FTSE 100 gains on hopes interest rates have peaked
The FTSE 100 added to substantial gains on Friday as investors continued to position for the end of the interest rate hiking cycle.
A weak US jobs report poured cold water on the notion the Federal Reserve would hike again this year, and with central banks appearing to march in lockstep, it could also mean interest rates stay the same in the UK for the foreseeable future.
Indeed, after the Fed and BoE held off hiking rates last week, the weak US jobs report even sparked market chatter of rate cuts – although there is no indication either central bank has any plans to do so in the near term.
“The FTSE 100 started the week modestly higher amid growing confidence the interest hiking cycle has peaked,” said AJ Bell investment director Russ Mould.
“Weak jobs figures from the US on Friday were the latest bit of news to underpin this status and with both Bank of England governor Andrew Bailey and Federal Reserve chair Jerome Powell due to speak this week, investors will be watching closely to see if they seek to counter or reinforce this narrative.
“For now, we’re still in a world where bad news equals good news because of the implications for rates. At some point though the market will turn to the implications of a significant weakening in the economy on corporate earnings.”
The implications of softer economic conditions were evident in Monday’s trade, with housebuilders slipping back after a strong rally last week. Taylor Wimpey was down 0.4% and Barratt Developments gave up 0.3%.
UK banks were among the top risers as markets aligned behind interest rate expectations and bond yields slipped. Natwest gained 2% and Standard Chartered perked up by 3%. The two were the heaviest hit during the last round of earnings.
Scottish Mortage slipped 0.6% after full year results provided insight into the pricing of their private assets.
“Scottish Mortgage was once the market’s leading investment trust, with great clamour to own its shares, but market dynamics have shifted and having large exposure to unquoted companies went out of fashion,” said Russ Mould.
“The big fear stalking Scottish Mortgage is its unquoted holdings would see their value marked down aggressively.
“Interestingly, the shares’ discount to net asset value has narrowed somewhat since the spring, and today’s publication of first-half numbers may provide a measure of reassurance to shareholders as its net asset value fell, but only modestly.”
Mapping MicroSalt’s commercial progress in 2023
MicroSalt is preparing to list in London as part of its journey to improve the health of millions of people with low-sodium salt products that can help tackle cardiovascular diseases worsened by the overconsumption of salt.
At a recent UK Investor Magazine Virtual Presentation, MicroSalt founders Tekcapital alluded to multi-million dollar sales for their portfolio companies – including MicroSalt – in 2024.
The foundations for MicroSalt achieving this goal were laid this year with an extensive series of commercial developments which added to existing partnerships with leading US supermarket chains Kroger and Hannaford Brothers.
Partnerships and deals outlined in this article exclude ongoing and late-stage negotiations with large multinational food businesses detailed in MicroSalt’s admission document.
1st November 2023 – MR Williams Placement
MicroSalt inked a new deal to distribute its full SaltMe! crisps product line into MR Williams, a major convenience store distributor in the southeastern US serving customers across North Carolina, South Carolina and surrounding states, MR Williams will now offer all four SaltMe! flavours to its network of convenience store clients.
19th October 2023 – Longs Drug Stores Placement
MicroSalt secured the distribution of its SaltMe! low-sodium crisps into Longs Drugs, Hawaii’s leading drugstore chain. Longs Drugs, owned by $90bn market cap CVS Health, operates around 70 locations throughout Hawaii.
Longs Drugs was acquired by parent company CVS Health in 2008 and is one of the largest healthcare chains in Hawaii.
19th September 2023 – Weijohn Farms Partnership
MicroSalt has partnered with Weijohn Farms Group to bring its low-sodium technology to their Sorbatto Fresh hazelnut line. With the North American hazelnut market projected to grow to $3.2 billion by 2030, MicroSalt’s sodium-reduction solution allows Weijohn to meet rising demand for healthier snacks.
7th September 2023 – Patent Filed for Reducing Baking Times and Lowering Sodium Content in Baked Goods
In September, investors learned of arguably the most significant commercial development for MicroSalt this year. The company filed a new patent application for technology to reduce sodium content and leavening time in baked goods.
