AP: Gold And Platinum Recover To Bolster Randgold, Petropavlovsk And Lonmin As FTSE 100 Rises
Overview: as was expecte,d the FTSE 100 climbed 0.7% in the morning as miners and energy stocks advanced, benefitting from higher oil and metal prices, while financial stocks recovered after falling on Friday after the Basel Committee made tighter than expected regulation proposals for the banking sector.
Cairn Energy (LSE: CNE) emerged atop the leaderboard with a gain of 5.5%, while quality and safety services provider Intertek (LSE: ITRK) was a distant second, climbing 2%, as did another oil and gas stock Tullow Oil (LSE: TLW).
Just three blue chip companies lost more than 1% today. Portable power supplier Aggreko (LSE: AGK), which made its debut in the FTSE 100 today, was down 1.5%, being in correction after climbing 8% on Friday. Asset management firm Schroders (LSE: SDR) and insurer Legal & General (SLE: LGEN) followed with losses of 1%.
Wall Street is set to extend Friday’s gains with financial bookmakers projecting the top indexes to rise today in anticipation of news from Dubai, where the troubled state-owned conglomerate Dubai World is set to meet its creditors, looking to negotiate a suspension of all repayments on its debts, which currently amount to US$22 billion. Futures for the Dow Jones Industrial Average, the S&P 500 index and the NASDAQ composite all inched about 0.1% higher this morning.
Commodities
Oil prices rose today with February Brent Crude reaching US$74.16/barrel, while US light, sweet crude improved to US$74.74/barrel.
Major oil and gas stocks mostly rose with the exception of Petrofac (LSE: PFC), which posted a small loss. BP (LSE: BP) added 1%, while fellow supermajor Shell (LSE: RDSB) advanced 1.2%, as did Tullow Oil (LSE: TLW). BG Group (LSE: BG) tacked on less than 1%, while Cairn Energy (LSE: CNE) took the lead with a 3.8% climb.
Midcaps also did well as Heritage Oil (LSE: HOIL) and Dragon Oil (LSE: DGO) added 1.5% and 1%, while Dana Petroleum (LSE: DNX) and Melrose Resources (LSE: MRS) gained less than 1%.
Most junior companies rose this morning. Iraq operating Irish oil company Petrel Resources (AIM: PET) led the sector with a 24% rally. Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) followed with a 5% gain, while Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) both added more than 3%.
Miners inch higher as gold and silver advance
Precious metals slightly improved, recouping some of their recent losses. Gold rose to US$1,113/oz, while silver and platinum reached US$17.35/oz and US$1,432/oz respectively.
Major mining stocks were mixed. In the FTSE 100, gold producer Randgold Resources (LSE: RRS) and platinum miner Lonmin (LSE: LMI) rose marginally, while silver miner Fresnillo (LSE: FRES) was flat, as was specialty chemicals firm Johnson Matthey (LSE: JMAT).
Midcaps Aquarius Platinum (SLE: AQP) and silver producer Hochschild Mining (LSE: HOC) posted losses of less than 1%, while gold miner Petropavlovsk (LSE: POG) took the lead in the sector in the FTSE 250 with a 1.7% advance.
Brazil focused gold miner Horizonte Minerals (AIM: HZM) led the juniors with a 8.5% climb.
Tajikistan operating gold miner Kryso Resources (AIM: KYS), commodity asset development company Mercator Gold (AIM: MCR) and Philippines focused gold producer Medusa Mining (AIM&ASX: MML) headed in the opposite direction, shedding 8%, 6% and 5% respectively. Turkey focused gold miner Ariana Resources (AIM: AAU) and Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) moved along, sliding 4%.
Copper and nickel rise
Base metals advanced as copper and nickel reached US$3.12/lb and US$7.93/lb, while zinc climbed to US$1.09/lb.
Base metal focused stocks didn’t show much movement in the morning. Anglo American (SLE: AAL) and Xstrata (LSE: XTA) added 1%, while Vedanta Resources (LSE: VED) took the lead with a 1.2% advance. Eurasian Natural Resources (LSE: ENRC), Kazakhmys LSE: KAZ) and Rio Tinto (LSE: RIO) rose marginally, while BHP Billiton (LSE: BLT) remained flat and Antofagasta (LSE: ANTO) posted a small loss.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved against the tide, shedding 2%.
Cement operator Prosperity Mineral Holdings (AIM: PMHL) was the top performer in the sector, surging 24% after agreeing to sell its Chinese cement asset for £300 million. South American focused junior miner Herencia Resources (AIM: HER), mineral sands producer Kenmare Resources (LSE: KMR) and Botswana operating nickel and copper miner Discovery Metals (AIM: DME) also did well, tacking on 4.5%, 4% and 3.5% respectively.
Indonesia operating coal miner Churchill Mining (AIM: CHL) and Tunisia focused metal miner Maghreb Minerals (AIM: MMS) slid 9% and 5% on no news.
Banks, insurance, private equity
Financial stocks were in buying mode in the morning. Barclays (LSE: BARC) and HSBC (LSE: HSBA) were the top performers in the banking sector with gains of more than 1.5%. Standard Chartered (LSE: STAN) followed with a 1.2% climb, while part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) added 1% and less than 1% respectively.
