FTSE leads the rebound against sour Apple Tuesday

Jamie Gordon
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FTSE leads the rebound against sour Apple Tuesday
Ahead of the inflation data released on Wednesday, the FTSE led the early morning rally in global equities, bouncing 1.0% following a Tuesday hampered by Apple‘s (NASDAQ:AAPL) bleak Coronavirus outlook and ZEW-based sentiment. The FTSE can celebrate this small victory, having also led the rally yesterday, but should brace itself for a turbulent few days. Inflation data will likely offer – at the very least – pause for thought, and Friday’s oncoming manufacturing PMIs are already making onlookers hold their breath. Later on Wednesday, Dow Jones futures anticipate a slow start for the world’s largest index, which over the last few weeks has reminded investors how much it acts as a lynch pin for any rally in global equities. Should this modest movement come to fruition, European markets could see their progress halted during the afternoon. Speaking on the morning’s movements, Spreadex Financial Analyst Connor Campbell stated,

“Quickly brushing aside the fears sparked by Apple’s revenue warning on Tuesday, the markets immediately got back on the horse on Wednesday, attempting to resurrect last week’s rally.”

“With its commodity stocks in rebound mode the FTSE was the morning’s best performer, leaping 1% higher to near 74507400.”

Among the main developments in this sector have come from Hochschild Mining Plc (LON:HOC), who have seen their shares bounce 7% on a strong set of full-year results, and Tower Resources PLC (LON:TRP), who announced their plans to spud the NJOM-3 well.

“A 0.6% increase from the DAX pushed it above 13740, leaving it around 40 points shy of its recent record peak. The CAC, meanwhile, added 0.5%, as it hovered 20 points below 6100.”

“The Dow Jones, however, is currently facing a less excitable increase of just 0.1% when the US session starts – something that could sap the energy from its European counterparts later this afternoon.”

“The markets are arguably in a transition period between focusing on daily new case and death toll figures, to data that will show the economic impact of the coronavirus. Already on Tuesday they got a taste, not only with the Apple statement but a drastic drop in the German and Eurozone-wide ZEW economic sentiment. Friday will be the biggie in this regard, bringing with it a wave of flash manufacturing PMIs. Until then, however, it seems like investors are content to ignore the warning signs for as long as possible.”

“Receiving a post-jobs report boost against the euro, but unable to maintain its gains against the dollar, the pound gets another test this Wednesday in the form of the latest inflation data. Analysts are expecting a sharp bounce, from 1.3% to 1.6% month-on-month.”

Tower Resources set to commence spudding of NJOM-3 well in Cameroon

Ishen Patel
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Tower Resources set to commence spudding of NJOM-3 well in Cameroon
Tower Resources PLC (LON:TRP) have told the market that they are planning to spud the NJOM-3 well. This well is located on the Thali licence, which is in Cameroon. Tower have said that these operations are set to commence in June, however the date is still flexible as it could take longer than expected. The oil and gas exploration firm said that long lead items are already at its base in Douala. However, some testing equipment needs to be moved before the well is spudded, along with the relevant personnel. Tower Resources said: “The Company has made considerable progress in farm-out discussions with a number of parties regarding some or all of the well funding, including exchanging draft term sheets, following a pause in discussions that took place while the Company was waiting for formal confirmation of the extension of the current exploration period of the Thali PSC. The Company believes that it will be able to complete a farm-out within its desired timeframe for the NJOM-3 well although there can be no certainty as to timing or eventual outcome of such discussions.”

Tower Resources’ joint venture

In October, Tower Resources announced that they had pursed a joint venture with an undisclosed oil major. The Company stated that it had given technical and commercial information to an ‘international oil company’ with a view to spark discussions of a potential joint venture. The announcement follows preliminary discussions held earlier in the year, and is focused on prospective co-operation on Tower Resources’ Namibian Blocks venture. “This process is at a very early stage, and may not lead to any agreement. However, it does provide a timely reminder that, in addition to our Cameroon appraisal and development project, the Company has two extremely attractive exploration opportunities in Namibia and South Africa.” Tower are certainly making progress in Cameroon, which is a country which might not have as much focus when it comes to oil and gas exploration. Tower Resources should remain confident and with the backing of the joint venture – shareholders will hope that exploration can result in high yield. Shares in Tower Resources trade at 0.48p (-9.14%). 19/2/20 12:08BST.

