Aridis Pharmaceuticals' cystic fibrosis drug earns orphan designation in Europe Fri, 19 Jul 2019 15:35:00 +0100 Clinigen Group says acquisitions fueling expected profit growth in its trading update Fri, 19 Jul 2019 15:33:00 +0100 Clinigen Group PLC (LON:CLIN) Head of Investor Relations Matthew Parrish tells Proactive Investors the company's recent trading update indicates that profits at the pharma services company are expected to have soared by more than a third when it reports its full-year results in September.

Gross profits were up 30%, while revenues increased by 19%, and Parrish says this significant growth was driven by M&A with the firm having closed two of its largest ever acquisitions last year.

]]> Avivagen commercializing its OxC-beta livestock product around the world Fri, 19 Jul 2019 15:07:00 +0100 Avivagen Inc (TSXV:VIV) CEO Kym Anthony tells Proactive Investors the Canadian life sciences company has developed and begun commercializing its OxC-beta Livestock product that promotes immune functions in livestock in the the Philippines, Taiwan, New Zealand and Thailand.

Anthony says the product, which has been shown to be effective in replacing the antibiotics added to livestock feeds, will soon be entering the US market.

]]> BevCanna study finds more than 70% of Canadian consumers would buy CBD-infused beverages Fri, 19 Jul 2019 14:25:00 +0100 Namaste Technologies adds two more licensed producers to CannMart cannabis marketplace Fri, 19 Jul 2019 12:45:00 +0100 Midatech Pharma hails positive results from first in man study Fri, 19 Jul 2019 10:42:00 +0100 BevCanna shares interesting results from focused study while announcing, "Anarchist" Fri, 19 Jul 2019 10:26:00 +0100 BevCanna (CSE: BEV) Chief Commercialization Officer Emma Andrews sat down with Steve Darling from Proactive Investors Vancouver to discuss BevCanna's first branded beverage. It's called  Anarchist and is truly made in British Columbia.

Andrews also talked about a very interesting study the company commissioned to focus on product and consumption preferences within the emerging cannabis-infused beverage market.

]]> Integumen lands two new Labskin AI deals with cosmetics giants Fri, 19 Jul 2019 06:33:00 +0100 Namaste Technologies reports 2Q financial results; sees improvements in books Thu, 18 Jul 2019 21:15:00 +0100 Namaste Technologies looks to a brighter future as it aims to be the world’s leading cannabis marketplace Thu, 18 Jul 2019 18:00:00 +0100 VolitionRX brings its Nu.Q cancer-screening platform to China Thu, 18 Jul 2019 15:15:00 +0100 Faron Pharma set to expand Clevegen cancer trial as data continues to impress Thu, 18 Jul 2019 14:38:00 +0100 Faron Pharmacuetical Oy’s (LON:FARN) clinical trial of anti-cancer drug Clevegen continues to deliver encouraging results chief executive Markku Jalkanen told Proactive’s Andrew Scott.

Dosing has now reached the maximum levels with no adverse effects on patients in the study, while significant signs of increased immune activity were noted.

Nine people have now been treated and once the drug’s safety has been established, Faron will increase the number and type of patients.

Colorectal cancer will be the initial focus, but Jalkanen wants to expand into other forms of difficult to treat cancers such as liver, melanoma and pancreatic.

“Once we’ve optimised the dosing we can move into cohort escalation. The first target will be CRC but if there are strong clinical efficacy signs we can expand even further.”

]]> Nemaura taps senior healthcare executive to support global launch of SugarBEAT Thu, 18 Jul 2019 13:49:00 +0100 Agile Therapeutics names industry veteran Dennis P. Reilly as CFO Thu, 18 Jul 2019 12:28:00 +0100 Silence Therapeutics agrees major collaboration with US firm Mallinckrodt Thu, 18 Jul 2019 12:00:00 +0100 Faron Pharmaceuticals makes good start to Clevegen immunotherapy trial Thu, 18 Jul 2019 10:30:00 +0100 Genedrive zips higher as chairman snaps up £10,000 worth of shares Thu, 18 Jul 2019 06:50:00 +0100 Cello Health trumpets first half performance Thu, 18 Jul 2019 06:43:00 +0100 OptiBiotix takes a “significant and exciting step” after inking UK online distribution deal Thu, 18 Jul 2019 06:22:00 +0100 Imagion Biosystems has breast cancer technology qualified as a breakthrough device Thu, 18 Jul 2019 05:49:00 +0100 LexaGene files additional US patents to protect proprietary LX2 genetic analyzer technology Wed, 17 Jul 2019 16:10:00 +0100 LexaGene protects shareholder value by filing another 3 US patents to protect science Wed, 17 Jul 2019 15:45:00 +0100 Lexagene Holding (CVE:LXG-OTCQB:LXXGF) Co-Founder and CEO Dr Jack Regan joined Steve Darling on Skype to bring the news the company has applied for 3 more patents to protect their technology.  Regan discussed what those patents deal with.

Reagan also told Proactive why it is so important for their company, which is pre revenue, to continue to go down the patent road.

]]> Seelos Therapeutics files new drug application for a Sanfilippo syndrome study Wed, 17 Jul 2019 13:00:00 +0100 Medexus Pharmaceuticals posts strong revenue numbers, trend to continue in 2019 Wed, 17 Jul 2019 12:37:00 +0100 Medexus Pharmaceuticals Inc (TSXV:MDP) (OTCQB:PDDPF) CEO Ken d’Entremont tells Proactive Investors the Canadian company posted fiscal fourth-quarter results, with revenue that more than quintupled year-over-year.

d’Entremont says the drug-maker saw revenue jump to $12.7 million, up from $2.1 million in the prior-year quarter due to its recent M&A activity and revenues coming from its pharma products.

]]> Summit Therapeutics flags potential of new antibiotic to treat drug-resistant gonorrhoea Wed, 17 Jul 2019 11:59:00 +0100 Alliance Pharma chips away at debt as revenues soar in first half Wed, 17 Jul 2019 06:45:00 +0100 MaxCyte making "significant progress" commercially and in the clinic Wed, 17 Jul 2019 06:30:00 +0100 MMJ Group focuses on strategic vision to be leading cannabis investment company Wed, 17 Jul 2019 05:34:00 +0100 MMJ Group Holdings Ltd (ASX: MMJ) non-executive director Mike Curtis updates Proactive Investors about its strategic partnership with MMJ operating company Embark Ventures (EBV).

The two companies have combined to create the highest quality investments, earnings and share price return for investors in the cannabis sector.

Mike Curtis has also been appointed to a new position of investment manager for Embark Ventures’ Canadian business.

]]> Exactus finds its new CFO in Kenneth Puzder Tue, 16 Jul 2019 14:36:00 +0100 Supreme Heights eyeing investments in 'exciting' CBD brands across UK and Europe Tue, 16 Jul 2019 13:23:00 +0100 Supreme Heights is a recently launched platform, based in London, which CEO Patrick Morton says is focused on opportunities in the UK and Europe's CBD health and wellness space.

''This marketplace is very fragmented, there's been an explosion of interest in the sector and CBD products .. but there's a lot of confusion about who is doing what''.

''Parent company The Supreme Cannabis Company Inc (TSXV:FIRE) (OTCQX:SPRWF), with its experience in Canada, has an information advantage, a lot of technical expertise and the idea is to download some of that to partner companies we want to invest in here''.

]]> Genedrive making commercial progress Tue, 16 Jul 2019 12:54:00 +0100 Zacks analyst John Vandermosten bullish on Dyadic International's C1 gene expression platform Tue, 16 Jul 2019 12:51:00 +0100 Zacks Small Cap Research Senior Biotechnology Analyst John Vandermosten talks to Proactive Investors about his most recent report on Florida-based biotech company Dyadic International Inc (NASDAQ:DYAI).

Vandermosten says Dyadic's most recent collaboration with VTT, a contract research organization, has extended its contract together, to develop its gene expression platform called C1.

]]> EMIS on track to meet full-year expectations as it streamlines the business Tue, 16 Jul 2019 07:18:00 +0100 Clinigen expects profits to soar by more than a third as acquisitions bed in nicely Tue, 16 Jul 2019 06:50:00 +0100 ReNeuron granted international patents over cell technology Tue, 16 Jul 2019 06:20:00 +0100 AIM billionaire Clinigen is still growing at a rate of knots Tue, 16 Jul 2019 06:15:00 +0100 SkinBioTherapeutics’ new boss has big plans for SkinBiotix Tue, 16 Jul 2019 06:00:00 +0100 Seelos Therapeutics receives funding grant from Team Sanfilippo Foundation Mon, 15 Jul 2019 18:00:00 +0100 Propanc Biopharma gears up to file clinical trial application for its lead anti-cancer therapy PRP Mon, 15 Jul 2019 17:15:00 +0100 ImmunoPrecise inks new agreement to use proprietary screening platform in cancer therapy Mon, 15 Jul 2019 16:16:00 +0100 Seelos Therapeutics receives grant money from research foundation to treat Sanfillipo Syndrome Mon, 15 Jul 2019 15:06:00 +0100 Team San Sanfilippo Foundation representatives told Proactive Investors the nonprofit medical research foundation has contributed grant money towards New York-based biotech Seelos Therapeutics Inc's (NASDAQ:SEEL) upcoming clinical study to treat Sanfillipo Syndrome.

Team San Filippo Foundation Treasurer Danielle O'Connor, along with President Kathleen Buckley and Vice President Patricia Taormino say the nonprofit will fund Seelos which will begin initial patient dosing with its SLS-005 therapy in the third quarter of 2019.

]]> Avalon GloboCare launches first-in-human study of AVA-001 for leukemia, non-Hodgkin lymphoma Mon, 15 Jul 2019 15:04:00 +0100 GlaxoSmithKline edges higher as Zejula passes late-stage ovarian cancer study with flying colours Mon, 15 Jul 2019 07:45:00 +0100 Oncimmune Holdings hails latest Spain deal for Lung cancer detection device Mon, 15 Jul 2019 06:47:00 +0100 Motif Bio PLC requests meeting with US regulator to discuss trial design Mon, 15 Jul 2019 06:24:00 +0100 OptiBiotix continuing to put in place commercial building blocks Mon, 15 Jul 2019 05:30:00 +0100 Imugene to acquire exclusive licence for potentially transformational oncolytic virus technology Mon, 15 Jul 2019 01:46:00 +0100 eWellness Healthcare targeting $7 billion injury-prevention industry via sales, marketing Fri, 12 Jul 2019 14:20:00 +0100 ReNeuron creates role of business development and alliance director as deals pursued Fri, 12 Jul 2019 14:10:00 +0100 Genedrive PLC optimistic on the long-term opportunity for its HCV test Fri, 12 Jul 2019 13:15:00 +0100 Genedrive PLC (LON:GDR) CEO David Budd tells Proactive London's Andrew Scott he remains confident the World Health Organisation will pre-qualify its HCV ID hepatitis C test in the near term despite some delays to the clinical trial.

He adds that the development of an antibiotic-induced hearing loss test with the NHS is ahead of schedule, with in-hospital trials expected to begin in the autumn after CE marking requirements.

]]> ReNeuron makes key business development hire as it looks to build on licensing deals Fri, 12 Jul 2019 12:03:00 +0100 ReNeuron Group PLC's (LON:RENE) Michael Hunt caught up with Proactive London's Andrew Scott following the news this morning that they've appointed a business development director, Nick Adams,  to help them build on the licence deals signed with Chinese giant Fosun Pharma.

Hunt also discusses the recent release of their preliminary results covering the 12 months to the end of March 2019.

One of the year's highlights came in February, when they reported positive initial data from the mid-stage study of its retinitis pigmentosa treatment.

]]> Renalytix AI hails President Trump's new kidney-focused policies Fri, 12 Jul 2019 08:19:00 +0100 Faron Pharma chief "thrilled" at early cancer trial progress Fri, 12 Jul 2019 08:15:00 +0100 US regulators grant orphan drug status to AstraZeneca’s Imfinzi cancer drug Fri, 12 Jul 2019 07:50:00 +0100 Uniphar to begin trading on AIM on 17 July with estimated £279mln market cap Fri, 12 Jul 2019 07:48:00 +0100 Open Orphan sells remaining stake in Integumen Fri, 12 Jul 2019 07:15:00 +0100 LexaGene's CEO takes us through the path to commericalization for unique pathogen detection system Thu, 11 Jul 2019 18:02:00 +0100 Namaste expands patient referral network through new agreement with ARBR Thu, 11 Jul 2019 13:50:00 +0100 Q BioMed on track with commercialization of non-opioid metastatic cancer pain drug Thu, 11 Jul 2019 13:45:00 +0100 Akari Therapeutics expects readouts from two key Phase II studies by year-end Thu, 11 Jul 2019 12:04:00 +0100 Clive Richardson, chief executive of Akari Therapeutics PLC (NASDAQ:AKTX), introduces the business to Proactive London and outlines some of the work they're doing in the area of acute and chronic inflammation.

Discussing their protein Nomacopan, he says it's currently being clinically evaluated in four indications including a severe blistering skin disease and a sight threatening surface of the eye condition.

]]> Benchmark makes breakthrough discovery in combating infection in tilapia Thu, 11 Jul 2019 11:15:00 +0100 Indivior unveils big upgrade as Suboxone digs in against generic competitors Thu, 11 Jul 2019 11:10:00 +0100 Collagen Solutions sees clear path to profitability as commercial development progresses Thu, 11 Jul 2019 10:59:00 +0100 Collagen Solutions PLC's (LON:COS) Jamal Rushdy and Hilary Spence talk Proactive London's Andrew Scott through the firm's results for the year ended 31 March 2019.

Revenues were up 22% in the year at £4.5mln, while its loss narrowed by just under £500,000 to £1.22mln.

The core business was profitable on an underlying earnings (EBITDA) basis in the final quarter.

Operationally, they landed 29 new customers as it grew its North American business by 72%.

]]> Verona Pharma: The AIM-quoted drug developer built on the research of a Glaxo legend Thu, 11 Jul 2019 10:40:00 +0100 Allergy Therapeutics continues to trade ahead of expectations as it makes market share gains Thu, 11 Jul 2019 10:20:00 +0100 Allergy Therapeutics expects earnings to come in ahead of market expectations Thu, 11 Jul 2019 07:25:00 +0100 Allergy Therapeutics PLC's (LON:AGY) CFO Nick Wykeman talks Proactive London's Andrew Scott through their trading update for the year to the end of June 2019.

He says net revenue for the year's expected to be £73.7mln, up 8% on last year, while cash at the end of June was £27.4mln.

That means the group has the funds to fully finance from existing resources the phase III clinical trial of its new short-form grass allergy inoculation due to start next autumn.

]]> ReNeuron enjoys “transformational” year; eye disease trial data due in October Thu, 11 Jul 2019 07:18:00 +0100 OptiBiotix Health hails scientific and commercial progress Thu, 11 Jul 2019 06:43:00 +0100 LexaGene’s LX Analyzer exceeds expectations during testing at major veterinary hospital Wed, 10 Jul 2019 18:20:00 +0100 Nemaura Medical submits De Novo application for SugarBEAT glucose monitor to FDA Wed, 10 Jul 2019 18:00:00 +0100 Genprex updates on positive results for its lung cancer drug Oncoprex Wed, 10 Jul 2019 16:34:00 +0100 Genprex Inc (NASDAQ:GNPX) CEO Rodney Varner updates Proactive Investors on the latest developments with the Texas-based company's non-small cell lung cancer drug, including positive study results done in humanized mice.

Varner says the study of its lead drug Oncoprex at The University of Texas MD Anderson Cancer Center was completed in April after examining the effects of the tumor suppressor gene TUSC2 found in Oncoprex in combination with immunotherapy treatment.

]]> BevCanna takes on the second half of 2019 with robust business objectives Wed, 10 Jul 2019 15:29:00 +0100 VolitionRx Limited awarded an additional $1.4 million in non-dilutive funding Wed, 10 Jul 2019 13:32:00 +0100 LexaGene Holdings reports favorable beta test results on its infectious disease diagnostic in animals Wed, 10 Jul 2019 13:01:00 +0100 LexaGene Holdings Inc (OTCQB: LXXGF)(CVE: LXG) CEO and Founder Dr Jack Regan tells Proactive Investors the biotech company has reported favorable beta test results from its infectious disease diagnostic analyzer in animals at the Massachusetts Veterinary Referral Hospital.

Dr. Regan says the company's test returns results are produced in about one hour versus three or more days.

]]> Tiziana Life Sciences has sights set high as it awaits key clinical data Wed, 10 Jul 2019 11:30:00 +0100 Redx Pharma red letter day as it agrees deal to sell pre-clinical cancer programme for up to US$203mln Wed, 10 Jul 2019 10:54:00 +0100 Redx Pharma's Lisa Anson discusses potential US$203mln cancer deal Wed, 10 Jul 2019 09:33:00 +0100 Redx Pharma PLC's (LON:REDX) Lisa Anson speaks to Proactive London's Andrew Scott after announcing they've sold one of their cancer research programmes for up to US$203mln.

The agreement with Jazz Pharmaceuticals (NASDAQ:JAZZ) has a tiered payment structure and will see Redx receive a upfront sum of US$3.5mln.

]]> GSK’s Dovato single-pill HIV treatment sails through year-long phase III trial Wed, 10 Jul 2019 08:25:00 +0100 Kazia Therapeutics substantial holder Willoughby Capital increases interest to 17.52% Wed, 10 Jul 2019 06:26:00 +0100 Two prominent research firms initiate coverage on Acasti Pharma with Buy rating Tue, 09 Jul 2019 19:41:00 +0100 Medexus Pharmaceuticals 'extremely undervalued,' says Mackie Tue, 09 Jul 2019 18:04:00 +0100 Ozop Surgical inks $7 million Equity Purchase Agreement with GHS Investments Tue, 09 Jul 2019 14:24:00 +0100 PreveCeutical Medical successfully infuses CBD with its Sol-gel pain-relief technology Tue, 09 Jul 2019 14:08:00 +0100 Collagen Solutions financially well set for success Tue, 09 Jul 2019 12:25:00 +0100 Cello Health launches in Germany with new Berlin office, appoints regional directors Tue, 09 Jul 2019 12:05:00 +0100 Latest data shows potential of Summit Therapeutics' DDS-04 antibiotic to treat pneumonia and sepsis Tue, 09 Jul 2019 12:05:00 +0100 Concepta ‘delighted’ as number of myLotus pregnancies moves into double figures Tue, 09 Jul 2019 11:15:00 +0100 Renalytix gushes higher as kidney failure test shines in validation study Tue, 09 Jul 2019 09:15:00 +0100 Dechra Pharmaceuticals revenue growth slows slightly in second half Tue, 09 Jul 2019 08:08:00 +0100 Benchmark CFO to step down Tue, 09 Jul 2019 07:36:00 +0100 Genedrive ‘confident’ of WHO approval for hepatitis C test by autumn Tue, 09 Jul 2019 07:19:00 +0100 THC Global obtains manufacturing licence for Southport cannabis facility Tue, 09 Jul 2019 04:04:00 +0100 THC Global Group Limited (ASX:THC) chief executive officer Ken Charteris talks to Proactive Investors about receiving a medicinal cannabis manufacturing licence at its large Southport manufacturing facility on Queensland's Gold Coast.

The licence is required for the commercial production of medicinal cannabis products as well as undertaking a larger research and development (R&D) program.

“This is a major event for the medical cannabis sector in Australia and allows for formulation of a new generation of medicine,” he says.

]]> THC Global Group’s second manufacturing licence opens door to product development Tue, 09 Jul 2019 01:41:00 +0100 Invex Therapeutics debuts on ASX trading up over 100% Mon, 08 Jul 2019 22:25:00 +0100 Medexus Pharmaceuticals sees fiscal 4Q revenue rocket following successful acquisitions Mon, 08 Jul 2019 20:36:00 +0100 CytoDyn brings on senior science advisor to develop leronlimab to treat HIV PrEP Mon, 08 Jul 2019 18:15:00 +0100 CytoDyn Inc (OTCMKTS:CYDY) CEO Dr Nader Pourhassan tells Proactive Investors the late stage biotechnology company is tapping industry veteran Dr Jonah Sacha as the company’s senior science advisor.

Dr Pourhassan says Dr Sacha, who has not been given an equity stake in the company, will lead the development of the company’s flagship leronlimab (PRO 140) drug as a potential therapy for HIV pre-exposure prophylaxis (PrEP) and cure for HIV.

]]> BevCanna launches new CBD-infused beverage line to hit shelves in October Mon, 08 Jul 2019 15:39:00 +0100 Advanced Oncotherapy: Democratising proton beam therapy Mon, 08 Jul 2019 14:56:00 +0100 Mimi's Rock signs heavyweight deal with boxing champ Lennox Lewis for new line of supplements Mon, 08 Jul 2019 14:36:00 +0100 CytoDyn taps top AIDS research expert Jonah Sacha as senior science advisor Mon, 08 Jul 2019 11:36:00 +0100 Integumen 'tapping into deep vein of pent-up demand' in skincare industry Mon, 08 Jul 2019 10:42:00 +0100 Integumen PLC’s (LON:SKIN) CEO Gerry Brandon tells Proactive London's Andrew Scott revenues soared by over 1,000% in the first half of the year as blue-chip customers continued to sign up for their cosmetics testing services.

Revenues jumped to £655,000 in the six months to the end of June, compared with just £54,000 a year earlier.

]]> Medical cannabis firm Kanabo Research eyes London listing as it nears first revenues Mon, 08 Jul 2019 10:33:00 +0100 Verona Pharma can make real difference to COPD market believes CEO Karlsson Mon, 08 Jul 2019 09:52:00 +0100 Jan-Anders Karlsson says the recent strengthening of its management team has given Verona Pharma  PLC (LON:VRP) the experience to take its respiratory disease treatment Ensifentrine to market.

The COPD drug is undergoing a phase IIb trial with 400 very severe sufferers who use a nebulizer.

Results are expected around the end of the year and Karlsson, the Aim and Nasdaq-listed group’s chief executive, believes Ensifentrine can make a real difference both to people with severe forms of the disease and earlier-stage sufferers.

“It’s a new mechanism, a new compound and a new mode of action,” he tells Proactive’s Andrew Scott.

“We can help people who have nowhere else to go.”

Talks are already ongoing with possible partners about commercialising the drug, though Karlsson believes Verona can market it on its own in the US.

“It’s elsewhere we will need some help,” he says.

]]> Integumen posts 1,200% rise in first-half revenue as big cosmetics companies sign up to use Labskin Mon, 08 Jul 2019 07:32:00 +0100 Star Combo Pharma to acquire natural health, food and beauty products company Bio-E Mon, 08 Jul 2019 06:42:00 +0100 Physiomics technology to be used to analyse Bicycle Therapeutics and Cancer Research UK cancer study Mon, 08 Jul 2019 06:29:00 +0100 Imugene reveals new clinical data for HER-Vaxx vaccine showing cancer-fighting response Mon, 08 Jul 2019 02:39:00 +0100 Imugene Limited releases new clinical data for HER-Vaxx cancer vaccine study Mon, 08 Jul 2019 02:30:00 +0100 Imugene Limited (ASX:IMU) chief executive officer Leslie Chong updates Proactive Investors on new clinical data from the Phase 1b study of its HER-Vaxx cancer vaccine after presenting at the European Society for Medical Oncology World Congress on gastrointestinal cancer in Spain over the weekend.

The data shows the cancer fighting antibody and clinical response rates continue to be positive in patients receiving the optimal biological dose of the vaccine.

Imugene’s HER-Vax is a B-cell peptide cancer vaccine designed to treat tumours that over-express the HER-2/neu receptor such as gastric, breast, ovarian, lung and pancreatic cancers.

Chong said the latest presentation for the vaccine further reinforced ongoing interest among the international oncology community in Imugene’s potentially revolutionary B-cell platform cancer vaccine and clinical development.

]]> Hemispherx Biopharma’s Ampligen treatment aims to disrupt the cancer market Fri, 05 Jul 2019 16:36:00 +0100 Sativa in talks with beverage firms to create CBD drinks in the UK Fri, 05 Jul 2019 14:40:00 +0100 Dyadic extends R&D agreement with VTT Technical Research Centre of Finland Fri, 05 Jul 2019 13:11:00 +0100 Open Orphan PLC - integration on track one week on from IPO Fri, 05 Jul 2019 12:33:00 +0100 Cathal Friel, chief executive of Open Orphan PLC (ORPH), caught up with Proactive London's Andrew Scott a week on from its re-admission to AIM.

Friel reversed Open Orphan into Venn Life Sciences in a £5.7mln all-paper deal and will be targeting what he describes as a fragmented orphan drug services market in Europe.

]]> Oncimmune CEO details multi-million-pound deal with Russia’s leading drugmaker Fri, 05 Jul 2019 10:34:00 +0100 Adam Hill, chief executive of Oncimmune Holdings PLC (LON:ONC), talks Proactive London's Andrew Scott through a multi-million-pound deal they've signed which will see its EarlyCDT Lung cancer detection test used by Russia’s leading drugmaker.

R-Pharm now has the exclusive right to use the EarlyCDT Lung in Russia, as well as in Belarus, Kazakhstan, Armenia and Kyrgyzstan, for the next five years.

]]> Physiomics’ Virtual Tumour software starting to gain traction in world of oncology Fri, 05 Jul 2019 05:30:00 +0100 THC Global Group Ltd granted trading halt by ASX Thu, 04 Jul 2019 22:45:00 +0100 BevCanna's existing infrastructure is a big advantage in cannabis-infused beverage space Thu, 04 Jul 2019 17:22:00 +0100 BevCanna (CSE:BEV) Chief Commercialization Officer Emma Andrews sat down with Steve Darling from Proactive Investors to discuss their company that is looking at the cannabis-infused beverages industry when it becomes legal in Canada in October.

Andrews talked about the advantages BevCanna has with their facility in Osoyoos, BC and what their strategy is for company growth around North America.

]]> Antibe Therapeutics is looking to the future after successful past year Thu, 04 Jul 2019 16:26:00 +0100 Antibe Therapeutics  (CVE:ATE-OTCQB:ATBPF) CEO Dan Legault joined Steve Darling from the Proactive Investors Toronto studio to discuss his recent letter to the shareholders in which he outlined the company’s last year.

Legault also talked about the year ahead and the prep work they are doing for a major meeting with the U.S. Food and Drug Administration.

]]> ValiRx readying itself for VAL301 clinical trials Thu, 04 Jul 2019 11:30:00 +0100 Russian drug giant strikes multi-million-pound deal to use Oncimmune’s EarlyCDT Lung cancer test Thu, 04 Jul 2019 11:00:00 +0100 Intelligent Ultrasound makes loud noises after winning deal with major ultrasound OEM Thu, 04 Jul 2019 09:05:00 +0100 Kazia Therapeutics substantial shareholder lifts interest to 17.4% Thu, 04 Jul 2019 08:13:00 +0100 Immupharma chairman details £2.66mln financing and open label extension study Thu, 04 Jul 2019 07:29:00 +0100 ImmuPharma PLC’s (LON:IMM) chairman Tim McCarthy caught up with Proactive London's Andrew Scott to discuss the results of a follow-up study which was designed to evaluate Lupuzor’s safety and tolerability.

McCarthy says the six month extension study confirmed its outstanding and robust safety profile.

He also details the subscription agreement with institutional investor, Lanstead Capital, which brought in around £2.66mln.

]]> Cellmid's Japanese shopping channel sale sets revenue record of $1.14 million Thu, 04 Jul 2019 07:01:00 +0100 SkinBioTherapeutics looks to make progress with commercial talks as new CEO takes charge Thu, 04 Jul 2019 06:35:00 +0100 eWellness Healthcare doubles down on $4 billion North American musculoskeletal treatment market Wed, 03 Jul 2019 13:50:00 +0100 Sativa delighted with Cenkos appointment as it opens CBD wellness centre Wed, 03 Jul 2019 11:41:00 +0100 Sativa Group PLC's (LON:SATI) Geremy Thomas caught up with Proactive London's Andrew Scott following the opening of their first cannabidiol (CBD) wellness retail outlet in Bath at the weekend.

The Goodbody Wellness store was launched on Friday evening by Crispin Blunt, MP for Reigate and co-chair of the All Party Parliamentary Group for Drug Policy Reform.

Sativa's also recently taken on Cenkos Securities as its Corporate Adviser and broker. 

Thomas says the appointment is in line with their progression from, in only 15 months, being the UK's first listed medicinal cannabis investment vehicle to its transition to a fully operational seed-to-consumer trading business.

]]> Midatech Pharma soars following “encouraging” dose data in MTX110 study Wed, 03 Jul 2019 09:24:00 +0100 OptiBiotix Health inks deal in Japan to develop cardiovascular health supplements Wed, 03 Jul 2019 06:38:00 +0100 Paradigm Biopharmaceuticals director acquires 140,000 shares valued at almost $170,000 Wed, 03 Jul 2019 06:04:00 +0100 CytoDyn anticipates near-term revenue from cell diagnostic company IncellDX Tue, 02 Jul 2019 18:00:00 +0100 CytoDyn Inc (OTCMKTS:CYDY) CEO Dr Nader Pourhassan tells Proactive Investors the biotech is anticipating revenue as early as August after inking a diagnostic license and supply agreement with cell diagnostic company IncellDX Inc for the use of its PA-14 antibody.

Dr Pourhassan also addressed off-topic questions on timelines for its cancer therapy to treat metastatic triple-negative breast cancer, as well as its recent tender offer.

]]> Dyadic International board member highlights upcoming milestones Tue, 02 Jul 2019 14:15:00 +0100 Dyadic International Inc (NASDAQ:DYAI) board member Dr Arin Bose, a 34-year Pfizer (NYSE:PFE) veteran, talks to Proactive Investors about what went into choosing Dyadic's research partners VTT Technical Research Centre of Finland Ltd and Spain-based biotech BDI Holdings.

Dr Bose also highlighted upcoming milestones for the biotechnology platform company. To see more of Dr Bose's background, please click here


]]> Futura Medical PLC - Elevator Pitch Tue, 02 Jul 2019 07:57:00 +0100 Futura Medical PLC (LON:FUM) chief executive James Barder pitches the company to investors.

For more information visit

]]> OptiBiotix Health welcomes Steve Prescott as CEO of its ProBiotix Health division Mon, 01 Jul 2019 13:18:00 +0100 Proactive London chats to Steve Prescott as he begins in his new role as CEO of OptiBiotix Health PLC's (LON:OPTI) wholly-owned subsidiary, ProBiotix Health.

Prescott, who will be based in the USA, was previously vice president of Marketing and Applications at Probi AB, a Swedish probiotic company that had annualised sales of 604mln Swedish krona in 2018.

]]> Kanabo Research sets sights on London listing Mon, 01 Jul 2019 11:29:00 +0100 Israeli-based Kanabo Research could become the first cannabis firm to list on the main market of the London Stock Exchange.
The company, which has developed a vaporiser for the inhalation of medical cannabis, is planning to list through a reverse takeover by cash shell Spinnaker Opportunities.
Spinnaker has signed a head of terms to buy Kanabo and the deal is waiting on UK approval.
Chief executive Avihu Tamir sat down with Proactive’s Andrew Scott to talk about the deal and Kanabo's move towards the commercialisation of its VapePod device.

]]> Oncimmune signs exclusive distribution deal in US for its lung cancer test Mon, 01 Jul 2019 09:17:00 +0100 Adam Hill, chief executive of diagnostics group Oncimmune PLC (LON:ONC), details their exclusive distribution agreement in the US for its early stage lung cancer test.

The deal with Biodesix is worth US$28mln over five years and will also see the two companies work together to develop further the EarlyCDT test in both the US and elsewhere.

]]> Propanc Biopharma boosts its patent portfolio for its anti-cancer therapy Fri, 28 Jun 2019 19:20:00 +0100 Propanc Biopharma Inc (OTCMTKS:PPCBD) CEO James Nathanielsz tells Proactive Investors the company has boosted its intellectual property portfolio for its anti-cancer technology currently in development.

The biopharmaceutical company’s portfolio now has 65 patents either in force or pending in most major countries around the globe. Nathanielsz also updated investors on the reasoning behind the company's recent reverse stock split.

]]> Orgenesis gets Orphan Drug designation to treat severe diabetes Fri, 28 Jun 2019 16:40:00 +0100 Orgenesis Inc (NASDAQ:ORGS) Chief Scientific Officer Dr. Sarah Ferber tells Proactive Investors the FDA has granted Orphan Drug designation to its Autologous Insulin Producing (AIP) cells as a cell-replacement therapy for the treatment of severe diabetes following a pancreatectomy, a surgical procedure performed to treat chronic pancreatitis.

According to Dr. Ferber, the Maryland-based biopharmaceutical company’s Israeli subsidiary, Orgenesis Ltd, has already gained approval to analyze the safety of targeting insulin-dependent diabetes.

]]> Appili Therapeutics is well funded and working to combat infectious diseases Fri, 28 Jun 2019 11:11:00 +0100 Appili Therapeutics (CVE:APLI) CEO Kevin Sullivan joined Steve Darling from Proactive Investors in Toronto to talk about the company that is advancing infectious disease drug development programs to provide solutions to patients and doctors.

Sullivan talked about the currents drugs in their pipeline and the work they are doing with the U.S. military.

]]> Namaste’s CannMart platform adds True Leaf's hemp based dog treats to platform Thu, 27 Jun 2019 16:18:00 +0100 True Leaf (CSE:MJ) Executive Vice President Tenzin Khangsar and Namaste (CVE:N} Interim CEO Meni Morim joined Steve Darling from Proactive Investors in Toronto to bringing news Namaste is putting True Leaf’s pet products in their sales platform CannMart

Both Morim and Khangsar talk about the relationship moving forward and the charity element they are doing to help launch it.

]]> Benchmark Holdings well placed to deliver on its five-year strategy Thu, 27 Jun 2019 15:01:00 +0100 Benchmark Holdings PLC's (LON:BMK) Malcolm Pye and Mark Plampin talk through the firm's results for the six months to 31 March 2019.

They say they're on track to meet their strategy goals after navigating what's been a challenging shrimp market to deliver a 25% rise in first-half earnings.

They add that the company's started to see the benefits from its investments, including the opening of a new facility in Salten, Norway, which has been well-received by customers.

]]> Shareholders approve Venn Life Sciences PLC / Open Orphan merger Thu, 27 Jun 2019 12:03:00 +0100 Cathal Friel, chief executive of Venn Life Sciences Holdings plc (LON:VENN) and founder of Open Orphan spoke to Proactive London's Andrew Scott following a general meeting to approve the merger of the two companies.

Friel, a co-founder of Amryt Pharma PLC (LON:AMYT), former chairman of Fastnet Oil & Gas for five years, and now chief executive of Venn, set up Open Orphan two years ago.

He and his team want to grow the company into a full-service consultancy for orphan and rare disease drugs.

]]> Seelos Therapeutics acquires gene therapy program license to treat Parkinson's Disease Thu, 27 Jun 2019 11:50:00 +0100 Seelos Therapeutics Inc (NASDAQ: SEEL) CEO Dr. Raj Mehra tells Proactive Investors the clinical-stage biopharma has acquired the exclusive worldwide licensing of a gene therapy program from Duke University.

Seelos head of R&D Dr. Tim Whitaker and Dr. Jeffrey Kordower of Rush University Medical Center are working together to move the program forward.

]]> Integumen 'running to catch up' with demand after 'transformational' year Thu, 27 Jun 2019 09:51:00 +0100 Integumen PLC’s (LON:SKIN) Gerry Brandon caught up with Proactive London's Andrew Scott to chat through the firm's 2018 numbers.

The results are the first since Brandon took over a year ago.

The company's switched its focus from sales of low-margin personal care products to Labskin – a lab-grown skin which cosmetic companies can use to test their latest products in a real-world setting.

]]> Acasti Pharma gets new Chinese patent that paves the way for its heart disease therapy Wed, 26 Jun 2019 16:58:00 +0100 Acasti Pharma Inc (NASDAQ:ACST) (CVE:ACST) Co-Founder and COO Pierre Lemieux tells Proactive Investors it was awarded a second patent in China covering its flagship drug candidate CaPre, an omega-3 phospholipid.

Lemieux says currently in China there is no approved drug like CaPre, where he says obesity and diabetes are problematic.

]]> Tiziana's Foralumab can be biggest disruptor to medical industry 'in a decade' Wed, 26 Jun 2019 12:39:00 +0100 Chairman and founder of Tiziana Life Sciences plc (LON:TILS) Gabriele Cerrone introduces Proactive London's Andrew Scott to their two lead programmes - one focused on liver cancer and the other on autoimmune diseases.

Tiziana's recently completed two critical clinical trials with data expected in the coming weeks.

Last November it dual-listed on NASDAQ and in the process raised £3.42mln.

]]> Phoenix Life Sciences International signs 75-year 5,000 acre lease to grow cannabis in Vanuatu Tue, 25 Jun 2019 17:54:00 +0100 Phoenix Life Sciences International Limited (OTCMKTS:PLSI) Matthew Bishop met with Proactive Investors at the MjMicro Cap Conference in New York. Phoenix Life Sciences uses organically produced cannabis to target and treat a variety of disorders including diabetes, pain, cancers, and more.

]]> CytoDyn to meet with FDA to discuss prostate cancer-detection test Mon, 24 Jun 2019 17:22:00 +0100 CytoDyn Inc (OTCMKTS:CYDY) CEO Nader Pourhassan revealed Monday that the FDA has granted company executives a meeting in August this year to discuss the company’s 510(k) application for clearance of its ProstaGene Prognostic Test.

What's more, Dr Pourhassan talked about a second tender offer filed Monday that will bring in nearly $18 million in funds.

]]> CytoDyn to meet with FDA on prostate-cancer test, applies HIV screening test to monotherapy trial Fri, 21 Jun 2019 17:12:00 +0100 CytoDyn Inc (OTCMKTS:CYDY) CEO Nader Pourhassan tells Proactive Investors it has requested a meeting with the Food and Drug Administration to discuss its application for clearance of its prostate cancer-detection test.

Dr Pourhassan also indicated the cell diagnostic company IncellDx has successfully developed a screening test to assess whether a HIV patient will respond effectively to leronlimab as a single treatment, which CytoDyn is using in its monotherapy trial.

]]> Vulpes Life Sciences Fund's Martin Diggle discusses Scancell investment Fri, 21 Jun 2019 09:21:00 +0100 Martin Diggle, co-founder of Vulpes Investment Management which manages the Vulpes Life Sciences Fund, discusses their recent investment into Scancell Holdings PLC (LON:SCLP).

After buying 77.56mln new shares at a price of 5p per share, which was a slight discount to the 5.35p closing price the previous day, the Vulpes Life Sciences Fund will have a 16.67% stake in the company.

]]> Hemispherx Biopharma makes progress with Phase 2 clinical trial to treat ovarian cancer Thu, 20 Jun 2019 14:32:00 +0100 Hemispherx Biopharma Inc (NYSEAMERICAN:HEB) CEO Thomas Equels tells Proactive Investors the biopharma has taken a key step forward in its Phase 2 clinical trial after it announced that the first patient has been treated with its flagship drug Ampligen.

Equels says this study looks at the effectiveness of Ampligen in combination with the drug Pembrolizumab at treating ovarian cancer.

]]> Venn Life Sciences to put Open Orphan merger to shareholders next Thursday Thu, 20 Jun 2019 08:27:00 +0100 Cathal Friel, chief executive of Venn Life Sciences Holdings plc (LON:VENN) and founder of Open Orphan, updates Proactive London's Andrew Scott on the proposed merger of the two companies.

Friel is reversing Open Orphan into Venn in a £5.7mln all-paper deal to bring to the market his platform that helps pharma companies commercialise their products in Europe.

]]> Milestone for Futura Medical as it completes recruitment for phase III erectile dysfunction gel Wed, 19 Jun 2019 07:37:00 +0100 Futura Medical PLC's (LON:FUM) Ken James discusses the completion of recruitment for the first European phase III clinical trial of their fast-acting treatment for erectile dysfunction (ED).

The headline data from the study is expected by the end of the year.

]]> LBT Innovations raises capital and generates sales leads in the US Wed, 19 Jun 2019 03:05:00 +0100 LBT Innovations Limited (ASX:LBT) chief executive officer Brent Barnes updates Proactive Investors on developments to forge ahead with product sales of its unique APAS Independence technology. 
The ground-breaking medical technology company has also raised $5 million on the back of FDA clearance, which will enable the execution of commercialisation plans.
Barnes will attend this week's American Society of Microbiology Microbe meeting in San Francisco to further showcase the APAS Independence to the US and global markets.
]]> CytoDyn CEO talks about latest HIV trial featuring its flagship drug, leronlimab Mon, 17 Jun 2019 17:11:00 +0100 CytoDyn Inc CEO Dr. Nader Pourhassan tells Proactive Investors the Washington-based biotech has teaming up with the Thai Red Cross AIDS Research Centre (TRCARC) to conduct a pre-exposure prophylaxis clinical trial of leronlimab (PRO 140) in subjects at high risk of HIV infection.

The CEO outlines differences between CytoDyn's leronlimab and the only product that is FDA approved to prevent HIV, Gilead Sciences' (NASDAQ:GILD) Truvada.

]]> Dyadic International to ring Nasdaq closing bell (Part 2 of 2) Mon, 17 Jun 2019 16:55:00 +0100 Dyadic International Inc CEO Mark Emalfarb and Chief Accounting Officer Ping Rawson tell Proactive Investors in a two-part video interview series the Florida-based biotechnology company will be ringing the Nasdaq closing bell at 4pm EST today.

Emalfarb says this landmark occasion marks Dyadic's 40th year anniversary, and speaks to the progress the company has made thus far, while Rawson talks through the shifting financial regulations that biotech has experienced since up-listing.

]]> Dyadic International to ring Nasdaq closing bell (Part 1 of 2) Mon, 17 Jun 2019 16:18:00 +0100 Dyadic International Inc (NASDAQ:DYAI) Chief Commercial Officer Matthew Jones and Chief Scientific Officer Dr. Ronen Tchelet tell Proactive Investors in a two-part video interview that the Florida-based biotechnology company will be ringing Nasdaq's closing bell at 4pm EDT today.

Jones comments on Dyadic's ongoing business development opportunities, when Dr. Tchelet speaks broadly on the progress of recent collaborations.

]]> WideCell's David Sefton clarifies financing agreement with institutional investor Mon, 17 Jun 2019 13:37:00 +0100 WideCells Group Plc (LON:WDC) executive chairman David Sefton updates Proactive London on their financing agreement with the European High Growth Opportunities Securitization Fund.

He says all bonds held by the fund will or have been converted into shares, and he's expecting confirmation of it in the coming days.

]]> Avacta's Alastair Smith updates on selection of cancer candidate to take into clinic Mon, 17 Jun 2019 13:20:00 +0100 Avacta Group PLC's (LON:AVCT) Alastair Smith tells Proactive London's Andrew Scott they've selected the cancer drug candidate they'll be taking into first-in-human clinical trials.

It's an important step for the company as it means they remain on track to submit an investigational new drug/clinical trial application by the end of next year.

]]> Seelos Therapeutics to meet with FDA on its proof-of-concept ketamine study to treat depression Fri, 14 Jun 2019 18:45:00 +0100 Seelos Therapeutics Inc (NASDAQ:SEEL) CEO Raj Mehra tells Proactive Investors the New York-based biopharma is scheduled to meet with the FDA to design a proof-of-concept study linked to its intranasal ketamine depression treatment aimed at patients with post-traumatic stress disorder (PTSD) at imminent risk of suicide.

Dr Mehra also commented on the positives from President Donald Trump's recent announcement that he would he would be willing to help the Department of Veteran Affairs with negotiating the price of a new Johnson & Johnson (NYSE:JNJ) ketamine depression drug.

]]> Venn Life Sciences eyes first acquisition target after £4.5mln raise Fri, 14 Jun 2019 10:35:00 +0100 Cathal Friel, chief executive of Venn Life Sciences Holdings plc (LON:VENN) and founder of Open Orphan, speaks to Proactive London's Andrew Scott after successfully raising £4.5mln in a share placing.

Friel is reversing Open Orphan into Venn in a £5.7mln all-paper deal to bring to the market his platform that helps pharma companies commercialise their products in Europe.

Friel and his team want to grow the company into a full-service consultancy for orphan and rare disease drugs.

]]> Buds & Duds: Cannabis stocks trip and stumble, HEXO sinks on 3Q earnings Thu, 13 Jun 2019 20:09:00 +0100 The duds are HEXO Corporation (NYSEAMERICAN:HEXO) (TSE:HEXO), MariMed Inc (OTCMKTS:MRMD). The buds are Namaste Technologies Inc (CSE:N) (OTCMKTS: NXTTF), High Hampton Holdings (CSE:HC) (OTCMKTS:HHPHF). 

]]> Summit Therapeutics 'taking leadership role' in development of new antibiotics Thu, 13 Jun 2019 12:49:00 +0100 Summit Therapeutics PLC's (LON:SUMM) Dr Richard Pye speaks to Proactive London's Andrew Scott following a first quarter update on operational progress across the portfolio.

Summit's currently developing three flagship treatments; Ridinilazole, designed to treat Clostridium difficile which can cause diarrhoea, SMT-571 for Gonorrhoea and DDS-04 which is aiming to treat Enterobacteriaceae, a family of bacteria that includes salmonella.

]]> Redx Pharma confirms start of phase I study of lead drug RXC004 Thu, 13 Jun 2019 12:13:00 +0100 Redx Pharma Plc's (LON:REDX) Lisa Anson speaks to Proactive London's Andrew Scott following the release of their interims to the end of March 2019.

Initial results from a phase I study of its lead drug, RXC004, a porcupine inhibitor aimed at treating cancer driven by the Wnt pathway, are expected in the second half of the year, with the full read-out expected in early 2020.

Redx has also secured short-term funding with a loan of up to £2.5mln and is in talks to find a longer-term financing solution.

]]> Scancell welcomes strategic new investor Vulpes Life Sciences Fund Thu, 13 Jun 2019 10:53:00 +0100 Scancell Holdings PLC (LON:SCLP) CEO Cliff Holloway caught up with Proactive London's Andrew Scott following the announcement they'd raised £3.88mln via a placing with a single new investor to help fund the progression of its lead cancer asset into clinical trials.

The Vulpes Life Sciences Fund will now have a 16.67% stake in the company when the shares are issued next Monday.

]]> THC Global granted manufacturing licence by Australian Office of Drug Control Thu, 13 Jun 2019 00:59:00 +0100 THC Global Group Ltd (ASX:THC) chief executive officer Ken Charteris updates Proactive Investors on the manufacturing licence granted to the cannabis company by the Australian Office of Drug Control.
"It's a significnat milestone ... we now are a farm-to-pharma process which means that we grow, and we actually then process to a complete medicine," says Charteris. 
He continues, "This is a great position for us to be in and we're the only company presently that holds the whole suite and also have their own breeds and processing. 
"The bigger news for us is that we're a global company - this now allows us to produce and formulate our own brands with our own products."
]]> CytoDyn CEO responds to share price rise as investors get excited about leronlimab Wed, 12 Jun 2019 18:57:00 +0100 CytoDyn Inc (OTCMKTS:CYDY) CEO Nader Pourhassan tells Proactive Investors he's optimistic about results the company has seen in pre-clinical studies relating to a liver disease known as NASH. However, he's not sure how much CymaBay Therapeutics Inc's (NASDAQ:CBAY) disappointing mid-stage trial results in NASH contributed to pushing up CytoDyn's stock.

Pourhassan also touches on other developments within the Washington-based company including timelines to submit its BLA and recent fundraising efforts.

]]> Humanigen teams up with Kite to treat a type of lymphoma cancer Mon, 10 Jun 2019 18:13:00 +0100 Humanigen Inc (OTCMKTS:HGEN) CEO Cameron Durrant tells Proactive Investors the California-based biotech has forged a clinical collaboration with Gilead Sciences Inc's (NASDAQ:GILD) subsidiary Kite, to study its therapy lenzilumab, with Kite's drug called Yescarta in patients suffering with certain forms of lymphoma cancer.

Durrant says he expects this Phase 1/2 study to begin by the end of 2019.

]]> Buds & Duds: Namaste Technologies shares rise as management cease trade order lifted Fri, 07 Jun 2019 18:40:00 +0100 Buds today are Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF), Harvest One Cannabis Inc (CVE:HVT) (OTCMKTS:HRVOF). Duds are Sunniva Inc (CSE:SNN) (OTCQB:SNNVF). 

]]> CytoDyn to meet with FDA to finalize next steps on leronlimab drug trial for HIV Fri, 07 Jun 2019 16:41:00 +0100 CytoDyn Inc (OTCMKTS:CYDY) CEO Nader Pourhassan tells Proactive Investors the FDA has requested an in-person meeting to discuss and potentially finalize the biotechnology company’s protocol for a trial of flagship drug leronlimab as a single treatment for HIV patients.

Dr Pourhassan also addresses the company's stagnant share price, and whether this poses a risk.

]]> Avalon GloboCare to produce its first series of clinical-grade exosome products by end of 2019 Thu, 06 Jun 2019 16:41:00 +0100 Avalon GloboCare Corp (NASDAQ:AVCO) CEO Dr. David Jin tells Proactive Investors that the biotech company will be producing its first series of clinical grade exosome products, used for skincare and hair growth, by the second half of 2019.

Dr. Jin adds that the New Jersey-based company is collaborating with the Massachusetts Institute of Technology to develop an AI-enhanced protein design technology, which will allow the company to innovate in new cell therapy techniques.

]]> Orgenesis explains the impacts of it's cell therapy development and manufacturing tech Wed, 05 Jun 2019 20:26:00 +0100 Orgenesis Inc.(NASDAQ:ORGS) CEO Vered Caplan meets Steve Darling of Proactive Investors at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA.

]]> Todos Medical is launching testing in Europe and Israel, in the next six to eight months Wed, 05 Jun 2019 20:20:00 +0100 Todos Medical (OTCMKTS:TOMDF) CEO Herman Weiss sits down with Proactive Investors' Steve Darling at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. The Israel based, cancer in-vitro-diagnostic company focuses on creating a methodology for cancer detection tests that are accessible, affordable, and accurate.

]]> Cannabics Pharmaceuticals opens up new lab and prepares to accept fresh biopsies Wed, 05 Jun 2019 19:03:00 +0100 Cannabics Pharmaceuticals Inc (OTCQB:CNBX) CEO Eyal Barad joined Proactive Investors' Steve Darling at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. The biotechnology company develops pharmaceuticals focusing on cancer research and focuses on the development of therapies and tools aimed at diverse ailments.

]]> Antibe Therapeutics targets opioids with post-op pain drug Wed, 05 Jun 2019 15:49:00 +0100 Antibe Therapeutics (OTCQB: ATBPF) CEO Daniel Legault chats with Proactive Investors' Steve Darling at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. The healthcare company focuses on the development of patents and out-licensing of improved compounds of existing drugs.

]]> LexaGene moves forward with its faster, easier pathogen detection Wed, 05 Jun 2019 12:32:00 +0100 LexaGene Holdings (CVE:LXG) (OTCQB:LXXGF) Co-founder and CEO Dr. Jack Regan joined Katie Lewis from the Vancouver studio of Proactive Investors to discuss the firm's recent announcement.

LexaGene's key feature is the open access nature of the instrument that allows end users to customize the instrument to target any pathogen of interest. The process is as simple as collecting a sample, loading it into the instrument using a preparation cartridge and pressing “go.” The instrument is able to process multiple samples at a time, returning results within around one hour.forward with its faster, easier pathogen detection

]]> Analyst sees 'clear rationale' for ImmuPharma to move forward with Lupuzor Wed, 05 Jun 2019 11:46:00 +0100 The Life Sciences Division's Dr Navid Malik offers up his thoughts and outlook on ImmuPharma PLC (LON:IMM) and its flagship drug Lupuzor - a treatment for the autoimmune disease Lupus.

Dr Malik says despite not meeting its primary end point in a recent phase III trial, the response rate overall compares well to a number of other pivotal studies and has an excellent safety profile.

Worldwide, there are 5mln people with Lupus, 1.5mln of them in the US, Europe and Japan.

]]> Benchmark Holdings looks to new product launches after good first half performance Wed, 05 Jun 2019 08:10:00 +0100 Benchmark Holdings PLC's (LON:BMK) CEO Malcolm Pye talks Proactive London's Andrew Scott through the group's first half trading update.

He's expecting full-year results to meet market estimates after delivering a 23% rise in adjusted earnings (EBITDA) in the first six months.

Growth in the genetics, animal health and knowledge services businesses offset lower revenue in the advanced nutrition division, which was hit by weakness in the global shrimp market

]]> Tauriga Sciences having success with their legal CBD chewing gum Wed, 05 Jun 2019 03:39:00 +0100 Tauriga Sciences (OTCMKTS: TAUG) Chairman and CEO Seth Shaw joined Steve Darling from Proactive Investors at the LD Micro event in Los Angeles to talk about their CBD chewing gum that just launched in New York City. Shaw also chatted about other products the company is expecting to launch this year. 

]]> CytoDyn shows value of company lies in their research and technology Wed, 05 Jun 2019 03:19:00 +0100 CytoDyn (OTCMKTS:CYDY) President and CEO Nader Pourhassan and Chairman and Chief Medical Officer Dr Richard Pestell joined Proactive Investors' Steve Darling during the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA.  Both talked about the company and where they are in the research on HIV and Triple Negative Breast Cancer.

]]> AdAlta capitalises on $5-million raising to progress drug to treat fibrotic diseases Wed, 05 Jun 2019 01:44:00 +0100 AdAlta Ltd (ASX:1AD) chief executive officer Sam Cobb updates Proactive Investors on the health-focused company's recent $5 million raising to progress the development of its key AD-214 drug for the treatment of idiopathic pulmonary fibrosis.
Cobb says recent animal trials will soon progress to human testing in Australia.
The company aims to start phase-one studies in January 2020.
]]> Wize Pharma Inc shows it's LO2A Eye Drops, which treat Dry Eye syndrome Tue, 04 Jun 2019 20:48:00 +0100 Wize Pharma Inc (OTCMKTS:WIZP) Chairman Noam Danenberg joins Steve Darling of Proactive Investors at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. Wize Pharma is a clinical-stage biopharmaceutical company. The Israeli company is focused on the treatment of ophthalmic disorders.

]]> StemoniX explains how they can create human micro-organs and the life-changing impact it will have Tue, 04 Jun 2019 18:10:00 +0100 Stemonix CEO Ping Yeh meets Steve Darling of Proactive Investors at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. The company creates stem-cell derived human tissue for custom drug discovery and personalized medicine.

]]> Emerald Bioscience Inc has a unique multi-cannabinoid platform addressing ocular diseases Tue, 04 Jun 2019 17:04:00 +0100 Emerald Bioscience Inc (OTCMKTS:EMBI) CEO and CMO Brian Murphy joins Steve Darling of Proactive Investors at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. The life science biopharmaceutical company is engaged in the discovery, development, and the commercialization of cannabinoid-based therapeutics.

]]> Acasti Pharma eyes phase III success with double data readout towards year-end Tue, 04 Jun 2019 15:18:00 +0100 Acasti Pharma Inc (NASDAQ:ACST) (CVE:ACST) CEO Jan D'Alvise speaks to Proactive's Andrew Scott after announcing their second Phase III trial for the drug CaPre has reached 100% randomisation - which means the last patient's been accepted into the trial and randomised either onto the drug or a placebo.

The milestone means the firm remains on track to report topline results towards the end of the year.

CaPre to treat hypertriglyceridemia (high levels of triglycerides in the blood) which is known to contribute to heart disease.

]]> WideCells team detail significant first contract for new Iconic Labs business Tue, 04 Jun 2019 12:26:00 +0100 WideCells Group PLC's (LON:WDC) David Sefton and John Quinlan tell Proactive London's Andrew Scott they're expecting to book initial revenues in the first year from the deal of more than £1mln and the contract, currently agreed in principle, offers the potential for material increases.

It's with a UK-based financial services business on a long-term retainer basis.

Sefton adds that the completion of the restructuring is now very close and will be followed by an official proposal to change the company’s name to Iconic Labs PLC.

]]> Proactive meets new director of OptiBiotix Health's prebiotics division Tue, 04 Jun 2019 10:35:00 +0100 Fred Narbel, the new managing director of OptiBiotix Health PLC's (LON:OPTI) prebiotics division, chats to Proactive London's Andrew Scott.

The division's home to the group's SweetBiotix, OptiBiotic and microbiome modulating technology platforms.

Narbel joins from Canadian dairy company Agropur, which recorded sales of almost US$6.5bn last year.

]]> Oncimmune reports successful large-scale lung cancer study Tue, 04 Jun 2019 08:00:00 +0100 Oncimmune Holdings PLC (LON:ONC) chief executive Dr Adam Hill speaks to Proactive London as the firm announced the positive results of a large-scale lung cancer study.

The company’s EarlyCDT-Lung test was used alongside x-rays and CT scans to check for the disease.

A total of 12,210 people in Scotland were monitored for two years as part of the Early Cancer Detection Test in what is believed to be the largest randomised controlled assessment of its kind.

]]> Sareum's Tim Mitchell upbeat after 'very successful' early-stage cancer trial Mon, 03 Jun 2019 14:56:00 +0100 Sareum Holdings PLC (LON:SAR) chief executive Tim Mitchell caught up with Proactive London's Andrew Scott to discuss some preliminary efficacy data released on a drug that Sareum helped to develop.

Of particular note was the impact SRA737 had in combination with a common chemotherapy called gemcitabine in patients with anogenital cancer ... ''the trial's been very, very successful indeed'', Mitchell says.

The data's been taken from a phase I/II clinical trial undertaken by Sierra Oncology, which licensed the drug candidate in a deal worth up to US$328.5mln plus royalties.

]]> BioPorto submits kidney-injury test in children to FDA Mon, 03 Jun 2019 12:56:00 +0100 BioPorto A/S (CPH:BIOPOR) CEO Peter Eriksen and US President Amy Winslow tell Proactive Investors the Danish company has submitted an application to FDA for approval of its proprietary NGAL Test that assesses the risk of acute kidney injury in children under 21.

Winslow adds color to the way in which the company will commercialize the diagnostic pending approval.

]]> Agile Therapeutics gets FDA new drug application acceptance for its contraceptive patch Fri, 31 May 2019 13:03:00 +0100 Agile Therapeutics Inc (NASDAQ:AGRX) CEO Al Altomari tells Proactive Investors the FDA has accepted for review its new drug application resubmission for Twirla, its low-dose combined hormonal contraceptive patch.

Altomari says this was a big day for the company, and looks forward to the assigned Prescription Drug User Fee Act (PDUFA) goal date of November 16, 2019.

]]> Buds & Duds: Cannabis stocks flatten out; Namaste shares climb in anticipation of financial results Thu, 30 May 2019 21:58:00 +0100 Buds today are Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF), Canntab Therapeutics Ltd (CSE:PILL.CN) (OTCMKTS:CTABF). The duds are MedMen Enterprises Inc (CSE:MMEN) (OTCQX:MMNFF), Isodiol International (CSE:ISOL) (OTCMKTS:ISOLF). 

]]> Dyadic International Chairman highlights recent Serum Institute of India collaboration Thu, 30 May 2019 13:00:00 +0100 Dyadic International Inc (NASDAQ:DYAI) Chairman Michael Tarnok tells Proactive Investors he's been very impressed with the nine collaborations Dyadic has formed in 2018.

In particular, the former Pfizer (NYSE:PFE) sales and marketing executive focuses on Dyadic's most recently announced collaboration with vaccines and immuno-biologics manufacturer Serum Institute of India.

]]> 'Watershed moment' for Nuformix as it reports positive results for lead chemo drug Thu, 30 May 2019 12:03:00 +0100 Dan Gooding, chief executive of Nuformix (LON:NFX) caught up with Proactive's Andrew Scott after reporting positive results in its clinical study for the company's lead programme NXP001.

Gooding says the drug – a treatment for chemotherapy-induced nausea – achieved bioequivalence to Merck's EMEND drug.

]]> Recce Pharmaceuticals on track to develop synthetic antibiotics targeting superbugs Wed, 29 May 2019 05:52:00 +0100 Recce Pharmaceuticals Ltd (ASX:RCE) executive director James Graham tells Proactive Investors the company is on the verge of developing a new class of synthetic antibiotics to counter antibiotic resistance.
As fears of superbugs may one day reach pandemic proportions, Graham says there hasn’t been a new class of antibiotics developed in decades.
Having received some global recognition, Recce fast-tracked regulatory review and has completed animal trials, with human studies soon to come, in Australia.
]]> Buds & Duds: Cannabis stocks nudge up as Namaste shares continue to rise Tue, 28 May 2019 20:27:00 +0100 Buds of the day are Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF), True Leaf Brands Inc (CSE:MJ) (OTCQMKTS:TRLFF) (FSE:TLA). The duds are Aphria Inc (TSE:APHA) (NYSE:APHA), Aleafia Health Inc (TSE:ALEF) (OTCMKTS:ALEAF). 

]]> HC Wainright analyst reiterates $9 price target on Catalyst Pharmaceuticals Tue, 28 May 2019 18:19:00 +0100 HC Wainright & Co senior analyst Andrew Fein explains to Proactive Investors why he's reiterating a Buy rating and $9 price target on biopharma company Catalyst Pharmaceuticals Inc (NASDAQ:CPRX).

Fein brings up the history behind Catalyst's competition with privately-held, New Jersey-based Jacobus Pharmaceutical Company Inc, and how he believes Catalyst can come out on top.

]]> CytoDyn updates investors on licensing agreement potentials at shareholders meeting Tue, 28 May 2019 18:10:00 +0100 CytoDyn Inc (OTCQB:CYDY) CEO Nader Pourhassan tells Proactive Investors the biotech recently held a shareholder's meeting, on May 22nd,  where company leaders discussed its licensing agreement potentials and the status of its ongoing clinical trials.

Pourhassan says today, he will by flying to South Korea to meet with the company that is producing CytoDyn's flagship drug leromlimab, Samsung BioLogics Co.

]]> OptiBiotix appoints US-based chief executive for ProBiotix Health Tue, 28 May 2019 15:04:00 +0100 OptiBiotix Health PLC's (LON:OPTI) Stephen O'Hara caught up with Proactive London's Andrew Scott to mark the appointment of Stephen Prescott as chief executive officer (CEO) of its wholly-owned subsidiary, ProBiotix Health.

Prescott will be based in the USA and was previously vice president of Marketing and Applications at Probi AB.

]]> Immupharma PLC assessing best route forward for lead drug Lupuzor Tue, 28 May 2019 12:54:00 +0100 ImmuPharma PLC's (LON:IMM) chairman Tim McCarthy tells Proactive London's Andrew Scott discussions with potential partners are ongoing as they consider the best route forward for its lead drug.

The results from an extension study of Lupuzor, a treatment for the autoimmune disease Lupus, will factor into the decision making.

McCarthy also updates on plans to merge the Elro and Ureka subsidiaries and are looking to out-licence their technologies, or spin off the businesses completely.

]]> Integumen PLC builds out laboratory capacity as it bags three new contracts Tue, 28 May 2019 08:41:00 +0100 Integumen PLC’s (LON:SKIN) Gerry Brandon caught up with Proactive London's Andrew Scott to discuss three new contracts they've won worth £290,000 in total.

The three new clients are a leading drug store chain, a European provider of beauty and household products, and the creator of CBD-infused tampons designed to fight period cramps.

To help accommodate the new business and the pipeline of potential orders, Integumen is increasing its laboratory capacity by 50%.

]]> Chinese economy boosts mining shares at the top end of the market, but at the junior end things aren’t so rosy Fri, 20 Apr 2018 11:47:00 +0100 Breakfast News - SkinBioTherapeutics, Pelatro, Sativa Investments, Harwood Wealth Management and more... Tue, 17 Apr 2018 10:29:00 +0100 Small Cap Brunch

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Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business 12 April 2018

Standard List**  of Main Market:

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(Incl Susp):


Total number of Standard List Companies trading:


*as at close of business 12 April 2018

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Total number of NEX Growth Market Companies (Incl Susp):


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Dish of the day

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Off the menu    

Tiso Blackstar Group (AIM:TBGR) has cancelled its quoting on AIM


What’s cooking in the IPO kitchen?


KRM22, a closed-ended investment company with a particular focus on risk management in capital markets, is looking to join AIM. Offer tbc, expected 30 April 2018

Main Market Premium Listing

Avast, global cybersecurity provider with 435m users worldwide. In 2017, the Group's Adjusted Billings was $811 million, Adjusted Revenue was $780 million, Adjusted Cash EBITDA was $451 million.  Seeking to raise $200m. Due in May. 

Fundamentum Supported Housing REIT. Raising £150m. Focussed on UK Social Housing assets. Due 2 May

Vivo Energy—retailer and marketer of Shell-branded fuels and lubricants in Africa, Due in May. 100% secondary sell-down of existing Shares by Selling Shareholders,  No new Money. Pricing TBA

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 03 May.

Odyssean Investment Trust—Raising £100m at £1. Due 1 May. The Company will primarily invest in smaller company equities quoted on markets operated by the London Stock Exchange.


Brunch buffet

Polarean Imaging (LON:POLX) 15.5p £11.3m

Polarean Imaging, the medical-imaging technology company, with a proprietary drug-device combination product for the magnetic resonance imaging (MRI) market, noted the publication of a study using Polarean's hyperpolarised gas MRI technology in a study of patients with severe asthma in the April edition of the American Journal of Respiratory and Critical Care Medicine (AJRCCM).

The study looked at patients with severe asthma and investigated the contributions of both inflammatory and non-inflammatory components of airway disease. A key finding was that MRI scans using hyperpolarized gas were able to identify, for the first time, the airway inflammatory (eosinophilia) and non-inflammatory contributions (smooth muscle dysfunction) to ventilation heterogeneity in patients with severe asthma.

The findings of the study suggest that in patients with severe asthma, inhaled hyperpolarized gas MRI may help discriminate between the different components of severe asthma, enabling more precise and personalised treatment decisions.


TP Group (LON:TPG) 5.85p £42.86m

TP Group, the specialist services and engineering group, announced its audited results for the year ended 31 Dec 2017.

Revenue up 39% to £29.5m (2016: £21.2m)

Adjusted EBITDA up 142% to £2.6m (2016: £1.1m)

Operating loss £0.5m (2016: £0.3m)

Closing cash of £21.9m (2016: £9.2m)

Order intake up 88% to £44.7m (2016: £23.8m)

Closing Group order book up 89% to £32.1m (2016: £17.0m)

Continued implementation of growth strategy across the business

Strengthened management team

Raised £20.8m to fund ambitious growth plans

Invested in Advanced Manufacturing Centre (£1.3m)

Completed two acquisitions in accordance with stated strategy


SkinBioTherapeutics (LON:SBTX) 10.6p £11.5m

SkinBioTherapeutics, a life science company focused on skin health, announced that the 'cream' formulation of its SkinBiotix® technology has passed effectiveness studies in models of skin. The cream formulation will now undergo further testing for stability in the coming weeks.

SkinBioTherapeutics' platform, SkinBiotix®, utilises extracts of probiotic bacteria for application to the skin. The Company has shown in skin models that its technology can improve the skin's barrier function.

The cream has been formulated to contain SkinBioTherapeutics' proprietary technology, SkinBiotix®. A crucial feature of the formulation phase is to test that the cream-SkinBiotix® combination retains the same beneficial properties as the original technology.

One important effect of SkinBiotix® in proof of concept studies was the increase of a specific skin protein essential to the barrier function of the skin. This effect was also shown when tested as a cream formulation. The data further showed a direct correlation between the amount of SkinBiotix® within the cream and the level of the protein present. Work on creating skin lotion and gel formulations is ongoing.


Pelatro (lON:PTRO) 84p £18.7m

Pelatro, the global precision marketing software specialist, announced a major contract win with a Central Asian subsidiary of a Western European Telco, which has more than 6 million customers. The contract is expected to be worth approximately $1.7m and is the largest entered into by the Company to date. The majority of the fees are expected to be recognised in 2018. Pelatro will implement its Precision Marketing Solution mViva and will also guide the Telco in setting up a fully-fledged Customer Value Management department along with required processes.

Following this contract win, and building on the revenue visibility provided by its existing client base, the Board is confident that Pelatro will at least meet market expectations for the full year ending 31 Dec 2018.

The Company remains in discussions with several potential new Telco customers and will provide the market with a more detailed update on new customer progress at the time of the Company's full year results on 1 May 2018.


Sativa Investments (NEX:SATI) 3.1p £12.7m

Sativa Investments, the UK's first medicinal cannabis investment vehicle, has signed a MOU with George Botanicals Ltd, a UK-based manufacturer, wholesaler and distributor of wellness CBD products, to purchase a 51% shareholding from its owner, Carbon Managers Limited for an expected consideration of circa £0.2m. George Botanicals has been providing its customers with high quality natural CBD products since Sept 2017, including vape pens, balms, E-Liquids, drops and edible gels that are shipped throughout the UK and are 100% laboratory tested.

"George Botanicals may well be one of Sativa's maiden investments and could provide an excellent gateway into the UK's fast growing CBD retail marketplace. My own original investment in George Botanicals was the precursor to the founding of Sativa as it revealed the wider opportunities across the CBD industry.”


Harwood Wealth Management (LON:HW) 150p £93.8m

Harwood Wealth Management, a UK-based financial planning and discretionary wealth management business, announces changes to the roles of certain board members.

Neil Dunkley, currently Joint CEO, will become MD of Financial Planning. Neil will remain an Executive Director of Harwood Wealth and the change in role will enable him to fully dedicate his time to management of the financial advisory business.

Alan Durrant, currently Joint CEO, will assume the role of sole CEO of the Group. Alongside his responsibilities as CEO, Alan will continue to lead the growth of Wellian, the investment management division of the Group.

These changes have been driven, in part, by the forthcoming changes to the Senior Managers Regime and as part of the Group's continuing evaluation of how best to organise its internal structure and reporting lines.

In addition, Nick Bravery, currently Group CFO, has informed the Group of his desire to step down as CFO with effect from 31 Oct 2018. Nick will assume the position of Company Secretary, a non-board role, moving forwards. The board intends to appoint a replacement Group CFO prior to Nick's transition and has identified a number of appropriate candidates. Further announcements will be made at the appropriate time. In the meantime, Nick will remain as Group CFO until 31 Oct 2018 alongside the Group's strong finance team.


