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  Randgold, ENRC and Lonmin lead FTSE 100 rally as gold, silver, platinum and copper rise
Reported by Proactive Investors on Monday, 2 November 2009 (on November 2, 2009)
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Overview: the FTSE 100 extended gains following a bullish start on Wall Street, where the Dow Jones industrial average opened with a 1.2% rally to recoup some of Friday’s losses.
The UK blue chip index tacked on 0.5% in early trade and then doubled its gains to 1% despite a late fall in the commercial property sector, where Hammerson (LSE: HMSO), Segro (LSE: SGRO), Liberty International (LSE: LII), British Land (LSE: BLND) and Land Securities Group (LSE: LAND) all shed 2-3%.
Bailed out banks Lloyds (LSE: LLOY) and Royal Bank of Sctoland (LSE: RBS) once again acted as a drag on the Footsie, posting considerable losses after RBS admitted that a deal with EU regulators and the UK government could include unplanned asset disposals. RBS slipped 8%, while Lloyds declined 2.5% in sympathy.
Hospitality company Whitbread (LSE: WTB) also showed up on the top fallers list with a 1.6% slide.
The mining sector was the sole driving force behind the Footsie’s upward movement with mining companies quickly making it to the top of the leaderboard and staying there until the end of the day. Gold miner Randgold Resources (LSE: RRS), base metals focused Eurasian Natural Resources (LSE: ENRC), and platinum miner Lonmin (LSE: LMI) were in the lead with gains of 5.5%, 5% and 4.5% respectively.
Software manufacturer Invensys (LSE: ISYS) was the only non-mining stocks among the top risers with a 4% climb.
Commodities
Oil prices inched slightly lower in the afternoon with December Brent Crude sliding to US$75.93/barrel, while US light, sweet crude for December delivery slid to US$77.76/barrel after reaching US$78 earlier in the day. Despite the slight decline in oil prices, all major oil and gas stocks were on the rise today.
Suppermajor BP (LSE: BP) and Petrofac (LSE: PFC) were in the lead with a gains of over 2%. BG Group (LSE: BG) also climbed 2%. Shell (LSE: RDSA) rose marginally, as did Cairn Energy (LSE: CNE) and Tullow Oil (LSE: TLW).
Midcap Dragon Oil (LSE: DGO) outperformed the sector with an almost 9% rally after Dubai based oil company ENOC agreed to acquire its remaining share capital.
However, fellow FTSE 250 constituents Heritage Oil (LSE: HOIL) and Dana Petroleum (LSE: DNX) went in the opposite direction, shedding 2.5% and 1.5% respectively.
Mongolia-focused Petro Matad Ltd (AIM: MATD) was at the bottom of the pile with a 23% decline after announcing a winter shutdown at its Davsan Tolgoi-1 well in Mongolia.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) also was in selling mode, sliding 12%.
US focused junior Empyrean Energy (AIM: EME) followed, sliding 5%.
Energy investor Xtract Energy PLC (AIM: XTR) and Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) were on the rise, climbing 6% and 5% respectively.
Gold and Silver climb to boost miners
Precious metals continued their climb with Gold rising to US$1,060/oz and Silver reaching US$16.60/oz, while Platinum improved to US$1,333/oz.
With rare exceptions, mining stocks were on the rise today.
Buoyed by the rising gold price, Randgold Resources (LSE: RRS) and fellow yellow metal producer from the FTSE 250 added 5.5% and 3.9% respectively.
Yamana Gold (LSE: YAU) rallied 6.3%.
Platinum miners Lonmin (LSE: LMI) and midcap Aquarius Platinum (LSE: AQP) tacked on 4.1% and 1.8% respectively, while FTSE 100 silver miner Fresnillo (LSE: FRES) rose 3.1%. However, midcap silver producer Hochschild Mining (LSE: HOC) went against the tide, sliding 1.5% on no news.
Blue chip specialty chemicals firm Johnson Matthey (LSE: JMAT) finished wit a modest gain of 1.2%.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) led the juniors with a 13% rally. Copper and gold miner EMED Mining (AIM: EMED) and Argentina focused gold explorer Patagonia Gold (AIM: PGD) followed, advancing 7% and 5.5% respectively.
UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) and Africa operating gold miner GMA Resources (AIM: GMA) rose 4% and 3.5% respectively.
