FTSE 100 continues its breakout as lockdowns loom; US markets take a dive
- FTSE 100 index jumps 111 points
- Bitcoin plunges
- Gold soars
5pm: FTSE finishes higher, Dow tells a different story
London’s leading index closed 111 points higher, a 1.7% jump, at 6,571 on Monday. Its counterpart, the FTSE 250, improved 49 points, 0.2%, to just under 20,538.
“The FTSE 100 is the standout performer of European indices as mining and pharma stocks have boosted the British index,” CMC Markets UK analyst David Madden wrote Monday. “A rally in industrial metals has lifted BHP Group, Rio Tinto, Glencore and Anglo America and they are some of the biggest risers on the FTSE 100 in terms of index points. Sterling’s move lower has benefitted companies like GlaxoSmithKline, AstraZeneca, Reckitt Benckiser, Unilever and Diageo as they all have relatively large foreign revenue streams so the fall in the pound benefits their sales.”
Prime Minister Boris Johnson is expected to announce additional coronavirus restriction measures tonight, and Scotland is set to enter a national lockdown starting at midnight.
As a result, transportation stocks took a plunge, including easyJet plc (LON:EZJ), which lost nearly 8% to GBP764.80.
In the US, traders were feeling less rosy at midday. The Dow tumbled 605 points, nearly 2%, to 30,000, the Nasdaq slid 258 points, 2%, to 12,631 and the S&P 500 fell 73 points, 2%, to 3,682.
3.20pm: Lockdown here we come
Most of the UK may be on the verge of entering lockdown but the FTSE 100, in contrast, is staging a breakout.
The index of heavyweight shares was up 163 points (2.5%) at 6,624; it’s been around that level for so long I’ve just refreshed my browser to make sure it has not locked up.
Talking of lock-ups, the prime minister, Boris Johnson, is set to address the nation at 8.00pm tonight and the expectation is that he will announce a national lockdown for England; Scotland and Wales have already announced lockdowns today.
BREAKING: Boris Johnson to address the nation at 8pm.
Presumably to announce new national lockdown, following Scotland’s lead.
— Piers Morgan (@piersmorgan) January 4, 2021
Seeing as the Footsie’s explosive start to the year is largely being driven by mining stocks it is perhaps not too surprising that the lockdown developments are having little impact on sentiment.
“What is interesting is that the FTSE suffered only the mildest hesitation after it was announced that Boris Johnson would be addressing the nation at 8pm this evening to outline tougher lockdown measures. At the very least it will be a return to the rules seen last November; at its worst, back to the harshest limitations put in place during the inaugural lockdown in March.
“For now it appears that the optimism surrounding the rollout of the Oxford/AstraZeneca vaccine is currently exerting a stronger pull on investors than fears over the economic impact of lockdown 3.0.
“That and the fact the poor pound was the one bearing the brunt if the negative reaction to the news, ensuring the FTSE could continue to gallivant about,” said Connor Campbell at Spreadex.
Away from the equity markets, it has been a great day for the gold bugs with the price of bullion surging US$44.50 to US$1,939.50 but not such a good one for cryptocurrency investors as Bitcoin has plunged US$1,750 to US$31,795.
“Due to the inelastic supply of bitcoin, it can suffer from upside volatility in thin markets, giving rise to spikes which resolve quickly but usually at higher levels, as has happened several times in recent months, most notably around Thanksgiving,” explained Michael Hall, the co-founder of the investment management firm, Nickel Digital.
“We see no reason to change our constructive long-term view on bitcoin, and the recent wave of institutional engagement supports this. We have also always been clear that bitcoin exposures should be carefully managed to low single-digit percentages in multi-asset portfolios,” Hall added.
2.52pm: Wall Street turns red following initial surge
Despite a short positive burst at the opening bell that saw the Dow and S&P 500 hit record highs, the main Wall Street indices swiftly reversed course on Monday morning.