Alliance Pharma (LON:APH) 75.2p £362.2m

Alliance Pharma, the specialty pharmaceutical group, announced that its wholly owned subsidiary, Alliance Pharmaceuticals Limited, has agreed to sell its 60% interest in non-core Unigreg Limited to its joint venture partner, Pacific Glory Development Limited, for a consideration of £2.9m.

Unigreg owns the rights to Forceval, a micro-nutrient supplement used in pregnancy, in China and some nearby territories. Alliance will continue to market the Forceval brand in the UK.

Through the Unigreg joint venture, Alliance has had an economic interest in China since 2007 and it remains a key territory for the Group. Last year, Alliance established its own affiliate in Shanghai to market a range of child nutraceutical products sold in China and to maintain close links to the Shanghai-based distributor of Kelo-cote™ in China, the product's largest market.


Forbidden Technologies (LON:FBT) 7.25p £12.9m

Forbidden Technologies, the developer and seller of cloud video platform technology using its patented Blackbird technology announced a preliminary collaboration with a leading Japanese telecommunications operator through its partnership with Dragon Touch Systems Inc.

Blackbird will be utilised in a specific part of the telco infrastructure to allow its B2B customers to edit and version content in the cloud. The proxy is continually uploaded to the Blackbird cloud and presented as growing files, where it is accessible to reviewers and a team of editors for daily collaboration. The team has the added advantage of speed, providing viewing and remote capabilities, which Blackbird offers without the bandwidth constraints.

This proxy-based cloud workflow offers enormous benefits of time management, collaboration efficiencies and flexibility to producers and broadcasters in the region.


Beowulf (LON:BEM) 6.65p £35.52m

Beowulf, the mineral exploration and development company, focused on the Kallak magnetite iron ore project and the Åtvidaberg polymetallic exploration licence in Sweden, and its graphite portfolio in Finland, announced the signing of a Graphite Collaboration Agreement with Åbo Akademi University, located in Turku, Finland.

The Agreement formalises the partnership that the Company, and its subsidiary Oy Fennoscandian Resources AB, has forged with Åbo over several years.  The Agreement is focused on knowledge sharing, the identification of graphite prospects, their exploration, and development into production assets.


Mercia Technologies (LON:MERC) 39.5p £117.2m


Mercia Technologies, the national investment group focused on the funding and scaling of innovative technology businesses with high growth potential from the UK regions, announced that Matthew Mead, Mercia's CIO, has notified the Group of his desire to step down from the Board and from his role as CIO with immediate effect, in order to pursue a portfolio advisory career. Following a handover period, Matt will remain working part-time with the Group as a Venture Partner, sitting on several investment panels for Mercia's managed funds. Matt will ensure an orderly handover of responsibilities to Mercia's current Head of Technology Investments, Julian Viggars, who is promoted to CIO and joins Mercia's Board with effect from today.   

]]> Breakfast Alert -Mountfield Group, Be Heard, Warehouse REIT, Real Good Food and more... Tue, 27 Mar 2018 11:06:00 +0100 Small Cap Brunch       

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Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business 21 March 2018


Standard List**  of Main Market:

Total number of Standard List Companies

(Incl Susp):


Total number of Standard List Companies trading:


*as at close of business 21March 2018


NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business 22 March 2018

                                *A corporate client of Hybridan LLP

**  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity


Dish of the day

No Joiners Today

Off the menu   

No Leavers Today


What’s cooking in the IPO kitchen?

NEX Exchange

Sativa Investments Due 29 Mar. Raising £1m at 1p. Mkt cap £4m.  Investment Vehicle  for investment opportunities and acquisitions in companies which are well-placed to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.


Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer raising $13.14m with market cap of £56.4m. Due 29 March.

Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC

Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.

SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 April

Polarean  - Medical drug-device combination company operating in the high resolution medical imaging market. Offer raising £3m at 15p with market cap of £11.01m. Due 29 March


Main Market Premium Listing

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 12 April.                            


Brunch buffet

Mountfield Group (LON:MOGP) 1.45p £3.5m

The Directors of Group  announced that 2017 saw a sizeable increase in Group's turnover and they expect, following conclusion of the audit, to announce a substantial increase to net profit achieved in the year to 31 Dec 2016.

Both CAF and MBG have performed very well during 2017, having both won a number of large contracts in the second half of the year.

As announced on 27 Nov 2017, the Group has a strong order book for 2018 and has, since then, announced further contracts for MBG. Currently the Group's orders secured for 2018 stand at £8.8m, a record high for the Group at this point of the year.  Of this amount, CAF's figure is £6.5m and MBG's secured orders are £2.3m.

Whilst CAF continues principally with its two substantial contracts for flooring at new City HQ office buildings it is also planning and negotiating other contract works for offices and data centres in London and also overseas. 

MBG's workload continues to expand with further contracts including that won from its leading UK telecoms provider client and from a resurgence of specialist data centre construction work. It is currently in advanced negotiations on two contracts that have an aggregate value of £2.3m.

The Directors are therefore optimistic as to the Group's outlook and anticipate that the Group's performance will continue to improve in 2018. 


1pm (LON:OPM) 48p £40.04m

1pm, the independent specialist provider of finance facilities to the SME sector announced that it has signed an asset finance facility with the British Business Bank ("BBB") under BBB's ENABLE Funding programme that will provide £35m of additional funding. The Facility will enable the Group to significantly expand its asset finance lending to businesses across the UK SME sector, primarily for those seeking "hard asset" finance. The new facility increases the total funding facilities available to the Group to in excess of £155m.

The Group continues to experience strong demand for asset finance including 'hard assets' the funding for which is provided through its Bradgate subsidiary. The deployment of this Facility will enable Bradgate to increase the amount and diversify the range of lending for business-critical equipment used by SME businesses while resolutely maintaining its strict underwriting criteria.

Deploying funds over the life of the Facility will enable the Group to significantly reduce its blended borrowing cost thus delivering one of management's key operational objectives to increase the Net Interest Margin from the Group's lending activities.


Shield Therapeutics (LON:STX) 17.5p £20.37m

Shield Therapeutics PLC, a commercial stage, pharmaceutical company delivering innovative specialty pharmaceuticals to address patients' unmet medical needs, announced that the European Commission (EC) has adopted the Decision to extend the approved indication for Feraccru to include treatment of all adults with iron deficiency (ID) with or without anaemia.

This decision, which follows the recent positive opinion of the Committee for Human Medicinal Products  (CHMP) of the European Medicines Agency (EMA) to adopt this extension of Feraccru's marketing authorisation approval, will provide Feraccru with a much broader commercial opportunity, as previously it was only approved and marketed in Europe for the treatment of iron deficiency anemia (IDA) in adult patients with inflammatory bowel disease (IBD).

"We are extremely pleased that following the CHMP positive opinion in February, the EU Commission has so rapidly ratified the expansion of the indication for Feraccru.  This decision confirms a significantly broader patient population target opportunity for Feraccru in Europe, where 40 million people are estimated to be iron deficient."


Be Heard (LON:BHRD) 2.28p £21.85m

Be Heard, the digital marketing services group, announced the appointment of Simon Pyper as CFO with effect from 9 Apr 2018.

Simon has broad experience in the media sector and consumer industries, from senior leadership roles over the past three decades.  Most recently, he was on the board of GlobalData plc, the AIM-listed data and analysis business, where he served as CEO of the Company from 2007 to 2016 and as CFO from 2016 to 2017.  Under Simon's leadership, GlobalData plc was admitted to AIM in 2010 and grew to a market capitalisation of more than £500m.

Previously Simon was Group FD of Datamonitor plc (2005-2007), a B2B media company which was acquired by Informa plc, and Finance Director of Musgrave UK (2001-5), the Irish grocery wholesaler and franchisor which acquired Budgens plc in 2002 and Londis in 2004.  Before then he held a variety of senior finance and commercial roles at Arcadia Group.

Following Peter Scott's appointment as Group CEO in January, and with Simon Pyper's imminent arrival, the Board has decided that the COO responsibilities will be shared between Peter and Simon, and accordingly Robin Price has decided to step down from the Board with effect from 9th April 2018. 


Warehouse REIT (LON:WHR) 100p £167.6m

Further to the announcement of Feb 5 2018, Warehouse REIT, the AIM-quoted specialist warehouse investor, confirmed that it has completed the acquisition from Hansteen Holdings plc of its Industrial Multi Property Trust portfolio, comprising 51 assets, the majority being multi-let UK urban warehouses, for £116m. As also stated, the acquisition is in line with the Company's strategy and concludes the successful deployment of all funds raised by the Company at IPO in Sept 2017, significantly ahead of plan, and brings the total property acquisitions to date to £279m.


Real Good Food (LON:RGD) 16p £12.5m

Real Good Food announced an update on its funding. The Board has identified that further substantial additional funding will be required over the coming months for working capital and investment purposes in order to implement the Group's business plan. The Board continues to explore the detail of financing this requirement, including the issue of new equity. 

As announced on 31 Jan 2018, the Group's three major shareholders, Napier Brown Ingredients Limited, Omnicane International Investors Limited, and certain funds managed by Downing LLP continue to demonstrate their support for the Group.  They have executed a term sheet, to that end, to provide additional funds to support the Company's working capital requirements, in the form of a draw-down loan note facility of up to £4m in aggregate, with Omnicane and NB Ingredients Ltd each providing up to £1.713m and certain funds of Downing LLP providing £0.574m.  These funds will relieve pressure on cash availability over the coming months whilst longer term funding arrangements are put in place.


ITM Power (LON:ITM) 33p £102.39m

Shell has announced the opening of a new hydrogen refuelling station at Shell Beaconsfield in Buckinghamshire. Supplied by ITM Power, this opening follows the launch of the first fully branded and public hydrogen refuelling site in the UK at Shell Cobham in Febr 2017.

Situated at one of the UK's busiest service stations, Shell Beaconsfield on the M40 will be the first site in the UK to bring hydrogen under the same canopy as petrol and diesel, providing drivers with a range of fuel choices to co-exist with traditional transport fuels. The hydrogen is generated on-site using an electrolyser that requires only water and electricity to generate the hydrogen gas.

Hydrogen fuel cell electric vehicles convert hydrogen into electricity to power the engine and produce only heat and water when driven. They can travel up to 700 kilometres on a single tank and can be refuelled in a few minutes.


Mosman Oil And Gas (LON:MSMN) 0.82p £2.77m

Mosman Oil and Gas Limited the oil exploration, development and production company, announced continued progress in respect to its Arkoma Stacked Pay Project.

The Operator is progressing the agreed and funded work program to install high-volume Electrical Submersible Pumps ("ESPs") and infrastructure upgrades to accommodate the expected increase in production volumes of water. The process of design, purchase, delivery and installation is underway to install ESPs in two wells. The current schedule is to install the two ESPs by the end of May and build production rates to full production by the end of July.

To facilitate the completion of the infrastructure upgrades and an extended period of production the parties have held discussions in respect of the existing Second Option, whereby Mosman can increase its interest by 27 March 2018, being the latest option exercise date. Inland Operating Company Inc. ("Inland") has now agreed to extend the latest option exercise date from 27 March 2018 to 31 July 2018.




]]> Breakfast News - Kore Potash, Action Hotels, Kore Potash and more... Fri, 23 Mar 2018 09:21:00 +0000 Small Cap Breakfast

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Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business 20 March 2018


Standard List**  of Main Market:

Total number of Standard List Companies

(Incl Susp):


Total number of Standard List Companies trading:



*as at close of business 20March 2018


NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business 20March 2018

                                *A corporate client of Hybridan LLP

**  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity


Dish of the day

No Joiners Today

Off the menu   

MayAir has left AIM after being acquired by Poly Glorious


What’s cooking in the IPO kitchen?

NEX Exchange

Sativa Investments Due 29 Mar. Raising £1m at 1p. Mkt cap £4m.  Investment Vehicle  for investment opportunities and acquisitions in companies which are well-placed to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.


Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer TBA. Due end March.

Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC

Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.

SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 April

Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd 

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March

Polarean  - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due 26 March


Main Market Premium Listing

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 12 April.

Broker and investment platform operator AJ Bell reported to be considering London float with a valuation at £50m.                               


Breakfast buffet

Integrated Diagnostic Holdings (LON:IDHC) $4.325 $655m

FYDec17 results from the consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria. Revenues increased 29% to EGP 1,514m in 2017 from EGP 1,171m in 2016, driven by a combination of better pricing, favourable currency translation and higher volumes. Net profit grew 44% year-on-year to EGP 384m in 2017 versus EGP 267m in 2016, benefiting from increased interest income and a lower foreign exchange loss.  Recommended final dividend of $0.16  per share, equivalent to $24m in total, compared with $0.14 per share, equivalent to US$ 21 million in total in 2016.

“We enter 2018 in a strong financial position and well positioned as a leading consumer healthcare company in the Middle East and Africa. In the coming year, we will continue to focus on expanding our geographies as well as on the process of integrating our new Nigerian operations”. FYDec18E EGP 1.8bn, PBT EGP 708m.


Action Hotels (LON:AHCG) 19.25p £28.4m

The “owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia,  announced the opening of Novotel Melbourne South Wharf hotel, ahead of schedule.

The 347-room flagship hotel owned by Action Hotels is built on a long-term, 92-year lease plot of land held by Action Hotels and operated under AccorHotels' 4-star Novotel brand. Situated in Melbourne's newly re-developed Conference & Exhibition Centre, it is perfectly located to service both business and leisure travellers with quality affordable accommodation. The Melbourne Convention and Exhibition Centre is the largest convention centre in the southern hemisphere and currently accommodates over 5,500 delegates, hosting over 1,030 events and attracting more than 680,000 attendees, with 220 events already confirmed for the new expansion space, commencing mid-2018.”

The hotel is already proving to be in high demand with better than expected advance bookings  of over AUS$3.5m.

FYDec18E rev $52.65m and $11m pre-tax loss.


Watkin Jones (LON:WJG) 183.6p £468.7m

The “UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation and build to rent sectors, confirms that the Group has achieved planning consent on Whitefriars Lane in Coventry for 778 student beds which will be delivered ahead of the start of the 2020/21 academic year.

In addition, the Group has secured, subject to satisfactory planning, a further site in Sheffield which is targeted to deliver in excess of 700 student beds ahead of the start of the 2021/22 academic year.  The growing momentum within the Group's student accommodation development business has led to the student accommodation development pipeline exceeding 9,800 beds with over 8,300 beds having received planning consent.  

All the developments due for delivery ahead of the 2018/19 academic year have been forward sold.  Five of the seven schemes scheduled to be delivered ahead of the 2019/20 academic year have been forward sold, with the remainder now having received planning consent.”

FYSep18E rev  £342.17m and £47.43m PBT.


MedaPhor (LON:MED) 10.5p £9.52m

MedaPhor, the intelligent ultrasound software and simulation company, announced its preliminary results for the year ended 31 Dec 2017, a pivotal year where the Company expanded into the larger clinical ultrasound software market.

Financial highlights

Revenues increased 27% to £4.2m (2016: £3.3m). North America sales double to £1.7m

Rest of World sales up 44% to £1.8m, with 83% growth for sales into China

Raised £5.4m net of costs by way of placing of shares

Year-end cash at £4.3m (2016: £1.8m)

Operational highlights

Acquired Intelligent Ultrasound Limited bringing artificial intelligence expertise to the Group

Won UK Government grant of £0.5m for NeedleGuide development

Post year-end events

First pilot of artificial intelligence-based software in UK hospital

Commenced NeedleGuide development

Launched Bodyworks Eve, our third simulator platform, aimed at the Emergency Medicine market


Microsaic Systems (MSYS.L) 2.1p £3.8m

The “developer of point of need mass spectrometry instruments,  announced a commercial contract with UK based technology and innovation centre, the Centre for Process Innovation (CPI).

The project will focus on examining the potential of the Microsaic Mass Spectrometry (MS) offering as an online, deployable tool for the elucidation of biopharmaceutical or biologic structure during the manufacturing or bioprocessing workflow.

Microsaic's technology is a powerful point of use analysis tool which can be integrated into complex manufacturing workflows, which has the potential to be utilised in upstream cell media, or downstream biologic purification. A typical workflow could benefit from real-time data to drive production optimisation, ensure process control compliance, and reduce risk for the final product.”


SDX Energy (LON:SDX) 49.5p £101.22m

The “North Africa focused oil and gas company, is pleased to announce that the SAH-2 well on the Sebou permit (SDX 75% working interest) in Morocco has been completed and tested at a restricted rate on a 40/64" choke. The well achieved an average flow rate of conventional natural gas of 12.9 million standard cubic feet per day, with a maximum flow rate during this test of 13.5 MMscf/ d.  The well will now be shut in for several days for a pressure build-up after which it will be connected to the local infrastructure and placed on test production.

In addition, the LNB-1 well on the Lalla Mimouna permit (SDX 75% working interest) in Morocco has been spud.  LNB-1 is the eighth well in the Company's nine well campaign in Morocco, and the first of two remaining exploration commitment wells to be drilled on the permit in 2018. The well is anticipated to take between 15-20 days to drill and if successful it will be completed, flow tested and connected to existing infrastructure.”


4d pharma (LON:DDDD) 133.5p £87.4m

The “pharmaceutical company focusing on the development of live biotherapeutics, provides the following update in relation to the development of its lead oncology candidate, MRx0518. MRx0518 is a single strain bacterial Live Biotherapeutic Product (LBP), isolated and purified from a healthy human faecal sample, that has been shown to have immune-stimulatory characteristics and activity in a number of pre-clinical cancer models. Following a successful development programme at the Company's own GMP production plant, plans are at an advanced stage to open clinical studies in the UK and the US in the near future.

Data will be presented today at the Microbiome R&D and Business Collaboration Forum, Rotterdam by 4D's Chief Executive Officer, Duncan Peyton, identifying key aspects of the mode of action of MRx0518.  Research carried out by 4D has identified a specific component of the bacteria, flaA, that plays a key role in the activity of MRx0518 by stimulating pathways that are known to be associated with the body's response to cancer.”


Beeks Financial Cloud Group (LON:BKS) 59.5p £29.24m

The cloud computing and connectivity provider for financial markets,  announced entry into the cryptocurrency market via a collaboration with Gemini Trust Company, LLC a next-generation digital asset exchange and custodian. Gemini is a licensed digital asset exchange and custodian built for both individuals and institutions. As a New York trust company regulated by the New York State Department of Financial Services (NYSDFS), Gemini is a fiduciary and is therefore subject to the capital reserve requirements, cybersecurity requirements, and banking compliance standards set forth by the NYSDFS and the New York Banking Law (NYBL).”   Via this new collaboration, Beeks can provide direct connectivity to Gemini via the Beeks Cloud, allowing Beeks' clients who are existing clients of Gemini to source and trade Bitcoin &Ethereum legitimately and securely. FYJun18E rev £6.2m, PBT £1.2m.


Brave Bison (LON:BBSN) 0.85p £4.9m

FYDec17  results from the e social video company. Revenue decreased by 48% to £9.1m (2016: £17.7m). £5.7m of this was due to a low margin advertising revenue product that was terminated by the Company in Q1 2017.

Fee Based Services revenues were impacted by loss of two major clients in Q4 2016.

CEO Claire Hungate appointed Q3 2017, prompting a strategic shift in the Company's focus to drive the Company towards profitability - gearing Brave Bison for growth in 2018.

EBITDA loss reduced by 51% to £1.7m £4.8m cash at the year end .

Analysis and strategy completed in order to launch a portfolio of new owned & operated channels in early Summer 2018.

The Group continues to trade in line with management expectations. We could see no forecasts.




]]> Breakfast News - Perfomatrix PLC, Action Hotels, Watkin Jones and more... Thu, 22 Mar 2018 10:14:00 +0000 Small Cap Breakfast 

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Total number of AIM Companies (Incl Susp): 


Total number of AIM Companies trading:


*as at close of business 20 March 2018


Standard List**  of Main Market:

Total number of Standard List Companies

(Incl Susp):


Total number of Standard List Companies trading:


*as at close of business 20March 2018


NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business 20March 2018

                                *A corporate client of Hybridan LLP

**  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity


Dish of the day

No Joiners Today

Off the menu   

MayAir has left AIM after being acquired by Poly Glorious


What’s cooking in the IPO kitchen?

NEX Exchange

Sativa Investments Due 29 Mar. Raising £1m at 1p. Mkt cap £4m.  Investment Vehicle  for investment opportunities and acquisitions in companies which are well-placed to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.


Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer TBA. Due end March.

Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC 

Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.

SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 Apri 

Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd 

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March

Polarean  - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due 26 March


Main Market Premium Listing

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 12 April.

Broker and investment platform operator AJ Bell reported to be considering London float with a valuation at £50m.


Breakfast buffet

Integrated Diagnostic Holdings (LON:IDHC) $4.325 $655m

FYDec17 results from the consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria. Revenues increased 29% to EGP 1,514m in 2017 from EGP 1,171m in 2016, driven by a combination of better pricing, favourable currency translation and higher volumes. Net profit grew 44% year-on-year to EGP 384m in 2017 versus EGP 267m in 2016, benefiting from increased interest income and a lower foreign exchange loss.  Recommended final dividend of $0.16  per share, equivalent to $24m in total, compared with $0.14 per share, equivalent to US$ 21 million in total in 2016.

“We enter 2018 in a strong financial position and well positioned as a leading consumer healthcare company in the Middle East and Africa. In the coming year, we will continue to focus on expanding our geographies as well as on the process of integrating our new Nigerian operations”. FYDec18E EGP 1.8bn, PBT EGP 708m. 


Action Hotels (LON:AHCG) 19.25p £28.4m

The “owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia,  announced the opening of Novotel Melbourne South Wharf hotel, ahead of schedule. 

The 347-room flagship hotel owned by Action Hotels is built on a long-term, 92-year lease plot of land held by Action Hotels and operated under AccorHotels' 4-star Novotel brand. Situated in Melbourne's newly re-developed Conference & Exhibition Centre, it is perfectly located to service both business and leisure travellers with quality affordable accommodation. The Melbourne Convention and Exhibition Centre is the largest convention centre in the southern hemisphere and currently accommodates over 5,500 delegates, hosting over 1,030 events and attracting more than 680,000 attendees, with 220 events already confirmed for the new expansion space, commencing mid-2018.”

The hotel is already proving to be in high demand with better than expected advance bookings  of over AUS$3.5m.

FYDec18E rev $52.65m and $11m pre-tax loss.


Watkin Jones (LON:WJG) 183.6p £468.7m

The “UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation and build to rent sectors, confirms that the Group has achieved planning consent on Whitefriars Lane in Coventry for 778 student beds which will be delivered ahead of the start of the 2020/21 academic year.

In addition, the Group has secured, subject to satisfactory planning, a further site in Sheffield which is targeted to deliver in excess of 700 student beds ahead of the start of the 2021/22 academic year.  The growing momentum within the Group's student accommodation development business has led to the student accommodation development pipeline exceeding 9,800 beds with over 8,300 beds having received planning consent.  

All the developments due for delivery ahead of the 2018/19 academic year have been forward sold.  Five of the seven schemes scheduled to be delivered ahead of the 2019/20 academic year have been forward sold, with the remainder now having received planning consent.”

FYSep18E rev  £342.17m and £47.43m PBT.


MedaPhor (LON:MED) 10.5p £9.52m

MedaPhor, the intelligent ultrasound software and simulation company, announced its preliminary results for the year ended 31 Dec 2017, a pivotal year where the Company expanded into the larger clinical ultrasound software market.

Financial highlights

Revenues increased 27% to £4.2m (2016: £3.3m). North America sales double to £1.7m

Rest of World sales up 44% to £1.8m, with 83% growth for sales into China

Raised £5.4m net of costs by way of placing of shares

Year-end cash at £4.3m (2016: £1.8m)

Operational highlights

Acquired Intelligent Ultrasound Limited bringing artificial intelligence expertise to the Group

Won UK Government grant of £0.5m for NeedleGuide development

Post year-end events

First pilot of artificial intelligence-based software in UK hospital

Commenced NeedleGuide development

Launched Bodyworks Eve, our third simulator platform, aimed at the Emergency Medicine market


Microsaic Systems (LON:MSYS) 2.1p £3.8m

The “developer of point of need mass spectrometry instruments,  announced a commercial contract with UK based technology and innovation centre, the Centre for Process Innovation (CPI).

The project will focus on examining the potential of the Microsaic Mass Spectrometry (MS) offering as an online, deployable tool for the elucidation of biopharmaceutical or biologic structure during the manufacturing or bioprocessing workflow.

Microsaic's technology is a powerful point of use analysis tool which can be integrated into complex manufacturing workflows, which has the potential to be utilised in upstream cell media, or downstream biologic purification. A typical workflow could benefit from real-time data to drive production optimisation, ensure process control compliance, and reduce risk for the final product.”


SDX Energy (SDX.L) 49.5p £101.22m

The “North Africa focused oil and gas company, is pleased to announce that the SAH-2 well on the Sebou permit (SDX 75% working interest) in Morocco has been completed and tested at a restricted rate on a 40/64" choke. The well achieved an average flow rate of conventional natural gas of 12.9 million standard cubic feet per day, with a maximum flow rate during this test of 13.5 MMscf/ d.  The well will now be shut in for several days for a pressure build-up after which it will be connected to the local infrastructure and placed on test production.

In addition, the LNB-1 well on the Lalla Mimouna permit (SDX 75% working interest) in Morocco has been spud.  LNB-1 is the eighth well in the Company's nine well campaign in Morocco, and the first of two remaining exploration commitment wells to be drilled on the permit in 2018. The well is anticipated to take between 15-20 days to drill and if successful it will be completed, flow tested and connected to existing infrastructure.”


4d pharma (LON:DDDD) 133.5p £87.4m

The “pharmaceutical company focusing on the development of live biotherapeutics, provides the following update in relation to the development of its lead oncology candidate, MRx0518. MRx0518 is a single strain bacterial Live Biotherapeutic Product (LBP), isolated and purified from a healthy human faecal sample, that has been shown to have immune-stimulatory characteristics and activity in a number of pre-clinical cancer models. Following a successful development programme at the Company's own GMP production plant, plans are at an advanced stage to open clinical studies in the UK and the US in the near future. 

Data will be presented today at the Microbiome R&D and Business Collaboration Forum, Rotterdam by 4D's Chief Executive Officer, Duncan Peyton, identifying key aspects of the mode of action of MRx0518.  Research carried out by 4D has identified a specific component of the bacteria, flaA, that plays a key role in the activity of MRx0518 by stimulating pathways that are known to be associated with the body's response to cancer.”


Beeks Financial Cloud Group (BKS.L) 59.5p £29.24m 

The cloud computing and connectivity provider for financial markets,  announced entry into the cryptocurrency market via a collaboration with Gemini Trust Company, LLC a next-generation digital asset exchange and custodian. Gemini is a licensed digital asset exchange and custodian built for both individuals and institutions. As a New York trust company regulated by the New York State Department of Financial Services (NYSDFS), Gemini is a fiduciary and is therefore subject to the capital reserve requirements, cybersecurity requirements, and banking compliance standards set forth by the NYSDFS and the New York Banking Law (NYBL).”   Via this new collaboration, Beeks can provide direct connectivity to Gemini via the Beeks Cloud, allowing Beeks' clients who are existing clients of Gemini to source and trade Bitcoin &Ethereum legitimately and securely. FYJun18E rev £6.2m, PBT £1.2m.


Brave Bison (LON:BBSN) 0.85p £4.9m

FYDec17  results from the e social video company. Revenue decreased by 48% to £9.1m (2016: £17.7m). £5.7m of this was due to a low margin advertising revenue product that was terminated by the Company in Q1 2017.

Fee Based Services revenues were impacted by loss of two major clients in Q4 2016.

CEO Claire Hungate appointed Q3 2017, prompting a strategic shift in the Company's focus to drive the Company towards profitability - gearing Brave Bison for growth in 2018.

EBITDA loss reduced by 51% to £1.7m £4.8m cash at the year end .

Analysis and strategy completed in order to launch a portfolio of new owned & operated channels in early Summer 2018.

The Group continues to trade in line with management expectations. We could see no forecasts.



]]> Breakfast News - Sativa Investments, Perfomatrix PLC,Action Hotels and more... Wed, 21 Mar 2018 11:51:00 +0000 Small Cap Breakfast

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Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business 20 March 2018


Standard List**  of Main Market:

Total number of Standard List Companies

(Incl Susp):


Total number of Standard List Companies trading:


*as at close of business 20March 2018


NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business 20March 2018 

                                *A corporate client of Hybridan LLP

 **  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity


Dish of the day

No Joiners Today

Off the menu   

MayAir has left AIM after being acquired by Poly Glorious


What’s cooking in the IPO kitchen?

NEX Exchange

Sativa Investments Due 29 Mar. Raising £1m at 1p. Mkt cap £4m.  Investment Vehicle  for investment opportunities and acquisitions in companies which are well-placed to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.


Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer TBA. Due end March.

Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC

Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.

SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 April

Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd 

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March

Polarean  - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due 26 March


Main Market Premium Listing

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 12 April.

Broker and investment platform operator AJ Bell reported to be considering London float with a valuation at £50m.


Breakfast buffet

Integrated Diagnostic Holdings (LON:IDHC) $4.325 $655m

FYDec17 results from the consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria. Revenues increased 29% to EGP 1,514m in 2017 from EGP 1,171m in 2016, driven by a combination of better pricing, favourable currency translation and higher volumes. Net profit grew 44% year-on-year to EGP 384m in 2017 versus EGP 267m in 2016, benefiting from increased interest income and a lower foreign exchange loss.  Recommended final dividend of $0.16  per share, equivalent to $24m in total, compared with $0.14 per share, equivalent to US$ 21 million in total in 2016.

“We enter 2018 in a strong financial position and well positioned as a leading consumer healthcare company in the Middle East and Africa. In the coming year, we will continue to focus on expanding our geographies as well as on the process of integrating our new Nigerian operations”. FYDec18E EGP 1.8bn, PBT EGP 708m.


Action Hotels (LON:AHCG) 19.25p £28.4m

The “owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia,  announced the opening of Novotel Melbourne South Wharf hotel, ahead of schedule

The 347-room flagship hotel owned by Action Hotels is built on a long-term, 92-year lease plot of land held by Action Hotels and operated under AccorHotels' 4-star Novotel brand. Situated in Melbourne's newly re-developed Conference & Exhibition Centre, it is perfectly located to service both business and leisure travellers with quality affordable accommodation. The Melbourne Convention and Exhibition Centre is the largest convention centre in the southern hemisphere and currently accommodates over 5,500 delegates, hosting over 1,030 events and attracting more than 680,000 attendees, with 220 events already confirmed for the new expansion space, commencing mid-2018.”

The hotel is already proving to be in high demand with better than expected advance bookings  of over AUS$3.5m.

FYDec18E rev $52.65m and $11m pre-tax loss.


Watkin Jones (LON:WJG) 183.6p £468.7m

The “UK developer and constructor of multi occupancy property assets, with a focus on the student accommodation and build to rent sectors, confirms that the Group has achieved planning consent on Whitefriars Lane in Coventry for 778 student beds which will be delivered ahead of the start of the 2020/21 academic year.

In addition, the Group has secured, subject to satisfactory planning, a further site in Sheffield which is targeted to deliver in excess of 700 student beds ahead of the start of the 2021/22 academic year.  The growing momentum within the Group's student accommodation development business has led to the student accommodation development pipeline exceeding 9,800 beds with over 8,300 beds having received planning consent.  

All the developments due for delivery ahead of the 2018/19 academic year have been forward sold.  Five of the seven schemes scheduled to be delivered ahead of the 2019/20 academic year have been forward sold, with the remainder now having received planning consent.”

FYSep18E rev  £342.17m and £47.43m PBT.


MedaPhor (LON:MED) 10.5p £9.52m

MedaPhor, the intelligent ultrasound software and simulation company, announced its preliminary results for the year ended 31 Dec 2017, a pivotal year where the Company expanded into the larger clinical ultrasound software market.

Financial highlights

Revenues increased 27% to £4.2m (2016: £3.3m). North America sales double to £1.7m

Rest of World sales up 44% to £1.8m, with 83% growth for sales into China

Raised £5.4m net of costs by way of placing of shares

Year-end cash at £4.3m (2016: £1.8m)

Operational highlights

Acquired Intelligent Ultrasound Limited bringing artificial intelligence expertise to the Group

Won UK Government grant of £0.5m for NeedleGuide development

Post year-end events

First pilot of artificial intelligence-based software in UK hospital

Commenced NeedleGuide development

Launched Bodyworks Eve, our third simulator platform, aimed at the Emergency Medicine market


Microsaic Systems (LON:MSYS) 2.1p £3.8m

The “developer of point of need mass spectrometry instruments,  announced a commercial contract with UK based technology and innovation centre, the Centre for Process Innovation (CPI).

The project will focus on examining the potential of the Microsaic Mass Spectrometry (MS) offering as an online, deployable tool for the elucidation of biopharmaceutical or biologic structure during the manufacturing or bioprocessing workflow.

Microsaic's technology is a powerful point of use analysis tool which can be integrated into complex manufacturing workflows, which has the potential to be utilised in upstream cell media, or downstream biologic purification. A typical workflow could benefit from real-time data to drive production optimisation, ensure process control compliance, and reduce risk for the final product.”


SDX Energy (LON:SDX) 49.5p £101.22m

The “North Africa focused oil and gas company, is pleased to announce that the SAH-2 well on the Sebou permit (SDX 75% working interest) in Morocco has been completed and tested at a restricted rate on a 40/64" choke. The well achieved an average flow rate of conventional natural gas of 12.9 million standard cubic feet per day, with a maximum flow rate during this test of 13.5 MMscf/ d.  The well will now be shut in for several days for a pressure build-up after which it will be connected to the local infrastructure and placed on test production.

In addition, the LNB-1 well on the Lalla Mimouna permit (SDX 75% working interest) in Morocco has been spud.  LNB-1 is the eighth well in the Company's nine well campaign in Morocco, and the first of two remaining exploration commitment wells to be drilled on the permit in 2018. The well is anticipated to take between 15-20 days to drill and if successful it will be completed, flow tested and connected to existing infrastructure.”


4d pharma (LON:DDDD) 133.5p £87.4m

The “pharmaceutical company focusing on the development of live biotherapeutics, provides the following update in relation to the development of its lead oncology candidate, MRx0518. MRx0518 is a single strain bacterial Live Biotherapeutic Product (LBP), isolated and purified from a healthy human faecal sample, that has been shown to have immune-stimulatory characteristics and activity in a number of pre-clinical cancer models. Following a successful development programme at the Company's own GMP production plant, plans are at an advanced stage to open clinical studies in the UK and the US in the near future. 

Data will be presented today at the Microbiome R&D and Business Collaboration Forum, Rotterdam by 4D's Chief Executive Officer, Duncan Peyton, identifying key aspects of the mode of action of MRx0518.  Research carried out by 4D has identified a specific component of the bacteria, flaA, that plays a key role in the activity of MRx0518 by stimulating pathways that are known to be associated with the body's response to cancer.”


Beeks Financial Cloud Group (LON:BKS) 59.5p £29.24m

The cloud computing and connectivity provider for financial markets,  announced entry into the cryptocurrency market via a collaboration with Gemini Trust Company, LLC a next-generation digital asset exchange and custodian. Gemini is a licensed digital asset exchange and custodian built for both individuals and institutions. As a New York trust company regulated by the New York State Department of Financial Services (NYSDFS), Gemini is a fiduciary and is therefore subject to the capital reserve requirements, cybersecurity requirements, and banking compliance standards set forth by the NYSDFS and the New York Banking Law (NYBL).”   Via this new collaboration, Beeks can provide direct connectivity to Gemini via the Beeks Cloud, allowing Beeks' clients who are existing clients of Gemini to source and trade Bitcoin &Ethereum legitimately and securely. FYJun18E rev £6.2m, PBT £1.2m.


Brave Bison (LON:BBSN) 0.85p £4.9m

FYDec17  results from the e social video company. Revenue decreased by 48% to £9.1m (2016: £17.7m). £5.7m of this was due to a low margin advertising revenue product that was terminated by the Company in Q1 2017.

Fee Based Services revenues were impacted by loss of two major clients in Q4 2016.

CEO Claire Hungate appointed Q3 2017, prompting a strategic shift in the Company's focus to drive the Company towards profitability - gearing Brave Bison for growth in 2018.

EBITDA loss reduced by 51% to £1.7m £4.8m cash at the year end .

Analysis and strategy completed in order to launch a portfolio of new owned & operated channels in early Summer 2018.


The Group continues to trade in line with management expectations. We could see no forecasts. 

]]> Breakfast News - Ilika Group, Aggregated Micro Power Holdings, IQE and more... Tue, 20 Mar 2018 10:27:00 +0000 Small Cap Breakfast

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Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business 19 March 2018

Standard List**  of Main Market:

Total number of Standard List Companies

(Incl Susp):


Total number of Standard List Companies trading:


*as at close of business 19 March 2018

NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business 19 March 2018

  *A corporate client of Hybridan LLP

**  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity

Dish of the day

No Joiners Today

Off the menu   

Haike Chemical Group has left AIM  Shareholders were given the option to exit at 30p. A matched bargain facility remains in place.

What’s cooking in the IPO kitchen?

NEX Exchange

Sativa Investments Due 29 Mar. Raising £1m at 1p. Mkt cap £4m.  Investment Vehicle  for investment opportunities and acquisitions in companies which are well-placed to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.


Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer TBA. Due end March.

Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC

Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.

SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 April

Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd 

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March

Polarean  - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due 26 March

Main Market Premium Listing

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 12 April.

Broker and investment platform operator AJ Bell reported to be considering London float with a valuation at £50m.

Breakfast buffet

Mears Group (LON:MER.L) 370p £383m

FYDec17 results form the   provider of services to the Housing and Care sectors in the UK .

Group revenue of £900.2m (2016: £940.1m), impacted by both delays to the timing of planned workloads following the tragic events at Grenfell Tower and a slow period in securing new contract revenues in Housing, combined with the planned rationalisation of Care contracts.

Group PBT and before amortisation of acquisition intangibles reduced to £37.1m (2016: £40.1m), with the diluted EPS reducing by 8% to 28.05p

Housing operating margins reduced to 5.2% (2016: 5.6%), reflecting the revenue reduction and a resulting lower overhead recovery.

Total dividend increased by 3% to 12p (2016: 11.70p), reflecting the Board's confidence in the underlying performance and the long term prospects of the Group.

“Order book at £2.6bn (2016: £3.1bn). The current bidding pipeline is in excess of £2bn for 2018, which is well in excess of normal bidding levels. The strategic evolution of Mears means greater access to opportunities previously out of our reach.” FYDec18E rev £961.58m. PE c.11x, yield c. 3.5%.


Altona Energy (LON:ANR) 0.35p £5.79m

“Altona announced that, following the appointment of Mr Brenton Newell, as Consulting Geologist to the Company, on 26 Feb 2018, an initial review of the existing drilling data relating to the Westfield Tenement (EL 5676) has now been completed.

Based on the identification Mr Newell has prepared a costed exploration programme of any shallow coal seams amenable to open cut mining. The programme will be conducted over three phases:

1 Initial Exploration

2 JORC compliant Mineral Resource Estimate definition

3 Bankable Feasibility Study”

The Company is now able to estimate the costs associated with the three phases of the proposed programme, which may be subject to revision following the result of each phase:

Initial Exploration AUD 230,000

JORC compliant Mineral Resource Estimate definition AUD 400,000

Bankable Feasibility AUD 900,000   

Total AUD 1.53m


NAHL Group (LON:NAH) 145p £63.43m

FYDec17 results from the  consumer marketing business focused on the UK legal services market.

Trading performance in line with expectations

Revenue up 2.5% to £51.9m (2016: £50.6m)

As expected, underlying op profit down 19.4% to £14.5m

PBT of £12.4m (2016: £15.8m)

EPS ahead of expectations at 21.7p (2016: 27.0p)

Recommended final dividend of 10.6p, providing a total dividend for the year of 15.9p (2016: 19.05p)

“Trading during the early part of 2018 has been in line with expectations. The evolution of our PI division is on track and we plan to counter the financial challenges caused by changing regulation. Whilst this necessitates investment in both PI cases and operational structures and processes, we expect to see some payback in 2019, accelerating thereafter. We continue to expect 2018 to be a year of transition and earnings contraction, however, we are enthused by the potential for change in PI. We have a market leading brand and the leadership team to evolve and develop the division to create strong, predictable and sustainable earnings and cash flow.”   FYDec18E rev £53m, PBT £13.1m. PE c.9x, yield c.8%.


Wynnstay Group (LON:WYN) 405p £79.68m

AGM Statement from the agricultural and retail group . 

“Trading in the first four months of the new financial year has been encouraging, with increased demand for most products. This reflects the general improvement in output prices and farmer sentiment, particularly dairy farmers, after two years of very depressed pricing, often below the realistic cost of production.”

"There are still important seasonal trading months ahead, but we are encouraged by the Group's performance in the new financial year so far."

FYOct18E rev £405.5m, PBT £8.2m, div 13.1p.


IQE (LON:IQE) 132.52p £1bn

FYDec17 results from the global supplier of advanced wafer products and wafer services to the semiconductor industry. Record financial results reflect the adoption of IQE's VCSEL technology in mass market applications and broadening IP portfolio sets the Group for continuing diversification and growth.

Revenue up 16.4% to £154.5m. Adjusted PBT up 18% to £24.3m. Net cash £45.6m from net debt of £39.5m.  Continued growth in 2018 driven by expansion of existing business and qualifications of new business streams.

Photonics revenue expected to grow c.35% to 60% in 2018. Wireless revenue expected to grow up to c.5% in 2018; SMI inventories expected to replenish in 2018, with potential for revenue expansion as GaN products make stronger contribution.

InfraRed revenue expected to grow c. 5% to 15% in 2018, with customer engagement broadening.

FYDec18E rev £175.06m, PBT £32.78m


Pennant International (LON:PEN) 96.5p £27.18m

Update on one of its key contracts and on its pipeline of opportunities for future work.

“As confirmed in the Group's preliminary results announcement on 12 March 2018, the re-scoping of the UK Contract has been successfully completed and work has recommenced on the contract.

The re-stated UK Contract was executed on 19 Mar 2018, concluding the legal formalities of the re-scoping. The contract value has been increased by £3.5m to reflect the additional work required.

The overall contract value is now just under £12m with circa £8m of revenue to be recognised over 2018, 2019 and 2020. With the fundamentals of the re-scoping (including rough-order-of-magnitude price) having been agreed between the parties prior to year-end (and a written agreement made on price early in the new year), the increased value was accordingly reflected within the order book of £34m previously announced.”


Ilika Group (LON:ILK) 23.5p £18.42m

The “pioneer in solid-state battery technology and materials innovation, announced a collaboration with PragmatIC and Arm Holdings to further progress development in ultra-thin and flexible semiconductor technology for mass market applications.

The 18-month project is supported by Innovate UK funding of £0.6m of which £0.4m will be payable to Ilika.

The principal objective of this collaboration is to deliver novel P-type metal-oxide semiconductor ('PMOS') circuit technology that can significantly enhance the characteristics of PragmatIC's CMOS designs. The project focusses on investigating the operarting parameters of PMOS, using Ilika's high throughput thin-film techniques which are proven for rapid identification and screening of functional thin-film materials. The initial phase of the project is intended to demonstrate the innovative thin film transistor performance, which is to be followed by scale-up and transfer of the material to deposition processes in a production environment.”


Aggregated Micro Power Holdings (LON:AMPH) 100p £43.2m

The “distributed energy company specialising in the sale of wood fuels and the financing and installation of distributed energy projects including biomass boiler ESCOs (Energy Supply Contracts) and stand by power generation, is pleased to announce a positive trading update with respect to the twelve months ending 31 March 2018.


The Company has previously issued guidance on AMP Group revenues being in excess of £30m for the twelve months to 31 Mar 2018. Recent positive trading during this winter season has now caused us to revise this guidance to circa £40m of revenues for the twelve month period. Further  guidance will be given when we issue a pre-close trading statement during May 2018.” We could see no forecasts.


Evgen Pharma (LON:EVG) 14.55p £13.57m

The “clinical stage drug development company focused on the treatment of cancer and neurological conditions, announced a new research collaboration with Imperial College London focusing on the mechanism of action in a number of diseases of SFX-01, the Company's lead product candidate.

The project is being funded principally by an Engineering and Physical Sciences Research Council Impact Acceleration Account grant and will be led by Professor Ed Tate, whose research interests at Imperial include chemical proteomics, medicinal chemistry and drug discovery. Evgen Pharma will supply SFX-01 and make a modest financial contribution.

The objective of the collaboration is to use advanced chemical proteomics technology to detect targets for SFX-01 and other sulforaphane analogues in live cells or tissues in specific disease model systems.”

]]> Breakfast News - Osford BioDynamics, Range Resources, Arix Bioscience and more... Fri, 16 Mar 2018 10:14:00 +0000 Small Cap Breakfast

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Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business 15 March 2018


Standard List**  of Main Market:

Total number of Standard List Companies

(Incl Susp):


Total number of Standard List Companies trading:


*as at close of business 15 March 2018


NEX Growth Market:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business 15 March 2018

                                 *A corporate client of Hybridan LLP

 **  Standard Listing as defined by Hybridan LLP to be a business with strictly operational activity


 Dish of the day

 Energean Oil & Gas—Seeking gross proceeds of c.$500m. Independent oil and gas exploration and production company focused on exploration, development and production of assets in the Eastern Mediterranean .  Raised $460m/£330m gross at  £4.55. Mkt Cap £696m. Main Market premium . ENOG.L


Off the menu   

Trinity Capital has left AIM pursuant to a voluntary liquidation.                                 


What’s cooking in the IPO kitchen?

NEX Exchange

Sativa Investments Due 29 Mar. Raising £1m at 1p. Mkt cap £4m.  Investment Vehicle  for investment opportunities and acquisitions in companies which are well-placed to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.


Kore Potash— advanced stage mineral exploration and development company whose primary asset is its interest in the Sintoukola Project, a potash project located in the Republic of Congo. ) Measured, Indicated and Inferred Mineral Resource of 5,953Mt at an average grade of 22.0% KCl. Offer TBA. Due end March.

Perfomatrix PLC, a global end to end Performance Marketing technology and services company headquartered in the UK, is looking to join AIM in early April 2018, offer TBC

Crusader Resources, an ASX-listed public company incorporated in Australia, which is primarily focused on the exploration and development of gold assets in Brazil. Offer TBC, expected late March.

SimplyBiz, a Financial Services Firm, looking to join AIM raising £30m via placing and £34.6m via a sale of existing ordinary shares at 170p giving a market cap of £130m. Expected 4 April

Bacanora Lithium—Readmission. No new money. Mkt cap £140m. Due 21 March. the new holding company for Bacanora Minerals Ltd 

Core Industrial REIT—established to invest in Irish-based industrial properties, predominantly located in the Greater Dublin Area. Vendor placing and new funds to a total of €225m, Target gross proceeds €207m. Expected Mid March

Polarean  - Medical drug-device combination company operating in the high resolution medical imaging market. Offer TBC. Due 26 March


Main Market Specialist Funds

Life Settlement—closed-ended investment company whose principal activities will be to support and manage portfolios of whole and partial interests in life settlement policies issued by life insurance companies operating predominantly in the US.  Due 6 Mar.

Main Market Premium Listing

Gore Street Energy Storage Fund—Seeking to raise £100m for the purposes of investment in a diversified portfolio of utility scale energy storage projects.  Due 12 April.

Broker and investment platform operator AJ Bell reported to be considering London float with a valuation at £50m. 


Breakfast buffet

Clear Leisure (LON:CLP) 0.93p £3.66m

Placing of £300k at 0.7p from the investment company with a portfolio of companies primarily encompassing the leisure and real estate sectors mainly in Italy.

The Placing, which was over-subscribed, is with certain existing and new investors. The funds raised will be used for working capital purposes, legal costs associated with debt recovery and to continue the development of the Company’s cryptocurrency strategy.

The focus of management is to pursue the monetisation of all of the Company’s existing assets, through selected realisations, court-led recoveries of misappropriated assets and substantial debt-recovery processes. 


Arix Bioscience (LON:ARIX) 218p £209.6m

Results of capital raise—circa £87m at 225p.

“Since the inception of Arix, just over 2 years ago, we have raised in excess of £250m to pursue our goal of accessing breakthroughs in life sciences and accelerating their development into important new medical treatments.

"We have built interests in 13 promising young businesses, to date, and see significant potential for value creation among them in the year ahead. We continue to evaluate other opportunities in high quality, science-based businesses and the financing announced today will enable us to embrace these for the benefit of our shareholders.”


cloudBuy (LON:CBUY) 4.8p £6.26m

FYDec17 results from the provider of cloud solutions to buyers and sellers.  Revenue for the year was £1.5m a reduction of 12% on 2016. This reduction was as a result of the end of 2 contracts in Q4 2016 and the continuing reduction in Company Formations revenue.  Operating loss excluding share based payments was £2.18m a reduction of 35% on 2016. Continuing cost initiatives are expected to result in a further reduction in administrative expenses in 2018. “Further investment of £1.7m from Roberto Sella in Dec 2017. This funding is anticipated to be sufficient to take the business to profitability based on forecast revenue from existing customers.”

“The main strategy for growth remains PHBChoices where we expect to see revenue in 2018 growing from the initial current level.”


Range Resources (RRL.L) 0.2p £13.29m

HY Dec17 results from the international exploration, development and production company, with interests in oil and gas projects in Trinidad and Indonesia, as well as oilfield services business in Trinidad. Financial performance has materially improved with a 77% reduction in loss before tax to $8.5m (prior year: $37.8m); Revenues increased by 39% to $5.4m (prior year: $3.9m), principally due to an increase in production; 

Trinidad: The average production for the period of 605 bopd was 22% higher than comparable prior year; Increase in production is mainly attributed to the ongoing waterflood programme, selective development drilling and workovers; Independent Competent Persons Report published confirming net 2P reserves of 16 MMstb and net 2C contingent resources of 8 MMstb.

Indonesia: The Company has been building an experienced operating team, and undertaking initial geological and geophysical studies; Upcoming work programme and budget are being finalised; and   Independent CPR published confirming net 2C contingent resources of 10.9 Bscf and 3.1 MMstb.


Osford BioDynamics  (LON:OBD) 160p £144.3m

The biotechnology company focused on the discovery and development of epigenetic biomarkers based on regulatory genome architecture, for use within the pharmaceutical and biotechnology industry, has presented its latest EpiSwitch™ biomarker data in a plenary talk entitled: "Multi-Center Biomarker Development for Diagnosis and Prognosis of Amyotrophic Lateral Sclerosis", at the 6th World CNS Summit in Boston, MA, 20-22 February 2018. Amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig's disease, is a type of motor neuron disease. 

OBD has demonstrated on the MIQE-compliant qPCR format of EpiSwitch™ that there are prognostic biomarkers that capture rates of development and stages of ALS. These results define actionable stratifications for individual patients on the basis of high resolution detection of chromosome conformations and regulatory genome 3D architecture.  This is a “unique opportunity to make a highly valuable contribution to improved patient care, clinical decisions and evidence of efficacy in drug treatments."


Shield Therapeutics (LON:STX) 17.5p £20.37m

Update following detailed analyses of the data from the double-blind period of the AEGIS-CKD study, which it has presented to the FDA in a previously scheduled pre-NDA meeting. Following a review of all enrolled subjects who completed the initial 16-week placebo-controlled portion of the study, a small number of patients in both treatment arms were identified as experiencing pre-specified events that could have led to withdrawal but, as permitted in the study protocol,  they remained.  Further analyses of the data have been conducted using an amended statistical analysis plan that removed the confounding data. As a result of these revised analyses, patients treated with Feraccru demonstrated a statistically significant response (p=0.0149) in haemoglobin levels after 16 weeks of treatment compared to placebo (difference 0.52g/ dl (CI 0.102, 0.930. Whilst the Company believes there is a clear and robust rationale for the analyses of the dataset as outlined, there can be no certainty that the FDA will accept the approach taken.  


Graphene NanoChem (LON:GRPH) 1.93p £3.89m

Pursuant to AIM Rule 1 the shares will delist on 19 March.

“The Company is pleased to report progress in advancing the Proposed Acquisition, including substantial work on the legal and financial due diligence. The Directors believe the Proposed Acquisition, if completed, would be transformational for the Company and its shareholders and will continue to work with their respective advisers to complete the necessary documentation to execute the Proposed Acquisition.

It is contemplated that upon completion of the Proposed Acquisition the Company will be undertaking an IPO, with a view to being admitted to trading on AIM in conjunction with the execution of a simultaneous fundraise, the proceeds of which are intended to be used to finance the development of the enlarged group going forward.”


Techfinancials (LON:TECH) 21.6p £15.67m

“TechFinancials is pleased to provide an update on significant progress at Cedex Holdings Ltd, a company in which it currently has a 2% interest and an option to acquire a further 90%, which would give TechFinancials up to 92% of CEDEX or 87.4% on a fully diluted basis. CEDEX is a blockchain-based on-line exchange for diamonds.

As scheduled, CEDEX will launch its token pre-sale event today, 16 March 2018 at 10.00am. CEDEX has set the sale price of the CEDEX coins at 1 Ether = 900 CEDEX coins.

The CEDEX management team has indicated that there is strong demand from potential participants in the event, which is expected to last up to 10 days.”

We could see no forecasts,


Conviviality LON:(CVR) 101.2p £185.48m

Further to the update announcement on 14 March 2018, the Company has been actively engaging with its stakeholders while it continues to work through its funding requirements: 

Customers and suppliers remain supportive of the Company and are working closely and constructively with the Company at this time;

We have had constructive discussions with our lenders which are on-going;

The Company has engaged with HM Revenues and Customs ("HMRC") regarding the £30m payment due on the 29 March 2018. HMRC has been receptive to our needs and these discussions continue; and

The Company is engaging with its advisers and broker regarding the possibility of an equity fundraise to effect a recapitalisation of the business.

FYApr18E rev £1.7bn and PBT £46.1m.  pEc.6x.





]]> Morning View . Global trade war risk drives safe haven investment Wed, 07 Mar 2018 11:49:00 +0000 Bluejay Mining* (LON:JAY) - STRONG BUY - Target Price 37p – Bluejay awarded Prospector and Developer of the Year for 2017 by Greenland

Gem Diamonds (LON:GEMD) –Sixth large diamond of 2018 from Letseng

Horizonte Minerals (LON:HZM) – Araguaia Feasibility Study planned for mid-2018

Wolf Minerals (LON:WLFE) – Interim results and operating update


Investor attendance indicates new confidence at Canadian mining conference

  • Swelling attendance for the PDAC conference in Toronto can be a strong indicator for clear recovery in confidence in the mining sector, as annual numbers continue on their upturn. While attendance is still a long way from its 2012 peak before producers were pummelled by a sharp price downturn, a number of sell-out events, including access to an investor exchange where mining companies showcase their assets, signals strong returning interest.
  • Themes covered in presentations and discussed on the sidelines included growing competition from exchange-traded funds and flashier commodities such as cannabis; still-tight capital markets for juniors; and stirring interest in mergers and acquisitions among larger producers.
  • Despite sentiment improving in the sector, capital still remains tight, especially for juniors. PDAC President Glenn Mullan notes “Junior mining companies are still struggling to raise money. It’s the seniors and producers that are doing very well”. Head of TMAC Resources also said the biggest issue is there isn’t money flowing to the sophisticated resource investors. Meanwhile other bankers highlighted a growing valuation gap as momentum-focused investment funds shun juniors in favour of large, liquid stocks.


Dow Jones Industrials





Nikkei 225





HK Hang Seng





Shanghai Composite





FTSE 350 Mining





AIM Basic Resources







US – Gary Cohn, a White House top economic adviser, quit from the National Economic Council after unable to convince President to re-consider potential import tariffs.

  • Cohn has been opposing the plan together with other people in the administration including Steven Mnuchin (Treasury secretary), Rex Tillerson (Secretary of state) and Jim Mattis (Defence secretary).
  • Equities and the US$ index traded lower on the news while safe haven assets gained including bonds and gold.
  • President is expected to sign new tariffs into law in the next few days.
  • Lael Brainard, a voting member on the FOMC, sounded optimistic on the US economic outlook suggesting the pace of monetary policy tightening may need to accelerate.
  • “In the earlier period, strong headwinds sapped the momentum of the recovery and weighed down the path of policy… today, with headwinds shifting to tailwinds, the reverse could hold true,” Brainrd commented yesterday.
  • “The most notable tailwind is the shift in America’s fiscal policy stance from restraint to sUBStantial stimulus in an economy close to full employment.”


Germany – German carmakers are among the most heavy hit on the local stock market on the back of increased chance of a full blown trade war between the US and its trade partners.

  • Trump earlier twitted that there is a potential for the US to impose tariffs on imported EU cars should Europe come back with retaliatory tariffs in response to charges on steel and aluminium.
  • “If the EU wants to further increase their already massive tariffs and barriers on US companies business there, we will simply apply a tax on their cars which freely pour into the US,” Trump said.


UK – Annual property prices growth rate slowed to the weakest in nearly five years in February, according to Halifax numbers.

  • The Halifax building society report the average home price fell from £226,408 in November, to £224,353 last month. That is a fall of £2,055.

RBS agrees to settle US$500m with the State of New York over miss-selling of financial products

  • The agreement pays US$100m to the state and US$400m to miss-sold homeowners.
  • New Yorkers are still feeling the effects of the housing crash according to the state attorney-general
  • Will be interesting to see if a pullback in house prices in the UK might lead to similar settlements?


Australia – GDP growth slowed more than forecast in Q4//17 as a pickup in personal consumption has been outweighed by a fall in exports on disrupted shipments of raw materials.

  • The A$ dropped 0.6% on the news but since has recovered most of its losses amid a pronounced weakness in the US$ on increased chance of proposed tariffs being brought into effect.
  • GDP (%qoq/yoy): 0.4/2.4 v 0.7/2.9 in Q3/17 and 0.5/2.5 forecast.


North Korea – The government is making steps towards de-escalation of tensions between neighbouring states no the Korean peninsula.

  • North Korea suggested to Seoul it was open to negotiations over ending its weapons programme and would suspend tests while talks are underway.
  • On a separate note, the US imposed new sanctions on the nation of the use of chemical weapons in the assassination of Kim jong Nam, the half-brother of North Korean leader.
  • “This public display of contempt for universal norms against chemical weapons use further demonstrates the reckless nature of North Korea and underscores that we cannot afford to tolerate a North Korean WMD program of any kind,” State Department said.



US$1.2409/eur vs 1.2338/eur yesterday  Yen 105.70/$ vs 106.11/$  SAr 11.827/$ vs 11.838/$  $1.387/gbp vs $1.382/gbp  0.781/aud vs 0.776/aud  CNY 6.324/$ vs 6.343/$


Commodity News

Precious metals:         

Gold US$1,332/oz vs US$1,322/oz yesterday

  • Gold prices resume their advance in the prospect of global trade war uncertainties which are spooking investors and boosting demand for safe haven assets. Bullion for immediate delivery gained as much as 0.5% to $1,340.59 “as the US trade tariff saga unfolds, we can expect stronger gold prices as the Trump administration adopts a bellicose approach on global trade policies”, according to Phillip Futures analysis. “Rising trade protectionism will elicit bearish sentiments on global currencies”.
  • While gold is favoured during turbulent times, UBS Group AG have warned metals to energy prices will be hurt should the US levies spark a global trade war, with commodity powerhouse Australia forecasting only a damaging race to the bottom. “It’s still good for gold” noted head of commodities and Asia-Pacific foreign exchange at the bank’s wealth-management unit, “obviously, going into a deep trade war, industrial commodities are going to be negatively affected”.
  • The risks of a global escalation surged earlier this week as President Trump stuck to his plan for raising import tariffs on steel to 25% and aluminium to 10%, provoking the departure of Gary Cohn as his top economic adviser. Among others, the European Union has vowed to respond with a ‘tit-for-tat’ war and has drawn up a $3.5bn hit list of retaliatory tariffs.
  • Senate leader Mitch McConnell went on to say “there is a lot of certainty among Republican senators that this could sort of metastasise into sort of a larger trade war”. Cohn’s move “opens the environment up to a while new wave of uncertainty. The likelihood of a trade war just jumped dramatically”, notes chief market strategist at JonesTrading Institutional Services.
  • The physical market was dented as import demand by India, the world’s biggest consumer after China, slid by almost a third last month as higher prices deterred buyers and traders deferred purchases in the hope of a proposed cut in duties. Overseas purchases settled 31% lower to 67 tonnes in February, equiValent to $2.2 billion. Indian import taxes on the precious metal sits at 10%, and ended up not getting cut in its federal budget of Feb 1st.

   Gold ETFs 72.2moz vs US$72.3moz yesterday

Platinum US$963/oz vs US$962/oz yesterday

Palladium US$975/oz vs US$984/oz yesterday

Silver US$16.68/oz vs US$16.44/oz yesterday


Base metals:   

Copper US$ 6,960/t vs US$6,949/t yesterday

  • As broad industrial metals fall under risk of trade wars, fundamental demand outlook for copper remains strong. The price of the red metal climbed the most in seven years in 2017, with the positive uptrend expected to be sustained on electric vehicle, mobile phone and computer chip manufacture growth. By 2025, demand for copper in electric-vehicle batteries will be more than three times what’s forecast for 2020, and demand will triple again by 2030, according to Bloomberg New Energy Finance.

Aluminium US$ 2,137/t vs US$2,147/t yesterday

Nickel US$ 13,490/t vs US$13,465/t yesterday

  • Russian mining firm Norilsk Nickel forecast strong demand from the battery industry from the 2020s, consuming more than 500,000 tonnes per year of the metal by 2025. This figure represents 25% of 2017 production, swelling from 3% consumption by the current battery industry.

Zinc US$ 3,288/t vs US$3,287/t yesterday

Lead US$ 2,418/t vs US$2,420/t yesterday

Tin US$ 21,350/t vs US$21,465/t yesterday



Oil US$65.3/bbl vs US$65.6/bbl yesterday

Natural Gas US$2.764/mmbtu vs US$2.709/mmbtu yesterday

Uranium US$22.25/lb vs US$22.25/lb yesterday



Iron ore 62% Fe spot (cfr Tianjin) US$73.3/t vs US$72.9/t - Rio Tinto to launch driverless trucks at fifth iron ore mine

  • Rio Tinto will expand its autonomous haul truck operations to the West Angelas mine this year, giving it five iron ore sites with the driverless vehicles in the Pilbara of Western Australia
  • Once the trucks have been deployed, Rio’s autonomous fleet at its Pilbara iron ore operations will increase to 100 vehicles, more than 25 per cent of Rio’s 380 haul-truck fleet in the Pilbara is already autonomous, with the miner expecting to have more than 130 trucks operating without drivers by next year
  •  Driverless trucks delivered an extra 700 hours more a year than their manned counterparts, representing an extra month’s work over the course of the year, as well as a perfect safety record, the company is also working to deliver a completely automated, driverless operations for its 50 trains and 1200 ore cars operating over 1700km of track by the end of the year

Chinese steel rebar 25mm US$680.6/t vs US$681.1/t - EU extends duties on stainless steel pipes from China

  •  European Union extended anti-dumping duties of between 48.3 and 71.9 percent on stainless steel pipes from China for a further five years, the EU’s Official Journal said on Tuesday
  •  Commission concluded that Chinese producers had significant spare capacity and that this was likely to lead to large-scale imports into the European Union at dumped prices if the measures were lifted
  • The measures are among 17 put in place by the European Union against different grades of steel and steel products from China

Thermal coal (1st year forward cif ARA) US$79.2/t vs US$79.0/t

Premium hard coking coal Aus fob US$234.1/t vs US$234.1/t



Tungsten APT European US$322-330/mtu vs US$319-326/mtu

Cobalt LME 3m US$83,250.0/t vs US$80,500.0/t - Glencore’s talk to sell cobalt to Chinese firm falter on price

  • Glencore is in talks to sell around a quarter of its cobalt output in a one-year deal to Chinese firm GEM, but price is a sticking point as Glencore and other major producers are now able to exert more influence in negotiations
  •  Source close to the matter said GEM had not yet signed a contract for this year with Glencore, which was offering a price with a fixed instead of a percentage discount to the monthly average from trade publication Metal Bulletin
  • “Volume and price are still under discussion,” the source said, adding volumes being discussed for 2018 were “more than 10,000 tonnes”, which is bigger than last year’s one-year contract of “less than 10,000 tonnes”


Company News

Bluejay Mining* (LON:JAY) 25p, Mkt Cap £212m – Bluejay awarded Prospector and Developer of the Year for 2017 by Greenland

STRONG BUY - included in MSCI index

Target Price 37p

  • Bluejay has been awarded "Prospector and Developer of the Year 2017" by the Government of Greenland. 
  • The award is given to companies or individuals who have demonstrated initiative and innovation within Greenland's mineral industry, robust environmental practices and social responsibility as well as providing inspiration on how to successfully explore in Greenland.
  • The award win was announced at the Government of Greenland's Greenland Day reception at the PDAC 2018 convention.
  • The award recognises Bluejay’s work and advance at the Dundas Titanium Project near Nuuk in north-west Greenland as well as work on the Disko-Nuussuaq Magmatic Massive Sulphide Nickel-Copper-Platinum project which lies to the South near the tourist town of Ilulissat which is 1,071m south of Qaanaaq.

Conclusion: This is important recognition for the company in Greenland. Rod McIllree has dedicated much of his life to exploration in Greenland and appears to be well respected in government circles for his dedication and efforts. The award indicates to us that the permitting process should go to plan and that Bluejay will be able to ramp up production of ilmenite feedstock from the beach at Dundas in the coming summer field season.

*SP Angel act as nomad and broker to BlueJay Mining.  An SP Angel Mining analyst has visited the Dundas (formerly Pituffik) ilmenite sands project in Greenland.


Gem Diamonds (LON:GEMD) 85.4p, Mkt Cap £118.4m –Sixth large diamond of 2018 from Letseng

  • Gem Diamonds has announced the recovery of a 152 carat white Type IIa diamond from its 70% owned Letseng mine in Lesotho.
  •  The most recent stone brings the number of stones exceeding  carats in size recovered so far in 2018 to six. All the stones, which include the 910 carat stone announced in January and reportedly the 5 largest diamond ever recovered, are reported to be Type IIa stones suggesting that not only are these large stones but they are of high quality.
  • At this stage, it is not clear what prices may be realised from the sale of these stones, however, the Letseng mine has built a reputation for the high values achieved by its production including the sale, last year, of a 58.38 carat white diamond which sold for US$61,905/ct (US$3.6m).

Conclusion: Gem Diamonds is recovering a number of large, potentially very valuable diamonds at the moment. Last year, the Letseng mine recovered seven diamonds larger than 100 carats in size while so far this year the mine has yielded six of these sized diamonds.


Horizonte Minerals (LON:HZM) 4.15 pence, Mkt Cap £59.4m – Araguaia Feasibility Study planned for mid-2018

  • Horizonte Minerals has confirmed that a significant proportion of the feasibility study for its Araguaia ferronickel project in Brazil is now complete and the study “is now scheduled for completion mid-year 2018.”
  • The company is currently focussed on optimising the plant site layout and the process flow sheet in order to balance capital costs against operational efficiencies.
  • Horizonte Minerals is also examining the mine scheduling with a view to possibly trading off the increased transport costs of shipping high-grade saprolite ore from its recently acquired Vermelho nickel-cobalt project against the benefits of capturing the current higher nickel prices.
  • We observe, however, that the “Vermelho mineral resource is historic in nature” and though it was no doubt done thoroughly by the reputable consultants, Snowden, on behalf of the previous owners, Vale, Horizonte is planning to undertake a new resource estimate to current NI-43-101 reporting standards “looking at the higher-grade nickel-cobalt portions of the deposit”. It seems likely that a final decision on shipping ore from Vermelho may not be made until the new resource estimation work is available.
  • Today’s announcement reiterates the broad parameters of a 900,000tpa of ore open pit mining operation feeding a central rotary kiln electric furnace to produce 14,500tpa of nickel per annum in 52,000tpa of ferronickel.
  • “The current mineral reserve supports a 28-year mine life with a 2 year construction period.”
  • Commenting on the current state of the nickel market the company points out that “While not obviously evident from the 8% rise in the average price in 2017, the nickel market noted a record annual supply deficit, driven by increased demand which outstripped a gain in supply” and “Stainless steel demand remains strong, underpinned by growth in 300-series steel output, up 7% in 2017.  Estimates indicate primary nickel demand in stainless will increase by almost 9% to more than 1.5Mt.”
  • The company also highlights the beneficial impact of current interest in moves towards electric vehicles which had “a positive effect on the cobalt market, with the metal’s 2017 average price more than double that of a year earlier and showing continued strength so far in 2018.”

Conclusion: Horizonte Minerals is moving ahead with feasibility work for Araguaia and we look forward to the findings of the feasibility study in the middle of 2018.


Wolf Minerals (LON:WLFE) 3.4p, Mkt Cap £37m – Interim results and operating update

  • Wolf Minerals reports a reduced loss of $29.2m for the six-months ending 31st December 2017 (2016 – loss of $50.6m).
  • The company has reduced operating cash outflows to $18.6m (2016 $28.7m) and net free cash outflow after investment reduced to $32.5m from $39.5m in 2016.
  • Net debt has, however increased from $148.6m at 30th June 2017 to $197.1m at 31st December.
  • The processing plant at the Drakelands mine treated approximately 960,000 tonnes of ore at an undisclosed grade to produce 79,099 metric tonne units (mtu) of tungsten concentrate and the company notes that it achieved an improvement in “both production and sales … up 36% and 37% respectively on the previous period”. The plant has, however reverted to restrictions on weekend operations which will have had a negative effect on the available processing hours.
  • Wolf Minerals details specific operating improvements it has delivered including improved pre-concentrate recovery arising from the dense media circuit and from “more consistent circuit run time” and from improvements in the gravity fines circuit. Wolf also continues to work on its ore blending strategy to optimise plant feed.
  • The company states that “The major activities within the operating turnaround plan were largely completed by the end of the period, with only two more outstanding items in the refinery and gravity fines to be implemented. These remaining activities will be scheduled over the coming months as the operating turnaround plan has been incorporated into daily activities and the focus moves to optimisation and performance improvement in a more stable environment.”


