daytrades july 4 morning ..., page-6

News Summary


Around the Traps ... with THE FERRET

04 Jul 2011 09:42:00

Sydney - Monday - July 4: (RWE Aust Business News)

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The Australian sharemarket should kick off well today on the back of Wall Street's 168-point advance on Friday and the local September SPI200 contract showing a gain of 48 points.

Although the Australian market started the new financial year on a negative note, the key indices were up again on the week.

The ASX 200 gained 83 points to 4591 and the All Ords also added 83 points to 4650 over the five trading days.

In the US, sharemarkets began the new quarter with a big boost of confidence after release of details of the second bailout package for Greece.

Worries of an imminent collapse of its economy has been averted for the time being after the German banks voluntarily agreed to rollover about two billion euros.

The passage of Greek austerity measures on Wednesday and Thursday is seen as paving the way for the heavily indebted country to get another round of aid and stave off a default.

It encouraged the European sharemarkets to produce a moderate rally indicated by London up 44 points, Paris up 25, Frankfurt 43 and Zurich up 51.

On Wall Street itself, the Dow shot up 168 points or 1.36 per cent while the S&P 500 gained 19 or 1.44 per cent , the Nasdaq Composite up 43 or 1.52 per cent and the 100 index 37 or 1.56 per cent ahead.

Over the past week, the Dow Jones index has risen 648 points, the S&P 500 is up 70.79 points, the Nasdaq Composite gained 163.4 points and the Nasdaq 100 is 144.15 points higher.

It was the biggest weekly gain in two years, as a strong reading of manufacturing activity lifted investor confidence ahead of the Independence Day holiday weekend.

In commodities, the gold price tumbled $20.20 to $US1,482.60 oz while the August WTI contract dipped 48c to $94.94 barrel as the AUD added about 50 points to US$1.07 in New York on Friday.

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Chinese businessmen are popping up in all directions.

Members of the Foreign Correspondents Association, of which Ferret is a member, has been invited to meet China's world famous beer maker, Tsingtao.

He will host a lunch for members and guests at the Mizuya Japanese Restaurant on July 22.

Tsibgtao might have a chat with FOSTER'S GROUP (FGL) which is currently fancy free having knocked back SABMiller's incomplete, non-binding and conditional proposal of $4.90 a share.

The board of Foster's believes the proposal significantly undervalues the company in the context of a change of control and, as such, it does not intend to take any further action in relation to it.

Shares of Foster's Group have been creeping higher to $5.19 after adding 4c on Friday. One source says the stock might even pull $6.

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There was a nice little packet that could have been made out of the movement of ATLAS IRON (AGO) during the week when the shares plunged to $3.25 after news that Atlas and FerrAus were getting together.

It was to pursue the consolidation of the iron ore assets in the southeast Pilbara but the market seemed to panic for some unknown reason and marked the shares down heavily.

The proposal was clearly spelled out as a plus for both companies.

The consolidation was to be achieved initially through the combination of complementary assets in the southeast Pilbara within FerrAus to create a significant, Southeast Pilbara focused iron ore development company, followed immediately by a recommended takeover offer for FerrAus by Atlas.

The FerrAus directors considered these transactions to be superior to the unsolicited takeover offer by Wah Nam International Holdings Ltd.

But by Friday market confidence had returned to look benignly at the deal which saw Atlas up 4c at $3.77.

Shares of FerrAus added 1.5c to 92c on Thursday.

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Shares of MAGNETIC RESOURCES NL (MAU) were certainly volatile last week with a low of 12.5c and a high of 16.5c, ending at 16c on Friday.

The company disclosed it has encouraging metallurgical results and bulk tonnage out of Mt Vernon in Western Australia.

It is very encouraged by the quality of new Davis Tube test results from Mt Vernon, specifically the low SiO2, Al2O3 and P contents.

The testwork of fresh rock samples from drillhole MVRC12 have generated concentrates averaging 67.5pc Fe, 1.6pc SiO2, 0.77pc Al2O3 and 0.02pc P.

The gangue content, with the majority of sulphides, was removed from the primary feed by the Davis Tube.

The drilling intersected substantial widths of low-grade coarse-grained magnetite-bearing gneiss, including 132m @ 13.3pc Fe (MVRC11) from 18m to end of hole at 150m, indicating the mineralised zone is open at depth.

The company is currently completing a detailed gravity survey which will be used in conjunction with ground magnetic data to model the magnetite bearing gneisses prior to drilling.

With figures like these we could see the Chinese steel millers sniffing around.

*****

XANADU MINES (XAM) has bounded ahead to 51.5c from 37.5c a week ago after reporting that the initial drill hole at the new Nuurstei coking coal project has confirmed the presence of a wide intersection of coal from a down hole depth of 70 metres.

Visual inspection indicates the coal has a hard, lustrous, bituminous character with a high vitrinite content.

"Results from the first drill hole of a proposed wide spaced drilling program are very encouraging and confirm that coal identified as sub crop over approximately seven kms of strike, extends to depth," chairman Brian Thornton said.

"The first hole intersected 42 metres of coal from 70 metres and ended in coal due to technical reasons."

The Nuurstei coking coal project is the first project of the recently formed Xanadu-Noble strategic alliance in Mongolia targeting coking coal and iron ore opportunities.