Ascent Resources has announced its intention to bid for the entire share capital of Amur Resources after ‘protracted’ discussions with the Amur board.

The announcement was made after Amur Minerals shares sank 88% to 0.225p as a result of trading ex-dividend due to the return of capital to shareholders following a disposal. Amur is paying shareholders a 1.8p special dividend after disposing of their Russia nickel-copper asset.

Ascent Resources are proposing to pay 1 Ascent share for every 21 Amur shares in issue. The deal would value Amur shares at 0.175p.

Taking into consideration the 1.8p dividend, the bid represents a 7.3% premium to the Amur closing price of 1.84p last night.

If the deal is agreed, Amur shareholders would own approximately 28.6% of the enlarged group, and Ascent shareholders would own approximately 71.4%.

Ascent included conditions to their proposal that Amur must have a minimum of $5m cash after paying the special dividend, and have no material liabilities.

Ascent says its vision is to combine Amur’s cash with its project pipeline in LATAM.

Ascent said Amur are yet to respond to their offer.

The FTSE 100 was higher on Thursday as debt ceiling negotiations took an important step forward and European economic data helped lift sentiment.

The FTSE 100 was 0.48% higher at the time of writing. The German Dax was 0.6% and the French CAC was flat.

“The FTSE 100 started the day on the front foot as the US debt ceiling deal was approved by the House of Representatives, virtually guaranteeing it will be signed off ahead of the extended 5 June deadline,” said AJ Bell investment director Russ Mould.

“This positive driver for stocks may not last as a US Treasury which has been draining its account at the Federal Reserve to keep the government going, thereby injecting significant liquidity into the system, reverses this policy and starts tapping the debt markets to bolster its coffers.

“For now, though, relief that a US default has been averted is dominating market sentiment.”

Eurozone inflation data was also helping to lift the mood as CPI fell to 6.1% from 7%. Commentators have suggested the ECB will now be able to hold off on more rate hikes.

UK housebuilders

UK housebuilders shook off disappointing UK house price data on Thursday with Persimmon, Barratt Developments and Taylor Wimpey all higher at the time of writing.

According to data from Nationwide, UK house prices slipped 3.4% in the year to May after slowing the pace of declines in April.

House prices fell 0.1% month-on-month after a 0.4% rise in April.

“UK house prices renewed their downward trajectory in May according to the latest figures from Nationwide.

“The recently reported sticky inflation in the UK has increased interest rate expectations and could have a dampening effect on the property market.”

Investors will be encouraged by Bank of England data signalling a pick up in activity, despite prices continuing to fall.

“Recent Bank of England data had shown some signs of recovery in housing market activity, although the number of mortgages approved for house purchase in March was still around 20% below pre-pandemic levels,” said Robert Gardner, Nationwide’s chief economist.

B&M European Value was the FTSE 100’s top riser for a second day in a row after reporting strong sales growth and cash generation yesterday.

Autotrader was down 4% as revenue in 2023FY grew 16% but operating profit slipped 9%.

“Auto Trader’s core marketplace has once again enjoyed an excellent year, delivering double-digit profit growth even against the backdrop of supply chain challenges in both the used and new car market,” said Wealth Club’s Charlie Huggins.

“The only fly in the ointment is the losses at Autorama, the recently acquired vehicle leasing business. This business is making annualised operating losses of £15m. Shareholders will want to see that loss significantly reduce in the year ahead. 

“The acquisition of Autorama is part of Auto Trader’s transformation from an advertising platform where consumers go to research used cars, to a fully online marketplace where consumers can go to transact.”

The FTSE 100 felt the strains on the Chinese economy on Wednesday as the index dipped following news that Chinese manufacturing activity contracted faster than expected.

China Manufacturing PMI fell to 48.8, lower than the 49.4 consensus. A reading below 50 signifies a contraction.

“Growth slowdown fears have accelerated as the latest data from China shows a faltering recovery, knocking back sentiment on markets,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Investors have been unnerved by the snapshot showing the Chinese manufacturing sector contracted again in May, while activity across services also slowed for the fourth month in a row. Far from being the powerhouse which will offset America’s slowdown, China’s economic recovery from the pandemic is looking more precarious.”

The FTSE 100 was down 0.85% at the time of writing. The index had nearly recovered early morning losses before the sellers reappeared in afternoon trade.