Conclusion: The improvements at Drakelands are being hard won and the company is fortunate to have both the supports of its principal investor,  RCF and an improving tungsten price as it works through the necessary improvements, though we believe there is still some way to go to get the operation onto a sustainable operational and financial footing.

]]> Bracing Yourself for a Possible Near-Term Melt-Up Fri, 05 Jan 2018 09:28:00 +0000 Bracing Yourself for a Possible Near-Term Melt-Up
Thanks to a subscriber for this report by Jeremy Grantham which may be of interest. A section of this report is posted in the subscriber's area.

Eoin Treacy's view

A link to the full repoort is posted in the Subscriber's Area.  We do not yet have evidence of bubbly activity in the majority of assets, with bitcoin and the other cryptocurrencies representing the most obvious exception.


Intel, Microsoft Deal With Widespread Computer-Chip Weakness
This article by Ian King for Bloomberg may be of interest to subscribers. Here is a section:

News of the weakness, found last year and reported Tuesday by The Register technology blog, weighed on shares of Intel, the biggest semiconductor maker, while boosting rivals including Advanced Micro Devices Inc. Intel’s silence for most of Wednesday added to investors’ unease.
Late in the day, Intel, Microsoft, Google and other tech bellwethers issued statements aimed at reassuring customers and shareholders. Intel said its chips weren’t the only ones affected and predicted no material effect on its business, while Microsoft, the largest software maker, said it released a security update to protect users of devices running Intel and other chips. Google, which said the issue affects Intel, AMD and ARM Holdings Plc chips, noted that it updated most of its systems and products with protections from attack. Inc., whose AWS is No. 1 in cloud computing, said most of its affected servers have already been secured.

Eoin Treacy's view
Every other month we have news of just how porous the devices we rely on for just about everything are to exposing our personal information. This is a significant challenge for the IT sector in all its forms. The argument for increasing reliance on the internet, cloud and Internet of Everything is completely dependent on security, lest the devices we employ be used against us. This represents a cost which both in terms of speed and convenience but potentially also money for consumers and represents a challenge for corporations to keep under control.


Supersonic. Hypersonic Is the U.S. Military's New Speed
This article by Justin Bachman for Bloomberg may be of interest to subscribers. Here is a section:

Boeing Co.’s XS-1 (Experimental Spaceplane), which the company dubs “Phantom Express,” got a green light this week by the Defense Advanced Research Projects Agency, or Darpa. The XS-1 is designed to quickly lift satellites as heavy as 3,000 pounds into orbit for $5 million or less, launching from the ground, deploying a small upper-stage module, and then landing like a traditional airplane—the key to reuse and lower operating expense. Darpa also has a separate program aimed at launching 100-pound satellites for less than $1 million per launch, using conventional aircraft.
“The XS-1 would be neither a traditional airplane nor a conventional launch vehicle but rather a combination of the two, with the goal of lowering launch costs by a factor of ten and replacing today’s frustratingly long wait time with launch on demand,” Jess Spoonable, a Darpa program manager, said in a May 24 statement.

Eoin Treacy's view
It has long occurred to me that the stealth bomber had its maiden flight in the late 1980s, but only entered service years later. Then I think about how different the original iPhone is from what I carry around.


Trump Administration Taking Step That Could Threaten Marijuana Legalization Movement
This article by Charlie Savage and Jack Healy for the New York Times may be of interest to subscribers. Here is a section:

The Trump administration on Thursday will free federal prosecutors to more aggressively enforce marijuana laws, effectively threatening to undermine the legalization movement that has spread to six states, most recently California.
The Justice Department is expected to rescind an Obama-era policy of discouraging federal prosecutors from bringing charges of marijuana-related crimes in states that had legalized sales of the drug.
It was not immediately clear whether the administration intends to carry out a federal crackdown on marijuana dispensaries, or is merely rattling its saber.
The Associated Press first reported the announcement, and a government official familiar with the matter confirmed that the change would be announced later on Thursday.

Eoin Treacy's view
This announcement acted as a catalyst for profit taking on cannabis related shares today as it introduces an additional risk to the market. Nevertheless, it also highlights the potential for a confrontation between the states and the Federal government about what is and is not permissible and who has sway over what can be consumed. Until the situation is resolved the potential for volatility is non-trivial.




]]> Euro Tests Three-Year High as End-of-Stimulus Fear Batters Bonds Wed, 03 Jan 2018 09:08:00 +0000 Euro Tests Three-Year High as End-of-Stimulus Fear Batters Bonds

This article by John Ainger and Samuel Potter for Bloomberg may be of interest to subscribers. Here is a section: 

The currency jumped, sapping stocks, and bonds slid as a slew of data signaled a potential uptick in inflation in the euro area, after manufacturing growth accelerated to a record in December. The numbers followed comments at the weekend from European Central Bank policy maker Benoit Coeure, who said that unless inflation disappointed there’s a “reasonable chance” the central bank’s extension of QE in October could be the final one.

While Coeure didn’t mention the exchange rate, his comments were a boon for euro bulls and coincided with a period of ongoing dollar weakness. The common currency’s strength is translating into a painful start to the year for Europe’s export-heavy stock markets, while bonds have picked up where 2017 left off, with benchmark German bund yields rising to the highest since October.

“The ECB suggestion that bond buying will not be extended is likely behind the recent push higher in the euro,” said Neil Jones, head of currency sales at Mizuho Bank Ltd. in London. “My sense is the euro will extend beyond its three-year high in the next two weeks.

Eoin Treacy's view

If I had to pick one market to watch on a daily basis in 2018 it is German Bunds. Germany has benefitted enormously from the ECB’s bond buying program and has enjoyed borrowing costs that were previously unimaginable. With negative yields on bonds out to seven-year maturities there is significant scope for re-rating when the ECB eventually exits its program.


Email of the day on the big picture and biotech

Happy and prosperous New Year to you and David and all the staff at “Fuller Tracey Money”.

I compliment you on the outstanding “Year-end Big Picture” video.  Your assessment of the interaction between the social, political and financial considerations is particularly insightful and gives me, and all your readers, a firm base on which to plan our investing for 2018.  Towards the end of the video you discussed the inter-relationship between AI and big data.  You said health care and biotech sectors would be major beneficiaries of these developments.
Only today I read a comprehensive “Seeking Alpha” biotech sector report which may be of interest to readers.

Eoin Treacy's view

Thank you for your kind words and I’m delighted you enjoyed the yearend video. At The Chart Seminar, I spend a good deal of time on the first day talking about the dangers of myopia when looking at markets. This is even more important when we have open positions that we monitor on a daily basis. It is too easy to focus only on what we own and to fall into the temptation of thinking we understand everything about them because we are looking at them every day. That is why when analysing any market, we recommend starting with as much data as you can get your hands on. A long-term chart tells us instantly whether we are in a secular bull or bear market. My resolution in 2018 is spend more time focusing on long-term charts. To read more, please click here.


Recreational pot puts medicinal marijuana on the backburner just as demand explodes
This article by Geoff Zochodne for the Financial Post may be of interest to subscribers. Here is a section:

But PwC said in a report earlier this year that some industry stakeholders felt the federal government’s “tight timeframe” for recreational legalization would lead to a lack of consultation and the potential to miss the opportunity to right the medical regime.
“Because decision-makers will have so little time for regulatory development, the focus will be exclusively on recreational cannabis, to the detriment of changes that may be required for medical cannabis,” PwC warned, adding that changes to the medical regime could be as far away as three years as a result.
One outstanding problem is that doctors may still be hesitant to prescribe cannabis to their patients, creating a bottleneck in the system for both patients and producers.

Eoin Treacy's view
2018 will see Canada become the first G7 nation to adopt recreational cannabis laws. That will subsequently represent significant challenges for the medical cannabis sector which will is dependent on prescription reimbursements from the national health system. To read more, please click here.





]]> Juncker and May fail to reach Brexit deal amid DUP doubts over Irish border Tue, 05 Dec 2017 08:43:00 +0000 Video commentary for December 4th 2017

Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.

Some of the topics covered include: rotation underway in response to the passing of tax cuts in the USA. Technology overbought conditions being unwound, domestically oriented sectors breaking out, gold steady, Rupee firm, oil pulls back from $65, 5-year bond yield tests the upper side of its range.

Juncker and May fail to reach Brexit deal amid DUP doubts over Irish border

This article by Daniel Boffey and Lisa O’Carroll for the Guardian may be of interest to subscribers. Here is a section: 
The text of the agreement has to be discussed in 27 national capitals, if EU leaders are to sign it off at a summit on 14-15 December. “The less time we have before the European council, the more difficult it becomes to run the text through 27 national administrations and get an agreement,” said one. “It is [the UK’s] decision to leave it to the last minute and it is [the UK’s] risk.”

Juncker and May attempted to put a brave face on the spectacular collapse of their plans in press statements at the end of the day. The commission president praised May for being a “tough negotiator” who was energetically fighting for Britain’s interests.

May insisted that progress was in sight and that the negotiators would reassemble by the end of the week, with Wednesday evening now sketched into officials diaries. “On many of the issues there is a common understanding and crucially it is clear we want to move forward together”, May told reporters. “There are a couple of issues, some differences do remain, which require further negotiation and consultation. And those will continue but we will reconvene before the end of the week and I am also confident we will conclude this positively.”

Government sources made clear that there were two key sticking points yet to be solved in the negotiations with the EU27 - the role of the European Court of Justice when it came to citizen rights and the Irish border.

Eoin Treacy's view
The Democratic Unionists (DUP) must be thanking their lucky stars that Theresa May needs their help to keep her government afloat. She has little choice than to consider their interests in the negotiations. As I see it there are five potential options for the question of the Irish border to be resolved.

Overextensions relative to the trend mean

Eoin Treacy's view
The passage of the tax bill was initially seen as a bullish catalyst for Wall Street but the primary indices gave up much of their advances by the end of the session. If we drill down a little further we can see there are some clear winners and losers.

Eoin's personal portfolio: stock market short initiated

Eoin Treacy's view
Details of these trades are posted in the Subscriber's Area.

Eoin's personal portfolio update from December 1st

Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

Russian Ships Near Data Cables Are Too Close for U.S. Comfort
Thanks to a subscriber for this article by David E.Sanger and Eric Schmitt for the New York Times. Here is a section:
The issue goes beyond old worries during the Cold War that the Russians would tap into the cables — a task American intelligence agencies also mastered decades ago. The alarm today is deeper: The ultimate Russian hack on the United States could involve severing the fiber-optic cables at some of their hardest-to-access locations to halt the instant communications on which the West’s governments, economies and citizens have grown dependent.

While there is no evidence yet of any cable cutting, the concern is part of a growing wariness among senior American and allied military and intelligence officials over the accelerated activity by Russian armed forces around the globe. At the same time, the internal debate in Washington illustrates how the United States is increasingly viewing every Russian move through a lens of deep distrust, reminiscent of relations during the Cold War.

Eoin Treacy's view
The USA is now the world’s largest oil producer, and its economy is not as dependent on energy as other major producers. At the other end of the spectrum Russia and Saudi Arabia are also major producers but their economies are close to totally dependent on energy. Just how much of a gamechanger unconventional oil and gas supply is cannot be underestimated as the geopolitical implications continue to unfold.

Email of the day on cannabis investments
Could you add and / or analyze the Cannabis Marijuana ETF isin code CA44054J1012? I'm sure the sector is of interest

Eoin Treacy's view
Thank you for this suggestion. I agree cannabis is a very topical sector not least as the USA’s opioid epidemic continues to make headlines.

Email of the day on total known holdings of gold

The chart for Total Known ETF holdings of Gold has started to accelerate upwards in the last few days. Could you comment as to whether this is significant.

Eoin Treacy's view
Thank you for bringing this chart to my attention.
Mars and beyond: Modular nuclear reactors set to power next wave of deep space exploration

This article from Gizmag may be of interest to subscribers. Here is a section:

Rated at 10 kilowatts, the Kilopower reactor puts out enough power to support two average American homes and can run continuously for ten years without refueling. Instead of plutonium, it uses a solid, cast uranium 235 reactor core 6 inches (15 cm) in diameter. This is surrounded by a beryllium oxide reflector with a mechanism at one end for removing and inserting a single rod of boron carbide. This rod starts and stops the reactor while the reflector catches escaping neutrons and bounces them back into the core, improving the efficiency of the self-regulating fission reaction. Until activated, the core is only mildly radioactive.


The design is modular, so the self-contained reactor units can be hooked together to provide as much power as and where it's needed, whether it's a deep space probe or a Martian outpost. According to Lee Mason, STMD's principal technologist for Power and Energy Storage at NASA Headquarters, the technology is "agnostic" to its environment, allowing it a wide range of applications.

Eoin Treacy's view
Small, modular and safe reactors, that can be produced in factories and transported to their destination via regular roads represent perhaps the only feasible future for the nuclear industry. The fact NASA is moving ahead with such designs, for its own purposes, increases the potential similar programs will find utility in the wider economy.

]]> In the Papers - BMW, Sky, Mazda, Plus500 Wed, 09 Aug 2017 07:48:00 +0100 Newspaper Summary

The Times

Fight goes on to extend deadline for PPI claims: A compensation claims company has vowed to fight on after it lost the first round of a legal battle to extend the deadline for claiming compensation on missold payment protection insurance.

Brexit forces Prudential Regulation Authority to sideline other tasks: The City regulator in charge of preventing financial crises has warned that the “material extra burden” of planning for Brexit will force it to put other work on the back burner.

Mystery of Air India artworks that have vanished off the radar: Troubles keep stacking up for Air India. Amid the tales of financial mismanagement emerging from the national carrier, and as vultures circle in a possible firesale, it has emerged that the company has lost an unknown number of artworks from a collection valued at more than £200 million.

Chinese aluminium cutbacks lift price over $2,000 a tonne: Aluminium was pushed above $2,000 a tonne for the first time in three years after the Chinese authorities cut production as part of an environmental crackdown.

British factory standards ‘worse than Asia’: Many of Britain’s clothing factories have worse ethical standards than manufacturers in China, Bangladesh and Burma, the Boss of one the U.K.’s biggest fashion retailers has claimed.

Germany’s surplus is on the rise: Germany’s trade surplus widened to a ten-month high in June at a time when the country faces pressure from the U.S. and Europe to rebalance in favour of imports and investment.

Outgoing Paddy Power Betfair Chief Breon Corcoran admits tech plan was disruptive: The outgoing Chief Executive of Paddy Power Betfair admitted that if the bookmaker had known how disruptive integrating the merged company’s technology platforms would be it might have delayed the project.

Slowdown in China raises trade fears: Growth of China’s imports and exports eased in July, raising concerns that global trade with the world’s second largest economy is starting to slow.

IWG office expansion unsettles investors: The biggest serviced office operator in the world may be boosting its global presence to cater for the boom in short-term shared office space but investors did not take kindly to such expansion hitting profits.

The Independent

Bank of England covered up failure of 1914 fund-raising effort: The Bank of England covered up a failure by the government of the day to raise enough money from private investors to fund a major borrowing programme at the outset of the First World War, new research has uncovered.

Airbnb and New York hotels clash over ‘fear-mongering’ YouTube video: Airbnb has long irked the hotel industry since it started over a decade ago. It seems the conflict between traditional hotels and the homes-rental startup may have worsened.

BMW allies itself with engineers as doubts of self-driving cars arise: BMW and Daimler, the world’s top luxury carmakers, have announced alliances with suppliers, talking up the virtues of having a bigger pool of engineers to develop a self-driving car.

Broadcasters in U.K. seeking Amsterdam offices as Brexit talks stall: At a glass-wrapped industrial estate in London north of the River Thames, Brexit is giving global broadcasters a headache.

RBS Boss tells fraud victims to take more care and not expect a refund: The Boss of the Royal Bank of Scotland has reportedly warned that victims of bank fraud should not expect automatic refunds.

Employers struggling to recruit staff as vacancies see less candidates: Employers are facing ever more difficulties in recruiting staff as the number of candidates for jobs shrinks in the U.K. due to Brexit.

Dutch authorities begin testing chicken meat as contaminated eggs scandal widens: Dutch authorities have reportedly started testing chicken meat originating from farms found to have produced eggs contaminated with insecticide.

The Daily Telegraph

FT journalists revolt over colleague’s sacking: The Financial Times faces newsroom unrest after it allegedly sacked a journalist who had been on unpaid leave without warning or compensation.

Murdochs face more delays and scrutiny of Fox News in £11.7 billion Sky takeover: The Government has erected a new obstacle to the Murdoch family’s pursuit of full control of Sky, after asking the media regulator to look again at 21st Century Fox’s record as a broadcaster.

Businesses urge Ministers to give them clarity on post-Brexit industrial strategy: Industry is calling for clarity from the Government over the nascent industrial strategy or risk one of the key planks of Conservative policy failing.

Success of pricing strategy leaves Pets at Home investors purring: Pets at Home shares leapt by almost 8% as after the company revealed that its efforts to lower prices was encouraging shoppers to return to its stores.

Diageo Boss sees pay drop a third in 2017 after missing long-term performance targets: The Boss of drinks giant Diageo has seen his pay drop a third after failing to hit targets linked to the long-term performance of the company.

Rotork’s flat results bear out decision to revamp management: Rotork, the engineering business that dumped its Chief Executive two weeks ago because of lacklustre performance, has reported flat sales at the half year mark.

Chinese firm Alibaba to open a ‘car vending machine’ next year: Chinese e-commerce company Alibaba is to open its own car “vending machine” next year in a bid to make buying a car “as easy as buying a can of Coke”.

The Questor Column:

Not everyone likes it, but there are sound financial reasons to buy tobacco: The nature of its product and a Serious Fraud Office investigation into allegations of bribery in Kenya mean that British American Tobacco is not a stock that will pass muster for investors who prefer to have an ethical bent to their portfolio – but the subsequent price swoon could present patient, long-term investors with a chance to step in. The move to 100% ownership of Reynolds, which deepens BAT’s presence in the U.S., may therefore not be as unfortunately timed as the share price response to the FDA’s consultation suggests. BAT is targeting $400 million (£307 million) of cost synergies from the acquisition and this helps to underpin analysts’ forecasts for further steady earnings and dividend growth, despite the long-term challenges posed to cigarette volumes by regulatory action and public health campaigns. The gradual shift to plain packaging in certain countries, including Australia, France, Britain and Ireland, is a further threat here, but emerging markets remain a key focus, with 80% of smokers living in low and middle-income countries, according to the World Health Organisation. It is growth here that is helping compensate for declines in the West. Questor says ‘Buy’.

The Guardian

Bank of England warns Brexit will put strain on regulatory resources: The Bank of England has warned that the task of regulating the City after Brexit will put a strain on its ability to police the financial sector.

Sky set to retain live Football League rights in £180m-a-year deal: Sky is set to retain the rights to the Football League in a blockbuster bidding battle with BT that has seen the price as much as double to £180 million a season.

Ed Sheeran’s Divide puts Warner Music’s streaming income on track to cross £1 billion: The popularity of Ed Sheeran and his latest album, Divide, helped drive a 58% increase in streaming revenue for Warner Music, putting it on track to make more than $1.3 billion (£1 billion) from digital services including Spotify and Apple Music this year.

Pensioners living in golden era as income rise outstrips workers’: Pensioners enjoyed a golden era between 1977 and 2016, with official figures revealing that their incomes have nearly tripled in real terms, rising much faster than the incomes of working people.

Mazda boosts petrol engine efficiency in fresh blow to diesel: One of the world’s largest automotive firms has hailed a technological breakthrough for the petrol engine, in an engineering twist for an industry racing to embrace the electric car.

Daily Mail

New Look profits plummet 60% as it struggles to deal with tough times on the high street: High street fashion chain New Look has revealed plummeting sales and earnings due to a ‘difficult’ market and cautioned trading will remain under pressure into 2018.

House builder Bellway says residential property market ‘robust’ as British buyers shrug off economic uncertainty: House builder Bellway has said the residential property market remains ‘robust’ with a healthy increase in sales recorded, despite uncertain economic conditions. In a trading update, the Newcastle-based group said revenue increased by more than 13% to £2.5 billion in the year ending July 31.

McDonald’s targets double-digit growth in China with 2,000 new stores over next five years: Fast food chain McDonald’s is targeting double-digit sales growth in China by rolling out 2,000 stores over the next five years.

Takeover bid is a happy end to Cannabis Cookbook Publisher Quarto Group’s poor start: A takeover bid diverted attention away from another terrible set of results at ailing publisher Quarto Group.

Virgin struggles in plan to supply high speed broadband to 800,000 homes: A £3billion plan to give super-fast broadband to 800,000 homes is around 571,000 short of hitting its target after being blighted by disputes with councils and management problems.

Daily Express

Lonmin to sell surplus platinum capacity as it steps up cash-raising efforts: Lonmin is to sell surplus platinum capacity as it steps up cash-raising efforts to combat higher costs.

Monitise agree £75 million takeover by U.S. financial services technology group Fiserv: Monitise has agreed an improved £75 million takeover by U.S. financial services technology group Fiserv after some of its investors baulked at the original.

Bitcoin hit fresh record high of $3,500 - with value up 264% in 2017: Bitcoin’s price has surged to a fresh record high amid a change to the blockchain technology that underpins the cryptocurrency.

Plus500 shares jump nearly 20% after scoring record half-year results: Shares in Plus500 have jumped by nearly 20% as the online trading platform scored record half-year results.

Banks pushed to the brink amid Saudi stand-off, warns Moody’s: Qatar’s banking system is facing huge pressure as growth slows over the crisis with neighbouring Saudi Arabia, credit rating giant Moody’s said.

Anger grows at Italian banks bailed out with taxpayers’ cash: The European Union has failed to update and tighten its regulations on when governments can pump money into their failing banks, meaning taxpayers are bailing out failed financiers, a top Brussels regulator has warned.

The Scottish Herald

Well-Safe makes first acquisition and installs Founder as new Chief: The decommissioning business established last week by oil services tycoon Alasdair Locke has appointed Phil Milton as its Chief Executive following the acquisition of his business.

Saracen returns to profit as revenues rise on ‘encouraging’ showing: Saracen Fund Managers bounced back into the black in its last financial year, as revenues increased sharply, its latest accounts reveal.

Highland fish and game firm expands capacity: Entrepreneur Magnus Houston is targeting further growth of his Coast and Glen seafood and game and his Fishbox businesses with the purchase of a factory in Muir of Ord, outside Inverness.

Johnston Press shares rise on printing deal news: Shares in Johnston Press jumped by 14% after the publishing company announced that it has extended its printing deal with Trinity Mirror for a further three years.

Hotel group behind Andy Murray’s Cromlix House targets the Caribbean: The management team behind Sir Andy Murray’s Cromlix Hotel has launched a new business to run luxury hotels in the Caribbean.

Frontier takes a stake in vaccine firm: Frontier IP, the intellectual property specialist, has acquired a 21% stake in The Vaccine Group, a University of Plymouth spin-out.

Buccleuch invests £4 million on three sites: Buccleuch Property has made a trio of industrial acquisitions totalling more than £4 million, including two buildings in the Ibrox area of Glasgow.

Holiday Inn-owner InterContinental Hotels Group secures rising revenues and profits: The FTSE 100 firm said pre-tax profit lifted 9% to $326 million (£251 million) for the six months ending in June. Revenues rose 2% to $857 million. The group launched 23,000 rooms over the period, up by 31% on last year.

The Scotsman

Standard Life profits rise ahead of £11 billion AAM merger: Financial giant Standard Life reported a better-than-expected rise in half-year profits ahead of next week’s planned £11 billion tie-up with Aberdeen Asset Management (AAM).

Construction groups upbeat as revenues climb higher: Morgan Sindall and Bellway have expressed confidence over the outlook for the housebuilding and construction sectors after hailing double-digit sales increases.

Exceptional outcome for Edinburgh IT heavyweight: Edinburgh-headquartered Exception has reinforced its status as one of Scotland’s largest indigenous IT businesses with double-digit increases in revenues and profit.

Automatic payouts for delayed rail journeys proposed by Labour: Rail passengers could be automatically compensated for delayed journeys under plans set out by Scottish Labour.

House price growth slows amid squeeze on spending power: The squeeze on consumers as inflation outruns low wage growth sucked some air out of the housing market last month as annual house price expansion slowed to a four-year low.

City A.M.

Missed expectations cause Tripadvisor shares to sink: TripAdvisor’s shares have tumbled around 7% after the travel company missed analyst estimates in the second quarter.

Time Inc posts weaker revenues but shares rise as it targets $400 million in cost savings: Time Inc revealed lower than expected revenue for the second quarter as advertising sales dropped, but the publisher’s shares rose after it announced it is targeting $400 million (£308 million) in cost savings.

Ikea’s new ‘Lion Man’ advert has the building blocks for a successful campaign: Over the last month, the brand which has achieved the greatest uplift in its ad awareness is Swedish furniture brand Ikea with its campaign based upon helping Brits ‘relax into greatness’.

Mining stocks edge lower on weaker than expected China trade figures: London-listed mining stocks stumbled after weaker than expected trade data from China overnight.

White Stuff cuts jobs in head office as profits fall: White Stuff was hit with plunging profits last year and was forced to make job cuts in its head office.

]]> In the Papers - Carlsberg, Condé Nast, EasyJet, Wed, 14 Jun 2017 07:42:00 +0100 Newspaper Summary

The Times

Big investor lashes out at ‘stitch-up’: One of the City’s biggest investment groups has strongly criticised the stock market regime that is set to allow a small London-listed company to be taken private, leaving furious minority investors lumbered with unlisted and illiquid shares.

Creditors to get less than 2p in the pound after Jaeger collapse: Unsecured creditors to Jaeger are owed close to £50 million with suppliers from all over the world hardest hit after the collapse of the fashion chain.

Accused tycoon strikes defiant note: Vijay Mallya, the Indian drinks baron, claimed that he would provide sufficient evidence to throw out all charges against him as he arrived at a London court to fight attempts to extradite him to face fraud allegations.

House prices immune to Brexit nerves: Growth in house prices picked up steam as the residential property market remained immune from the Brexit slowdown elsewhere in the economy in recent months.

Share values ‘in bigger bubble than 1999’: More investors think shares are overvalued than during the technology bubble in 1999, according to a poll of institutional shareholders.

Near-zero unemployment poses recruitment challenge, says Ashtead: One of the leading plant hire companies in Britain and the U.S. has warned that near-zero unemployment among skilled blue-collar workers is presenting unprecedented recruitment challenges for industrial services companies.

The Independent

London traders dubbed ‘the Cartel’ to be flown to U.S. to face court: Three London-based former traders who dubbed themselves the “Cartel” have agreed not to fight extradition to the U.S. on charges they manipulated the $5.3 trillion-a-day foreign exchange market.

Federal Reserve set to raise interest rates again: The U.S. Federal Reserve is widely expected to raise its benchmark interest rate this week due to a tightening labour market and may also provide more detail on its plans to shrink the mammoth bond portfolio it amassed to nurse the economic recovery.

Payday lender complaints have tripled over the last year, reveals data: Complaints relating to payday lenders have tripled over the past year, according to data published by the financial consumer rights watchdog.

H&M, Zara, M&S and others found buying from highly polluting factories: Global fashion brands including H&M, Zara and Marks & Spencer are buying material produced in factories that devastate peoples’ health in Indonesia, China and India, a new investigation has found.

Carlsberg announces zero carbon pledge inspired by Donald Trump’s rejection of Paris agreement: Carlsberg has pledged to eliminate all carbon emissions from its breweries by 2030, citing Donald Trump’s decision to withdraw the U.S. from the Paris climate agreement as a key motivation.

The Daily Telegraph

Condé Nast cans to seal deal with Farfetch: Condé Nast, the publisher of Vogue and GQ, is scrapping its ambitious shopping website in favour of a deal with Farfetch, the online retail platform that is heading towards a $5 billion listing.

VW faces ‘super claim’ over dieselgate as U.K. and Netherlands motorists join forces: Volkswagen is facing its biggest legal challenge in Europe over the “dieselgate” scandal with a U.K. class action against the car maker teaming up with a similar claim in the Netherlands.

Marissa Mayer resigns from Yahoo as iconic internet firm sold to Verizon: Marissa Mayer is leaving Yahoo after five years as Chief Executive, it has finally been confirmed, after Verizon completed its $4.5 billion (£3.5 billion) takeover of the once-mighty internet giant.

Andy Higginson leaves N Brown for private equity: N Brown, the plus-sized and over-50s fashion retailer, has announced that Chairman Andy Higginson is leaving the company to “pursue opportunities in private equity”.

Stanley Gibbons shares bounce back as Disruptive Capital clarifies interest: Shares in stamp dealer Stanley Gibbons bounced back after private equity firm Disruptive Capital restated its interest in a possible takeover.

Spire Healthcare searches for CEO after Chairman steps back: Spire Healthcare has begun its search for a new permanent Boss after announcing Executive Chairman Garry Watts has taken a step back due to ill health.

The Questor Column:

Don’t buy Burford’s fully priced shares, go for the bonds and get a 4.7% yield: Litigation finance is a niche area but a growing one and one company that is actively involved, so far to great effect, is Burford Capital, now the third biggest stock on Aim, the London Stock Exchange’s junior market. Burford funds lawsuits in return for a share of any compensation awarded. The company is also expanding its range by offering lawsuit defences (and taking a share of the money saved), while it can also sell a percentage interest in cases, sometimes for a healthy profit. The shares (to which the numbers in the box refer) have performed brilliantly over the past 18 months, zooming from barely 200p to nearly £10. The timing and amount of any court payments are unpredictable, while in most cases the identity of clients is kept under wraps. The £175 million issue was very successful and the bond, whose ticker is BUR3, pays a 5% coupon and matures in 2026. The price has increased from 100p at listing to around 101.2p, so the “yield to maturity” (in effect, the annualised total return, including the small capital loss at maturity) is around 4.8%. The 6.5% coupon 2022 bonds (BUR1), which trade at 110.5p, offer a yield to maturity of 4.2% and the 6.125% 2024 paper (BUR2) has a yield to maturity of 4.75%. Questor says ‘Buy’.

Update: Carillion: When we first flagged concerns about the stock in March, we noted how the year-end net debt pile of £219 million (a figure that averaged £587 million over the year) and the pension deficit of £663 million meant that interest payments and pension contributions came to £107 million, against an operating profit of £147 million, leaving little margin for operational error. On paper the yield is 9.4% and the price-to-earnings ratio is less than 6 for 2017, but the share price implies that the market still does not believe the numbers. All eyes will now be on the first-half trading statement due on July 11, and then the interims on August 23. Last year’s interim dividend was 5.8p and that will be the benchmark for investors. Questor says ‘Avoid’.

The Guardian

Embattled Uber CEO Travis Kalanick takes indefinite leave of absence: Uber’s CEO, Travis Kalanick, has announced that he will take an indefinite leave of absence as the embattled company released a damning report on its workplace culture that called on the company to “review and reallocate” Kalanick’s responsibilities.

Brussels plan could force euro clearing out of U.K. after Brexit: Brussels has published proposals that could force London’s prized euro-clearing trade out of the City after Brexit, as the EU plans for life without Europe’s biggest financial centre.

EasyJet offers private jet experience at Luton – without the private jet: EasyJet passengers can now travel like billionaires – at least to as far as the steps of the plane – following the launch of a new venture to allow the airline’s customers to use the private jet terminal and facilities at Luton airport.

Britons feel the squeeze as inflation rises to four-year high of 2.9%: U.K. inflation rose to a four-year high in May as the pound’s sharp fall since the Brexit vote worked its way through the economy, intensifying the squeeze on household budgets.

EDF Energy’s Vincent de Rivaz to step down after winning Hinkley battle: The man who helped secure Britain’s first new nuclear power station in a generation will step down as Chief Executive of EDF Energy in October, marking the end of a 15-year tenure.

Daily Mail

Heineken forced to sell pubs in £403 million Punch Taverns takeover after watchdog Expresses concerns: Heineken could be forced to sell pubs as part of a £403million takeover of Punch Taverns after the competitions watchdog expressed concerns. The Competition and Markets Authority claimed the merger, which will see Heineken buy around 1,900 pubs from Punch Taverns, will restrict competition in 33 different areas.

Banks get power to snoop on WhatsApp over fears scrambled messages could be used in dodgy trades: Banks will get fresh powers to snoop on errant traders after a WhatsApp monitoring service was backed by Blackberry.

British tech pioneer snapped up by American buyers after losing battle with Apple and Google: A former darling of Britain’s tech scene is being snapped up by American buyers after losing a battle with Apple and Google.

Ted Baker fights off threat of the online upstarts: Fashion group targets shoppers who want affordable luxury: The fashion group said prioritising quality and not overselling its garments had helped it avoid the pitfalls of its competitors, which have struggled against competition from the likes of Boohoo and Asos.

Insurer Charles Taylor adds Microsoft Boss to board as non-Executive Director: Insurer Charles Taylor has added a Microsoft Boss to its board as Non-Executive Director. Tamer Ozmen runs Microsoft U.K. Services and will also sit on Charles Taylor’s audit, remuneration, and nominations committees.

£36 million payday for bankers as Allied Irish Banks floats in City for up to £11.8 billion: Bankers and lawyers will enjoy another bumper pay day from the biggest City stock market float for two decades – a listing that will also be a major boost for the British economy.

Paul May 57, appointed non-exec Director at Restaurant Group: Frankie & Benny’s owner has appointed the Boss of Patisserie Valerie to its board. Paul May will join Restaurant Group, which also operates Mexican food chain Chiquito, as a non-Executive Director next month.

Daily Express

Repair and renew business slashes damage costs for builders, insurers and householders: Repair and renew is the new replacement says the firm that is tackling damage in a radically different way so disaster-struck householders and businesses are saved a fortune.

America crushes Saudi oil control: Prices fall as U.S. heads for new supply record: Oil prices have continued to tumble as the U.S. takes on Saudi Arabia to become one of the biggest producers in the world.

Political uncertainty and falling pound are worrying for business leaders: The pound kept sliding as concerns over U.K. economic outlook intensified after a collapse in business confidence following the general election.

Eurozone recovery dealt major blow over fears for Germany’s economy - confidence wanes: Confidence in Germany’s economy has tumbled, dashing hopes for a growth boom over the coming year that could pull up the eurozone.

Global credit crunch warning issued on debt bubble as current trends mirror 2008 crash: Warning signals have been felt after a key credit indicator mirrored the same pattern experienced ahead of the financial crisis of 2008, in an eerie sign that the global economy is heading for another downturn.

The Scottish Herald

Cut in VAT urged amid ‘threat’ to economy from surging inflation: Scottish Chambers of Commerce has warned of a “real threat” to the economy from falling consumer spending power and called for a cut in value-added tax, after it emerged annual U.K. inflation had hit 2.9%.

Ticket software start-up aims to raise £400,000 in investment drive: Make It Social, the event ticketing start-up, has revealed plans to raise at least £400,000 from angel investors from home and abroad as it closes in on deals with major customers.

Drilling underlines potential of North Sea find: North Sea-focused Faroe Petroleum has said recent drilling has confirmed a find it made off Norway last year is commercially viable in the current low oil price environment.

Standard Life Boss ‘happy’ to consider annuity book sale: Standard Life Chief Executive Keith Skeoch has revealed he would be “quite happy to dispose” of the Edinburgh financial giant’s annuity book if the deal was right for shareholders.

Chinese technology company Huawei and Edinburgh University launched joint venture for distributed data management: Global technology company Huawei and the University of Edinburgh are to open a new lab for distributed data management and processing, writes Karen Peattie.

Optoscribe continues growth in next-generation photonic components: Optoscribe, a leading supplier of glass-based integrated photonics components, has closed a series B investment round of £1.8 million in line with its expansion and product supply plans.

PR company Beattie ramps up international expansion plans amid political uncertainty: Scottish public relations firm Beattie Group is to accelerate its international expansion plans by strengthening operations in North America.

MBM Veritas concern for RBS compensation claimants as key Scottish MPs lose their seats: Losing two members of the U.K.’s All-Party Parliamentary Group on Fair Business Banking in last week’s General Election is a setback for businesses seeking compensation from Royal Bank of Scotland claims MBM Veritas, the group created to support firms affected by the bank’s GRG restructuring division.

The Scotsman

Highlanders dig in to bring broadband to their rural homes: It is the technology of the future, made possible by some old-fashioned elbow grease. Residents in some of Scotland’s most remote locations are helping to dig trenches in order to enjoy some of the fastest broadband speeds anywhere in the U.K.

Housebuilding in Scotland remains stagnant, industry warns: Housebuilding in Scotland continues to flatline with just 88 more homes built in 2016 than in the previous year, official figures reveal.

Seedrs hails ‘successful’ debut for secondary market: Crowdfunding platform Seedrs, which counts Sir Andy Murray among its backers, has closed the window on its inaugural round of secondary trades.

Iomart to hike dividend by 90% after jump in profits: Web hosting and cloud computing specialist Iomart said shareholders were in line for a 90% increase in their dividend as it reported higher annual earnings.

Grangemouth owner Ineos to expand European facilities: Chemicals giant Ineos has announced plans to increase the capacity of the cracker facility used to break down gases at its Grangemouth site as part of a major European expansion programme.

City A.M.

Faberge owner Gemfields receives approach from China’s Fosun Gold that could outbid shareholder Pallinghurst’s takeover offer: Emerald, ruby and amethyst miner Gemfields has received a takeover approach from China’s Fosun Gold.

MAN, Volvo Group, Daimler, Iveco and DAF facing £3.9 billion court battle with British road hauliers: British road hauliers have obtained no-win-no-fee backing in a £3.9 billion price fixing claim against some of the world’s largest truck manufacturers.

Unite union warns fresh strike action “almost certain” if fresh talks fail in bitter BMW dispute after workers reject pensions offer: Unite union has warned a further bout of strike action at BMW’s U.K. plants over pensions is “almost certain” if fresh talks fail to reach a resolution.

Imperial Brands appoints a non-Executive Director with experience in tobacco alternatives and cannabis: Imperial Brands has strengthened its board with a new non-Executive Director who has experience in what it calls “next generation” products.

Royal Dutch Shell received a huge U.K. tax credit due to North Sea decommissioning costs: Royal Dutch Shell paid over $55.6 billion (£43.7 billion) to governments last year, but in the U.K., it received a tax credit as a result of decommissioning costs, according to a report.

]]> SNP Leftist Vision for Scotland Will End In Tears Wed, 15 Mar 2017 08:07:00 +0000 SNP Leftist Vision for Scotland Will End In Tears

Here is the opening of this column by Allister Heath for The Telegraph:

It’s not exactly great timing: on the very same day that Nicola Sturgeon called for another Scottish referendum, the price of oil tumbled again, falling to a fresh three month low.

Given that Scottish nationalism is still predicated on the idea of using petrodollars to fund a big welfare state, this is bad news for the movement to break up the UK. Politics isn’t just about economics, of course, but the SNP’s case for an independent, socialist Scotland is even weaker today than it was when it was last defeated in 2014.

There is little hope of the price of oil recovering in a game-changing way any time soon. Brent crude futures were trading at under $51 a barrel at one point yesterday: the rush for shale in the US and other global forces have devastated Opec’s ability to keep prices high. The cartel, together with the likes of Russia, has been trying to cut back on output, but it’s all been for nothing. Prices are down by 8pc in a week, with more to come, and the US industry has been adding rigs for the past eight weeks in a row.

This is good news for inflation and for consumers – Asda was one retailer that announced a 2p cut in the price of petrol and diesel yesterday, for example – but not for the SNP. Scotland’s budget deficit was already a crippling 9.5pc of GDP in 2015-16, roughly as bad as the UK’s was at the height of the financial crisis. Thanks to the rest of the country’s generosity, the devolved government is able to get away with spending far more than the economy could possibly afford – yet Sturgeon is committed to more of the same, forever. Public spending per capita in Scotland was £12,800 in 2015-16, compared with £11,500 for the UK.

The sums don’t add up - and if Scotland were to retain either the pound or adopt the euro, it wouldn’t even be able to print money to pay the bills. Sturgeon, like Jeremy Corbyn and the political left across the UK, still believes in the myth of the magic money tree. She still thinks that, post-independence, she would simply be able to click her fingers to conjure up the vast subsidies her government currently receives from England. It’s preposterous, dangerous nonsense, as is the view that Scotland would be able to tap the EU for massive transfers instead. Scotland is relatively wealthy by global standards and Brussels will find itself facing a fiscal crisis after the UK, a key net contributor, leaves.


David Fuller's view

Nicola Sturgeon has plenty of chutzpah, which some admire but I have always felt that she was a divisive influence within the UK and a disaster for Scotland. 

However, for a critical analysis, which is also entertaining, I tip my hat to Allison Pearson of The Telegraph for this article: Nicola Sturgeon is a liar and a traitor – off with her head!

A PDF of  Allister Heath's column is posted in the Subscriber's Area.



Nicola Sturgeon Timing: A Cynical Ploy to Take Advantage of Brexit Uncertainty

Here is the opening of this topical column by William Hague for The Telegraph:

The risk that Scotland would leave the UK was one of the main reasons I voted Remain last June, despite my lack of enthusiasm for many aspects of the European Union. Entirely predictably, in both Scotland and Northern Ireland, an attempt to pull the UK apart as we negotiate our exit from the EU has now begun.

There can be no going back on the decision nevertheless taken by the British people as a whole to leave. But the Government will now have to fight a war on two fronts, with each making an impact on the other. Every time EU negotiators warn there might be no deal or complain of British intransigence, they will be adding grist to the mill of the Scottish nationalists. And with each demand for special treatment for Scotland, those nationalists will weaken the ability of UK ministers to maintain tough positions that will lead to the best deal for the whole of the United Kingdom.

Nicola Sturgeon’s speech on Monday morning showed that she has identified the seizing of this moment of extreme pressure on the Westminster government as the one best hope of destroying the UK. It also demonstrated that she will use any argument to achieve her ends – even complaining that Scotland faces ‘‘the prospect of a centralisation of power at Westminster’’ when the Scottish parliament has in fact acquired major additional powers, some of which it has not even used.


David Fuller's view

Perhaps I am an incurable optimist but I think (hope) William Hague is too pessimistic in this column.  Yes, the UK Government faces some very tough negotiations and the Jean-Claude Juncker school of thought may be more interested in “punishing” Britain if only to deter similar exit moves from other EU countries.  That would be a desperate, intellectually bankrupt strategy.

This item continues in the Subscriber’s Area where a PDF of William Hague’s article is also posted.


China H-Shares Advance as Industrial Output Rises, Inflows Climb

This article from Bloomberg News may be of interest to subscribers. Here is a section:

China’s industrial output and fixed-asset investment beat estimates for the first two months of the year, adding to recent data suggesting that the nation’s economic recovery is holding up. Depreciation pressures on the yuan have prompted Shanghai investors to buy Hong Kong stocks as well, with net southbound purchases in the past eight sessions rising to 9.8 billion yuan ($1.4 billion). The odds of a Federal Reserve interest-rate increase this week have climbed to 100 percent.

“The market is extending a rebound after some consolidation in the past two weeks and as mainland funds continue to pile in to hedge against the risk of yuan depreciation after a possible Fed rate hike," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.


Eoin Treacy's view

The Hong Kong listed China Enterprises Index has some of the lowest valuations for a major index in the world, at an historic P/E of 8.5 and a yield of 3.5%. Investors are nonetheless fearful it is a value trap because there are so many concerns about the quality of earnings, how long stimulus will be sustained; the trajectory of the Yuan and the outcome of the Party Congress which is taking place this week.


Email of the day on stretched valuation metrics:

Yes, I know that prices can remain stretched a lot longer than you can imagine and we need to watch price action but.....

Eoin Treacy's view

Thank you for these illuminating charts. This article focusing on some of the points raised by Robert Shiller may be also be of interest. Both these articles highlight what might be considered the inflationary effects extraordinary monetary policy have had on asset prices. 


Email of the day - on vapes and e-cigarettes

Hope you are keeping well.

We are getting loads of orders for Vape labels at the moment and talking to other guys in our industry they are all getting the same - we are talking millions of labels. The industry is seriously expanding, at this time it appears to be multi small to medium players but there must be some serious money to be made somewhere!

The label, bottle, liquid etc. can't come to more than £1.50 so potential profit is there.

I know you've probably already had a look but thought I'd mention it!


Eoin Treacy's view

Thank you for this insightful email. The market for e-cigarettes has been somewhat overshadowed by the hoopla surrounding the evolution of the cannabis industry in the USA. Part of the reason for this is because there has been considerable controversy about the safety of the chemicals used in the vapourising process and the fact that some of the flavours such as bubble gum appear to be directly aimed at children. That resulted in related shares initially surging but subsequently collapsing because the cost of getting new products approved by regulatory authorities surged.


Upcoming Speaking Engagements


Eoin Treacy's view

I’ve accepted an invitation from the American Association of Professional Technical Analysts’ to speak at their annual conference in Kansas City, Missouri on March 17th. the topic of my talk will be “A trip through global markets”

]]> In the Papers - Uber, British Gas, Shell, Co-op Wed, 08 Feb 2017 08:23:00 +0000 Newspaper Summary

The Times

Developers told to build houses or lose the land: Developers that do not build homes quickly enough could have their land seized by local authorities, in plans being proposed by the government.

Shopkeepers happy to ring changes with Tesco merger: Charles Wilson’s charm offensive to win support for Booker’s proposed £3.7 billion merger with Tesco made a positive start, with one independent shopkeeper calling him a “goose that lays the golden eggs”.

Chancellor could block exchanges’ mega-merger: The government could demand that the Bank of England blocks the London Stock Exchange and Deutsche Börse’s merger, under powers granted to the Treasury when the central bank was nationalised 71 years ago.

Brexit drives General Motors into red: The American owner of Vauxhall has blamed the Brexit vote for pushing its European division into the red last year.

Time for long, hard look at sales: A failure to keep entirely on top of trends hit the retailer hard in the third quarter, with its U.K. sales falling sharply. Like-for-like figures were down by 4.7%, pushing its comparable sales performance down by 7.3%.

May’s Brexit plan ‘is the second worst option for U.K.’: The government’s strategy of leaving the single market and cutting immigration is the second worst economic plan possible for Britain’s future after Brexit, Oxford Economics has warned.

Lloyds’ climbdown in fraud scandal: Lloyds will review cases in which customers became victims of the fraud perpetrated by its Reading branch, raising the prospect that it will offer compensation.

Liver bird in the hand is worth £48 million: The Grade I listed Royal Liver Building, famously flanked by a Liver bird on each tower, was sold to Corestate Capital Holding for £48 million. The property is located on the city’s Unesco-protected waterfront, which also features a monument to the Beatles, right.

Factory fall dashes German growth hopes: Germany suffered a surprise collapse in its manufacturing and construction output in December, plunging the broader industrial production sector into its sharpest monthly fall in almost eight years and dashing hopes of strong growth at the end of last year.

Green’s stepson takes £700,000 dividend: The stepson of Sir Philip Green, the retail billionaire whose family took millions of pounds out of the high-street chain BHS in dividends, received a dividend of nearly £700,000 from his property investment company last year. Brett Palos was paid a dividend of £686,000 by Prime London Residential Ltd for the year to the end of April 2016, up from £588,000 the previous year, according to the latest accounts filed at Companies House.

Game, set and match to David Lloyd: David Lloyd Leisure is bulking up its U.K. operations with the acquisition of 16 tennis-based health and fitness clubs from Virgin Active for an estimated £90 million.

The Independent

Bank of England policymaker Kristin Forbes on verge of voting for rate rise: Kristin Forbes, an external member of the Bank of England’s Monetary Policy Committee, has given a strong signal that she is on the verge of voting to increase interest rates for the British economy.

Coal power station blamed for thousands of deaths to get £10 million subsidy: A coal-fired power plant which produced twice the legal amount of toxic gas for seven years has been awarded a £10 million state subsidy to produce electricity for a single year.

Lloyds apologises for distress caused by corrupt bankers in loan scam: Lloyds Banking Group, owner of HBOS, said it will review the cases of hundreds of its customers who were scammed in a £245 million fraud, involving two former employees.

Uber and Deliveroo eat up baby boomers: Baby boomers have become a driving force behind the fledgling gig economy, with more people from that age group applying to work at companies like Uber, Deliveroo and Just Eat than any other demographic.

Millions of lampposts across U.K. could be fitted with wind turbines: Millions of lampposts could be fitted with wind turbines connected directly into the National Grid.

British Gas ‘plans to’ hit 11 million customers with 9% price increase: The U.K.’s biggest energy provider British Gas is reportedly preparing to hit millions of households with a price increase that could add almost £100 a year to their annual bills.

Four million households to save on energy bills after crackdown: Ofgem has set a temporary price cap to protect over four million households who prepay for their energy.

Vegetable rationing and lettuce shortage spurs rise in sale of seeds: A shortage of certain vegetables in U.K. supermarkets has spurred a rise in the sale of seeds.

High street sees ‘most disappointing’ quarter since 2009: The high street saw its “most disappointing” quarter since the 2009 financial crisis in the final three months of 2016, and January sales have also lagged behind expectations, new research shows.

Tax to rise to 30-year high as austerity extends ‘well into the 2020s’: Public services, including health, are set to experience a severe and prolonged squeeze in the coming years, despite the Chancellor’s loosening of the Government’s fiscal rules, and that austerity will stretch “well into the 2020s”, according to the Institute for Fiscal Studies.

U.S. dollar rises on hints Fed will hike interest rates in March: The U.S. dollar continued to recover on Tuesday from a recent bout of selling, supported by comments from a U.S. Federal Reserve official suggesting that the bank has not ruled out an interest rate hike as soon as next month.

The most expensive homes in Britain just got cheaper because of Brexit: Home values in the Hyde Park area fell 14% in the 12 months through January, the biggest drop in central London’s neighbourhoods, as sellers cut their asking prices in the wake of the Brexit vote.

The Daily Telegraph

Shell submits plans to dismantle North Sea stalwart: Royal Dutch Shell is to call time on four decades of history as it prepares to publish multi-billion pound plans to dismantle the colossal oil rigs in the Brent oilfield in what will be viewed as a major milestone for the industry.

Co-op Chairman refuses to rule out injecting more capital into troubled Co-op Bank as Chief Executive steps down: The Chairman of the Co-operative Group has refused to rule out putting more money into the ailing Co-op Bank amid heightened concerns over its capital position.

Jobs boom in construction depends on success of huge infrastructure projects: Britain’s construction industry is on course to add 35,000 jobs a year for the next five years - but much of this expansion is dependent on massive troubled infrastructure projects.

Tata steel returns to profit in U.K. and Europe: Tata’s European steel business - which includes its sprawling Port Talbot site - is back in profit. A combination of operational improvements, currency movements, lower energy costs and stronger steel prices helped the Indian-owned company’s European arm deliver £74 million of earnings before interest, tax, depreciation and amortisation in the third quarter.

Six traders plead not guilty to Euribor rigging: Six City traders, including a former Deutsche Bank star, have pleaded not guilty to rigging a key financial benchmark in the latest case into the manipulation of global interest rates.

GW Pharmaceuticals to develop oncology portfolio after cannabis medication shows promising results: GW Pharmaceuticals is hoping to develop a treatment for cancer after announcing promising results from an early stage study looking at how its cannabis-based molecules can help patients with the disease.

The Questor Column:

With Dunstone back in the saddle, TalkTalk shares could start to gallop again: Her departure from the Chief Executive’s position at TalkTalk could just be the catalyst that finally gets the shares to raise a gallop. The broadband and telecoms market remains brutally competitive, a fact reaffirmed by a 3% year-on-year drop in average revenue per user. This all explains why the shares have done poorly, especially as the dividend is no longer covered by earnings and a cut is distinctly possible – a yield of 8.9% really does fall into the “too-good-to-be-true” category. Yet a cut is already expected, using stockbrokers’ research as a guide, and the yield should still be decent even after any reduction. Throw in the appointment as Executive Chairman of Sir Charles Dunstone, a 30% shareholder and Founder of the business from his Carphone Warehouse days, and things could really get interesting. We rated the shares only a hold when we covered them in November at 200p, but following the share price fall and in light of the positive developments we now upgrade our stance to buy. Questor says ‘Buy’.

Update: Severn Trent: A solid third-quarter update from Severn Trent, the water utility, should reaffirm the market’s faith in its ability to possibly grow its plump dividend. Its Chief Executive, Liv Garfield, last week noted that the company had outperformed key performance targets laid down by the regulator. As a result, the company will bank more in its so-called “outcome delivery incentive” rewards than expected and such strong gains in operational efficiency will support profits, cashflow and the 81.7p forecast dividend for the year to March. This equates to a yield of 3.6% and the shareholder return could start to grow nicely as profits advance and the company increases its payout ratio (the percentage of profits paid as dividends) towards peer group levels. Questor says ‘Buy’.

The Guardian

Brexit will cost U.K. 30,000 finance jobs, says Brussels thinktank: The U.K. could lose 30,000 finance sector jobs as a result of Brexit, but EU rivals need to act to avoid importing banking risk to the continent, according to an influential thinktank with close ties to the European commission.

Housing market is ‘broken’, government admits in white paper: England’s housing market is broken, the government has admitted, with home ownership a “distant dream” for young families, as it unveiled a white paper promising a fresh wave of home building.

‘U.K. could be fastest-growing G7 economy if it gets trade deals right’: The U.K. could shake off the near-term impact of Brexit to become the fastest-growing economy in the G7 group of rich countries between now and 2050, according to a report that paints a bright outlook for the country’s prospects outside the EU.

Church of England: we’ll vote to block excessive boardroom pay deals: The Church of England, a major institutional investor, has put U.K. company Bosses on notice that exorbitant pay deals will not be tolerated.

U.K. tax burden will soar to highest level for 30 years, warns IFS: The government is on course to impose steep cuts in public spending and increase taxes by the end of the decade to their highest level in 30 years to combat the U.K.’s persistent budget deficit.

Daily Mail

Housebuilder Bellway buys up land as Government announces overhaul of U.K. housing industry: On the day, the Government announced an overhaul of Britain’s broken housing industry and promised more affordable properties, it was no surprise to see the housebuilders boosted.

Now even Germany wants to scupper LSE deal: Deutsche Boss probed over £3.8 million share deal: An insider trading probe into the foreign takeover of the London Stock Exchange may have been triggered by a dirty tricks campaign orchestrated by German critics of the deal.

FTSE 250 soars to record high and pound bounces back as BoE hints interest rate could rise: The FTSE 250 hit a record high last night and the pound bounced back against the dollar after a senior Bank of England official said interest rates may need to rise in the coming months.

Heineken ‘will force’ pubs to sell its beers after it closes deal to buy Punch Taverns: Heineken will try to fill bars with its own beer when it snaps up Britain’s second biggest pub chain for £1.8billion.

Daily Express

Wind of change for Co-op as CEO Richard Pennycook steps down: Co-op Boss Richard Pennycook, who led its fightback from the brink of collapse in 2013, is to step down as the mutual’s Chief Executive.

Desperate France turns on Germany in battle for London’s banking jobs post-Brexit: French officials have turned on Germany amid a desperate battle to lure finance jobs out of London and into the Eurozone after Brexit.

Greece will crumble under debts - IMF anger at Eurozone austerity targets: Troubled Greece will buckle under the weight of its huge debts, which are highly unsustainable over the longer term, according to damning analysis of the Eurozone’s bailout by the International Monetary Fund (IMF).

BP hope for turnaround in 2017 after second consecutive year in the red: Oil giant BP has remained in the red for a second year in a row, but said it hoped 2017 would be its turnaround year amid a bounce back in crude prices.

The Scottish Herald

BP Boss is bullish on the North Sea: BP Chief Executive Bob Dudley has said the North Sea remains a heartland for the oil and gas giant which is set to conduct a big exploration programme that could result in it creating jobs.

Six solicitors struck off by tribunal in last financial year: The number of solicitors struck off for professional misconduct fell in the last year despite the Scottish Solicitors’ Discipline Tribunal noting that the cases it hears are becoming increasingly more complicated.

Construction output expected to decline: Overall Scottish construction sector output is forecast to contract at an average annual rate of 0.4% over the five years to 2021.

Scottish labour market weakens further: Scottish labour market conditions continued to deteriorate in January, with a further significant decline in permanent staff placements by recruitment agencies, a survey shows.

Wells off Shetland highlight potential of oil find: Shetland-focused Hurricane Energy has said the results of recent drilling have increased confidence that the company has made a bumper find in an area that has received little attention from oil and gas companies.

New president for farmers union: Dumfriesshire farmer Andrew McCornick has been elected as the new president of NFU Scotland, triumphing in a three-way contest that unseated sitting president Allan Bowie and his fellow vice president Rob Livesey during the union’s AGM in Glasgow this week.

Wealth management business spends £3.3 million on stake in Edinburgh fund manager Amati: Edinburgh fund house Amati Global Investors has entered into a deal that could see it be completely taken over by wealth management and employee benefits business Mattioli Woods.

Government urged to set up pay ratio legislation: Mandatory limits on pay ratios is the only way to control Executive pay, according to industry body the Association of Accounting Technicians (AAT).

Diageo and Unite strike deal on pension changes: Diageo has reached a deal with trade union Unite over changes to its pension scheme after a dispute that almost led to industrial action before Christmas.

Maven deal in Inverness: Maven Capital has acquired an Inverness city centre office building for £4.4 million which the investor plans to turn into a Travelodge hotel.

The Scotsman

Aldi usurps Co-op to become U.K.’s fifth-biggest grocer: Britain’s supermarket pecking order has been shaken up after Aldi usurped the Co-operative to become the nation’s fifth-largest grocer.

Scottish golf clothing brand scores hole in £1 million: Royal & Awesome, the golf clothing brand, has cracked the £1 million turnover mark as it prepares to celebrate its fifth anniversary.

Warning over rates bills shock for renewable power: Investors in renewable energy projects face a financial shock this spring when a business rates revaluation comes into force, a Scottish property consultancy has warned.

FirstGroup on track despite tough bus and rail trading: Transport giant FirstGroup said a Brexit boost from the weak pound was helping keep it on track for the full year, but warned that trading remains tough in its bus and rail arm.

City A.M.

London Stock Exchange and Deutsche Boerse confident European regulators will wave through £21 billion mega merger: The London Stock Exchange (LSE) moved one step closer to its £21 billion mega-merger with German exchange Deutsche Boerse, formally submitting concessions to competition regulators in Brussels.

Plus500 confident it can deal with FCA crackdown and commits to London: Spreadbetting firm Plus500 saw its shares jump 3% as the company indicated it was well placed to deal with regulatory pressures presented by the City watchdog.

More than 90% of European goods could clear customs within seconds after Brexit: Customs clearance for European goods in the aftermath of Brexit could still take just seconds if the U.K. secures tariff-free trade with the continent, one of the U.K.’s most senior customs officials has said.

FTSE 250 media company behind Cannes Lions festival buys $69 million U.S. firm: Ascential, the FTSE 250-listed media company formerly known as Emap, has agreed to buy U.S. advisory and business services group MediaLink.

Chief Executive of Deutsche Bank Israel arrested over allegations of VAT misreporting: The Chief Executive of Deutsche Bank Israel was arrested on suspicion of VAT violations.

]]> Canada Faces Era of Pipeline Abundance After Keystone Move Thu, 26 Jan 2017 08:27:00 +0000 Canada Faces Era of Pipeline Abundance After Keystone Move

This article by Robert Tuttle for Bloomberg may be of interest to subscribers. Here is a section:

More pipelines from Canada would also “generate greater competition for crudes of comparable quality such as those imported from Mexico or Venezuela,” Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London, said in an instant message.

The administration moved to expedite approval and construction of the Keystone XL pipeline as well as the Dakota Access line through North Dakota. Trump said he wanted to renegotiate terms to get a better deal for the U.S., including more U.S.-made materials in the lines.

The 830,000-barrel-a-day Keystone XL has been blocked since it was first proposed in 2008. TransCanada said in a statement it will reapply for the project.


Eoin Treacy's view

Canada represents a problem for OPEC. It has vast reserves which are largely economic at today’s prices and it borders the world’s largest consumer. Despite that proximity its tar sands have been stranded, inhibited by lack of access to key global markets, which has made Canada something of a bit player in the global market. With the development of pipelines West, East and South that could all change in the coming decade.


Chan Zuckerberg Initiative's AI Acquisition Will Make Science Free for All

This article from may be of interest to subscribers. Here is a section:

But the importance of Meta in the context of making science accessible to everyone is anchored in its AI-driven technology. Thousands of scientific papers are published every day, and the sheer volume of available data means it’s hard to whittle it down to what’s most important to individual studies. Ultimately, access is just one part of the challenge. For access to information to truly empower the scientific community, one has to be able to systematically analyze and review all the available data available. That’s where Meta comes in. It can easily find the most relevant material that will further the research in a fraction of the time it would take a human.


Eoin Treacy's view

Isaac Newton is reputed to have said “If I have seen further than others, it is by standing upon the shoulders of giants.” He successfully built on the work of those who had come before him. One of the greatest challenges in human history has not only been to come up with ingenious solutions to difficult problems, but to also ensure we don’t forget or lose them.

The printing press allowed us to duplicate manuscripts which reduced the risk of losing knowledge. The internet has been a similarly disruptive innovation for a whole range of reasons but perhaps most important is that by distributing availability of knowledge it further reduces the risk it will be lost. With so much research now being conducted, the evolution of artificial intelligence to greatly enhance the ability of researchers to find the shoulders of giants on which to stand is a further iteration of this trend.

The commercial viability of artificial intelligence is coming hot on the heels of the internet from an historical perspective and represents a powerful tailwind for the continued acceleration of technological innovation.


Fed Debate Over $4.5 Trillion Balance Sheet Looms in 2017

This article by Christopher Condon for Bloomberg may be of interest to subscribers. Here is a section:

The dollar is a particular source of worry for U.S. policy makers, having appreciated 23 percent since mid-2014. The Fed expects to keep tightening while central banks in Japan and Europe hold steady or consider more accommodation. That could further strengthen the greenback and introduce a headwind for U.S. growth.

“Slowing down the economy a little bit at the long end of the market has some benefits if you think primarily that exchange rates are driven by short-term interest rates,” Rosengren said. “You might want some of the removal of accommodation to come at the long end, which would be done by the balance sheet.”

The Boston Fed released research on Jan. 19 that backs up this view of exchange rates and the yield curve. Former Fed economist Roberto Perli was more skeptical, pointing to global demand for longer-term U.S. Treasuries.

“If long U.S. rates were to increase significantly as a result of balance sheet shrinking, there would still be large inflows into U.S. assets, which would support the dollar,” said Perli, a partner at Washington consulting firm Cornerstone Macro LLC.


Eoin Treacy's view

The Fed’s balance sheet at $4.46 trillion represents a potent source of supply for a bond market that shows increasing signs of topping out. As long as the balance sheet was increasing it was hard to argue with the rationale for pursuing the bullish momentum trade in Treasuries. However with interest rates now rising and the Fed no longer adding to its inventory of bonds a major source of fresh demand has been removed from the market.


Email of the day on steel errata

Also, at, it states that Chinese steel production is in the order of 66,000 tons per annum and one Nimitz class aircraft carrier requires around 47,000 tons.

Please see attached the correct figure for Chinese steel production.

Still loving the service after decades of knowing David.


Eoin Treacy's view

Thank you for this graphic from the World Steel Association which quotes completely different figures than those found in The figures you provided make more sense so I have amended the article. This additional article from CNBC quotes the world Steel Association figures. 


]]> 2017 Roundtable, Part 2: Manual for a Mixed-Up Market Tue, 24 Jan 2017 08:16:00 +0000 2017 Roundtable, Part 2: Manual for a Mixed-Up Market

Thanks to a subscriber for Part 2 of this transcript from Barron’s which may be of interest. Here is a section on German Bunds:

Next, like Felix, I would short German Bunds. They are yielding 0.27%, and Germany’s inflation rate is 1.7%. Historically, it is very rare to have a Bund yield below the inflation rate. The current gap is a record. The Bund yield is unsustainably low.

Schafer: What is the best way for an individual to short German Bunds?

Gundlach: Short the futures. I agree with Felix that the Italian bond market is deeply troubled. Shorting Italian bonds could potentially produce a massive home run; they are yielding 47 basis points less than 10-year U.S. Treasuries, which represents a full buy-in on the idea that the euro zone will last forever. If the euro zone breaks up, a possibility we have discussed, and Italy has to go it alone, sovereign bonds could yield 1.9%. The current yield is insanely low. But shorting German Bunds appeals more. They are more vulnerable at this point than U.S. bonds.

One argument for U.S. bonds when yields hit a low last July was that they yielded more than German Bunds, which had negative yields. In other words, U.S. bonds were better than something really terrible, but that didn’t make them good. Underlying the argument was the notion that German yields would stay negative forever. Well, forever lasted about a month. Since then, Treasury yields have risen more than German rates, but Bunds could underperform in the next leg of the bond bear market.

Zulauf: In 2012, there were widespread fears about the euro zone breaking apart. Back then, money flowed from the southern countries to the northern countries, and into Bunds. The next time the euro zone looks endangered, money will flow out of the euro completely and into another currency, primarily the U.S. dollar.


Eoin Treacy's view

A link to the full report is posted in the Subscriber's Area.

Germany has benefitted enormously from the ECB’s quantitative easing program. As the largest economy in the bloc it garners the most purchases which are weighted by GDP. As the region’s largest creditor it holds sway over the direction policy takes. The creation of the Euro alleviated currency risk for Germany and country’s approximating its economic model such as the Netherlands and Austria. However for countries that did not have economies similar to Germany’s it crystallised currency risk.


Email of the day on cannabis and steel

For information. Canopy has made an offer to buy Mettrum for Canopy stocks. This will triple my Canopy position and will help you to understand the reason for the similar chart pattern since early December.

On your presentation yesterday (that I watched today), I was intrigued by the iron ore comment. Canadian iron ore companies (have a look at: Alderon, Labrador iron ore...) are on fire and I sold way too early exactly because I saw China slowing down and their financial situation reminded me of USA 2007-2008.

So stock piling for war?.... hmm.. It is true that the US never really got out of the depression woes until their implication in the WW2 conflict, which they used also to help breaking European French and English ''Empires'' among others. This is certainly something to watch, and Trump ''shoot first'' attitude probably add to the concern for sure.

Eoin Treacy's view

Thank you for this additional intelligence on the Canadian cannabis sector. Iron-ore is an interesting market because steel is such a political sector. China is expected to account for 71% of global steel production this year according to this article from CNBC. That’s a lot of supply and not all of it is designed to cater to the domestic market.


Woman dies from antibiotic-resistant bacteria when no antibiotics worked

This article from Kurzweil AI may be of interest to subscribers. Here is a section:

The death of a hospitalized patient in Reno Nevada for whom no available antibiotics worked highlights what World Health Organization and other public-health experts have been warning: antibiotic resistance is a serious threat and has gone global.

The patient — a female in her 70s — was admitted in for an infection and died in September 2016 from septic shock the CDC announced on Jan. 13. The patient had been treated for multiple infections in India before traveling to the United States. The infection that led to her hospitalization in Reno was caused by a strain of carbapenem-resistant Enterobacteriaceae (CRE)* bacteria known as Klebsiella pneumoniae. Although not all strains of Klebsiella pneumonia are CRE, the strain that infected this patient was resistant to all available antibiotics, according to the CDC. (Carbapeneum is a “drug of last resort.”)

In a paper in The Lancet in October, researchers reported that more than a third of blood infections in newborn babies involving Klebsiella pneumoniae and similar bacteria were resistant to multiple drugs to the point they were virtually untreatable and “threaten the return of a pre-antibiotic era in Indian neonatal intensive care units,” the study’s authors warned.


Eoin Treacy's view

Antibiotic resistance is a vital topic of conversation because it affects all of us and represents perhaps the single biggest risk to general health we can fathom. The pace of technological innovation is perhaps the greatest hope we have of finding a solution that does not rely on fighting a losing war against an enemy capable of changing tactics to overcome conventional responses. This article from NewAtlas highlights one such solution. Here is a section:

The study combined the new PPMO with meropenem, a type of carbapenem antibiotic that's effective against a broad range of bugs, and pitted it against three different types of bacteria that make use of NDM-1. In all cases, the PPMO restored meropenem's ability to kill the bacteria in vitro, and also managed to kill off an NDM-1-expressing strain of E. coli in tests in mice.

"We're targeting a resistance mechanism that's shared by a whole bunch of pathogens," says Geller. "It's the same gene in different types of bacteria, so you only have to have one PPMO that's effective for all of them, which is different than other PPMOs that are genus specific." Geller says the new drug should be ready for human testing in about three years.

There is every reason for optimism that this problem can be overcome but it requires constant vigilance and technology represents our best chance to overcome it. It is not a problem that will just go away.


]]> European Ideological Civil War Laid Bare In Davos Fri, 20 Jan 2017 08:23:00 +0000 European Ideological Civil War Laid Bare In Davos

Here is the opening of this informative report by Ambrose Evans-Pritchard for The Telegraph:

Europe's leaders lashed out at each other in Davos in an inflamed dispute over how to stop the EU collapsing, laying bare the festering divisions that will plague the European project long after British withdrawal.

"The whole idea of an ever-closer Europe has gone, it's buried," said Dutch premier Mark Rutte, dismissing calls for full political union as a dangerous romantic fantasy.

"The fastest way to dismantle the EU is to continue talking about a step-by-step move towards some sort of superstate," he said at the World Economic Forum.

His comments went to the heart of a fierce battle under way for control over the EU project, and provoked an impassioned counter-attack from Martin Schulz, the European Parliament's president.

Mr Schulz called it profoundly misguided to give up the dream of political union and retreat to the nation state. "If it's Angela Merkel, or Mark Rutte, or whoever else, they must have the courage to say that we need ever-closer union more than ever in the 21st century, and without it the EU has no future," he said.

Mr Schulz accused Europe's ministers of subverting the EU in a "double game", agreeing to measures behind closed doors in the EU's council of ministers and then denying any responsibility once they return home. "This is destroying the European spirit."

He accused prime ministers of arriving for meetings at the Justus Lipsius Building in Brussels and proclaiming before they even enter the door that they are there only to protect their own narrow interest.

"We have some members sitting inside the European Parliament trying to destroy the EU from within. They are drawing EU salaries, and one of them is running for the presidency of France," he said.

Frans Timmermans, the European Commission's vice-president, said there was a "fundamental ideological confrontation going on in our EU". He called on Europe's leaders to stop hiding behind subterfuge and pick their side, rather than blaming Brussels for everything. "You need to show your cards, show where you stand," he said.

