losses to end marginally higher. No significant economic data was released throughout the session. A report by the National Association of Homebuilders claimed that 98 U.S. housing markets are gaining momentum. Over 55% of Dow components rose with Bank of America leading the gainers with a 3.4% rise. United Technologies and HP both gained over 1.7%. The other end saw American Express, McDonalds and Home Depot all falling over 0.6%.
  • FTSE 100: Down 0.24% (or 14.33 points) to 5,875.93. European markets, including the FTSE 100, continued another session noting falls on the back of an absence of a Greek deal. The banking sector, after rising yesterday, was mixed with Barclays and RBS falling while Lloyds jumped 1.5%. Despite a minor gain from Rio, the mining sector was mostly lower with BHP, Fresnillo, Anglo American and Randgold Resources falling. The energy sector was varied. Shell rose 0.2% while BG Group slipped 1.3%.

 

Overnight Summary:

 

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