Starcom shares jump on supply and support agreement with CubeMonk

Ishen Patel
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Starcom shares jump on supply and support agreement with CubeMonk
Starcom PLC (LON:STAR) have signed a three year supply and support agreement with US shipping serviced provider CubeMonk Inc. The wireless solutions and technology firm said that the agreement would allow the supply and support of Kylos Air technology units. The Kylos Air technology will be used as part of CubeMonk’s tracking service for air containers. Starcom expressed that they had been working with CubeMonk over the last year to implement Kylos Air technology for shipping solutions. The firm noted that the trial had been successfully completed, and had produced pleasing results – adding that it had seen “very positive feedback from the end users in the trial.” Avi Hartmann, CEO of Starcom, commented: “Following the successful trial, we are proud to have reached this important milestone in our relationship with Cubemonk in the USA. This contract, along with others under active negotiation, demonstrates the significant opportunity for Starcom to expand its OEM strategic partnerships with companies that will benefit from our proven technology to enhance their respective businesses.” The Kylos Air units are connected through Starcom’s online control software, and will monitor key container parameters including location, internal temperature and shocks experienced. The units are automatically shut off during the take off and turn on immediately after the landing of the aircraft in order to comply with aviation regulation – which shows their practical use.

Starcom’s rising profit expectations

At the start of the month, Starcom reinstated their strong expectations following a strong period of trading. The firm that it expects to swing to an annual profit following strong revenue gains tied in with stable gross margins. Adjusted earnings before interest, tax, depreciation and amortization are expected to be around $300,000, swinging from a loss of $8,000 the year prior. Gross margin remained stable at 41% compared to 40% for 2018. The wireless solutions for remote tracking and monitoring of assets and people firm said that it strengthened it product offering and created its own opportunity for accelerated growth. Looking forward, the firm said that in 2020 it will be looking to delivery up to $2 million worth of Lokies, which will give a great chance for the firm to expand its horizons. Looking ahead, Starcom said it will build on its collaborations with companies such as Zero Motorcycles Inc, Israel Chemicals Ltd and WIMC Solutions Inc. Shares in Starcom trade at 1p (+4.39%). 19/2/20 11:57BST.

Post Brexit immigration plans will not give visas to ‘unskilled workers’

Ishen Patel
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2
Post Brexit immigration plans will not give visas to ‘unskilled workers’
The British Government, led by PM Johnson has unveiled their plans for the post-Brexit immigration reform. PM Johnson still faces a lot of work to get Brexit ‘done’, however progress has been made since the December election – where he won the legitimate mandate to govern. One of the key themes of the Brexit campaign back in 2016 was the issue of immigration. The rise of disengagement with British Politics came down to the fact that the government were seemingly not taking a stance on EU immigration. Lies, rumors and propaganda on immigration dominated both Brexit campaigns – for both the ‘leave’ and ‘remain’ sides, however PM Johnson has made a commitment to deliver Brexit in the best interest of the British people. Today, the British Government said that low skilled workers would not get visas to work in the country under the post-Bret immigration plans. PM Johnson has urged businesses and employers to move away from cheap labour which has been found in Europe over many years. The Home Office said EU and non-EU citizens coming to the UK would be treated equally after UK-EU free movement ends on 31 December. Home Secretary Priti Patel told BBC Breakfast the government wanted to “encourage people with the right talent” and “reduce the levels of people coming to the UK with low skills”. She added that businesses could also recruit from among eight million “economically inactive” potential workers in the UK. There has been speculation over heavy reform of the British immigration system, with the Australian points based system variant being the ideal option. Under the post Brexit plans, overseas workers would have to reach a 70 point threshold to work in the UK. Speaking English, and having an approved sponsorship would give them 50 points – which in the view of the British Government would allow the most skilled workers to join the British workforce. With this system arises the worries of discrimination and prejudice – many would argue. For example how would EU nationals be able to work in the UK when they are coming here for the first time, or have no employment concretely confirmed. The post Brexit immigration system is a risky one – however it seems that PM Johnson and his newly appointed Cabinet are keen to put these actions in to plan. It will be interesting to see how events unfold from here …