David Fuller's view

The masks of EU solidarity have clearly fallen away at Davos.  This will have shocked delegations from a number of other countries, particularly American readers of The New York Times and The Washington Post, and also anyone influenced by President Obama’s view of the EU and Angela Merkel.

This item continues in the Subscriber’s Area, where a PDF of AEP’s report is also posted.


Bankers in Davos See Trump Making Wall Street Great Again

Here is the opening of this topical article from Bloomberg:

Wall Street’s high-flyers in Davos, basking in their firms’ strong fourth-quarter earnings, said they’re confident Donald Trump’s incoming administration will loosen regulatory constraints on financiers -- even if it leaves Barack Obama’s signature Dodd-Frank Act largely intact.

Bank executives, speaking on condition of anonymity at events around the Swiss ski resort, said they’re not counting on Trump to overturn Dodd-Frank. Instead, they expect the federal agencies that enforce the rules to ease up on them and support bankers’ efforts to limit how much capital and liquidity their companies need to pay bills or absorb losses in a crisis.

The bankers said they recognize that changing or overturning the 2010 Dodd-Frank Act would require support in the U.S. Senate that Republicans may lack. Instead they’re counting on Trump’s team to dial back how supervisory agencies enforce and interpret rules. Led by Federal Reserve Governor Daniel Tarullo, U.S. regulators have adopted an extra-strict version of the global standards on capital and liquidity set by the Basel Committee on Banking Supervision in the aftermath of the 2008 financial crisis.

“Legislation, obviously that’s harder to do than just changing regulations,” JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said in a Bloomberg Television interview with John Micklethwait on Wednesday. “Regulators can change a lot of things easily about compliance, about costs, certain rules about lending, how you use your liquidity, how you use your capital. I would like to see some of those looked at and maybe modified a bit, and I think it would be good for the economy.”

At a panel discussion on the global banking outlook in Davos Thursday morning, JPMorgan asset-management CEO Mary Callahan Erdoes echoed that view.

“It’s going to be a great several years,” Erdoes said. “It’s going to be very positive for businesses in the U.S., which should cascade to businesses around the world.”

David Fuller's view

There has always been a cycle to bank regulation.  When excessive speculation by banks ends in a crash, as we last saw in 2008, and many of them have to be rescued, there is always a call for new, much tougher regulations.  These are designed to significantly boost cash reserves, limit leverage and also punish the offending banking industry.

As a consequence, it is more difficult for the economy to recover because banks are unable to provide the liquidity required by their customers, as we have seen since the 2008 credit crisis recession. Eventually, anger towards banks subsides and governments commence easing tight regulations, as we are about to see with the incoming Trump administration. This will help the banking industry and also the US economy.

Some people worry that this will soon lead to another banking crisis.  Those concerns are premature because banks are not about to repeat the same mistakes at the first opportunity.  On average, it usually takes at least a generation before banks lose their discipline and contribute to another financial crisis.    


The Evolution of Theresa May Sets Brexit Britain On Course for a Bright Global Future

Here is the opening and also the last paragraph of this topical article by Fraser Nelson for The Telegraph:

By her standards, Theresa May was relatively restrained at the Davos summit.  She loves enemies, and not in the Christian way. In front of her stood a congregation of the very people she holds up to ridicule: the plutocratic masters of the global economy, or, as she calls them, “citizens of nowhere”. On another day, she might have delivered one of the machine-gunnings that she reserves for the Police Federation or Boris Johnson. But this time she had another mission: to position Britain as the new global leader in free trade and reintroduce her country to the world.

The result was nothing short of a manifesto for a new British foreign policy and one of the best speeches given by a Prime Minister in recent years. It was a landmark not only in the evolution of her approach to Brexit, but in the development of her own political identity. It shows how far she has travelled in just a few months.

The traditional Davos speech involves clichés about the world’s ills and abstract nonsense like the “fourth industrial revolution”. The Prime Minister preferred to talk plainly. Rather than join them in lamenting populism, she sought to explain it: if people’s legitimate grievances aren’t addressed by established political parties, voters turn to insurgents. She could have added that Britain, virtually alone in Europe, has no problem with populism: the BNP dead, Ukip in crisis. And why? Because we had Brexit. It was not a Trump-style disruption; Brexit was how Britain avoids Trump-style disruption.

This is the point that European leaders find hard to understand. From Sweden to Sardinia, they are facing Eurosceptic insurgents whom they portray as barbaric and xenophobic. So they tell themselves (and their voters) that Britain has succumbed to a similar malady and is now sinking into a pit of hate crime, nativism and isolationism. This is not an anti-British agenda, necessarily, just the panic of politicians who can’t think of other ways to fend off new challengers. Mrs May came to offer some gentle advice: if you respond to people’s concerns, populism tends to go away. As Britain’s recent mini-revolution has just demonstrated.

Still, the Prime Minister has arrived rather late to all this. One of the great risks of Brexit was that the vote would be portrayed as a once-great country in meltdown, retreating from the world. Such concerns needed to be answered clearly, calmly and repeatedly. Had Boris Johnson become Tory leader he would have done this from day one. But Mrs May arrived in office implementing what seemed to be a far meaner version of Brexit than the one compellingly articulated by the Vote Leave campaign. We heard about EU nationals as bargaining chips, companies drawing up lists of foreigners, and new rules making it harder for foreigners to buy British companies.


In her speech, she quoted Edmund Burke, to the effect that if a state cannot change, it cannot survive. That good governments do not become wedded to mistakes, but scour the horizon for opportunities and adapt with the times. As she has worked out, the same is true of prime ministers.


David Fuller's view

I am relieved.  OK, the Prime Minister and her Cabinet were thrown in at the deep end but they were not providing the kind of Brexit that I voted for.  Fortunately this has changed dramatically in little over a week.

How did that happen?  Was it a tactical decision to appear to have turned inwards, to lull the Brexit opposition and EU into a false sense of security before striding boldly and positively forward?  I hope not and I don’t think so.

Was it a simultaneous eureka moment By Theresa May and Chancellor of the Exchequer Philip Hammond, or did they receive some very helpful advice?  I suspect it is the latter although we may never know.  However, I do recall mentioning shortly after Theresa May became Prime Minister that she could always get some sound advice from The Telegraph’s editorial team.  While very much on her side, they had become a little more critical in the last several weeks, but no more as we see with the article above.

Whatever, Theresa May and Philip Hammond have reassured their supporters.  They have also seized the initiative on Brexit and are determined to set their own agenda with a divided EU which is in disarray.  Good luck to them.


Bond Guru Who Called Last Bear Market 40 Years Ago Says Go Long

This article by Andrea Wong for Bloomberg may be of interest to subscribers. Here is a section:

Money velocity isn’t a bullet-proof economic indicator. Financial innovation, and the rise of shadow banking, have made it hard to measure exactly how much money is floating around in the financial system. And some would say that "money" itself is going through an identity crisis these days.

Hunt isn’t the only one seeing the record-low pace as an ominous sign. The fact that money velocity declined rapidly during years of near-zero interest rates may signal aggressive monetary easing actually led to deflation instead of inflation, economists at the St. Louis Fed wrote back in 2014.

"In this regard, the unconventional monetary policy has reinforced the recession by stimulating the private sector’s money demand through pursuing an excessively low interest rate policy," economists Yi Wen and Maria A. Arias wrote.

"I know I’m the minority here,” Hunt said. “I’m just trying to see the world as I think it should be seen.”


Eoin Treacy's view

I have long argued that the disintermediation associated with the internet and technological innovation is a major contributor in the decline in the velocity of money. The downtrend in the data from 1997 offers a graphic representation of the deflationary influence of technology. It also helps to explain why the surge in the quantity of money associated with quantitative easing has not resulted in high inflation.


Email of the day on Canadian cannabis stocks

Pot luck... If the Canadian government continue to support AND passes legislation favorable to the development of the cannabis industry, some companies may have exponential growth, My pick has been Canopy on the TSX and I will continue to hold it.


Eoin Treacy's view

Thank you for highlighting Canopy Growth Corp which as you point out is one of Canada’s most popular vehicles for expressing a view on cannabis. Canada is home to a significant number of recreational cannabis and cannabis related pharmaceutical start-ups, which as you say. would benefit from favourable legislation. You never know before the bull market ends there may be calls to exchange the maple leaf for something even more commercial than maple syrup.

]]> Dimon Says Euro Zone May Not Survive Without Change in Direction Thu, 19 Jan 2017 08:22:00 +0000 Dimon Says Euro Zone May Not Survive Without Change in Direction

Here is the opening of this common sense assessment by one of the contemporary world’s most successful bankers, written for Bloomberg:

The euro region could break up if political leaders don’t get to grips with the discontent that’s spurring support for populist leaders across the continent, JPMorgan Chase & Co. Chief Executive Dimon said he had hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes. That hasn’t happened, and if nationalist politicians including France’s Marine Le Pen rise to power in elections across the region “the euro zone may not survive,” Dimon, 60, said in a Bloomberg Television interview with John Micklethwait.

“What went wrong is going wrong for everybody, not just going wrong for Britain, but in some ways it looks like they’re kind of doubling down,” Dimon said in the interview Wednesday at the annual meeting of the World Economic Forum in Davos, Switzerland. Unless leaders address underlying concerns, “you’re going to have the same political things about immigration, the laws of the country, how much power goes to Brussels.”

Officer Jamie Dimon said.

Dimon’s remarks on Europe were unusually pessimistic, coming in a wide-ranging interview in which he also criticized regulations that he said stunt economic growth. But he reiterated optimism for President-elect Donald Trump. Minutes later, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein also expressed concern about Europe, telling CNBC that leaders are facing a backlash in the midst of a long, complicated process to create an economic bloc.


David Fuller's view

Many people have said this for some time, including in this service, but Jamie Dimon’s view will attract more attention.

Eurozone leaders provide a classic example of arrogant groupthink.  They speak mainly to each other, in the comfort of their palatial headquarters in Brussels and Strasbourg, financed by beleaguered taxpayers, and agree that they know what’s best.  Yes, “they’re kind of doubling down,” as Dimon says.


Just Like In the 1980s, Theresa May Faces Chaos From Militant Unions. And Just Like Margaret Thatcher, She Must Not Flinch

Here is a latter section of this significant column by William Hague for The Telegraph:

Philip Hammond has rightly warned the EU that “we will do whatever we have to do”. So, in addition to pursuing trade agreements around the globe, what could we actually do, to convince the world that we have good enough plans for them to start buying pounds?

Here are five ideas:

1. Establish Free Ports. My very talented successor as MP for Richmond, Yorkshire, Rishi Sunak, has pointed out how Free Ports could bring a major boost to the economy, manufacturing and the north. This would allow goods to be imported, manufactured and re-exported without any duties or taxes because they would not officially enter the UK. The jobs created could run into tens of thousands, and the merchandise handled into hundreds of billions of pounds.

2. Give tax incentives to key global industries. Special tax relief for the film industry has been a huge success: major new studios have been built in Britain, over 200 films a year are being made here and we have 260,000 jobs thriving on the back of them. Every £1 of tax relief is meant to bring £12 back into the economy. We could give similar carefully targeted incentives to other creative, scientific and high-technology businesses, helping aerospace, biotechnology and others to see the UK as especially attractive.


David Fuller's view

Philip Hammond’s comment that “we will do whatever we have to do” was the perfect response to the EU, and from a former Remainer who previously sounded very pessimistic.   

Here are my brief responses to William Hague’s five ideas:

“Establish Free Ports.”  I had not thought of this but it makes sense to me.

“Give tax incentives to key global industries.”  I would favour across the board tax cuts which could be revenue neutral or even positive if the UK economy grew sufficiently as a consequence.  Special tax relief did create a booming film industry in the UK and helping the scientific and high-technology businesses is certainly a very good idea since they represent the future.  However, less glamorous industries are also important for a diversified economy and why cherry pick?  We do not want to create unnecessary resentment and damage other contributing industries.

This item continues in the Subscriber’s Area where a PDF of William Hague’s article is also posted.


Email of the day

On Monday’s Markets Now:

I just wanted to say how much I agreed with the subscriber email 2 yesterday on the ‘huge difference’ you & Eoin make with your service.

Give me the Markets Now over Davos any day of the week.

The financial services industry needs more people with competence & integrity like Iain Little & Bruce Albrecht. David Brown’s laser sharp intellect (& I suspect more ‘right brained’ judgement) knocks spots off so many of the city talkers I come across. 

I would have really enjoyed the ‘pub’ afterwards but I had to be home early. I find it best not to irritate my wife by getting home too late & the dog is always there waiting for his walk.

With best regards


David Fuller's view

Thank you so much.  It was good to see you again, looking so well, and I enjoyed our chat as we were approaching the Club.  There is no better audience than veteran subscribers and I learn something new at every session of Markets Now.

I sympathise with your wife and patient dog, and am sure your early arrival back home was welcomed.


Behind China's Bond Selloff, a Risky Twist on the Repo Trade

This article by Shen for the Wall Street Journal may be of interest to subscribers. Here is a section:

As much as 12 trillion yuan ($1.73 trillion) in bonds—or 19% of the country’s $9 trillion bond market—could be subject to such repurchase agreements, according to an estimate by Shui Ruqing, president of bond clearing-house China Central Depository & Clearing Co., cited last month in China’s influential Caixin Magazine. Traders say the deals are so opaque that even estimates are hard to make.

Banks sometimes use the “dai chi” agreements to move risky assets temporarily off their books during earnings periods or audits, the people said. Brokers like Sealand typically use them to borrow quickly and flexibly—leveraging their investments many times over, they said.

Until last year, Chinese financial regulators had largely ignored the practice, beyond saying they opposed it during a bond-market crackdown in 2013. But the informal nature of dai chi also meant the trades could be difficult to enforce when conditions worsened.

“Because it’s not really an official business, agreements aren’t legally binding,” said the executive who had bought bonds from Sealand.

Sealand’s problems became apparent on Dec. 15, when the southern China-based company announced that two of its traders had forged dai chi agreements worth 16.5 billion yuan ($2.4 billion), a move that market participants interpreted as meaning the broker didn’t intend to honor the deals.

The amount was more than five times what Sealand had declared in its Sept. 30 financials as its financial assets under official repurchase agreements, and more than seven times its disclosed bond-holdings.


Eoin Treacy's view

China has developed extraordinarily quickly from a closed backwater into a massive financially significant hub. While the pace of development has been blistering the evolution of regulatory standards of governance has been much more moderate. The single party system where cronyism, nepotism and the modern equivalent of simony combine to ensure just about anything is permissible, provided your social standing is within the correct circle, and only exacerbates the situation.


Goldman, Citi Beat Estimates as Trading Buoys Wall Street

This article by Dakin Campbell for Bloomberg may be of interest to subscribers. Here is a section:

Citigroup Chief Executive Officer Michael Corbat and Goldman Sachs CEO Lloyd Blankfein have been cutting costs and restructuring management to adjust to stricter capital requirements and a revenue downturn since the financial crisis. Goldman Sachs’s 2016 revenue was the lowest in five years, though investors and analysts are speculating the firm’s trading operations could be one of the biggest beneficiaries of Trump’s policies.

“The benefits from higher interest rates, accelerating capital deployment and historically low credit costs have been evident throughout the large-cap U.S. bank earnings releases,” Marty Mosby, an analyst at Vining-Sparks IBG, said in a note. “The fundamental story remains intact.”


Eoin Treacy's view

Bond trading profits are dominating headlines among the major banks but hide the fact that most have seen their businesses contract over the last few years as the high cost of complying with regulation bit into the size and scope of their businesses.


Pot Industry Exhales (a Little) After Trump's Attorney General Pick Testifies

This article by Polly Mosendz for Bloomberg may be of interest to subscribers. Here is a section:

Dayton said Sessions "may be against marijuana policy reform, but he is not stupid. He knows that these cannabis laws are hugely popular, not just among Americans in red and blue states, but with his boss who campaigned in favor of these laws."

While his responses, on their face, were hardly a coup for the cannabis industry, Sessions didn't morally condemn pot smokers either.

"The United States Congress has made the possession of marijuana in every state, and distribution of it, an illegal act," he testified. "If that ... is not desired any longer, Congress should pass a law to change the rule."

The Drug Policy Alliance, an organization opposed to the war on drugs, called the testimony "wishy-washy at best." The group's senior director of national affairs, Bill Piper, added: "It is clear that he was too afraid to say the ‘reefer madness’ things he said just a year ago, and that’s progress. But he made it clear throughout the hearing that he will enforce federal law."


Eoin Treacy's view

While a good many politicians have made statements condemning cannabis use “evolution” of their views on the topic are increasingly required as an ever increasing number of states legalise recreational or at least medical use. That has created a bull market in supply of the herb, not least because it grows like a weed. Wholesale prices have contracted considerably as operations initiated following Colorado’s legalisation reach commercial scale. That has resulted in mixed performance for the related shares.

]]> In the Papers - Deloitte. BP, Amazon, HMRC Tue, 06 Dec 2016 08:46:00 +0000 Newspaper Summary

The Times

Tata ready to keep Port Talbot open: Tata Steel says it has made significant commitments to more than 4,000 workers at the Port Talbot steelworks in south Wales, which has spent the past eight months under threat of closure.

World still has taste for best of British: The Queen’s grocer, which claims to have invented the scotch egg nearly 300 years ago, has had a stellar year, with strong sales of jams, teas, hampers and spirits lifting it to record profits.

Green means go as car sales get a battery-powered boost: Motorists appear to have shrugged off fears of an economic slowdown, with the latest figures showing that new car sales are continuing to grow. In an accelerating trend in the industry, more than a quarter of the year-on-year growth is attributed to sales of electric and hybrid vehicles.

Nuclear reactors pass French safety test: The French state electricity group at the head of the project to build Britain’s new nuclear power station received a welcome boost when it was authorised to restart seven reactors in France closed after safety fears. However, EDF was told that four other reactors would stay shut while tests continue.

Deloitte fined $8 million for ‘serious misconduct’: America’s audit watchdog has fined Deloitte’s Brazilian division a record $8 million for falsifying audit reports, altering documents and providing false testimony.

Drop in the ocean is enough to secure Gulf of Mexico contract: BHP Billiton has narrowly edged out BP to win the right to develop a potentially lucrative deepwater oil project in Mexico.

BP digs deep to refuel industry in North Sea: BP has begun experimental drilling in a group of potential gasfields in the North Sea.

Smoke signals suggest BAT will up offer for rival Reynolds American: British American Tobacco’s takeover of Reynolds American is poised to move a step closer when the FTSE 100 cigarette maker sweetens its $47 billion offer for the maker of Camel and Newport cigarettes.

Buyer takes bite out of Rhubarb: A luxury catering group with contracts including the Goodwood Estate, the Royal Albert Hall and the Sky Garden in the City’s Walkie Talkie tower, has changed hands in a deal valuing the business at an estimated £70 million to £75 million.

The Independent

Mark Carney rounds on critics for avoiding ‘hard truths’ about economy: The Governor of the Bank of England, Mark Carney, has accused critics of the Bank’s low interest rates of avoiding “hard truths” about the state of the economy in the wake of the global financial crisis.

Iceland has hit back at Iceland: The supermarket Iceland has hit back at the Icelandic government after it shunned the retailer’s attempt to settle their trademark dispute.

Euro value bounces back after Italy referendum to reach two-week high: The euro jumped back to its highest level since mid-November, as markets shrugged off the outcome of the Italian constitutional referendum.

Thousands of U.K. restaurants could go out of business because of Brexit: Thousands of U.K. restaurants could be at risk of going out of business as the sharp fall in the value of the pound since the Brexit vote raises costs for imported food and threatens to squeeze consumer spending.

Amazon Go launches, letting people walk into shops and take things: Amazon has launched a real-life shop where people can just pick things up and leave.

The Daily Telegraph

Rolls-Royce’s Chief critic relents on troubled engineer - with a miserly 1p upgrade: One of Rolls-Royce’s harshest critics has eased his negative stance on the troubled engineer - giving a miserly 1p upgrade on his predictions for the company’s shares.

GW Pharma pledges commitment to U.K. growth as it cancels London listing: GW Pharmaceuticals plans to expand manufacturing in the U.K. and boost cultivation of the cannabis plants it uses to make a treatment for severe epilepsy, its Chief Executive has said.

City Pub undaunted by industry cost hikes ahead of Aim float: A surge in sales at City Pub Company has helped dampen fears of a slowdown in the pub sector ahead of its planned listing on London’s junior market next year.

St Modwen pushes ahead with sale of New Covent Garden plot: Property company St Modwen is pushing ahead with the sale of part of its valuable New Covent Garden Market site in south London, despite fears that the capital’s property market has peaked.

Norwegian Air’s U.S. expansion cleared for take-off: Norwegian Air’s expansion into the U.S. has received a boost after travel authorities cleared the low-cost carrier’s trans-Atlantic permits.

No special Brexit deal for the City of London, warn Hammond and Davis: The City of London will not get any special treatment in the upcoming Brexit negotiations, senior members of Theresa May’s Cabinet have told a group of high-profile banking and insurance Chiefs. 

The Guardian

Mark Carney: we must tackle isolation and detachment caused by globalisation: The Governor of the Bank of England has issued a rallying cry to policymakers across advanced economies to tackle the causes of a growing sense of “isolation and detachment” among people who feel left behind by globalisation.

Mark Carney’s history lesson shows we haven’t learned on globalisation: History repeats itself. That was the message from Mark Carney as the Governor of the Bank of England sought to draw some conclusions about the future of globalisation at the end of a turbulent year.

Mark Carney: European economies face hit if cut off from City of London: The Governor of the Bank of England has warned that European economies could be damaged if their access to the City of London is disrupted after Britain leaves the EU.

Hard Brexit would damage ‘almost every sector’ of U.K. economy: Leaving the single market would be damaging to almost every sector of the British economy, from manufacturing and energy to retail and financial services, according to a report commissioned by an alliance of Conservative, Labour and Liberal Democrat politicians trying to stop a hard Brexit.

Chris Grayling to unveil plans for new fully privatised railway line: The government is to unveil plans for a fully privatised railway line, with track and trains operated by the same company.

U.S. bank quit Sports Direct role over share deal concerns, court filing claims: A top U.S. investment bank resigned as a key adviser to Mike Ashley’s Sports Direct because of concerns that the retail company had manipulated its share price, according to claims made in a high court document.

Hammond and Davis meet Bank Chiefs to talk Brexit ‘opportunities’: Banking leaders from Goldman Sachs and HSBC were among those who met the Chancellor and the Brexit secretary to discuss how to keep financial services in the U.K. after leaving the European Union.

Daily Mail

Online estate agent Purplebricks sees shares soar after it delivers its maiden U.K. profit: Purplebricks shares soared after it delivered its maiden U.K. profit. The online estate agent, which was set up in 2014 by brothers Michael and Kenny Bruce and is backed by fund Manager Neil Woodford, posted underlying profits of £300,000 in the U.K. for the six months to the end of October.

Tata Steel and unions close to agreeing rescue plan for Port Talbot plant: Tata Steel and unions are close to agreeing a rescue plan for the Port Talbot plant. An announcement is expected this week on a plan that could save up to 4,500 jobs at the South Wales site.

Ferrari shares race to record high as investors bet on Italian companies that export goods beyond the Eurozone: Ferrari shares raced to a record high as investors bet on Italian companies that export goods beyond the Eurozone following the resignation of prime minister Matteo Renzi. The luxury car maker, which sells 95% of its cars outside its home country, gained nearly 3% in early trading in Milan to give it a value of £8.5 billion.

Burberry shares jump after reports it has shrugged off a string of takeover offers from U.S. accessories brand Coach: Burberry shares jumped after reports it had shrugged off a string of takeover offers from U.S. accessories brand Coach. A deal would have created a luxury fashion giant worth £16 billion, combining Burberry’s flair for coats with Coach’s strength in handbags.

Italy’s finance Chiefs scramble to secure rescue of world’s oldest lender: More than £700 million was wiped off Italy’s largest banks  as finance Chiefs scrambled to secure a rescue of the world’s oldest lender. As markets swung wildly following Sunday’s referendum vote, senior bankers held emergency talks to save Monte dei Paschi di Siena, which is crippled with £25.5 billion of bad debt.

Topps Tiles slips after flooring retailer admits error in last week’s full-year results: Topps Tiles slipped after the flooring retailer admitted an error in last week’s full-year results. The firm had climbed after announcing like-for-like sales had leapt 0.8% in the first eight weeks of its new financial year.

Daily Express

Services sector grows at fastest rate for 10 months: The economy is on course to see out 2016 in good shape after Britain’s powerhouse services sector grew at its fastest rate for 10 months in November.

Italy vote is ‘harbinger’ of doom: Deutsche Bank Boss warns of more turbulence after No: Deutsche Bank’s Chief Executive warned staff of more Eurozone turmoil after Italian Prime Minister Matteo Renzi’s resignation over a referendum on constitutional reform.

Italy’s banks at recession lows: Monte Dei Paschi stocks tumble amid No vote uncertainty: Fears are rising for Italy’s troubled banks after Italian Prime Minister Matteo Renzi resigned over a humiliating defeat in a national referendum.

Now pushy European Union angers the U.S. as it tries to control American banks: Furious American banks are fighting back against burdensome Brussels plans, which would allow European regulators to exert more control over foreign lenders.

The Scottish Herald

Fund drops Europe focus after Brexit: The Standard Life European Private Equity Trust is abandoning its geographic focus due to ongoing uncertainty in European markets limiting the potential investments it can make.

Cloud Global aims for the skies with first acquisition: Aviation firm Cloud Global has demonstrated its growth ambitions with the acquisition of ACS Aviation – a flight training specialist that is also the operator of Perth Airport.

Whisky water firm makes first deal in Russia: A Scottish company that sells water sourced from private springs near whisky distilleries has secured its first deal in Russia, marking its 15th export market.

Bargain-hungry shoppers send non-food sales soaring: Bargain-hungry shoppers bolstered retail takings last month, with non-food sales jumping 40% during the week including Black Friday.

Diageo hailed as stronger than Pernod: Diageo has stolen a march over Pernod Ricard after a leading ratings agency declared that it has a stronger credit quality than its Scotch whisky rival.

Asbestos removal firm changes hands in deal backed by U.K.SE: A Wishaw-based asbestos removal business has changed hands in a management buyout backed by U.K. Steel Enterprise (U.K.SE).

Scots pay drops as postings rise: Pay rates went into reverse as the number of new job postings increased in Scotland in November, figures reveal.

Air compressor available on Earth: The VERT.04 technology, said to be the first new air compressor design for three decades, was unveiled as prototype satellite cooling system for the Ministry of Defence’s Centre for Defence Enterprise, which aims to improve significantly the quality of infrared imaging.

Edinburgh Gin heads for duty free at capital airport: Edinburgh Gin has entered the travel retail market for the first time with a listing at Edinburgh Airport. The gin, which is owned by Ian Macleod Distillers after its September acquisition of the Spencerfield Spirts Company, will be available at Dufry-owned World Duty Free.

The Scotsman

RBS reaches £800 million settlement over 2008 rights issue: Royal Bank of Scotland  said it has agreed to pay up to £800 million to settle claims dating back to its £12 billion rights issue in 2008.

Car sales accelerate in November, says trade body: New car sales grew by 2.9% in November compared with the same month last year, according to the latest industry figures.

Scottish economy to slow sharply in 2017, warns think-tank: Scotland’s economy is forecast to grow a meagre 0.4% next year, half the rate for the U.K. as a whole and slashed from a 2% prediction last June, a think-tank says in a report.

Online backlash as English chemists bans Scottish banknotes: It’s a familiar issue to generations of Scots when shopping south of the border. Banknotes accepted as a matter of course in Dundee can prompt confusion if used in Dunstable.

City A.M.

Financial sector’s tax contribution hits a record £71.4 billion: The tax take from Britain’s financial sector has hit record levels, underscoring its economic importance as talks between the government and the City enter a new phase in the run up to Brexit.

Brexit prompts a “tsunami” of British solicitors to register in Ireland, according to the Law Society of Ireland: A “tsunami” of British lawyers have flocked to register on the Irish roll of solicitors this year following the U.K.’s vote to leave the EU.

Institutional West End property sales sizzle to record high as investors capitalise on weaker pound and foreign interest: Institutional sales of commercial property in the West End have topped £2.7 billion in the year-to-date, the highest volume ever recorded, according to estate agent Savills.

Hefty bill from counterfeiting and piracy costs EU £71 billion and 790,000 jobs each year: Counterfeit goods and piracy cost the EU economy a whopping £71 billion every year, according to research from the European Union’s intellectual property office.

HMRC told to hurry up and produce “tangible results” by Treasury Committee chairman: A Tory heavy-hitter said workers with life-threatening diseases could miss out on compensation pay-outs because of failings by the taxman and urged authorities to speed up the process.


]]> Hillary Clinton has enough electoral Votes to Win the White House in final Fix map Wed, 09 Nov 2016 08:16:00 +0000 Hillary Clinton has enough electoral Votes to Win the White House in final Fix map
Here is the opening of this topical report by The Washington Post:

The presidential election ends — we hope! — Tuesday.
Below we offer our last ratings of the race, our look at the truly competitive states on the eve of this most unpredictable of elections. While we are moving two states in Donald Trump’s direction on this second-to-last day of the campaign, the overall map still clearly favors Hillary Clinton: She has 275 electoral votes solidly or leaning her way — five more than she needs to win the White House on Tuesday night. In fact, even if Trump holds all of the states either solidly or leaning his way and wins all three states currently rated as “toss-ups,” he is still seven electoral votes short of 270.
Our big change on the eve of the election is to move North Carolina from “lean Democratic” back to “toss-up.” From mid-September to mid-October, Clinton led in 19 of the 20 polls conducted in the state. But, of the nine most recent polls, four show Clinton ahead, three show Trump in the lead and two project a tie. Trump has a 1.4 percent edge in the RealClearPolitics polling average.

David Fuller's view
I imagine our American subscribers are looking forward to the end of this election campaign which seems interminably long.  I assume the view that if Trump cannot win Florida, which should declare shortly after 10:00pm EST, Clinton has won this election.  The Washington Post is calling Florida a “toss-up” in the article above.  Wall Street has bet on a Clinton victory this week following the FBI’s comment that there were no new findings in its review of her emails.  
Let’s hope for a clear result and a dignified conclusion to this election. 


The Upside of Russian Interference
Here is a concluding section from this interesting column by Leonid Bershidsky for Bloomberg:

Figures on both the left, such as journalist Glenn Greenwald, and the pro-Trump right, such as the Republican nominee's friend Roger Stone, have spoken of a "new McCarthyism."
I'm not ready to subscribe to that notion yet, if only because, as a Russian citizen, I am not merely able to work for a mainstream U.S. news organization: I've been welcomed by the many Americans I have interviewed while covering this campaign. These span a political spectrum from fiery progressive Liz Garst in Iowa -- a person that, to me, embodies the best of Russia's old-time influence on the U.S. -- to far-right militia members in northern Florida, who are perhaps the most susceptible to the current brand of Russian propaganda.
Americans are generally nice to visitors -- and uncommonly helpful to journalists -- but they used to be far more suspicious of Russians while the Soviet Union was still around. Despite the best efforts of supposedly progressive Hillary Clinton, that suspicion has not yet returned. It may do so if the Russia-bashing continues after the election; I suspect it will die down somewhat as the electoral battle recedes into history.
In any case, it's worth considering how the U.S. will internalize the real and perceived Russian meddling this year. Americans are hard-headed and used to doing things their own way; they turned the previous Russian influence campaigns, often waged with the worst of intentions, to their advantage. Can Putin's propaganda and perhaps cyber-espionage campaign also serve a useful purpose?
I believe it can. Putin is providing a useful service to the U.S. by holding his malicious mirror to its political establishment. It's a troll's mirror, but it does reflect a nasty reality: A complacent, clannish elite that has written convenient rules for itself but not for the society it governs. Much of this society, both on the right and on the left, doesn't like what it sees.
As with previous Russian attempts to change the U.S., this one should lead to a realization that it's time to clean up U.S. democracy and make it more representative and inclusive, perhaps by stripping away some obsolete voting rules, perhaps by breaking the destructive stranglehold of the ossified two-party system.
The country I have seen this year -- the big cities and small towns I've explored, the progressives and Second Amendment zealots I've met, this whole vast, great land -- deserves far better than what I watched it live through. I'd like to help in my small way, and I think my country will end up helping, too, even though it may be trying to inflict damage.

David Fuller's view
The two-party system mentioned in the penultimate paragraph above is often criticised on the basis that it is not sufficiently representative and inclusive.  That is a valid point in both the USA and UK.  However, I have always preferred the two-party system because it does produce stronger governments.
I have seldom been impressed by the multi-party governments that we usually see in continental Europe and some other democratic regimes.  They are weaker and consequently less decisive and effective.  They are also beholden to special interest pressure groups.  The consequences are weaker governments and more frequent elections.
What I would advocate is term limits.  If the two-term presidential system is good enough for the USA, and I believe it is, I would prefer the same for Prime Ministers. I also think representatives in the Senate, Congress and UK Parliament should have time limits of perhaps three terms.  Yes, it would remove some successful, effective politicians but it would also reduce the number of cliques while introducing new talent and energy.  Career politicians remain in office well beyond their sell-by date.  


My personal portfolio
A position increased and a profit taken

David Fuller's view
Details and charts are in the Subscriber’s Area.

Referendums Are Now Part of Our Democracy. If Judges Reverse Them, We Are In a Dangerous Place.
Here is the opening of this informative column by Charles Moore for The Telegraph:

'Remember, remember the Fifth of November” some of us chant on this day. The rhyme goes on about how Guy Fawkes wanted to blow up the King and Parliament: “Threescore barrels of powder below/ Poor old England to overthrow.” We do things differently nowadays. For “barrels of powder” read “QCs arguing”.
The legal confusion about how to trigger Article 50 has left both sides in the Brexit story striking some odd attitudes. The Leavers – of whom your columnist is one – look as if they are saying that Parliament should not have the power of decision over Article 50. Yet it was they who spoke so often about recovering parliamentary sovereignty.
The Remainers, many of whom have devoted more than 40 years to undermining our national independence, have suddenly decided to uphold the rights of our sovereign Parliament. Human rights lawyers who have argued for entire careers that Britain’s home-grown tradition of rights is grossly inadequate for the modern world have gone all gooey about the Bill of Rights of 1689 and the limits it sets upon the royal prerogative.
Personally, I have particularly enjoyed watching Lord Kerr of Kinlochard stepping forward to speak for England. John Kerr, former UK Permanent Representative to the European Union, former head of the Foreign Office, billed by the BBC as the “author” of Article 50, is known by former colleagues as “Machiavelli” (with emphasis on the “Mac”, Lord Kerr being Scottish). He is a man of great charm and brilliance. I have always profited from my conversations with him about the life of Lady Thatcher. But I must admit that I had never before seen him as the defender of this nation’s ancient liberties.
Now The People’s Kerr explains that Article 50 is not irrevocable, and every possible opportunity must be given to Parliament and electors to vote again. Come to think of it, I don’t know why I am surprised: it would be entirely in character for the inventor of the device for leaving the EU to have so drafted it that it forces us to stay.

David Fuller's view
In December the UK’s Supreme Court will commence its review of the recent High Court’s decision that only Parliament can trigger Article 50.  If it reverses that decision because Parliament backed the June 23rd Referendum by no less than a 6 to 1 majority, then Mrs May will be free to commence negotiations to leave the EU.
However, if the Supreme Court upholds the High Court decision, then it is very likely that the Prime Minister will trigger a General Election in 2017.  I maintain that Mrs May would win that election with an increased majority. 
A PDF of Charles Moore’s column is posted in the Subscriber’s Area along with an Editorial. 

The Markets Now
Here is the new brochure for the next event on Monday evening 28th November, at London’s Caledonian Club. 

David Fuller's view
OK, the US Presidential Election is over… we hope.  Interestingly, infrastructure spending is back on a number of political agendas.  That should help GDP growth.  Commodities are generally firm, with ‘Dr Copper’ joining other metals in breaking to the upside.  A number of government bond yields bottomed in July, including US 10-Yr Treasuries. 
Groupthink pundits are saying nothing will change but that is a contrary indicator.  This is a great time to have an exciting new speaker in Clive Burstow.  Come along and participate in the discussion of market opportunities – the last session for 2016.
I look forward to another lively session at The Markets Now seminar, attended by highly experienced international investors, led by our long-term subscribers.  Iain Little has more interesting material, including his popular “Trusts In Focus” programme.  Iain also introduced Clive Burstow of Barings, a specialist in the analysis and management of mining stocks – a hot topic this year. 
I can’t wait and it is always fun to chat with delegates at the cash bar following the three presentations.

Not With A Bang But A Whimper (and other stuff)
Thanks to a subscriber for this report by Ben Inker and Jeremy Grantham for GMO which may be of interest. Here is a section:
At GMO we have put particular weight for identifying investment bubbles on the statistical measure of a 2-sigma upside move above the long-term trend line, a measure of deviation that uses only long-term prices and volatility around the trend. (A 2-sigma deviation occurs every 44 years in a normally distributed world and every 35 years in our actual fat-tailed stock market world.) Today’s (November 7) price is only 8% away from the 2-sigma level that we calculate for the S&P 500 of 2300.

13. Upside moves of 2-sigma have historically done an excellent job of differentiating between mere bull markets and the real McCoy investment bubbles that are likely to decline a lot – all the way back to trend – often around 50% in equities. And to do so in a hurry, in one to three years.

14. So we have an apparent paradox. None of the usual economic or psychological conditions for an investment bubble are being met, yet the current price is almost on the statistical boundary of a bubble. Can this be reconciled? I believe so.

15. There is a new pressure that has been brought to bear on all asset prices over the last 35 years and especially the last 20 that has observably driven the general discount rate for assets down by 2 to 2.5 percentage points. Tables 1 and 2 compare the approximate yields today of major asset classes with the average returns they had from 1945 to 1995. You can see that available returns to investors are way down. (Let me add here that many of these numbers are provisional. We will try to steadily improve them over the next several months. Any helpful inputs are welcome.) But I do believe that readers will agree with the general proposition that potential investment returns have been lowered on a wide investment front over the last 20 years and that stocks are generally in line with all other assets.

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

I agree that the topic of bubbles is central of what our job as analysts is. If we can succeed in identifying the latter stages of a bubble, we can avoid the worst effects of the subsequent bear market, so that we are in the privileged position of having ample liquid capital with which to participate when a new bull market evolves. The big question now is to what extent the major stock market indices exhibit bubble characteristics.


Voters could legalize marijuana for quarter of all Americans
This article from Reuters highlights one of the more important decisions to be taken by US voters today. Here is a section:

In California, where medical marijuana has been legal since 1996, a recent poll by the Public Policy Institute of California showed 55 percent of likely voters supported a ballot initiative that would authorize the state to tax and regulate retail cannabis sales much like it does alcoholic beverages.

That was similar to the numbers favoring legalization from opinion polls in Massachusetts and Maine. Slimmer majorities or pluralities also point to legalization in Arizona and Nevada.

Approval by California alone, America's most populous state with 39 million people, would put nearly a fifth of all Americans living in states where recreational marijuana is legal, according to U.S. Census figures. That number grows to more than 23 percent if all five state measures pass.

Backers of legalized marijuana sales have tried for decades to win support at the ballot box, with little success until the past few years, starting with victories in Colorado and Washington state in 2012.

Experts say the latest initiatives include more sophisticated regulatory mechanisms aimed at keeping cannabis away from children and banning the involvement of criminal gangs and drug cartels. Public opinion has rapidly swung toward favoring legalization.

"It's changed in the minds of these voters from being like cocaine to being like beer," said University of Southern California political scientist John Matsusaka.

Eoin Treacy's view
Time and again prohibition has been demonstrated as a failed strategy. There are of course very real side effects that result from smoking cannabis and most particularly for young people. The problem for those campaigning against legalisation is proving cannabis has no health supporting effects. Millions of people have personal experience to the contrary and that has helped drive wider acceptable of the plant’s curative properties. This is especially true for ailments modern medicine is not a good fit for such as chronic pain, migraines and posttraumatic stress.

Adobe gets experimental: Photoshopping voices, drawing hacks and VR editing
This article by Emily Ferron for Newatlas may be of interest to subscribers. Here is a section:

According to Jin, the software needs about 20 minutes of voice recording to learn the speech patterns and wave forms of the original speaker's voice. Then, the user can simply type in the edited version of the text and hear the desired changes played back practically instantly. In the demo, Jin playfully altered a sentence, "I kissed my dogs and my wife" to "I kissed Jordan three times." New words that were not in the original recording were re-created in the speaker's tone and timbre.

While this technology has obvious applications in the entertainment and voiceover industries, it could have long-reaching societal repercussions as well. Just as Photoshopping allegations come into play when the veracity of an image is suspect, VoCo could open voice recordings to the same kind of scrutiny. To counter security concerns, Jin said that features like watermarking and anti-forgery measures are on the way.

Other notable Adobe "sneaks" include Project Stylit and CloverVR. The former is a tool for creating digital art with traditional fine art looks. The latter tackles a more-cutting edge issue, introducing new methods for editing 360-degree videos for virtual reality applications.

Eoin Treacy's view
Online retail is in many respects the business of selling pictures since the customer has no other way of inspecting the product. By successfully implementing a subscription pricing model Adobe succeeded in making its Photoshop suite of products the industry standard. Its Maya animation and graphics package is now also on a subscription model and is one of the most widely used tools in the gaming and advertising sectors.

Copper Enters Bull Market as Declining Stocks Ease Glut Concerns
This article by Joe Deaux for Bloomberg may be of interest to subscribers. Here is a section:

“We’re getting the idea that these markets are a lot tighter than many people think, particularly as China continues to do pretty well,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “The PBOC is saying interest rates are in line with fundamentals, meaning they won’t be doing anything new and they see stability there.”

Copper for delivery in three months rose 2.7 percent to settle at $5,235.50 a metric ton in London. That marked a more- than 20 percent gain from a low in January, meeting the common definition of a bull market. The metal touched $5,250.50, the highest since October 2015.

Eoin Treacy's view
Copper held a progression of lower rally highs for five years but had developed type-2 bottom characteristics since January’s mean reversion rally and is now breaking out.

]]> In the papers: Bradford & Bingley, Carpetright, Syngenta Wed, 26 Oct 2016 07:24:00 +0100 The Times
Weak pound hits German exports: German exports to Britain are set to fall by up to 9% next year because of the weakness of the pound after the Brexit vote.

Treasury to sell £16 billion of Bradford & Bingley loans: The government has begun to clear out almost £16 billion of taxpayer-owned Bradford & Bingley mortgages as it attempts to recoup billions handed to the defunct lender.

Fall in pound forces up prices at Carpetright: Carpetright is increasing prices as its grApples with the plunging pound and has warned that gross profit margins would be hit by “increased sourcing costs”.

AT&T Boss hits back at ‘uninformed’ politicians: American politicians who have spoken out against AT&T’s $85 billion bid for Time Warner are uninformed, the telecom group’s Boss claims.

Dublin woos London’s EU agencies: The Irish government will formally invite two high-profile London-based EU agencies to move to Dublin as Britain prepares for Brexit.

Corporate woes knock South Korean economy: The exploding smartphone which heaped embarrassment on its manufacturer, Samsung, has also played its part in the slowing down of the South Korean economy, according to the country’s central bank.

Christmas will come late for Syngenta shareholders: ChemChina’s $43 billion takeover of Syngenta is unlikely to go through until next year. Syngenta said that it did not expect the merger to close beforehand because of delays on requests by the European Commission for more information.

World Bank finds Britain less friendly: Britain has dropped down the World Bank’s ranking of business-friendly countries as rival nations make themselves more attractive.

Thousands of Vauxhall jobs at risk from Brexit: Thousands of jobs at Vauxhall factories are at risk after the carmaker’s American owner warned that it could shut plants and cut capacity across Europe after taking a $400 million hit from the Brexit vote.

The Independent
Nearly 10,000 people are applying for the same job in China: Nearly ten thousands Chinese jobseekers are competing for one position: an officer worker at a political organisation.

Hornby’s prices are chugging higher as Brexit obstructs the tracks: Hornby isn’t an obvious microcosm for what is going on in Britain’s post-Brexit economy. The maker of everything from model trains to Airfix kits looks, on the face of it, to be a unique and niche business.

Hard Brexit could damage business, U.K.’s biggest tech CEO warns: Simon Segars, the Chief Executive of Britain’s biggest technology firm, has warned the Government’s plans to clamp down on immigration from the European Union in the event of a hard Brexit would damage his business.

Twitter to cut 300 jobs as losses mount: Twitter is planning widespread job cuts, to be announced as soon as this week, according to people familiar with the matter.

The Daily Telegraph
Carney sends pound rebounding as he says markets 'mistaken' to be so gloomy on Article 50: The pound rebounded strongly after Mark Carney hinted the Bank of England does not want the currency to dive too far, and called markets’ doom and gloom around Brexit “mistaken”.

Apple bets on bumper Christmas to slow iPhone sales slide: Apple is predicting better than expected Christmas sales from its iPhone 7 last after reporting a further slide in revenues and its first decline in annual profit since 2001.

Vodafone braced for multi-million pound Ofcom fine: Vodafone is braced for a multi-million pound fine from the industry regulator after an eighteen-month double-probe into its suspected customer failings.

3i sells debt management arm for £222 million: The private equity group 3i has decided to sell its debt management business to Investcorp for £222 million, leaving the firm to work on its private equity and infrastructure investments.

Brexit fails to dent demand for cars, says Pendragon: The prospect of Brexit and the economic uncertainty it is bringing has failed to dampen motorists’ desire for a new set of wheels, according to car dealer Pendragon.

National Express scraps Nuremberg S-Bahn contract: Transport giant National Express has scrapped a deal to run commuter train services in the German city of Nuremberg, dealing a setback to its plan of expanding in Europe’s biggest rail market.

High youth unemployment leaves £45 billion hole in U.K. economy: High youth unemployment is costing the British economy £45 billion per year, according to research from PwC, as well as blighting the careers of workers who miss out on a job in their teens and twenties.

The Questor Column:

Buy Morrisons in the hope of a dividend treat: The latest numbers on Britain’s grocery industry, from Kantar Worldpanel, show that it remains a tough market. Tesco (whose retail bonds still could interest yield seekers, as Questor’s Income Portfolio column mentioned recently) appeared to do best of the big quoted grocers in the 12 weeks to October 8, with a 1.3% gain in sales, compared with a 0.4% drop at Sainsbury’s and a 3% slide at Morrisons. However, it was intriguing to see Morrisons’ shares rise on this news. In addition, the Chief Executive, David Potts, is still cutting capital expenditure and costs, sweating the firm’s working capital and above all paying down debt. Morrisons’s market value is £5.3 billion. Subtract its cash and investments and add on its debts and the firm has an “enterprise value” of £6.3 billion – yet it has property and plant valued at £7.1 billion. This suggests that there is value here. The lower the debt goes, the better, as that derisks the business. If Mr Potts hits his cost and working capital goals, Morrisons could start to generate healthy levels of cash flow. Questor says “Buy”.

Aveva: Aveva, a specialist in computer-aided design software and is part of the FTSE 250, can hardly be described as a bargain either, on nearly 30 times forward earnings, but the difference is that analysts’ earnings estimates are creeping higher once more. This may be down to rising oil prices, as the resources industry is one of Aveva’s key target markets alongside power plants and shipbuilding, and also the pound’s plunge, as Aveva makes more than 90% of its sales overseas. In addition, Aveva will have a new Boss next year when James Kidd replaces long-term Chief Executive Richard Longdon. Meanwhile the balance sheet has net cash and dividends are rising. The lofty valuation means the stock has its risks but stronger oil prices and a weaker pound are both helpful and it will be interesting to see what the new Boss brings. Questor says “Hold”.

The Guardian
Mark Carney: politics won't affect how long I stay in my job: The Governor of the Bank of England has indicated that an onslaught on his performance by the Conservative party establishment will not influence whether he stays in his post beyond 2018.

EU trade deal with Canada on brink of collapse after Belgian disarray: The EU’s hopes of signing a free-trade agreement with Canada this week are on a knife-edge after Belgium announced it could not sign the treaty because of opposition from regional parliaments.

Manufacturers feel falling pound is bad despite increasing their exports: A majority of manufacturing exporters believe the falling pound is bad for their businesses despite helping them to increase exports in the last three months at the strongest pace for two and half years.

Gender pay gap could take 170 years to close, says World Economic Forum: The authors of a new report forecasting that it could take 170 years to eradicate the disparity in pay and employment opportunities for men and women have called for urgent action to close the gender equality gap.

Daily Mail
Owner of Costa Coffee and Premier Inn embarks on fierce battle with rival artisan cafes and Airbnb-style accommodation sites: The Owner of Costa Coffee and Premier Inn has embarked on a fierce battle with rival artisan cafes and Airbnb-style accommodation sites. Hospitality giant Whitbread is rolling out upmarket coffee shops, and has launched a boutique hotel brand that can only be booked online to compete with Airbnb.

Royal Bank of Scotland could be granted last-ditch reprieve as Clydesdale Bank announces bid for its Williams & Glyn branch network: The Royal Bank of Scotland could be granted a last-ditch reprieve after Clydesdale Bank announced a bid for its Williams & Glyn branch network. Natwest Owner RBS has been scrambling to ditch the 300 branches ahead of a European Union deadline, or else face the possibility of being forced by Brussels to sell at a loss.

Daily Express
Spike in fraud since introduction of pension freedoms: The surge in fraud since last year’s pension freedoms has turned out to be far greater than originally feared. A shocking £13.3 million of pension fraud was reported to the City of London Police alone in the first six months after former Chancellor George Osborne’s reforms were introduced in April 2015.

Car insurance monthly instalments not a smart move: Motorists are burning money by paying for their car insurance in monthly instalments. Drivers pay an extra £73 a year by spreading the cost.

John Lewis names first female managing Director in its 152-year history: John Lewis has named Paula Nickolds as its first female Boss in the department store’s 152-year history.

The Scottish Herald
Activist hikes stake in STV further: Crystal Amber has ramped up its stake in STV to nearly 14% after buying its second big batch of shares in two days.

Perth pharmacy chain sees profits rise despite challenging conditions: Walter Davidson & Sons, Scotland’s biggest independent pharmacy chain, has hiked profits by nearly 40% to £2.02 million in its latest financial year.

Farm workforce hits all-time low: Scotland's farm workforce is now the smallest on record, with the latest official figures putting it at 63,400 souls, down by 1,900 since 2015.

£1.25 million backing for Argyll hydro scheme: A hydro power station on the River Lochy in Argyll has secured £1.25 million crowd funding from investors after enjoying a successful start with its generating operations.

Ury golf resort set to rival Trump’s Links: The group that runs tennis star Andy Murray’s Cromlix Hotel has joined forces with an Aberdeenshire estate to launch a golf resort that is set to rival U.S. Presidential candidate Donald Trump’s Menie Estate complex.

Crummock profits down as contracts delayed: Crummock Holdings, the civil engineering and road surfacing firm, has highlighted delays in receiving orders for large contracts as profits dropped to £366,076, from £570,657 in its financial year.

The Scotsman
Oil company Xcite Energy heading for liquidation: Shares in North Sea oil company Xcite Energy were suspended after crunch talks with its bondholders broke down.

Fears for high street as store closures accelerate: Concerns have been raised over the health of Scotland’s town centres after data published revealed that the number of store closures jumped sharply in the first six months of the year, with the net drop in retailers the highest in the U.K.

Dundee sports games firm targets £1.5 million funding goal: A Dundee-based maker of sports simulation games is seeking to raise £1.5 million as it prepares for the launch of its debut title.

SME boost as LendingCrowd lands seven-figure funding deal: An Edinburgh-based peer-to-peer lending platform has secured a seven-figure cash injection under a Scottish Enterprise initiative to boost funding to smaller businesses.

Robertson completes £20 million project for Glasgow Caledonian: Construction group Robertson has completed a £20 million contract as part of a major redevelopment project at Glasgow Caledonian University.

City A.M.
U.S. mobile network Sprint narrows losses on higher revenue and more customers: U.S. mobile network challenger Sprint has narrowed its losses in its latest quarter thanks to higher revenue from more customers.

Procter & Gamble shaves its costs and rakes in a rise in sales: U.S. consumer goods giant Procter & Gamble has posted a surprise rise in sales that sent shares higher in New York, despite warning over growth in coming months.

Wind in CK Hutchinson’s sails as its network deal approved by Italians: A merger of CK Hutchison’s 3 Italia and Italian Network Wind has been given final approval in Italy, just months after the European Commission stepped on Hutchison’s bid for O2.

GW Pharmaceuticals and British Sugar sign cannabis plant deal: British Sugar – a subsidiary of Associated British Foods – has signed a deal to grow cannabis plants for GW Pharmaceuticals.

Whirlpool sales lowered by the strong dollar: Shares in U.S. white goods maker Whirlpool took a hit after it give a downbeat outlook for coming months.

]]> In the papers: EDF, Morgan Stanley, Travis Perkins Thu, 20 Oct 2016 07:42:00 +0100 The Times
EDF ordered to switch off five reactors: The company building Britain’s first nuclear power station for 21 years has been ordered to shut down five more reactors in France for emergency tests.
Britain’s tax system is ‘too complex and stops growth’: The “punishingly complex” tax system is holding back private companies, according to the Institute of Directors and a group of entrepreneurs, investors and accountants.
French tourism suffers after terror attacks: Hotels, restaurants and retailers in Paris and the Riviera are facing a “disastrous” drop in income as a consequence of tourists staying away for fear of terrorism and ordinary crime, industry Bosses have warned.
Morgan Stanley jumps on banks’ profit bandwagon: Profits at Morgan Stanley rose by more than 50% in the third quarter, boosted by a near-doubling in revenues at its trading business.
Dennis fights to stay behind the wheel at McLaren: Ron Dennis is fighting to hold on to his job in charge of McLaren.
Sales revenue falls by third at estate agent: Property sales at Foxtons have fallen by more than a third in three months.
Saving euro clearing is ‘not priority’: Safeguarding the business of processing trillions of euro-denominated transactions through London is not a key part of the negotiations to leave the European Union, according to a Treasury minister.
May opposes higher tariffs against China steel dumping: Theresa May is opposing tougher European protection against Chinese steel imports, dashing hopes in Brussels of a shift in position.
New Barbies leave Mattel sitting pretty: Barbie was the star of the show for Mattel in the third quarter, with a 16% rise in worldwide sales.
The Independent
Cannabis drug developer GW Pharma cancels London stock market listing: A U.K. drug company specialising in cannabis-based medicines has ditched its stock market listing in London in favour of trading exclusively on New York’s Nasdaq, but claims it will keep its headquarters in Cambridge.
Jobs market holds up in August: The jobs market held up well in August and September, showing few adverse effects from the June Brexit referendum result.
Banks consider ‘moving London staff to Luxembourg to get access to EU’: The Head of financial development for Luxembourg said a string of overseas banks and fund managers had explored moving London staff to the tiny country since the Brexit vote.
China's economy grows 6.7% but experts warn of 'unsustainable' bubble: China’s economic growth remained stable in the third quarter, all but ensuring the government’s full-year growth target is met and opening a window for policy makers to deliver on vows to rein in excessive credit and surging property prices.
Travis Perkins to close 30 branches and axe up to 600 jobs: Travis Perkins, Britain’s biggest builders' merchant and the owner of the DIY chain Wickes, has announced plans to shut stores amid ‘uncertain trading’ in a move impacting up to 600 jobs across the group.
The Daily Telegraph
Big businesses warn U.K. will be the loser from government intervention on foreign takeovers: Top businesses have spoken out about the damage that a heavy-handed government clampdown on foreign takeovers is likely to inflict on the U.K.’s interests at home and overseas.
Housebuilder Barratt's London Boss suspended after arrests linked to the awarding of contracts: A senior Executive at Barratt Developments has been suspended after being arrested on suspicion of bribery over possible misconduct in awarding contracts for new housing developments.
Google in talks with Disney, Fox and CBS to launch online TV channel: Google has signed a deal with CBS to provide channels for its planned online TV service, according to reports, and is in “advanced talks” with Disney and Fox to broadcast their shows too.
Handelsbanken shrugs off Brexit to post rising profits: Handelsbanken, the Swedish lender that is growing quickly in the U.K., has boosted profits, lending and deposits in Britain, shrugging off the uncertainty caused by the Brexit vote.
Eurostar traffic falls 10% on terror fears but weak sterling boosts Channel Tunnel operator: Demand for train travel to the Continent has dropped this year as terror attacks in Brussels and Paris spooked holidaymakers, the latest figures from Eurotunnel suggest.
The Questor Column:
Park cash in this Aim-listed storage firm to protect it from inheritance tax: And while Aim has something of a reputation as the Wild West of the stock market, its members include some well-established businesses that pay reliable dividends. One example is Lok’nStore Group, which offers “self-storage” to individuals and businesses that don’t have enough space for all their possessions. One fund manager who has a large holding in Lok’nStore is Mark Slater, the son of the late Jim Slater, the financier and former Telegraph share tipper. Mr Slater pointed out that the use of self-storage was routine in America and said he expected the same to happen here in time. Questor pays special attention to fund managers who have “skin in the game” and Mr Slater certainly qualifies, with a £4.5 million holding in the Slater Income Fund. Questor says “Hold”.
The Guardian
Philip Hammond attempts to ease concerns over hard Brexit: Philip Hammond has sought to allay fears that the economy will be sacrificed in Brexit negotiations, with support for foreign high-skilled workers, the expectation of a favourable deal for the City and a staunch defence of the Bank of England’s independence.
Saudi Arabia raises $17.5 billion from bonds to repair damage to public finances: Saudi Arabia has raised $17.5 billion (£14 billion) from its first foray into the global bond markets as it seeks to repair the damage to its public finances caused by the collapse in the oil price since 2014.
Bank of England rebuts May and Hague's attacks on quantitative easing: The Bank of England has hit back at attacks by Theresa May and Lord William Hague on its money creation programme by pointing to the beneficial impact on the economy of the quantitative easing (QE) announced in its emergency post-Brexit stimulus.
TV advertising market set for worst year since 2009 amid Brexit fears: Broadcasters are facing the prospect of the worst year for TV advertising since the recession of 2009, as uncertainty over the likelihood of a hard Brexit has seen jittery companies strip more than £400 million from marketing budgets.
Daily Mail
Technology firm Laird loses almost half of its value after becoming latest victim of global slowdown in smartphone sales: Technology firm Laird lost almost half of its value when it became the latest victim of the global slowdown in smartphone sales.
Demand for black clothes in Thailand to mourn death of country’s King causes rush in Tesco’s South Asian outlets: Demand for black clothes in Thailand to mourn the death of the country’s King has caused a rush in Tesco’s South Asian outlets.
Country-wide boycott of Reckitt Benckiser products in South Korea leads chemicals firm to post weakest sales growth in five years: A country-wide boycott of Reckitt Benckiser products in South Korea led the chemicals firm to post its weakest sales growth in five years.
Drivers will be able to buy a car simply by signing up for smartphone when Volvo's Chinese owners launch new vehicle: Drivers will be able to buy a car as simply as signing up for a smartphone when a new vehicle is launched by the Chinese owners of Volvo.
Restaurant king Sir Terence Conran fights off allegations that he deprived former business partner of £3 million payday: Restaurant king Sir Terence Conran has fought off allegations that he deprived a former business partner of a £3 million payday.
Daily Express
European Commission could reject Italy's budget plans in shock and unprecedented move: Italy's spending plans for next year may be slapped down in an extraordinary and extreme move by the European Commission (EC).
Are you getting a refund? 750,000 mortgage customers set for compensation: Thousands of home owners could be in line for hundreds of pounds in compensation after lenders wrongly hiked mortgage bills. More than 750,000 people have had arrears lumped in with their monthly mortgage payments, found the industry watchdog.
Government axes plans for pensioners to sell retirement income: Pensioners hoping to sell poor-value retirement income next year have been left disappointed after the Government scrapped its plans for a secondary annuity market.
City beasts lose rag with Government over Brexit ineptitude: Top bankers and key City figures have accused the Government's Brexit officials of ignoring Britain's crucial financial sector amid preparations to leave the European Union (EU).
Britain's employment rate at record high following Brexit vote: Britain's employment rate remains at a record high, as the number of people in work increased in the weeks following Britain's vote to leave the European Union (EU), official data revealed.
The Scottish Herald
Law and finance firms face big risk of collapse: Nearly one-third of professional services firms in Scotland are still considered to be at a heightened risk of insolvency, underlining fears expressed ahead of the EU referendum in June that a Brexit vote would have a damaging effect on the sector.
Algy Cluff hails exciting North Sea prospects: North Sea-focused Cluff Natural Resources has hailed a big increase in estimates of the size of the possible resource base on its licences which it said underlined the potential to make big finds in the area.
Aberdeen LatAm IT in return to growth: Sterling’s weakness, a mild recovery in commodity prices and the growing strength of Latin American markets helped the Aberdeen Latin American Income fund make a positive return in the last financial year.
Online peer-to-peer platform LendingCrowd offers joining bonus to attract new investors: Peer-to-peer platform LendingCrowd is offering new investors a 2.5% joining bonus as it seeks to increase the pot of cash it has available to lend to small and medium sized enterprises.
Property developer pledges to create 2,000 Scottish jobs over 10 sites: London & Scottish Developments has pledged to deliver an estimated 2,000 new jobs across ten retail sites it acquired from Tesco last year, by leasing space to the likes of Aldi, Lidl, Home Bargains and Marks & Spencer.
Clark upbeat after landing £25 million of new contract wins: Paisley-based Clark Contracts has reported contract wins worth £25 million in the last six months.
Rearo seals £1-million-bathroom deal: Rearo, a Glasgow-based manufacturer of bathroom and kitchen surfaces, has secured a £1 million distribution deal with Meyer Timber for its bathroom wall panel product, Selkie. The range will be distributed from Meyer Timber’s depots in a deal that Norrie McLeod from Rearo, said was an excellent opportunity to increase Selkie’s exposure across the U.K.
McGill’s lifts profits in tough year: Greenock’s McGill’s Buses defied tough trading conditions to hike profits by 12.5% to £3.6 million last year.
The Scotsman
North Sea industry seeks to tap into ‘small pools’: The regulator for the North Sea industry has highlighted the “very significant” potential of more than three billion barrels of oil waiting to be tapped in U.K. waters.
Travel booking tech firm checks in with £5.3 million funding: An East Kilbride-based provider of booking systems for the travel sector is looking to ramp up its overseas presence after securing a £5.3 million investment.
Food allergy app sees appetite for growth in Scotland: An app focused on food allergies is to officially launch in Scotland next year, amid an expected strong appetite for the service.
East Lothian energy supplier gearing up for launch: An East Lothian energy supplier that is promising to share three-quarters of its profits with customers is preparing to launch next year after beating its fundraising target.
Crisps maker Mackie’s grows exports with Russia deal: Mackie’s at Taypack, the Perthshire crisps maker, has landed a deal to supply Russian supermarket chain AzbU.K.a Vkusa.
Property group seals seven-figure deal for Dundee halls: Dundee property and investment firm Carling Property Group has acquired Alloway Halls in the city from Abertay University in a seven-figure deal.
City A.M.
Chemical Industries Association urges tariff-free Single Market access to keep investment rolling in as part of Brexit manifesto: The U.K.'s chemical industry has urged the government to negotiate tariff-free access to the Single Market in a Brexit manifesto published.
London construction slowing after the Brexit vote: Construction in London is undergoing a slowdown following the Brexit vote, according to chartered surveyors.
Private equity firms backed to capitalise on Brexit opportunities: Private equity houses have been backed to capitalise on uncertainty over the U.K.’s Brexit vote with new investments.
BT comes under pressure from digital minister: The minister for digital policy has said the government is committed to improving competition in the U.K. broadband market as watchdog Ofcom weighs the case for breaking up BT.
Twitter fires its new head of VR... in the same week it hired him: Twitter is ploughing on into the world of virtual reality, though it faced a small setback after announcing it had fired its new head of VR (roughly 48 hours after he started his new job).
West Texas Intermediate crude price highest level in more than a year on U.S. stockpile data: Prices of the black stuff rose more than 2% after a surprise fall in U.S. crude inventories.

]]> UN Fears Third Leg of Global Financial Crisis With Prospect of Epic Debt Defaults Fri, 23 Sep 2016 07:12:00 +0100 UN Fears Third Leg of Global Financial Crisis With Prospect of Epic Debt Defaults
Here is the opening of this mischievous report by Ambrose Evans-Pritchard for The Telegraph, perhaps best not read if standing near a ledge, busy traffic or other obvious hazards:
The third leg of the world's intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history.
It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.
"Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out," said the annual report of the UN Conference on Trade and Development (UNCTAD).
We know already that the poisonous side-effect of zero rates and quantitative easing in the US, Europe, and Japan was to flood developing nations with cheap credit, upsetting their internal chemistry and drawing them into a snare. What is less understood is just how destructive this has been.
Much of the money was wasted, skewed towards "highly cyclical and rent-based sectors of limited strategic importance for catching up," it said.
Worse yet, these countries have imported the deformities of western finance before they are ready to cope with the consequences. This has undermined what UNCTAD calls the "profit-investment nexus" that ultimately drives growth and prosperity.
The extraordinary result is that some countries are slipping backwards, victims of "premature deindustrialisation". Many of them have fallen further behind the rich world than they were in 1980 despite opening up their economies and following the global policy script diligently.
The middle income trap closed in on Latin America and the non-oil states of the Middle East a long time ago, but now it is beginning to close in such countries as Malaysia and Thailand, and in some respects China. "The benefits of a rushed integration into international financial markets post-2008 are fast evaporating," it said.
Yet the suffocating liabilities built up over the QE years remain. UNCTAD says corporate debt in emerging markets has risen from 57pc to 104pc of GDP since the end of 2008, and much of this may have to written off unless there is a world policy revolution.
"If the global economy were to slow down more sharply, a significant share of developing-country debt incurred since 2008 could become unpayable and exert considerable pressure on the financial system," it said.
"There remains a risk of deflationary spirals in which capital flight, currency devaluations and collapsing asset prices would stymie growth and shrink government revenues. As capital begins to flow out, there is now a real danger of entering a third phase of the financial crisis which began in the US housing market in late 2007 before spreading to the European bond market," it said.

David Fuller's view
I am not a fan of acronyms, especially the long ones, beloved by nerdy backroom types.  To lessen readers’ possible frustration, UNCTAD, stands for United Nations (that’s the easy part) Conference on Trade and Development (the cumbersome part).
I am not sure why AEP, one of the best financial journalists in the business, decided to share parts of this UNCTAD with us.  Perhaps it is an indirect caution against overconfidence regarding Brexit.  He did warn us shortly after the referendum result, as I recall, that the Brexit process would be challenging over the medium term, before the advantages were realised. That was a sensible comment, I felt.  Brits need to stay focussed and work hard, in order to redevelop a fully independent and internationally oriented UK.
What about the UNCTAD report?
This item continues in the Subscriber’s Area, where a PDF of AEP's article is also posted.

Email of the day
On Brexit articles, from a pre-subscriber:
I am not currently a subscriber but I always glance at the introductions to articles that you e-mail to me.  I must say that I agree with all of David's comments regarding the EU and am glad that he is helping publicise intelligent articles in favour of Brexit.  Unfortunately, it seems at times that most of these articles are from the Telegraph.  I was disappointed at the very negative response in the Financial Times and it does seem to me that somehow these more positive articles need to appear more frequently in other publications and were they to do so they may calm people’s fears on the subject.

David Fuller's view
I am glad to hear that you enjoy the Brexit articles, and don’t be afraid to subscribe, it’s an investment.
I am aware of how emotive the Brexit issue is for many of us in the UK.  If I am testing the patience of some subscribers on this subject, I apologise but I do think not only Brexit but overall developments in Europe are hugely important, and they certainly affect markets.
Re the FT, I assume its ambition is to be the most informative and successful financial paper in Europe.  It may have achieved this but the EU has overly influenced its political and even economic views, in my opinion.   


America Is Not the Greatest Country on Earth. It is No. 28
Here is the opening of this interesting report from Bloomberg:

Every study ranking nations by health or living standards invariably offers Scandinavian social democracies a chance to show their quiet dominance. A new analysis published this week—perhaps the most comprehensive ever—is no different. But what it does reveal are the broad shortcomings of sustainable development efforts, the new shorthand for not killing ourselves or the planet, as well as the specific afflictions of a certain North American country.
Iceland and Sweden share the top slot with Singapore as world leaders when it comes to health goals set by the United Nations, according to a report published in the Lancet. Using the UN’s sustainable development goals as guideposts, which measure the obvious (poverty, clean water, education) and less obvious (societal inequality, industry innovation), more than 1,870 researchers in 124 countries compiled data on 33 different indicators of progress toward the UN goals related to health.
The massive study emerged from a decadelong collaboration focused on the worldwide distribution of disease. About a year and a half ago, the researchers involved decided their data might help measure progress on what may be the single most ambitious undertaking humans have ever committed themselves to: survival. In doing so, they came up with some disturbing findings, including that the country with the biggest economy (not to mention, if we’re talking about health, multibillion-dollar health-food and fitness industries) ranks No. 28 overall, between Japan and Estonia.
Eradicating disease and raising living standards are lofty goals that have attracted some of the biggest names to philanthropy. Facebook Inc. founder Mark Zuckerberg and Priscilla Chan, his wife and a pediatrician, on Wednesday pledged $3 billion toward the effort. The new study itself was funded by (but received no input from) the Bill & Melinda Gates Foundation. The 17 UN Sustainable Development Goals (SDGs) themselves are a successor to the Millennium Development Goals, a UN initiative that from 2000 to 2015 lifted a billion people out of extreme poverty, halved the mortality of children younger than five years old, and raised by about 60 percent the number of births attended to by a skilled health worker.
The research team scrubbed data obtained on dozens of topics from all over the world. For example, to make sure they had adequate data on vaccine coverage for each region, they looked at public surveys, records of pharmaceutical manufacturers, and administrative records of inoculations. “We don’t necessarily believe what everybody says,” says Christopher Murray, global heath professor at the University of Washington and a lead author of the study. “There are so many ways they can miss people or be biased.”
The U.S. scores its highest marks in water, sanitation, and child development. That’s the upside. Unsurprisingly, interpersonal violence (think gun crime) takes a heavy toll on America’s overall ranking. Response to natural disasters, HIV, suicide, obesity, and alcohol abuse all require attention in the U.S.

