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20 August 2019 06:51 AM
Overseas Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Dow Jones Industrial Average26,13625,886250.000.96-3.75
S&P 5002,9242,88935.001.21-1.78
NASDAQ8,0037,896107.001.35-1.76
FTSE 100 Index7,1907,11773.001.02-4.25
DAX 3011,7150153.001.32-4.44
CAC 40 Index5,3725,30171.001.34-3.26
Nikkei 225 (Japan)20,56320,419144.000.71-4.21
HKSE26,29225,734558.002.17-8.60
SSE Composite Index2,8832,82459.002.10-1.41
S&P/TSX Composite Index16,30416,150154.000.96-1.10
NZ 5010,75610,70253.000.500.02
US Volatility (Vix)17
Overseas Market Report

US sharemarkets rose on Monday. Investors focussed on interest rate reforms unveiled by China over the weekend. And the German government also fuelled speculation that fiscal policy could be eased to boost economic growth. Senior White House officials, including the President, also gave positive statements on the US economy. Shares in Apple rose by 1.9% after President Donald Trump said on Sunday that he had spoken with Apple Chief Executive Officer Tim Cook, who "made a good case" that tariffs could hurt Apple. Tech stocks rose after the US Commerce Department extended a reprieve permitting China's Huawei to buy components from US companies. The Dow Jones rose by almost 250 points or 1.0% with the S&P500 up by 1.2%, while the Nasdaq gained 107 points or 1.4%.

Global oil prices rose by around 2% on Monday after a weekend attack on a Saudi oil field. Reuters reported: "A drone attack by the Houthi group on an oilfield in eastern Saudi Arabia on Saturday caused a fire at a gas plant, adding to Middle East tensions, but state-run Saudi Aramco said oil production was not affected." Oil prices also rose on the prospect of central banks easing monetary policy and governments easing fiscal policy. The Brent crude price rose by US$1.10 or 1.9% to US$59.74 a barrel. And the US Nymex price rose by US$1.34 or 2.4% to US$56.21 a barrel. 

Base metal prices were mixed on the London Metal Exchange on Monday. Nickel fell 1.7% and tin lost 0.7%. But other metals rose up to 0.6% with lead up the most.

The gold futures price fell by US$12.00 or 0.8% to US$1,511.60 an ounce. The spot gold price was trading near US$1,496 an ounce in late US trade. Iron ore fell by US85 cents or 0.9% to US$88.70 a tonne.

CommoditiesCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
Oil Brent59.7458.641.101.88-4.37
Oil - West Texas crude56.1656.21-0.05-0.090.95
Gold Spot $/OZ1,496.001,496.00-0.30-0.024.93
Silver Spot $/OZ16.9016.900.000.054.18
Iron Ore92.6092.600.100.08-22.13
Thermal Coal Newcastle66.4066.300.000.08-10.46
APAC Hard Coking Coal FOB155.00157.50-2.50-1.59-12.92
Aluminium ($US/t)1,7631,7604.000.20-3.33
Copper Mar-18 ($US/lb)2.602.60-0.20-0.08-5.28
Lead ($US/t)2,0512,03813.000.630.34
Nickel ($US/t)15,94316,222-279.00-1.728.60
Zinc ($US/t)2,2502,2491.000.06-6.75
Tin ($US/t)16,48016,599-119.00-0.72-7.29
Uranium ($US/lb)25.0025.000.000.00-0.20
Australian Market ReportCurrent
Level
PreviousChangeDaily %
Change
Monthly %
Change
ASX All Ords6,5506,48665.001.00-3.47
S&P/ASX 2006,4676,40662.000.97-3.48
ASX 24 Futures6,440
Australian Market Report

Monday 19 August - close. Australian shares opened the week's trading firmly higher on Monday as the local market rebounded from its worst week since November, recording its best session in two months. The S&P/ASX 200 Index advanced 61.9 points, or 1 per cent, to 6467.4, its biggest percentage gain since June 19. The broader All Ordinaries climbed 64.6 points, or 1 per cent, to 6550.5.

Ashanti Headlines

US enticed by Greenland's rare earth resources

  • President Donald Trump's idea to buy Greenland may be a long shot, but the US has staked an interest in the island's resources in particular, its rare earth minerals.
  • The US recently signed a memorandum to co-operate with the autonomous territory on rare earth mining to promote investment in the sector, amid wider efforts to secure alternative supplies after China hinted that it could restrict exports to the US.
  • Greenland is estimated to hold 38.5m tons of rare earth oxides, and total reserves for the rest of the world stand at 120m tons.
  • China dominates the global production of these rare earths, a group of 17 metals difficult to commercialise but critical to high-tech applications, including electric vehicles, wind turbines and military technology. More than 70 per cent are mined, and an even higher percentage processed, in China.
  • The recent press around the US's increasing interest in Greenland highlights the strategic positioning of Greenland Minerals Ltd (GGG.ASX) as an emerging global player in the rare earths supply chain as the US and Europe look to secure competitively priced non-Chinese rare earths.

Saracen reports record NPAT of A$92.5M, trades down

Saracen traded down to as low as A$3.44/share in early trading today on the back of FY2019 results, released yesterday:

  • 355koz produced at an average AISC of A$1,030/oz
  • Only A$36M increase to cash and equivalents over FY19 (approx. A$100/oz produced)
  • A$217M reported expenditure on “Growth & Exploration” vs. FY19 guidance of A$113M (and FY18 actual of A$72M)
  • At the close of trading yesterday Saracen was trading at 33x P/E ratio (vs. recent high closer to 50x)
  • With 3.3Moz Reserves on the book and 400kozpa production guidance, such high trading multiples remain hard to justify


Have a question? admin@ashanticapital.com.au

ERA Communications