Distil agree botanical drinks venture with British Honey

Ishen Patel
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Distil agree botanical drinks venture with British Honey
Distil PLC (LON:DIS) have signed a joint venture agreement with British Honey Co Ltd. The drinks manufacturer said that the deal will allow the production and marketing of a new range of botanical spirits. Both companies have agreed to contribute an initial £30,000 towards production and marketing of the new product range. An intellectual property rights clause in newly create brands and recipes will mean that these new products are jointly owned and that future revenues will be split evenly. Distil will have access to to British Honey’s distillery for production, and notably, the gin and vodka producing firm have pledge to assist British Honey with the marketing and distribution of their own brands. The new venture will start immediately, and Distil are expecting to incur additional costs in its current financial year. The firm have already told shareholders that profit for the year ending March 31 will fall below expectations, but should show a year on year rise. Don Goulding, Executive Chairman, Distil Plc commented: “I am very pleased to partner with BHC to facilitate an accelerated innovation agenda and more nimble product development capability. The joint venture will facilitate the creation and marketing of exciting new products and will improve Distil’s capability to develop and refresh its own brand portfolio. This new collaboration brings together complementary capabilities which will benefit both companies and we look forward to communicating our progress in the coming months.”

Distil’s strong festive trading

In January, Distil noted that they had reported a strong set of fundamentals across the Christmas period. The gin and vodka producer told shareholders that it had seen a good sales performance for the festive period, which was one aspect of the impressive update. Distil said that revenue for the third quarter, which ended on December 31 increased by 7% year on year which was supported by continued marketing investment. The firm did says that they saw a 13% drop in revenue despite maintaining its marketing investment spend. Shares in Distil trade at 0.85p (+3.03%). 19/2/20 11:31BST.

Invesco S&P 500 UCITS ETF reaches $10 billion UAM

Ishen Patel
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0
Invesco S&P 500 UCITS ETF reaches $10 billion UAM

The Invesco S&P 500 UCITS ETF has reached $10 billion of assets under management, which has been revealed in an update on Wednesday.

This makes this fund the first of its kind which is listed in Europe to reach this milestone, which is a notable achievement for Invesco.

The market was told in today’s update that $500 million new assets had been raised in the first six weeks of 2020, and Invesco alluded this to strong, consistent demand derived from strong trends and performance in 2019.

The Invesco fund took in almost half of all net inflows into S&P 500 ETFs in 2019, accounting for US$3.4 billion of the total US$6.9 billion, and the landmark hit today shows a real victory for Invesco.

Strong growth was attributed to the relatively low cost of the fund, and its outperformance versus the index.

Doug Sharp, Senior Managing Director and Head of EMEA at Invesco, said: “Last year was a landmark for the European ETF industry as total assets hit the US$1 trillion mark. It was also a record year for our business with just under US$12 billion of net inflows, the third-highest total in Europe. We have seen solid demand for new and innovative products as well as for what you could call ‘core building blocks’ as investors are using ETFs to meet a variety of needs throughout their portfolios.

“The growth in our S&P 500 UCITS ETF, particularly over the past year, indicates that investors are also becoming more aware of the differences between ETFs and how, even for the largest and most liquid benchmarks on the planet, picking the right one can make a material difference in terms of performance.”

Markets and analysts have noted the stronger flows into the synthetic S&P 500 ETFs in 2019, following weaker demand for their physical counterpart.

Interestingly, Invesco also noted that investors are not only considering price when looking at a fund but also on which specific product offering suits the intended outcomes and goals they intend to reach.

The process of fund investing is now becoming more personalised, and individuals have the chance to really gauge with the holdings in order to deliver the greatest potential for the desired outcome.

