Australian market's report last week

Still here actually. Just finishing up before heading home, so last week’s market report is a long distance look, and might have to be a bit shorter than usual.

Before getting to the market, then, perhaps a final word on Indaba, and how you read the mood of the mining industry.

Healthy is the one-word answer, but not yet robust. It seemed that the conference itself was dominated by suppliers and service providers trying to sell their assorted wares. Genuine miners and bankers were perhaps a little thin on the ground, which was to be expected after such a tricky time over the past 18 months. Australian miners were well represented, and the London banking crowd was here at about 75 per cent strength. There were plenty of bow ties and pinstripe suits on display, a look which is so totally out of place on the Cape Town waterfront, but at least Jeremy Dowler from Baobab Resources had the good sense to look much more relaxed, complete with a long fruity drink, when he hosted a very pleasant farewell lunch at Camps Bay on Friday.

And with your binoculars on at Camps Bay how did the Australian stock market perform last week.

If you ignore Friday’s sell off, not badly. The last day of the week was the bad one, with the all ordinaries index on the ASX diving by 2.4 per cent and the metals and mining index plunging by 3.9 per cent after the sharp fall on Wall Street. But, if you take a longer view, the picture wasn’t quite so bad. There were two up days last week and three down. That averaged out as a pretty modest decline in the metals index of just 0.7 per cent. The gold index was down two per cent, and the all ordinaries 1.4 per cent. BHP Billiton, the local market leader, actually ended the week up A15 cents, a good sign that even in a sell-off there are buyers hunting out quality stocks.

Time for prices, and since you’re in South Africa let’s start with gold.

Falls across the sector, as expected, but most by modest amounts. If you look really hard you can even find a couple of stocks which rose. Ramelius (RMS), which released a statement outlining the likelihood of good profits on Friday, added A2.5 cents to A56 cents. And Emmerson Resources (ERM), one of the Tennant Creek crowd, crept half a cent higher to A20 cents. After that it’s all down. The biggest fall was a drop of A22 cents to A77.5 cents suffered by Carrick Gold (CRK). Other movers included Kingsgate (KCN), down A67 cents to A$8.51, Resolute (RSG), down A4 cents to A94.5 cents, Gryphon (GRY), down A3.5 cents to A40 cents, Chalice (CHN), down A7.5 cents to A35.5 cents, and Troy (TRY), down A6 cents and A$2.10.

We get the picture, let’s move through the sectors with iron ore next, please.

Same story, one up and lots down. The odd man out was FerrAus (FRS), one of the emerging small players in the Pilbara region, which will probably do a deal with a major, eventually. It added A3 cents to A76 cents over the week. Now comes the list of the fallen. Firstly, Fortescue Metals (FMG) dropped just A2 cents to A$4.51, despite the corporate cops announcing that they would appeal the verdict in the case they lost against FMG’s chief executive, Andrew Forrest. Other movers included Atlas (AGO), down A9 cents to A$1.85, Gindalbie (GBG), down A4.5 cents to A90.5 cents, Giralia (GIR), down A2 cents to A$1.52, Brockman (BRM), down A4 cents to A$2.71, and Iron Ore Holdings (IOH), down A5 cents to A$2.13, though that fall needs to be seen in the context of a A16 cents drop on Friday alone.

In other words, Iron Ore Holdings was well ahead before Friday’s shake out?

Precisely. It makes the point that it was more a case of one bad day wiping out a reasonably positive trend.

Let’s move along to the fuel twins, uranium and coal, please.

All down among the uranium stocks, but it was a surprisingly strong week for coal. Extract (EXT) led the way down among the uranium stocks, despite plenty of Indaba-linked publicity and a good story to tell about the Rossing South project. It fell A60 cents to A$7.30. Manhattan (MHC) lost A16 cents to A$1.37. Mantra (MRU) fell A43 cents to A$5.30. Forte (FTE) lost A1.5 cents to A17.5 cents, and Paladin (PDN), which had been the darling of the Australian uranium pack, fell another A12 cents to A$3.52, a price which is exactly A$2.00 off the peak of A$5.52 reached last June.

Coal was the sector which performed best over the week despite losing ground on Friday. Coal of Africa (CZA) was the star attraction, adding A19 cents to A$2.34, in spite of some heavy selling on Friday. Macarthur Coal (MCC) added A8 cents to A$9.53, an even more impressive result because it dropped A56 cents on Friday. Whitehaven (WHC) rose by A15 cents to A$4.58, while Riversdale (RIV) had a tougher week than most, losing A49 cents over the week to close at A$6.96, with A43 cents of the fall coming on Friday.

Base metals now, please.

Not much joy here. The most notable performance came from Sabre Resources (SBR), which appears to have been the only base metal play to gain ground, perhaps courtesy of our mid-week report on its exploration activities near the historic Tsumeb copper mine in Namibia. Sabre added A3 cents to A40 cents. The only other stock to avoid the sector-wide sell-off was zinc hopeful Mt Burgess Mining (MTB), which managed to stand still at A1.4 cents, not a bad effort in a sea of red ink. Other zinc movers included Terramin (TZN), down A6 cents to A70 cents, Perilya (PEM), down A7 cents to A54 cents, and CBH (CBH), down A1.5 cents to A12.5 cents.

Other copper movers included OZ Minerals (OZL), down A9.5 cents to A97.5 cents, Sandfire (SFR) down A28 cents to A$3.42, Equinox (EQN), down A13 cents to A3.60, and Marengo (MGO), down A1 cent to A12.5 cents.

Nickel stocks were led by Mincor (MCR), which slipped A4 cents to A$1.42, and which like so many others, had its worst day of the week on Friday. Other nickel movers included Independence (IGO), down A39 cents to A$3.75, and Panoramic (PAN), down A12 cents to A$1.72.

source:minesite

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