David Fuller's view
Interesting but incredibly subjective, in my opinion.  However, size of population seems to be a key factor, if you look at the table at the end of this article which shows The Top 30.  Among the first 23, only the United Kingdom at number 5 and Germany at 15 clearly have larger populations than the other highly ranked countries.
I am surprised to see the UK so highly rated, not least given all the diesel fumes, especially in London.  Smoking and obesity are also UK problems. Having visited most of these countries, I am baffled to see New Zealand no higher than 30.  The USA does have big problems with violence, alcoholism and obesity, as mentioned, but it also has by far the largest population among the top 30 listed. 


The Markets Now
Here is the new brochure for our next meeting at The Caledonian Club on Monday evening, 10th October 2016. 

David Fuller's view
I look forward to seeing another lively group of subscribers, at this event.  Former subscribers and newcomers are also welcome.  These are unusual times in the markets so we should also have some interesting discussions, not least over refreshments following the three presentations.  Fellow subscriber Tim Price is a popular guest speaker. 

My personal portfolio
A net profitable trade rolled forward

David Fuller's view
Details and charts are in the Subscriber’s Area.


Email of the day on Japan's stimulus program
Hello I read your analysis about the Topix bank index, for the first time I don't really agree with you. The bank of Japan is doing something new and it could push the Topix banks index up. I cannot attach graphs here to this message, but if on Bloomberg you compare the Topix bank index (or any bank index) to the difference in 30 year and 10 year JGB yields the correlation in the last 2 years is almost perfect. I believe they intend targeting yields to keep the curve ripid to help the banks. The same thing will probably happen in the Eurozone as they soften some capital rules as well, so I think the bank indexes should be watched even if only on a relative basis (bank indexes should outperform general indexes like sp500 and DAX and the yield curve become more ripid in Eurozone Japan and US), sorry I can't attach my Bloomberg graph. I hope at the chart seminar in London you can let me understand why you do not consider correlations such as these. They are not long term correlations, but are valid in a zero bound environment.

Eoin Treacy's view
Thank you for this email highlighting some key measures of how the financial sector has reacted to the Bank of Japan’s stimulus policies. I look forward to covering these topics with you in person in London this November. It’s looking like an interesting group of delegates will be in attendance.

EU Banks May Need Rescue Funds Equaling Twice ECB Capital
This article by Boris Groendahl for Bloomberg may be of interest to subscribers. Here is a section:
The Brussels-based SRB, the resolution authority for 142 banks including Deutsche Bank AG and BNP Paribas SA, will use the minimum capital requirement set by the European Central Bank as a proxy for capital that would be needed to absorb losses in a crisis, Koenig said in an interview this month. The ECB last year set an average requirement for the highest-quality capital of 9.9 percent of risk-weighted assets.
Requiring banks to have at least that same amount again in loss-absorbing liabilities will ensure that they can recapitalize themselves quickly after restructuring, Koenig said. This minimum requirement of own funds and eligible liabilities, or MREL, is calculated at the “30,000-foot level,” and more precise levels tailored to each bank will follow after the ECB sets new capital requirements and changes are made to capital, bank-failure and insolvency rules, she said.
“We want to avoid confusing the markets by saying, this is our decision this year, knowing that it will be different next year,” Koenig said. “So we take an indicative step this year. For next year, we hope that some of the dust has settled.

Eoin Treacy's view
When reading about the increasingly high obstacle of regulation, higher and higher capital requirements for banks and stricter requirements for what constitutes Tier 1 capital I am put in mind of the adage that “generals are always fighting the last war.” These are policies that would have been appropriate before the crisis in order to mitigate risks. They represent a barrier to lending activity today that deters banks from acting as liquidity providers, regardless of where short-term interest rates are set.


Email of the day on the Dollar Index
Do you think the Fed announcement will change the trajectory for the USD (DXY) heading into year end? and in turn potential provide some strength to the commodities?

Eoin Treacy's view
Thank you for this question which may also be of interest to other subscribers. The Fed’s announcement that the economic activity is moderating suggests that the interest rate differential between the US Dollar and other major currencies like the Euro is unlikely to expand rapidly. That would suggest the rangey environment overall for the Dollar Index may continue a while longer, subject to what happens in Europe and Japan.

California's legal marijuana market is on the verge of exploding
This article by Ben Gilbert for Business insider may be of interest to subscribers. Here is a section:
We're not talking about de-criminalization, or police de-prioritization.

We're talking about alcohol-style regulation and sale of marijuana to adults, age 21 and up. We're talking about legally allowed personal cultivation, state/local taxation of retail sales/distribution, and re-evaluation of sentences/records for people charged with marijuana offenses.
We're talking about outright, full-on legalization of marijuana. And in the world's sixth largest economy, that means billions of dollars.

If California's Proposition 64 passes on November 8, and sales begin by January 1, 2018, California's looking at an additional $1.5 billion flooding into the marijuana market. That number swells to just shy of $3 billion in 2019, and nearly $4 billion by 2020, based on the latest report from New Frontier Data and ArcView Market Research.

And to be clear, that's on top of the already booming medical marijuana market — the total size of the cannabis market would reach $4.27 billion in 2018, and would grow to $6.45 billion by 2020.
The ballot initiative has overwhelming support in California: Over 60% of respondents support Prop. 64, compared to just 34% opposed, according to Ballotpedia's average of polls.

Eoin Treacy's view
Evidence from companies like GW Pharmaceuticals and others means that the Drug Enforcement Agency’s (DEA) assertion cannabis is a Schedule 1 narcotic with no medical use and a high probability for misuse is looking increasingly outdated. Arguments for full legalisation go a step further and promote the view cannabis is no more dangerous for consenting adults than alcohol. Considering the damage abuse of alcohol is capable of that’s not a particularly high barrier.

The Chart Seminar 2016
We are pleased to confirm two venues for The Chart Seminar in 2016.

Eoin Treacy's view
We are pleased to confirm two venues for The Chart Seminar in 2016.

The first will be in London on November 24th and 25th. We will be working with a partner to co-promote the event and expect a full house (we cap the event at 50). The Radisson Blu Edwardian Vanderbilt on Cromwell Road will be the venue for the seminar. 

If you are interested in securing your place please contact Sarah Barnes at

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non EU residents are not liable for VAT). Subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.

]]> US Recession Jitters Stoke Fears of Impotent Fed and Fiscal Paralysis Fri, 09 Sep 2016 07:27:00 +0100 US Recession Jitters Stoke Fears of Impotent Fed and Fiscal Paralysis

An ominous paper by the US Federal Reserve has become the hottest document in high finance.
It was intended to reassure us that the world's hegemonic central bank still has ample firepower to overcome the next downturn. But the author was too honest. He has instead set off an agitated debate, and rattled a lot of nerves.
David Reifschneider's analysis - 'Gauging the Ability of the FOMC to Respond to Future Recessions' - more or less concedes that the Fed has run out of heavy ammunition.
The Federal Open Market Committee had to cut interest rates by an average of 550 basis points over the last nine recessions in order to break the fall and stabilize the economy. It could not possibly do so right now, or next year, or the year after. Quantitative easing (QE) in its current form cannot compensate, and nor can forward guidance. They are largely exhausted in any case.
"One cannot rule out the possibility that there could be circumstances in the future in which the ability of the FOMC to provide the desired degree of accommodation using these tools would be strained," he wrote.
This admission is painfully topical as a plethora of data suggest that the US economy may have hit a brick wall in August. The ISM gauge of manufacturing plunged below the boom-bust line to 49.4, and the services index dropped to a six-year low, with new orders crashing nine points.
My own tentative view is that these ISM readings are rogue surveys. The Atlanta Fed's 'GDPNow' tracker points to robust US growth of 3.6pc in the third quarter. The New York Fed version is coming in at 2.8pc.
Yet the US expansion is already long in the tooth after 87 months, and late-cycle chemistry is notoriously unpredictable. Warning signs certainly abound. Corporate profits have been slipping for six quarters, the typical precursor to an abrupt slump in business spending. "The only thing keeping the US out of recession is the US consumer. If consumption stalls then we really are in trouble," says Albert Edwards from Societe Generale.
I am willing to bet against him for now. The M1 money supply - often a good leading indicator - has picked up after a weak patch earlier this year and is now surging at a rate of 10.1pc. This pace would normally signal a burst of torrid growth a few months later. It is in stark contrast to the monetary contraction before the Lehman crisis.
My presumption is that the day of reckoning has been pushed well into 2017, but in the dead of the night I have a horrible sweaty feeling that Mr Edwards may be right. It is not a time to be chasing stock markets already at vertiginous levels.
History will judge that those nations best able to weather the next global downturn are those that grasp the essential character of our desperate deflationary age, and can cast aside deeply-ingrained and totemic beliefs about debt. The losers will be those spooked by shadows on the wall.
The winners - or survivors - will be those most willing to seize on the cheapest borrowing costs in history to fight back, preferably combining fiscal and monetary in a radical fashion. Call it helicopter money if you want, or 'overt monetary financing' of deficits. The accounting terminology is irrelevant.
Since no country can risk watching its precious national stimulus leak away to free riders in the austerity camp - at least in a crisis - this may imply some degree of calibrated protectionism. The twin liberal pieties of progressive public policy and global free trade may ultimately come into conflict. That is tomorrow's battle.

David Fuller's view
Yes, the Fed would like a cushion in terms of higher interest rates as a defence for limiting the next recession.  However, we do not live in an economic environment which would make that possible at this time.  Moreover, we can only guess as to when and to what extent circumstances are likely to change in future.  So far, the Fed has wisely held off on raising rates, which could make a soft economy even weaker, particularly if the Dollar Index rose, as it most likely would.
However, it would be mistaken to think that the Fed is in charge of the economy, beyond its role as the regulator of US monetary policy.  The traditional three engines of economic growth are consumer, corporate and government spending.

EU Retreat From US Trade Deal Leaves the Field to Britain

They’ve managed it. The naysayers have succeeded in killing off what would have been the first trade deal signed between the world’s two biggest economic blocs.
“TTIP”, or the Transatlantic Trading and Investment Partnership between the EU and the US, was meant to be part of the plan for a renewed, competitive Europe, helping its indebted economies to carry the deadening weight of the euro. Instead, it is becoming a potent symbol of EU dysfunction.
After years of protests, petitions and successful peddling of terrifying myths about the deadly threat this deal posed to rights, democracy, safety and the environment, European politicians are capitulating. EU mandarins are trying to keep it together in the face of a tough US stance and competing demands by 27 countries but, in the crystal clear estimation of French trade minister Matthias Fekl, the deal is “dead”.  
The Eurocrats will continue to insist that, like a convalescent dictator, it is very much alive and well. But to be sure, it is simply resting! Taking the air! But they know as well as anyone else that TTIP - and the useful €120 billion boost they said it would bring the EU economy - is at best being put into a long, deep freeze.
The good news, of course, is that this clears that enormous “queue” for trade deals with the US that Barack Obama was warning us about when he visited Britain before the EU referendum. A post-Brexit UK, he said, would be “at the back” of this queue, and at the G20 last week, he again declared that a UK-US deal won’t be a priority. With TTIP dead, however, there is no queue. Saying that Britain is at the back of it is rather like saying that Mr Obama is at the back of the queue of lame duck US presidents leaving office: he’s also at the front of it.
Any decision on trading terms between the US and its allies will be down to Mr Obama’s successor. Pessimists argue that the anti-globalisation mood taking hold across the pond will preclude any deal making. Donald Trump has demonised trade and even Hillary Clinton has gone lukewarm. But although there is a worrying rise in such hostility, there are reasons to think that Brexit Britain can slip around this roadblock.
The multilateral, sprawling agreements currently running into problems, like TTIP and its Pacific equivalent, are totemic, regional pacts with explicitly geopolitical aims. They are agreed only after torturous negotiations between dozens of countries with different cultures and priorities. They establish remote – and therefore scary-sounding – new regulatory and legal systems and the backlash against them feeds on the idea of a faceless, nationless technocratic class taking over the levers of power at the expense of citizens.
By contrast, a single-country deal with a reliable ally, whose legal system and economy already have much in common with the US, is a less threatening prospect and is unlikely to worry former car workers in Detroit. That is one of the reasons that Mr Trump can insouciantly declare that Britain would certainly not be “at the back of the queue” for a deal, as he did in May.
Mr Trump might not be the most reliable ally. But there are geopolitical reasons why it would make sense for the US to consider a deal, especially if Mrs Clinton wins. It would signal that the UK, a useful US ally in Europe, is not out in the cold. It would help, in a less ostentatious way than TTIP, to expand the sway of economic relations based on the rule of law and regulations, rather than the rule of might favoured by Russia and China. It would also establish a framework to which the EU would hopefully be added in future decades.

David Fuller's view
The global region of greatest uncertainty right now is in the EU.  It gives me no satisfaction to point this out but the EU’s leaders have brought it on themselves, although the real cost is borne by the citizens of their countries, particularly in the Mediterranean nations.
Today, we can forget all about forecasts of tortuous Brexit negotiations over several years, designed to ensure that the EU was an alliance which countries could join but never leave.  The EU’s political programme to create ‘a United States of Europe’ has been derailed because it had no popular support.  The absence of border controls in Europe seems like a nice idea but makes no sense in a world where traffickers will swamp countries by bring the world’s poor from different cultures to richer democratic nations.  A political backlash is underway, not least within Germany and France.

The Weekly View: The Danger of Looking Back: Lessons From Lost Decades
My thanks to Rod Smyth for his ever-interesting letter, published by RiverFront Investment Group.  Here is the opening paragraph:
Our industry’s most ubiquitous disclaimer, “Past performance is no guarantee of future results,” is good advice.  Despite this advice, many investors make decisions based on the emotional journey of past performance – money follows performance.  US investors are now pulling money out of international stocks following a decade of flat returns and 6 years of underperformance relative to US stocks; meanwhile, at RiverFront, we are adding to our international holdings. 

David Fuller's view
Rod Smyth is a very good contrarian thinker.  This is a fascinating issue – a collector’s item for students of stock markets.

Draghi Dialing Down the Drama May Mark Wane of Monetary Activism

Take European Central Bank President Mario Draghi, who on Thursday talked up the effectiveness of his institution’s stimulus policies to date, but damped expectations that he’ll load up with fresh asset-buying soon. His only new announcement after again downgrading euro-area growth forecasts was that officials will look into how to ensure the current program overcomes a worsening scarcity of bonds.

Even with the scheduled end of the 1.7 trillion-euro ($1.9 trillion) plan just six months away, Draghi said policy makers meeting in Frankfurt haven’t yet discussed what they’ll do when that day comes. If a new laissez-faire tone is creeping in to replace years of hyperactivity, it may be a signal that the division of labor between central banks and governments in providing economic support is shifting.

“Draghi doesn’t sound like a central banker who’s in any hurry to ease further,” said Tim Graf, head of European macro strategy at State Street in London. His stance “fits in with the G-20 statements about using all actors to support growth, including the fiscal side. Taking ever-easier monetary policy for granted is becoming less valid.”

Eoin Treacy's view
The ECB faces a number of obstacles to employing a US style quantitative easing program within its jurisdiction. Among these are the relative depths of the respective markets. The ECB has self-imposed rules about how much of any particular issue it can own and how much debt of any one country it can purchase. Additionally, the EU’s corporate bond and asset backed markets are not nearly as liquid as their US equivalents, which represent a challenge for the size of purchases the ECB needs to make to have an influence on the market.

Duterte Outbursts Taking Toll as Philippine Stock Losses Mount
This article by Ian C Sayson for Bloomberg may be of interest to subscribers. Here is a section:
“The latest incident raises concern that President Duterte’s unpredictable behavior in politics will be disruptive and could eventually spill into economics and business,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc., the Philippines’ biggest lender. It’s “further weakened a market that’s already been made vulnerable by uncertainty over U.S. interest rates, elevated valuations and overseas fund withdrawals,” he said.

The Philippine index is trading at 18.3 times 12-month estimated earnings. While that’s down from 19.6 in July, it’s still the highest in Asia and at a 32 percent premium to the MSCI Asia Pacific Index. The country’s economy expanded 7 percent last quarter from a year earlier, after 6.8 percent growth in the first three months of 2016.

Investors may be better off holding cash in the near term as the index could test its 7,500 support level, said BDO Unibank’s Ravelas. The gauge could fall as low as 7,330 in the next two months over concerns the budget deficit will rise when taxes are cut and spending raised, April Lee-Tan, head of research at COL Financial Group Inc. in Manila, said Monday.

“Smart investors should take advantage of the weakness and accumulate because this is all sentiment-driven," said Rizal’s Palma Gil. “Other than incendiary statements and killings related to the drug war, investors like Duterte’s economic and fiscal policies or at least what has been communicated so far,” he said, adding that he expected the index would go back up to 8,000.

Eoin Treacy's view
Duterte was elected on a law and order and anti-corruption ticket and admitted in his inaugural address that his methods were unorthodox and would not be approved of by many observers. Here is a link to a video of that address.

Email of the day on bitcoin prices
Regarding Bitcoin, after a summer lull it looks like it is coming into form once again - would welcome another update on the charts/ medium term view which hopefully is of interest to other subscribers. I must say it does have elements that remind me of the 90's tech bubble (volatile, illiquid, devoted followers etc) and I have been following it closely. Many thanks

Eoin Treacy's view
Thank you for this reminder that Bitcoin is a market where fully committed advocates contrast sharply with those who doubt it will ever become a viable medium of exchange. The blockchain foundation on which the market for bitcoin rests has significant potential in recording transactions and reducing the cost and inefficiency of banking, accounting and record keeping over the next few years before it is eventually superseded by quantum computing.

GW Pharmaceuticals Jumps on Report It May Be Acquisition Target
GW Pharmaceuticals Plc jumped after Reuters reported that the company had hired Morgan Stanley as an adviser after being approached by several drugmakers interested in an acquisition.

GW gained 20 percent to $101.47 at 3:31 p.m. in New York trading, its biggest intraday gain since March. Reuters cited people familiar with the matter in its report.

The U.K. company, with a market value of $2.56 billion, develops drugs derived from cannabis. Its leading asset is an experimental treatment for epilepsy, and it’s also working on candidates for cancer, type 2 diabetes and schizophrenia. GW has one approved drug, Sativex, which is used to control involuntary muscle spasms from multiple sclerosis.

Insys Therapeutics Inc., which develops drugs based on synthetic cannabis, rose 5 percent to $15.67.

GW, based in Cambridge, England, isn’t currently interested in a sale, Reuters reported, citing people familiar with the matter. A representative for GW declined to comment.

Eoin Treacy's view
Cannabis is increasingly being recognised for its uses as a pain reliever and mood stabiliser; confirming what millions of users in the illicit market have testified to for decades. With the tide of public opinion turning there is a race on to secure interests in the sector as companies bet on the potential for further legalisation to be approved in the USA, not least during the November ballot.


]]> In the papers: Aston Martin, Morrisons, KPMG Tue, 28 Jun 2016 06:44:00 +0100 The Times
Markets braced for further panic after debt downgrade: Britain has been hit with a two-notch downgrade to its sovereign credit rating in a move that is likely to send another wave of panic through markets. Standard & Poor’s said the decision to leave the EU could relegate sterling from the world’s exclusive reserve currencies.
Housebuilders crash as Leave vote spooks investors: The U.K.’s housebuilders have lost nearly 40% of their value since the referendum result, having been hit hard by investors who believe there is likely to be a drop in demand for new homes if the economy suffers.
Aston Martin says road to new plant is now smoother: Aston Martin is to stick to its plan to build a carmaking plant in south Wales, even arguing that the vote for Brexit has made the project more viable.
Morrisons ‘treats suppliers the worst’: Morrisons has the worst record among major supermarkets for mistreating suppliers, according to a report by the industry watchdog. A fifth of respondents to a survey of more than 1,000 suppliers and trade associations said that Morrisons “rarely” or “never” complied with industry rules governing supply chain relations.
Soldier victims of ‘forex fraud’ sought: Gurkhas caught up in an alleged £50 million City fraud have been urged to come forward by lawyers leading the fight for compensation.
Khan demands London has a seat at table for EU talks: Sadiq Khan demands that a representative for London is appointed to the U.K.’s team for negotiations over its departure from the European Union.
Javid meets business to assess future ‘challenges’: Sajid Javid insisted that the U.K. “remains open for business” after Brexit, before a hastily arranged roundtable meeting with corporate leaders and trade bodies.
The Independent
Brexit may be Scotland’s chance to steal London’s finance crown: For all the uncertainty Scotland faces with the cloud of Britain’s exit from the European Union, there could yet be a silver lining, according to U.K. Lawmaker Mark Garnier.
Foxtons share price slides 20% after it warns Brexit will hit profits: Shares in estate agent Foxtons suffered a massive 20% slide on the stock market on Monday morning after the company released a trading update saying that the results of the EU referendum would likely weigh on profits.
Brexit vote sees U.K. credit rating downgraded to AA negative by Fitch: Fitch has downgraded the U.K.’s credit rating to AA negative, after similar moves by Moody’s and S&P, following Britain’s vote to leave the EU.
Volkswagen agrees $15 billion settlement over vehicle emissions cheating scandal: Volkswagen has said it will settle claims from a lawsuit over its emissions cheating scandal to the tune of almost $15 billion (£11.35 billion), the largest U.S. civil settlement ever agreed by a car manufacturer.
 of gentle wisdom. The real world often works another way. For a recent example, consider Kazakhstan’s national oil company KazMunaiGas (NC).
The Daily Telegraph
Italy eyes €40 billion bank rescue as first Brexit domino falls: Italy is preparing a €40 billion rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets.
KPMG faces full probe into HBOS audit – eight years after the bank crashed: KPMG’s role in assessing HBOS’ finances in the year ahead of its collapse in the financial crisis will at long last come under scrutiny, the U.K.’s audit watchdog has decided.
Brexit: Norway-style deal with EU would help U.K. avoid damaging recession, says Morgan Stanley: Britain must pursue a Norway-style agreement with the EU if it is to avoid a damaging recession, according to Morgan Stanley.
GW pharma shares flying high after stellar results for epilepsy drug: A British biotech that develops drugs derived from the cannabis plant has unveiled stellar results from late-stage trials testing its key mediation on children with severe, untreatable epilepsy, sending shares in the company soaring by 25%.
Steel industry could ‘crumble’ in wake of Brexit vote, warns union: Britain’s steel industry could “crumble” because of the Brexit referendum, according to union leaders, who are now demanding an urgent meeting with the Government over their concerns.
Insurance shares hit after Brexit vote: Shares in London-listed insurance firms have taken another tumble as analysts try to judge the damage that Brexit could inflict on their customer base and investment portfolios.
The Questor Column:
Foxtons: Foxtons’ profit warning meant the estate agent was also in the dumps on the market, losing 22.6% and leaving the firm at its lowest ever closing price. The heady days when the stock was pushing £4 less than a year after the initial public offering in September 2013 seem like a distant memory. Peel Hunt analysts were particularly gloomy about the firm, saying its annual profit forecast of £42 million could be halved, and that even a recovery in the London market would not be enough to revive the estate agent when its competitors are eager to undercut it on commission. The Questor column advised selling in March, after Foxton posted a 2.6% fall in annual profits as cheaper rivals sprang up across its London heartland. The firm has previously managed to balance falling sales with the growing lettings market, but this equation no longer works if there is a broader draining of activity from the capital city. We see no reason to take the plunge, even at the current rock-bottom price. Sell. Foxtons at £1.04-30.5p. Questor says “Sell”.
The Guardian
Brexit: Asian financial markets remain tentative after Britain’s vote to leave EU: Britain’s decision to leave the EU continued to reverberate around the Asia-Pacific financial markets on Tuesday as some analysts warned that global markets were bracing for a full-blown recession in the U.K.
RBS slumps 25% as Brexit puts bank shares under severe strain: Bank shares are under severe pressure after the Brexit vote, with bailed-out Royal Bank of Scotland shedding a quarter of its stock market value at one point.
U.S. stock markets sink again following Brexit vote: U.S. stock markets were rocked again on Monday by the aftershocks of the U.K.’s referendum decision to quit the European Union.
Chaos ahead after Brexit vote, says U.K.’s food and drink industry body: The U.K. food and drink industry is facing a period of uncertainty and chaos following the vote to leave the EU as more than a quarter of its workforce come from Eastern Europe, according to the sector’s trade body.
Big investment houses warn of inequality risk after Brexit: Britain’s historic vote to leave the EU has prompted some of the world’s most powerful investment houses to turn their focus to inequality.
Trust in charities at record low after scandals: Public trust in charities in England and Wales has fallen to the lowest recorded level since monitoring began in 2005, in the wake of a series of high-profile scandals.
Daily Mail
Probe into collapse of BHS and its £571 million pension deficit widens with investigation into its auditor: The probe into the collapse of BHS and its £571 million pension deficit widened with an investigation into its auditor.
Hedge fund Boss George Soros who made £760 million betting against pound on Black Wednesday fails to repeat feat following Brexit vote: Hedge fund Boss George Soros who made £760 million betting against the pound on Black Wednesday failed to repeat the feat following the Brexit vote.
Investigators to probe accountancy firm employed by Halifax/Bank of Scotland - eight years after bailout helped trigger financial crisis: Investigators will at last probe the accountancy firm employed by Halifax/Bank of Scotland – eight years after its bailout helped trigger the financial crisis.
Aston Martin sees losses almost triple over past year due to major expansion drive aimed at transforming fortunes: Aston Martin saw losses almost triple over the past year due to a major expansion drive aimed at transforming its fortunes.
Shares in airline easyJet nosedive as it warns Brexit uncertainty, strikes and bad weather will bring lower profits: Airline easyJet has warned on profits after it said that economic uncertainty stemming from Britain’s decision to leave the EU will add to its existing woes caused by recent strikes and bad weather.
Daily Express
Brexit will not trigger recession and U.K. economy will grow, says Moody’s ratings Boss: Britain’s decision to leave the EU will not trigger a recession, a top ratings agency has said. Alastair Wilson, the head of the sovereign ratings at Moody’s said Britain is “not looking at a recession,” despite fear-mongering from other businesses in the City.
EU Bosses reject informal talks with Britain & demand the U.K. formally triggers Brexit now: Senior EU Chiefs have refused to start informal negotiations with Britain – demanding that the U.K. begins divorce proceedings before any talks can take place.
The Scottish Herald
Forrest makes big profit after Glasgow showroom sale: Forrest Furnishing has reported a huge leap in profits after selling its Macdonald Furniture Galleries showroom on Glasgow’s Cathedral Street.
Lanark haulage firm JHP on the up after bank funding boost: A Lanark-based haulage and logistics firm as acquired news premises to accommodate its expanding fleet, growing workforce after securing a £300,000 funding package from Bank of Scotland.
Scottish dairy brand launched to boost U.S. exports: A new Scottish dairy brand is being launched at a New York food show to help meet the increasing U.S. demand for products with Scottish provenance.
Large business tax supplement raises more than expected: Tax revenue generated from the Scottish Government doubling the supplement rate applicable to large businesses is expected to be £62.4 million.
U.K. strong enough to weather the storm, says Cameron and Osborne: David Cameron and George Osborne have moved to calm nerves over Britain’s withdrawal from the EU, as the financial markets responded with continued volatility after Thursday’s Brexit vote.
The Scotsman
Omega aims to ‘under-promise and over-deliver’: Life sciences firm Omega Diagnostics said it remained confident on the prospects for its “revolutionary” product that checks the immune systems of HIV patients.
New Chief Executive for smart antennas firm Sofant: Smart antenna specialist Sofant Technologies announced its appointment of David Wither as Chief Executive.
SECC profits boosted by record conference haul: The company behind the Scottish Exhibition and Conference Centre (SECC) and the SSE Hydro has reported a steady rise in turnover and underlying earnings after enjoying a record year for conference events.
Edinburgh and Glasgow retail sites go under hammer: Three commercial properties across the Central Belt are being sold over the internet this week by the capital markets division of consultancy Lambert Smith Hampton (LSH).
City A.M.
The U.K. can afford no more delays on airport expansion, the Boss of Gatwick Airport has said: The Boss of Gatwick Airport is to renew calls for a new runway, arguing it is the only option suitable for expansion.
HS2 completion timetable “unrealistic”, says National Audit Office: The Department for Transport set an “unrealistic timetable” for the completion of High Speed 2 (HS2), the National Audit Office (NAO) has said.
Parliaments across Europe intensify calls for more corporation tax transparency, as Public Accounts Committee unveils open letter asking for just that: Parliaments across Europe are urging their respective governments to do more to make tax transparent.
Boutique investment bank shares suffer in U.S. as Brexit dampens M&A prospects: Boutique investment bank share prices are tumbling in the U.S. with the U.K.’s Brexit expected to slow mergers and acquisitions (M&A) activity.
JJB Boss flexes muscles to snap up Fitness First’s U.K. operations: JJB Sports Founder Dave Whelan is in talks to buy the British operations of gym chain Fitness First. The multi-millionaire business tycoon’s DW Sports is set to fork out £70 million for a takeover of the business, Sky News reported.
Brexit fallout: McLaren’s Chief Executive has urged the government to find a way to create stability, fast: The Boss of one of the world’s elite supercar manufacturers might be expected to prize speed above anything. So it’s hardly surprising that McLaren Chief Executive Mike Flewitt has urged the government to find a way to create stability as fast as possible after Thursday’s vote in favour of Brexit.
Italians worry the U.K. might buy less prosecco in the wake of Brexit vote and the fall in Sterling: Italian prosecco producers have been spooked by the U.K.’s vote to leave the EU last week, worrying that the hit to the pound could “upset” trade and send sales flat.
Miner BHP Billiton swims against the tide with spending boost: The battered mining sector could be on the tip of a pick up after BHP Billiton unveiled plans to boost how much it spends on finding oil and copper. Speaking during a presentation to Citxigroup investors, BHP said it will raise exploration spending by nearly 30% over this financial year, from $700 million (£530 million) to $900 million.

]]> In the papers: TalkTalk, JD Wetherspoon, Microsoft Tue, 21 Jun 2016 06:59:00 +0100 The Times
Funding Circle agrees £100 million deal with Europeans for small business: The European Investment Bank will invest £100 million in Britain’s small and medium-sized companies through a deal with Funding Circle, the online lending platform.
Households have record spending money boost: The supermarket price war and the national living wage have helped average weekly disposable income to rise to a record £201 a week per household, according to research from Asda.
TalkTalk Chief’s pay rises despite losing £80 million to cyberhack: The pay package for TalkTalk’s Chief Executive almost trebled last year despite the group suffering a hacking attack in which the personal details of 157,000 customers were stolen.
Prosecutors investigate former VW Chief for failing to come clean on emissions: The former Chief Executive of Volkswagen has been placed under investigation in Germany for failing to inform investors soon enough about the carmaker’s rigged emissions tests.
L&C mortgage broker eyes up £300 million float: Britain’s biggest fee-free mortgage broker could float on London’s stock market with a valuation that would give its Chairman a bumper pay day.
Royal Mail wraps up deal for Spanish parcel network: Royal Mail has made its biggest European acquisition in a decade with the takeover of Spain’s second largest Express parcels network.
IMF calls for bold measures in Japan: The slow economic growth that has beset Japan since the early 1990s could take several more years to resolve unless the government commits to bold reforms, the International Monetary Fund said in a tough assessment.
Modi opens India to foreign investors as bank Chief quits: India announced a package of economic reforms, loosening strict rules on foreign direct investment as the government moved to bolster growth and create jobs.
My Local collapse set to add to high street woes: Thousands of jobs are at risk after it emerged that a company that bought more than 100 convenience stores last year from the supermarket chain Wm Morrison is on the verge of collapse nine months later.
Ruby miner digs up $44 million treasure trove: Gemfields, the Africa-focused producer of rubies and emeralds, delighted investors by announcing a record $44.3 million in proceeds from its auction of precious stones in Singapore.
Allergy drug failure leads to Circassia shares crash: Shares in Circassia Pharmaceuticals, the biotech company in which Neil Woodford has a 19.1% stake, lost two thirds of their value after the apparent failure of a trial for a product to combat allergies to cats.
The Independent
JD Wetherspoon pub Chief Tim Martin sends new Brexit message to George Osborne on beer mats: JD Wetherspoon has printed half a million new beer mats calling for the U.K. to leave the EU in the final days of campaigning.
Microsoft becomes first tech giant to invest in legal weed industry: America’s burgeoning weed industry just seems to be climbing higher. Tech giant Microsoft announced Thursday it is partnering with a cannabis industry-focused software company called Kind Financial.
The Daily Telegraph
George Soros warns consequences of Brexit vote could be worse than Black Wednesday: George Soros has warned that a vote to leave the European Union will create a ‘Black Friday’ far more damaging than when he bet against sterling and forced the U.K. out of the European Exchange Mechanism in 1992.
Ex-Barclays traders await verdict in Libor trial: The jury in the trial of five former Barclays traders accused of fraud by Libor manipulation has been sent out to consider its verdict at the end of a three-month court battle.
BP fast-tracks Egyptian gas project: BP will push forward with plans to develop its deepwater natural gas field in Egypt’s East Nile Delta by early 2018, just three years after the energy giant made the discovery.
BT loses battle with Ofcom over broadband prices: BT has lost a court showdown with Ofcom over broadband prices, one year after launching an appeal against the watchdog’s restrictions on the wholesale price of superfast broadband.
Twitter pays $150 million for London AI startup Magic Pony: Twitter has acquired London artificial intelligence startup Magic Pony for around $150 million (£102 million), according to sources close to the company.
Top golf ball maker Titleist to float in U.S. - under the ticker ‘golf’: Golf group Acushnet – which owns the Titlest, Footjoy and Scotty Cameron brands – is planning to go public and list on the U.S. markets under the ticker “golf”.
HBOS report delayed again as audit watchdog fumbles probe: The report into HBOS’s accounts has been delayed yet again, as the audit watchdog missed its own target date for publishing the results of its investigation.
Healthcare tycoon turns attention to helping Brits turn down that fifth pint: One of the U.K.’s most successful healthcare entrepreneurs has revealed plans for a new preventative medicine start-up, which he claimed will reduce pressure on the NHS and help people to make better lifestyle choices.
The Questor Column:
Gemfields ruby auction beats estimates: Gemfields the ruby and emerald miner that also owns jeweller Faberge, has endured a tough time as commodity prices moved lower, but the latest figures from a ruby auction mean we’re keeping the faith. The gem miner made $44.3 million (£30.2 million) selling 1.5 million carats of rubies from its Montepuez mine. The sale saw nearly all the lots sold and with revenue ahead of expectations, which shows demand is still holding up as the global economy slows. The amount of revenue from selling gemstones now exceeds $170 million for the year to the end of June. Market consensus is for adjusted pretax profits of $33.5 million in the 12 months to the end of June, up from $26.3 million the previous year, giving 0.7p in forecast earnings per share. Gemfields is an interesting proposition as it tries to create a dominant position in the coloured gemstones market from mine to shop. It now has two fully operational gemstone mines: the 75pc-owned Montepuez ruby mine in Mozambique, and the 75pc-owned Kagem emerald mine in Zambia. Both sites increased gemstone production last year. Gemfields has used debt to get the mines into production and this is always a risk in the uncertain world of precious gemstone pricing and sales. That said, it is developing a proven route to market through its auctions and while demand holds up it should be able to pay down the debts. Gemfields’ is always going to be a high-risk stock, as it is Aim-listed and thinly traded. That said, we believe it should be able to make it through this tricky period and long term it has a strong market position and attractive future prospects. Gemfields at 38p-0.125p. Questor says “Hold”.
Avoid Majestic shares until profits recover: Majestic Wine aimed to reverse falling profits and sales through the takeover of wine crowdfunding platform Naked Wines last year. The sales are moving in the right direction but the annual results show it still has much to do. Majestic is facing a problem that is familiar for many retailers. Increased competition from discount supermarkets who are undercutting them on price. The strategy chosen to fight back against this threat was to buy the rapidly growing Naked Wines in April last year. The rapid sales growth at Naked Wines is impressive, the problem is a high price was paid for that growth. Majestic reported sales up 41pc to £402.1 million during the 12 months to the end of March 28. Breaking that number down the majority of the growth came from adding £104.3 million in sales from Naked Wines which increased 27pc during the year. Majestic alone reported like-for-like sales up 4.8pc to £244 million during the year, the first increase in four years. But rising costs outpaced the improved sales performance, and profit before interest and tax fell 27pc. Naked Wine cost £70 million in total which was split roughly 60pc in cash and 40pc in shares. The deal looks expensive at 70 times profits, or 0.7 times sales. The cash paid for Naked Wines turned an £11 million net cash balance last year, to £25.5 in net debt at March 26. The cash generation of the new combined group also fell sharply to £14.1 million during the year, from £27.2 million a year earlier. The pretax profits tumbled 75pc to £4.7 million, from £18.4 million a year earlier. Majestic made £4.3 million in pretax profits during the first half its financial year, meaning it made just £400,000 during the second-half, which includes the Christmas trading period. Market consensus is for sales to rise about 10pc this year, but adjusted pretax profits are forecast to fall 10pc in the year to the end of March 2017. We think the risks are elevated and until the company can demonstrate a strong year of cash generative and profitable growth we would advise staying away. Avoid. Majestic Wine at 455p+17¼p. Questor says “Avoid”.
The Guardian
Pound posts biggest rise in eight years as FTSE jumps 3%: The pound posted its biggest one-day rise for almost eight years and the FTSE 100 share index jumped 3% on Monday, as traders reacted to an apparent shift in support towards a remain vote in Thursday’s EU referendum.
Morrisons’ treatment of suppliers again highlighted by watchdog: Morrisons has been forced to repay cash and discipline staff after it was found to have breached the grocery market code of conduct for a second time by demanding lump sums of about £2 million from suppliers.
Judge allows Starbucks customers to sue over underfilled lattes: A federal judge said two Starbucks customers may pursue a lawsuit accusing the coffee chain of cheating patrons by underfilling lattes.
Nissan to sue Vote Leave campaign over EU referendum flyer: Nissan is to take legal action against the Vote Leave campaign after the Japanese carmaker’s logo was used on leaflets calling for voters to back Brexit in Thursday’s referendum.
Daily Mail
London and Country Mortgages boss Michael Edge set for £210 million payday as firm lines up for a £300 million sale or float: Britain’s biggest fee-free mortgage broker is lining up a £300 million sale or stock market flotation despite the prospect of Brexit.
Healthy diners with a taste for sushi lift restaurant chain Wasabi as it expands across the U.K.: The U.K.’s love of sushi has cost restaurant chain Wasabi its profits – as it expands rapidly across Britain.
Daily Express
Growing firms put mobile connections at heart of overseas trading: Growing firms are forecasting 25 cents of their growth will come from international trade over the next five years, with the U.S. and Western Europe offering the best opportunities and mobile technology at the heart of the expansion.
Home sellers asking for £100k above sale prices: Home sellers are demanding tens of thousands of pounds more than the sale price they are likely to achieve, figures have revealed.
First time buyers priced out of Help To Buy as housing market soars: Sky-high house prices in England have left first-time buyers frozen out of a government scheme that is supposed to help prospective owners on to the property ladder.
The Scottish herald
Business Growth Fund to ramp up activity in Central Belt and Aberdeen: Business Growth Fund Chief Executive Stephen Welton has said it plans to ramp up activity in Scotland where the Central Belt and Aberdeen could offer rich pickings.
EnQuest shares rise after update: Shares in North Sea-focused EnQuest have risen 11% as investors appeared to welcome a statement saying the oil and gas business is not in any company specific talks with the regulator about its finances, writes Mark Williamson.
Scottish dairy company aims to build major export business: Graham’s The Family Dairy has revealed plans to build a major export business, with its managing Director highlighting opportunities to sell butter to China, Japan, and South Korea and win sales in the Middle East.
FirstGroup adjusts pay scheme after bonus crash: FirstGroup has reshuffled the measures used to calculate annual Executive bonuses, after Chief Executive Tim O’Toole saw his bonus crash from £578,000 to £162,000 due to a dent in operating profits.
Scots drug firm raises £4.3 million in first round of funding: Mironid, a Lanarkshire pharmaceutical firm, has raised £4.3 million in Series A funding to continue research and preclinical development programmes into degenerative kidney disease, major inflammatory disease and cancer.
Morton Fraser extends Scottish Government work: Law firm Morton Fraser has been appointed as sole external legal adviser under the Scottish Government Framework 2015, providing litigation services to various Scottish Government Directorates and agencies and to the office of the advocate general.
Scottish firm sets Motability vehicle supply record: Glasgow-based Allied Vehicles sold more than half of all wheelchair accessible vehicles supplied through the Motability scheme in the U.K. last month.
RBS faces new litigation threat over GRG: Small businesses who believe they were pushed under by Royal Bank of Scotland’s controversial Global Restructuring Group are being offered a fresh opportunity to join a legal action against the bank.
The Scotsman
Law firm Gillespie Macandrew bolsters Edinburgh office: Gillespie Macandrew has appointed corporate and commercial solicitor Chris Gibson to its Edinburgh office.
Highland Spring taps Whitespace to ‘rejuvenate’ brand: Edinburgh-based creative agency Whitespace has won a contract to take bottled water firm Highland Spring on a “brand rejuvenation journey”.
Border Biscuits donates a strawberry summer gift: Lanark based Border Biscuits has donated a strawberry patch to Lanark Community Development Trust to support its regeneration of Castlebank Park and mark the launch of a new range of cookies.
City A.M.
Facebook shareholders give green light for share issue to keep Zuckerberg in control: Facebook Chief Executive Mark Zuckerberg will maintain control of the tech titan after investors approved a proposal to issue $5.7 billion (£3.9 billion) non-voting shares.
Royal Dutch Shell’s shale unit to become “catalyst for change” at the oil major: Royal Dutch Shell’s recently revamped shale unit is set to become a blueprint for change across the oil major.
EU referendum: Voting Remain could create another 75,000 jobs in London, according to Confederation of British Industry: There is the potential to create more than 75,000 jobs in London if the U.K. votes to remain in the EU, according to new research.
Tobacco volumes decline in China for the first time in two decades and bring down global volumes: Smokers in China stubbing out their cigarettes helped the world’s largest tobacco market shrink last year, while Western Europe enjoyed growth.
Telecom challenger eyes profit in late 2016 as second U.S. tie-up looms: U.S. wireless service provider FreedomPop has said it will be profitable before the end of the year. FreedomPop, which launched in the U.K. last September, is also targetting a partnership with a second U.S. carrier by the year’s end.
SABMiller Chief exec’s earnings drop 17% ahead of megabrew deal: The Chief Executive of British drinks giant SABMiller has taken an almost 17% hit to his pay packet after failing to deliver on share price earnings last year.
Brexit would leave London “isolated” according to the boss of City Airport: Brexit would fundamentally undermine Britons’ ability to trade and travel, according to the Chief Executive of London’s City Airport.

]]> Email of the day on the Philippines and Duterte Thu, 19 May 2016 07:48:00 +0100 Email of the day on the Philippines and Duterte
I was a little perturbed to see both of you mentioning Duterte's rise to power as if this was a move in the direction of good governance. 

The man is a complete maverick. He is a populist who has been compared to Donald Trump, but he sounds much more dangerous.  His main claim to fame is ridding his city Davao from crime, which was done by supporting death squads. He has said that he will kill 100,000 criminals.  He made fun of the rape of an American missionary in a prison by saying she was so beautiful that he should have been first in line to rape her.

Nobody has any real clue about what he will do in office.  He probably doesn't know himself.

Here is the best article I have been able to find about that.

Eoin Treacy's view
Thank you for sharing your view and here is a link to an article from the Sydney Morning Herald referring to the episode when Duterte made a wholly inappropriate comment on the rape and murder of an Australian missionary during a prison riot in 1989. He also claims to have been the person to fire the first shot during the subsequent storming on the prison where a significant number of the perpetrators were killed.

Email of the day on cannabis/marijuana companies
Another company with exposure to the cannabis market is GW Pharmaceuticals, a UK company which has had a significant rerating since it also listed its shares in the US.

Eoin Treacy's view
Thank you for highlighting GW Pharmaceuticals and I had added it to the cannabis/marijuana companies section of the Chart Library.

Death of the Gold Market
Thanks to a subscriber for this report by Paul Mylchreest for ADM Investors Services International Limited covering the most bullish scenario for gold. Here is a section: 
Using data from the LBMA and Bank of England on gold stored in London vaults and net UK gold export data from HM Revenue & Customs, we estimate that the “float” of physical gold in London (excluding gold owned by ETFs and central banks) has recently declined to +/- zero.
If we are correct, the London Bullion Market is running into a problem and is facing the biggest challenge since it collapsed from an insufficient supply of physical gold in March 1968.
Besides the growth in physical gold demand from existing sources (see below), there is more than US$200 Billion of trading every day in unallocated (paper) gold. If buyers lose confidence in the market’s structure and ability to deliver actual bullion, the market could become disorderly (via an old fashioned “run” on the vaults) as it seeks to find the true price of physical gold.

Eoin Treacy's view

The argument often cited by gold bugs is that the derivatives market for gold dwarfs the size of the physical market. That is also the case in the equity, bonds and other futures and options markets because most people wish to benefit from volatility in prices rather than holding the physical asset. This only becomes a problem when someone attempts to corner the market, by buying up available futures contracts then taking delivery and refusing to have their holdings lent against.

Obama Administration Extends Overtime Pay to Millions
This article by Dave Jamieson for the Huffington Post may be of interest to subscribers. Here is a section:
The administration will accomplish that by raising what’s known as the overtime salary threshold. Nearly all workers earning salaries beneath that threshold are entitled to time-and-a-half pay whenever they work more than 40 hours in a week.
The current threshold is just $23,660. The White House will be doubling that number, to $47,476, guaranteeing overtime rights for salaried workers earning less than that. The Labor Department will now update the threshold every three years to make sure it keeps pace with inflation.
The White House estimates that the change will bring overtime rights to 4.2 million workers who are currently excluded. It will also clarify eligibility for another 8.9 million workers who may or may not have overtime protections under the current rules, officials said.
On a call with reporters Tuesday, Labor Secretary Tom Perez said the reform was meant to address “both underpay and overwork.”
“The overtime rule is about making sure middle-class jobs pay middle-class wages,” Perez said. “Some will see more money in their pockets … Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights.”

Eoin Treacy's view
US Average Hourly Earnings All Employee YoY broke out of a six-year range in September and the Fed raised interest rates for the first time in years shortly afterwards. There is a great deal of speculation about the health of the economy but there is no denying minimum wages demands are rising; with a number of major conurbations having already hiked the rate to $15. The move by the government to make more mid-level employees eligible for overtime is another move that is likely to put upward pressure on wage demands.

]]> California is poised to become the center of cannabis culture Tue, 17 May 2016 07:17:00 +0100 California is poised to become the center of cannabis culture
This article by Robin Abcarian for the Los Angeles Times may be of interest to subscribers. Here is a section:
Personally, I am not a weedinista. I hate feeling stoned. I don't think pot will save the world, and dependence, especially with younger users, can be a problem. But I do think, in some settings, it can work miracles.

A year ago, probably after hearing me knock pot smokers one too many times, David Downs, a San Francisco cannabis journalist, who is married to my niece, sat me down and explained something I hadn't known. There are two important components in marijuana. The primary psychoactive ingredient in pot is THC, which also has medicinal properties such as pain relief and nausea reduction. And there's CBD, a non-psychoactive ingredient that has been shown to be helpful for many ailments, including epilepsy, cancer pain and anxiety.

Increasingly, researchers are investigating the health benefits of CBD. Growers, in turn, are meeting consumer demand for pot strains that are high in CBD and low in THC.

You can achieve a tremendous benefit from high-CBD marijuana and never feel stoned.
This was a revelation.

Eoin Treacy's view
I have to smile at signs proclaiming UCLA is a smoke free campus when driving through Westwood Los Angeles since the smell of marijuana smoke is such a common occurrence. Cannabis is available to anyone who wants it today and not just in California. Considering it is now legal in a handful of states and the FDA is coming under increasing pressure to reclassify it, the movement to build a greater awareness and market for the drug is increasingly successful.

Email of the day on China and governance
In Friday’s audio, you speculated about possible reasons for China’s tightening of social conditions.  The following report from an Australian reporter in China, leaves me with little doubt. Xi has already shown his cards.  If the country is opaque today, the future will be more so.  If governance is everything, China will be a laggard.

My first assessment was that more centralization and tougher social conditions in China would delay economic growth but I now think the opposite is just as likely. 

The need for economic reform has been obvious but progress has been slow.  Debt has increased, excess capacity remains a serious problem  while attempts to influence stock markets were ham-fisted.  The failure of the bureaucracy is evident but implementing tough economic policies in the face of public resistance has been difficult. The existence of the country’s strongest unions in the infrastructure and heavy industry sectors, seems to have made change impossible.

In the West we are seeing how democratically elected governments are being taken over by populists whose promises are unrealistic and mostly damaging to their economies.  In Australia we are at day nine in an eight week election campaign where the economically conservative government, which is acutely aware of the nation’s unsustainable path, is struggling to sell a moderate budget which sees debt continuing to increase while depending also on continuing world economic growth and financial stability. 

Premier Xi has no intention of allowing China to go down that same path.  He can see the country’s problems as clearly as we can but the system has failed.

I can easily see Xi blaming bureaucrats and weak leadership in the provinces.  The scene is being set for a major purge.  A second cultural revolution.  Xi can see what the markets are saying and he could  use his power to implement tough economic policies.  There will be significant short term social pain and major economic risks but a strong turnaround in the economy is likely to emerge. China could regain its position as an economic powerhouse.

The period of turmoil will see China’s markets collapse. This will be a black swan event.  Knock-on effects around the world will be serious but, as is often the case, will be another good long term buying opportunity.

Eoin Treacy's view
Thank you for sharing your perspective and this article highlighting the increasingly leftist leanings of Communist Party rhetoric. Most forward looking societies prize bettering oneself through pursuing education and China is no different. Therefore regardless of how you dress it up in idealism, relegating the most educated people in society to its lowliest echelons can only be considered a retrograde step.

Bull Market Losing Big Ally as Buybacks Fall Most Since 2009
This article by Lu Wang for Bloomberg may be of interest to subscribers. Here are two sections:
The first-quarter slowdown was mostly executives responding to the economic and credit stress earlier in the year, according to Joseph Amato, chief investment officer of equities at Neuberger Berman LLC in New York, where the firm oversees $243 billion. As the fear subsides, buybacks are likely to stay elevated, he said.

“The scare in the first quarter was overblown,” Amato said. “The economy is growing on the global basis at a reasonable level. That, in our mind, would suggest that companies will come back and have a typical buyback program consistent with levels of the last few years.”


Their role in keeping the bull market afloat is more pronounced this year. According to Bank of America Corp., the firm’s trading clients from hedge funds to wealthy individuals were net seller of stocks for 15 straight weeks through May 6, a record streak. The only buyer was corporations scooping up their own shares.

“Companies have been a fairly consistent buyer that has supported the late stage of this bull market,” Channing Smith, a managing director at Capital Advisors Inc. in Tulsa, Oklahoma, said by phone. The firm oversees about $1.6 billion. Their potential retreat means “there is less firepower to counter any type of bout of selling,” he said.

Eoin Treacy's view
I devoted a lengthy discussion in the Subscriber’s Audio on Friday to the role of buybacks in both supporting the market and manipulating valuations by decreasing EPS. Anything that impinges on companies buying back their shares represents a challenge for the market. Corporations have been the primary driver of demand for shares and buybacks have been an important artery for the transmission of central bank liquidity.

]]> 3 Reasons Why Gold Isn’t Behaving Like Gold Right Now Tue, 28 Jul 2015 10:31:00 +0100 July 27, 2015

Green-GoldAs many of you know, I was in San Francisco the week before last where I had been invited to speak at the MoneyShow, one of the biggest, most preeminent investor conferences in the world. Over the past couple of decades, I’ve spoken at many MoneyShows all around the country and have covered many different topics. Gold investing is one that often draws a big crowd. Not this year. Guess which natural resource stole the show?

The commodity that attracted attendees’ attention is one that until pretty recently could only be grown and harvested under the shroud of secrecy. Marijuana. Currently legal in 23 states and the District of Columbia, medical marijuana generated $2.7 billion in 2014 and is expected to bring in $3.4 billion this year. Investors are taking notice. The cash crop is even starting to change intranational migration. Whereas many retired seniors flock to warmer climates in which to live out their golden years, others now factor in whether a state will permit them to self-medicate in order to treat their arthritis, according to a recent Time article.

Investors themselves who might have suffered from arthritis attended the pot presentation at their own risk, as it was standing room only. They couldn’t have been pulled away even to sit comfortably in the scarcely occupied room next door. Sentiment toward gold was indeed very bearish at the MoneyShow, as it is around the world right now.

Gold Hits the Reset Button

Gold is universally recognized as a safe-haven investment, a go-to asset class when others look uncertain. Following the 2008 financial crisis, for instance, the metal’s price surged, eventually topping out at $1,900 per ounce in August 2011.

But last week proved to be a particularly rocky one for the metal, even with Greece and Puerto Rico’s debt dilemmas, not to mention the recent Shanghai stock market decline, fresh in investors’ minds. Gold traded down for 10 straight sessions to end the week at $1,099 per ounce, its lowest point in more than five years. Commodities in general dropped to a 13-year low.

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Gold stocks, as expressed by the XAU, also tumbled.

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The selloff was given a huge push when China, for the first time in six years, revealed the amount of gold its central bank holds. Although the number jumped nearly 60 percent since 2009 to 1,658 tonnes, markets were underwhelmed, as they had expected to see double the amount.

Then in the early hours last Monday, gold experienced a “mini flash-crash” after five tonnes appeared on the Asian market. Initially this might not sound like a lot, but five tonnes equates to 176,370 ounces, or about $2.7 billion. It also represents about a fifth of a normal day’s trading volume. Suffice it to say, price discovery was effectively disrupted. In a matter of seconds, gold fell 4 percent before bouncing back somewhat.

Reflecting on the trading session, widely-respected market analyst Keith Fitz-Gerald noted: “Far from being a one-day crash, this could represent one of the best gold-buying opportunities of the year.”

The last time the metal descended this quickly was 18 months ago, on January 6, 2014, when someone brought a massive gold sell order on the market before retracting it in a high-frequency trading tactic called “quote stuffing.” Last month I shared with you that we now know who might have been responsible for the action—and many others that preceded it—and pointed out that the accused party’s penalty of $200,000 was grossly inadequate. Last Monday I told Daniela Cambone during the Gold Game Film that such downward price manipulation seems to result in little more than a slap on the wrist. But if manipulation is done on the upside, traders could get into serious trouble.

Besides apparent price manipulation, other factors are affecting gold’s behavior right now, three in particular.

1. Strong U.S. Dollar

Like crude oil, gold around the world is priced in U.S. dollars. This means that when the greenback gains in strength, the yellow metal becomes more expensive for overseas buyers. With the U.S. economy on the mend after the recession, the dollar index remains steady at a 12-year high.

It’s important to recognize, though, that gold is still strong in other world currencies, including the Canadian dollar. As such, our precious metals funds have hedged Canadian dollar exposure for Canadian gold stocks, which has benefited our overall performance.

2. Interest Rates on the Rise?

Federal Reserve Chair Janet Yellen continues to hint that interest rates might be hiked sometime this year, perhaps even as early as September. When rates move higher, non-yielding assets such as gold often take a hit.

As you can see, the 10-year Treasury bond yield and gold have an inverse relationship. When the yield starts to rise, investors might find bonds a more attractive asset class.

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3. Slowing Manufacturing Activity

Earlier this month I wrote about the downtrend in manufacturing activity across the globe. As many loyal readers are well aware, we closely monitor the global purchasing manager’s index (PMI) because, as our research has shown, when the one-month reading has fallen below the three-month moving average, select commodity prices have receded six months later.

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China is the 800-pound commodity gorilla, and its own PMI has remained below the important 50 threshold for the last three months, indicating contraction. The preliminary flash PMI, released last Friday, shows that manufacturing has dipped to 48.2, a 15-month low. For gold and other commodities to recover, it’s crucial that China jumpstart its economy.

In the meantime, we’re encouraged by news that the slump in prices has accelerated retail demand in both China and India, which, when combined, account for half of the world’s gold consumption.

Battening Down the Hatches

They say that a smooth sea never made a skillful sailor. No one embodies this more than Ralph Aldis, portfolio manager of our precious metals funds. He and our talented team of analysts are doing a commendable job weathering this storm. We’re invested in strong, reliable companies, and when commodities eventually turn around, we should be in a good position to catch the wind.

We look forward to the second half of the year, when gold prices have historically seen a bump in anticipation of Diwali, which falls on November 11 this year, and the Chinese New Year. As you can see, average monthly gold performance has ramped up starting in September.

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 “Gold is down 15 to 25 percent below production levels,” Ralph says. “That might cause some companies to halt production.”

And, in so doing, help prices find firmer footing.

After my trip to San Francisco, an important rallying point for the 1960s counterculture movement, it only seems fitting that I traveled to Colorado, one of the first states to legalize cannabis for recreational use. It was only a coincidence that Julia Guth chose to retreat to the state’s beautiful mountains for the Oxford Club’s educational seminar. It was a privilege to present to two assemblies of curious investors like yourself.  I enjoy meeting many of you when I’m on the road.

]]> Northland Capital Partners View on the City ValiRx, Craneware, Action Hotels Thu, 16 Jul 2015 07:43:00 +0100 ValiRx Plc (LON:VAL) – CORP: VAL 401 update
Market Cap: £10.9m; Current Price: 36p

ValiRx initiates preparations for Phase 2b clinical trial of VAL401
ValiRx announced that it has initiated preparations for a Phase 2b clinical trial of its lung cancer drug, VAL401—the company’s second clinical candidate.
 A clinical trial contract has been established between ValiSeek and Clinical Accelerator, a UK-based clinical trial management organisation, to manage and execute a Phase 2b Clinical Trial in patients with non-small-cell lung adenocarcinoma.
 The trial will be designed to assess the treatment’s:
1. effectiveness (as observed by measurements of disease progression, quality of life and survival);
2. pharmacokinetics; and
3. safety and tolerability.

NORTHLAND CAPITAL PARTNERS VIEW: ValiRx’s appointment of Clinical Accelerator is instrumental in seeking a fast-track of VAL401 into Phase 2b trials. VAL401 is a novel reformulation of a generic drug which has over twenty years of clinical use in the treatment of mental disorders. As such, the drug’s safety profile is well established. ValiRx is now reformulating the drug for the treatment of lung cancer, given strong pre-clinical data supporting this new indication. 

Vadim Alexandre +44 (0)20 7382 1134

Craneware (LON:CRW): FY pre-close
Market Cap: £175.7m; Current Price: 655p

Further growth in revenue visibility
 Total value of contracts signed of $72.5m (FY14: $71.0m) but given the company’s revenue recognition policy, the bulk of the revenue of these sales has not been recognised and FY revenue is expected to be between $44.5m and $45m (consensus $48m), representing 4.5% to 5.6% growth. Adj. EBITDA expected to be between $14.0m and $14.5m, up 6.9% to 10.7% (consensus $13.8m).
 Renewals in the year above 100% with strong cash generation resulting in year-end cash above $40m (FY14: $32.6m).
 FY results due 8th September.
NORTHLAND CAPITAL PARTNERS VIEW: Slightly pedestrian pre-close with 2% growth in total contracts signed and c. 5% growth in reported revenue reflecting the company’s conservative revenue recognition policy. This means that the company has good revenue visibility over a three year period – at the interim stage this stood at $119.9m with $98.0m ‘Revenue under Contract’, $20.1m ‘Renewal Revenue’ and $1.8m of ‘Other Recurring Revenue’. Renewal rates remain strong with customers expanding their deployments and the company remains well capitalised. The US healthcare market also looks more stable following the recent Supreme Court ruling in favour of Obamacare. Shares continue to trade at the upper of the sector at 26.8x FY15 and 23.3x FY16.

David Johnson +44 (0)20 7382 1130

Action Hotels (LON:AHCG): TRADING
Market Cap: £83m; Current Price: 56.5p

On track to meet expectations
 Revenue was +11% YoY to $22m in 1H FY15 on the back of the group delivering occupancy levels above 80%. The ibis Salmiya Kuwait and ibis Sharq Kuwait performed particularly strongly with occupancy levels of 88% and 90% respectively. As a result, EBITDA was +14% to $8.7m YoY.
 The outlook looks positive. In addition to recently announcing the acquisition of the 73 room ibis hotel near Melbourne airport in Australia establishes the ninth hotel and 1,561 rooms. The development pipeline is on track to deliver a further three hotels before the end of 2015.
 In May management alluded to a positive start to the new year where 1Q15 started well and where ADR was +3% YoY to $111, revenue was +22% compared to the same period in the prior year. Consensus is looking for c. $15m of EBITDA for FY15 so given the $8.7m of EBITDA produced in the 1H15 forecasts look well underpinned in our view.

NORTHLAND CAPITAL PARTNERS VIEW: The business is trading well and with the hotel portfolio expanding and key partnerships in place, management appears on track to deliver on its goal of 16 hotels and 2,820 rooms by 2017. The stock currently trades on at a c. 49% discount to Adj. NAV per share of 84p and offers a dividend yield of c. 3.2% to investors.

]]> Q2 2015 Share Price Performance (Part 2) Wed, 15 Jul 2015 15:48:00 +0100


In this blog, I am going to comment on the Q2 and H1 performance of the Tier 2 group of 52 companies with share prices of between $0.10 and $0.99 to start 2015.


Q2 2015 Tier 2 Performance


  • Decliners outnumbered advancers by 29 to 23


  • Average and median share price changes were -2% and -7%, respectively
  •  Five companies had share price increases of 40% or more
    •  Medifocus (+188%) – bounce off a bottom triggered by a survival financing and a technology option
    •  Tribute Pharmaceuticals (+93%) – completed a financing and announced both product acquisitions and its own acquisition by Pozen (to be completed in Q4)
    •  Theratechnologies (+57%) – 2015 share price climb continues, supported by improved financial results
    •  Imperial Ginseng Products (+55%) – up on extremely low trading volume and minor news
    •  Sernova (+47%) – completed a small financing but jumped on no news back to 2014 high
  • Six companies had share price declines of more than 40%
    •  IMRIS (-40%) – filed for Chapter 11 protection, with Deerfield Management as the potential buyer
    •  NeutriSci International (-50%) – continues a 9-month share price decline
    •  Aeterna Zentaris (-51%) – the decline appears to be linked with the announcement of a new Phase 3 study of Macrilen
    •  Ceapro (-52%) – appeared to be increased trading volume linked to two good announcements (improved financials and technology development)
    •  Annidis Health Systems (-61%) – completed a survival financing with its Chinese partner but declined on very low trading volume
    •  Axxess Pharma (-63%) – continues a year-long decline



H1 2015 Tier 2 Performance

  •  Advancers outnumbered decliners by 27 to 25
  •  Average and median share price increases were +17% and +1%, respectively
  •  Ten companies had share price increases of 40% or more (+42% to +328%) and ten companies had share price decreases of 40% or more (-43% to -78%)
  •  The best performer in this group in H1 was Theratechnologies (+328%)

2014/2015 Sector Overview

Q1 has been the most positive quarter in both 2014 and 2015 for both the Tier 1 and 2 groups of companies. The other quarters appear to be a more balanced mix of advancers and decliners. The Tier 2 group has more volatility, based on the number of companies with price changes over 40%, which would be expected for the smaller cap companies.



Medical Marijuana Group

Eight Medical Marijuana companies listed on the TSX Venture Exchange are being monitored for share price performance in 2015 (tickers APH, BCC, BED, MT, OGI, TPI [now TBQBF on OTCBB), TWD; MJN added after Q1 report). Many of these companies have been public for less than 12 months, are in the early stages of commercialization and are not yet profitable. There are other companies in this sector which are listed on other exchanges or are private.

  •  There were 7 decliners and only 1 advancer in Q2
  •  Average and median share price changes in Q2 were -14% and -15%, respectively
  •  Only 1 company, Canadian Bioceutical (BCC; +53%) had a substantial H1 share price increase (most of the jump was in Q1)
  •  Tweed Marijuana (TWD) agreed to acquire Bedrocan Cannabis (BED); Bedrocan shareholders will be entitled to receive 0.4650 common shares of Tweed for each common share of Bedrocan

Looking Ahead

  •  Broad stock market trends are negative as I write this blog. The Chinese stock market is sliding down as inexperienced Chinese retail investors panic. The Greece – EU/ECB/IMF confrontation is a second area of concern. U.S. earnings season is just starting and there are some signs of lower than expected growth. Uncertainty equals risk and risk makes money look for safety or the sidelines.
  •  The U.S. pharma and biotech trends remain positive as M&A activity continues and there are enough positive Phase 3 trials and regulatory approvals.
  •  Q3 is a slower quarter – people still take holidays – where there is usually less volatility, the exceptions being those companies with very positive or negative news.


[The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog. Past share price performance may not be an indicator of future share price performance. This blog does not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]


As with all our posts, please see our full legal disclaimer.

]]> Two Things the US Government Got Right Tue, 07 Jul 2015 15:22:00 +0100

In a shocking and uncharacteristic display of common sense the US government have recently managed to pass two laws which are absolutely a fabulous idea.

The legalization of marijuana in the US is the first one.

I say this not because I'm a closet pot smoker, or even reside in the US. I'm not and I don't but because Government's involvement in deciding and having control over what we do and don't put in our bodies is the height of absurdity.

The leading cause of death in the Western world is not giggling stoners stumbling into oncoming traffic but heart disease. We may as well ban deep fried food and TV...

The other law passed is the JOBS act, which, in a nutshell, allows everyday people to invest in private business while at the same time allowing private business to solicit capital from everyday people.

Combining the two would certainly produce some interesting investment choices, especially if marijuana precedes the investment choice. Then again, this would be akin to drinking alcohol and gambling, which is about as American as Apple pie and let's face it, without those two Vegas would consist of a single motel and gas station run by a guy with a lazy eye named Chuck.

I bring this up is since I recently received an email from a friend where he discussed both crowdfunding and marijuana.

He had been debating whether the marijuana crowdfunding platforms are an "industry to watch". Legislature changes often provide accelerant to glowing embers and the legalization of marijuana is no different.

We all remember how crazy pot stocks got a few months back. In fact, we detailed this in a January edition of a private alert we put out on select trades we're placing our personal capital into.

At the time we determined that due to the asymmetry available we just HAD to short one which stood out. Specifically, a useless pump and dump candidate one of our editors of the alert service brought to our attention. The company in question was General Cannabis Corp (CANN).

Easy pickings - find a company with little substance that is being run up on a deadly combination of BS and stupidity and you have yourself a candidate. What could possibly go wrong?

What indeed?

Well investors who went long CANN as we went short in mid-January lost their shirts but no matter, they may have kept their underwear as it hasn't completely disappeared. Rest assured, however, that we'll get another series of amusing debacles before we all go in a box.

Equity crowdfunding, like the now legalized marijuana industry, is relatively new so the question as to whether marijuana crowdfunding platforms are a sector to watch really isn't a silly one.

We've been very close followers of equity crowdfunding since its emergence, and are very well connected into the ecosystem so I thought I'd offer some insight into the industry as I see it.

Before I proceed a caveat is in order. Seraph, the company Mark and I founded, are, together with our members, investors in a company that keeps a pulse on the equity crowdfunding marketplace and we're vetting a number of candidates continuously in this space. We do therefore have a bias towards the industry as we have placed capital and are looking to do so again.

It seems obvious to me that the vast majority of the crowdfunding platforms out there, while being run by well intentioned entrepreneurs, will absolutely never make any profits. And when the venture capital that is currently keeping them alive dries up they will simply disappear like a fading sunset over the horizon.

Now, I've been accused of being too harsh on many of the platforms who are looking to raise money so I'm going to choose my words carefully. Here goes: most are crap and will die!

Don't get me wrong. I'm incredibly excited about crowdfunding in general and believe that the growth will continue. In part, because the financial architecture that has been built ensconcing Wall Street, brokers, various other "intermediaries" and political interests provide little value in our world today. People are fed up with them and increasingly distrusting of the financial institutions which we are told are "safe".

Quarter over quarter, investment via equity crowdfunding is experiencing tremendous growth, and as more laws and regulations are relaxed and people become aware of investment opportunities, we certainly hope - and expect - this growth to continue. There is a movement of capital globally from public to private and crowdfunding is but one conduit for these capital flows.

Equity crowdfunding is a great experiment in the sense that for the first time since the Great Depression, non-accredited retail investors have access to privately listed investment opportunities.

The United States and the United Kingdom acted nearly simultaneously in 2012, allowing equity-based crowdfunding in the US via the JOBS Act and in the UK through new regulations put in place through their Financial Conduct Authority (FCA).

While American accredited investors have been able to crowdfund for several years now, the American government finally implemented rules legalizing equity crowdfunding for non-accredited investors a few weeks ago. Government efficiency at its finest…

The reason why, for the first time in almost 100 years, non-accredited retail investors suddenly became allowed to become angel investors is better answered by the guys who were instrumental in drafting the legislation and bringing about the concept itself. We discussed this some time ago with our colleagues Jason Best and Woodie Neiss and you can listen to their story here and here.

Since 2012, the UK, US, and other markets have seen literally hundreds of equity crowdfunding platforms listing thousands of investment opportunities - with varying models.

In a very general sense, four models of equity crowdfunding platforms have emerged:

1) Platforms for Everyone

Take any trip on the London tube today and - unless you're blindfolded - you'll not miss the advertisements from Crowdcube, which boasts nearly £90,000,000 in investments and nearly 190,000 people registered on their site. They continue to be a leading platform in this space. Crowdfunder and Seedrs are two other well-known platforms.

These platforms accept investment in increments as little as £10, though the average investment is actually well over £1,500. They focus on the retail investor who I imagine would often be mom and pop investors. While there are tech and other startup-type businesses listed, investments can also be made into more established consumer goods and retail-type businesses.

2) Platforms Geared Towards Sophisticated Investors

Sites focused on accredited investors require much higher thresholds for investment. Jerusalem-based OurCrowd, has been very successful through a focus on Israel's hi-tech scene. It has also been expanding listings outside of Israel as well. In the United States, CircleUp is another that comes to mind.

3) Real Estate Crowdfunding

People are claiming that the future of commercial real estate is in crowdfunding. Washington, DC-based Fundrise is the first and among the most notable.

4) Niche markets

There are also a host of specialty crowdfunding platforms. Some focus on agriculture and yes, others focus on growing other products... like marijuana.