Gary Buxton, Head of EMEA ETFs at Invesco, explains: “Investors wanting exposure to simple benchmarks generally look first at how much it is going to cost. Our range of portfolio building blocks have some of the lowest costs and best tracking in Europe for core benchmarks. For example, our S&P 500 UCITS ETF has a management fee of just 0.05% per annum and bid-offer spreads typically two to three basis points, meaning it has the lowest all-in cost of the largest competing products in Europe.

“When you are looking for passive exposure to US equities, however, there is more than just cost to consider. Our synthetic replication method enables us to capture all the dividends, gross of tax, on the index constituents. This gives it a clear structural advantage over physically replicating ETFs that must pay dividend withholding tax, which is measurable in terms of performance.”

The fund has seen a gradual rise to be a strong performer, and across 2019/20 it has outperformed its benchmark of 21.6% against the index value of 21%.

The Invesco S&P 500 UCITS ETF features an accumulating dividend treatment, and has an ongoing charge of 0.05% per annum.

This does give Invesco an edge over rival funds, as the S&P 500 is the most traded index in the globe. Within a saturated market, a couple of other alternatives are listed below.

iShares Core S&P 500 ETF

iShares offer another fund which tracks the S&P 500, and the details are noted.

This ETF is listed on the NYSE Arca, and has 505 holdings. It is currently priced at $338.26, which is significantly lower than the Invesco counterpart, and charges a 0.04% charge per annum which is again slightly lower than Invesco.

This ETF has net assets of $219 billion in total.

SPDR S&P 500 ETF Trust

This product is priced at $337.42, and is listed on the NYSE Arca in similar fashion to the iShares Core S&P.

The current management fee is 0.09%, which is a considerable rise on both the Invesco and iShares counterpart. This ETF is passively managed, as are the other two products and deal directly on the exchange that they are listed on.

This ETF has total net assets of $307.85 billion, which is bigger than both the iShares and the Invesco funds that have been offered.

SkinBioTherapeutics agree psoriasis treatment deal with Winclove Probiotics BV

Ishen Patel
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1
SkinBioTherapeutics agree psoriasis treatment deal with Winclove Probiotics BV
SkinBioTherapeutics PLC (LON:SBTX) have agreed a deal with Winclove Probiotics BV for development of a product. The company said that its subsidiary AxisBiotix Ltd has signed a development agreement with Winclove Probiotics BV, which would involve the treatment of psoriasis. Maarten Pekelharing, CEO of Winclove, said: “We have developed business partnerships across the world and a key criteria for us is that our partners share our ambition to make a difference in people’s health and want to use their businesses as a force for good. “We are proud to begin a collaboration with SkinBioTherapeutics and feel privileged to work with such a renowned scientist as Prof. Catherine O’Neill. We are very excited to help SkinBioTherapeutics develop and bring to market together a new probiotic formulation for such an innovative scientific area as the gut-skin axis with the potential to enhance the quality of life for people with difficult to treat skin conditions like psoriasis.” SkinBioTherapeutics said that the companies had collaborated to help manage the symptoms of skin condition, psoriasis. Both firms will look to combine their knowledge and expertise to develop a probiotic blend of bacterial strains, based on the modifying properties of specific bacterial species on known psoriasis disease pathways. The blend will then be developed into a probiotic food supplement which will be named AxisBiotix. The life sciences and medicinal firm also said that it will take responsibility for the identification and selection of the bacterial strains and patient testing. Winclove, the other pattern will take control for the formation and manufacturing of AxisBiotix. Stuart Ashman, CEO of SkinBioTherapeutics, said: “There is strong scientific evidence pointing to a link between gut dysfunction, stress-induced alterations to the gut microbiome and skin inflammation. We believe that in this partnership with Winclove, which was initiated by our CSO, Prof. Cath O’Neill, we can create a specific probiotic food supplement that has the potential to help manage the hard-to-treat symptoms of psoriasis. “This agreement with Winclove represents the next phase of SkinBioTherapeutics’ strategy to develop new avenues of microbiome-based technology, this time focused on the gut-skin axis. It also represents the second phase of our strategic plan, following our recent agreement with Croda plc in the active skincare sector.”