In the first minutes of trading, the Dow Jones Industrial Average was down 0.24% at 30,532 while the S&P 500 dropped 0.18% to 3,749 and the Nasdaq fell 0.11% to 12,878.
The quick reversal may have surprised some traders as the session was expected to be a positive one to start 2021.
Political developments in the US, namely the Georgia Senate runoff elections on Tuesday and formal Congressional approval of Joe Biden’s electoral college victory on Wednesday, may have given markets pause for thought and some may decide to hold fire until the last vestiges of uncertainty from the US election are finally laid to rest ahead of the presidential inauguration on January 20.
Back in London, the FTSE 100 was paying little heed to Wall Street’s uncertainty and was up 176 points at 6,636 shortly after 2.45pm.
2.30pm: Scotland to join Wales in national lockdown at midnight tonight
Scotland is going into national lockdown from midnight tonight.
The advice to stay at home will become mandatory, said Nicola Sturgeon, Scotland’s first minister, with exceptions made “for essential purposes”.
The move follows a national lockdown in Wales, which is also due to start from midnight tonight.
Meanwhile, in England …
Nothing seems to be able to upset the mood in London, however, with the FTSE 100 up 178 points (2.8%) at 6,639.
1.50pm: Retail footfall slumps
Shopper visits to UK retail destinations declined alarminlgy last week, according to data from market research outfit, Springboard.
Footfall was down 23.2% week-on-week, driven by a 31.8% decline in shopper visits to shopping centres; the high street saw a 21.9% decline in footfall while retail parks saw a 16.8% fall-off.
Footfall across the whole of the UK was down 55.7% year-on-year, with the high street taking a 64.6% hit, shopping centres 60% and retail parks 31.9%.
Footfall in Tier 4 (lockdown) locations was 72.2% lower than last year but only 33.9% lower in Tier 3 locations.
“The end of the festive trading period and tightened government restrictions unsurprisingly saw footfall in UK retail destinations drop significantly at the end of 2020. Moving into a new year, with the extension of Tier 4 across virtually all of England and lockdowns in place in the devolved nations, retailers are unlikely to see any respite until restrictions are eased in the coming weeks or months,” predicted Diane Wehrle, the insights director at Springboard.
“We know from our experience of retail reopening in June 2020 that until the widespread roll out of the vaccine, retail footfall will remain significantly below the pre Covid level,” she added.
The news was not unexpected but still did little to boost currently negative sentiment towards retailers such as JD Sports Fashion PLC (LON:JD.), which was down 3.3% at 831.8p, and Frasers Group PLC (LON:FRAS), which was lagging the market, barely changed at 451.6p.
In what was the last week of 2020, footfall in UK #retail destinations continued to respond to tightening government restrictions, dropping significantly from the week before.
— Springboard (@Springboard_) January 4, 2021
The FTSE 100 was up 173 points (2.7%) at 6,634.
12.35pm: Markets start the year on the front foot
Well, it’s one for the money … two also for the money, probably but it’s definitely “go, cats, go” on US markets this afternoon.
Spread betting quotes point to the Dow Jones industrial average opening 144 points higher at 30,750 or thereabouts.
The S&P 500 is expected to open its 2021 account 17 points higher at 3,773 while the Nasdaq Composite is on course to rise 54 points to 12,942.
“After contemplating on what might be next for the markets during the holiday period, stock market investors are apparently in the same bullish mood as they were before despite growing concerns over valuations and the economy. The disconnect between economic reality and the markets have thus broadened, all thanks to cheap central bank and government money flooding the financial markets,” according to Fawad Razaqzada of ThinkMarkets.
“Along with stocks, gold and silver have also started the new year with a bang as the dollar has extended its falls. The ongoing risk-rally means investors are continuing to swap their dollars for more risk sensitive currencies such as commodity dollars and emerging market currencies. As a result, the dollar index has fallen to levels not seen early 2018. This in turn, has helped to push prices of buck-denominated precious metals even higher,” the analyst added.