South American based explorer Mariana Resources (AIM: MARL) led the fallers with a 12% decline. Turkey focused gold miner Ariana Resources (AIM: AAU) slipped 7%, while Brazil focused gold miner Horizonte Minerals (AIM: HZM) and commodity asset development company Mercator Gold (AIM: MCR) lost 4.5% and 4% respectively.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM), Turkey focused gold miner Stratex International (AIM: STI) and Africa focused gold miner Pan African Resources (AIM: PAF) shed over 3%, as did Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML).
Miners resilient as copper and nickel gain
Base metals fluctuated around the morning levels with Copper inching slightly higher to US$2.96/pound and Nickel sliding to US$8.24/pound. Zinc got back to US$0.98/pound.
Base metals focused miners raked in good gains to start the week.
Eurasian Natural Resources (LSE: ENRC) led the way with a 5% increase. Kazakhmys (LSE: KAZ), Vedanta Resources (LSE: VED) and Xstrata (LSE: XTA) all gained more than 4%, as did Rio Tinto (LSE: RIO).
Anglo American (LSE: AAL) advanced 3.2%, while Antofagasta (LSE: ANTO) and BHP Billiton (LSE: BLT) both tacked on more than 2%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) rose marginally.
Southern Africa focused investor Strategic Natural Resources PLC (AIM: SNRP) led the sector with a 9% gain. Australia focused coking coal producer Caledon Resources (AIM: CDN) had its early gains trimmed to a little over 3%.
Tunisia focused metal miner Maghreb Minerals (AIM: MMS) went in the opposite direction, sliding 6%.
Banks, insurance, private equity
RBS (LSE: RBS) and Lloyds (LSE: LLOY) weighed on the sector with losses of 8% and 2.5% respectively. Sector peers Barclays (LSE: BARC) and HSBC (LSE: HSBA) did better, rising over 2%, while Standard Chartered (LSE: STAN) added 1.3%.
Insurance companies mostly rose today. Old Mutual (LSE: OML) and car insurer Admiral Group (LSE: ADM) were in the lead, climbing 3% and 2% respectively, while Prudential (LSE: PRU) tacked on 1.5%.
Aviva (LSE: AV) rose 1%, while RSA Insurance Group (LSE: RSA) posted marginal gains.
However, Legal & General (LSE: LGEN) and Standard Life (LSE: SL) went against the tide, sliding 2% and 1.4% respectively.
Private equity group 3i (LSE: III) declined marginally.
Large and Mid Cap News
GlaxoSmithKline (LSE: GSK) announced that it has reached the US Food and Drug Administration’s (FDA) targeted primary efficacy endpoint in the second and final phase 3 trial of its lupus drug treatment, BENLYSTA. The ‘Bliss-76’ trial the drug achieved a statistically significant improvement in patient response rates.
International Gold miner Randgold Resources (LSE: RRS, NYSE:GOLD) says it will move quickly to fill in the gaps in the feasibility study on the newly renamed Kibali (Moto Gold) project and to bring the mine into production as soon as possible. Randgold closed the acquisition of Moto Goldmines earlier this month.
Irish no-frills airline Ryanair Holdings PLC (LSE: RYA) said it is making little progress in its discussions with Boeing Co over the delivery of 200 planes, and said that should talks not be completed before the year-end, it will end its relationship with Boeing and return its surplus cash to shareholders, thus putting a brake on its mid-term expansion plans.
Dana Petroleum (LSE: DNX) said the thickness, quality and extent of the reservoir in the Tornado exploration well was in line with pre-drill projections after the drilling of the sidetrack was completed.
Small Cap News
Ascent Resources plc (AIM: AST) announced it has completed the drilling of the PEN-104 sidetracked gas well in the Nyírség permits of Eastern Hungary. This is the second sidetrack well and according to Ascent, logs of PEN-104 indicate the “presence of a substantial gas reservoir”.
Mobile email and data synchronisation group Synchronica PLC (AIM: SYNC) said it has signed a contract for US$270,000 with a Southern-African mobile operator for an initial 100,000 user license for its mobile email product Mobile Gateway, as well as a contract for ongoing professional services.
Faroe Petroleum PLC (AIM: FPM) said licence operator OMV has successfully completed drilling the side-track to the Tornado discovery well west of Shetland, in which Faroe has a 7.5 percent working interest.