MicroSalt said it had recently demonstrated successful use of its proprietary low-sodium technology in developing a new reduced-sodium recipe for baked products. With demand growing globally for lowered sodium across the $500 billion worldwide bread market, MicroSalt’s innovation provides a solution for low-sodium baked goods that also enables faster, more sustainable production. The patent-pending technology adheres micron-sized salt particles onto a carrier for better distribution in dough, reducing baking times while lowering sodium content.
This breakthrough could be applied across a wide variety of baked goods to help meet evolving consumer demand for low-sodium, health-conscious alternatives.
31st July 2023 – Expansion into the Phillippines
MicroSalt demonstrated global demand for low sodium SaltMe! crisps with expansion into the Philippines market, securing new distribution deals with major retailers Healthy Options and S&R Membership Shopping.
Both retailers placed significant initial orders for SaltMe! crisps and expressed strong interest in future orders as demand grows globally for premium low-sodium snacks. With 33 stores, Healthy Options is the largest all-natural products chain in Asia. S&R operates 22 warehouse stores focused on imported premium goods, presenting major expansion opportunities throughout the Philippines.
26th June 2023 – 100+ Additional US Stores Stock MicroSalt
In June, MicroSalt announced a raft of new distribution deals with regional grocery chains in the northeastern US MicroSalt’s saltshakers were to be stocked in 51 Fine Fare stores, 8 Trade Fair stores, and 72 Big Y supermarkets in New York, New Jersey, Pennsylvania, and New England.
Fine Fare and Trade Fair stores are focused on the New York market, while Big Y operates over 70 locations across New England as the region’s second largest supermarket chain.
17th May 2023 – 400 US Stores
MicroSalt secured a major distribution expansion of its SaltMe! crisps and MicroSalt low-sodium salt shaker products into over 400 additional US retail stores. New retail partners stocking MicroSalt’s products include regional grocery chains like Brookshire Brothers and Pete’s Fresh Market, as well as natural independent grocers across the country such as Heinen’s, Dick’s Fresh Market, Zerbos, Better Health Market, and Tdych’s Marketplace.
2nd May 2023 – Fortune 500 National Retailer
MicroSalt announced a partnership with a Fortune 500 national retailer to develop and launch reduced sodium versions of the retailer’s private label snack brands.
Through the deal, MicroSalt will replace traditional salt with its MicroSalt® low-sodium alternative in several snack offerings, which will roll out to 800 of the retailer’s stores by Q4 2023.
With over 7,000 store locations nationwide, the partnership provides a major opportunity for MicroSalt to scale the availability of its sodium-reducing salt technology across a major retailer’s private label snack portfolio.
13th March 2023 – H Mart
H Mart is one of the fastest growing Asian supermarket chains in the United States. With over 97 stores across the US, H Mart has rapidly expanded since its first store opened in 1982 in Queens, New York.
As the largest Asian grocery chain in America, H Mart provides a full range of Asian and Western groceries and is known for its food halls. The deal with MicroSalt will make SaltMe low sodium crisps available in H Mart’s stores nationwide.
27th February 2023 – United Natural Foods and KeHE Distributors
MicroSalt expanded the distribution of its salt shakers through deals with two major US food distributors, United Natural Foods and KeHE Distributors. The two distributors are among the largest in the US retail food market.
United Natural Foods, Inc. (NYSE: UNFI), the largest publicly traded wholesale distributor in the US and Canada, delivers healthier food options to retail stores across both countries.
KeHE Distributors has 16 distribution centers across North America. KeHe provides exposure to a plethora of grocery stores, supermarkets, natural retailers and online eCommerce drop shippers.
6th February 2023 – US Salt
MicroSalt partnered with US Salt LLC, the leading producer of private label round can table salt in the United States. Through the agreement, US Salt will distribute and deliver MicroSalt’s innovative low-sodium salt solutions to US consumers. With control of over 90% of the US private label, round can salt market, US Salt has the potential to bring MicroSalt’s sodium-reducing alternative salts to the masses.
