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Market:	ASX
Sector:	Media
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Web Site:	Proactive Investors Australia
Other Articles:	11-08-201006-08-201005-08-2010

FTSE 100 reaches new 2009 highs on strong session from mining, oil & gas and financial stocks

Overview: the FTSE 100 was on the rise throughout the day and closed 70 points higher to reach new 2009 highs of over 5,100 points less than a week after eclipsing the 5,000 plateau. The blue chips were helped by increase in oil and metal prices, giving a boost to the mining and energy sectors, both of which put up a strong performance today. Financial stocks also climbed, reacting to the positive sentiment in the market.

Wall Street further buoyed the Footsie as the Dow Jones industrial average opened with a 35 point gain.

Tullow Oil was atop the leaderboard with a gain of over 7%, fuelled by speculation of a possible takeover by Italian energy giant Eni and reports of a major oil discovery in offshore Sierra Leone by an Anadarko-led consortium which also includes the Irish-based oil and gas explorer. Tullow’s strong performance further lifted the energy stocks, which were having a good day with BG Group and Petrofac rising over 3% to add to their recent gains.

Clothing retailer Next (LSE: NXT) also did well, gaining over 5.1% to join Tullow after releasing its interim results, reporting “better than expected progress” as pre-tax profits rose 6.9%.

InterContinental Hotels Group (LSE: IHT) was another non-mining stock to show up among the market’s leading risers. The leaderboard was otherwise flooded by miners, led by Xstrata (LSE: XTA), Eurasian Natural Resources (LSE: ENRC) and Randgold Resources (LSE: RRS).

Engineering firm Smiths Group (LSE: SMIN) was the sole FTSE 100 constituent to shed more than 1%, dropping 2.3% just a day after being downgraded to equal-weight by Morgan Stanley.

Commodities

Oil prices moved higher today with West Texas Intermediate (WTI) added US$2, almost reaching US$71/barrel, while Brent Crude was at US$68.8/barrel.

Most energy stocks rose on Wednesday.

Tullow Oil (LSE: TLW) led the way, rallying 7% after announcing an oil discovery in offshore Sierra Leone, while still riding the momentum from the speculation about a possible takeover by Italian oil and gas major Eni.

BG Group (LSE: BG) continued its climb, rising a further 2.6% to 1,154p per share. BP (LSE: BP) recovered from early losses to finish with small gains. Fellow supermajor Shell (LSE: RDSB) added a little over 1%.

Cairn Energy (LSE: CNE) also gained about 1%, while fellow FTSE 100 constituent Petrofac (LSE: PFC) tacked on 3%.

Heritage Oil (LSE: HOIL) outperformed fellow midcaps with a 2.2% gain as Dana Petroleum (LSE: DNX) finished with marginal gains and Dragon Oil (LSE: DGO) found itself at the bottom of the pile with a small loss.
Latin American operating Gold Oil (LSE: GOO) emerged as the leading faller among the juniors, dipping 7%.

African focused energy company Dominion Petroleum (AIM: DPL) also declined, moving down 4.8%. Natural gas producer Volga Gas (LSE: VGAS), which mainly operates in Russia’s Volga region, gained early but slipped into the negative later in the day to finish with a loss of about 2%.

Max Petroleum (LSE: MXP) was one of the top performers in the sector, rising 7%. US focused junior Empyrean Energy (AIM: EME), Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) and Ukraine focused gas producer Regal Petorleum (AIM: RPT) rose 3%, 4% and 5% respectively. Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) joined the leaders in the afternoon, gaining over 4%.

Precious metals gain as gold, silver and platinum climb

Gold continued climbing, moving up to US$1,016/oz. Other precious metals moved in unison with Gold as Silver surged to US$17.35/oz and Platinum improved to US$1,334/oz.

The mining sector rose in early trade, bolstered by higher precious metals prices.

Gold miners were in the lead today as Randgold Resources (LSE: RRS) and mid tier yellow metal producer Peter Hambro Mining (LSE: POG) added 4.3% and 4.6% respectively. Silver miners also did well, as blue chip Fresnillo (LSE: FRES) and FTSE 250 miner Hochschild Mining (LSE: HOC) rose 4% and 3% respectively.

Platinum miner Lonmin (LSE: LMI) climbed 4% and mid cap Aquarius Platinum (LSE: AQP) added 2%.

Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved up 1%.

Juniors were mixed.

UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) again was in demand, rallying 11%. Philippines focused gold producer Medusa Mining (AIM&ASX: MML), African focused gold deposit developer Cluff Gold (AIM: CLF) and Turkey focused gold miner Ariana Resources (AIM: AAU) also were in buying mode, adding 7.6%, 6.6% and 5% respectively. Western Australia operating Norseman Gold (AIM: NGL) also did well, climbing 4%.

South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) joined in, gaining 4.4%.

Uzbekistan focused gold miner Oxus Gold (AIM: OXS) Uzbekistan focused gold miner Oxus Gold (AIM: OXS) led the fallers in the morning, dipping 23% after releasing its interims. However, broker Fox-Davies Capital maintained its “buy” recommendation for the stock, though cut its price target to 30 pence from 33 pence. Oxus is currently valued at 11.5 pence per share. The message worked, helping Oxus trim its losses to 15% as it was trading at 12.75p per share in late afternoon.

Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and nickel and platinum focused Australia and South Africa operating miner Braemore Resources (AIM: BRR) were in decline, losing 6% and 5% respectively.

Commodity asset development company Mercator Gold (AIM: MCR) followed with a 7.4% loss. Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD), Tajikistan operating gold miner Kryso Resources (AIM: KYS) and South American focused Mariana Resources (AIM: MARL) all shed over 3%.

Base metal miners rise

Base metals prices were up. Copper climbed to US$2.89/pound, Nickel improved to US$7.78/pound, while Zinc climbed over US$0.85/pound.

Major base metals miners also were on the rise this morning.

The world’s fourth largest copper producer Xstrata (LSE: XTA) climbed added over 3%, as did Vedanta Resources (LSE: VED), Kazakhmys (LSE: KAZ) and Anglo American (LSE: AAL).

BHP Billiton (LSE: BLT) and Rio Tinto (LSE: RIO) both rose 2.8%. Chilean copper producer Antofagasta (LSE: ANTO) lagged behind with a gain of 1.6%.

London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) did particularly well, climbing 4.6%.

Some juniors did very well today, taking home big gains.

South American focused junior miner Herencia Resources (AIM: HER) was the runaway winner, soaring 69% to 0.80p per share. Nickel laterite play Rusina Mining (AIM: RMLA) and Mozambique operating tantalum producer Noventa (AIM: NVTA) followed with gains of16% and 24% respectively, while Amur Minerals Corp (AIM: AMC), an exploration and mineral resource development company focused on East Russia, tacked on 7%.

Indonesia operating coal miner Churchill Mining (AIM: CHL) also rose, climbing almost 9%.

Specialty minerals exploration and development company Thor Mining (AIM: THR) was among the leading fallers in the sector, shedding 11%.

Copper and nickel explorer Regency Mines (AIM: RGM) also was in selling mode, dipping 8.7%, while South Africa operating chrome miner Chromex Mining (AIM: CHX) lost 6%.

Banks, insurance, private equity

All major financial stocks were in demand today.

HSBC (LSE: HSBA) was the leading riser among major banking groups, tacking on 4%. Lloyds (LSE: LLOY) rose 3.7%, while another partly nationalised bank Royal Bank of Scotland (LSE: RBS) finished with marginal gains. Barclays (LSE: BARC) added more than 2%, as did Standard Chartered (LSE: STAN).

Insurers also were in demand on Wednesday.

Old Mutual (LSE: OML) was the top performer, climbing almost 3%. Legal & General (LSE: LGEN) and Aviva (LSE: AV) added a little less than 2%. Prudential (LSE: PRU) rose 2%.

Friends Provident (LSE: FP), Standard Life (LSE: SL) and RSA Insurance Group (LSE: RSA) posted marginal gains.
JP Morgan Chase (LSE: JPM) added 2.3%.

Private Equity group 3i (LSE: III) made up for yesterday’s losses, rising 2%.

Large and Mid Cap News

In a trading update ahead of their closed period, De La Rue (LSE: DLAR) reported that overall group performance remains in-line with management expectations and that the Groups ‘Currency’ division continues to perform well. The update was received positively by investors, with shares in De La Rue gaining more than 1½% on Wednesday.

