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02 October 2018 07:42 AM
Overseas Market Report
Current Level
Previous
Change
Daily % Change
Monthly % Change
Dow Jones Industrial Average
26,651
26,458
193.00
0.73
2.64
S&P 500
2,925
2,914
11.00
0.36
0.80
NASDAQ
8,037
8,046
-9.00
-0.11
-0.89
FTSE 100 Index
7,496
7,510
-15.00
-0.19
0.85
DAX 30
12,339
12,247
92.00
0.75
-0.20
CAC 40 Index
5,507
5,493
13.00
0.24
1.85
Nikkei 225 (Japan)
24,246
24,120
126.00
0.52
6.04
HKSE
27,789
27,716
73.00
0.26
-0.36
SSE Composite Index
2,821
2,792
30.00
1.06
3.53
S&P/TSX Composite Index
16,104
16,073
31.00
0.19
-0.97
NZ 50
9,324
9,327
-3.00
-0.03
0.12
US Volatility (Vix)
12
Overseas Market Report
US sharemarkets were mixed on Monday. Investor sentiment was boosted by the new US-Mexico-Canada trade agreement (USMCA). Shares in Tesla rose by 17.4%. Reuters notes that "signs it had met targets for quarterly production numbers added to relief at Chief Executive Elon Musk's settling a lawsuit with regulators that could have forced him out." The Dow Jones index finished higher by 193points or 0.7% after being up 280 points in early trade. The S&P 500 index was up 0.4% but the Nasdaq lost 14.5 points or 0.2%.
Global oil prices rose by almost 3% on Monday to 4-year highs. There was optimism about prospects for the global economy on the new US-Mexico-Canada trade deal. But there remains the on-going concern about global oil supplies when US sanctions against Iran take force on November 4. Reuters notes that US President Donald Trump spoke to Saudi King Salman on Saturday on ways to maintain sufficient supply. Brent crude rose by US$2.26 or 2.7% to US$84.98 a barrel and the US Nymex price rose by US$2.05 or2.8% to US$75.30 a barrel.
Base metal prices were mixed on the London Metals Exchange on Monday. Zinc, aluminium and tin rose by up to 1.5% while other metals fell by up to 0.8%.
The gold futures price fell by US$4.50 an ounce or 0.4% to $1,191.70 an ounce. The spot gold price was trading near US$1,190 an ounce in late US trade. Iron ore was unchanged at US$69.50 a tonne.
Commodities
Current Level
Previous
Change
Daily % Change
Monthly % Change
Oil Brent
84.98
82.73
2.25
2.72
9.76
Oil - West Texas crude
75.54
75.30
0.24
0.32
8.22
Gold Spot $/OZ
1,190.00
1,189.00
1.20
0.10
-0.93
Silver Spot $/OZ
14.50
14.50
0.00
0.17
-0.19
Iron Ore
65.30
65.00
0.30
0.38
5.32
Thermal Coal Newcastle
114.60
114.20
0.40
0.39
-2.88
Coking Coal FOB ECP AUS
0.00
0.00
0.00
0.00
0.00
Aluminium ($US/t)
2,071
2,048
23.00
1.14
-1.44
Copper Mar-18 ($US/lb)
2.79
2.79
0.00
0.00
5.23
Lead ($US/t)
2,016
2,023
-7.00
-0.33
-2.02
Nickel ($US/t)
12,406
12,507
-101.00
-0.81
-2.38
Zinc ($US/t)
2,700
2,658
41.00
1.54
9.66
Tin ($US/t)
18,970
18,860
110.00
0.58
-0.43
Uranium ($US/lb)
27.00
28.00
0.00
-0.18
3.78
Australian Market Report
Current Level
Previous
Change
Daily % Change
Monthly % Change
ASX All Ords
6,293
6,326
-33.00
-0.52
-2.10
S&P/ASX 200
6,172
6,208
-35.00
-0.57
-2.33
ASX 24 Futures
6,167
Australian Market Report
Monday 1 October - close. The local sharemarket has kicked off the new week and new month in negative territory, held down by heavy falls from the banks. Trading volumes were light, with many states marking the Labour Day public holiday. The ASX200 closed down 35 points or 0.6% to 6,172.3, while the broader All Ordinaries index was down 33 points, or 0.5 per cent, higher at 6292.6 points.
Ashanti Headlines
Base Resources (BSE.ASX, 26cps, m.cap A$293m with 1.13b SOI, Cash US$29.7m, Mineral Sands Producer)
Ashanti Capital conducted a non-deal roadshow with Tim Carstens from Base Resources (ASX:BSE), presenting for two days in Hong Kong and one in Singapore. The company was extremely well received by a number of institutional and family office investors.
Based on the roadshow presentations, the key points of opportunity include;
Pure mineral sands exposure, uniquely positioned given strong cash flows in Kenya and development upside in Madagascar
FY18 EBITDA up 32% to US$109m, brokers expect Base to generate US$125m EBITDA FY18 from Kwale operations in Kenya
Kwale recently optimized: +60% increase in mining rate and spiral capacity, significant decrease in mining costs (hydro mining)
Focus of market is Kwale mine extension, key data points expected Nov 18 (Kwale South) and Feb 19 (North Dune)
Company see’s positive current pricing for Rutile and Zircon (c.75% earnings), flatter outlook for ilmenite
Investors understood relevance of outstanding safety and community track record in Kenya, providing good lead through to Madagascar
Toliara is a world class project, expected to show stronger economics that Kwale but with 40+ year mine life
Continued work on the project continues to surprise on upside, Ranobe project acquired for US$92m
PFS on Toliara expected to be delivered January 2019, first time the market get to understand the project economics
Base Resources (ASX:BSE) is undervalued on most metrics, the company understands the market wants to know three key points. What is the mine life at Kwale, what are the project economics on Toliara and how will Toliara be funded? Answers to each of these questions will be provided by early next year, providing an opportunity to buy in the mid 20c range, Base Resources raised c.A$100m at25.5c in December 2017. Since this capital raising, Base has paid down project debt (1/10/18), optimized operations at Kwale and continued resource definition/exploration in Kenya. The company expects to have zero net debt by the end of 2018 with a clearer picture on Toliara is due for Q1, this quarter may be the last opportunity for Base Resources to trade undervalued, production from Toliara has the potential to adjust global supply points for minerals sands.
Please contact the desk on +61 8 6169 2668 should you wish to discuss further.
Ashanti Capital Pty Ltd, ABN 61 614 939 981, the holder of an Australian Financial Services License (AFSL) number 493204. Any advice included in this document is general advice only, based solely on consideration of the investment or trading merits of the financial product/s alone, without taking into account the investment objectives, financial situation and particular needs (i.e. financial circumstances) of any particular person. Before making an investment or trading decision based on the advice, the recipient should consider carefully the appropriateness of the advice in light of his or her financial circumstances and obtain a copy of and consider the Product Disclosure Statement for that product before making any decision.
While this communication is for informational purposes only and based on the information from sources which are considered reliable. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Ashanti Capital, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Ashanti Capital accept any responsibility to inform you of any changes.
This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Ashanti Capital.
Ashanti Capital and/or entities and persons connected with it may have an interest in the securities, the subject of the recommendations set out in this report. In addition, Ashanti Capital and/or its associates will receive commissions on any transaction involving the relevant securities.