“US Salt is looking forward to working with MicroSalt® to help with our low-sodium initiatives. Sodium is a worldwide concern in the food industry, and we believe Rick and his team are the industry leaders that can help propel our future growth,” said Bob Jordan, Vice President of Sales & Marketing of US Salt LLC, at the time of the deal.
31st January 2023 – Giant Food of Maryland LLC
MicroSalt partnered with Giant Food of Maryland LLC (Giant), a leading supermarket chain in the mid-Atlantic region, to offer lower sodium options for customers.
As part of the agreement, Giant will carry Microsalt’s saltshakers in all of its over 160 stores in Delaware, Maryland, Virginia and Washington D.C.
AIM movers: Plexus contract and SDI acquisition
Plexus Holdings (LON: POS) has secured a £175,000 contract from Neptune Energy for the Exact adjustable wellhead and Centric mudline systems. This will enable the permanent abandonment of a UK North Sea well. The work starts in the middle of 2024. The share price is 26.7% higher at 19p.
Future Metals NL (LON: FME) has agreed to vary the option agreement with Osprey Minerals to acquire 100 square km of highly prospective land near to the Panton project in Australia. The upfront consideration will be A$625,000 in shares at 3.4 cents each and the option period will be extended to 17 November. The share price rose 22.7% to 2.3p.
Automotive connections supplier Strip Tinning (LON: STG) has received a new production nomination for its glazing business and supply will commence in the second quarter of 2024. This will continue while the vehicles are in production. There should be €525,000 recognised in 2024. The marques involved include Mercedes, VW, Skoda and Toyota. The share price increased 17.7% to 50p.
Trading restarted in India power generator OPG Power Ventures (LON: OPG) shares following publication of the accounts to March 2023. Revenues were better than forecast at £58.7m, down from £80.1m, while pre-tax profit fell from £13.2m to £10.4m. This year pre-tax profit could halve. Capacity utilisation is increasing. The share price is 12.4% ahead at 12.25p.
FALLERS
Artemis Resources (LON: ARV) says that diamond drilling has commenced at the 49%-owned Osborne joint venture. This is targeting north dipping stacked LCT pegmatite in the southern zone. Spodumene bearing pegmatite has been confirmed. The share price fell 10.7% to 1.25p.
Shares in Surface Transforms (LON: SCE) continue to decline following Friday’s announcement of reduced revenue guidance. The previous forecast for 2023 revenues was £13m and it was cut to £8.6, £6.3m of which has already been earned. The share price slipped a further 15.6% to 13.5p.
Mosman Oil & Gas (LON: MSMN) says its net production US oil and gas wells was 3,564 barrels of oil equivalent in the quarter to September 2023, down from 5,937 barrels of oil equivalent in the previous quarter. The average sale prices were higher. Two wells were not producing because they were waiting for a jet pump to be installed. One of them has had the jet pump installed in October. The share price is 7% lower at 0.02p.
SDI Group (LON: SDI) has acquired temperature sensors manufacturer Peak Sensors for £2.3m net of cash. The initial payment is £1.58m and the deal should be earnings enhancing in the first full year. Peak Sensors should add £1m to revenues and operating profit of £150,000. The share price declined 4.92% to 116p.
The Investment Trust landscape and harnessing discounts with BRI Wealth Management
The UK Investor Magazine was delighted to welcome Dan Boardman-Weston, Chief Executive and CIO of BRI Wealth Management, for an in-depth discussion around Investment Trusts and the current environment.
We start with a look at the growing popularity of Investment Trusts among retail investors when compared to institutional investors and the reasons behind this trend.
There is consideration paid to the macroeconomic environment and the impact this is having on Investment Trust discounts.
Dan highlights the deep discounts in Investment Trusts currently and where he sees opportunity in the space.
