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Latest Proactive Investors News
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Gold falls on non-farm payrolls to end week at $1,725 - Gold prices shed US$12 per ounce this week as Friday’s stronger than expected US employment data made it unlikely that the Federal Reserve will opt for another round of quantitative easing to support the recovery.The Department of Labor said the US economy created 243,000 new jobs in January, the biggest monthly gain in payrolls since April last year.Importantly, the jobless rate fell for the fifth month in a row, dropping from 8.5 percent in December to 8.3 percent in the latest sign that the economic recovery in the US is back on track.Two days before the release of the non-farm payrolls figures, Federal Reserve chairman told the House Budget committee that the economic conditions have “certainly improved”, however, the pace of the recovery was slow.Further quantitative easing would lift growth in consumer prices, boosting gold’s appeal as an inflation hedge and reducing demand for the US dollar, which is seen as an alternative asset to the yellow metal.Gold ended the week at US$1,725/oz, down US$12 from a week ago. >>>
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Brent posts weekly gain, US crude falls on inventories data - Oil prices were headed in different directions this week. While US crude futures were in decline, Brent prices rose in London amid signs of further progress in Europe’s efforts to resolve its debt problems.This week, the EU managed to agree on a deal to tighten fiscal discipline within the euro zone by introducing automatic penalties for countries that breach their budget deficit targets. All EU members except for Britain and the Czech Republic signed the agreement.In the meantime, Greek Prime Minister Lucas Papademos said the debt-ridden country has made “significant progress” it its negotiations with private bondholders to hammer out a deal that would reduce its debts and enable it to secure further financial aid from the EU and the IMF.If Greece missed out on the next €130 billion bailout package, it will likely fail to pay €14.4 billion worth of bonds that are due on March 20 and go into a default.Papademos suggested that a deal could be in place as soon as early next week.Oil futures in London and New York received more support from Wednesday’s manufacturing data released by the Chinese government. >>>
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FTSE 100 news summary: Xstrata, ENRC, Antofagasta, Tullow Oil, Smith & Nephew, Unilever - It has been a busy week for mining companies. Several majors released their production reports this week, while Xstrata (LON:XTA) confirmed it is in talks with Glencore (LON:GLEN) over a merger of equals. Anglo-Swiss mining giant Xstrata (LON:XTA) confirmed that it is currently in discussions with its major shareholder Glencore over an all-share “merger of equals”.The deal would value the combined business at around US$82 billion.The statement from Xstrata was issued in response to press speculation that the two companies are in advanced merger talks and could officially announce the deal early next week.Xstrata confirmed that it has received an approach from Glencore, which “may not lead to an offer being made by Glencore for Xstrata”, adding there can be no certainty that any offer will be made.The Switzerland-based commodities trader holds a 34 percent stake in fellow FTSE 100 constituent Xstrata, which currently has a market cap of £36.3 billion.Peers Eurasian Natural Resources (LON:ENRC), Antofagasta (LON:ANTO) and Vedanta Resources (LON:VED) released their production reports this week.ENRC said volumes for most ferroalloys production dropped in the last three months of 2011 compared to the last quarter of 2010 with the exception of a five percent increase for low-carbon ferrochrome and ferrosilicochrome.Total saleable ferroalloys production for the year fell 2.9 percent against 2010.Iron ore production also was in decline during the quarter with iron ore extraction and primary concentrate production falling 3.3 percent and 3.8 percent respectively.Total saleable product for the year was down five percent from 2010.Meanwhile, Antofagasta reported a 13.3 percent jump in group copper production to 187,000 tonnes during the last quarter of 2011, which was mainly due to increased production at Esperanza and Los Pelambres.Copper production in the full year 2011 was 640,500 tonnes, up 22.9 percent from the 521,100 tonnes produced in 2010.Moving to Vedanta said its silver production in the third quarter rose 37 percent to 1.85 million ounces and leadproduction more than doubled, rising 107 percent to 29,000 tonnes.During the quarter, iron ore output reached 5.04 million tonnes, up from 4.78 million tonnes in the corresponding prior quarter.Away from mining companies, telecom major BT (LON:BT.A) said its adjusted pre-tax profits jumped 48 percent to 18 percent to £628 million during the last three months of 2011 despite a five percent drop in revenues to £6.77 billion.BT also told investors it expected to achieve its 2013 EBITDA target of over £6 billion this year, while delivering a free cash flow of £2.4 billion.Fellow blue chip, insurer Old Mutual said that it will return £1 billion to shareholders after selling its long-term savings and banking operations in Sweden, Denmark and Norway for £2.1 billion.The remaining proceeds of £1.1 billion will be used to reduce deBT, said Old Mutual.In the oil and gas sector, Tullow Oil (LON:TLW) has signed two new production sharing agreements covering the EA-1 and Kanywataba licences in the Lake Albert Rift basin and said it will now finalise farm-down deals with CNOOC and Total.In addition, the Ugandan government has granted Tullow a production license for the Kingfisher project.Fellow oil major Royal Dutch Shell (LON:RDSB) reported lower than forecast growth in sales and profits. >>>
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Mid and small cap news: Misys, Propability, Game Group, Cranswick, ValiRx, Amphion Innovations, Fusion IP - Beleaguered computer games retailer Game Group (LON:GMG) emerged among the top performers in London on Friday after its lenders agreed to revise its borrowing facilities.Game said the revised terms mean it will operate at a lower borrowing level than previously but the new terms will allow it to continue to trade.The group added it now expects a loss before tax and non-recurring items of £18m for the year to 31 January 2012 but it would not now breach its loan covenants.Game warned three weeks ago it was in danger of breaching its EBITDA test after a slump in trading over Christmas.But after receiving support from its stakeholders and lenders, the retailer said it will meet its covenant tests for the period to 31 January 2012 when they are tested on 27 February.Biotech firm ValiRx (LON:VAL) and intellectual property commercialisation company Amphion Innovations (LON:AMP) also did well this week. >>>
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