FTSE 100 movers

B&M European Value was the FTSE 100’s top riser after the budget retailer said they were carrying ‘excellent profitable momentum’ into 2024FY.

B&M’s revenues were 30.7% ahead of pre-pandemic FY20 levels on a constant currency basis in 2023FY and cash generated from operation jumped 44.8% to £866m.

B&M shares were 7% higher at the time of writing.

“During Covid B&M benefited as one of a handful of retailers which were able to stay open and operate. Its performance during this period therefore comes with an asterisk attached, which is why investors will be particularly pleased to see its value credentials paying off in a more normal retail environment,” said AJ Bell investment director Russ Mould.

“In theory B&M should be well placed against a backdrop where households are really watching their pennies and that is largely reflected in this latest trading update. The company is also generating lots of cash which it can return to shareholders.

Prudential shares were down over 5% after chief financial officer James Turner resigned amid a code of conduct breach. Turner is the 26th CFO of an FTSE 100 firm to step down this year.

Ocado was down 5% as the premium retailer looked set to be demoted from the FTSE 100.

Challenger Energy Group shares jumped on Wednesday as the oil explorer said a recent study of its Uruguay assets estimates there could be up to 4.9 billion barrels of recoverable oil in place. This makes the asset a world-class project.

Listen to the recent UK Investor Magazine Podcast with Challenger Energy Group here.

On a recent Podcast with UK Investor Magazine, CEO Eytan Uliel alluded to the potential of the AREA OFF-1 prospects. Today’s announcement confirms it.

Challenger’s AREA OFF-1 asset consists of three prospects; Teru Teru, Anapero and Lenteja.

These three prospects are estimated to hold a total Estimated Ultimate Recoverable resource of circa 2.0 billion BBOE (Pmean, unrisked, and over 4.9 BBOE in an upside case.

The world-class nature of the asset has attracted the interest of oil majors, and Challenger said their target is to complete a farm-out by the end of the year.

“We continue to be encouraged by the opportunity that our AREA OFF-1 licence in Uruguay represents. Our technical work highlights how AREA OFF-1 is clearly world class acreage with massive resource potential, in what has become a global exploration hotspot,” said Eytan Uliel, Chief Executive Officer of Challenger Energy.

“To capitalise on this, I can confirm that a farm-out process has now commenced, with very strong initial indications of interest received from multiple major oil companies. Our target is to complete a farm-out transaction by year end, so that we can continue to rapidly progress work on the block, and thereby generate value for shareholders.”

Challenger Energy Group shares were 10% higher at the time of writing and had been considerably higher before traders booked profits.

XTB researchers have taken to Microsoft’s AI chatbot, Bard, for investment ideas. XTB set out to judge how AI can help investors when selecting stocks and asked Bard directly which stocks would be good to invest in.

These are the results.

When asked for 5 stocks in general to invest in, its recommendations were: Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG) and Tesla (TSLA).

When asked for 5 lesser known stocks to invest in, its recommendations were: Acacia Communications (ACIA), CrowdStrike Holdings (CRWD), Marqeta (MQ), Roblox Corporation (RBLX) and Snowflake Computing (SNOW).

These are fairly generic answers and there was no analysis of why these stocks should be selected. AI chatbots use vast data sets to provide information and the answers were likely based on the analysis of market commentary, as opposed to performing financial analysis on the stocks.

A thorough financial analysis of companies may be an AI development we see in future.

XTB also asked Bard tips for novice investors. Again, the answers were very generic and can be found through a quick Google search:

1. Set your goals. What are you hoping to achieve with your investments? Are you saving for retirement, a down payment on a house, or something else? Once you know your goals, you can start to develop a strategy to reach them.
2. Do your research. Before you invest in anything, it’s important to learn as much as you can about it. Read financial news, research different investment options, and talk to a financial advisor if you need help.
3. Start small. There’s no need to invest a lot of money right away. Start with a small amount that you’re comfortable with and gradually increase your investment over time.
4. Be patient. Investing is a long-term game. Don’t expect to get rich quick. Invest for the long term and you’ll be more likely to reach your financial goals.
5. Diversify your portfolio. Don’t put all your eggs in one basket. Spread your money across different investments to reduce your risk.