Aquis weekly movers: Progress in Brazil for Cadence Minerals
Cadence Minerals (LON: KDNC) says that the 36.2%-owned joint venture that owns the Amapa iron ore project in Brazil has signed a memorandum of understanding with Sinoma Tianjin Cement Industry Design, which will provide a final proposal to complete a definitive feasibility study for the project and then submit a fixed price contract to construct the project. It will also attempt to obtain the financing required. The share price jumped one-third to 7p, but this is only back to the level in September. It has still declined by three-eighths this year. Chief executive Kiran Morzaria bought 100,806 shares at 7.4p each.
ChallengerX (LON: CXS) generated cash from operations in the quarter to September 2023, although there was an overall outflow of £47,000, leaving £1,000 in the bank. More cash will be required to develop the FlashBet Wheel App. Even so, the share price increased 16.7% to 1.05p.
Wishbone Gold (LON: WSBN) has confirmed the mineralised base metal system at Cottesloe in the Paterson Range, Western Australia. There is copper, zinc, silver, lead and cobalt. This is before the drilling has hit the target mineralisation zone. The share price rose 14.3% to 2p.
KR1 (LON: KR1) holds an allocation of 7.5 million TIA – the digital asset of Celestia – KR1 plans to start staking activities on the Celestia network. At the end of September 2023, NAV was 45.11p/share. The share price is 13% higher at 52p.
TruSpine Technologies (LON: TSP) says that the FDA 510(k) application for Cervi-LOK has oved to the substantive review stage. The share price improved 8% to 1.35p.
Fuel additives developer SulNOx Group (LON: SNOX) generated second quarter revenues of nearly £54,000, which was lower than the previous year. There was £562,000 in the bank and a further £700,000 has been raised since then. The share price is 3.85% ahead at 27p.
Ananda Developments (LON: ANA) has signed a MOU with Nottingham Trent University to pursue grant funding for the medicinal cannabis breeding programme. The intention is to develop a formal strategic partnership. The share price moved up 3.77% to 0.275p.
Arbuthnot Banking (LON: ARBB) non-exec directors Jayne Almond bought 3,000 shares at an average price of 912.5p each. The share price edged up 0.77% to 655p.
FALLERS
Mental health treatments developer Mydecine Innovations Group (LON: MYIG) says that it is filing a prospectus supplement so that it can issue 7.36 million shares at 15 cents/share to raise $1.1m. The share price fell 10% to 9p.
Marula Mining (LON: MARU) chief executive Jason Brewer has exercised 400,000 warrants at 4p each. The share price dipped 9.46% to 8.375p.
Shepherd Neame (LON: SHEP) director George Barnes bought 1,000 shares at 735p each. The share price slipped 5.26% to 720p.
IamFire (LON: FIRE) had cash of £149,000 at the end of April 2023, following a £768,000 cash outflow from operations. Investee company WeShop is making good progress. However, there is material uncertainty as a going concern and more cash is required or bond terms will need to be renegotiated. The share price fell 1.56% to 1.575p.
Premier African Minerals shares: proceed with caution
Premier African Minerals shares sank on Friday after issuing an update on the Zulu lithium project.
Company updates that include the word ‘challenges’ are rarely good. Premier African Minerals issued such an update on their Zulu lithium project on Friday, and shares closed considerably weaker.
Investors have been on tenterhooks awaiting an update from the project as the first production target under a recently revised offtake agreement looms.
The RNS issued at 2.30pm on Friday was not the one many had hoped for.
Friday’s update suggests the first 1,000 tonne production deadline at the end of November is going to be missed.
The company said whether they meet this deadline ‘will be largely dependent on the resolution of the ongoing commissioning and optimisation issues.’
To issue such a statement at this stage of production optimisation signals deep concern at Premier African Minerals or their contractor Stark that the first production target will be missed.
Investors may have been perturbed to learn they will be further diluted by the issuing of $2.5m in newly issued shares to contractor Stark, who is yet to bring the production plant up to the required standard.
Premier African Minerals did say the plant was producing lithium concentrate of the prescribed specification – but stopped short of sharing the actual lithium grades.