While markets seem to be determined to ignore the worrying rise in the number of coronavirus cases, attention probably will be paid to the US manufacturing purchasing managers’ index (PMI) due out in a couple of hours’ time.
Economists have pencilled in a reading of 56.3 for December.
In the UK, we’ve already had the PMI reading; it hit a 37-month high of 57.5 in December from 55.6 in November, prompting Howard Archer, the chief economic advisor to the EY ITEM Club to venture that the manufacturing sector has “clearly been less affected than many other areas of the UK economy by restrictions on activity”.
“The Government stressed that it wanted manufacturers to stay open during the lockdown and during the restrictions on activity thereafter, and lessons have been learned in keeping activity going from the previous lockdown. Many factories have been adjusted to meet the social distancing requirements so employees can still work there,” Archer noted.
The EY ITEM Club had been expecting gross domestic product in the UK in the final quarter to have contracted by a “mere” 1% quarter-on-quarter but the increased restrictions announced on December 20 prompted a change to the forecast to a reduction closer to 2%.
“This would result in overall GDP contraction of 10.5% in 2020,” Archer said.
Today also saw the release of data on house purchase mortgages and the message here from Pantheon Macroeconomics is that the mortgage market is heading for a hard landing.
House purchase mortgage approvals rose to 105,000 in November, from 97,500 in October, well above the consensus forecast of 83,500.
“The looming end to the stamp duty holiday at the end of March propelled house purchase mortgage approvals in November to their highest level since August 2007,” said Samuel Tombs, the chief UK economist at Pantheon.
“Demand looks set to remain strong right up until the threshold for SDLT returns to GBP125K, from GBP500K at present, given that the number of people visiting one of the three main property websites remained 22% average its 2016-to-2019 average in December, the same as in November. The effective interest rate for all new mortgages was no higher in November than at the start of the year, despite the jump in quoted rates for loans with a LTV [loan-to-value] ratio of 75% or higher, suggesting that existing homeowners with small mortgages are behind the market’s momentum,” Tombs continued.
“Absent any government policy changes, we continue to think that the housing market will be very subdued in the summer, given that higher mortgage rates have reduced the ability of first-time buyers to participate in the market. The rollout of vaccines also will make people content once again with their pre-pandemic housing choices,” Tombs suggested.
Bank of England house purchase mortgage approvals in November notably shooting up 105k to the highest monthly level since August 2007 just ahead of the crisis… still a bit of catchup in that from lockdown but also obviously stimulus from trying to get stamp duty discount… pic.twitter.com/CpdZiW7Mvj
— Faisal Islam (@faisalislam) January 4, 2021
Meanwhile, the stock of consumer credit declined in November to 9.9% below its November 2019 peak, following another hefty net repayment.
Net consumer product in November declined by GBP1.9bn after tumbling GBP0.6bn in October; the consensus forecast had been for a fall of GBP1.3bn.
The FTSE 100, after a rip-roaring start, was in cruise mode for the second half of the morning and remains in that mode at 6,624, up 163 points (2.5%).
10.40am: Banks and housebuilders left behind
Mining shares continue to drive London’s blue-chip benchmark higher.
The price of gold is up 20% (US$37.40) at US$1,932.50 an ounce this morning while the price of silver has soared 3.8%.
As a result, the FTSE 100 is up 177 points at 6,637, despite UK-focused banks and housebuilders getting the cold-shoulder in this post-Brexit New Year.
NatWest Group PLC (LON:NWG) is off 3.4% at 162p while Lloyds Banking Group PLC (LON:LLOY) is down 2.5% at 35.53p. In the housebuilding sector, Taylor Wimpey PLC (LON:TW.), off 1.4% at 163.5p, is the weakest performer.
“With Brexit finally here, there are precious few signs of initial difficulties allaying some of the fears over what the eventual exit could look like. While there is typically plenty of speculation over what Brexit could look like, the deals focus on goods over services means that it may take some time to truly gauge how much of an impact this break up will have upon the economic growth prospects,” said Joshua Mahony at IG Group.
