Weekly Brief 24th January 2020
Another week of January has trundled along, but not without note: coronavirus is wreaking havoc, Davos has done the same, and the weather continues to turn in Australia.
But we managed to survive not just another week of January, but Blue Monday aka the most depressing day of the year. But how did it come to be? It was the work of the reputable psychologist Cliff Arnall, who created a scientific formula that included various factors, from weather conditions to debt levels. Arnall created the formula for a travel company and you will be pleased to know that it has no scientific basis! Nevertheless, it has stuck and I am sure that we can all agree that it is very fitting that the day should fall in January. However, it hasn’t been all that blue for some of our clients…
Client News:
BlueRock Diamonds Plc (AIM: BRD) published its Q4 2019 and FY 2019 production update, delivering a maiden profit in H2 2019. Revenue was up 190% to £4.1 million and sale of carats up 118% to 12,675 for FY19.
Contango Holdings Plc (LSE: CGO) raised £1.4 million through a conditional placing of 28,000,000 New Ordinary Shares. The Company expects to issue a Prospectus, with details of the purchase of the Lubu Coalfield in Zimbabwe.
Hot on the heels of last week’s announcement that planning consent has been awarded for the development of the Wressle oil field in the East Midlands, Europa Oil and Gas (Holdings) Plc (AIM: EOG) issued an update on farm-out discussions for three of its offshore Ireland licences including its flagship Inishkea gas project. The Company continues to talk to a number of potential partners, although this no longer includes the major oil company it had previously been in negotiations with. Europa said it is prioritising securing a partner to drill Inishkea which is located next to the producing Corrib gas field.
MGC Pharmaceuticals Ltd (ASX: MXC) signed a supply agreement with THC Global Group Limited to produce and supply pharmaceutical grade Canndeo branded phytocannabinoid products to Australia and New Zealand for THC Global.
United Oil and Gas Plc’s (AIM: UOG) acquisition of a 22% interest in the producing Abu Sennan concession in Egypt from Rockhopper Exploration Plc is nearing completion following the submission of the signed Deed of Assignment to the government for approval. In the meantime, progress continues to be made on the ground at Abu Sennan. Specifically, the recently drilled ASH-2 well has been consistently producing at over 3,000 bopd which has increased the field’s overall production to an average of c. 8,000 bopd.
You may have missed…
Shard Capital published its monthly commodities report, providing an overview of market performance in 2019 and a touch of 20/20 vision for the year ahead. Those investing in resource stocks would have been relatively pleased with how commodities performed in December 2019. Whilst zinc ended as a loss, lead’s price finally stopped falling, silver went into a swings and roundabouts mode, with investors uncertain of the direction it would take, but nevertheless it recovered, and gold, along with a number of other commodities such as palladium, continued to rise. This placed commodities, as a whole, in a relatively good position going into 2020. However, Shard Capital advises that investors should keep a beady eye on market movements this year. This might seem like an obvious thing to do, yet it is easy to sit back once an investment has been made and hope for the best. When it comes to the markets, drawing on the title of Danish philosopher Søren Kierkegaard’s book, ‘De omnibus dubitandum est’ (‘everything must be doubted’).
With gold prices on the up, some investors certainly demonstrated that they are erring on the side of caution as gold is often viewed as a ‘safe haven’ or a ‘hedge’ during periods of uncertainty. Shard Capital has observed that the price of gold looks set to increase further, setting a target for a US$1,630 target for the precious metal. Nonetheless, gold is not stealing all the limelight in the commodity market. Positive developments in US economics in 2019, coupled with the recent tensions between the US and Iran, has led to an increase in the price of Brent. Shard Capital regards the backdrop to be ‘very bullish’ where this commodity is concerned. Similarly, the Company predicts that a silver rush is likely to occur but might not last; and that palladium, based on ‘chart patterns’, could continue to make leaps. Copper finished 2019 in a positive position and Shard Capital predicts that the upward trend could continue and by February the commodity could reach US$6,400.
To read the Report in more depth and about the other commodities not touched on here, head to the following link: https://www.shardcapital.com/capital-markets/commodity-derivatives/
In the news this week…
Why do we all age differently? Well, scientists at Stanford University have discovered that there are four main ageing types and that we all have individual biological patterns of ageing. Read more here…
The word ‘pettifogging’ has made the news! Have a read here to find out what this archaic word means and why it was used.
The infamously stolen ‘Portrait of a Lady’ by Gustav Klimt was found 23 years later hidden in a wall.
The restoration of the ‘Adoration of the Mystic Lamb’ revealed a shockingly disturbing revelation.
Leading fashion retailer Asos breached the £1bn mark for the first time since late 2018 after a record Black Friday, recovering from their two profit warnings last year.
Sainsbury’s CEO is retiring after six years in the company.
The UK has been consumed with election fever over the past 12 months – be it the European Elections in May or the much anticipated and dramatic General Election in December – whichever way you look at it, it has been a bit serious. So, courtesy of SBP, here are some less controversial elected officials to provide some respite:
Fair Haven, Vermont – The current mayoral pawsition is held by the aptly named Lincoln, the Nubian goat, who will only serve one term in office. I’m sure he will be the absolute greatest of all time.
Omena, Michigan – Sweet Tart the cat was elected in 2018 and will hold the pawsition until next year, winning by a record number of votes. She has previous experience in politics as she served as vice mayor before being elected. She keeps her constituents on a short leash with the help of her first and second vice-mayors, Diablo and Punkin (who are both dogs), and her press secretary, Harley (a goat).
Idyllwild, California – Mayor Max II, the golden retriever, comes from a proud lineage of other town mayors as he continued the legacy of his predecessor and cousin, Max I, in 2014. When the end of his term approached, he was overwhelmingly voted to continue to serve and still does to this day – clearly his bark is much worse than his bite!
Rabbit Hash, Kentucky – This town has had canine mayors since 1998, and is currently being held by Brynneth Pawltro, the pit bull, with her two Ambassadors (Lady the border collie and Bourbon the Australian shepherd, naturally) supporting her and available to step in if Brynn is otherwise engaged. Brynn took over from Lucy Lou the border collie, who became the town’s first female mayor.