If Premier African Minerals fails to ship a minimum of 1,000 tonnes per month at the required specification by the end of November, their partner Canmax has the right to receive penalty payments from Premier African Minerals.
Should Premier be unable to make cash payments to meet these penalties, they must issue Canmax with newly issued shares in Premier African Minerals.
The stakes are high.
Investors will be growing increasingly concerned about the viability of the Zulu plant and the competence of management. In addition, the emergence of contradictory statements on X, formerly Twitter, made by the Stark CEO will increase uncertainty.
Just hours after Premier African Minerals announced Zulu was experiencing ‘optimisation issues’ and ‘material flow challenges’, Stark CEO Geoffrey Madderson said “there is no issue on the plant.”
Madderson posted: “Guys, relax. There is no issue on the plant. The plant is running well and the next big steps are the new large mill to bring to 100% of nameplate. 37.5t per hour to float.”
Someone has released a mistruth. Either Premier African Minerals’ Nomad has signed off a factually incorrect RNS, or the Stark CEO has made an incorrect assertion in a social media post.
Time will tell.
AIM weekly movers: Sopheon bid approach
Product management software supplier Sopheon (LON: SPE) has received a bid approach from IOps Buyer Inc, which is a subsidiary of Wellspring Worldwide Inc. The two companies have agreed in principle to a 1000p/share bid. The share price jumped 84.7% to 905p. Due diligence has been completed and discussions are advanced. Chicago-based Wellspring Worldwide provides software and data systems for managing technology transfer and intellectual property.
Real Good Food (LON: RGD) says first half revenues were 2% ahead at £16.1m, although volumes fell by 10%. October revenues appear set to be 6% higher. The cake decorations supplier has significantly reduced its loss due to higher margins. A shortage of cash has held back growth, but the company could be profitable for the full year. Talks continue concerning the extension of the loan agreement with Hilco Private Capital. Interim results will be published in December. The share price recovered 45.8% to 1.75p.
Explorer Orosur Mining Inc (LON: OMI) reduced its first quarter loss, although there were no revenues. The focus is likely to become the new joint venture lithium asset in Nigeria. The share price advanced 36.6% to 2.8p.
Digital content services provider Zoo Digital (LON: ZOO) has launched a new facility in Chennai, and combined with director buying, that pushed up the share price 34.9% to 49.9p, which takes it back to the level at the end of September. Zoo Digital believes there is significant growth potential in India and that is why it has opened a second facility in the country. Chairman Gillian Wilmot 162,905 shares at 36.99p each.
FALLERS
Velocys (LON: VLS) is the worst performer today because the conditions for the $15m strategic investment from Carbon Direct have not been met. To receive this cash the sustainable fuel developer needs to raise $40m, including $8m already raised, and management is still trying to secure investors. The $15m cash injection is no longer binding. Velocys needs more cash before the end of the year. There is a significant market opportunity in sustainable aircraft fuel, but Velocys is in a weak position when discussing additional funding and the share price slumped 69.8% to 0.31p.
Carbon ceramic disc brakes developer Surface Transforms (LON: SCE) has reduced revenue guidance for 2023 to £8.6m, having generated £6.3m up until October. The previous forecast for 2023 revenues was £13m. There have been problems ramping up production in the second half and it will not be completed until early next year. A new debt facility is being negotiated to enable an increase in annual capacity to £150m. The share price declined 36.6% to 16p.
Powerhouse Energy (LON: PHE) is deferring development of the Longford project in Ireland. It will assess the position with Hydrogen Utopia (LON: HUI). The Powerhouse Energy share price slipped 30.7% to 0.26p.
Mineral sands company Base Resources (LON: BSE) says mining will end at Kwale in December 2024. There is insufficient resource development potential to extend the mine life, which would require significant capital spending. The share price fell 30% to 6.125p. In the quarter to September 2023, ilmenite and rutile prices improved, but zircon was lower. There was $77.2m in cash at the end of September 2023, having paid a dividend of $29.9m on 28 September, which is not much less than the market capitalisation of £71.4m.