Buyer Beware

At the end of the day, equity crowdfunding - like all forms of angel investing - is inherently very risky. You have to accept that you will lose more times than you'll win but hope that your wins are many times bigger than your losses.

Over the last 30 years early stage venture capital has outperformed stocks and bonds by a large margin, returning an average of 21.29%. This while, as I mentioned last week, up to 3/4 of early stage deals will fail.

Investing in private early stage deals is extremely time consuming and difficult. It takes skill and lots of experience. I learn something new every day and I'm almost completely surrounded by veterans and due diligence from the moment I wake till late at night when I typically pen these articles to you. It's not a part time thing! There are a few key ingredients that I think are worth pointing out to those interested in getting their feet wet.

Do the Obvious

I am no longer surprised by people losing money in private deals. Occasionally someone will bring me a deal saying it looks really good. I'll hit them with some simple questions which any investor should have considered before wasting their or my time on.

  1. Have you done a background search on the people involved?
  2. Due diligence: have you asked for their financials, and if it's a start-up with none to show, have they been in business before? If so, ask for the financials of that business. What competition do they have? This question the founders need to have done extensive work on. Have you called the company, bought their product, tested their service? You can learn a lot from finding out how they're servicing clients right now.
  3. What terms are being offered? In early stage deals terms are way more important than valuation!

Still interested in crowdfunding?

We for sure are! Crowdfunding is a phenomenon that is changing the way that capital is being allocated. It is fundamentally better for individuals to make their own choices with their capital than it is for Governments or incestuous corporates tied to the government to do this for us.

What I do think, however, is likely to happen is that there will be an entire host of investors getting burned, just like they do at Vegas or Macau. Many will believe that they'll see the next Uber or Apple get listed on a crowdfunding site, and at the same time will be able to identify the deal.

Furthermore, even if they identify the deal they will have no idea about the structure of the terms and can easily be wiped out by VCs funding the company in a Series B or C round where investor protections were never put in place.

While it's possible I've yet to see the early stage deals from close networks that cross our desks being posted onto any platforms, certainly in the early stages. I don't see this changing.

Small networks of industry professionals will continue to share deals with those closest to them before taking in capital from any outside sources. Human nature isn't about to change and humans are social creatures.

When Seraph gets a great deal we share it with those closest to us. Why would we do anything else? That's human nature....

Furthermore, founders are typically in search of smart capital that can help them build their business. This means connected money with skills and knowledge is always going to be at a premium. If you're an entrepreneur raising capital and looking to grow your business obtaining that from a crowdfunding platform is much more difficult.

The most promising investment opportunities will continue to be shared in tight, close-knit circles. They will, however, find their way onto crowdfunding platforms when they reach later stage financing such as Series B and C rounds. When a company has in place the smart money and is just looking for expansion capital then I think the crowfunding sites are a sweet spot.

Lastly, back to the original question which my friend was discussing - marijuana crowdfunded deals. I don't see them as any different from a backed beans crowdfunded deal. Crowdfunding is merely a conduit.

- Chris

"An investment in knowledge pays the best interest." - Benjamin Franklin

]]> Broker spotlight – AB Foods, Ophir Energy, Enquest, Premier Oil, BHP Billiton, Rio Tinto Fri, 29 May 2015 08:57:00 +0100 Northland Capital Partners View on the City Rockwell Diamonds and Nektan Fri, 29 May 2015 07:14:00 +0100 Rockwell Diamonds (TSE:RDI) – CORP: FY15 results

Market Cap: CAD$12m; Current Price: 23c

Saxendrift to wind down as Remhoogte/Holsloot wind up

  • Loss for the year attributable to equity holders of parent Co. (14.0) (9.4) 49
  • Source: Northland Capital Partners estimates
  • Rockwell expects to close the acquisition of the Remhoogte/Holsloot Project at the end of May 2015 as all the conditions precedent have been met.
  • The declining grades at Saxendrift mean that Rockwell is planning to reduce operations at the Mine and redeploy the plant at its other development projects.
  • Forecasts, rating and price target remain under review.

NORTHLAND CAPITAL PARTNERS VIEW: Wednesday’s announcement was the start of what we hope will be the rebirth of Rockwell Diamonds. FY15 has been difficult year for Rockwell with a 54% increase in total income for the Company YoY outweighed by a 52% increase in total costs, resulting in a 49% increase in the attributable loss YoY. During the financial year the Company closed the Saxendrift Hill Mine, put Niewejaarskraal on care and maintenance while the geological model is refined and the processing capacity is increased and is now looking to close operations at the flagship Saxendrift Mine due to the declining grades. The securing of a bridge financing facility (27/05/15) is a major development for Rockwell Diamonds that allows the Company to close the acquisition of the Remhoogte/Holsloot Project, associated fleet and three plants. Once Rockwell closes the transaction with Bondeo, expected at the end of May 2015, and owns the projects outright it should then be easier for the Company to secure a longer term finance facility. The acquisition of the Remhoogte/Holsloot Project will be a transformational event giving the Company a higher margin operation that should move Rockwell forward.


Nektan (LON:NKTN): Financing

Market Cap: £37m; Current Price: 166p

£8m financing complete 

  • Nektan raised a further £0.9m through the fundraising over-allotment which will be used to further support the growth strategy. The amount consists of £0.75m non-VCT convertible loan notes at the same terms as the previous notes announced on 28 April 2015. Furthermore, a total of 89,552 new ordinary shares have been placed at 167.5p (£0.15m) makes up the remainder.
  • This takes the total funds raised to £8m including the financing of c. £6.7m from existing, new institutional and private shareholders announced on 28 April 2015, of which a proportion to the value of £4.7m was comprised of convertible notes at c. 167.5p and a DTL loan facility for a further £0.6m. DTL has agreed to exchange £0.45m of the remaining £0.6m drawdown under the loan facility for a subscription of non-VCT notes of equivalent value.
  • The funding will support the Company’s expansion in the US tribal and commercial casino market where it has now signed 18 contracts and/or letters of intent with licensed casino operators. Furthermore, the funding will support the continued growth of the Company’s European business where 16 white label partners have gone live on the Evolve platform with a further 14 contracts signed in the past 90 days and finally the funding will enable the business to launch its partnership with The Sun in the UK where it will operate white-label real money gaming from the end of the current financial year (June 2015). 

NORTHLAND CAPITAL PARTNERS VIEW: As alluded to previously despite the funding (£8m) being secured at what looks to be a c. 29% discount to the IPO price in November 2014, the additional funding not only puts the business in a good position to execute on recently signed contracts in the US and white-label solutions in Europe but also provides additional firepower for further growth so the news should be well received by the market in this regard.     

]]> Avago Agrees to Buy Broadcom for $37 Billion Fri, 29 May 2015 07:04:00 +0100 Avago Agrees to Buy Broadcom for $37 Billion 

This article by Dana Mattioli, Dana Cimilluca and Shayndi Raice for the Wall Street Journal. Here is a section:

Neither Avago nor Broadcom has the kind of dominance over individual markets that better-known rivals such as Intel Corp. and Qualcomm Inc. enjoy, and a merger could help address that. In addition to consumer applications, Broadcom supplies the vast majority of chips used in the latest networking switches found in corporate data centers, a fast-growing business that could enhance Avago’s communications-focused revenue stream.


Researcher Dealogic estimated before the deal was announced that an acquisition of Broadcom valued at $35 billion would be one of the largest semiconductor takeovers ever, coming amid a burst of deals among such companies. So far this year, there have been more than $26 billion in semiconductor deals announced globally, not including the tie-up between Broadcom and Avago, according to Dealogic. That is more than double the volume in the same period last year and the largest year-to-date total since Dealogic started keeping records in 1995.

Eoin Treacy's view 

With interest rates so low and corporate spreads no longer contracting there has seldom been such an opportune time to borrow money. The flip side is that prices have increased in line with increased activity. Nevertheless demand for chips remains robust as the number of connected devices remains on a secular growth trajectory in line with the Internet of Everything theme.

Broadcom had been confined to an almost 15-year base and it took an acquisition to push it to new recovery highs. This helps to illustrate how focused the bull market has been on a select group of companies. As prices increase it is inevitable investors will look for promising companies that have not yet rallied which may represent catch-up potential.

Avago remains in a reasonably consistent uptrend and while somewhat overextended relative to the 200-day MA at present, a sustained move below $110 would be required to question medium-term scope for additional upside.

The results of this Chart Library Filter of the Nasdaq Composite Index highlight that there are a number of shares with similar long-term base formation completion characteristics. 


What Google Just Announced Is a Bombshell 

This article by Joshua Topolsky for Bloomberg may be of interest to subscribers. Here is a section:  For instance, while listening to music in Spotify you can search for more info on an artist, or if you're talking about a restaurant in WhatsApp, Google can pull up data on the place and even help you make reservations. And this is not a feature of the app itself, rather a helper that lives inside of the entire operating system.

This is a major move for two reasons. The first is that it really brings Google back to a place of dominance as the glue that holds your digital life together. The web has thrived and grown in no small part because of Google's ability to track, organize, and understand all of its disparate pieces. Now it's able to do the same thing with every app running on your phone. It allows Google to get back into the search game by speaking the common language of apps. It gives the company a second life with access to user behavior and needs.

But secondly, it starts to show how Google can be an interconnecting layer between the apps themselves — a kind of neutral staging ground between one action and another. This is a sea-change for how we use our mobile devices and how mobile apps interact with one another. Currently, we use OS-defined tools which let apps interact with each other (with rules defined by the OS-makers, not developers). But imagine if developers didn't have to think about how their work connects to the rest of your world? Imagine if Now on Tap is aware enough of the core functions of those apps that it can predict what you'd most likely want to do with them, and then execute on those needs?

Eoin Treacy's view 

We have become somewhat inured by Google’s announcements of what can realistically be described as vanity projects; plans for a massive new headquarters which had to be shelved being the most recent. However today’s release is important because it takes Google back into where it makes the vast majority of its money. I downloaded the Google search app onto my phone last week. The linking together of various different elements of search results is a positive development in my opinion. I’ve been using it more as a result and this type of user engagement should be beneficial for the company’s bottom line. 


China Most-Wanted: Nabbed in New Jersey 

This article from Bloomberg News may be of interest to subscribers. Here is a section: China’s most-wanted fugitive, an official accused of embezzling more than $40 million, is in U.S. custody, according to the Communist Party’s anti-graft agency.

Yang Xiuzhu, who fled China in 2003, was detained after entering the U.S. using a fake Dutch passport last year, according to the party’s Central Commission for Discipline Inspection.

In the first confirmation of Yang’s whereabouts in a decade, the commission’s International Cooperation Department said she escaped from detention in the Netherlands in May 2014 - - after being rejected for political asylum and before she could be sent back to China.

Eoin Treacy's view 

Considering the vast sums of money that change hands within state owned organisations my first reaction to this news was “Is that all?” $40 million might sound like a lot of money but is in fact very little when one thinks about the personal and family wealth accrued by the ruling cadres.

Nevertheless this is a PR coup for the Chinese administration. China’s anti-corruption chief and Politburo member Wang Qishan announced in March he will be visiting the USA this summer. Following today’s news we can now put that visit in a wider context. The Party wishes to throw media attention on members who have absconded with millions of Dollars while ensuring that the process of internal reform sustains the status quo. 


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  I think all investors will benefit from guest speaker David Brown’s new presentation. I learned from it, not least how to assess some familiar data more clinically.  In other words, he shows us how to think a little more clearly, particularly in terms of identifying bear markets near their tops.  This is never easy given all the emotions involved.  Many people jump the gun, as you will have seen over the last few years, which can leave them susceptible to overstaying when the important and often overlooked warning signs are flashing.  Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  

]]> Broker spotlight, including Direct Line, Admiral, Zoopla and Intertek Thu, 28 May 2015 08:03:00 +0100 Broker heavyweight JP Morgan Cazenove has its sights on UK insurers and has dialled up Direct Line (LON:DLG) with an upgrade.

It moves the shares to 'overweight' from 'neutral' prevously, while the target is punted up to 349p from 240p.

"UK non-life insurers are facing a tough environment at the moment, with all the profit drivers (i.e. underwriting, investment income and ancillary income) under pressure," says analyst Ashik Musaddi.

But  any hint of rising pricing would be good for any pure play motor insurers such as Direct Line, Admiral, and Esure.

Admiral (LON:ADM) has its target driven upward to 1,388p from 1,134p while the rating remains 'underweight'.

Esure (LON:ESUR) is kept at 'overweight' with  the target lifted to 299p from 280p.

US broker gives property portal Zoopla (LON:ZPLA) a kick today, raising the target to 400p from 269p and repeating a 'buy'.

"In our view, the acquisition of uSwitch has raised the bar with respect to the services offered by property portals and enhanced the customer journey. We also believe that this enhanced offering will be very difficult for its competitors to replicate or match. We expect the acquisition to be significantly earnings enhancing," it said in a note.

On the downgrade front today, Deutsche is downbeat on Intertek (LON:ITRK), downgrading the stock to 'hold' from 'buy'. The target price is also reduced to 2654p from 2725p.

"We believe that there is a considerable opportunity for the incoming CEO, André Lacroix, to effect a degree of cultural change in the business (more focus on cross selling, possible changes to incentive structures) but that this may take sometime to effect and is now partly priced in," the broker said.

]]> Northland Capital Partners View on the City Arian Silver, Mariana Resources, MotifBio, DiamondCorp and others Thu, 28 May 2015 07:14:00 +0100 Motif Bio plc (LON:MTFB) - BUY*: FDA minutes confirm Phase 3 programme

Market Cap: £21m; Current Price: 33p; Target Price: 89p 

FDA meeting minutes confirm iclaprim Phase 3 clinical development programme

  • Motif announced today that it received the official meeting minutes from the U.S. Food and Drug Administration (FDA) guidance meeting which was held on 14 April 2015. 
  • The minutes confirm the FDA's agreement with Motif's Phase 3 clinical development programme for iclaprim - Motif’s flagship broad-spectrum antibiotic designed to be effective against multi-drug resistant bacteria. 
  • Iclaprim is being developed as an intravenous (IV) formulation to treat acute bacterial skin and skin structure infections (ABSSSI) and hospital acquired bacterial pneumonia (HABP) - two serious and life threatening infections caused by multi‐drug resistant bacteria. 
  • The FDA confirmed that two successful Phase III trials are required for the approval of the drug. 

NORTHLAND CAPITAL PARTNERS VIEW: iclaprim is set to fill a major market void in the battle against antibiotic resistance. If approved, the drug could achieve over $1bn/year in sales. Today’s FDA minutes confirm the regulator’s support for Motif’s programme. We maintain our BUY rating and 89p price target.


DiamondCorp (LON:DCP) – BUY: Update note

Market Cap: £36m; Current Price: 11.3p; Target Price: 16.4p (from 17.7p) 

FY14 results reflect last years the progress toward production

  • Forecasts and price target downgraded to 16.4p (from 17.7p). BUY rating maintained.

NORTHLAND CAPITAL PARTNERS VIEW: DiamondCorp’s FY14 results reflect the progress towards production made last year with a LBT of £3.3m. This was higher than our expectations (£2.4m) due to a £1.7m fair value adjustment that relates to the convertible bonds that outweighed the substantial £0.9m reduction in corporate expenditure against our forecasts. The Company’s net debt position of £21.9m was noticeably higher than the £14m we had previously forecast, largely a result of the increased capital cost in FY14 associated with the changes to the development schedule for the Lace Diamond Mine combined with an increase in the carrying value of the convertible debt. While these results reflected the development of Lace from last year, this year will see maiden production from the Upper K4 kimberlite at Lace that is expected to commence in H215. The extraction of diamonds during the ramp of production from the Upper K4 kimberlite is being treated as a credit to capex and not revenue. As a result, our headline forecasts do not reflect the cash generative nature of the business with Lace generating US$5.8m to fund development capital expense. We have made a number of changes to our valuation DiamondCorp following the FY14 results and the net effect is a downgrade to 16.4p (from 17.7p). In our view, the Company is still significantly undervalued with our revised price target offering 46% upside to the current price of 11.3p.


Arian Silver (LON:AGQ) – CORP: Q115 results

Market Cap: £10m; Current Price: 30.5p 

Q115 reflect the development of the San José Mine 

  • PBT for Q115 increased to US$1.9m compared to a LBT of US$1.1m in Q114, due to a US$3m fair value adjustment in relation to the derivative liability associated with the Quintana loan note and BMPA.
  • Net debt increased to US$24.5m in Q115 from US$21.7m in Q114.

NORTHLAND CAPITAL PARTNERS VIEW: The Q115 results reflect the significant transition Arian Silver has gone through in the first part of 2015. During Q115, Arian was focused on the continued development of the San Jose Mine and commissioning of the silver-lead circuit La Tesorera processing plant. In Q215, we expect first production from the zinc circuit as part of the commissioning process. Arian expects to start recognising production and revenue as part of the ramp up phase of operations during Q215 at it moves the mine towards commercial production.


Rockwell Diamonds (TSE:RDI) – CORP: FY15 results

Market Cap: CAD$11m; Current Price: 21c 

From yesterday: Secures bridge finance for the Remhoogte/Holsloot acquisition 

  • Rockwell expects to close the acquisition of the Remhoogte/Holsloot Project with Bondeo 140cc at the end of May 2015 as all the conditions precedent have been met and regulatory approvals granted.
  • The cost of the acquisition has been lowered to US$21.9m (from US$29m) through the exclusion of some of the earth moving fleet being acquired and the deferment of the acquisition of the Bo-Karoo property pending regulatory approval. The revised transaction will comprise of US$12.2m for the mineral rights and three processing plants and US$9.7m for earth moving fleet. Rockwell will also sell the Saxendrift Extension property to the vendors of Remhoogte/Holsloot for $0.5m.
  • Rockwell has secured a bridging loan for US$16.5m from key shareholders Diacore (US$15m) and Rockwell’s Chairman Mark Bristow (US$1.5m) to meet the revised purchase consideration and working capital. The initial term of the loan is three months, extendable for a further month. Interest is payable at 1.25% per month for the first period.
  • Rockwell plans to refinance the bridging loan in Q215. Should Rockwell not be able to refinance the by the end of August 2015 the providers of the bridging loan will be repaid from 25% of the sales of rough diamonds and 100% of the beneficiation income until the loan is fully repaid.
  • Forecasts, rating and price target remain under review.


Mariana Resources (LON:MARL) – SPECULATIVE BUY: FY14 results

Market Cap: £19m; Current Price: 2.5p

LBT in line with FY13

  • LBT of £6.8m in FY14 is comparable with £6.9m in FY13.
  • Net debt of £0.6m in FY14 was compares to net cash of £2.7m in FY13. 
  • No change to rating.

NORTHLAND CAPITAL PARTNERS VIEW: Nothing unexpected in Mariana Resources’ results from last year. Since the period end the Company completed a £1.8m placing in February providing what should be sufficient cash for the year. Mariana is currently focusing its attention on the 10,000m drill programme at the Hot Maden project located in North eastern Turkey that has continued to deliver exciting results. At its other projects in Peru, Suriname, Argentina and Chile Mariana has re-prioritised work to ensure that the Company has a cash buffer in the near term. This ensures that Mariana will be able to finance its share of the next phase of exploration at Hot Maden, post the 10,000m drill programme that is being funded by joint venture partner Lidya as part of its earn in to the project.

Connemara Mining Company (LON:CON) – CORP: Inishowen update

Market Cap: £0.9m; Current Price: 1.6p 

Initial results from Inishowen Gold Licences

  • Initial results from sampling of quartz vein boulders at the Inishowen Gold Project, located near Donegal, Ireland, returned grades including; 15.35g/t Au, 6.99g/t Au, 4.52g/t Au and 5.42g/t Au.

NORTHLAND CAPITAL PARTNERS VIEW: Positive initial results from Connemara Mining Company demonstrating the project justifies further work. Prospecting work is ongoing and the Company expects that Geophysics and additional sampling will be required to identify potential drill targets.

]]> EC Official Denies Greek Government Statement That a Deal Is Close Thu, 28 May 2015 07:12:00 +0100 EC Official Denies Greek Government Statement That a Deal Is Close 

This article by Nikos Chrysoloras, Eleni Chrepa, Rebecca Christie for Bloomberg may be of interest to subscribers. Here is a section:  The euro gained 0.2 percent to $1.0889 as of 4:58 p.m. London time. Greek two-year notes rose, pushing the yield 114 basis points lower to 23.77 percent. Greek shares also climbed, with the benchmark Athens Stock Exchange gaining 3.6 percent at the close of trading.

“Everyone was scared Greece was close to leaving the euro zone,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “Just some hope is pushing the market up. They seem to be trying to do anything possible to keep Greece in the euro zone.”

U.S. Treasury Secretary Jacob J. Lew, who spoke Wednesday with Tsipras for the second time in less than a week, said he’ll push for movement in the standoff at a Group of Seven gathering of finance ministers and central bank governors in Germany.

“It’s time for everyone to park the rhetoric on the side and look for that sensible place where accommodation can be found,” Lew said at an event in London. “No doubt the worst and deepest consequence would be to Greece. But it’s profoundly in the interest of the European and global economy for the accident to be avoided.”

Eoin Treacy's view 

How the Europeans are going to resolve the Greek tragedy is still weighing on sentiment. Since they have patched over disputes at the last minute on every other occasion the market is beginning to price in the potential that this time will be no different.

Greece’s ability to make the next payment to the IMF is contingent on funds being released from their bailout package to fund it. This is a robbing Peter to pay Paul strategy but is unfortunately the reality of the Eurozone’s approach to the crisis. It means that the reforms demanded of Greece are where the crux of the argument lies and they will have to deliver if they are to expect leniency. 

Yen slides to lowest level in nearly 8 years 

This article from the Nikkei News service may be of interest to subscribers. Here is a section A weak yen used to provide a shot in the arm when Japan's economy depended heavily on exports. With production shifted offshore, the country has moved to an investment-driven growth model. Yet the weak currency still serves as a tail wind for exporters. Heavy machinery maker IHI assumes a rate of 115 yen to the dollar for the year through March 2016. If the yen remains weaker than this, operating profit will likely end up higher than the projected record high of 90 billion yen ($733 million).

But Honda Motor offers a contrast. Exports at the automaker accounted for a measly 3% in fiscal 2014, making currency fluctuations a small matter. Panasonic also has moved manufacturing overseas, particularly for products marketed there, shrinking the impact of foreign exchange rates to less than one-fifth the company's previous level.

"Exports are having a hard time growing in terms of volume, while its effects on capital investment and jobs are weak," said Masaaki Kanno at JPMorgan Securities Japan, referring to the yen's recent slide.

Nonetheless, publicly traded companies here expect combined pretax profit to grow 9% for fiscal 2015 to a second-straight all-time high. A weaker yen may even send profit growth into double digits.

Eoin Treacy's view 

The US Dollar completed a six-month range yesterday to break out to new recovery highs against the Yen, unwinding just about all of the credit crisis devaluation in the process. This remains a consistent trend and a sustained move below ¥120 would be required to begin to question medium-term scope for continued outperformance. 


Barrick deal fulfills Thornton aim of forging China link 

This article by Simon Casey for Bloomberg may be of interest to subscribers. Here is a section Barrick said Tuesday that Zijin will buy 50 percent of its interest in a Papua New Guinea mine for $298 million. Looking ahead, Toronto-based Barrick and Zijin will evaluate opportunities for future cooperation, including the potential to jointly construct mines. Barrick said it may take advantage of Zijin’s access to “low-cost capital from Chinese institutions.”

“A twenty-first century mining company with global reach and the intention to become an industry leader must, by definition, have a distinctive relationship with China,” Thornton said Tuesday in a statement.

Even before Thornton took over as chairman last year, succeeding Barrick founder Peter Munk, he was looking to build links with China. That’s a recognition of the nation’s growing importance not just as a user of key commodities but also as a producer. While Barrick has long been the world’s largest gold producer ranked by sales, Zijin is catching up fast and is now the second-biggest, according to data compiled by Bloomberg.

Eoin Treacy's view 

China is among both the largest consumers and producers of gold so it makes sense for Western companies to wish to gain access. They have an added incentive as access to additional capital for either acquisitions or expansion dwindles. Meanwhile Chinese companies are well capitalised and have access to attractive borrowing terms.

Barrick Gold needed this deal more than Zijin and the response of the respective share prices bears this out. Barrick has been ranging between $10 and $13.30 since November and pulled back from the region of the 200-day MA last week. It will need to sustain a move above that level in order to signal a return to demand dominance beyond the short-term  


Email of the day on how to make best use of the Service 

I am trialing your service. You speak in the daily service about your and David's favourite views. Could you tell me where I can find these and also could you recommend how I can get the best understanding of value from your site. Many thanks.

Eoin Treacy's view 

Thank you for taking the time to trial our service. FullerTreacyMoney is content rich so we understand that it may be overwhelming for new subscribers to figure out how best to use what we offer.

Every day we post a number of articles in Comment of the Day which we believe are of interest either in themselves or because they related to major issues or investment themes. We record a daily audio commentary to put what happened that day in context and to point our short-term movements in the market. As someone just getting acquainted with the Service I would suggest listening to one of the Friday Audios. This is when we put forward our longer-term outlook for the various different asset classes and would be the most accessible way of figuring out where we stand on various topics.   

I would also suggest playing around with the Chart Library. Add instruments you are interested in to your Favourites so you can monitor your portfolio and watch list. Our comprehensive globally oriented Chart Library is updated daily with close to 15000 stocks, bonds, indices, funds, currencies and commodities.

We also tell you exactly what we are doing with our own money both from a trading and investment perspective as it happens.

We spend a great deal of time identifying investment themes and have a strong record of being early. If you click on the Investment themes tab in the main menu (located in the middle of the black bar) you will be presented with two different category searches. Every article we write is categorised by whether it falls into one of our major themes (Energy, Technology, Precious Metals/Commodities, Autonomies, China, India, Japan etc.) as well as into individual “Tags”.

For example if you are interested in the broad China sector. The vast majority of the articles we write relating to the topic can be found under the China tab. If you are interested in an individual subject or company such as Citic Securities you can search the Tags for the name of the company or subject. You can also browse the Tags by clicking on one of the letters on the Investment Themes page.  


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  I think all investors will benefit from guest speaker David Brown’s new presentation. I learned from it, not least how to assess some familiar data more clinically.  In other words, he shows us how to think a little more clearly, particularly in terms of identifying bear markets near their tops.  This is never easy given all the emotions involved.  Many people jump the gun, as you will have seen over the last few years, which can leave them susceptible to overstaying when the important and often overlooked warning signs are flashing.  Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  

]]> Broker spotlight - Tesco, Sainsbury, Morrison, Weir, Beazley, Hiscox, Homeserve Wed, 27 May 2015 07:50:00 +0100 JP Morgan Cazenove upgraded niche insurers Beazley (LON:BEZ) and Hiscox (LON:HSX); both are now rated as ‘overweight’.

Beazley’s target price increases to 308p from 255p, and for Hiscox it is lifted to 950p from 801p.

Amlin’s (LON:AML) rating is left unchanged at neutral by the broker, though the price target is nudged slightly higher to 475p from 470p.

Homeserve (LON:HSV), the emergency repair firm, meanwhile, had its price target increased to 490p from 440p by Citigroup. A ‘buy’ rating was repeated.

Energy sector engineer Weir (LON:WEIR) was downgraded to ‘hold’ from ‘buy’, by Deutsche Bank.

Nomura’s shopping list remained unchanged as it assessed the supermarkets, though there were some minor adjustments.

Tesco (LON:TSCO) and Sainsbury (LON:SBRY) remain as ‘neutral’ picks though the targets mover up slightly to 195p and 220p respectively, while Morrison (LON:MRW) remains a ‘buy’ and its target increases to 280p from 260p.

]]> Northland Capital Partners View on the City Hummingbird Resources, Premier African Minerals, MotifBio, Rame Energy and others Wed, 27 May 2015 07:15:00 +0100 Motif Bio plc (LON:MTFB) – BUY*: Initiation of coverage

Market Cap: £20m; Current Price: 31p; Target Price: 89p

  • We initiate coverage with a BUY rating and 89p price target  
  • Global antibiotic resistance crisis: antibiotic resistance has become a major public health concern, with close to 50,000 deaths annually across Europe and the US attributed to the problem. Despite this looming crisis, the global pipeline of novel antibiotics is insufficient, creating an opportunity for specialist drug developers, such as Motif.
  • Iclaprim addresses desperate need for novel antibiotics: Motif’s flagship late-stage antibiotic, iclaprim, targets an underutilised mechanism of action making it less susceptible to developing antibiotic resistance. The drug has already been tested on over a thousand patients, providing considerable evidence to support its safety and efficacy. Iclaprim is expected to commence phase 3 trials in H2-2015. 
  • Grossly undervalued: we believe that Motif is grossly undervalued. Our risk-adjusted DCF analysis indicates a fair value of 89p/share, indicating 187% upside to the current share price. Moreover, Motif’s closest peer, NASDAQ-listed Paratek, trades at a substantial premium to our target value for Motif.

NORTHLAND CAPITAL PARTNERS VIEW: In the wake of a major global public health crisis driven by rampant antibiotic resistance, Motif’s late clinical-stage antibiotic, iclaprim, is set to fill a major market void. Having already been tested on over a thousand patients, iclaprim’s safety and efficacy is well supported. If approved, the drug could achieve over $1bn/year in sales. We initiate coverage with a BUY rating and 89p price target.  


Premier African Minerals (LON:PREM) – SPECULATIVE BUY: Initiation

Market Cap: £13m; Current Price: 2.4p

  • Production expected in June

NORTHLAND CAPITAL PARTNERS VIEW: Premier African Minerals (Prem) is now fully funded to move the RHA Tungsten Project, located in Zimbabwe, into production in June 2015. The open pit will have an estimated life of twenty-two months producing around 120,000mtu of tungsten. The funds generated from the open pit operation will be used to cover corporate overheads, delayed capex and as a contribution towards the cost of developing the larger underground operation at RHA. This underground operation is expected to result in the production of around 100,000mtu per annum for over twelve years. Based on the near term nature of production, the low operational and capital cost of the RHA project we initiate coverage of Premier African Minerals with a SPECULATIVE BUY rating.


Rame Energy (LON:RAME) – CORP: Raki/Huajache update

Market Cap: £9.1m; Current Price: 9p

  • Final grid certification pending; positive wind data on next projects
  • Certification for the final grid connection for the 15MW Raki/Huajache wind projects (where Rame has a 20% stake) is pending. The nature of the Raki/Huajache projects (they are electrically separate for qualification under the Chilean renewable energy regulations (PMGD) but share a newly built collector substation onsite) has led to a slight delay – this is the first such situation in Chile and has necessitated more legal definition and technical input. The minor modifications to the substation required are expected to be completed shortly.
  • EKA, the counterparty to the PPA, has agreed to delay the PPA start date to allow for the final completion. The JV partners (Santander Investment Chile Limitada and Rame) have now agreed on completion dates tied to a final commercial account with the EPC contractor Vestas. The agreement is still subject to final approval within Santander, which is imminent, and anticipates commencement of energy sales in the middle of June. 
  • Rame has been gathering further wind data at the next potential project sites in the Santander portfolio (133MW total). Following the installation of taller masts (112m) the actual data gathered over seven months indicates a ≥25% increase in annual energy production against previous assumptions for the next two projects (totalling 54MW). This could correspond to a significant increase in the NPV of the projects. The new data is being analysed to conclude turbine selection and Rame has started the consultation programme with local government and nearby communities.

NORTHLAND CAPITAL PARTNERS VIEW: The Raki/Huajache project is now nearing completion with the close out of the EPC contract and the modifications to the substation required to meet the PMGD regulations to gain certification. The project has been a learning curve for various parties and will mark Rame’s transition from an EPC to a niche Independent Power Producer (IPP) targeting 300MW in three years. The additional wind data on the next 54MW of projects suggests higher levels of energy production and hence a higher NPV on the next two projects. As previously argued, there is considerable funding interest in the Chilean renewables market and Rame has proven experience and expertise and a large portfolio of projects at various stages. This progress and potential is not reflected in the current price.


Hummingbird Resources (LON:HUM) – BUY: FY14 Results

Market Cap: £33m; Current Price: 35p; Target Price: 82.4p

  • Change in year end
  • Hummingbird Resources has changed its financial year-end to bring it in line with its subsidiary companies. It will move from the 31st May to the 31st December. As a result, the Company reports in these results as seven months to the 31st of December 2014. 
  • LBT for the seven months to 31st December 2014 was US$3.4m, which appears in line with the results for the twelve months to 31st May 2014. Net debt or the seven months to 31st December 2014 was US$20.6m, which is up from US$10.4m in the results for the twelve months to 31st May 2014.
  • Our forecasts will now be updated to bring them in line with the new year-end. Rating and price target maintained.

NORTHLAND CAPITAL PARTNERS VIEW: It is difficult to give a detailed review of these results compared to our forecasts due to the change in year-end but these results appear broadly in line with our expectations.


DiamondCorp (LON:DCP) – BUY: FY14 results

Market Cap: £35m; Current Price: 10.8p

  • From yesterday: FY results reflect development progress at Lace
  • LBT of £3.3m for FY14 was up from £2.6m in FY13 and higher than our forecasts of £2.4m largely due a £1.7m fair value adjustment that outweighed a reduction in corporate expenditure.
  • Net debt increased to £21.9m in FY14 from £11.6m in FY13 noticeably higher than the £14m we had forecasts due to increase in capex associated with a change in the development schedule.
  • Forecasts and price target under review. BUY rating maintained.

NORTHLAND CAPITAL PARTNERS VIEW: While these results reflected the development of Lace during last year, this year will see maiden production from the Upper K4 kimberlite at Lace that is expected to commence in H215. The impressive growth profile for DiamondCorp’s production will see production increase 547% in two years from around 68,000cts in 2015 to 440,000cts in 2017. We continue to believe the Company looks undervalued.

]]> Bond Traders Uncover Secret to Rates That Fed Just Does Not Get Wed, 27 May 2015 07:06:00 +0100 Bond Traders Uncover Secret to Rates That Fed Just Does Not Get 

This article by Daniel Kruger for Bloomberg may be of interest to subscribers. Here is a section:  That pessimism has been reflected in yields on the 10-year note, which are still well below their most recent peak of 3.05 percent last year. They were at 2.18 percent as of 6:30 a.m. in New York on Tuesday, according to Bloomberg Bond Trader data.

“The Fed has opinions; the market has positions,” said Jack McIntyre, who helps oversee $45 billion at Brandywine Global Investment Management in Philadelphia. “If the data doesn’t show marked improvement soon, they’re going to get pushed back into 2016.”

Fed Chair Janet Yellen said Friday she still expects to raise rates this year if the economy meets her forecasts, with a gradual pace of tightening to follow.

Eoin Treacy's view 

Everyone seems to be talking about when the Fed’s first rate hike will be. However I don’t think this is the most relevant question. The bigger question is when the Fed’s second rate hike will be. The economy is doing a bit better and wages are beginning to rise. One the other hand the disinflationary pressure of lower commodity prices and the stronger Dollar has so far stayed the Fed’s hand. 

The Fed will need to begin to remove monetary accommodation if it wishes to avoid inflating an asset price bubble. This might be the deciding factor in whether they decide to raise rates in September or not. Following the first hike they will then probably wait and see what effect it has on asset prices. It could be a while before they raise rates again and it is reasonable to assume the pace of the advance will be slower than what we saw from 2003 onwards. 


IMF Says Yuan No Longer Undervalued Amid Reserve-Status Push 

This article by Fion Li for Bloomberg may be of interest to subscribers. Here is a section:

The yuan still has some way to go before it can become a major reserve currency, former Federal Reserve Chairman Ben S. Bernanke said Tuesday in Taipei. The IMF requires that a currency is “freely usable” to be included in its SDR basket.

Endorsement by the Washington-based lender would lead to about $1 trillion being switched into Chinese assets over the next five years, according to an estimate this month from Standard Chartered Plc. AXA Investment Managers estimated some 10 percent of the $11.6 trillion of global reserves would flow into yuan assets, though it didn’t give a timeframe.

China should allow greater flexibility in its exchange rate, with intervention limited to avoiding disorderly market conditions or excessive volatility, said the IMF’s China mission, which is led by the lender’s deputy director of Asia and Pacific Markus Rodlauer. The statement said it contains the views of the IMF staff involved and has not yet been endorsed by the institution’s board.

The yuan rose 0.6 percent versus the dollar in the past 12 months, while Brazil’s currency dropped 28 percent and Russia’s slid 32 percent. China’s productivity will probably rise more rapidly than the rest of world so its exchange rate will need to appreciate to take account of that, David Lipton, the IMF’s No.2 official, said at a briefing Tuesday in Beijing.

Eoin Treacy's view 

By remaining relatively steady against the Dollar over the last year, the Renminbi has appreciated against a wide basket of other currencies not least the Euro, Yen and Korean Won which account for more of its trade than the US Dollar. The currency has unwound almost the entire 1993 devaluation suggesting that the CNY6 level relative to the US Dollar is probably about as strong as the Chinese want to see the currency. 


Email of the day on London housing prices 

Dear David, As you are based in London and well placed to view the situation do you agree with Jim Mellon's opinion that the London real estate sector is both overheating and over leveraged? He is also positive on Some areas of European property which is probably fairly consensus due to the current global QE game of pass the parcel from USA/UK to the EU. I can personally report from Spain a notable pick up in real estate activity from foreign buyers and the re emergence of many high street estate agents (closed since 2008/9) which is almost always a leading indicator on property activity (in both directions as I saw in Dublin 2008). I am currently happily invested in Foxtons which is still benefiting from the election feel good factor but watching it like a hawk (AKA Estate agent). best regards

Eoin Treacy's view 

David is on holiday at present in the beautiful Welsh countryside but I’ll bring your email to his attention when he returns. Here are my thoughts:

As a truly global capital London property has benefited from its attraction to foreign investors, the proximity of the City with its outsized pay structure, low interest rates on a global basis, an expanding population and the absence of a building boom have all contributed to London’s high price environment.

This chart of London property prices highlights the fact they have risen by 140% in 13 years from 2002. They have paused over the last year in what is so far a reasonably gradual process of mean reversion. 

This chart of UK Nationwide Average House Price Index has been largely rangebound since 2007 and will need to hold the £180,000 level if the breakout to new highs is to be given the benefit of the doubt.


Email of the day on robotics and the Eoins Favourites section of the Chart Library: 

Regarding your optimism of the robotics and tech story and the prospects of the likes of FANUC in Japan, could you recommend a UK based investment vehicle to access FANUC and its peers? Also could you explain the criteria on the "Eoin’s favourites" section of the chart library?, I am assuming that they are favourites as in best of class as opposed to just favourites/watchlists from a both long and short perspective? Best regards

Eoin Treacy's view 

Thank you for these questions which I’m sure will be of interest to subscribers. Let me take them in reverse order. 

Over the years every time I have posted a review of a stock market sector I created a section in my Favourites so that I could easily return to the list in future. At The Chart Seminar I use my Favourites to go through examples of Commonality and to review sectors of interest to delegates. One of the most common requests in the feedback we get is that subscribers would like to have access to my Favourites list rather than recreating their own. With that in mind I started recreating the various sections from my Favourites in the main Chart Library about six months ago.

All of my lists of Dividend Aristocrats, Dividend Champions and Dividend Contenders can be found here.  

The Eoin’s Favourites section contains the lists I have so far entered. It’s not complete yet but it is meant to function as a resource rather than a recommendations list. 


Audi claims first synthetic gasoline made from plants 

This article by Eric Mack for GizMag may be of interest to subscribers. Here is a section: In late 2014, Global Bioenergies started up the fermentation unit for a pilot program to produce gaseous isobutane from renewable biomass sugars such as corn-derived glucose. Gaseous isobutane is a sort of raw material for the petrochemical industry that can then be refined into a variety of plastics, fuels and other applications.

The next step in the process was to run the material through a conditioning and purification process, allowing it to be collected and stored in liquid form under pressure. Some of it was then sent to Germany to be converted into isooctane fuel, creating a pure, 100 octane gasoline.

"To me this is a historic moment," says Global Bioenergies CEO Marc Delcourt. "It is the first time that we have produced real gasoline from plants."

Isooctane is currently used as an additive to improve fuel quality, but could also be used a stand-alone fuel. Audi calls the final, refined form of the fuel "e-benzin" and claims that it burns clean due to its lack of sulfur and benzene. Also, its high grade enables it to power engines using high compression ratios for more efficiency.

Audi will test the fuel composition and conduct engine tests to see how it performs before eventually trying it out in vehicle fleets. Delcourt says he could see it being used in consumer cars on a large scale "very soon."

"We thinking we're bringing green-ness to a field that desperately needs green-ness," says Rick Bockrath, vice president for chemical engineering at Global Bioenergies. "It's basically how we're moving away from an oil-based economy towards something that has a renewable, sustainable future to it."

Eoin Treacy's view 

This follows a story from a month ago talking about how Audi produced a diesel fuel from air and water through a chemical process. Today’s story is a further iteration of this concept.

In the last month we have also learned that artificial photosynthesis has been achieved. Here is a section from an article by Lynn Yarris for Lawrence Berkeley National Lab: 

Scientists with the U.S. Department of Energy (DOE)’s Lawrence Berkeley National Laboratory (Berkeley Lab) and the University of California (UC) Berkeley have created a hybrid system of semiconducting nanowires and bacteria that mimics the natural photosynthetic process by which plants use the energy in sunlight to synthesize carbohydrates from carbon dioxide and water. However, this new artificial photosynthetic system synthesizes the combination of carbon dioxide and water into acetate, the most common building block today for biosynthesis.

“We believe our system is a revolutionary leap forward in the field of artificial photosynthesis,” says Peidong Yang, a chemist with Berkeley Lab’s Materials Sciences Division and one of the leaders of this study. “Our system has the potential to fundamentally change the chemical and oil industry in that we can produce chemicals and fuels in a totally renewable way, rather than extracting them from deep below the ground.”


Email of the day on posting webinars 

I enjoyed your presentation on Webinar very much, very interesting and relatively easy for me to follow. Is it possible you and David can post this type of visual and audio presentation daily, or at least on Friday's for the big picture long term outlook, instead of audio only presentations you do at the moment. Thanks for a great service, from a veteran subscribe.

Eoin Treacy's view 

Thank you for your kind words. I agree that creating a chart illustrated talk would be helpful and we just need to work out the mechanics. One of the greatest impediments would be making sure the audio is captured as a separate file so that it can be uploaded for subscribers who only wish to listen to the mp3 while on the go. I’ll look into how to generate a screencast and save it as a link we can make available to subscribers. If anyone has suggestions on how this might be achieved I be happy to hear them.


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  I think all investors will benefit from guest speaker David Brown’s new presentation. I learned from it, not least how to assess some familiar data more clinically.  In other words, he shows us how to think a little more clearly, particularly in terms of identifying bear markets near their tops.  This is never easy given all the emotions involved.  Many people jump the gun, as you will have seen over the last few years, which can leave them susceptible to overstaying when the important and often overlooked warning signs are flashing.  Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  

]]> Broker spotlight including DCC, Royal Mail, Burberry and Glaxo Tue, 26 May 2015 08:24:00 +0100 Energy distributor DCC (LON:DCC) gets an upgrade from analysts at German bank Berenberg today, who lifted the target price on the shares to £5,850 from £4,780.

It comes after the group's acquisition of Butagaz, France’s second largest LPG business and DCC’s largest acquisition to date.

"We believe the lower oil price is putting increased pressure on oil majors to dispose of downstream assets and view DCC, the market leader in Energy distribution in Europe, as a likely beneficiary," said the broker, rating the shares 'buy'.

Royal Mail (LON:RMG) was delivered an upgrade from City firm Cantor, which lifted the rating to 'hold' from 'sell'. Shares in the London-listed postal giant did well in early trades.

Cantor also rose its target price on the shares to 500p from 440p.

Heavyweight JP Morgan Cazenove repeated an 'underweight' rating on GlaxoSmithKline (LON:GSK) and lowered its target to 1,320p from 1,380p previously.

Fashion group Burberry (LON:BRBY) gets its target price slashed to 2,319p today from 2,513p by Goldman Sachs.

Last week, the group's full year results got a disappointed reaction from investors.

Positives on revenues and pre-tax profit were overshadowed by a 1.1% drop in adjusted profits, with FX costs weighing, and a cautious outlook statement.

]]> Northland Capital Partners View on the City: Mariana Resources, Premier African Minerals, W Resources and Melrose Resources Tue, 26 May 2015 07:04:00 +0100 Mariana Resources (LON:MARL) – SPECULATIVE BUY: Hot Maden update

Market Cap: £19m; Current Price: 2.5p 

  • Discovery of another zinc zone and extension gold-copper zone to the south
  • Mariana Resources and its joint venture partner Lidya has completed the first four holes of the Phase II drill programme and is reporting the assay results of the first two holes at the Hot Maden project.
  • The gold-copper shoot appears to be steeply dipping to the west and plunging to the south. Work to date has defined a strike of 225m and it remains open at depth and along strike.
  • HTD-08 was drilled to the north of the two Phase I discovery holes HTD-04 and HTD-05 and has discovered another area of zinc mineralisation located to the west of the gold-copper shoot. The hole then passes below the plunge of gold-copper shoot in to the area of zinc mineralisation to the east of the shoot. Results from the zinc mineralisation to the west of the shoot in HTD-08 include 90.9m at 0.78% Zn. Results from below the gold-copper shoot in HTD-08 include 7.2m at 2.1g/t Au and 1.6% Cu and 8m at 1.8% Cu. Results from the zinc mineralisation to the east of the shoot include 2m at 11.9% Zn.
  • HTD-09 was drilled between the two phase 1 discovery holes. This hole also appears to have also drilled below or on the margin of the plunge of the main gold-copper shoot but still returned relatively positive results that include 22m at 3.1g/t Au and 1% Cu.
  • HTD-10 was drilled between HTD-09 and HTD-05 to further test the continuity. Assay results are currently pending but a visual inspection of the core by the Company and its joint venture partner includes 66m of chalcopyrite and pyrite mineralisation in brecciated andesites with an additional 80m of sulphide bearing andesites.
  • HTD-11 was drilled to the south of the HTD-05 to test for a southern extension to the mineralisation. Assay results are also pending for this hole. However, a visual inspection of the core appears to indicate 125m of chalcopyrite and pyrite mineralisation located within brecciated andesite.
  • No change to rating.

NORTHLAND CAPITAL PARTNERS VIEW: These results are another positive development for Mariana Resources from its Hot Maden project, located in Turkey. HTD-08 has resulted in the discovery of another large area of zinc mineralisation to the west of the gold-copper shoot, with 90.9m at 0.78% Zn (Figure 1). This zinc mineralisation seems to be forming a halo around the gold-copper shoot that now appears to be plunging towards the south. As a result of the shoot’s plunge, it appears that the gold-copper shoot comes to surface between hole HTD-04 and HTD-08 and the gold-copper mineralisation observed in this hole is therefore narrower and lower grade. HTD-09 appears to have been drilled below the plunge of the gold-copper shoot (Figure 2) and a visual inspection of the core from HTD-10 also appears to confirm this with two larger zones of visually inspected sulphide mineralisation. The visual inspection of the core from HTD-11 is a further exciting development that appears to demonstrate the extension of the high grade gold-copper shoot to the south. Based on all the information to date the gold-copper shoot is steeply dipping to the west and also plunges to the south and extends over at least 225m. The mineralisation remains open along dip and along plunge towards the south, so there is further room for further upside.


Premier African Minerals (LON:PREM) – CORP: RHA update

Market Cap: £11.2m; Current Price: 2p 

  • Construction on schedule
  • Processing plant has been delivered to site on schedule
  • Management team induction has been completed.
  • Appropriate Process Technologies, the plant manufacturer, expects to be commissioning the plant by the 03/06/15.
  • Mining continues to progress well.

NORTHLAND CAPITAL PARTNERS VIEW: Premier African Minerals continues to stay on track for its ambitious production target of June for its 45% owned RHA Tungsten Project. With production imminent, Prem looks good value at these levels. 


W Resources (LON:WRES) – BUY: FY14 Results

Market Cap: £8.9m; Current Price: 0.28p 

  • From Friday: Maiden revenue of £1m
  • Maiden revenue of £1m during FY14. LBT increased to £0.6m in FY14 compared to £0.3m in FY13, as a result of the operational loss at La Parrilla and an increase in administrative and finance costs. Net debt of £0.6m in FY14 compared with net cash of £1m in FY13.
  • Company expects to receive approvals for the fast track mine development at La Parrilla in Q415.
  • AGM to be held on 19/06/15
  • Forecasts and price target remain under review, rating maintained.

NORTHLAND CAPITAL PARTNERS VIEW: No surprise in the FY14 results from W Resources. The weaker APT prices during the second half of the year lead the Company to complete a strategic review of its tailings operations with fast track development of hard rock operations at both La Parrilla and Régua cited has the best routes for the Company to achieve its objective of becoming a sizable tungsten producer. The Company is currently advancing its portfolio of projects in Spain and Portugal and further updates are expected shortly.


Management Resource Solutions (LON:MRS) – CORP: Financing update


From Friday: First replacement offer of debt financing received

MRS has received the first replacement offer of debt financing and anticipates receiving further competitive proposals within the next week. This follows the default by Halcyon Capital Management Pty on its contracted obligations to provide the funding for the acquisition of D&M Group.

The facility under negotiation is significantly less than that contracted from Halcyon, reflecting the lower level of equipment financing to be replaced, significantly reduced transaction costs and a smaller working capital facility. MRS and the vendors have also agreed in principle to revise the consideration structure so that c. 52% of the purchase price will be paid on completion (AUS$4m) with the balance deferred up to three years. As a result, the working capital position of MRS post acquisition should be improved on March’s terms.

The lending proposal from an established Australian bank is subject to a number of pre-conditions and the entering into of definitive agreements but it is anticipated that MRS will be able to complete the acquisition by the first week of July.

Given the focus on completing the acquisition, MRS has not been in a position to identify new directors and hence Murray d’Almeida has agreed to defer his retirement as non-executive chairman for the immediate future.

]]> Broker spotlight - BP, BHP Billiton, Daily Mail & General Trust, QinetiQ, Amur Minerals Fri, 22 May 2015 10:05:00 +0100 Investors becoming convinced bond yields have seen their lows? again! Fri, 22 May 2015 07:15:00 +0100 Investors becoming convinced bond yields have seen their lows? again! 

Thanks to a subscriber for this report from SocGen which may be of interest to subscribers. Here is a section: 

An integral part of our Ice Age thesis has been to overweight longer dated government bonds as deflation becomes an ever more immediate threat. That strategy has produced superior returns, even relative to global equities. Clearly at some point this 33 year bull market in government bonds will end, but why are market commentators just so keen to pronounce its demise? It is because the continued bond bull market mocks the paucity of the recovery with its accompanying deflation, thereby threatening the asset class they really want to be bullish about ? the equity market.

I have read a lot of very convincing commentary in recent weeks to the effect that we have seen the lows for 10y+ government bond yields with various explanations surrounding the dollar?s recent decline and the recovery in the oil price, etc., etc. And to be sure we did certainly enter some sort of twilight world recently when German 10y yields sank to 0.05%. The sharp dip in German yields below Japanese yields, even at the 30y end of the curve, was also accompanied by a bizarre dive in Spanish yields well below the US ? a curious state of affairs indeed. All that has happened though over the past few weeks is that some sort of normality has been restored (see chart below).

I do not see this as the end of the bull market for long government bonds. Despite the oil price rise, core inflation remains extraordinarily low at a time when the global economy is still struggling to gain traction. Aside from continued growth disappointments in the West, the outlook for the oil price and the Chinese economy will be key. And on that latter score we remain far more concerned about China than most market commentators. And notwithstanding the (over)-confidence evident among central bankers, Europe and the US remain only one recession away from outright deflation. 

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

This is a big question and it wouldn’t be a market without some disagreement but we rely on the price/yield action to justify our view. If we look at the economic data we are presented with, it would be easy to conclude that there are deflationary pressures and yet if we look around there is evidence of new wage demands which are a major source of inflationary pressure. If I think about the people I know who have moved jobs, it was not because they had to move but because they were enticed with a better pay offer elsewhere. With so much debate I believe it is more important than ever to have some long-term perspective. 


OPEC Preview & Revising Down 

Thanks to a subscriber for this report from the team at DNB. Here is a section:

As written above, Saudi Arabia see no reason to let higher cost producers continue to produce while themselves, a low cost producer, should cut oil production in a supply driven downturn. If you cut your output when demand is dropping you do not give your market share to someone else, but if the price drop is due to a supply growth story the situation is different. There were stories also leading up to the last OPEC meeting in November that meetings were held with non-OPEC producers in order to gather support for production cuts also from countries outside of OPEC. It turned out that there was no appetite to contribute from any non-OPEC nations then. The situation may of course however be different this time since now all oil exporting countries have felt the pain of lower prices while that was really not the case last autumn.

Again we are seeing in front of the OPEC meeting, which will be held on June 5, that some OPEC countries are trying to rally support from several non-OPEC producers to contribute to production cuts. Algeria and Venezuela are reportedly in dialog with Azerbaijan, Kazakhstan, Mexico and Oman in order to achieve a collective cut in production between OPEC and non-OPEC producers. The key is however Russia, which is still the world’s largest crude oil producer at 10.7 million b/d. A tiny percentage cut from Russia is more worth than a large percentage cut from Oman to put it that way.

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

There is no sign yet that the Baker Hughes Rig Count has stopped falling despite the fact that oil prices are now trading in the region of $60; having been closer to $45 in March. As a result we don’t yet know what price will encourage fresh expenditure on drilling but we can conclude it is higher than $60. As a result it is still too early to conclude at what point the market will return to equilibrium. If the Saudi Arabians feel the same way they have no incentive to curtail supply.


CalAmp and the Internet of Things 

Thanks to a subscriber for this note from Canaccord Genuity on CalAmp which may be of interest to subscribers. Here is a section: 

We hosted upbeat investor meetings with CalAmp CEO Michael Burdiek on April 29th, in the mid-Atlantic region. Following our meetings, we maintain our belief CalAmp is well positioned for solid long-term growth in the Industrial IoT market through both organic initiatives that include entering new markets and through potential acquisitions. In fact, we believe CalAmp’s recent $150M low-interest rate convertible offering provides the company with increased financial flexibility for its M&A strategy focused on accretive acquisitions in targeted IoT verticals. We remain impressed with management’s longer-term strategy to build upon its strong hardware portfolio and offer an increasing mix of higher-margin recurring revenue solutions. Finally, as evidenced by the strong Q4/F2015 results, we believe CalAmp’s Wireless DataCom business is well positioned to drive strong F2016 and F2017 sales and earnings growth driven by ramping sales to Caterpillar, growing insurance telematics sales, ramping international sales, a growing product portfolio, an increasing list of new customer opportunities, and anticipated steady growth of higher-margin recurring revenue sales. We maintain our BUY rating and $26 PT. 

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

The Internet of Things represents a myriad group of themes often with little relation to one another. CalAmp for example focuses on automobile connectivity particularly for those with large fleets of vehicles they need to monitor. On the other hand Sensata Technologies produces the sensors that allow diesel vehicles in particular to run self-diagnostics. Both are leveraged to the auto sector and both are in the sensor and enhanced communication segments that contribute to the Internet of Things theme but they are not strictly related. 


Email of that day on investing in the Global Corporate Autonomies Fund 

Just a note 

I managed to get this investment done via Davy's stock brokers in case you have any other Irish clients who might be wondering ... 

I have a self-administrated pension and as part of pension trust I have an authorised stock trading account with Davy's 

Davy's completed the set-up of the Autonomies fund a few weeks ago on their system for me and completed the purchase of the Autonomies fund for me through my pension structure... 

All good. I am very pleased to have you on board as the fund manager steering the ship :) 

Do you have an expected return you would like to be returning on a yearly basis? 

Do you have a chart in the chart library that tracks the fund?

Eoin Treacy's view 

Thank you for letting me know and thanks also for your interest in the Global Corporate Autonomies Fund. The fund holds 100 of the 146 Autonomies we have identified at any one time and is reweighted quarterly. In line with the most up to date research from the Cass Business School the fund adheres to an “equalish” weighting so that winners are run for longer and losers are given a little more room to recover. 

We invest in consistent trends for as long as they remain consistent and the Autonomies have provided plenty of those over the last number of years.  A systemic approach is taken to reweighting so that the fund remains diversified between sectors. Overextensions relative to the MA of more than 30% are viewed as opportunities to lighten while reversions to the mean are viewed as buying opportunities. It is envisaged that the fund will outperform the MSCI World by a few percent per annum. I’ve added both the Accumulation and Income versions to the Library. 


Speaking Engagement 

Eoin Treacy's view 

Here is the link to the presentation I delivered at the Round-the-Clock-Trader webinar event this afternoon. 

]]> Broker spotlight - M&S, Burberry, Hargreaves Lansdown, Zoopla Thu, 21 May 2015 08:21:00 +0100 Analysts topped up their targets for Marks & Spencer (LON:MKS) this morning after the retailer’s full-year results on Wednesday.

The figures were pleasing from the high street giant and Marc Bolland’s outlook was confident, as Jefferies noted.

“We believe M&S is still fundamentally in the early stages of a multi-year recovery,” said the broker, which raised its share target price by 35p to 660p

Barclays joined in and scrapped its ‘underweight’ rating on M&S and lifted its target price by a hefty 210p to 600p. 

Share in M&S were changing hands for 587p apiece at the time of writing.

Burberry (LON:BRBY) remains in fashion with RBC Capital Markets, despite yesterday’s cautious outlook from chief executive Christopher Bailey.

However, the broker did knock 50p off is 1900p share price target.

“We like Burberry's leadership in digital, outwear and scarves,” RBC said.  

“But 2016 is shaping up to be another year of pedestrian earnings growth for Burberry, which should put a lid on the shares.”

Nomura nudged up its target for Zoopla (LON:ZPLA) shares by 35p to 285p.

The online estate agent Zoopla (LON:ZPLA) yesterday reported record revenues in the first half of the year.

However, it noted said it had experienced a membership slide due to increased competition from new rival

JP Morgan stayed ‘neutral’ on Hargreaves Lansdown (LON:HL.) after Wednesday’s results from the financial services firm, which showed profits were 0.2% lower, despite record net inflows of £2.75bn.

The broker added 50p onto its original 1050p target price for Hargreaves shares. 


]]> Northland Capital Partners View on the City Ferrex Plc, Safestyle UK, Stratex International and Lombard Risk Management Thu, 21 May 2015 07:25:00 +0100 Stratex International (LON:STI) – BUY*: Goldstone Resources update

Market Cap: £5m; Current Price: 1p; Target Price: 6.8p 

  • Auger programme defines two new target zones
  • Goldstone Resources (GRL.L), a company where Stratex owns a 33.45% interest, has announced an operational update at its Homase/Akrokerri Gold Project, located in Ghana. Goldstone has completed a 1,332 hole auger sampling programme over eight high-priority gold targets located along strike from the 602,000oz Au Homase/Akrokerri gold deposit.
  • Results have defined two target zones (Figure 1): 1) a 1,500m anomaly at the AK02 prospect, located to the southwest of the Homase/Akrokerri gold deposit; 2) a 800m anomaly, the AK04 prospect that may be an extension of the AK02 anomaly. Both targets appear to occur over a flexure of the structural zone that hosts the existing resource to the northeast.
  • Three lines of shallow reverse circulation drilling (1998-1999) may have intersected part the AK02 zone, with results including 5m at 1.3g/t Au from 39m (99AKRC083), 6m at 1.6g/t Au from 24m (98AKRC028) and 2m at 3.1g/t Au from 21m (98AKRC021). However, the results from the auger programme suggest that the strongest anomalies have not been drill tested to date.
  • Historic RC drilling over the 800m AK04 anomaly only took place over 100m of strike and had mixed results that include 1m at 8.4g/t Au from 20m (00AKRC109) and 3m at 2.3g/t Au from 40m (00AKRC104). 700m strike of the anomaly has yet to be tested. Close-spaced infill auger sampling is now underway to support drill target definition.
  • No change to forecasts, rating or price target.
  • Figure 1: Map of the Homase/Akrokerri Gold Project

NORTHLAND CAPITAL PARTNERS VIEW: It is positive to see that Stratex’s acquisition of a 33.45% interest in Goldstone Resources already demonstrating the potential for further upside at its Homase/Akrokerri Gold Project. The initial resource of 602,000oz Au at Homase/Akrokerri forms an important base for Goldstone to build on by discovering additional proximal satellite orebodies, creating a larger resource base on which an economic operation can be established. The Company is focusing its efforts on establishing near surface gold oxide mineralisation that can be combined with the existing 100,000oz Au oxide resource and mined and processed at low cost, creating a potentially high margin operation.


Ferrex (LON:FRX) – CORP: Nayega update

Market Cap: £6.88m; Current Price: 0.6p 

  • Completion of the DFS for the accelerated start up
  • Ferrex has completed a Definitive Feasibility Study (DFS) for an accelerated start up and defined a maiden Ore Reserve at its Nayega Manganese Project, located in northern Togo.
  • The DFS sees a reduction in both capital and operational costs combined with an accelerated start-up of a 250,000t operation, improving the project’s economics.
  • A maiden Ore Reserve of 8.48mt at a grade of 14% manganese (Mn) has been defined.

NORTHLAND CAPITAL PARTNERS VIEW: The completion of the Definitive Feasibility Study and the establishment of a maiden Ore Reserve at the Nayega Manganese Project, located in Togo, are major milestones for Ferrex. The updated study results in the simplification and modularisation of the plant but other elements of the study remain largely unchanged. A third party review of the DFS is currently underway as part of the financing due diligence, and further details of the DFS will be published once the review is completed and the mining permit is issued.


Safestyle (LON:SFE): Trading Update

Market Cap: £154m; Current Price: 198p 

  • Current trading in line with expectations 
  • Following on from the positive statement at the time of finals in March, the business appears to have made a good start to the new financial year where order intake was +2.7% YoY in the first four months and this compares to strong prior year comparatives. 
  • Alluding to cost increases relating to glass prices and costs relating to regulatory requirements however a sales price increase was introduced in January 2015 which helped offset some of these cost pressures so the Board is confident in delivering growth in revenue and profits in the current year. 
  • In FY14, the business delivered +9% YoY revenue growth to £136m on the back of increasing the average unit sale prices and average order value, and combined with a 7% reduction in operating costs the business produced PBT of £16.8m, +10% YoY and c. 3% ahead of consensus forecasts. Consensus is looking for c. 4% PBT growth in FY15. Given the positive start to the new year, this looks achievable. 

NORTHLAND CAPITAL PARTNERS VIEW:  The share price has performed well since the final results in March +14% and since listing in December it is +87%. The stock rating has improved and the shares now trade on c. 11.5x consensus FY15 EPS from below 10x previously, and still not overly demanding in our view. With a prospective dividend yield of c. 5% the story should continue to attract attention in our view. 


Lombard Risk Management (LON:LRM) – Prelims

Market Cap: £30.0m; Current Price: 11.4p 

  • FY results in line; departed founder and CEO returns as NED
  • Revenue +5.4% to £21.5m (recurring flat at 42%). Licence revenue +1% and recurring revenue +5.8%. Adj. EBITDA down 23.3% to £4.6m; PBT down 47.7% to £2.3m and basic EPS down 58% to 0.87p. Capitalised R&D spend was £5.1m (FY14: £5.3m).
  • Net cash down fractionally at £2.2m with cash generated from operations of £5.7m (+£0.5m) offset by capitalised R&D, loan repayments (£0.7m) and dividends (£0.2m). Proposed final dividend of 0.045p bringing the FY DPS to 0.08p (+6.7%). 
  • Outlook: Positive with further initiatives from the European Banking Authority with more revenue from ALMM and LCR expected. First contract delivered for the new US Federal Reserve reports FRY-14 and more revenues expected in FY16 along with the IOSCO changes. Further growth expected from the Compliance area. Larger contribution from the partner channel. Record recurrent revenue at c. £9.5m and order book at £5.9m.
  • Following the announcement that John Wisbey, founder, CEO and major shareholder (38%), was stepping down with immediate effect (19/05/15), it has been announced that he will continue to serve as a NED. John McCormick has stated his intention to resign as a NED. Philip Crawford will act as Executive Chairman on an interim basis.

NORTHLAND CAPITAL PARTNERS VIEW: Results overshadowed by the sudden departure of John Wisbey, founder, CEO and major shareholder, on Tuesday and his return as an NED today. Wisbey has indicated no immediate intention to reduce his holding (38%) but he is likely to be perceived as overhang in the market. Unsurprisingly, Lombard Risk has been closely identified with Wisbey and hence the selection of a new CEO is key. FY results were in line with forecasts that were revised down in March following some regulatory delay that resulted in some contract deferrals. The level of capitalised R&D spend remains considerable and there was also a noticeable spike in operating costs in H2. We would look for a return on that investment. 

]]> Big, Old and Ugly Stocks Look Pretty to Bank of America Thu, 21 May 2015 07:10:00 +0100 Big, Old and Ugly Stocks Look Pretty to Bank of America 

Here is the opening of this topical column from Bloomberg: Go after the ones “active” managers won’t touch

At best, you would hope the consultant you hired to help pick out mutual funds had your specific investment goals and risk tolerances in mind. Or at worst, you would hope the consultant had something more in mind than a raging desire not to get fired.

But that's the delightfully cynical theory being floated by Bank of America Merrill Lynch strategist Savita Subramanian. In her assessment, the key motivation by consultants may be to justify their existence by making clients believe they are getting something for their money when they invest in an active fund with way higher fees than passive funds that simply track benchmark indexes.  

"Signs of reluctance to take career risk in the financial services industry are popping up everywhere," Subramanian wrote in a report. The fear-of-firing could be driven by the last financial crisis, she wrote, or the difficulty of picking individual stocks in a macro-driven world,  "or the convergence of headwinds facing active equity investors over the last few years." 

Much has been written about those headwinds facing active managers, who have watched investors pull money from their funds for nine straight years while piling into passive funds. Only 21 percent of active U.S. stock funds beat their benchmark last year, the worst rate on record at Morningstar. 

David Fuller's view 

The first graph in Bloomberg’s article says it all in terms of investor preferences.  


The Weekly View: Trends and Counter-Trends 

My thanks to Rod Smyth for his ever-interesting letter, published by RiverFront Investment Group.  Here is a brief sample:

US bond yields bottoming: We have argued for a year (most recently in our March 2nd Weekly View) that US bond yields need to be understood in a global context and that the US yields were being held down by German yields.  The sharp rise in German yields (10-year yields have risen from ) to ).8% in just two weeks) has led to a rise in US yields despite the weaker economic data.  Reflecting on the chart below, which shows the yields on the highest quality US corporate bonds, we believe that the low in early 2015, which matched the low in mid-2012, could mark the bottom for this cycle.

David Fuller's view 

Subscribers will be able to see that chart in The Weekly View, but here are some government yields to keep an eye on: USA 30Yr, UK 30Yr, German 10Yr, Swiss 10Yr and Japan 30Yr.  My guess is that they have all bottomed for the cycle, but inevitably one never has confirmation of that until well after the event and yields are considerably higher. 

This item continues in the Subscribers’ Area, where The Weekly View is also posted.  


Email of the day 

On mean reversion towards the MA:

“Dear David, Thank you for your service. I note your recent decision to open a long in the H Shares index. You have consistently mentioned that the best time to enter longs is after mean reversion to the 200 day moving average, however the H Shares index is still considerably above the 200 DMA, and I wonder why you felt confident in opening the long here. Best wishes,”

David Fuller's view 

I am delighted that you appreciate the service and thank you for a very interesting question, certain to be of interest to a number of other subscribers.

This item continues in the Subscribers’ Area.


Good News America: Saudi Vies for Great Satan Status in Iran 

My thanks to a subscriber for this informative article by Roula Khalaf for The Financial Times.  Here is the opening:

It’s not quite the Great Satan — at least, not yet. But it’s an enemy that the Iranian regime and the people can unite against

Now that Iran’s Islamic government is close to a nuclear deal with the US and other world powers, the traditional “death to America” slogan is losing its lustre but the loathing of Saudi Arabia is gaining appeal.

Though this is happening by accident more than design, driven by a stand-off in Yemen between Iranian and Saudi proxies, it is blissfully convenient for Iran’s rulers.

Iranians never learnt to hate America despite their leaders’ best efforts to whip up resentment. It certainly won’t grow easier to convince them of devious American plots if a nuclear accord is signed.

When it comes to Saudi Arabia, however, Shia Iranians are happy to bash their Sunni neighbour. Persian-Arab enmity goes back centuries; Iranian-American hostility is only a few decades old. “People in Iran love Americans, and Saudi Arabia is the one country that everyone hates,” one political analyst tells me. “If it’s not the Great Satan it’s only because it’s not that important.”

Indeed, in my own meetings in Iran, there are sometimes awkward moments: someone casually drops a disparaging remark about Arabs then realises I come from Lebanon and reassures me Iranians love the Lebanese but less so Gulf countries. In Lebanon, of course, Iran has Hizbollah, its most prized proxy.

I heard Saudi leaders denounced as “immature children” who bomb fellow Muslims in Yemen and join hands with jihadi terrorists in Syria and Iraq. It’s impossible to convince anyone that the Islamic State of Iraq and the Levant (Isis), which threatens the Saudi regime possibly even more than it threatens Iran, is not a Saudi creation. The notion that Saudi Arabia should reject an Iranian role in the affairs of other Arab states also meets with incredulity. A common language (Arabic) doesn’t give one country the right to claim authority over another, say Iranian officials.

David Fuller's view 

Thanks to technology, the USA no longer has the same vital interests in the Middle East, although it would understandably like to prevent the region’s wars and terrorism from spreading westward.  If ongoing Sunni-Shia conflicts threaten the Middle East’s oil production, the USA can quickly ramp up its shale oil output, avoiding a repeat of recessions caused by earlier energy crises.  

Many other countries could do the same.  If they follow the USA’s energy policies, from shale oil and gas to solar-led renewables, in 20 to 30 years time the Middle will have the luxury of consuming all of its own oil and gas.

The FT article is posted in the Subscribers' Area.    