SkinBioTherapeutics’ November blues

A few months back, the firm updated the market by reporting that its loss had widened. The widened loss for financial 2019 was caused by increased research and development spending, but the firm have reassured shareholders that there will be long term benefits. The firm focused on skin health said it will develop its core technology SkinBiotix, which has secured an extended agreement with Croda International PLC (LON: CRDA) for use in cosmetic applications. For the annual financial year ending June 30, the firm made a pretax loss of £1.4 billion widened from the £941,451 figure a year ago. Additionally, no revenue was generated in either financial period, which caused shares to crash. Research and development expenditure increased from £416,000 to £708,000 omprising development work with the University of Manchester, ongoing manufacture, scale-up and formulation work as well as the costs for the cosmetic human study. The update today from SkinBioTherapeutics does show good progress, and following the widened loss, shareholders will hope that results can turn into revenues for the firm. Shares in SkinBioTherapeutics trade at 11p (-11.00%). 19/2/20 11:00BST.

Hochschild Mining shares jump 7% on strong annual results

Ishen Patel
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0
Hochschild Mining shares jump 7% on strong annual results
Hochschild Mining Plc (LON:HOC) have seen their shares jump on the back of a strong set of annual results. The mining titan said that its’ profit doubled in 2019, as the firm looked to deliver further progress and developments. Hochschild Mining said that revenue spiked 7% to $755.7 million, compared to $704.3 million in 2018. The growth will certainly please shareholders at a time where the mining industry has seen mixed results. Notably, the FTSE 250 listed firm added that full year production was 477,400 ounces of gold equivalent, which smashed their initial guidance of 457,000 ounces. Going forward, the firm said that it was targeting production around 422,000 ounces across 2020. The firm attributed their strong production figures to record numbers at the Inmaculada mine in Peru and San Jose mine in Argentina. On the back of these strong results, Hochschild have lifted their final dividend to 2.335 US cents, which shows a 19% increase from 1.959 US cents a year ago. Ignacio Bustamante, Chief Executive Officer said: “In 2019, we have delivered some strong financial results which reflect another robust year of production including records at two of our operations and good cost control. Improved precious metals prices in the second half of the year combined with strong free cashflow generation saw us reduce leverage further and finish the year with net debt at $33 million. We have again discovered a significant amount of resource additions at Inmaculada and anticipate another year of ambitious exploration with exciting drill targets at all our current operations and projects throughout our entire southern Peru cluster. In addition, we can look forward to progressing our portfolio of greenfield opportunities and strategic alliances.”

Hochschild’s fourth quarter

Around a month ago, Hochschild released their fourth quarter results – where the firm noted a fall in production. The firm said that its gold production totaled 78,050 in the three month period, however this saw a dip of 4.1% compared to the 81,370 total which was reported in the third quarter. On a better note for shareholders, gold production figures were higher than a year ago where the fourth quarter figure in 208 was 73,100. This was driven by a “better than expected” performance from the Inmaculada mine in Cusco, Peru. Looking at silver production, fourth quarter production once again fell by 12% giving a total figure of 4.6 million ounces. In the third quarter, the figure delivered was 5.3 million and on a worse note, year on year silver output fell by over 20%. On an overall basis, 2019 production for gold was 570,500 gold equivalent ounces and 46.2 million silver equivalent ounces, both down 3.0% year-on-year. Despite the slip in the fourth quarter, Hochschild Mining have managed to see a very strong 2019. Shareholders should remain optimistic as the firm has set out clear expectations for the next year of trading. Shares in Hochschild Mining trade at 171p (+7.04%). 19/2/20 10:28BST.