“Commodity prices are enjoying a lucrative start to the year, with precious metal gains being followed up by similarly impressive upside for energy prices. Dollar weakness has been seen throughout the FX market as traders prepare for a year of economic recovery; however, while the likes of gold and silver are often seen as havens, they often perform best in the years following a crisis as highlighted by the 2009-11 bull-run.”
The roll-out of vaccines, rather than the alarmingly rapid increase of coronavirus infections, seems to be driving the share price performance of package tours operator TUI AG (LON:TUI), which is up 9.6% at 502.6p.
The same generosity of spirit is not being extended to no-frills airline easyJet PLC (LON:EZJ), which is 0.9% lower at 822.2p after Citigroup issued a “sell” note, abandoning its previously neutral stance. The price target was cut to 650p from 750p.
The same broker upgraded British Airways owner International Consolidated Airlines (LON:IAG) to ‘buy’ with the price target cranking up to 195p from 150p; the shares currently trade at around 162.65p, up 1.9%.
9.55am: Manufacturing PMI rises as companies stockpiled ahead of Brexit
The seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI) rose to a three-year high of 57.5 in December, up from 55.6 in November.
The level of the PMI was mainly boosted by a marked lengthening of suppliers’ delivery times and a substantial increase in stocks of purchases as part of preparations before the end of the Brexit transition period, according to IHS Markit.
“Customers, especially those based in the EU, brought forward purchases, boosting sales temporarily. It seems likely that this boost will reverse in the opening months of 2021, making for a weak start to the year. Note also that the December PMI data were collected prior to the border closures, which will have led to further logistics and production disruptions for many companies,” said Rob Dobson, a director at IHS Markit, which compiles the survey.
“Worryingly, the manufacturing sector was already beset by near-record supply-chain delays even prior to the closure of Dover-Calais shipping. Manufacturers reported freight delays – especially at ports – plus shortages of certain raw materials and a lack of supplier capacity. Vendor lead times, a bellwether of supply-chain pressures, lengthened in December to a similar extent to during the first wave of the pandemic,” he added,
Duncan Brock, the group director at the Chartered Institute of Procurement & Supply (CIPS) said: “both UK and European firms stockpiled goods and materials at a fair lick in an attempt to sideline further disruption this winter”.
“This rush to secure supplies meant already stressed supply chains paid the price with some of the longest delays in the near 30-year survey history. Bunged up ports caused backlogs to rise to levels not seen for a decade and optimism for the year ahead dropped to a six-month low as the challenges for manufacturers just kept coming.
“After a severely turbulent year, UK makers still have a great deal to worry about. Job numbers continue to fall, and material shortages have resulted in the highest cost inflation since 2018. The sector is holding its breath until the terms of the new deal are fully understood and whether new business can be sustained in the same way in a post-Brexit marketplace,” Brock added.
9.20am: Onwards and upwards
The FTSE 100 has flown out of the traps on the first day of trading of the New Year.
London’s index of leading shares was up 136 points (2.1%) at 6,596, with Entain PLC (LON:ENT), up 26% at 1,425.5p, leading the advance after it rebuffed a bid approach from its partner in the US, MGM Resorts International (NYSE:MGM).
“Global stock markets enter 2021 at or near all-time highs despite ongoing uncertainty around the pace of recovery from the pandemic and the threat of fresh lockdowns lasting well into the spring. Despite the anxiety around when we get back to normal, the major fears of last year have receded and liquidity remains strong,” said Neil Wilson at markets.com.
“There is a general risk-on mood and vaccine positivity could be a factor – the UK approved the use of the Oxford University/Astra Zeneca vaccine, with half a million doses ready today. It will allow a faster easing of restrictions, but the country looks likely to endure tougher restrictions in the meantime. We could also say that the lack of chaos/Armageddon/doomsday from Brexit is also a factor. Indeed after a fairly muted response in the FX markets to news of the deal on Christmas Eve, following the UK’s leaving the EU properly on Hogmanay, sterling has headed higher,” he noted.
