Market Update

Gneral - Van Eck and a few other interesting shareholding-moves - Australian Vintage

Good afternoon...

European PMI is very strong - Spanish jobless claims biggest fall on record - German exports at record - increasingly large budget surplus in Germany - industrial production and factory orders strong here -  Europe is doing pretty well in the moment, and has been for a while now. I think the next thing will be an end to Draghi´s massive money printing exercise - at least if he is behaving responsibly!

In the US: Costs are rising again / ....recent numbers for the labor market, durable goods and manufacturing point to a sound economy there as well.

China: Manufacturing is slowing, while the government is tightening a bit....investors are concerned, but I think, that the Chinese will not allow the economy to cool down by too much...especially not ahead of their big 5-year meeting in October.

Metals have been under pressure, mainly because of liquidity concerns in China. I think it´s a mixed bag of reasons for this. Weak prices for iron ore on the Dalean Exchange did not help, and some investors are still worried about the weak Chinese PMI last week. Macquarie points out, that the PMI has been way ahead of ( strong ) fundamentals, and that  this might be merely a normalisation of the descrepancy between PMI ( forward looking ) and Industrial Production ( backward looking ). I tend to agree, as I cannot really see too many weak pockets right now in the world economy. I am of the opinion, that base metals are attractive at current prices!! Momentum players are hammering the complex, opening good opportunities for fundamental investors!

The A$ is being sold heavily recently...0.7350 to the US is a new, recent low. The A$ looks like it´s on it´s way to test the low of the 12-month trading range at about 71.50....a bit of a surprise to me.Good for the resources companies, but bad for us...against the Euro, we have lost 11ct or 8% in the currency from the high in late Feb. In A$, gold for example is trading at 1655 right now - that is just 7A$ below the average price so far this year, and the average price for the last 18 month!

Gold is under renewed at 1218 US$....Looks like the complete win by Macron h

Australian Vintage - interesting stock for wine lovers! I have not written about them for some time, as there was little reason to own them. Their largest market is the UK; and weak Sterling is making it very hard for them to earn a serious margin. But last week, Chinese company Vintage China Fund L.P., which is a partnership established by the founders of China´s largest online wine retailer YesMyWine, took a 15% equity stake in AVG via a placement at 46ct/share, which respresented a premium to the share price. China is the largest wine market now, and this relationship could be massive for the company. AVG is a proven maker of excellent wine, and has won numerous awards over the years The share price did have a hard time, though, as too much wine is being produced in the world, and competition is intense. The new shareholder could really be a game changer for AVG. I am currently not a holder of the stock, but I will watch closely!

A few interesting, substantial shareholder moves:

Van Eck have decreased the shareholdings in Evolution, Oceana, Northern Star....between the 17th of April and the 4th of May, the Index Fund has been a seller just about every day, selling for example nearly 20 mill Evolution. This kind of selling across the board certainly has quite an impact. From what I have heard, a few Aussie players have started to position themselves for the big reweighting in June. This probably expalsins partially, why these stocks have held up relatively well despite the selling. Blackrock has made big bets ( in terms of percentage of the relevant companies ) in Oklo Resources ( 15% of company ), and in Beadell Resources ( 11.6% ) - inmy opinion, two pretty optimistic bets!

In Finders, the chairman has bought 1 mill shares.

I fear there has been very little news over the last few days on a micro-level - I guess the companies are trying not to release too much, as the cautious & disppointed mood generally does not create a lot of upside from some halfway important announcement!

Have a nice evening, anyway

your slightly frustrated