Good afternoon
The US$ feels like it wants to test the top of the 16-month trading range at around 1.15 to the Euro, also putting some pressure on the Euro/A$ exchange rate, which fell nearly 2% since yseterday morning ( i.e. the A$ is largely unchanged against the US$ ). But as the day progressed, some ECK-officials came out saying, that the market misinterpreted Draghi yesterday...!!! So most reversed...Dollar up, bonds up ....the world is short-lived!
Base metals are holding their strong close from yesterday, gold is slowly appreciating, while iron ore and steel rebar had another good day in China today. Iron ore is back to 60 US$/t.
The French like their Macron: Consumer Confidence jumps to a 10-year high - but that´s not enough to prevent European equities from another down-day. I guess the very weak US$ does not help here!
Genex - the Queensland Government declared GNX Solar Power Stage II, the Hydro-Power Project, as well as the electricity transmission line as "Prescribed Project" as well as a project of "Critical Infrastructure". Only one other project in Queensland has this statuts, and it´s a coal mine. The definition of these proejcts is : being critical or essential for the State for economic, eniromental or social reasons. This announcement should turn out to be very important, as it should alleviate concerns, that the government-financed and -built transmission line might not be finished in time ( mid-end 2019 ) for GNX´s projects. Also, the company is in the middle of negotiating off-take agreements with the Queensland Government for Solar Stage II as wella s for the Hydro-pump Project, which should be made easier and quicker by this announcement. GNX is having meetings at a very high level of the Federal Government as well. So I think all ingredients are there to get this project not only of the ground, but also at a reasonable speed, and hopefully with substantial governement involvement. Beyond me, why this stock only moved up by 1 ct today! Broker Morgans Financial, who has done the placement a few month ago, remains the largest seller in the stock.....an appauling performance! I bought some more privately today.
Horizon - the PAN-offshoot announced some inspiring exploration results from their gold asset today - some reasonable intersctions of 5-6m at 4-5-6g / t. Interesting, but not enough to set the market alight!
Australian Vintage - as some of you will remember, I have been involved their for some time, while not having been a shareholder for some time. I ahd sold my position, as the exchange rate of the A$ to Sterling became very negative for the company, as the UK is their main export market. AVG wine labels have continued to be very succesfull, but profitability has been limited the last few years due to the global wine glut, the worst of which should be behind us. The company is generating cashflow, and just released an updated outlook for the financial year tom 30th of June, which should show a net profit of 4.1 mill A$. The effect of weak Sterling should reduce in future - provided the currency does not fall further ( about 40% of sales are going into Europe/UK, and nearly all of it to the UK ). And a few month ago, AVG did an important deal with the founder of the largest, Chinese webpage for imported wine. They took a 16 Mill A$ placement in AVG at 46ct, which back then, was a small premium to the share price of AVG. Imports of wine into China are growing strongly again - the webpage has 30-40% growth p.a. - and I think it´s not unconceivable for AVG to have their international growth in China in the future. Given the substantial equity investment in AVG itself, I would also imagine, that the Chinese importer might not be very price sensitive.
I am currently not a holder of AVG, but the share price has been weak lately - 41.5ct today, and I have them on my watch list.
have a nice evening!
WS
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