Ferguson PLC (LON:FEG), the company formerly known as Wolseley, has agreed to sell Wolseley UK, its UK based heating and plumbing distribution business, to Clayton, Dubilier & Rice, a global private investment firm for net cash consideration of around GBP308mln.
The news got a cool reception with the shares defying the general trend, sliding 0.4% to 8,852p.
8.45am: Let’s hope this is the 2021 way
The FTSE 100 opened the first session of the new trading year with a roar – and in doing so regained the losses posted in the final session of 2020.
The index of UK blue-chips opened 130 points to the good on Monday morning at 6,591.41.
Coronavirus vaccine hopes far outweighed the prospect of further lockdown restrictions with the AstraZeneca/Oxford inoculation roll-out starting later Monday.
On the currency markets, the pound reacted positively to the Christmas Eve Brexit deal, which has helped calm nerves, though the major star was Bitcoin. It soared to a new high of US$34,000 per coin on Sunday, representing a 75% jump in the last month and a 360% advance in the past year.
Turning to the London Stock Exchange, Entain (LON:ENT) was the most notable feature as the Ladbrokes and Coral bookmakers owner advanced 26% after an GBP8.1bn bid approach from MGM Resorts.
Glencore (LON:GLEN), Anglo American (LON:AAL) and BHP (LON:BHP) mustered gains of 3.5%-4.1% amid hopes for a vaccine-led economic bounce-back, which some analysts expect will spark a mini natural resources boom.
There was some early but mild profit-taking in the banking and house building sectors, which both are perceived beneficiaries from an orderly Brexit.
There are also some question marks around the settlement for the financial services sector, which will have to wait for the EU to grant a form of recognition known as equivalence.
Proactive news headines:
Tiziana Life Sciences PLC (NASDAQ:TLSA) (LON:TILS) said top-line data will be available later this month from its recently-completed clinical trial in coronavirus (COVID-19) patients that received its nasally-administered monoclonal antibody, Foralumab. Anecdotal feedback from the Brazil study, carried out in collaboration with the Harvard Medical School and Santa Casa de Misericordia de Santos Hospital, was “positive and suggests that the treatment was well-tolerated”, the company said. Tiziana added that the scientific approaches used “could potentially be effective against SARs, MERS, and all variants of coronaviruses”.
Great Western Mining Corporation PLC (LON:GWMO) has announced the first pour of gold and silver at its Mineral Jackpot property. The company produced a dore bar as a pilot exercise using material from test spoil heaps on the Mineral Jackpot property, which is in Mineral County, Nevada. The success of the trial proves the concept of being able to extract gold and silver from up to 12,000 tons of material available from 38 spoil heaps on the property, Great Western said.
Sirius Real Estate Limited (LON:SRE) said it has completed transactions for three business parks in Germany totalling EUR26mln (GBP23.3mln) which it said will generate a total of EUR1.9mln (GBP1.7mln) of annualised net operating income. The FTSE 250 firm said the acquisitions comprise two previously announced purchases in Norderstedt, Hamburg for EUR9.1mln and in Nuremberg for EUR13.7mln, as well as a new acquisition for EUR3.2mln immediately adjacent to its existing Mannheim II business park. Sirius said the acquisitions have been acquired at an “attractive” blended net initial yield excluding costs of direct vacancy of 7.2% and will provide a mix of around two-thirds production and storage space and one-third out-of-town office space.
Zephyr Energy PLC (LON:ZPHR) has told investors that the drill crew for its State 16-2 well in Utah has been operating around the clock since the December spud and progress to date is fully in line with expectations. The company also noted that following the spud it subsequently received the third US$600,000 tranche of the US$2mln grant funds allocated by the US Department of Energy. A final tranche of US$200,000 is due once drilling operations are complete. Zephyr highlighted that its strategic goal for 2021 is to establish production and positive cash flow, either with its existing assets or through acquisition.