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  I think all investors will benefit from guest speaker David Brown’s new presentation. I learned from it, not least how to assess some familiar data more clinically.  In other words, he shows us how to think a little more clearly, particularly in terms of identifying bear markets near their tops.  This is never easy given all the emotions involved.  Many people jump the gun, as you will have seen over the last few years, which can leave them susceptible to overstaying when the important and often overlooked warning signs are flashing.  Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  


Chart Library Filter System Release 

Eoin Treacy's view 

We’d like to thank subscribers for their patience in waiting for the release of the Chart Library Filter System. We introduced it last night and you will find the Filter button next to the Search in the black menu stripe across the top of the Chart Library homepage.


PayPal Will Pay $25 Million to Resolve CFPB Bill Me Later Claims 

This article by Carter Dougherty for Bloomberg may be of interest to subscribers. Here it is in full: 

PayPal Inc., a unit of EBay Inc., will forfeit $25 million in restitution and fines to settle Consumer Financial Protection Bureau claims that it illegally enrolled customers in an online credit product.

“PayPal illegally signed up consumers for its online credit product without their permission and failed to address disputes when they complained,” CFPB Director Richard Cordray said in a statement Tuesday. “Online shopping has become a way of life for many Americans and it’s important that they are treated fairly.”

PayPal, which announced plans to split from EBay last year after activist investor Carl Icahn said the parent firm was slowing its growth, often signed up customers for its credit product without their consent, CFPB said. The company also failed to post payments properly, lost payment checks and didn’t resolve billing disputes.

In particular, CFPB said, PayPal used deferred-interest promotions, which push off payments to a later date, to rope in customers. The company then made it difficult to avoid the deferred fees, which customers can typically do by paying off a loan before a specified date, the agency said.

Amanda Miller, a spokeswoman for PayPal, said the company “takes consumer protection very seriously.”

“We continually improve our products and enhance our communications to ensure a superior customer experience,”

Miller said in an e-mail. “Our focus is on ease of use, clarity and providing high-quality products that are useful to consumers and are in compliance with applicable laws.”

PayPal agreed to refund $15 million to consumers who were unjustly charged and pay $10 million in penalties.

Eoin Treacy's view 

When the Treacy family were signed up for a PayPal credit account with a $1000 limit it came as a surprise since we were not consulted in any way and only found out about it when the first bill arrived. It struck us as an aggressive marketing strategy but since we pay the balance on our credit accounts at the end of every month anyway, it did not discomfort us in any measurable way. Online forum comments suggest that other people did not have the same experience. 


Los Angeles Lifts Its Minimum Wage to $15 Per Hour 

This article by Jennifer Medina and Noam Scheiber for the New York Times may be of interest to subscribers. Here is a section: 

The increase, which the City Council passed in a 14-to-1 vote, comes as workers across the country are rallying for higher wages and several large companies, including Facebook and Walmart, have moved to raise their lowest wages. Several other cities, including San Francisco, Chicago, Seattle and Oakland, Calif., have already approved increases, and dozens more are considering doing the same. In 2014, a number of Republican-leaning states like Alaska and South Dakota also raised their state-level minimum wages by ballot initiative.

The effect is likely to be particularly strong in Los Angeles, where, according to some estimates, almost 50 percent of the city’s work force earns less than $15 an hour. Under the plan approved Tuesday, the minimum wage will rise over five years.

Mayor Eric Garcetti of Los Angeles, right, on Monday. He said in an interview on Tuesday that “we’re leading the country.” Credit Nick Ut/Associated Press

“The effects here will be the biggest by far,” said Michael Reich, an economist at the University of California, Berkeley, who was commissioned by city leaders to conduct several studies on the potential effects of a minimum-wage increase.

“The proposal will bring wages up in a way we haven’t seen since the 1960s. There’s a sense spreading that this is the new norm, especially in areas that have high costs of housing.”

Eoin Treacy's view 

One might argue that California’s low tax on property, at 1% of value, has done more to inflate the cost of housing than any other single factor. However that is not up for conversation since real estate is one of the primary avenues for family wealth accumulation. It is more politically expedient to push for higher wages and not just a little higher. $15 is among the highest minimums in the world.

Restaurants have been experimenting with drones for delivery, iPads for ordering and slimming down the number of waiting staff. A doubling of the wage base over the next five years will act as a major incentive to reduce headcount and to maximise productivity per worker. We can expect to see a lot more robots in the customer service sector not least in the food preparation sector. 


Email of the day on adjusting BHP Billiton price chart after the demerger 

I trade BHP Billiton (BLT) from time to time. This morning, as I was looking at trade setups, I noticed that the historical prices for BLT provided by your service (and the Daily Telegraph, which has as its source AJ Bell), compared to prices provided by Bloomberg (and the Financial Times), are very different. For example, as shown in the attachment, your service has the December and January lows at just below 1300, whilst Bloomberg have them below 1200. Also, the March and April 2015 lows in BB are at approximately 1300 compared to your 1400. In fact, all the numbers seem to out by about 100. The current price is the same, so perhaps there is an historical adjustment made as a result of the demerger of South32 in one data service and not another. Could I ask you to look into it and let me know whether that is in fact the case, or if there is another reason at work?

Eoin Treacy's view 

Thank you for your detailed email and I can confirm that the price charts have now be rebased to alleviate the step which occurred as a result of the demerger. 


Speaking Engagement 

Eoin Treacy's view 

I’ve agreed to give at talk for the upcoming Round-the-Clock-Trader webinar event on Thursday. The topic of my talk will be currency volatility and its role in equity market returns which I anticipate taking 35mins. Since I’ll be the last speaker, starting at 8:00pm British Summer Time, we’ll have plenty of time to talk about whatever it is delegates are interested in. It’s free to sign up just follow this link.  

]]> Finsbury gets its Just Desserts A bright year for LiteBulb Wed, 20 May 2015 10:27:00 +0100 BLU Financial and Operational Results, BLV Acquisition, CBUY Contract Win, FIF Proposed Acquisition, FITB Final Results and New Kiqplans, FXI Contract Win, IDOX Trading Update, LBB Final Results, MARL Drilling Progress and Metallurgical Results, MXO Criteria and Final Results, NOP Completion of Farm Out, PPIX Patent Application, PROX New Contract, PLI Agreement and Q1 2015 Results, RSTR Final Audited Results, STR Admission to AIM and Raise £10m

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.


BELLUS Health, a drug development company focused on rare diseases, reported its financial and operating results for the first quarter ended March 31, 2015. Enrolment completed for the KIACTA™ Phase III Confirmatory Study in AA amyloidosis, with a total of 261 patients participating in the study; approximately 75 percent of the required events to complete the KIACTA™ Phase III Confirmatory Study have occurred; the study is on track to conclude in 2016. The company concluded the quarter with a cash position of $11.5m, which should enable the Company to finance its operations beyond the end of the Phase III Confirmatory Study for KIACTA™. Revenues amounted to $0.79m for Q1 2015, (Q1 2014:$0.47m). The increase is primarily attributable to sales-based royalty revenue received in 2015 in relation to the VIVIMIND™ license agreement with FB Health. The increase is also attributable to higher revenue recognised for accounting purposes in 2015 in relation to the service agreement with Auven Therapeutics for KIACTA™. R&D expenses amounted to $0.32m for Q1 2015, (Q1 2014 $0.46m). The decrease is primarily attributable to lower expenses incurred in relation to the development of Shigamab™ during the first quarter of 2015. Net finance income amounted to $0.24m for Q1 2015, (Q1 2014:$0.17m). The increase is primarily attributable to an increase in the foreign exchange gain that arose from the translation of the company's net monetary assets denominated in U.S. dollars, due to the appreciation of the U.S. dollar versus the Canadian dollar during Q1 of 2015.

Belvoir Lettings (LON:BLV)

Belvoir Lettings, one of the UK's largest lettings franchises, announced the joint franchisees of the existing Belvoir Oldham and Bury offices have completed the acquisition of Rayson Wilshaw, a leading estate and lettings agent in Bury. Total consideration will be £0.25m, of which 50 percent will be being paid in cash funded by Belvoir Lettings and the remaining 50 percent to be paid as a deferred consideration over a 4 year period. Having opened the Belvoir Bury office in January 2013, this franchise has gone from strength to strength, acquiring the neighbouring Oldham office in January 2014 and winning the 2014 Belvoir New Franchise of the Year award.  This acquisition will more than double the size of their business, expanding their lettings portfolio to over 1,000 properties and enabling them to gain a firm foothold in the estate agency market in Bury. This acquisition further reinforces Belvoir's strategy to support franchisees to grow the Belvoir brand across the UK in lettings and estate agency. As a result of the acquisition the Company's managed service fee revenue is projected to increase by £33,000 per annum and interest on the loan will be charged at 8.95 percent.

cloudBuy (LON:CBUY)

cloudBuy, the global provider of cloud-based e-commerce marketplaces and B2B buyer and supplier solutions, announced the signing of an agreement with the Ministry of Economy of a Middle Eastern state to provide a cloudBuy investor website and marketplace. The initial contract value is $0.85m with further potential as 40 additional eligible government organisations have the opportunity to join once the solution is live.  The investor website is similar in scope to cloudBuy's existing Invest Northern Ireland website with the addition of a cloudBuy marketplace for local business and government agencies. It will support businesses seeking to set up and trade in the region, facilitate B2B trading and provide a single point of contact for individuals and organisations to book and attend trade shows and other events. The first phase of the system is planned to go live this summer.

Finsbury Food Group (LON:FIF)

Finsbury Food Group, a leading UK specialty bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels, announced the proposed acquisition of the business, production assets, stock and customer list of Johnstone's Just Desserts from administrators FRP Advisory. Johnstone's, a supplier to the leading national coffee shop chains, produces cake, including its renowned caramel shortcake. This proposed acquisition signals the escalation of Finsbury's entry into the foodservice cake channel and in particular the high growth national coffee shop segment. This is in line with the Group's channel diversification strategy, indicated at the recent acquisition of Fletcher's in 2014. Completion of the acquisition is conditional on the finalisation of property lease details which both the Group and FRP are working on to complete as soon as possible. Finsbury will provide staff in relation to manufacturing and finance, to serve the purpose of ensuring a smooth integration process until completion Finsbury intends to work with the Johnstone’s management team at its existing site in East Kilbride to build on its strong customer relationships and market position and drive growth focusing on its high quality, well respected, coffee shop product ranges. 

Fitbug Holdings (LON:FITB)*

Fitbug Holdings, the provider of online personal health and wellbeing services, provided its final results for the year ended 31 December 2014. The company has successfully capitalised on the rapidly growing B2C market for wearable technology: Sales agreements signed with international blue chip retailers, including Sainsburys, Target, BestBuy and Amazon. Product offering developed to include pioneering digital coaching service - "Kiqplan™"- received positively by industry participants leading to a range of high profile sales and marketing opportunities: Integrated into the Samsung Digital Health platform - included as one of the strategic partner applications in Samsung's S Health platform, available globally and included as an inaugural member of the Jawbone Marketplace which features best-in-class devices and apps spanning categories including fitness, sleep and food. There was a 208 percent increase in revenues to £2.3m, but a loss after tax of £3.7m, which reflects the significant investment in development and marketing. The company also announced that it has expanded its pioneering Kiqplan offering through the launch of four new training programmes (Sun's Out Guns Out, Bikini Hot, Your first 5k and 10k run ready), which work together with wearable health technology to help users achieve their health and wellness goals. This launch, which brings the total number of Kiqplans to ten, complements the Company's existing range of digital health solutions which are focused on encouraging a healthy lifestyle through the provision of an integrated and quality service.   

Fusionex International (LON:FXI)

Fusionex, an international provider of software specialising in Analytics and Big Data, announced its latest Fusionex GIANT win with Brother Industries, a multi-national electronics and electrical equipment company headquartered in Nagoya, Japan and listed on the Tokyo Stock Exchange. The contract, which is on a multi-year basis, is the 25th win for GIANT and demonstrates the increasing traction of the Group's Big Data product. Established in 1908, Brother Industries produces communications and printing equipment, including printers and all-in-ones, at manufacturing and sales facilities in more than 40 countries and regions worldwide, allowing it to implement global business strategies and activities. Brother Industries will leverage Fusionex GIANT to keep track of its daily operations across different geographies and time zones; transforming real-time operational data into actionable insights that promote better and more well-informed decision making. In tandem with this, Brother Industries will also utilise Fusionex's data platform to maintain close ties with, manage and enhance its customer engagement experience with its global network of agents and customers. The comprehensive Fusionex GIANT platform will help Brother Industries understand the 'journey', preferences and other aspects of its partners' and customers' profiles, so that Brother Industries is able to plan more effectively with better insight and foresight.


Idox, a leading supplier of specialist information management solutions through its two divisions, Public Sector Software and Engineering Information Management (EIM), announced a trading update for the six months to 30 April 2015. Public sector sales, which accounts for three quarters of group revenues, were up 14 percent, but EIM revenues were down 28 percent, resulting in group revenues being flat when compared to the first half of 2014.  Net debt was £9.7m compared to £15.8m at 31 October 2014.  The Public Sector division has continued to grow its managed services and hosting offering with two significant contract wins; Pendle and Watford, and has made further market share gains replacing 24 competitor systems.  Over £2m in revenues have been achieved from outsourced service delivery for the UK General Election. The public sector team has embarked on a new national initiative to be launched in July which will open up new revenue opportunities. The Digital Spirit acquisition has been successfully integrated and will deliver its synergies as planned in the second half. In response to the downturn in market conditions in the engineering business, the division was restructured at the turn of the year, resulting in approximately £3.0m in annualised saving across the Group.

Litebulb Group (LON:LBB)

LiteBulb, the branded product developer, announced audited results for the year ended 31 December 2014, a year of transformational growth and investment to establish a solid platform for future growth and profitability. In addition, trading in the first four months of 2015 is ahead of budget with revenue for the four months to 30 April 2015 up 152 percent to £5m (from £2m in 2014). In line with the trading statement of 27 January 2015, revenue increased 170 percent to £21.9m (2013: £8.1m) - and H2 delivered a positive EBITDA of over £2m. There was a gross profit of £7.9m (2013: £3.3m), leading to an EBITDA loss reduction of £0.2m to £0.4m (2013: £0.6m) and cash at bank as at 31 December 2014 of £4.2m (2013: £1.8m). The group acquired Go Entertainment (April 2014) and Concept Merchandise (December 2014), and produced strong organic revenue growth across existing divisions: Litebulb Studios (formerly Rizon Studios) up 67 percent to £1.0m (2013: £0.6m), Bluw up 34 percent to £5.5m (2013: £4.1m) and Meld up 10 percent to £7.8m (2013: £7.1m). The current trading - ahead of budget saw revenue for four months ended April 2015 up 152 percent to £5.0m (2014: £2.0m) and a strong response from retailers to new 2015 product ranges.

Mariana Resources (LON:MARL)*

Mariana Resources, the exploration and development company with projects in South America and Turkey, announced the completion of the first two holes (HTD-08 and HTD-09) of the Phase II drill program, carried out by JV partner Lidya Madencilik Sanayi ve Ticaret A.S. and the receipt of preliminary metallurgical testwork results from Lidya, at the Hot Maden gold-copper project in eastern Turkey. Drill hole HTD-08 was collared approximately 50m to the north of the high grade gold-copper mineralisation intersected in HTD-04, drilled at 60 degrees to the east to a depth of 273m.  Quick logging has identified a primary sulfide-bearing stock work / breccia zone between 123m and 169m downhole, with a massive sulfide zone (chalcopyrite-pyrite) from 131m to 136.7m downhole.  In parallel, logging and sampling of drill hole HTD-09, a 50m step-back hole under HTD-04 drilled to 361m, has commenced.  A second drill rig is now operating on site and is expected to accelerate the advancement of the Phase II drill program. The preliminary metallurgical testwork was performed on crushed drill core obtained from the Phase I drill program, with the initial testwork including: basic leach analysis on selected intervals from all drill holes (SGS's analytical technique BLE563), modal analyses on samples from drill holes HTD-01, HTD-04, and HTD-05, and a bench flotation test on one composite sample sourced from drill holes HTD-01, HTD-04, and HTD-05.   Key results include: a basic heap leach resulted positive gold recoveries, however a flotation process appears preferential to recovering gold and copper. The primary sulfide phases from modal mineralogical analysis are chalcopyrite, pyrite/marcasite, sphalerite, galena, and trace bornite. Importantly, no arsenic-bearing phases such as enargite were detected.  Gold occurs either as free grains, or is associated with pyrite, and is fine grained (20 to 75 microns) from Scanning Electron Microscope images. High (93 percent) copper recovery was achieved from a rougher concentrate prepared from the composite sample.  The test indicated a "clean" concentrate free of deleterious elements could be produced. (Conditions used for the test were 85 percent of material at -75 microns, pH of 11.5, with reagents 50 g/t 3418A and 10 g/t MIBC).


MX Oil, the oil and gas investment company announced that the pre-qualification criteria have now been released by the National Hydrocarbons Commission for mature onshore conventional fields in Mexico.  This is the third phase of Bid Round 1 and part of Mexico's energy reform, which is intended to boost domestic oil and gas production by enabling foreign companies to invest in Mexico's Energy industry, ending a 76 year old state monopoly.  MX Oil's joint venture company with local operator partner Geo Estratos is anticipated to make an application to pre-qualify for Phase 3 in the coming weeks and, given the announced criteria, is confident that this can be achieved without the need to bring in a production partner. As part of Phase 3, a total of 26 Land Contract Areas in the states of Chiapas, Nuevo Leon, Tabasco, Tamaulipas and Veracruz will be awarded to companies that satisfy the pre-qualification requirements and win the subsequent tender process.  MX Oil is primarily focussed on Type 1 blocks, which include onshore fields with estimated resources of around 100 mmboe.  The key criteria for the award of Land Contract Areas applicable to the JVCo include: Minimum equity of $5m for each Type 1 block and Joint ventures that do not comply with the $5m equity threshold will qualify with a minimum equity threshold of $3m. The company also notes the recent statement made by the relevant departments of the Government of Mexico, including the National Hydrocarbons Commission, that details of the tender and contract models for the extraction of hydrocarbons under the third phase of Bid Round 1 (Phase III) will be announced on 12 May 2015.  Phase III is focused on the tender for mature onshore conventional fields in Mexico, which MX Oil intends to participate in. The Group reported an operating loss of £0.85m (2013: £92,000) and made a net loss from continuing activities of £1.15m (2013: £51,000) during the year to 31 December 2014. Net cash outflow from operating activities was £o.65m (2013: £0.22m), with net cash outflow from investing activities at £0.77m (2013: £o) and net cash inflow from financing activities of £2.83m led to cash and cash equivalents as at 31 December of £1.52m.

Northern Petroleum (LON:NOP)

Northern Petroleum confirmed that, further to the announcement on the 5thMarch 2015, the farm out of the Italian onshore permit, Cascina Alberto, to Shell Italia E&P, a wholly owned subsidiary of Royal Dutch Shell, completed on the 7th May 2015. The Italian regulatory authorities have approved the transfer of 80 percent of the permit interest to Shell and Shell has paid to Northern Petroleum $0.85m as agreed under the farm out agreement. The work programme has started with the re-processing of existing seismic data to determine whether there is a requirement for further seismic acquisition to help delineate a proposed target for an exploration well. Shell will carry Northern Petroleum for the costs of the exploration campaign, which will include a carry on the acquisition of any new seismic until the seismic costs reach $4m and a carry on an exploration well until the well costs reach $50m.

ProPhotonix (LON:PPIX)

ProPhotonix, a designer and manufacturer of LED illumination systems and laser diode modules with operations in Ireland and the UK, announced that it has filed a patent application on its unique heat sink for optical modular array assemblies. The invention is a water-cooled heat sink design suitable for a range of different optical module arrays and sizes that allows for easy replacement of individual optical modules.  Design features include precise orientation of the optical modules to ensure an exact electrical connection to an external driver circuit.  In addition, the thermal management capacity allows a large density of optical modules, which enables high optical output for many applications. The invention allows for easy removal and replacement of modules in the field by non-technical personnel, thus alleviating the need for skilled technicians for repair. Importantly, the heat sink has been designed to ensure that the "back end" of the optical module (e.g., the end of optical module where the emitter is located) is circumferentially orientated within a given opening. This allows for light sources of optical modules to be precisely connected to an external circuit every time, even when optical modules are being replaced. In conjunction with optical modules, typical applications for this invention include computer-to-plate printing, maskless lithography and laser marking.

Proxama (LON:PROX)

Proxama, the international mobile commerce company specialising in proximity marketing and provider of end-to-end payment solutions for card issuers, announced that it has been awarded an exclusive contract with Exterion Media UK, Europe's largest privately owned out-of-home media owner. Proxama is also delighted to announce that it has been awarded a £1m grant by Innovate UK as part of their aim to support the UK's high streets. Proxama's proximity marketing division, which focuses on connecting consumers to retailers and brands via Bluetooth Beacon technology, will provide Exterion with a managed service to deliver proximity marketing services to consumers' smartphones, whilst using public transport.  The contract is for up to three years and the first phase will look to build on the successful trial conducted on buses in Norwich late last year, with a roll-out to UK major cities. Exterion has a nationwide portfolio of advertising environments in the largest urban areas in the country. They also own media sites in numerous high footfall locations in London and are the sole providers of advertising space on Transport for London's bus and Underground services.

ProMetic Life Sciences (TSX:PLI)*

ProMetic Life Sciences, a biopharmaceutical company with globally recognised expertise in bioseparations, plasma-derived therapeutics and small-molecule drug development, announced that it has entered into a strategic manufacturing agreement with Emergent BioSolutions. The long-term manufacturing agreement provides ProMetic with access to additional cGMP capacity in an FDA-licensed facility, located in Winnipeg, Canada. ProMetic will use this capacity for the development and manufacture of plasma-derived biopharmaceuticals using ProMetic's proprietary plasma purification platform, known as Plasma Protein Purification System. The additional product manufacturing capacity will provide the ability to process up to 250,000 litres of plasma annually with the potential for further expansion should the parties agree. This 15-year manufacturing agreement involves an initial annual minimum payment of approximately $4m per year, rising to $7m per year in 2018 and to $9m per year by 2021, for an aggregate total of minimum fees exceeding $100m over the life of the contract. The agreement allows for a flexible approach for the use of resources up to that value, and any additional resources used beyond that minimum cost will be charged on an as-used basis. ProMetic generated a net loss of $20.4m in Q1 of 2015 (Q1 of 2014:$8.7m). Of the $20.4m net loss incurred in Q1 of 2015, approximately $9.5m comes from the variation in fair value of the warrant liability and the loss on debt extinguishment which do not affect cash. In addition, the corporation increased its investment in R&D costs incurring a total of $9.9m in the Q1. Total revenues for Q1 of 2015 were $1.9m compared to $5.7m for Q1 of 2014. Revenues from the sale of goods amounted to $1.4m compared to $3.2m for the same period in 2014. Service revenues were $0.5m for the quarter ended March 31, 2015 compared to $2.5m for the quarter ended March 31, 2014. The decrease is due to lower product sales and the fact that services billed to NantPro are being eliminated upon consolidation due to its acquisition from a control perspective in May 2014.

Rightster Group (LON:RSTR)

Rightster Group, the online video distribution and monetisation network, announced its preliminary results for the twelve months ended 31 December 2014. The company has shown significant growth over the course of the year including the completion of two strategic acquisitions and noteworthy additions to its client roster. Total Transaction Value has risen from £11.0m in 2013 to£16.9m in 2014; net revenue has increased from £6.2m in 2013 to £8.7m in 2014 and gross profit has grown from £0.6m in 2013 to £3.9m in 2014. Average monthly video views have risen to 1.2bn in H2 2014 (369 percent growth from H2 2013) and content owners have increased from 850+ to 2,500+. Publishers have grown from 7,500+ to 10,500. Highlights in Q1 of 2015 include the following: Average monthly video views for Q1 2015 estimated at 1.6bn and by the end of Q1 2015, the company surpassed 72m subscribers and reached 124m unique users worldwide across its YouTube Network (the latter being a 125 percent increase from the end of Q1 2014). The group also secured a partnership with Microsoft Lumia and extended its global partnership with 20th Century Fox, to include 10 additional international territories. The group also provided an update on its proposed placing announced on 30 April 2015, each at 18 pence per Placing Share to raise approximately £5m before expenses. The Loan Notes will, when issued and subject to the satisfaction of certain conditions, be convertible into new ordinary shares at a price of 18 pence per new ordinary share.

Stride Gaming (LON:STR)

Stride Gaming, the multi-branded online bingo-led operator, announced its intention to raise at least £10m and seek admission of its ordinary shares to trading on AIM. Stride Gaming is a UK focused, real money, bingo-led online operator, using its proprietary and purchased software to provide online bingo and related gaming activities to players. The group operates a multi-branded strategy which includes the online bingo brands Kitty Bingo, Lucky Pants Bingo, Bingo Extra, Jackpot Café, Jackpot Liner, King Jackpot, together with the online casino brands  Spin and Win and Magical Vegas. The Group has experienced significant organic growth of its proprietary brands with NGR up 40 percent between Q1 to Q4 2014. Additionally, the group has been acquisitive with the acquisition of the business and assets of Table Top Entertainment in September 2014. The group also owns an Italian online gaming business, Baldo, which has an Italian gambling licence, as well as a 24.5 percent interest in a licensed Spanish operator, QSB Gaming Limited. The directors believe there are a number of growth opportunities for the group, both organically and through acquisition. The overall UK gambling market is substantial and is forecast to pass £3bn of NGR by 2016. The UK online gaming market is estimated to grow approximately £1.6bn of NGR by 2016 with bingo-led online gaming estimated to account for 32.3 percent of the UK online gaming market. With the implementation of the point of POC tax in the UK, and the general increase in regulation, the directors believe that a number of smaller-scale online bingo operators will suffer a significant impact to their margins from the POC tax that will make it difficult for them to continue operating. The directors also believe that with bingo generally attracting a predominately female demographic, the pressure on margins created by the POC tax will also lead to the larger multi-product online gambling operators prioritising their marketing spend more towards their core product leaving opportunity for a bingo-led business to increase market share both from organic growth and through acquisition.

]]> Broker spotlight - Babcock, Crest Nicholson, Aberdeen Asset Management, Tate & Lyle Wed, 20 May 2015 08:00:00 +0100 Public sector outsourcer Babcock (LON:BAB) received a double broker boost today.

Analysts from Citi and Deutsche Bank both upped their share price targets for the business, which reported a 32% jump in annual underlying pre-tax profit this week.

Citi scrapped its ‘underweight’ rating on the the engineering and support services group to a ‘hold’ and ramped up its target price by 50% to 1850p.

Deutsche Bank – with its ‘buy’ rating - now expects the shares to reach 1200p, up from its earlier target of 1150p. Shares currently trade at 1100p. 

Crest Nicholson (LON:CRST) is also in favour with Deutsche Bank.

The house builder reported a jump in first half sales yesterday and the broker reckons shares are worth 402p.

Goldman Sachs no longer has a ‘buy’ stance on Aberdeen Asset Management (LON:ADN).

The heavyweight broker has a ‘neutral’ rating on the fund manager.

Aberdeen has experienced hefty outflows from its funds recently  amid uncertainty over emerging markets.

However, the firm still posted a 25% rise in half-year profits earlier this month.

Elsewhere, Exane BNP Paribas turned sour on sugar company Tate & Lyle (LON:TATE). 

Analysts at the French firm now have an underweight rating on Tate’s shares and a target price of 550p.

]]> Northland Capital Partners View on the City Amphion Innovations,Rame Energy, Sunrise Resources, Amino Technologies and others Wed, 20 May 2015 07:24:00 +0100 Rame Energy (LON:RAME) – CORP: Financing update

Market Cap: £8.3m; Current Price: 8.25p

  • Financing of Cerro Coihue (Cerro Bayo) complete
  • Executed binding terms with Anden Re. Capital SpA regarding the $4.7m funding facility (as announced 13/03/15) for the Cerro Coihue (previously described as Cerro Bayo) off-grid wind project in Chile that is to supply power to a producing mine owned by TSX listed Mandalay Resources.
  • All conditions have been satisfied including final agreement and execution of the EPC contract and the signing of a revised PPA to reflect the revised project timescales. Project completion is now expected in Q4. Rame is acting as the EPC contractor and construction has commenced. Three Vestas V44 600kW wind turbines have been purchased and will be fully refurbished and optimised for local conditions. The other components are ready for overhaul whilst new power electronics, that will improve power quality and delivery, have been delivered.
  • Anden Re has invested $3.5m of equity for a 75% holding. In addition, it has provided Rame with a $1.2m debt facility to fund Rame’s equity participation. The parties are also moving towards terms for a broader relationship for potential financing of Rame’s off-grid and smaller on-grid project portfolio.

NORTHLAND CAPITAL PARTNERS VIEW: Important step in the process for the Cerro Coihue (previously known as Cerro Bayo) off-grid wind project but potentially more generally for Rame’s off-grid and smaller on-grid project portfolio. The relationship with Anden Re complements Rame’s framework agreement with Santander Investment Chile Limitada for larger projects. The companies have co-financed the 15MW Raki and Huajache projects, where Rame has a 20% equity participation, that are mechanically complete. There is considerable funding interest in the Chilean renewables market and Rame has proven experience and expertise with a large portfolio of projects at various stages. This is not reflected in the current share price.

Amphion Innovations plc (LON:AMP) – CORP; Appointment of broker

Market Cap: £9.6m; Current Price: 5.75p

  • From yesterday: Appointment of Northland Capital Partners as broker
  • Yesterday, Amphion Innovations plc, the developer of medical and technology businesses, announced the appointment of Northland Capital Partners Limited as joint broker to the company.

NORTHLAND CAPITAL PARTNERS VIEW: Amphion Innovations specialises in developing companies in the medical and technology sectors. The group has a significant shareholding in seven partner companies developing proven technologies targeting substantial commercial marketplaces. Two of these companies have recently listed on AIM, namely Motif Bio plc and Kromek Group plc.


Clontarf Energy (LON:CLON) – Corp: FY14 results

Market Cap: £3.5m; Current Price: 0.75p

  • No surprises in FY14 results
  • LBT decreased to £0.3m in FY14 from £3.2m in FY13, which included £2.5m of impairments.
  • Net debt of £0.4m in FY14 compares with £1.9m in FY13 with the reduction largely the result of the conversion of a £0.6m loan into equity and proceeds of £0.6m from equity financing in FY14.

NORTHLAND CAPITAL PARTNERS VIEW: No surprises in this set of results from Clontarf Energy as it continues to engage with the parties concerned regarding its interest in the Tano 2A Block located in offshore Ghana. Its other projects in Peru and Bolivia remain lower key in the current sector environment. The Company has also engaged with a number of intermediaries to seek to fund and develop the Company and will provide further updates in due course.


Sunrise Resources (LON:SRES) – CORP: H115 results

Market Cap: £1.5m; Current Price: 0.2p

  • Sunrise continues to use capital efficiently
  • LBT of £0.15m for H115 was slightly down from £0.16m in H114. Net cash decreased to £0.24m in H115 compared to £0.53m in H114.
  • At the County Line Diatomite Project, deeper sampling is scheduled for the summer and a review of commercial options for future development is ongoing.
  • At the Bay State Silver Project, drill permitting has been initiated.
  • At the Cue Diamond Project and Bakers Gold Projects, Native Title and drilling programmes have been delayed by heavy rains, this work is now expected to commence in H215.

NORTHLAND CAPITAL PARTNERS VIEW: Sunrise Resources continues to make progress across a portfolio of projects at a minimal cost. The Company continues to be one of the more efficient explorers on AIM for its use of capital. Near term production from the County Line Diatomite project would be a transformational event for the Company, as the cash flow generated from this operation could then be used towards the discovery and development of other mineral deposits, reducing dilution for shareholders.

Amino Technologies (LON:AMO) – BUY: Acquisition

Market Cap: £70.9m; Current Price: 132p; Target Price: 150p

  • Acquisition expands offering into ‘TV everywhere’
  • Acquisition of Booxmedia Oy, a cloud TV platform, for an initial €7.9m (€7.2m in cash and €0.7m in shares) and performance based deferred consideration (50/50 in cash/shares) of up to €2.6m over the next three years. Booxmedia’s FY14 (Dec) revenue was €1.4m and EBIT of €0.2m with c. 54% of recurring revenue and €0.5m net cash on the balance sheet. Booxmedia is based in Helsinki with 18 staff and management will stay with the business post acquisition.
  • Acquisition provides Amino with a proven cloud-based platform that can enable the delivery of ‘TV everywhere’ to a full range of IP connected devices, including smartphones, tablets, games consoles, STBs and home gateways. It also expands Amino’s addressable market to include mobile operators, OTT providers, media companies and broadcasters. Existing Booxmedia customers include Finnish quad play operator DNA Oy (also a shareholder prior to the acquisition) that offers a ‘TV everywhere’ smartphone and tablet service.
  • Given Booxmedia’s relatively early commercial status, the acquisition has limited impact on P&L forecasts for FY15 and FY16 but cash is adjusted down (FY15: £16.9m from 21.7m; FY16: £19.5m from £24.8m). BUY rating and 150 price target remained unchanged.

NORTHLAND CAPITAL PARTNERS VIEW: Acquisition broadens Amino’s product offering as well as its addressable market. The consumption of content is becoming increasingly fragmented across multiple device types (TV, tablet, smartphone etc) and Amino needs to be able to offer its customers a comprehensive solution. The consideration price looks reasonably full, reflecting Booxmedia’s relatively early stage of commercialisation, but Amino remains comfortably capitalised to fund the progressive dividend policy and other bolt on acquisitions. We maintain our BUY rating and 150p price target.

]]> Roger Bootle: More Markets and Less Government Should Be At the Heart of Cameron Economic Agenda Wed, 20 May 2015 07:16:00 +0100 Roger Bootle: More Markets and Less Government Should Be At the Heart of Cameron Economic Agenda 

Here is a section of this excellent article from The Telegraph, and a PDF version is in the Subscribers' Area:

Like Lady Thatcher, David Cameron’s first administration was dominated by an overarching macro objective, the need to stabilise the public finances.

Of course, there is much more work still to be done on this. But the debt ratio will soon peak. I know, it will still be too high. But all the markets require is confidence that it will be coming down. They will have it. Whisper it quietly only among friends, but the fiscal crisis is over.

Yet man cannot live by fiscal stability alone – and neither can governments. The second administration, while carrying on the work of fiscal stabilisation, should have at its heart something different. It should be about markets: allowing them greater rein where they work well, introducing them where they don’t currently exist and, yes, intervening to reform them where they work badly.

What’s more, there should be a moral tone to this objective. One of the most galling aspects of Labour’s election campaign was its assumption of moral superiority. The implication was that business was tainted because it was selfish, while state spending, regulation and interference were “caring” and altruistic. Labour is yet to appreciate that markets have a better record of delivering the goods for ordinary people.

The Conservative Party knows this – but it still has a long way to travel. The areas where markets need to be helped to work better are headed by the labour market. The previous government made huge strides, but there is more to be done.

Reducing the cap on welfare payments and increasing the tax-free allowance will continue to tip the balance of incentives in favour of work.

Tightening up the requirements for trade unions to gain support before calling strikes, and enabling employers to employ temporary replacement labour, will tilt the balance against damaging strike action which penalises the many to promote the interests of the few.

In addition, there needs to be major action on tax structures as well as levels. Reducing the top rate may bring few plaudits but it is necessary to reverse Gordon Brown’s cynical and destructive rise, and to make plain the commitment to keeping talented people in this country. This, too, has a moral aspect. Except in times of national emergency, the government has no right to take virtually half of a person’s income in tax. Concede this point to the Left and the overall battle will be lost.

David Fuller's view 

This is excellent advice, and not just for David Cameron’s economic agenda.  Any aspiring economy would benefit from Roger Bootle’s guidelines, not least those of Europe.  


Vortex bladeless turbines wobble to generate energy 

My thanks to a subscriber for this fascinating article from Gizmag.  Here is the opening: Looking somewhat like a giant reed gently swaying in the wind, the new Vortex bladeless wind-driven generator prototype produces electricity with very few moving parts, on a very small footprint, and in almost complete silence. Designed to reduce the visual and aural impact of traditional spinning-blade turbines, this new device takes advantage of the power contained in swirling vortices of air.

Many opponents of spinning wind turbines point to their supposed danger to birds and other flying animals, as well as their rather noisy operation and – particularly in commercial installations – their enormous size. Though these may well be excuses by those who prefer to stay with older electricity generating technologies that they know and trust, standard wind-driven turbines do have these issues and this tends to hold back their universal acceptance and use.

This is where the creators of the Vortex bladeless believe that their device has the advantage. A relatively compact unit, it relies on the oscillation of its reed-like mast in reaction to air vortices to move a series of magnets located in the joint near its base to generate electricity.

Though obviously not as efficient as a high-speed, directly wind-driven turbine, this is offset by the fact that the Vortex has fewer moving parts and is, according to the creators, up to 80 percent more cost effective to maintain. Coupled to the notion that it supposedly has a greater than 50 percent manufacturing cost advantage and a 40 percent reduction in its carbon footprint compared to standard wind turbines, the system also seems to offer direct economic advantages.

We've explored a number of bladeless wind-turbines before – the Solar Aero turbine being one (though, by definition, not really bladeless as it merely covered the spinning blades with a housing) and the Saphonianbeing another. The latter being more of a true bladeless "turbine," it still required hydraulic actuation of pistons to generate electricity, so its efficiency was probably not all that great (and, to be perfectly frank, it was not strictly a turbine either as it had no spinning parts).

The Vortex, on the other hand, is purported to take advantage of the swirling motion of wind and not direct force like the aforementioned units. This means that it can generate energy from the repeating pattern of vortices (known as the Kármán vortex street), which are generated as the air separates to pass by a blunt body, such as the Vortex structure itself.

This also means that groups of Vortex units can be huddled closer together as the disruption of air movement in the wind stream is nowhere near as critical as it is when positioning standard, blade-driven wind turbines. This will also help ameliorate the inherent efficiencies in each unit as they can be grouped much closer together than their standard turbine counterparts and, therefore, potentially generate more power per square meter.

David Fuller's view 

For years I have ranted about contemporary windmills and wind farms, because of their expense, maintenance costs, inefficiencies, noise, ecological damage to birds and other wildlife, and visual blight on the landscape.  In contrast, the vortex bladeless turbines are a vast improvement. 

What never ceases to amaze me, although I comment on it all the time, is the incredible inventiveness of people all over the world, in response to a needs-must requirement to protect ourselves and our planet from potential calamities such as manmade global warming and ‘peak oil’.  In fact, only a decade ago it was still fashionable to assume that the cost of crude oil would continue to rise remorselessly, ruining our economies in the process.  Today, thanks to technology, ever higher oil prices are only an OPEC pipedream. 

This item continues in the Subscribers’ Area.


Email of the day 

On an ETF for industrial commodities:

“Hello David/Eoin Is there an etf for industrial commodities? Many thanks,”

David Fuller's view 

Thanks for an interesting question.  You will see a number of ETFs in the ‘Funds’ section of our dropdown menu in the Chart Library, and it really depends on exactly what you are looking for.

This item continues in the Chart Library.


How Is India Doing? 

My thanks to a subscriber for these bullet points from Goldman Sachs.  Here is the opening:

The long-term positive macro story is still largely intact

We met with a number of technocrats in place in key ministries who seem

well in command of their brief. We heard no complacency as yet on the need

for reforms.

Quiet progress on longer-term structural reforms in some areas (National

Infra Fund, reducing energy subsidies, direct transfer of subsidies).

Significant progress on increasing coal production and dealing with

transport/environment clearance bottlenecks.

Recognition that the MAT was an 'own goal' and committed to defusing the


Feeling that corruption levels are diminishing and ease of doing business is


Strong conviction that some big-ticket reforms will in fact occur, especially

GST, where we heard widespread agreement that if passed, this would have

significant positive impact.

 Near-term progress has been slower than expected

Passing reform legislation through Parliament is proving an obstacle (the

opposition is focusing on polarizing issues like land reform, and retain control

of the Upper House)

Lack of progress in addressing balance sheet problems for PSU banks and

corporates, limiting appetite for private investments

General sense that onshore monetary conditions are tight and, in our view,

over-optimism about near term RBI easing

Rural incomes/spending under stress due to weak commodity prices and

lower government spending, with no obvious near term relief

David Fuller's view 

These and the other points mentioned sound reasonable to me.  India (weekly & daily) from the time Narendra Modi threw his hat into the electoral ring in September 2013, before peaking at 30000 in early March of this year.  I have maintained that it would experience a well deserved consolidation before eventually moving higher. 

This item continues in the Subscribers’ Area, where the list of bullet points is also posted..


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  I think all investors will benefit from guest speaker David Brown’s new presentation. I learned from it, not least how to assess some familiar data more clinically.  In other words, he shows us how to think a little more clearly, particularly in terms of identifying bear markets near their tops.  This is never easy given all the emotions involved.  Many people jump the gun, as you will have seen over the last few years, which can leave them susceptible to overstaying when the important and often overlooked warning signs are flashing.  Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  

Euro Drops After ECB Official Pledges to Speed Up Bond Purchases 

This article by Rachel Evans for Bloomberg may be of interest to subscribers. Here is a section: 

Improving economic data from the euro area has fueled speculation policy makers may curtail asset purchases before a September 2016 end date, lifting the euro from a 12-year low.

ECB President Mario Draghi attempted to quell such talk last week, saying the program would be implemented “in full.”

The euro fell versus 15 of 16 major peers as Coeure’s comments about injecting money more quickly into the euro-zone economy emerged early Tuesday in the text of a speech delivered in London the day before. ECB Governing Council member Christian Noyer said separately in Paris on Tuesday that the central bank is ready to extend Q

“The euro has lookeE if needed.

d pretty shaky after those comments, especially that they’re front-loading the effort of QE,” said Fabian Eliasson, head of U.S. corporate foreign-exchange sales at Mizuho Financial Group Inc. in New York. “The overall direction is fairly skewed toward the downside.”

Eoin Treacy's view 

Having embarked on an 18-month process of re-expanding its balance sheet, it would be cavalier of the ECB to think that it had achieved success in reigniting economic activity after only three months. There is little prospect of the ECB ceasing its purchase program as long as the size of the balance sheet is still below €3 trillion but they may alter the types of instruments they purchase. 


Musings From the Oil Patch May 19th 2015 

Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report. Here is a section: 

It is possible that what is happening in China with respect to EVs and hybrid vehicles is a precursor of how America’s vehicle sales and distribution models will work. In response to air pollution and vehicle congestion in major cities, China has begun a strategic initiative to build EVs and is encouraging foreign manufacturers and their partners to join the effort. China expects as many as 40 new EV models go on sale in the country this year, triple the number of new EV models available two years ago. As described in an article in Business Week, Toyota Motors (TM-NYSE) will only market an EV in China as it is committed to hydrogen-powered vehicles as a better alternative to EVs elsewhere. In fact, its dedication to hydrogen-powered vehicles is why Toyota ended its all-electric Rav4 EV crossover partnership with Tesla Motors, Inc. (TSLA-Nasdaq).

China has new emission guidelines that call for a 28% improvement in average per vehicle fuel consumption by 2020, something that likely requires manufacturers to embrace plug-in EVs. Since China controls the permitting of new manufacturing facilities, automakers are almost forced to embrace EVs if they want to have plants capable of manufacturing new vehicles. According to an analyst with A.T. Kearney in Shanghai, China, all the new EV models coming to market may enable the industry to get 1-2 million EVs and other new energy vehicles on the country’s roads by 2020. That achievement, however, will still fall well short of the government’s target of five million EVs being on the road.

While China may be the model, the technology still is short of delivering a reasonably-priced EV with a traveling range similar to that of an ICE vehicle, or roughly 200 miles on a single charge. There is also the issue with fast charging of EVs, as drivers will measure charging times against the length of time they must spend at the gas pump filling up their ICE vehicle. Environmental concerns are an important consideration for EVs, but they were largely bought by people more interested in impressing their neighbors with their statement about environmental concern than their economics. The fact these clean-fuel vehicles are now being traded in for conventionally-fueled vehicles at an accelerating rate suggests that economics are clearly trumping environmental considerations. Whether this is a good thing or not remains to be seen, but the fact it is happening tells us how powerful the pocketbook is for consumer purchasing decisions. It also tells us that auto manufacturers need to address the shortcomings of EVs and hybrids if they want them to become a competitive auto market segment. Then again, those manufacturers may just elect to let the draconian U.S. fuel-efficiency standards force consumers to buy these less desirable vehicles.

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

As the world’s largest car market, China’s regulatory structure will make waves around the world. If China is insisting on electric vehicles in order to contain pollution then car manufacturers will have little choice but to build them. 

An additional thought with regard to range anxiety: A large number of people, at least in Southern California lease they vehicles. In order to get the best price for the vehicle at the end of the lease, mileage has to be kept low. This means that many people rent a car for long trips and use their own car for commuting. I wonder if it is conceivable that the same model will expand beyond SoCal with the advent of electric vehicles which may or may not have overcome their range issues within the next decade. 


BHP left with $2.8bn of reject assets after spinoff 

This article by David Stringer for Bloomberg may be of interest to subscribers. Here is a section: 

Despite BHP Billiton’s spin off and sale of about $15 billion of unwanted assets over the last three years, the biggest miner remains saddled with a portfolio of even harder-to-shift rejects.

A total of nine assets — from a US thermal coal mine to UK oil and gas platforms — haven’t made the cut for a new slimmed-down parent or the demerger company South32.

The unloved operations, valued at more than $2.8 billion according to RBC Capital Markets, are hampering Chief Executive Officer Andrew Mackenzie’s quest to halve the size of BHP’s core portfolio to focus on big ticket earners including crude oil, iron ore and copper.

“They did the big clean up with South32 and these are what are left,” said Michelle Lopez, a Sydney-based investment manager at Aberdeen Asset Management Ltd., which holds BHP shares. “I’m sure they’ve been on the sale slate for a long time. It’s a disappointment.”

Global mining companies are trimming portfolios to focus more closely on their most profitable operations as commodity prices have tumbled and amid a drive to reduce costs.

BHP, Rio Tinto Group and Glencore Plc have agreed the sales of $14.3 billion of assets since 2012, according to data compiled by Bloomberg.

An attempt to sell one of BHP’s reject assets, the Nickel West unit of mines and facilities in Australia, ended in November after it failed to attract a suitable bid. BHP has taken $1.8 billion in writedowns on the operation since 2012.

Eoin Treacy's view 

BHP Billiton has a market cap of approximately £78 billion. South32, which represents the spin-off of industrial metal businesses not least alumina, has a market cap of over £6 billion so the additional assets the company could neither sell nor spin-off represent a comparatively small proportion of the overall business. I have added both the UK and Australian listings of South32 to the Chart Library. 

]]> Broker spotlight, including HSBC, Plus500, Rio Tinto, ITV, Reed Elsevier... Tue, 19 May 2015 10:23:00 +0100 US broker Bernstein has downgraded HSBC (LON:HSBA) as the risk/reward balance is evenly matched at the Asia-focused bank.

Potential upside drivers such as the yield and US rate rises are priced in, but they also provide downside support leaving the shares with little place to go.

“We don’t see any clear avenues for management to break out of this deadlock now – especially in an environment where income is sluggish.

“Looks like a slog to keep income and costs flat and continue to build capital.” 

‘Market perform’ in the new rating with a 650p target price. 

Spread bet firm Plus500 (LON:PLUS) tumbled yesterday as it froze 55% of UK accounts due to money laundering checks.

Liberum remains a buyer following the decline, but says how many clients it loses and the longer term brand damage are the key issues. 

Its price target is under review but fair value is 490-570p, says the broker. digital entertainment (LON:BWIN) has been kept as ‘underperform’ by Credit Suisse with a target price of 80p despite the recent outbreak of bid interest.

The broker says there is strategic rationale for the potential acquisition of by GVC or 888 Holdings, with significant synergy potential.

But the broker sees limited upside to the current share price, even in a scenario where a deal completes. 'Fair value' from a deal is 114p, Credit Suisse adds.

US broker Jefferies remains switched on to broadcaster ITV (LON:ITV), rating the shares a 'buy' and lifting the target price to 291p from 231p.

"ITV remains a focused way to play the UK..," says analyst David Reynolds, who add that the broker thinks it's uniquely positioned to leverage international syndication opportunity.

"The M&A debate continues to rage and ITV looks more attractive not less as Crozier's business model transformation sustains."

In another upgrade, heavyweight Goldman raises its rating on information provider Reed Elsevier (LON:REL) to 'buy' from 'neutral'. 

The broker note boosted the shares, which were up 2.1% making the company  the second biggest gainer on Footsie.

Sage Group (LON:SGE) was given a price target upgrade by Jefferies to 650p, from 575p, and the recommendation was a repeated 'buy'.

Among the big losers was miner BHP Billiton (LON:BLT) which shed 2.84% to 1,431p.

HSBC moved its rating on the group to 'reduce' from hold, while JP Morgan Cazenove also had the daggers out.

It lowered the target price to 1,425p from 1,600p and retained a 'neutral' stance.

Rival mining giant Rio Tinto (LON:RIO), meanwhile,  has finally signed off the huge underground development plan for the Oyu Tolgoi copper mine in Mongolia. 

Bank of America Merrill Lynch say it is good news though it had already included underground production commencing in 2019, in its forecasts, hence the target price remains 2,700p and the rating ‘underperform’.

Satellite communications group Inmarsat (LON:ISAT) should not be affected longer term by the rocket failure that delayed its latest satellite launch, Merrills said.

The rocket would have launched I-5 F3, the satellite required for global mobile coverage, but the delay is expected to have a small negative effect on 2015 earnings. Buy says the broker.

]]> Northland Capital Partners View on the City Entertainment One, Caledonia Mining and Advanced Oncotherapy Tue, 19 May 2015 07:14:00 +0100 Advanced Oncotherapy (LON:AVO) Completion of key milestone 

Market Cap: £132m; Current Price: 9.9p

  • Successful RF Power testing of the first CCL unit
  • Advanced Oncotherapy (AVO) announced that the Radio Frequency (RF) Power tests of the first Coupled Cavity Linac (CCL) unit have been successfully completed at the Company's testing facility at CERN in line with expectations.
  • The RF Power units generate the high-power needed to accelerate protons to speeds whereby they can effectively target cancer cells.
  • This announcement follows the successful completion in January of the LIGHT system's first CCL unit, an accelerating structure that consists of a series of cells that accelerate protons from energies of 37.5 Mega-electron Volts (MeV) to the full 230MeV required to treat all radiosensitive tumours.

NORTHLAND CAPITAL PARTNERS VIEW: AVO continues to progress the development of its flagship LIGHT system. Notably, the company reiterated that it expects the first unit to be installed in Harley Street, London, by the end of 2016 and first patient treatments expected in 2017.


Entertainment One (LON:ETO) – Prelims

Market Cap: £942m; Current Price: 381p

  • Substantial growth aspirations
  • Underlying EBITDA +16% to £107.3m (+11% to £117.2m on a pro forma basis) and adj. PBT +13% to £88.8m – in line with consensus – on revenue down 4% to £793m (pro forma) with a strong performance in Television (+32%) offset by lower revenue in Film (down 13%). Adj. free cash flow of £41.0m (FY14: £18.8m). 10% increase in dividend to 1.1p. Adj. EPS +12% to 23.5p.
  • Substantial growth in Television Production & Sales content anticipated with the first full-year contributions from Paperny Entertainment and Force Four Entertainment resulting in >850 half hours of content in FY16 (572 in FY15). Pro forma investment in acquired content and productions increased 3% to £285.5m. Annual independent valuation of ETO’s library has increased 22% to $801m.
  • Going forward, the The Mark Gordon Company (where ETO acquired a 51% stake in January) will be fully consolidated rather than treated as a JV. Since the acquisition, two new series have been green-lit by US networks for first seasons. 

NORTHLAND CAPITAL PARTNERS VIEW: Strong set of financials with the diversified nature of the business meaning that Television Production & Sales and Family divisions were able to offset the revenue weakness in Film. The latter is expected to pick up in 2015 and the Film Division is scheduled to release 250 films in FY16. The management continues to execute on its aggressive expansion plan (to double the size of the Group within five years) through organic growth and via acquisition with the focus on getting closer to the creation of content. Shares trading on 12.8x FY16. 


Caledonia Mining Corporation (LON:CMCL): Resource upgrade

Market Cap: £22m; Current Price: 43p

  • Moving 86,391oz Au at a grade of 5.47g/t Au from Inferred to Indicated category
  • Caledonia Mining Corporation has upgraded 86,391oz of gold (Au) at a grade of 5.47g/t Au from Inferred to Indicated Resource category as well as adding a further 4,599oz Au at a grade of 3.05g/t Au to the Indicated Resource category. This upgrade is based on drilling completed at depth below the AR Main and Blanket Sections of the Blanket Gold Mine located in Zimbabwe.

NORTHLAND CAPITAL PARTNERS VIEW: It is positive to see Caledonia Mining Corporation increasing confidence levels in its resource base at its 49%-owned producing Blanket Gold Mine. The upgrade of 86,391oz Au is around two years of production based on last year’s production rate, so is a significant development for the Company. Caledonia now expects to further increase the pace of exploration drilling with additional drill rigs that have now been commissioned.

]]> Microsoft Windows 10 is on board the Spark Platform Tue, 19 May 2015 07:03:00 +0100 Microsoft Windows 10 is on board the Spark Platform 

This press release caught my attention over the weekend. Here is a section: As a 3D printing platform, Spark brings the power of 3D printing into other technologies. By pairing with Microsoft, Spark will enable Windows 10 users to directly access optimized and more reliable 3D printing experiences. Additionally, Microsoft's worldwide developer community can freely access Spark's APIs and development platform to create 3D printing enabled applications for the Windows platform. 

Steve Guggenheimer, Corporate Vice President of Developer Platform & Evangelism and Chief Evangelist for Microsoft explains it this way:

"We’re approaching a tipping point with 3D printing, which means there is a huge market opportunity waiting for companies developing applications for Windows 10. By providing the 3D printing building blocks found in the Spark platform and optimizing it for Windows 10,

Autodesk has empowered our global developer community to confidently enter this new world of additive manufacturing.”

All of this means that the steps between ideation, design, and physical creation in additive manufacturing have just become quite a bit more streamlined. The future is now, and it’s powered by Spark. 

Eoin Treacy's view 

Autodesk is making a big push to become the go-to company for 3-D printing. As a major manufacturer of Computer Aided Design (CAD) software one could argue that producing the tools necessary to take 3-D printing to the next level is a natural progression. Early 3-D printer manufacturers rallied impressively from 2012 and into 2013 but had to engage in an aggressive M&A battle to maintain their top position. Not only have they had difficulty integrating all of the companies they bought, but 3-D Systems and Stratasys now run of the risk of being left behind by evolving technological innovation they have no part in. 


The Big Golden Book 26 Gold Stocks in the One Report 

Thanks to a subscriber for this report from Morgan Stanley focusing on the Australian gold mining sector. Here is a section: 

Our gold price outlook remains relatively subdued:

A strengthening USD, rising US interest rates and a muted inflation outlook are all headwinds to gold prices, though geopolitical tensions (such as rising concerns around Greece’s debt position) and extensions to consensus views on timing of US rate tightening have added volatility. Under this backdrop, equity selection is critical.

Reduced capital spend has been the collective approach: 

Within the ASX gold miners discussed in the Big Golden Book, total cash costs have declined ~7% since the last Golden Book six months ago, while production is up 4%, implying relatively flat absolute operating costs over the period. The “cost-out” trend continued to include some capital spend reductions, particularly from Newcrest following completion of Cadia East and Lihir investments, but capex reduction trend looks to have slowed, with improved sector free cash generation appearing to now include real cost reductions at the operating level. 

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

Australian gold miners have faced a number of the same issues as their counterparts elsewhere but have been insulated somewhat by the weakness of the Australian Dollar. The price of gold in Australian Dollars dropped from A$1800 to A$1400 between 2011 and early 2013. It broke out of a yearlong range in January and has returned to test the upper side of the underlying base near $1500. A sustained move below that level would be required to question medium-term scope for additional upside.  


Ivanhoe, First Quantum lead the pack 

This article by Kip Keen for Mineweb may be of interest to subscribers. Here is a section: 

Leading the pack is, hands down, First Quantum: up 50%. It had pretty close company, however. Copper Mountain Mining, Imperial Metals, Lundin Mining, and Turquoise Hill all zoomed ahead between 30-40%. Not far behind with 20-30% gains were Sherritt, Capstone, Freeport, Hudbay, and Southern Copper. Thereafter came Antofagasta, Trevali, Taseko and Nevsun between 10% and 20%. Then in the single digits, were BHP Billiton, Rio Tinto and Vedanta. Among a selection of leading base metal resource developers – 19 of the larger cap juniors on the TSX or TSX-V – the impact was more muted but still positive (see chart below). There were three heavy losers during the period: Highland Copper (-33%), Pilot Gold (-32%) and Panoro (-25%). Continuing up the ladder, but still in negative territory, were Rathdowney (-9%), North American Nickel (-8%), NGEx (-2%). Drawing more or less even was Western Copper and Gold

Eoin Treacy's view 

Mining companies have been among the most unloved of any sector over the last few years as major declines in iron-ore and coal contributed to investor malaise while other sectors such as biotech took off. This forced them into major periods of consolidation where costs were cut, expansion cancelled and cashflow optimised. A number are now completing medium-term bases.  


Email of the day on an ETF for industrial commodities 

Is there an ETF for industrial commodities? Many thanks. 

Eoin Treacy's view 

Thank you for this question which others may have an interest in. We have categorised all the funds in the Chart Library by domicile, currency, objective, type, geographic focus and theme. For commodity related funds look under the Fund Objective folder, then the Industrial Metals or Materials folders. 


Speaking Engagement  

Eoin Treacy's view 

I’ve agreed to give at talk for the upcoming Round-the-Clock-Trader webinar event on Thursday. The topic of my talk will be currency volatility and its role in equity market returns which I anticipate taking 35mins. Since I’ll be the last speaker, starting at 8:00pm British Summer Time, we’ll have plenty of time to talk about whatever it is delegates are interested in. It’s free to sign up just follow this link.  

]]> Broker spotlight, including, 888 Holdings, Royal Mail Group, SABMiller and BHP Billiton Mon, 18 May 2015 07:49:00 +0100 Online betting group (LON:BP.Y) was in the news this morning and received an upgrade from banking group Exane BNP Paribas, which raised the stock to 'neutral' from 'underperform'.

It came as 888 Holdings (LON:888), itself the subject of a failed £700mln takeover bid by bookmaker William Hill in February, confirmed market talk that it had made a takeover proposal to Bwin.

Elsewhere, postal group Royal Mail (LON:RMG)  was sent positive vibes from the investment bank Investec, which moved to 'buy' from 'reduce' on the stock.

Earlier this month,  the group was boosted after Dutch-owned postal firm Whistl, formerly TNT, has suspended deliveries after private equity backer LDC pulled its funding to help expand the business.

JPMorgan Cazenove is upbeat on brewer SABMiller (LON:SAB), repeating an 'overweight' stance and the share price target lifted to 4,100p from 4,000p. Last week, it announced it was quenching its thirst for craft beers with a move to buy London-based brewer Meantime.

The biggest loser on Footsie was diversified mining giant BHP Billiton (LON:BLT), down 4.21%, to 1,467p. It was  downgraded to 'hold' from 'buy' by Morningstar.

Another notable downgrade on Monday was BP (LON:BP.), which was lowered to 'sell' from 'neutral' by heavyweight Goldman.

]]> Northland Capital Partners View on the City Starcom Plc Mon, 18 May 2015 07:21:00 +0100 Starcom (LON:STAR) – CORP: Prelims Market Cap: £5.0m; Current Price: 5.87p From Friday: Difficult 2014 but up to date product set gaining traction

  •  Revenue under the revised revenue recognition policy was $5.0m down 14% against the restated FY13. In April, management announced the decision to change the policy regarding ‘bill and hold’ contracts and not recognise revenue relating to bill and hold prior to the delivery of goods. Recurring revenue from Starcom Online was flat at $1.3m.
  •  Gross margin increased to 50% (FY13 restated: 39%) and gross profit increased 7.0% to $2.5m but increased operating costs led to an adj. operating loss of $1.4m (FY13 restated: $0.9m). On top of this, there were provisions for doubtful debts of $1.3m, including $770k from the Ukrainian distributor who has been forced to cease trading given the local political situation. This customer is looking to re-establish his business elsewhere and continues to promise eventual repayment of this debt. 
  •   Cash was flat at $0.2m but net debt increased to $1.1m (FY13: $0.8m) with operating cash outflow offset by last February’s placing (£2m). The buy and hold contracts secured in H2 FY14 resulted in an $0.6m increase in inventories to $3.4m (as inventory has reverted to the company) but there was an $1.1m reduction in trade receivables (to $1.9m) and a $1.2m reduction in trade payables. This shift in working capital has placed a short term cash strain on finances but it is anticipated that the inventory will be realised through new sales during 2015. Management is considering a number of proposals regarding its cash requirements. 
  •   The product set is now fully developed and is being actively promoted globally. The endorsement of Helios by the major distributor of Porsche cars in Germany has provided an important reference site. The smaller Helios TT designed for the motorcycle market is making initial sales. Triton has been successfully tested by a major pharmaceutical company and a large shipping forwarding agency and revenues are now starting to flow. A new version of Watchlock, jointly developed by partner Mul-T-Lock (part of Assa Abloy), is scheduled to be launched in Q4. Year end Dec Revs ($m) Adj. EBITDA ($m) Adj. PBT ($m) Tax (%) Adj. EPS (c) PER (x) Div (p) Net cash ($m) Yield (%) 2013A 5.8 -0.7 -1.9 - -0.02 NEG - -0.8 - 2014A 5.0 -0.9 -1.5 - -0.02 NEG - -1.1 - 2015E Forecasts under review 2016E SOURCE: Northland Capital Partners Limited. 
 NORTHLAND CAPITAL PARTNERS VIEW: A difficult 2014 with the impact of the loss of the Ukrainian customer (that accounted for c. 20% of 2013 sales) and the slower than expected uptake of the WatchLock product. The decision to adopt the more conservative revenue recognition policy impacted the top and bottom lines for FY14 and FY13 but also reduced Trade Receivables and increased Inventories. As a result, the balance sheet is stretched in the short term and management are considering a number of options. On the positive side, Starcom has a range of up to date products and is generating revenues from multiple sources. It has also geographically diversified the business with wins in multiple territories. As these new products gain traction, we anticipate the business returning to growth and profitability.

]]> #TEST Fri, 15 May 2015 14:50:00 +0100 Broker spotlight - TalkTalk, Merlin Entertainments, SSE, BHP, Antofagasta Fri, 15 May 2015 08:12:00 +0100 Analysts were at opposite ends of the line on TalkTalk (LON:TALK) this morning.

Barclays topped up its share price target on the telecoms provider by 60p to 380p.

RBC Capital Markets, meanwhile, despite remaining keen, lowered its prediction for TalkTalk shares by 10p to 410p.

It comes after broadband, fixed-line and mobile provider raised its revenue targets yesterday after reporting solid full-year figures.

The group is continuing to shift to a “quad-play” strategy under chief executive Dido Harding - bundling mobile, broadband, TV and home phone deals as standard.

However, it is under pressure from rivals BT and Sky and Harding has been voicing her competition concerns to regulations lately, specifically around BT’s takeover bid for EE.

Elsewhere, Barclays was also keen on Legoland owner Merlin Entertainments (LON:MERL), which told investors yesterday it made a ‘satisfactory’ start to the year.

It did warn of a weaker euro, which could affect UK visitor numbers, but Barclays stayed ‘overweight’ on the theme park operator and added 60p onto its original 450p target price.

Deutsche Bank decided to send out a note on UK energy utilities at the end of the week.

The broker believes SSE (LON:SSE), like Centrica, is likely to enjoy higher energy retail margins under a Tory majority government than it would have done under Ed Miliband

“As with Centrica (Hold, TP 250p), we increase our assumed energy retail margin for SSE from 4% to 5% following the election of a Conservative majority government.”

It now reckons SSE shares are worth 1560p, up from its earlier 1460p verdict.

Onto oil - and Jefferies still rates BHP Billiton (LON:BLT) a 'hold' although the broker slashed 150p from its target price today, which now stands at 1450p. 

Shares in BHP are currently changing hands for 1,555p.

Miner Antofagasta (LON:ANTO) also suffered a downgrade on Friday. 

Liberum Capital now has a ‘sell’ rating on the copper producer and wiped 100p from its original 800p target.


]]> Draghi Says ECB Policy Potent as Low-Rate Risks Monitored Fri, 15 May 2015 08:05:00 +0100 Draghi Says ECB Policy Potent as Low-Rate Risks Monitored 

Here is the opening of this informative report from Bloomberg: Mario Draghi said the European Central Bank’s non-standard measures have proven effective, and low interest rates haven’t yet led to financial imbalances.

Unconventional actions “have proven so far to be potent, more so than many observers anticipated,” the ECB president said in a speech in Washington. “While a period of low interest rates will inevitably result in some local misallocation of resources, it does not follow that it has to threaten overall financial stability” and “there is little indication that generalized financial imbalances are emerging,” he said.

The ECB cut its benchmark interest rate to a record-low 0.05 percent in September and has relied on a range of non-standard stimulus to resuscitate the 19-nation economy. Policy makers have provided banks with loans designed to fuel credit supply and started buying government bonds in March, while urging governments to push ahead with structural reforms.

“Structural reforms that increase confidence in economic prospects and encourage entrepreneurs to capitalize on today’s extremely accommodative financing conditions will make our policy commensurately more powerful,” Draghi said in his speech on Thursday.

He said that such reforms are essential to ensure the ECB’s policies have their desired impact.

“It is ultimately only a combination of policies, that are complementary and mutually consistent, that will allow our policy to reap its full effects –- and to bring about a lasting return of both prosperity and stability for the whole euro area,” he said.

Draghi reiterated that the ECB is committed to implementing its 1.1 trillion-euro ($1.2 trillion) asset-purchase plan “in full,” and “in any case” until inflation has recovered lastingly.

“While we have already seen a substantial effect of our measures on asset prices and economic confidence, what ultimately matters is that we see an equivalent effect on investment, consumption and inflation,” he said.

David Fuller's view 

Super Mario Draghi is the best thing that has happened to the EU since the 2008 financial crisis.  Moreover, having won his long battle to determine his own ECB monetary policy last year, he is becoming bolder in urging governments to implement structural changes.  The requirement for this is so obvious to anyone with a modicum of insight regarding what enables economies to prosper, but will any of the EU’s bureaucratic socialists pay attention?  I certainly hope so and there are quiet capitalists in the EU but socialism remains a form of religion for too many. 

This item continues in the Subscribers’ Area.  


S&P 500 Rises to Record on Weaker Dollar, Easing of Bond Selloff 

Here is the opening of a short-term summary report from Bloomberg:

U.S. stocks rose for the first time this week, with the Standard & Poor’s 500 Index topping its closing record, as a weaker dollar boosted multinational companies and a bond-market selloff showed signs of easing.

The Standard & Poor’s 500 Index increased 1 percent at 3:03 p.m. in New York. The gauge has climbed 1.8 percent since falling to a one-month low May 6. Apple Inc. and Microsoft Corp. jumped more than 2 percent. The Bloomberg Dollar Spot Index retreated 0.3 percent, headed for a fifth weekly decline. The yield on 10-year Treasuries fell five basis points to 2.24 percent while German bund rates slipped two basis points. Gold rose to the highest since February.

The Bloomberg dollar gauge has retreated from its highest level in data back to 2005 as economic reports undermine prospects for higher borrowing costs. An unexpected drop in wholesale prices fueled doubt about whether inflation is high enough to warrant a rate increase. Declines in the currency have generally boosted shares of the biggest U.S. companies on speculation they make American products more attractive.

The S&P 500’s record was its first since April 24. The gauge fell as much as 1.8 percent through May 6, amid concern the Fed would raise interest rates even with worsening economic data. Stocks have whipsawed between gains and losses in the past six weeks as investors weigh whether a first-quarter slowdown in growth was temporary. It is 0.2 percent higher this week.

David Fuller's view 

Corporate growth has been much stronger than national growth, on average, since 2009.  However, looking ahead the global economy is now likely to do somewhat better, due to increasing confidence, continued monetary policy accommodation and low commodity prices which are now just beginning to recover.

This item continues in the Subscribers’ Area. 


These 10 Pieces of Art Just Sold for Almost $800 Million 

Here is the opening of this informative article from Bloomberg:

The art market is on such a tear even the insiders are scratching their heads. Since New York’s spring sales started last week, at least $2.1 billion of art has been sold at Christie’s and Sotheby’s, with the top 10 lots accounting for almost $800 million.

Christie’s said collectors from 35 countries were bidding at its May 11 sale while Sotheby’s said clients from more than 40 countries were out in force the next evening. They jockeyed for Impressionist, modern, postwar and contemporary art.

“There’s a lot of money out there and people are chasing great works,” said Mera Rubell, who, along with her husband, Don, runs a private museum in Miami showcasing their collection. “Now the young artists are selling for millions.”

That means bargain hunters will be sorely disappointed: Picasso and Monet may be at record highs, but prices for living (if not quite young) artists are nipping at their heels. The 60-year-old Christopher Wool’s canvas spelling “Riot” in chunky black letters sold for $29.9 million — the same price paid for a 1948 Picasso portrait of his lover Francoise Gilot.

Records were smashed. In just 11 minutes, bidding for a Picasso surged from $100 million to $160 million before settling at $179.4 million, the most expensive work ever purchased at auction. The value of the work increased by 462 percent.

David Fuller's view 

These astonishing art prices tell us several things.  1) What we already knew is that leading stock markets have done very well.  2) Liquidity is abundant.  3) The deflation that we are experiencing is mostly positive and created by technology.  4) Confidence among wealth creators is very high.  5) The global economy is much more likely to expand than contract. 

What could go wrong?

This item continues in the Subscribers’ Area.


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  Markets remain fascinating and guest speaker David Brown returns with a new subject certain to be of interest to every hands-on investor.  Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  


DoubleLine Presentation: Summer insects 

Thanks to a subscriber for inviting me to Jeff Gundlach’s presentation yesterday down the street in Beverly Hills. The presentation was an updated version of the talk he gave in May with a number of additional slides on debt issuance. I posted that presentation in Comment of the Day on May 7th.  