Admiral Group (LSE: ADM), Aviva (LSE: AV) and Old Mutual (LSE: OML) led the insurers with gains of 1.5%, while Prudential (LSE: PRU) and Standard Life (LSE: SL) followed, climbing 1.3% and 1%, respectively. RSA Insurance Group (LSE: RSA) was flat, while Legal & General (LSE: LGEN) sank to the bottom of the pile with a loss of nearly 1%.
Private equity group 3i (LSE: III) added less than 1%.
Large and Mid Cap News
Edinburgh headquartered Cairn Energy (LSE: CNE) said it has secured a rig for the summer drilling season at its Greenland exploration project. The oil and gas producer has contracted the Stena Forth drill ship for approximately 6 months in 2010.
European Real Estate Investment Trust and Hammerson (LSE: HMSO) announced they had entered into a 50:50 joint venture with the Canada Pension Plan Investment Board (CPPIB) to acquire the 93,000 m² Silverburn shopping centre near Glasgow. The JV will pay a total of £297 million for the property, representing a £148.5 million commitment for each party.
In a pre-close trading statement, National Express Group PLC (LSE: NEX) said underlying revenue trends have stabilised in the fourth quarter and its full year profit is expected to be consistent with previous guidance. According to executive Chairman, John Devaney the transport operator has resolved its significant issues.
FTSE100 constituent The London Stock Exchange Group PLC (LSE: LSE) has agreed to acquire Turquoise Trading Ltd to create a new pan-European trading venue. The integration of the LSE Group’s Baikal platform and the Turquoise platform will provide a neutral European equity trading platform, which will be a FSA regulated Multilateral Trading Facility.
UK outsourcing specialist, the Capita Group Plc (LSE: CPI) announced the acquisition of ICT service group Synetrix Ltd for £75 million in a cash deal with private equity group, the Apax Partners. According to the FTSE100 constituent the acquisition will add to and strengthen its current IT capabilities.
Small Cap News
Goldplat PLC (AIM: GDP) said it has has entered into an agreement with Sanu Exploration (BVI) Ltd, a wholly owned subsidiary of NGEX Resources Inc, to acquire Sanu's option over the 246 square kilometre Nyieme gold project in Burkina Faso.
Firestone Diamonds (AIM: FDI) has entered into a JV (joint venture) agreement with Tawana Resources, giving it the right to earn up to an 85% interest in Tawana’s kimberlite exploration and evaluation projects in Botswana, including eight kimberlites in the Orapa field.
Telecoms giant, Vodafone (LSE: VOD) announced it will offer Apple’s (NYSE: AAPL) iPhone on its mobile phone network on January 14th2010. The increasingly popular iPhone was previously distributed and operated in the UK exclusively on Telefonica’s (IBEX: TEF, NYSE: TEF) O₂ network.
Ovoca Gold (AIM: OVG) has entered into a conditional acquisition agreement for a 100% interest in a portfolio of gold exploration projects in the Magadan region of Russia for up to US$25 million, looking to position itself as a significant junior gold explorer in that country.
Alkane Energy PLC (AIM: ALK) and TEG Group PLC (AIM: TEG) announced in separate statements a collaboration which will see them will jointly bidding for a range of anaerobic digestion (AD) facilities. Alkane will provide the gas handling, gas engines and grid connections and TEG will be responsible for the construction and operation of the anaerobic digesters and waste handling.
Prosperity Minerals Holdings (AIM: PMHL) has taken another step towards selling its Chinese cement business Upper Value Investments Limited official, having entered into a conditional sale and purchase agreement for the disposal with TCC international Holdings (HKG: 1136) to focus its investment strategy on its iron ore business and seek expansion into new markets in China.
Anti-microbial chemicals maker Byotrol (AIM: BYOT) said it has entered into a six month option agreement with a Fortune 150 corporation over exclusive rights to enter into negotiations for a licensing deal over the company’s patented technology.
Range Resources Ltd (ASX: RRS; AIM: RRL) said testing has confirmed a commercial discovery for its Smith #1 well in the North Chapman Ranch area in Texas and that the government of Somalia's Puntland State has now ratified the previously announced changes to the production sharing agreement over the Dharoor and Nugaal valley exploration areas.
Broadband satellite operator, Avanti Communications Group plc (AIM: AVN) (‘Avanti’) announced it has raised £280 million through a combination of equity and debt based financing. The proceeds will fund the purchase, launch and operation of the HYLAS 2 satellite.
Plantic Technologies Limited (AIM: PLNT) has entered a joint collaboration agreement with National Starch LLC to establish a site for the manufacture of Plantic products in the US and relocate one of its existing proprietary manufacturing lines from Australia to the US.
Junior gold producer, Ascot Mining (Plus ASMP, FSE: AM3) confirmed this morning that it had produced its first gold dore bar at the Chassoul Mine in Costa Rica. Mining operations and the mill circuit are now “fully operational” at Chassoul, with the first 10 ounce gold dore bar produced after the completion a successful primary test-run of the entire ore processing circuit . A larger 100 ounce gold pour is scheduled to occur before Christmas.