Power Metal Resources PLC (LON:POW) has updated on exploration work at the Ditau project in Botswana. Ditau, which includes two prospecting licences held in a joint venture with Kavango Resources PLC (LON:KAV), is prospective for rare earths. The group said the first stage of orientation work at Ditau is now complete, including geophysical and geochemical surveys.
i3 Energy PLC (LON:I3E) said it has relinquished UKCS licence P.1987 in the North Sea., cutting its licence fees outlay. The licence was relinquished at the end of its two-year second term; to move into the third term of the licence an approved field development plan would have been required. Licence P.1987, which encompasses UK Block 13/23d contains contingent resources that have been evaluated as sub-commercial by i3 and in an ‘independent competent person’ report and as such do not represent a viable commercial development, the company said.
Jersey Oil and Gas PLC (LON:JOG) has announced the US$850,000 settlement of a dispute with TGS-Nopec Geophysical Company (TGS), Previously, TGS claimed uplift payments from Jersey Oil and Gas totalling US$1.05mln, though this was challenged by the company. Since then, hearings took place in Norwegian courts and, based on legal advice, a settlement was subsequently negotiated.
Tirupati Graphite PLC (LON:TGR) has said it is fast-tracking the expansion of primary graphite output from its Vatomina and Sahamamy projects in Madagascar. The company is on track to commission Vatomina in the second quarter of 2021 and to build production to 6,000 tonnes per year. This will take capacity across both projects to 9,000 tonnes per year of flake graphite output.
Metal Tiger PLC (LON:MTR) said it has spent around A$146,000 on increasing its stake in Southern Gold Limited to around 17.72%. The investor in natural resources bought 1.23mln shares in the Aussie-listed gold explorer at an average price of around A$0.1193 a share. Southern Gold has a substantial portfolio of high-grade gold projects in South Korea that are largely greenfield epithermal gold-silver targets in the south-west of the country, Metal Tiger told investors.
Ncondezi Energy Ltd (LON:NCCL) has provided an update on historical development cost reimbursement negotiations with China Machinery Engineering Corporation for work on the integrated Ncondezi 300MW coal-fired power project and coal mine in Tete, Mozambique. “It is with great pleasure that we update investors on the positive progress regarding agreement of project historical development costs to be reimbursed to the company at financial close,” said Ncondezi chief executive Hanno Pengilly in a statement. “Following an extensive third-party audit review of the company’s historical costs over a 10 year period, and following successful negotiations with CMEC, Ncondezi has been able to demonstrate US$26.7mln of historical expenditure on the project.”
Mosman Oil and Gas Ltd (LON:MSMN) has agreed to sell its interest in the Welch project, Texas, in a cash deal worth US$420,000, after a prior deal failed to close. The new deal is with Steadfast Energy Partners LLC and Silver Dollar Energy Investments LLC. This transaction is expected to close on January 15, 2021. The company pointed out that project ranking in its recent strategic review prioritised assets with lower operating costs.
Panthera Resources PLC (LON:PAT) has agreed with Moydow Holdings Ltd to extend the date for completion of the sale of the Kalaka gold project to Moydow, to January 14, 2021. While substantial progress has been made, the extension of time is required due to the limited progress over the holiday period. On July 22, 2020, Panthera announced that it had entered into a conditional sale and purchase agreement to divest its interests in the Labola gold project in southwest Burkina Faso and the Kalaka gold project in southwest Mali to Moydow.
Westminster Group PLC (LON:WSG) said that following a placing in December it has redeemed all remaining convertible secured loan notes and convertible unsecured loan stock and has also fully repaid the mezzanine loan facility from RiverFort and YA II. The AIM-listed firm said there were no conversions of the loan notes and that the repayment of the debts, totalling around GBP2.6mln, will strengthen its balance sheet and also result in an annual saving of around GBP0.3mln in interest and fees, which it said was a “major objective” of the recent GBP5mln placing that was completed on December 22, 2020.