Shares in Nostra Terra (AIM: NTOG) came in demand this morning after the emerging oil and gas exploration and production company said the results of the reserves report for its Bloom property doubled its reserve base, providing the company with a “great opportunity for cash flow.”
UAE based oil company Emirates National Oil Company Limited (ENOC) has agreed to acquire the remainder of issued share capital of Turkmenistan operating oil and gas player Dragon Oil (LSE: DGO), valuing the entire company at £2.357 billion.
Middlesex-based provider of integrated support services AssetCo (AIM: ASTO) has launched a joint venture (JV) with Abu Dhabi government to develop and operate Rabdan Disaster City, a multi-agency emergency services training centre in the Emirate.
Solomon Gold PLC (AIM: SOLG) said it appointed John Bovard as an additional non-executive director with immediate effect
Alternative Networks (AIM: AN.) announced the acquisition of the Aurora Kendrick James Group in a cash and shares deal worth a combined £5.5m. Additionally Alternative Networks also revealed a new contract win which will be ‘materially assisted’ by the acquisition.
BGlobal (AIM: BGBL), the smart metering company, announced today a conditional placement with institutional investors to place approximately 4.586 million shares at 49 pence each to raise £2.25 million. The funds are to be used to finance the accelerated roll out of its smart meters, as well as to beef up the company’s working capital.
Alternative energy company Ocean Power Technologies (AIM: OPT) said it has successfully completed trials of its Underwater Substation Pod (USP) product in Spain, which it said was a unique product in the offshore market with the potential to create a new revenue stream.
Jubilee Platinum PLC (AIM: JLP; JSE: JBL) and Sylvania Resources Ltd (AIM, ASX: SLV) plan to enter into a strategic partnership to smelt Sylvania's platinum group metal (PGM) concentrates from its tailings retreatment projects that are not tied into other contracts using Jubilee’s ConRoast smelter in South Africa.
HansonWesthouse said Australian-based uranium focused company Forte Energy’s (ASX, AIM: FTE) Mauritanian uranium projects had a significant upside following Friday’s report on essay results, which caused the broker to up its target price for the company to 11.5 pence and retain a ‘buy’ recommendation for the stock.
Intelek PLC (AIM: ITK) said its wholly-owned subsidiary Paradise Datacom has received further orders for the supply of multi-frequency band solid state power amplifiers for an ongoing US government programme. The latest order of US$0.7 million brings the total orders received under this programme for the current financial year to US$3.0 million.
Alkane Energy (AIM:ALK), the gas to power energy company, which captures coal mine methane, and uses it as a fuel for electricity generation and industrial heating, announced today a signing of a twelve months tolling contract with GDF Suez UK.
Uruguay Mineral Exploration Inc (TSX-V: UME; LSE: UGY) said the signature with Fortune Valley Resources Inc (TSX-V: FVX) of the agreement to combine their businesses has been rescheduled for November 6 2009, extending the deadline from October 30. Due diligence is still being undertaken by both parties and they expect to sign the agreement on or before the new date, Uruguay Mineral said.
Central China Goldfields PLC (AIM: GGG) said it was notified that Obtala Resources PLC (AIM: OBT) has increased the number of company shares it controls to 21.9 million from 20.4 million, thus raising its stake to 11.94 percent from 11.13 percent.
Red Rock Resources PLC (AIM: RRR), the mining exploration and mineral investment company with interests in iron ore and manganese in Australia and Zambia, and uranium investments in Africa and Australia, has made a cash investment of C$989,800, or £565,000, in Cue Resources Ltd (TSX-V: CUE).
Integrated support services provider AssetCo’s (AIM: ASTO) broker Arden Partners noted today’s announcement of a contract win in Abu Dhabi, where the company will now develop and operate an emergency services training centre named the “Rabdan Disaster City”.
Faroe Petroleum PLC (AIM: FPM) said licence operator OMV has successfully completed drilling the side-track to the Tornado discovery well west of Shetland, in which Faroe has a 7.5 percent working interest.
Broker Seymour Pierce has initiated coverage of Westminster Group PLC (AIM: WSG) with a ‘buy’ recommendation and 60 pence price target, an upside of around 70 percent from its current share price of 35p.
Links: Full news story
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