This afternoon Tullow Oil (LSE:TLW), announced a deepwater discovery at the Venus exploration well, located offshore Sierra Leone. The Venus well is being developed by operator and majority stakeholder Anadarko Petroleum Corp (NYSE:APC), Tullow Oil own 10% of the prospect. Investors reacted strongly in London where shares in Tullow rose significantly following the news gaining over 8%.

BP PLC (LSE: BP) said it has sold its wind power interest in India, in line with its declared strategy of focusing its wind business on the development portfolio in the US.

Turbines and aircraft engines maker Rolls-Royce PLC (LSE: RR) announced plans to collaborate with EDF Energy, the UK business of French utility group Eletricite de France, on programmes that will initially support the construction of four new nuclear power plants in the UK.

Countermeasures, materials and ammunition specialist Chemring Group PLC (LSE: CHG) said it has entered into an agreement to acquire the entire issued stock capital of Hi-Shear Technology Corp (NYSE-Amex: HSR) for £80 million in cash.

This morning UK Coal (LSE: UKC) proposed a placing and an open offer to existing shareholders to raise an additional £100 million. UK coal is Britain’s largest coal producer, supplying 6% of the country’s coal requirements for domestic energy suppliers. Investors reacted negatively to the news, pushing UK Coal almost 9% lower following the announcement this morning.

London Stock Exchange Group PLC (LSE: LSE) said it has agreed to acquire MillenniumIT, a Sri Lankan-based technology services company serving the capital markets industry, for US$30 million.

Small Cap News

Shares in Galantas Gold Corporation (AIM & TSX-V: GAL) rallied over 30% after the company said data from a recent geological survey conducted by the government in Northern Ireland helped identify new gold exploration targets in its license areas in Counties Tyrone and Fermanagh.

Ambrian Capital (LSE: AMBR) indirectly benefitted from the Chinese government’s US$585 billion stimulus package after inflow of raw materials to China reached record levels in the first half, helping the London-headquartered stockbroker’s new copper merchanting business deliver a robust performance as the group turned losses into profits.

Entrepreneur adviser specialist Tenon Group PLC (AIM: TNO) reported a fall in revenues for the full-year and a dip in profits, while the growth of its Recovery operations exceeded the expectations it previously flagged in a July trading statement.

Shares in Leed Petroleum (AIM: LDP) rallied 22% after the Gulf of Mexico operating oil and gas exploration junior announced the successful flow testing of the 14-1 onshore well on the Sorrento Dome field in Louisiana, planning to return it to production after it was shut-in in 2006 after various attempts to isolate water production.

Uzbekistan focused gold miner Oxus Gold (AIM: OXS) posted lower revenues and swung to losses in the first half of this year as its main operation Amantaytau lost US$1.56 million as operations were halted due to delays as its refinery.

Amur Minerals Corp (AIM: AMC), an exploration and mineral resource development company focused on East Russie,  appointed William McLucas and Eric McAuslan as non-executive directors with immediate effect.

This morning West African Diamonds (AIM:WAD) announced an agreement to a joint venture, to develop their secondary Koidu project in Sierra Leone. Investors have welcomed the deal with privately owned Japanese developer Thunderball Ltd.

Ukraine focused gas producer Regal Petroleum (AIM: RPT) posted a 30% increase in revenues and narrowed its operating loss, expecting a significant increase in production in H2 and improved revenues next year.

Gulf Keystone Petroleum Ltd. (AIM: GKP) said it was notified yesterday that Gibca Ltd has sold 20 million company shares, representing its entire 4.18 percent stake.

UK tungsten and tin developer Wolf Minerals (ASX: WLF) has completed a A$4 million equity raising, at 41 cents per share.

TyraTech Inc (AIM: TYR) said it has made considerable progress in the first six months of the financial year, increasing net revenue to US$3.3 million from US$2.4 million a year earlier and reducing the pretax loss to US$6.2 million from US$8.9 million.

Nexus Management PLC (AIM: NXS) has advised shareholders that they should be very wary of any unsolicited approaches to acquire their Nexus shares particularly when monies are required to be sent in advance of a transaction.

Radio Frequency Identification (RFID) specialist Kenetics Group Ltd (AIM: KEN) reported soaring revenues and narrowing losses for the first half, saying the performance has been very encouraging in the light of the current global downturn in business activities.

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