EQTEC PLC (LON:EQT), a world-leading gasification technology solutions company for sustainable waste-to-energy projects, announced that it has agreed an unsecured term loan facility of GBP1.25mln with Altair Group Investment Limited, a substantial shareholder in the company. The loan facility is for a term of 12 months and the principal and any accrued interest are repayable in full on December 31, 2021, but the company can repay the loan early without penalty. The facility is unsecured and has a coupon of 6% per annum, payable quarterly in arrears. It will be used to pay all sums due to Riverfort Global Opportunities PCC Ltd and YA II PN, Ltd in full and final settlement of amounts owed to them, releasing and discharging any secured assets and obligations under any previous agreements with those lenders.
Guild Esports PLC (LON:GILD), a UK-based owner and developer of esports teams announced that it has appointed Tennyson Securities as its joint broker. Tennyson Securities is the new home of the primary team that recently left Mirabaud Securities, providing continuity of Guild’s broking relationships. Tennyson Securities will work alongside Zeus Capital.
Iconic Labs PLC (LON:ICON), a multi-divisional new media and technology business, advised that at its annual general meeting held on December 31, 2020, all resolutions were duly passed on a poll vote, with the exception of resolutions 8, empowering the directors’ to disapply statutory pre-emption rights, and 9, the purchase by the company of its own shares.
Mkango Resources Ltd. (LON:MKA) (CVE:MKA has announced that, with the objective of minimising dilution to shareholders, Talaxis Limited has agreed to amend the terms of a warrant held by it. Under this amendment Talaxis has agreed to a cashless exercise of the warrant for 1,000,000 common shares in lieu of payment for 12,000,000 shares at 6.6p each. The warrant was due to expire on December 31, 2020. This amendment significantly reduces the dilution to other Mkango shareholders and avoids the company issuing 12,000,000 shares at a significant discount to the current market price. Following the issuance of the shares, Talaxis will increase its ownership of Mkango from 14,285,715 shares to 15,285,715 shares post-warrant exercise, representing an increase from 10.7% to 11.3% of the issued and outstanding shares. The group also said that Shaun Treacy, a non-executive director of Mkango, has exercised warrants for 1,200,000 new shares at a price of 6.6p each, for total proceeds to Mkango of GBP79,200 (US$107,000). Following the warrant exercise, Treacy will own a 1.4% interest in Mkango. After these two transactions, there are no further warrants outstanding. William Dawes, chief executive of Mkango commented: “The cashless warrant exercise agreed with Talaxis minimises potential dilution to other Mkango shareholders as the Company enters a transformational period of growth, with anticipated 2021 news flow including results from the ongoing feasibility study for the Songwe Hill rare earths project and the recently completed rutile exploration programme in Malawi, and developments in relation to Maginito and its interest in UK rare earth magnet recycler, HyProMag. Furthermore, the warrant exercise by non-executive director, Shaun Treacy, demonstrates confidence in the Company and the market outlook. With the growing global demand for critical materials related to electric vehicles and wind power, Mkango is uniquely positioned in the rare earths sector, where we anticipate increasing market focus and corporate activity.”
Faron Pharmaceuticals Ltd (LON: FARN), the clinical-stage biopharmaceutical company has announced that Dr Markku Jalkanen, the group’s chief executive officer will present in a pre-recorded presentation at the virtual H.C. Wainwright BioConnect Conference that will be available on-demand starting Monday, January 11, 2021, at 6.00am ET. An audio webcast of the presentations will be available in the Investors section on Faron’s website at https://www.faron.com/investors
6.50am: Happier new year
The first day of the new trading year looks set to be subdued – in contrast to the final session of 2020, which saw a 1.4% drop in the FTSE 100 index.
The index of UK blue-chips looks set to open 14 points higher at 6,474.52.
