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05 July 2018 07:47 AM
Overseas Market ReportCurrent
PreviousChangeDaily %
Monthly %
Dow Jones Industrial Average24,17524,307-132.00-0.54-2.57
S&P 5002,7132,727-13.00-0.49-1.23
FTSE 100 Index7,5737,593-20.00-0.27-1.48
DAX 3012,31812,349-32.00-0.26-3.67
CAC 40 Index5,3205,3174.000.07-2.57
Nikkei 225 (Japan)21,71721,786-69.00-0.31-3.65
SSE Composite Index2,7592,787-28.00-1.00-11.40
S&P/TSX Composite Index16,30516,26342.000.261.13
NZ 509,0019,026-25.00-0.272.79
US Volatility (Vix)16
Overseas Market Report

US sharemarkets were closed on Wednesday for the Independence Day holiday.

Global oil prices rose on Wednesday, driven higher by a decline in US crude inventories and rising Iranian supply risks. US crude inventories fell by 4.5 million to 416.9 million barrels over the week to June 29. And Iranian President Hassan Rouhani hinted that his country may disrupt regional crude oil exports if the US followed through with sanctions against Iran's oil sales. Brent crude rose by US48 cents or 0.6% to US$78.24 a barrel and the US Nymex (unsettled due to the US public holiday) rose by US19 cents or0.3% to US$74.33 a barrel.

Base metal prices were mostly lower on the London Metal Exchange (LME) on Wednesday ahead of expected new trade tariffs from the US on Friday. Zinc (-3.2%) fell to near one year lows. Copper (-1.5%) was near 11-month lows. Producer Freeport McMoran was granted an extension of a temporary operating permit at its Grasberg mine, likely boosting copper supplies. Aluminium rose by 0.9%.

The gold futures price rose by US$4.60 an ounce or 0.4% to $1,258.10 an ounce. The spot gold price was trading near US$1,256 an ounce in late North American trade. Iron ore fell by US40 cents or 0.6% to US$63.35 a tonne.

PreviousChangeDaily %
Monthly %
Oil Brent78.2477.760.480.623.92
Oil - West Texas crude74.1874.140.040.0513.22
Gold Spot $/OZ1,258.001,255.002.900.23-3.00
Silver Spot $/OZ16.1016.100.000.05-2.42
Iron Ore59.1059.30-0.20-0.27-3.70
Thermal Coal Newcastle116.50115.301.201.002.82
Coking Coal FOB ECP AUS193.10193.90-0.80-0.411.42
Aluminium ($US/t)2,1152,09619.000.89-8.82
Copper Mar-18 ($US/lb)2.842.84-6.40-2.20-11.15
Lead ($US/t)2,3182,386-68.00-2.83-7.26
Nickel ($US/t)14,05414,354-300.00-2.09-8.88
Zinc ($US/t)2,7532,844-92.00-3.22-12.44
Tin ($US/t)19,68219,731-49.00-0.25-4.55
Uranium ($US/lb)23.0023.000.000.66-0.22
Australian Market ReportCurrent
PreviousChangeDaily %
Monthly %
ASX All Ords6,2746,303-29.00-0.462.70
S&P/ASX 2006,1836,210-27.00-0.433.14
ASX 24 Futures6,149
Australian Market Report

Wednesday 4 July - close. Australian shares have closed lower, hurt by falls in banking and energy stocks on concerns about heightened trade tensions between the US and China. The benchmark S&P/ASX200 index dropped 26.8 points, or 0.43 per cent, at 6,183.4 points, while the broader All Ordinaries index fell 29.1 points, or 0.46 per cent, at 6,273.7 points. 

Ashanti Headlines

Berkeley Energia Limited (BKY.ASX, 80 cps, m.cap cA$211.8m with 258.3m SOI, Cash $99.8m, Uranium Developer)

Uranium Tailwinds

  • A uranium investment vehicle, Yellow Cake, is to trade on the AIM market of the London Stock Exchange from 5 July 2018 having raised £151.7 million to purchase and hold uranium. The company has arranged a 25% offtake of Kazatomprom’s annual production, approximately 8.1Mlb U3O8, at a 7.7% discount to the spot price and the option to purchase a further US$100 million of uranium each year for the next nine years. We see this as a somewhat self-fulfilling proposition as Yellow Cake will be absorbing supply out of the spot market, altering the current supply-demand dynamic 
  • Japan Regulator says Tokai No. 2 reactor meets post-Fukushima safety rules, the country's Nuclear Regulation Authority said yesterday, clearing the way for the unit to restart after a 30-day public comment period
  • According to market analysts, the current production halt at McArthur River (the world's largest Uranium mine) is likely to be extended. A formal decision from Cameco is expected by the end of the month. 

BKY remains our preferred exposure to Uranium for the following reasons:

  • Salamanca is fully funded and slated to be one of the top 10 producers globally. 
  • A quality project that is globally competitive on capex and opex metrics.
  • Project NPV of c$300M using conservative $45/lb uranium price
  • Strategic project with a +15 year mine life.
  • We anticipate there will be several key macro catalysts for Uranium by end of CY18.

Please contact the desk on +61 8 6169 2668 should you wish to discuss further 

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ERA Communications