Eoin Treacy's view 

The title of yesterday’s talk “summer Insects” is in reference to a quote from the Chinese philosopher  Zhuangzi “You can’t discuss ice with a summer insect” This is in reference to the fact that almost everyone active in the bond market today has no experience of trading in a secular bear market. This is a point I have made repeatedly over the last few years not least at The Chart Seminar. If you started out in your career in 1980 and bought the dips in Treasuries for the next thirty five years you would be a wealthy person today and will have cruised into late middle age without experience of a secular bear market. 


Google reveals lessons learned (and accident count) from self-driving car program 

This article by Francis X Govers III for Gizmag may be of interest to subscribers. Here is a section: 

Urmson's statements came in the form of a post on Backchannel, which followed an Associated Press report revealing the accident count in the wake of a new California law requiring Google and others to report accidents involving its self-driving cars to the state. Google reported three accidents between May 2014 and May 2015, while Delphi, which has its own version of a self-driving car, an Audi SQ5, reported its vehicle was struck while waiting to turn at an intersection and not under autonomous control.

In his post, Urmson details that the Google Cars were rear-ended seven times by other cars, side swiped twice, and hit once by a car running a stop sign, with the majority of the accidents occurring on city streets rather than highways. The 1.7 million miles (2.7 million km) the cars are reported to have traveled combines the distance traveled autonomously and under manual control.

Eoin Treacy's view 

The more data that is recovered from self-driving cars, the more confidence we can have that they are approaching commercial utility. Last week’s announcement that Nevada is pressing ahead with legalising autonomous vehicles is a major step forward for companies like Daimler and Google pioneering the rollout of this technology. 


Solar and Silver 

Eoin Treacy's view 

David posted an article from the Telegraph on Monday highlighting the role silver plays as a conductor in solar cells. Considering the fact that silver suffered from a loss of demand with the demise of photographic film, the potential for growth in another industrial sector is a potentially important bullish catalyst. In order to gain some additional perspective on just how much of a growth sector this might represent for sliver there are two key considerations. The first is demand growth projections which are bullish and second the capacity for technological innovation which is potentially bearish.

]]> Northland Capital Partners View on the City Circassia Pharmaceuticals and Richoux Group plc, Eastbridge Investments and Richoux Group plc Fri, 15 May 2015 07:40:00 +0100 Eastbridge Investments (LON:EBIV) – CORP: Placing

Market Cap: £1.2m; Current Price: 0.85p


  • Placing for funds to invest in the property and real estate sector
  • Placing to raise £100k at 0.87p/share with new investors. The funds will be used to make investments in line with Eastbridge’s Investing Policy in the property and real estate sector.
  • The Board has already identified a number of investment opportunities and the funds will enable it to accelerate the evaluation and execution of those prospects. 
  • Upon Admission, Eastbridge will have a total of 208.1m shares in issue, of which 51.3m are held in treasury.



Circassia Pharmaceuticals Plc (LON:CIR) Intended acquisitions and fundraise  

Market Cap: £606m; Current Price: 320p


  • Intention to acquire Aerocrine and Prosonix
  • Circassia announced that it intends to acquire Aerocrine and Prosonix.
  • Aerocrine, is a Swedish listed company focused on the development and commercialisation of medical diagnostic products for use in the diagnosis and management of patients with asthma.
  • Circassia made an all cash offer for Aerocrine of up to SEK 1.78 billion (approximately £139 million) in total consideration.
  • Prosonix, is a privately-held specialty pharmaceutical company focused on the development of product candidates for the treatment of asthma and/or chronic obstructive pulmonary disease (COPD).
  • Circassia made an offer for Prosonix of an aggregate cash consideration of up to £100 million.
  • Circassia separately announced today that it proposes to raise £275 million, through a Placing and Open Offer.


NORTHLAND CAPITAL PARTNERS VIEW: Circassia is rapidly becoming a self-sustaining specialty biopharmaceutical company. These acquisitions enhance the group’s ability to commercialise its late-stage pipeline of potential new allergy and asthma products once approved. 


Richoux Group plc (LON:RIC): Finals

Market Cap: £18m; Current Price: 19.5p

  • Healthy revenue and EBITDA growth
  • Revenue was +10.4% YoY at £12.7m as the business benefited from the new restaurant openings in 2013. Adj. EBITDA was +10% YoY after adjusting for opening costs, impairment and onerous lease provisions at £1.6m. No dividend recommended.
  • There are currently seventeen restaurants which operate under Richoux, Dean’s Diner, Villagio and Zippers brands. As at the end of FY14, the business had c. £4m of net cash on the balance sheet with which to further expand into new sites. 
  • Outlook statement reads positively where FY15 has started well and management reports that trading in the new year is in line with expectations. There are further plans afoot to open a new Richoux restaurant off Gloucester Road in central London and a more measured roll-out of Dean’s Diner is planned with a further two site openings towards the later part of FY15, in Orpington and Hempstead Valley, Kent.

NORTHLAND CAPITAL PARTNERS VIEW: The business produced a creditable performance in FY14 where growth in underlying EBITDA matched growth in revenue and there is sufficient cash on the balance sheet with which to add more sites as alluded to above. There are no forecasts in the market for the business but we estimate the stock trades on c. 8.8x EV/EBITDA for the financial year to December 2014, which doesn’t appear overly demanding in our view. The additional Richoux and Dean’s site openings will also add to the scale of the business. 

]]> Broker spotlight - Mondi, Compass Group, Royal Mail, SABMiller Thu, 14 May 2015 08:16:00 +0100 Brokers pushed up their targets for paper maker Mondi (LON:MNDI) this morning after the group’s results were packed full of positives.

Shares soared yesterday as the South African firm reported an operating profit of €236mln in the three months to March – 29% above the comparable period last year.

Wood costs, paper for recycling, resin, energy and chemicals costs were all lower than last year, while currency movements also helped out.

Today, Credit Suisse upped its target price for the shares by 145p to 1630p with an ‘outperform’ rating. Shares currently trade at 1433p.

Deutsche Bank also chipped in. It already rated Mondi as a ‘buy’ but raised its share price forecast by 130p today to 1640p.

Elsewhere, catering company Compass Group (LON:CPG) received an upgrade from Societe Generale.

The French broker reckons shares are now worth 1190p after Compass reported an increase in first half earnings on Wednesday.

It also said full-year guidance remains "positive and unchanged. Compass shares were trading hands for 1,117p this morning.

Credit Suisse posted a more positive note on Royal Mail (LON:RMG).

Despite keeping its ‘underperform’ rating on the postal group intact, the Swiss broker added 40p to its share price target, which now stands at 410p. 

Share in Royal Mail currently trade at 480p. 

Nomura, meanwhile, stayed neutral on SABMiller (LON:SAB) but added 200p onto its share price target.

The broker now reckons shares in the brewing giant are worth 3,600p after it beat full-year estimates yesterday.

]]> Northland Capital Partners View on the City Churchill Mining, Lookers PLC, Ideagen plc and ValiRx Thu, 14 May 2015 07:47:00 +0100 Churchill Mining (LON:CHL) – CORP: Placing

Market Cap: £19.8m; Current Price: 16p

  • Placing to raise £850k
  • Placing to £850k at 10p/share plus a one for two warrant exercisable at 15p/share and expiring on 30th June 2018. The placing shares represent c. 6.4% of the enlarged issued share capital.
  • The proceeds will be used to continue the progress of its international arbitration claim against the Republic of Indonesia at the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC.
  • Directors (David Quinlivan, Fara Luwia and Nicholas Smith) have subscribed for 2.55m shares in the placing. Cause First Ventures has subscribed for 1.65m shares and currently holds 15.9m (12.8%) of the share capital. Its holding will increase to 13.2% post placing.
  • Northland Capital Partners acted as broker to the placing and will receive warrants to subscribe for 100,000 new shares on the same terms as the placing warrants.
  • Placing shares to be admitted on 19th May and the enlarged share capital will consist of 132.7m shares.


ValiRx plc (LON:VAL) Development update 

Market Cap: £8m; Current Price: 0.21p

  • Completion of pre-clinical studies at ValiSeek
  • ValiRx issued a development update on the progress of pre-clinical studies at ValiSeek Limited.
  • ValiSeek was formed to progress the novel cancer treatment drug, VAL401, towards Clinical Efficacy trials for the treatment of lung cancer and other oncology indications.
  • ValiSeek reported on the completion of its pre-clinical toxicology and pharmacokinetic studies. 
  • Preclinical efficacy of VAL401 in the treatment of adenocarcinoma tumours has been confirmed in pancreatic and non-small cell lung cancer models in addition to the prostate cancer models previously run by Tangent.
  • The newly reported pancreatic data shows VAL401 to demonstrate comparable anti-tumour activity to clinical drug Gemcitabine in an adenocarcinoma model.  
  • Preclinical toxicology and pharmacokinetic studies have been completed to the required regulatory standards confirming safety, tolerability, distribution and metabolism of VAL401.
  • Prototype manufacturing of encapsulated VAL401 in the oral clinical format has been completed and formal stability studies are underway. 
  • Clinical-based regulatory planning has commenced with a first Science Advisory Meeting taking place between ValiSeek and the Medicines and Healthcare Products Regulatory Agency. This meeting initiates the regulatory process for clinical trials.

NORTHLAND CAPITAL PARTNERS VIEW: VAL401 is rapidly moving into the clinic. Moreover, the newly reported pancreatic cancer data presents a further area of high unmet medical need, further enhancing the commercial value of VAL401.


Lookers PLC (LON:LOOK): Interim Statement

Market Cap: £616m; Current Price: 157p

  • Strong 1Q15 performance 
  • Motor division delivered a robust performance with gross profit from new cars +4%. Furthermore, investment in the fleet sector is paying off where gross profit from new fleet cars was +12% though at similar margins to the prior year. 
  • In used cars, gross profit was +10% and margins also improved on the back of focusing on stock management and sourcing quality cars which helped improve volumes and margins. Volume in used cars also benefited from increasing leads generated online and the business is focusing on enhancing its online presence. 
  • In aftersales, turnover was +7% YoY and gross profit in aftersales was +9% YoY as volumes and margins benefited from an increasing proportion of customers choosing to enter service contracts as well as improving customer retention. 
  • Outlook reads positively and management believes the business is in a good position to meet current market expectations. Consensus is looking for PBT of £66.7m, earnings of 13.3p and a dividend of 3.1p for FY15 despite marginal downgrades to forecasts over the last month. 

NORTHLAND CAPITAL PARTNERS VIEW: The statement reads well and the business has a strong balance sheet with net debt/EBITDA remaining below 1x. Operational and net cash flow levels are ahead of budget and there are high levels of unutilised bank facilities to draw upon should this be needed to help grow the business organically or through M&A in both the motor and parts divisions. The stock currently trades on 11.8x FY15 consensus earnings, not particularly demanding and not too dissimilar a multiple to that of Pendragon (PDG.L) though the prospective dividend yield of c. 2% is lower compared to that of PDG. However, investors should be encouraged by the strong performance in the early part of FY15.


Ideagen (LON:IDEA) – Pre-close

Market Cap: £62.2m; Current Price: 35p 

  • FY in line
  • FY results in line with expectation with both organic growth and contributions from the EIBS and Gael acquisitions. Revenue expected to show growth of c. 59% to £14.3m and adj. EBITDA +42% to c. £4m. Net cash at the end of April was £5.2m (H1 FY15: £2.8m) and it will at further acquisitions.
  • Strong contribution from Gael. Integration is well underway and a number of existing Ideagen customers have upgraded to the enlarged product set. Ashley Marron, CEO of Gael, has been appointed Group COO.
  • Good levels of contracted work in progress, a growing recurring revenue base and a strong pipeline. Growth across Manufacturing, Life Sciences, Aviation and Banking as well as renewed momentum in the NHS, post-election.

NORTHLAND CAPITAL PARTNERS VIEW: Positive pre-close with performance in line with estimates at the top and bottom line. The Gael acquisition (January 2014) was substantial (£18m in cash) but has made a substantial difference to the business in terms of the product set and customer base, strengthening Ideagen’s position in the healthcare, manufacturing and aviation sectors. Demand for Governance, Risk and Compliance software continues to grow as regulation increases in volume and extends to additional sectors. Shares are trading on 16.7x FY15 and 13.0x FY16 – reasonably undemanding for the sector.

]]> Bond Market Meltdown Deconstructed: Five Charts That Explain Why Thu, 14 May 2015 07:42:00 +0100 Bond Market Meltdown Deconstructed: Five Charts That Explain Why 

Here is the opening of this topical report from Bloomberg: More than $450 billion has been wiped out across global bond markets in the past few weeks and, for many people, there doesn't seem to be any particular reason why.

Sovereign-bonds yields had fallen so far that in order for them to make sense, investors would have needed to see persistent deflation and European recessions. For a while, that seemed like a real possibility, as oil went from more than $100 a barrel to less than $50 and many forecasters were predicting $30. Well, that didn't happen, and oil started to rise at the same time as evidence of incipient inflation and economic growth in Europe.

That sparked speculation -- proven to be unfounded -- that the European Central Bank could even end its bond-buying program early. Against that backdrop, holding bonds with yields close to zero made little sense, causing investors to unwind one of the most crowded trades in all of markets. So, next time someone says "we don't really know," don't buy it. Here are a few reasons that explain why.

David Fuller's view 

No disrespect to Nick Gartside of JPMorgan who is interviewed in Bloomberg’s Audio at the beginning of this article above, and asked if the bond market bubble has burst?  He replies: “It’s a correction, not a reversal in bonds.” 

How does he know this?  He may feel the odds are still on his side because that answer would have been correct on every other setback in bonds during the last 35 years.  However, with signs that the global economy may now be responding to stimulus efforts from central banks, notably in the EU, and with the US Federal Reserve hoping to lift rates in September, the exceptionally low yields seen earlier this year is a risky background.

A more objective answer to the question above would be, and I am quoting Eoin on this: “So far, it is a correction…”  Personally, I question whether CIOs of fixed income departments are the best people to ask if the bond bull market, probably the best in history, is ending or over.  No one knows for certain but they will understandably have more conflicting emotions on this subject. 

Meanwhile, we can look at the latest technical evidence, from two perspectives, to help you decide what you think.

This item continues in the Subscribers’ Area.


Email of the day 2 

The influence of government bonds on corporate bonds:

“As a follower of your excellent service for many years, I am watching the current moves in US Treasuries. I fully understand the reasons for these movements but could you explain why any increase in treasury and bund yields may have a follow-on effect on corporate bond values? Forgive me if I haven't quite grasped the nettle on this.”

David Fuller's view 

I thank you for your long interest in our service and for this question which will also be of interest to some other subscribers.

This item continues in the Subscribers’ Area.


The Weekly View: Stocks Rally as Payrolls Rebound 

My thanks to Rod Smyth for his excellent letter, published by RiverFront.  Here is a brief sample:

At RiverFront, we believe asset allocation (the choice between asset classes, such as stocks versus bonds/cash, or US stocks versus international stocks) is by far the most important decision an investor makes.  Since there is no ‘index’ that is customized for an investor’s risk tolerance and retirement needs, some active decision regarding asset allocation is necessary, in our view.  In recent years, ‘target date’ products that are marketed to meet a retirement date have become extremely popular because the concept is simple.  We are alarmed by the high percentage allocation to bonds, as the retirement date approaches, within many target date products.  In the current interest rate environment and with life expectancy expanding, we think bonds are much less appropriate than they used to be when rates were higher, especially relative to inflation.  

David Fuller's view 

I agree, and I think the risk of a panicky spike in bond yields, as one-way traffic reverses, is uncomfortably high.     

The Weekly View is posted in the Subscribers' Area.


The Markets Now 

Monday 15th June, at the East India Club, 16 St. James’s Square, London SW1Y 4LH

David Fuller's view 

Here is the new brochure listing some of our topics and the important questions most investors face.  Markets remain fascinating and guest speaker David Brown returns with a new subject certain to be of interest to every hands-on investor. Note also Iain Little’s challenging topic summarised in the penultimate question.  I look forward to their presentations and also to hearing the views of friends and subscribers.  


Pareto Securities on Pretium Resources 

Thanks to a subscriber for this report which may be of interest to subscribers. Here is a section

We expect Brucejack to have sizeable production and free cash flow

Based on Pretium Resources' June 2014 feasibility study and starting from 2018, we believe the Brucejack deposit has the ability to produce average annual life-of-mine (LOM) gold production of 404.1koz at an all-in sustaining cost (AISC) of CAD 500/oz for 18 years, post an initial capital cost of CAD 811.9m.

We initiate with a BUY rating and a target price of CAD 10.88/share.

Our target price is based on a sum-of-the-parts valuation composed of the following: 1.0x NPV9% of our LOM assumptions for the Brucejack project, balance sheet items, the after-tax PV9% of general and administration and exploration costs, PV7% of the after-tax interest costs, financing assumptions and in-the-money (ITM) instruments.

Eoin Treacy's view 

A link to the full report is posted in the Subscriber;s Area.

The post credit crisis environment has been difficult for explorers as energy prices surged, access to credit was restricted and gold prices fell from their 2011 peak. More recently the outlook has improved not least because energy prices no longer represent so much of a headwind and gold prices have stabilised. The rationalisation that has purged the sector of wildcat investors has resulted in leaner, more disciplined and cheaper operations. This is reflected in the valuation of the Gold BUGS Index relative to the bullion price. 


7 Top Futurists Make Some Pretty Surprising Predictions About What The Next Decade Will Bring 

This article by Jacqueline Howard for the Huffington Post may be of interest to subscribers. Here is a section:

Dr. Ray Kurzweil, inventor, pioneering computer scientist, and director of engineering at Google:

"By 2025, 3D printers will print clothing at very low cost. There will be many free open source designs, but people will still spend money to download clothing files from the latest hot designer just as people spend money today for eBooks, music and movies despite all of the free material available. 3D printers will print human organs using modified stem cells with the patient's own DNA providing an inexhaustible supply of organs and no rejection issues. We will be also able to repair damaged organs with reprogrammed stem cells, for example a heart damaged from a heart attack. 3D printers will print inexpensive modules to snap together a house or an office building, lego style.

Eoin Treacy's view 

Technological innovation is accelerating at an exponential pace. Fashion is already largely online and Amazon delivers within two days so the merit of 3D printing a garment which has a low incremental cost to begin with is questionable. However, printing items with high incremental value that once took days, weeks or were previously impossible is another story entirely. It is already possible to have a dental crown manufactured within an hour of scanning and advances are regularly announced in the medical field. 


Sure-Fire Loser Aussie Turns Winner as RBA Seen Ending Rate Cuts 

This article by Netty Ismail for Bloomberg may be of interest to subscribers. Here is a section

After the Reserve Bank of Australia chose not to comment last week on whether it would keep cutting interest rates, hedge funds erased bets on an Aussie decline and strategists boosted forecasts for the first time in months. The currency responded by climbing above 80 U.S. cents, moving further away from the 75-cent level RBA Governor Glenn Stevens favors to keep the economy competitive.

Stevens’s reluctance to pursue ever-looser monetary policy for fear of inflating a real-estate bubble leaves the Aussie at the mercy of investors lured by the highest government-bond yields of any top-rated nation. That means his only hope of a weaker currency may be a surge in the U.S. dollar fueled by the Federal Reserve’s plan to raise interest rates this year.

“Australian interest rates, whichever way you cut it, are still well above comparable global rates and that attracts money to the Australian dollar,” said Shane Oliver, head of investment strategy ion Sydney at AMP Capital Investors Ltd., which manages $124 billion. “That problem won’t be eliminated

until the interest-rate differential is closed.”

Eoin Treacy's view 

The RBA played a pivotal role in weakening the Australian Dollar as it balanced supporting the export sector with the risk of further inflating the property market. As the resources sector stabilises, the need to continue to set all-time new lows for rates is less compelling and there is no denying that property prices around the major conurbations are not cheap. 


]]> Broker spotlight - easyJet, Experian, Randgold Resources, Mytrah Energy, Patagonia Gold ... Wed, 13 May 2015 10:51:00 +0100 Analysts are still on board with easyJet's plans (LON:EZJ), although estimates were lowered for the airline after yesterday’s cautious update.

Boss Carolyn McCall said on Tuesday that third quarter revenue per seat will likely fall by four percentage points, hurt by French air traffic strikes.

Responding today, broker Jefferies stuck with its ‘buy’ rating, but knocked 50p off its share  price target, which now stands at 1800p. 

“Soft summer yield comments were disappointing, but we believe EZJ's structural advantages will sustain its outperformance in this low fuel cost  environment.”

Cantor Fitzgerald also kept its ‘buy’ rating on the low-cost carrier intact but placed its 1900p target price under review.

“For prudence, we trim our forecasts for 2015-17. That said, EZJ’s fundamentals remain strong, demand in Europe is recovering .”

Elsewhere, JP Morgan listed Randgold Resources (LON:RRS) as a gold stock with the potential to recover in a 'lower-for-longer' gold price environment.

The Wall Street heavyweight now has an ‘overweight’ rating on the miner and upped its target price by 300p to 6900p.  Randgold shares currently trade at 4,769p. 

On oil, JP Morgan lifted its price target on Cairn Energy (LON:CNE) shares this morning by 5p to 211p.

The broker gave special mention to Cairn’s early stage Senegal operations.

Last year Cairn made two significant discoveries off the Atlantic Margin. Its SNE-1 discovery, off the coast of Senegal, was recognised as potentially the largest global oil discovery in 2014.

The US broker also upgraded FirstGroup (LON:FGP) to its most preferred pick in the UK transport sector.

There were no ratings changes but the bus and train group now has the most upside to the broker’s price target of 159p and near-term catalysts.

Go-Ahead (LON:GOG 'overweight') moves up to number 2 on balance sheet upside and more rail catalysts.

Also this morning; credit specialist Experian’s (LON:EXPN) share price target was nudged up by Nomura.

Signs of growth in Latin America helped push Experian shares higher on Tuesday, even though its full-year profits were hit by foreign currency moves.

“Given some recovery in US lending, the core credit growth rate could be in the high single digits,” said Nomura analysts.

“LatAm is capable of the same if the consumer business can start firing again when the lending environment improves.”

The broker raised its target price on Experian's shares by 50p to 1200p and kept its ‘neutral rating’ in place.

Down a division, Argentina-focused miner Patagonia Gold (LON:PGD) remains a buy for Northland after the latest drilling up date from Cap-Oeste. 

Assays showed bumper grades, which could go some way to boost the resource base to make the project viable.

While this work goes on at Cap Oeste, production continues at Lomada and Northland reiterated its 4.5p price target.

Predictions of severe disruption this year from the El Nino weather pattern have hit shares in companies based around the Pacific Ocean.

India-based renewable groups Mytrah Energy (LON:MYT) and Greenko (LON:GKO) both fell sharply yesterday on the warning from the Aussie Met office, but Cantor Fitzgerald said the reaction was excessive.

Indeed, Cantor is more concerned abut a convertible debt overhang at Greenko, hence a ‘hold’ recommendation and 86p target,  but Mytrah remains attractive and undervalued and it remains a buyer with a 130p target price. 

Uruguay miner Orosur Mining (LON:OMI) has updated on progress at its San Gregorio mine, where exploration of the development stage SG Deeps has resulted in a new resource estimate and Northland says buy with a 32p target price.

]]> Northland Capital Partners View on the City Quarto Group Wed, 13 May 2015 09:59:00 +0100 Quarto (LON:QRT) – FD retirement and trading update

Market Cap: £38.7m; Current Price: 196p

  • Q1 trading on track; FY15 more H2 weighted
  • Prior to yesterday’s AGM, management provided a brief trading Q1 update. Q1 revenue was down 3.4% to $28.4m in what is the company’s traditionally quietest quarter. As flagged in March’s FY results, FY15 results will be more H2 weighted. Net debt reduced $3.5m to $77.6m YoY but increased $11.6m on FY14 position – reflecting the usual seasonal cashflows. 
  • Today, Mick Mousley, Quarto’s long standing CFO, has announced his retirement after 28 years with the company. He will continue in his role until a successor can start. The search has commenced.
  • Management believes the Group is on track to meet its expectations of organic growth and debt reduction for this year.

NORTHLAND CAPITAL PARTNERS VIEW: Mick Mousley will leave after a very significant contribution as CFO. He provided continuity after the departure of founder Laurence Orbach in 2012 and has been instrumental in the strategy of bringing greater focus to the Quarto business. Reassuring Q1 update in what is a seasonally quiet quarter and given the investment made in product and imprints during FY14, we would anticipate organic growth to come through during the rest of the year as well as the contribution from the The Ivy Press acquisition. As previously argued, the level of debt will continue to deter some investors (and helps to explain the anomalous PER rating: 6.0x FY15 and 5.2x for FY16) but Quarto’s focus on ‘evergreen’ titles provides asset-backing for the debt that was refinanced in February for a further four years ($95m revolving credit and term loan). The headroom in the facility provides scope for further bolt-on acquisitions as Quarto pursues its expansion in Children’s publishing, a growth market. 

]]> Greene King, Royal Mail, Thomas Cook, Standard Chartered, eg Solutions… Tue, 12 May 2015 11:08:00 +0100 Royal Mail (LON:RMG) should get a boost from competitor Whistl suspending its operation, but JP Morgan suggests competitive pressures may still be on the rise.

The US broker has raised its price target by 6% to 535p following Whistl’s decision, but notes Royal Mail shares had already done well in anticipation.

Regulator Ofcom remains keen to cultivate an environment supportive of competition, it says, though the pressure may come through later than previously forecast.

Goldman Sachs added that for Royal Mail should see an  immediate increase in volumes in its downstream network, although the final impact will depend on the strategic review of Whistl’s operations. Buy with a 585p target is its view.

In a sector wide review of UK Pubs, JP Morgan has upgraded Greene King (LON:GNK) and Young's (LON:YNGA) to ‘Overweight’ while Marston's (LON:MARS) and Mitchells & Butlers (LON:MAB) remain neutral.

For all its challenges, UK pubs offers good exposure to the consumer environment, said the broker with generally stable predicable cash flows, attractive yields and potential to grow through consolidation. 

Credit Suisse is keen on travel group Thomas Cook (LON:TGC) where the target price rises to 180p from 153p while the rating is now 'outperform'.

The Swiss broker said earnings expectations have stabilised, the UK outlook is improving, Nordic capacity risks have reduced, the fuel and foreign exchange cost outlook is the best for 10 years, the Fosun deal supports the product plans and refinancing can boost earnings 2017 by 8-15%.

Meanwhile, Macquarie downgraded Standard Chartered (LON:STAN) from ‘neutral’ to ‘underperform’. Investec also this morning that it still has a ‘sell’ rating on the bank’s shares.

“Despite an “election bounce”, STAN’s share price has still declined by 8% over the past 2 months (in which the FTSE100 index has continued to rise), we remain sellers,” said Investec’s Ian Gordon. 

Marketing group Cello's (LON:CLL) AGM Statement indicates good progress with strong revenue growth driven by Health.  The VAT issue has not progressed although was expected given the  public sector pause during the election. Cello’s core value driver, Health,is making good progress. Buy says N+1 Singer. 

eg solutions (LON:EGS) has had an encouraging start to current year with a number of new contract wins with existing blue chip customers across a range of verticals; from financial services to local government. 

This, together with new product launches for mobile and forecasting solutions scheduled in September, gives management confidence for the year. Buy with a 105p target.

Europa Oil's (LON:EOG) long-anticipated CPR covering its offshore Ireland licences has been issued.  The gross mean prospective resources have increased by 20% to 1.49bn boe from 1.25bn boe previously. 

The licence has also seen a lead upgraded to a prospect which has been named Shaw. This licence is now drill ready and awaiting a drilling decision from the operator, Kosmos Energy. 

The target price remains a punchy 44.3p compared to a market price of 6.4p.

]]> Northland Capital Partners View on the City W Resources, Sportech plc, MotifBio and Anite Group Tue, 12 May 2015 07:30:00 +0100 Motif Bio plc (LON:MTFB) – CORP: To present at leading industry event

Market Cap: £21m; Current Price: 32.5p

  • Motif Bio to present at leading biotech event, the 2015 BIO International Convention
  • Motif Bio announced that it has been selected to present at the 2015 BIO International Convention, a leading global event for the Biotechnology sector. 
  • BIO International is the world's largest biotech meeting, regularly attracting c. 15,000 biotechnology and pharmaceutical players from 65 countries, offering unparalleled business partnering and networking opportunities. 

NORTHLAND CAPITAL PARTNERS VIEW: Motif continues to aggressively pursue its marketing strategy of finding a potential partner to support the further development of its flagship antibiotic, iclaprim. Commercial interest in antibiotics has taken off, with the announcement of several mergers and partnering deals in the space in recent years. By featuring at the Bio International Convention, Motif further positions itself to capitalise on this interest.


W Resources (LON:WRES) – BUY*: Update

Market Cap: £8.7m; Current Price: 0.3p

  • Update on CAA/Portalegre
  • Completed scout diamond drilling programme at the CAA/Portalegre gold and base metal exploration licence in Portugal, with encouraging results from the five holes drilled. 
  • In the 1058m drilling campaign, Hole CAAD-05 insected 16m of gold at 1.37g per tonne between 124m and 140m – the most significant in the CAA programme. The results include: 
  • 16m at 1.37g per tonne from 124 metres in CAAD-05
  • 2m at 4.32g a tonne from 128m in hole CAAD-05
  • 2m at 3.83g a tonne from 138m in hole CAAD-05
  • 16m at 0.44g a tonne from 66m in hole CAAD-04 
  • Initial analysis indicates continuity between Hole CAAD-05 and Hole CAAD-04 and the trenching results from October 2014. Potential for extensions to the South East at depth.
  • Holes CAAD-01 and CAAD-03BIS and BIS2 reported low grade zinc and silver with scope for exploration. 
  • Maintain BUY rating. Forecasts and price target remain under review.

NORTHLAND CAPITAL PARTNERS VIEW: Encouraging results at CAA/Portalegre with the potential for extensions at depth and to the South East with apparent continuity between two holes in this campaign and the 2014 trenchingassay results. Management is now considering its next steps including the farming out of the gold and base metals project over the coming months. This would enable management to focus on its tungsten assets.


Anite (LON:AIE) – BUY: Pre-close

Market Cap: £255m; Current Price: 84.8p; Target Price: 120p

  • FY in line
  • Q4 trading in line with expectation with trends reported earlier in the year continuing. As a result, FY revenue (NCPe: £120.2m) and adj. EBIT (NCPe: £21.8m) expected to be in line. Net cash better than expected at £36.9m (H1 FY15: £29.8m and NCPe FY15: £29.8m).
  • Device & Infrastructure Testing (previously Handset Testing) good progress was made with Interoperability Testing and Propsim Channel Emulators. Network Testing saw a strong initial contribution from Xceed acquisition (October) and growth from the recently launched Invex II benchmarking platform.
  • Upgrade to cash forecasts but otherwise unchanged. Maintain BUY rating and 120p price target. FY results expected July 1st.

NORTHLAND CAPITAL PARTNERS VIEW: Positive outturn to the year given the traditional Q4 weighting with P&L expected to be in line with forecast and a beat on cash. Outlook statement is reasonably encouraging with spend across both divisions and contributions from recent acquisitions. We maintain our BUY rating and 120p price target.


Sportech plc (LON:SPO): Trading update

Market Cap: £140m; Current Price: 68p

  • Expect to be in line with full year expectations
  • In Racing & Digital key customer contracts were successfully renewed with Mountaineer Gaming, Emerald Downs and Parx racing and the business is progressing with several potential new customers. However amounts wagered in the four months was -3% on prior year. Furthermore, the digital business has suffered from the loss of two significant and profitable customers. 
  • In Sportech Venues, the severe winter weather has caused race day cancellations and temporary venue closures as well as the rebuilding of a major venue meant overall betting volumes were -9% YoY in venues.
  • In Football Pools the business is performing in line with management expectations and new players to date in 2015 were 10% higher YoY. Furthermore, online customers were being acquired at a much lower cost which is encouraging for the bottom line in the pools business. The Board also confirms that it had received an approach for the pools business which was rejected.      

NORTHLAND CAPITAL PARTNERS VIEW: Sportech is a quality business with a large fully regulated gaming footprint from licensed markets which is not necessarily reflected in the rating of c. 14x FY15 consensus earnings. However today’s reference to lower betting volumes in the first four months, specifically in venues which was -9% and accounts for almost a third of revenues, would imply lower profit expectations, though management expects trading will be in line for FY15.

]]> Miners balance out rough day for banks on ASX Tue, 12 May 2015 07:20:00 +0100 Miners balance out rough day for banks on ASX 

This article by Max Mason for the Sydney Morning Herald may be of interest to subscribers. Here is a section:  The bad performance of the banks on Monday was more or less balanced by a strong day for the big miners.

BHP Billiton lifted 1.7 per cent to $31.82 and Rio Tinto pushed 0.3 per cent higher to $58.62, while iron ore miner Fortescue Metals Group gained 2.8 per cent to $2.57.

Miners were enjoying a strong run, thanks to a 30 per cent jump in the price of iron ore over the past weeks to $US61.40 ($77.76) a tonne, Metal Bulletin said.

However, UBS was forecasting iron ore to fall back to $US45 a tonne in the second half, thanks to increasing supply and China's economy continuing to soften.

This is more likely to affect the smaller miners, who have higher costs and lower-quality ore.

"We have back-calculated our company net present values to the current share price in order to determine what iron ore price the equity market is currently factoring in," UBS analyst Glyn Lawcock said.

"Our analysis suggests an average implied price of $US51.50 per tonne, which suggests the market is still implying discount to spot."

Eoin Treacy's view 

At The Chart Seminar in Sydney last year delegates were at pains to highlight that fact that just about all of them had positions in Australian banks because it had been the go-to sector since the resources sector peaked not least because the banks continue to have full franking on top of attractive dividends.  

The sector has outperformed since 2009 but has pulled back sharply over the last month and is now testing the relative uptrend and the upper side of the underlying congestion area. This is now an important point for Australia¡¯s banks since they are approaching potential areas of support. Westpac is representative and will need to find support within the next $1 if the medium-term progression of higher reaction lows is to hold. 



Zulily Shares Jump After Alibaba Raises Stake in Online Retailer 

This article by Kristen Haunss and Spencer Soper for Bloomberg may be of interest to subscribers. Here it is in full:  Shares of Zulily Inc. rose as much as 24 in premarket trading after Chinese e-commerce company Alibaba Group Holding Ltd. increased its stake in the U.S. online retailer.

Alibaba bought $56.2 million of stock, according to a regulatory filing. That brought the Chinese company¡¯s stake to 11.5 million shares, or 9.3 percent, according to filings and data compiled by Bloomberg. Alibaba Chairman Jack Ma has set a goal of getting 50 percent of sales from outside China as the nation¡¯s economy is projected to grow at its slowest pace since 1990.

Shares of Zulily -- which sells clothing, home decor and related items, mostly to women -- rose as high as $16.45 percent 8:25 a.m. in New York on Monday.

The stock had dropped 82 percent since its all-time closing high of $72.75 on Feb. 27, 2014, after a November 2013 initial public offering. The shares dropped to a record low close of $10.82 on May 6 and then rebounded in the following two days as Alibaba added to its stake.

At the end of March, Zulily had 5 million customers who had made at least one purchase in the previous year, up 35 percent from the previous year. More than half of all the Seattle-based company¡¯s sales are on mobile devices. 

Eoin Treacy's view 

Zulily succeeded in the flash sale sector where may before it failed but has run into trouble as it grew because of its zero inventory business model. This means that the end user who successfully purchases items in one of its "events" may wait three weeks or longer to receive the goods. It is not yet apparent whether the company has come to terms with its logistics issues but its database of 5 million potential customers has obvious appeal for a potential acquirer.

The share bounced on Friday from the region of $10 and a sustained move below that level would be required to question additional potential for a closing of the overextension relative to the 200-day MA.  


World Equity Market Valuations Tables May 11th 2015  

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

Most months I highlight the cheaper markets on a P/E basis within these tables. However this month I thought the performance of Germany's TecDAX was worthy of mention.

The rise of electricity storage Something for everybody 

This article by John P. Banks for the Brookings Institute may be of interest to subscribers. Here is a section:  In sum, there is great potential for storage both in front of the meter and on the customer side of the meter. Costs need to come down, but the longer-term trajectory indicates that this will happen, and policies and regulations to incentivize storage need to continue to be implemented to spur the creation of markets. The DOE's QER is a step in the right direction, calling for the establishment of a framework and strategy for storage and flexibility. 

In the near-term, it is likely that most of the market development and storage capacity deployed will be at the grid-scale in competitive markets such as PJM, but the SCE procurement certainly highlights the impact of supporting policy and regulation in spurring competitively procured PPA-type arrangements. In addition, California's investor owned utilities have initiated the first round of storage auctions in response to the state's mandate, with final project selection and submission to the California Public Utilities Commission for approval this coming fall.  

In the longer-term, solar-plus-storage could become increasingly economic on the customer side. Indeed, as Hamilton of the Electricity Storage Association described, the three biggest storage markets in the residential sector are California, Arizona, and Hawaii and what they all have in common is lots of solar. But beyond selected markets, residential-scale storage systems such as Tesla's PowerPack won't likely lead to mass defection from the grid in the next five to 10 years. The important point, however, is that Tesla's announcements and all the other recent news is exciting because it shows the progress and potential of a technology with multiple applications and benefits across the grid, providing something for everybody. 

Eoin Treacy's view 

In my review of utility grade energy storage companies last week, I highlighted that the sector has been in existence for a number of years but it is Tesla's high profile into the sector that has ignited media interest. We are still in the very early stages of this evolution and it is likely to persist into the lengthy medium term. 

]]> Broker Spotlight: Centrica, Man Group, Hikma, JD Sports, Mariana Resources... Mon, 11 May 2015 11:51:00 +0100 The pressure is off Centrica after Labour failed to gain power in the recent election, prompting HSBC to abandon its bearish outlook. Meanwhile, views converge on hedge fund manager Man, but SocGen downgrades Aberdeen Asset Mgt.

]]> Northland Capital Partners View on the City Action Hotels, Mariana Resources and Cyan Holdings Mon, 11 May 2015 08:12:00 +0100 Mariana Resources (LON:MARL) – SPECULATIVE BUY: Initiation

Market Cap: £19.2m; Current Price: 2.5p 

Hot Maden living up to its name with the hottest drill results of 2015

NORTHLAND CAPITAL PARTNERS VIEW: We have just returned from a site visit at Mariana Resources Hot Maden Project, located in eastern Turkey. While we were on site the drill rig was turning, testing the northern extension of the high grade copper-gold and zinc-silver mineralisation that was defined during the phase I drill programme (12/02/15). The high grade nature of the poly-metallic mineralisation defined to date means that even a relatively small deposit could generate significant value. Mariana has no near-term financial commitment at the project and is also getting paid by its joint venture partner Lidya Madencilik as the project advances. Lidya has to spend an additional US$1,800,000 on exploration and make payments of US$350,000 to Mariana to earn a 70% interest in the project. Despite the large amount of excitement surrounding the Hot Maden project, Mariana should not be viewed as a “one trick pony” and its portfolio approach to exploration means it has several other projects that hold much promise for further upside. Based on the exceptional results and potential of Hot Maden to deliver significant shareholder value, alongside the exploration potential of Mariana’s projects in Turkey, Peru, Suriname, Argentina and Chile we initiate coverage with a SPECULATIVE BUY rating.


Action Hotels (LON:AHCG): Finals

Market Cap: £86m; Current Price: 58.5p 

  • Finals slightly below but dividend in line 
  • Revenue was +26% to $38m on the back of a 9% increase in the average daily rate (ADR) to $113, a 5% increase in revenue per available room (RevPAR) to $84 and average occupancy increased by 1% to 78% on a l-f-l basis YoY. Although a commendable performance where Adjusted EBITDA increased by 34% YoY to $11.3m this was c.6.5% below consensus for FY14. Final dividend increased by 126% to 1.45p taking the total to 2.17p and in line with expectations and points to a dividend yield of c.3.7% at the current price. 
  • 1Q15 has started well where ADR was +3% YoY to $111 though marginally below the FY14 ADR of $113 we ascribe this to seasonality and expect ADR to increase throughout the year. Revenue was +22% compared to the same period in the prior year. Consensus is looking for c.57% YoY revenue growth which implies the business has a lot to do in the remainder of the year in order to meet forecasts for FY15.  
  • The group also appointed a new CFO, Krish Sundaresan, who comes with a wealth of experience in senior finance positions at international companies in the Middle East, Singapore, Japan, Australia and India. These are also key areas of expansion for the group. 

NORTHLAND CAPITAL PARTNERS VIEW: The hotel portfolio continues to expand in high growth regions though the share price is not particularly undemanding at c. 18x FY14 EV/EBITDA in our view. Finals are slightly below expectations though the business still produced a strong performance and finally an improving dividend at current price levels implies a yield closer to 4% which should attract attention.  


Cyan Holdings (LON:CYAN) – Prelims

Market Cap: £13.0m; Current Price: 0.29p 

  • Commercial progress on a number of fronts
  • Revenue +40% to £194k but with R&D spending +25% to £1.8m, operating losses remained flat at £3.3m. Year end cash of £2.3m (+43%) following £3.5m in new funding (gross) during the year. 
  • Commercial orders from Tata Power Mumbai and Essel Utilities in India, participated in multiple pilots in India and Brazil and received an order for smart street lighting in China. John Cronin has taken on a more substantive role as Executive Chairman; appointment of Peter Mainz and Harry Berry to the board and strengthened sales and marketing function with appointment of Mark Coyle.
  • Post period end, Cyan received a smart metering purchase order worth c. £1m from Enzen Global Solutions (India) for 21k smart meters, announced that Tata Power in India has successfully deployed the Cyan smart metering solution and confirmed presence in South Africa through distribution agreement and proof of concept order. Submitted R&D tax credit cash refund claim of £401k (FY13: £270k).

NORTHLAND CAPITAL PARTNERS VIEW: Commercial progress on a number of fronts with commercial orders secured for both advanced metering and lighting products and in multiple territories (India and China) and as well as the participation in a number of pilots. The commercialisation of Cyan’s technology is still at an early stage, however, as evidenced by the modest revenues but Cyan is dealing with large utilities and accelerated adoption of smart metering by existing customers or the conversion of pilot customers would transform the company’s P&L. As previously argued, the demand drivers for Cyan’s product set are strong with significant energy loss in its target markets and Cyan’s technology offers a low cost smart metering approach. The accelerated deployment at Enzen is encouraging but utilities tend to move slowly and the business will be loss making and cash consuming for this year at least.

]]> Xtract at the inflexion point Fri, 08 May 2015 14:45:00 +0100 This week has seen two announcements from Xtract Resources that have led to increased investor interest and relatively large trade volume. Xtract Resources focus on precious and base metal projects with near term cash flow potential. Last year the company acquired the Chepica Gold and Copper mine in Chile. Earlier this week on 6th May the company announced an increase in concentrate gold grades at this project, followed by a further announcement on 8th May. This highlighted a £3m fundraise having identified two significant acquisition opportunities that the management team believe could transform Xtract into a mid-tier producer.

Recent exploration work at Chepica has opened up a major gold bearing reef close to surface. Processing this reef is a simple, low cost process and will compliment current underground operations. The expectation that this would impact positively on recovered grades has become reality with gold concentrate grades increasing 10 fold from 40 to 400 grams per tonne. A further programme has been initiated to identify more high grade shoots that can be mined from surface. The £3m raised will be used in part for acquisition opportunities and working capital for further development at Chepica. It will also enable them to negotiate a significant discount on its outstanding option payments at Chepica and agree an option on a surface deposit close to the mine that would substantially boost the resource and mine life.

Small mining companies are exposed to a number of risks - exploration, development, operational and commodity prices to name a few. Xtract is no different but they have delivered on their promise of returning the mine to profitability and we look forward to further news flow with regards acquiring new assets and the planned increase in profitability.





]]> Busy week for Rosslyn Fri, 08 May 2015 13:50:00 +0100 It has been a busy week for Rosslyn Data Technologies with two announcements that have caught the eye. Rosslyn is a leader in cloud-based data analytics. They have developed a cost effective, scalable, cloud based solution versus traditional on premise, slow and expensive solutions. Their platform RAPid enables companies to simply collect, cleanse, enrich and analyse data from numerous sources. 

On the 5th May the company announced a partnership with PricewaterhouseCoopers. The launch of a joint business relationship with PwC brings in fresh and new data services to companies around the world. As detailed in the announcement, PwC and Rosslyn will help clients by collaborating on existing solutions and developing offerings in three areas:

Help companies succeed by leveraging PwC’s business insights along with Rosslyn’s suite of cloud-enabled data technologies. Companies can therefore use the data more efficiently to reduce costs and risks, improve productivity and improve customer services.

Use the combined power of PwC’s analytical acumen and Rosslyn’s platform to help businesses make the most of technology and information and be better equipped to compete and creating new services to reinvent and optimise operations.

Optimise and improve companies’ innovation, guiding then to break new ground in their businesses.

Further encouraging news followed on the 8th May with two contract wins with a Fortune 500 provider of services and technology and a FTSE 250 Strategic Outsourcing Company. The multi-year deals are worth $375,000 and £170,000 respectively and both clients are likely to be live in a matter of weeks, highlighting the time benefits of using Rosslyn’s platform.  

The new business wins indicate that momentum is building at Rosslyn as they progress towards breakeven. House broker, Cenkos Securities, forecast this will be achieved in the next fiscal period. The company must continue revenue growth and maintain good cash husbandry to achieve this without requiring further funds. Operating in a competitive market provides other headline risks. Recent developments suggest that the business proposition is being de-risked and we look forward to hearing more from Rosslyn.

Charles Clark, CEO said that this week’s contract wins “underpin our strategy of land and expand where, through our self-service big data cloud analytics platform, we are able to rapidly deliver value and deepen our relationships. Clients of all sizes are now able to rapidly exploit their large and complex data sets whilst seamlessly expanding into multiple other business areas from one centralized platform.” 

]]> Broker spotlight – Election results, Babcock, Dixons Carphone, BHP Billiton, Randgold, Real Estate ... Fri, 08 May 2015 11:40:00 +0100 The more decisive election result, and a better than expected outcome for the Conservative party, is ‘probably positive’ for public sector outsourcing groups - says JP Morgan

]]> Northland Capital Partners View on the City Pendragon Group Fri, 08 May 2015 08:25:00 +0100 Pendragon PLC (LON:PDG): Trading Statement

Market Cap: £526m; Current Price: 36p

  • Good performance in the 1Q15 
  • Strong performance from PDG where underlying profit before tax was +10.4% YoY on the back of not only an increase in online visits to, and +25.6% in the quarter but also the new ‘click and collect’ service which launched in February has helped used vehicle sales increase by over 8%, outperforming the market. 
  • Aftersales gross profit was +3.6% on a l-f-l basis on the back of technology enhancement. Used vehicle gross profit was +2.9% on a l-f-l basis which included benefit from the ‘click and collect’ service whilst new vehicle sales gross profit was +9.9% on a l-f-l basis as the business benefited from double digit revenue growth in Evans Halshaw and Stratstone.
  • Balance sheet remains in strong shape where underlying net debt to EBITDA ratio remains below the target range of 1x to 1.5x. The outlook remains positive and given the strong start to FY15 management are comfortable in meeting expectations. Consensus PBT forecasts imply 7.5% PBT growth for FY15 to £64.7m, however given that the 1Q15 was 10.4% or 300bps higher we expect there should be positive changes to forecasts.

NORTHLAND CAPITAL PARTNERS VIEW: The share price has been slightly weaker in recent months down c.12% since the early part of March. Today’s news should be well received so we expect the shares to trade well today. The stock trades on c. 11x FY15 consensus earnings which does not appear demanding in our view and with potential upgrades to follow the multiple looks less demanding. A prospective dividend yield of c. 3% doesn’t appear overly attractive. However, investors should be encouraged by the performance in the early part of FY15.

]]> U.K. Conservatives to Win Most Seats, Election Exit Poll Suggests Fri, 08 May 2015 08:10:00 +0100 U.K. Conservatives to Win Most Seats, Election Exit Poll Suggests 

Here is this topical report from Bloomberg: David Cameron is on course to remain prime minister at the head of a minority government after the U.K. general election, an exit poll showed. The pound jumped.

The prime minister’s Conservatives were forecast to win 316 of Parliament’s 650 seats, with Ed Miliband’s Labour Party trailing on 239 seats, according to the survey of voters published shortly after polling stations closed Thursday.

The forecast, based on interviews at voting centers in 140 districts across Britain, put the Scottish National Party in third place with 58 seats and Deputy Prime Minister Nick Clegg’s Liberal Democrats fourth with 10, almost wiping out the 57 seats they won in 2010.

“We haven’t had an incumbent government increase its majority since 1983,” Conservative Chief Whip Michael Gove told the BBC. “If it is right, it means the Conservatives have clearly won this election and Labour has lost it.”

The pound rose 1.1 percent to $1.5418 as of 10:02 p.m. London time. Sterling strengthened 1 percent to 73.15 pence per euro.

The first results from electoral districts will start coming in from about 11 p.m. London time, with the final seat not due to declare until Friday afternoon.

David Fuller's view 

If true, and the exit polls cannot be entirely wrong, this is an unexpectedly large triumph for David Cameron and all the Conservative Party.  


Brexit Threat Looms Over UK Election and European Fate 

Here is the opening of this insightful analysis by Ambrose Evans-Pritchard for The Telegraph: Chanceries, political elites and business federations across Europe, regardless of whether they are on the Left or the Right, are hoping theConservative Party loses this week's general election.

All the better if a motley Labour government is strapped to a bloc of triumphant Scottish Nationalists, guaranteeing a double-lock against any further flirtations with Brexit. Or so goes the argument.

They should be careful what they wish for. David Cameron is perhaps the only man who can ultimately prevent Britain breaking away from the EU, and therefore prevent a fatal body blow to an ailing project that lost its emotional hold over Europe's people long ago and no longer has a plausible claim to economic legitimacy.

Lest we forget - carried away by a short-term cyclical rebound - the eurozone is only just beginning to recover from an economic slump that has proved deeper and more intractable over the past six years than the Great Depression, with four sovereign insolvencies and mass unemployment to match. Nor should we forget either that the second leg of this episode was entirely caused by policy blunders and the unworkable structure of EMU governance.

A Labour-SNP arrangement would be inherently weak and unstable, like the string of Gladstone governments dependent on the swing vote of the Irish Home Rule movement in the late 19th century.

There might be no referendum on EU withdrawal in 2017, but that would settle nothing. "While a Labour victory might reduce the prospect of Brexit over the next five years, it could increase them over the next 10," writes the think-tank Open Europe.

A Tory defeat would flush out the last EU dreamers and leave a post-Cameron party with even less tolerance for the posturing of Commission chief Jean-Claude Juncker, who this week accused the Anglo-Saxon world of trying to destroy the euro and vowed to stop Britain imposing its "exclusive agenda on all the other member states of Europe”.

There is a high likelihood that such a party would let it rip on euroscepticism while in opposition and then come roaring back in five years time, led by Boris Johnson if the bookies are right, fully-immunized against the illusionary seductions of europhilia by his childhood in Brussels.

His economic report on the pros and cons of Brexit concluded that the City of London could continue to flourish in a free-trade world outside the EU. Such an outcome might not be ideal - he argued - but the worst of all worlds would be for Britain to stay shackled to a political construction that failed to reform. This is a warning shot.

David Fuller's view 

A voluntary alliance of previously independent nations in a single currency is bound to lose support within member countries which are weakened by that union over lengthy periods.  For the EU, this becomes inevitable if GDP growth persistently underperforms and there is no federal system to support the weakest countries. 

Mario Draghi’s ECB is a monetary lifeline for the EU but it cannot change Greece’s economic policies or those of any other state.  ‘Brexit’ will eventually occur if there is no political and economic reform within the EU.  Wolfgang Schauble’s comments on this point, which you can find a little further along in the article above, are telling.  In fact, I strongly recommend the entire article to anyone interested in this topic.

A PDF of the article is posted in the Subscribers’ Area.


My personal portfolio 

A trade opened

David Fuller's view 

Details and charts are in the Subscribers’ Area.


Greece Faces Deadline Next Week as ECB Eyes Haircut Option 

This article by Nikos Chrysoloras and Ian Wishart for Bloomberg may be of interest to subscribers. Here is a section:  Most members of the ECB’s Governing Council, led by President Mario Draghi, argued Wednesday that it would be unfair to restrict access to liquidity before the outcome is clear from Monday’s meeting of euro-area finance ministers, one of the people said. For now, governors are content to keep Greek banks’ liquidity for as long as they are solvent and have adequate collateral, according to a so-called “terms of reference” unofficial document read to Bloomberg News.

“In the interest of all parties involved, one shouldn’t expect spectacular results on Monday,” German Finance Minister Wolfgang Schaeuble told reporters in Berlin. Handing aid to Greece without reforms in the country is a “bottomless pit that doesn’t make sense,” he said. 

Eoin Treacy's view 

While the current focus of attention is on how Greece will manoeuvre through what is a difficult few weeks, there are some additional considerations that are also coming to bear. For traders, the funding mechanism for trades and the fact that bonds trade on a relative value basis are important right now. 

The combination of the Euro’s decline, the ECB’s newly found expansionary zeal and ultra-low interest rates created the conditions for a powerful carry trade from May 2014. As the Euro declined the inverse relationship with the stock market evolved and bond prices surged. 


To Raise, or not Raise? That is the Question 

Thanks to a subscriber for this report by Jeff Gundlach at DoubleLine Capital. There are some really interesting charts in this presentation, not least those pertaining to European equity yields relative to bonds as well the maturity schedule for Treasury and Covenant Light debt. 

Eoin Treacy's view 

A link to the full report is posted in the Subscriber's Area.

The Euro STOXX 50, an index of Eurozone Blue Chips, yields 3.38%. Spanish debt yields less than 2% and Bund yields are much lower. 

This chart of the Index redenominated to US Dollars highlights just how much of a role the Euro’s weakness has had on the Index’s nominal performance. This is a similar situation to Japan when it embarked on its QE program in 2012. It took a while for earnings expectations to catch up with the benefit that accrues from the competitive advantage of a sharply weaker currency. 


Alibaba Shares Surge as Chinese E-Commerce Giant Replaces CEO 

This article by Lulu Yilun Chen and Tim Culpan for Bloomberg may be of interest to subscribers. Here is a section: Alibaba Group Holding Ltd. shares surged the most intraday since September as the company named a new chief executive officer, nine months after a record initial public offering.

China’s biggest e-commerce operator posted a 45 percent increase in revenue.

Daniel Zhang will become CEO on May 10, replacing Jonathan Lu, who will remain on the board as vice chairman, the company said Thursday. The change was announced as Alibaba’s sales rose to 17.4 billion yuan ($2.8 billion) in the three months ended in March, beating analysts’ estimates.

Zhang hopes to build a global platform beyond China, part of a strategy that is “a long journey,” he said in an interview Thursday on Bloomberg Television.

Alibaba’s market value had plunged as much as $90 billion from a November peak amid concern about slowing economic growth and criticism from the Chinese government about its business practices. Billionaire Chairman Jack Ma elevated Zhang after the chief operating officer helped turn the Nov. 11 “Singles’ Day” shopping promotion into the company’s biggest sales day.

“Perhaps Jack is sending a signal to the capital markets and the regulator that he’s willing to make changes,” said Mike Clendenin, managing director of RedTech Advisors.

Eoin Treacy's view 

Alibaba’s honeymoon period is over. Investors are now focusing on the success of its business model in delivering on the promise of international domination. One of the issues it faces with competing internationally is the long shipping times required to move goods from China to the end customer. Solving this challenge requires a great deal of investment in logistics and local warehousing within target markets. As a result progress is slow. 

]]> Broker spotlight - Imperial Tobacco, Home Retail, Genel Energy, Rightster, Motif Bio... Thu, 07 May 2015 12:03:00 +0100 Imperial Tobacco (LON:IMT) remains a buy for the scribes at UBS despite the problems it is suffering in Iraq.

Another wrinkle is the uncertainty over the deal between US rivals Reynolds/Lorillard, which if it goes through would see a raft of brands sold to Imperial to get regulatory clearance.

UBS says while the deal is not certain to happen, Imperial’s current valuation offers an attractive risk/reward trade-off, especially if eventually it does consolidate all its US cigarette production into Lorillard’s Greensboro factory.

Earnings could get an US $800m boost from that, while leverage, cheap debt and a tax shield means this would translate into a 25% uplift in Imperial’s free cash flow.

Imperial’s yield meanwhile limits the downside if the deal does not go through. The target price 3,350p.

Peel Hunt likes Acacia Mining (LON:ACA), the former African Barrick but said the share price may be getting ahead of itself.

With a heavy second half weighting, the company should trade at one times NAV ahead of this key production period, which has prompted a downgrade to' hold' from 'buy' despite the NAV estimate rising to 300p.

Cenkos analyst Simon French has resumed his coverage of online video specialist Rightster (LON:RSTR) - after the AIM firm arranged a new £5.3mln funding - with a ‘buy’ recommendation.

French highlights that Rightster is one of the larger participants in the global online video market, which he says is forecast to grow by 29% (CAGR), between 2014 and 2017, to US$23bn. 

He adds that the company is already YouTube’s largest partner in Europe and said its multi-territorial approach provides it with significant global reach.

Motif Bio’s (LON:MFTB) newly unveiled three-pronged funding strategy for the clinical development of its lead antibiotic candidate, called iclaprim, can maximise shareholder value, says Vadim Alexandre, analyst at Northland Capital.

“Given the overwhelming recent interest in antibiotic drug development by multiple stakeholders globally, including governments, major foundations, healthcare providers and the pharmaceutical industry, we estimate that Motif Bio’s three-pronged funding strategy allows the group considerable flexibility in how best to proceed with iclaprim,” he said in a note.

In the mining sector, meanwhile, Alexandre’s colleague Dr Ryan Long described Mariana Resources (LON:MARL) latest exploration results from the Hot Maden project as ‘positive’.

Long, who is currently visiting the site, said he has been impressed by the potential scale of the project and noted several other targets outside the current area of focus which he believes could add further upside for Mariana.

Home Retail Group (LON:HOME) is in for a tough year, Exane BNP Paribas reckons.

Analysts at the French broker think the shares will ‘underperform’ and knocked 20p off their 180p target this morning.

At Argos, the transformation program is behind plan, according to the firm, while store closures at Homebase present additional execution risk and operational headwinds.

“Some investors who regard Home Retail  as a geared top-line recovery story, now find themselves geared into near term forecast risk,” said the broker.

“In our view caution will continue to weigh on forecasts and valuation.”

Looking ahead, BNP Paribas reckons Homebase looks set to face a reinvigorated competitor in B&Q. 

Argos, meanwhile, continues to lack pricing power  and its competitive advantage for convenience is being eroded by online peers.

Elsewhere, Citi analysts tucked into Just East (LON:JE.) after the company’s first quarter trading update this week.

Just Eat lets customers  order food from over 40,000 different restaurants and takes a commission of about 10%.

Total orders for the 3 months to 31 March were up 51% and Citi upped its price target for the shares by 35p to 550p. 

“We continue to believe this premium valuation is justified, given the early-stage evolution and strong current earnings growth trajectory,” said the broker.

Barclays topped up its share price predictions for FTSE 100 insurance giant Prudential(LON:PRU).

The broker now has a target price of 1877p on the company’s shares with an ‘overweight’ rating.

Oil firm Genel (LON:GENL) suffered a downgrade this morning. 

Broker Jefferies cut its target price for the shares from 757p to 705p, but adds it is the only stock trading below core NAV (639p) due to the overhang from continued Kurdistan (KRI) export payment uncertainty. 

Clarity on this situation is a catalyst out there but with no certainty on timing. 

]]> Yellen Says Stock Valuations Quite High, Bond Yields Low Thu, 07 May 2015 08:27:00 +0100 Yellen Says Stock Valuations Quite High, Bond Yields Low 

Here is the opening and a latter section of this topical article from Bloomberg: Federal Reserve Chair Janet Yellen, surveying the financial landscape for signs of bubbles after more than six years of near-zero rates, warned that both stocks and bonds are richly valued.

“I would highlight that equity-market valuations at this point generally are quite high,” Yellen said in Washington on Wednesday in response to a question at a forum on finance. “Now, they’re not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very low, but there are potential dangers there.”

Yellen said bond yields “could see a sharp jump” when the Fed raises its benchmark interest rate. Most Fed officials predict that will happen this year for the first time since 2006.

The prospect of an adverse market reaction could make the Fed wary about raising rates too soon and too rapidly, said Thomas Costerg, an economist at Standard Chartered Plc in New York.


Yellen said that after holding rates near zero since December 2008, the Fed must be on the lookout for threats to financial stability. She spoke in response to questions from International Monetary Fund Managing Director Christine Lagarde during a panel discussion at the “Finance & Society” conference sponsored by the Institute for New Economic Thinking.

She said she sees signs of “reach for yield” in the market for leveraged loans, and that bond yields could jump when the central bank raises its benchmark rate.

“Long-term interest rates are at very low levels,” Yellen said. “We could see a sharp jump in long-term rates” after liftoff.

“We saw this in the case of the taper tantrum in 2013, where there was a very sharp upward movement in rates,” she said in reference to the episode in the middle of that year, when then-Chairman Ben S. Bernanke suggested that the Fed could start tapering its bond purchases in the next few meetings.

David Fuller's view 

What is the single word that springs to mind when someone asks you to describe a 35-year bull market?

Yes, I agree, it is BUBBLE!

Institutional investors have been buying US Treasuries for over three decades, wisely because inflationary pressures were coming down.  They received an additional fillip from QE.  However, is it still appropriate to refer to “safe assets like bonds”, as Dr Yellen does above?  Not in this context, I suggest. 

(See also yesterday’s ‘Interesting charts of the day.)   

This item continues in the Subscribers’ Area. 


Cameron Might Just Win After All, Bookmakers Say on Eve of Vote 

Here is the opening of this topical report by Bloomberg: Ed Miliband might want to hold off measuring for curtains in No. 10 Downing Street just yet as Conservative incumbent David Cameron stages a comeback in the betting market on the eve of the election.

William Hill Plc, the biggest U.K. bookmaker, gives Labour leader Miliband and Cameron the same chance to be prime minister, with the odds on both at 10-11, meaning a successful 11 pound ($16.70) bet wins 10 pounds. Last month, William Hill had Miliband as favorite, as did Betfair, which now gives both an even shot.

Opinion polls indicate neither Cameron nor Miliband will win enough seats tomorrow to govern the U.K. without the support of smaller parties. Odds show the most likely next government is a Labour minority, given the Scottish National Party has offered to support Miliband. Yet the Conservatives will win the most seats and votes, odds show.

David Fuller's view 

I think Cameron needs at least 15 more seats than Miliband, taking him over 300, to be sure of forming the next government.  Polls are not reflecting this but they can be inaccurate.  Betting shops are a fraction closer, as are the UK’s financial markets which have remained stable.

Conservatives underestimated Miliband’s energy for the campaign and this could be costly.  Also, Conservatives lost the word game.  All leftwing types now describe the most socialist policies as ‘progressive’.   Conservatives were branded as the ‘austerity’ party and until the last few days only George Osborne seemed to talk about responsible governance. 

I found it a depressing campaign, woefully short of leadership, not to mention humour with the exception of Boris Johnson who will surely be the next leader of the Conservative Party.      


My personal portfolio 

A trade closed

David Fuller's view 

Details and charts are in the Subscribers’ Area.


Indian Stocks Slump to Five-Month Low as Foreigners Extend Sales 

Here is the opening and also the last paragraph of this report from Bloomberg: Indian stocks tumbled, with the benchmark index falling to its lowest level this year, after block deals in index futures and foreign funds extended the longest selloff in local shares this year.

Bharat Heavy Electricals Ltd., the top power-equipment maker, was the biggest loser on the S&P BSE Sensex, while NTPC Ltd., the largest utility, fell the most in eight weeks. ICICI Bank Ltd. slid to a three-month low, sending a gauge of lenders its sharpest loss since April 27. The yield on sovereign bonds due 2024 climbed to a four-month high and the rupee weakened.

The Sensex plunged 2.6 percent to 26,717.37, the lowest close since Dec. 17. The gauge briefly extended losses to more than 10 percent from its Jan. 29 record, meeting the definition of correction, as more investors seek more evidence that the government’s efforts to bolster growth will lead to a revival in company profits. Foreigners sold $475 million of shares on Thursday and Monday, and have been sellers of CNX Nifty futures since April 23.


The Sensex has dropped 2.8 percent this year and trades at 14.8 times projected 12-month earnings, the cheapest since December. The MSCI Emerging Markets Index is valued at 12.5 times, data compiled by Bloomberg show

David Fuller's view 

Markets are volatile and this remains a lengthy consolidation of earlier strong gains for India.  That is a normal process which allows valuations for this fast-growing market to catch up.

Charts for India are in the previous section above. 

]]> Northland Capital Partners View on the City Mariana Resources and MotifBio Thu, 07 May 2015 08:15:00 +0100 Motif Bio plc (LON:MTFB) – CORP: Strategy update 

Market Cap: £21m; Current Price: 32p

  • Three pronged approach to fund approved trials
  • Motif Bio issued an update on its strategy to fund its FDA approved Phase 3 clinical development programme for the Company's lead antibiotic candidate, iclaprim.  
  • The Company anticipates commencing Phase 3 trials in the second half of this year.
  • The group will apply a three-pronged approach to fund the trials, including: 
  • Strategic partnerships with other pharmaceutical companies; 
  • Non-dilutive government funding from grants; 
  • Market funding should the valuation of the Company be supportive.  

NORTHLAND CAPITAL PARTNERS VIEW: Given the overwhelming recent interest in antibiotic drug development by multiple stakeholders globally, including governments, major foundations, healthcare providers and the pharmaceutical industry, we estimate that Motif Bio’s three-pronged funding strategy allows the group considerable flexibility in how best to proceed with iclaprim and thereby maximise shareholder value. 


Mariana Resources (LON:MARL) – CORP: Hot Maden update

Market Cap: £21m; Current Price: 2.75p

  • Phase II drilling progress and initial metallurgical results
  • Mariana Resources’ joint venture partner Lidya has completed the first two holes (HTD-08 and HDT-09) of the 10,000m Phase II drill programme at the Hot Maden project, located in Turkey.
  • Drill hole HTD-08 was collared c. 50m north of previous drill hole HTD-04 (103m at 9.0 g/t Au & 2.2 % Cu from 25m) and intersected a primary sulphide stockwork/breccia zone between 123m and 169m down hole with massive sulphide between 131m and 136.7m down hole. Core is now at the ALS laboratory in in Izmir with results expected shortly.
  • Drill hole HTD-09 was a c. 50m step back hole to drill under of previous drill hole HTD-04 to a depth of 361m. The core is currently being logged and sampled.
  • A second drill rig is now on site and should speed up the drill programme.
  • Initial metallurgical work has been completed on the deposit, but it is very preliminary in nature. There appears to be no deleterious elements such as arsenic or mercury and the gold is mostly free or associated with pyrite and fine grained in nature (20 to 75 microns).
  • A quick leach on a small sample from the Phase I drilling returned positive preliminary results for gold with a rougher concentrate returning 93% recovery on the copper. Though at this stage much more detailed testing is required including gravity separation tests on the gold.
  • Assay results are expected in May and will continue to be released throughout the drill programme.

NORTHLAND CAPITAL PARTNERS VIEW: Positive results from the initial follow up drill programme at Mariana’s Hot Maden project with visual inspections of the core from HTD-08 demonstrating the continued presence of a brecciated sulphide stockwork. Initial metwork is also positive with good recoveries of both the copper and the gold. We are currently in the final day of our site visit to the project and have been impressed by the potential scale of the project and note the presence of several other targets outside the current area of focus that could provide further upside.

]]> Broker spotlight - BHP Billiton/South32, Zoopla, Asos, Sky, DP Poland... Wed, 06 May 2015 12:37:00 +0100 Shareholders vote today on the demerger of BHP Billiton’s (LON:BLT) unwanted assets into South32 and the mining giant has been busy showing analysts around the assets on their way out.

JP Morgan sees cost savings rather than improved production or longer mine lives as the driver of the rag bag of aluminium, silver, lead and manganese operations

The staff also generally seemed supportive said the broker despite the prospect of job cuts.

JPM estimates BHP's underlying earnings will fall around US$2bn post the deal, with net debt largely the same, leaving a slightly tighter balance sheet. 

Neutral is the broker’s rating with a 1,600p price target.

Zoopla’s (LON:ZPLA) move to buy energy  comparison site uSwitch was praised by Berenberg this morning.

Last week, the online property portal announced the £160mln acquisition. Boss Alex Chesterman said the move would create a “single resource for customer’s property needs.”

According to analysts at Berenberg, Zoopla is now one step ahead of Rightmove (LON:RMV) in expanding its portal to include other businesses  related to the home.

“We are raising our price target of Zoopla to 2600p (from 2500p) as a result of the growth potential of the newly acquired company ,” said the broker.

JP Morgan raised its target price on online fashion retailer ASOS (LON:ASC) by 400p to 4000p this morning.

ASOS showed clear top-line momentum through the second quarter which we expect to have continued into Q315,” said JP Morgan’s Georgina Johanan.

"Whilst we are only half way through the current quarter, we raise our full-year PBT forecasts by 4% to reflect our confidence on the top line. 

“With the shares  now 14% below recent highs, we take this opportunity to reiterate our 'overweight' recommendation.”

After reporting its results yesterday, Aberdeen Asset Management (LON:ADN) had its share price target cut by RBC Capital Markets.

The broker reckons the stock will underperform and now has a 440p target price on the shares.

Despite reporting a £270mln profit, Aberdeen was hit by heavy fund outflows as investors bailed out of emerging markets.

Jefferies, meanwhile, kept its ‘hold’ ratings on Sky (LON:SKY) and Vodafone (LON:VOD) but decided to up its share price target by a fraction on both.

House broker Peel Hunt has given drug distributor and developer Clinigen (LON:CLIN) a bullish write-up following its acquisition of Idis for £225mln.

The deal is strategically compelling, argues the broker, strengthening its competitive advantages in all three of its existing divisions, with the potential for revenue synergies to benefit each. 

Idis also adds a new division supplying unlicensed medicines on demand, opening up a large (possibly US$5bn plus) market opportunity for the company.

Greater critical mass meanwhile, gives Clinigen the clout to capitalise on the opportunity and the potential means a punchy new price target of £10 against 717p previously. Clinigen is also Peel Hunt’s top pick in the sector.