In Asia on Monday, the mood was one of optimism with the main markets there buoyed by coronavirus vaccine hopes.
The Nikkei 225, for example, hit a 30-year high, while Korea’s Kospi climbed 2%. China, by contrast, delivered a relatively restrained performance with a 0.8% gain.
Here in the UK, the worries likely to haunt the Footsie relate to a prolonged, stricter and economically punitive lockdown.
“We are entirely reconciled to do what it takes to get the virus under control. That may involve tougher measures in the weeks ahead,” Prime Minister Boris Johnson told the BBC’s Andrew Marr on Sunday.
The Daily Mail, meanwhile, is calling the roll-out of the new AstraZeneca/Oxford inoculation Operation Hope.
A total of 530,000 doses will be available at 100 hospitals for those people in the most vulnerable groups.
Health secretary Matt Hancock said: “This is a pivotal moment in our fight against this awful virus and I hope it provides renewed hope to everybody that the end of this pandemic is in sight.”
On currency markets, it has been an epic start to the year for Bitcoin with the cryptocurrency setting a new record above US$34,000 over the weekend.
Demand has been driven by corporates pursuing alternative asset allocation strategies, diversification by major institutional holders and the emergence of dedicated funds.
Although the corporate diary is bare today, the year always begins with a flurry of updates from retailers and 2021 is no different with trading statements expected from Next (LON:NXT), Morrisons (LON:MRW) tomorrow, and from Greggs (LON:GRG) on Wednesday.
Barratt Developments, meanwhile, will provide some insight into the health of the housebuilders and their prospects post-Brexit on Friday.
Around the markets:
- Pound US$1.3682 (up 0.1%)
- Bticoin US$32,768.92 (-3.1%)
- Gold US$1,925.80 (+1.6%)
- Brent Crude US$56.62 (+0.8%)
6.45am: Early Markets: Asia / Australia
Shares in Asia-Pacific were mostly higher on the first trading day of 2021. Mainland Chinese stocks surged with the Shanghai composite gaining 1.03%.
Proactive Australia news:
Core Lithium Ltd (ASX:CXO) has surged on news that the company’s largest shareholder and offtake partner, China’s Sichuan Yahua Industrial Group, has signed a deal to supply battery-grade lithium hydroxide to US electric vehicle manufacturer Tesla Inc (NASDAQ:TSLA) over the next five years.
Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) (FRA:7OR) is eagerly awaiting assay results from Big One Deposit of the Mt Oxide Copper Project in northwest Queensland that are expected to provide an entree for a “transformative” year in 2021.
Artemis Resources Ltd (ASX:ARV) (OTCMKTS:ARTTF) (FRA:ATY) has made a strong start to 2021 with on-ground exploration activities at Carlow Castle Gold-Copper-Cobalt Project and detailed planning for a multi-rig program at the Paterson Central Gold-Copper Project.
Tempus Resources Ltd (ASX:TMR) (CVE:TMRR) (FRA:4W0) has executed a joint venture agreement with Canadian company Robinhood Gold Corp (RGC) covering the Mineral Creek Gold Project in British Columbia, Canada.
Anteris Technologies Ltd (ASX:AVR) (FRA:DDF) has entered into a short-term facility for the advance of $1.22 million which provides immediate funds equivalent to the company’s forecast research and development (R&D) tax incentive offset for the majority of the 2020 calendar year.
Red River Resources Limited (ASX:RVR) (FRA:R1R) has received further assays in follow-up drilling at Eleanora Lode of its Hillgrove Gold Mine in northern NSW, including the highest grade to date of 1-metre at 57.2 g/t gold and 1.6% antimony from 188 metres.
Chalice Mining Ltd (ASX:CHN) (OTCMKTS:CGMLF) (FRA:C8U) has received a key access approval to additional exploration areas at its 100%-owned Julimar Nickel-Copper-Platinum Group Element (PGE) Project, around 70 kilometres northeast of Perth in Western Australia.