Petrotal shares in green as oil reserves rise at end of 2019

Ishen Patel
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0
Petrotal shares in green as oil reserves rise at end of 2019
Petrotal Corp (LON:PTAL) have reported a rise in reserves at the end of 2019, in an update on Tuesday afternoon. The firm also told shareholders that it had started to drill the Bretana 6H oil well in Peru. Looking at the firms oil reserves, Petrotal said that they saw a rise of 20% at the end of 2019 to 21.5 million barrels of oil compared to the 17.9 million figure one year ago. Proved plus probable reserves also surged 21% which totaled 47.7 million barrels of oil compared to 39.4 million barrels of oil. Net present value, before tax, but with a 10% discount, was $434 million from proved reserves, showing a rise from $151 million at the end of 2018. For proved plus probable reserves, it more than doubled to $1.10billion from USD536 million. Manolo Zuninga, President and Chief Executive Officer, commented: “Following the Company’s successful drilling campaign in 2019, we are very pleased to see a meaningful upgrade of reserves in the 1P and 2P categories. PetroTal is glad to see that NSAI’s 2P OOIP estimate now approximates our internal estimate. We are confident that future production data will substantiate the higher recovery factors, and in the end, all of the above serves to create value for our stakeholders. We look forward to achieving further growth in 2020, with new oil wells and increases in recovery factor, and I would like to sincerely thank our team, as well as our shareholders for their ongoing support of PetroTal.”

Petrotal invest into Peru

A few weeks back, Petrotal told shareholders that they are looking to expand their operations and production in Peru. The firm said that they will set aside a budget of $99 million for work across 2020, in order to expand their operations and tap into new resources. The firm alluded to their new capital program, saying that it will allow them to be a “free cash flowing company”. Petrotal hopes that this new injection of funds will allow the firm to achieve its production target of 20,000 barrels of oil per day from the Bretana oil field based in Peru by the end of 2020. The firm outlined its target production over 2020 of 13,500 barrels per day which would be a significant rise from the 2019 figure. Notably, fourth quarter average production was 7,757 per day and the new targets will certainly impress shareholders. Petrotal are in a very sound position right now, and the fact that the firm is looking to expand its operations should yield in results. Therefore shareholders and the firm should remain confident for what the future holds. Shares in Petrotal trade at 25p (+2.00%). 18/2/20 14:26BST.

Panther Metals file applications to operate in Canada

Ishen Patel
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0
Panther Metals file applications to operate in Canada
Panther Metals Plc (LON:PALM) have told the market that they have filed applications to operate in Canada. The mining firm expressed their intentions to file applications for four exploration permits covering the Big Bear gold project in Canada. The applications will cover the north, south, east and west of the project, the company said, and “supplement and append the existing exploration permit which is in place for the central part of the project over the Schreiber Pyramid gold occurrence and gold occurrences in the vicinity of Bear Lake”. Darren Hazelwood, CEO, commented: “The exploration permitting applications for the Big Bear Gold Project in Ontario, Canada, have been lodged to allow Panther to refine and test prospective gold and base metal targets outlined by both Panther and in historical exploration work. Successful permitting will allow Panther to undertake an inaugural core drilling programme of up to 20 diamond drill holes as well as associated bedrock trenching. We are also pleased to announce that a geophysical contractor visited site last week in order to plan the logistics for the drone-borne aerial magnetics survey we are scheduling to be flown in early Spring. We look forward to providing further details on this in due course.” Notably, the permit applications also make provision for tented camp sites associated with the drilling and trenching programmes and the storage of fuel. Panther noted that the central part of the project already has an exploration permit in place for the drilling and trenching of seven target areas coinciding with historical gold occurrences and more recent soil and rock chip sampling work, which means that the potential could be there for the firm. The applications will now go through a process of ‘governmental, First Nation community and local landowner, stakeholder review’ and Panther have said that they expect a decision to be made around April 5.

Panther Metals get green light on Annaburroo

A few days back, Panther Metals saw their shares surge over 50% as they received the go ahead on n exploration permit for its operations in Australia. The firm said that the exploration permit at the Annaburroo gold project in Australia had been granted, and it seems that this has caught shareholder optimism. The Annaburroo Gold Project comprises a single licence (EL32140) covering an area of 149.8km2, located 105km to the southeast of Darwin, Northern Territory. Grab samples at the asset have found gold grades of 61.2 grammes pet tonne and 50.8 grammes per tonne. Shares in Panther Metals trade at 4p (+11.94%). 18/2/20 14:09BST.
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