Crypto mining is the process of using powerful computers to solve complex mathematical equations and validate transactions on a decentralised ledger system known as a blockchain.
These transaction ‘blocks’, once they are completed, reward the miner with cryptocurrency such as Bitcoin for their efforts.
Argo uses large banks of computers to mine large amounts of cryptocurrency which can then be sold for fiat money.
How it’s doing
In February 2021, Argo reported it mined 129 Bitcoin (or equivalent) in February, up from 93 in January.
Based on daily foreign exchange rates and cryptocurrency prices during the month, mining revenue in February amounted to £4.34mln, compared to January’s £2.48mln.
At the end of February, the company held 599 Bitcoin + Bitcoin equivalent.
The company’s total mining capacity stands at 1,075 petahash (a quadrillion hashes per second, with a hash being a number-crunching algorithm that generates an alphanumeric string).
In November 2020, Argo reported higher revenues and wider mining margins, with the firm highlighting “extremely exciting” developments over the period in the cryptocurrency sector.
In an update, the digital currency miner reported an average monthly mining margin of around 57% for November compared to 40% in October, while revenues generated for the period rose to £1.48mln from £1.2mln.
Expanding mining capacity
Rising price of Bitcoin and other cryptocurrencies
Adoption of blockchain and crypto could push prices even higher
What the boss says: CEO Peter Wall
“This has been an extremely exciting month for cryptocurrency miners. We have seen the value of Bitcoin climb exponentially to over £14,000 as investors and payment service providers are turning their interest to cryptocurrencies.”
“At Argo, we are continuing to prioritise efficiency in our mining operations and this has enabled us to increase our revenue by 23% this month and achieve our highest mining margin since the halving earlier this year”.
SEQI and CBA will invest US$39 million and US$25 million respectively into the facility, complementing existing investments led, and arranged by Taurus Mining Finance Fund No. 2 L.P and the Australian Government’s Clean Energy Finance Corporation (CEFC).
Following the syndication, the Taurus investment will be reduced to US$35 million from US$91 million and CEFC to US$39 million from US$47 million.
“Robust financial characteristics”
Salt Lake Potash chief executive officer Tony Swiericzuk said: “I am extremely pleased to welcome SEQI, an experienced global debt investor and leading Australian bank CBA into our Senior Debt Facility.
“The breadth and quality of investors that have been attracted to this facility is testament to the robust financial characteristics and positive environmental credentials of the project and its proficient execution by the SO4 team.
“We look forward to continuing our relationship with Sequoia and CBA as we pursue our vision of a multi-lake SOP province in WA.”
SEQI, advised by Sequoia Investment Management, is a UK-based lender with £1.8 billion under management.
It has been a leader in the infrastructure sector, transforming it from a lending asset class to an investment asset class, working closely with investors and other key counterparties.
It is listed on the FTSE 250 Index of the London Stock Exchange.
The Commonwealth Bank of Australia is Australia’s leading provider of integrated financial services, including retail, premium, business and institutional banking, funds management, superannuation, insurance, investment and share broking products and services.
Under the agreement, Alta will be issued 600,000 fully paid ordinary shares in Wishbone and be entitled to receive a 1% net smelter royalty from Wishbone on all minerals mined and sold from the tenement.
Alta managing director Geraint Harris said: “This is an excellent outcome for Alta as our key focus is firmly on our Italian projects, namely our flagship Gorno Zinc Project and the Punta Corna Cobalt Project.
“We have now divested all of our Australian-based exploration assets so that our management time and expenditure can be directed exclusively on these priorities.
“The Paterson Project can now have the focus it deserves from Wishbone Gold while Alta shareholders retain upside exposure through the equity capital in Wishbone and also the royalty.”
Thick, high-grade zinc-lead extensions
The company recently undertook a step-out drilling program at the Gorno Zinc Project in Italy which returned high-grade zinc and lead with silver – extending known mineralisation in the east and west of this new target zone.
One step-out hole intersected thick high-grade mineralisation, making an 80-metre extension southeast of the newly discovered Pian Bracca South zone.
This hole returned 10 metres at 8.8% zinc and 4.2% lead (12.9% zinc and lead) and 53 g/t silver from 32.4 metres, including 3.8 metres at 21.5% zinc and 10.8% lead (32.2% zinc and lead) and 135 g/t silver from 36.1 metres.
In addition, another hole intersected two intervals of mineralisation, including 5.1 metres at 11.8% zinc and 4.9% lead (16.7% zinc and lead) and 34 g/t silver from 105.5 metres.
Harris said at the time: “The significant broadening of our exploration footprint highlights the many prospective new target areas which can immediately add to the current Zorzone mineral resource estimate and also those that are yet to be uncovered within the Gorno Zinc District.”
Kinetiko Energy Ltd (ASX:KKO) is about to produce its first gas from the Amersfoort Project in South Africa, a country that is hungry for energy having experienced regular and widespread blackouts in recent years.
The revitalised company has been on a fast-track towards production and cash flow since being reinstated to the ASX last May.
In a short period of time, it has achieved a number of key milestones, including a 227 per cent lift in resources, and production is imminent after completing the workover of its own pilot well while negotiations with offtakers are in the advanced stage.
Just the start
And the story is only just beginning with first production from the pilot program to generate revenue that will assist in delivering a maiden gas reserve and further developing the Amersfoort project into an important energy player in southern Africa.
What’s more, there is plenty of additional upside at Amersfoort with the current independently certified 2C resource of 4.9 trillion cubic feet just from a small portion of the 7,000 square kilometre project in the country’s heavily populated and industrialised northeast.
Survey reveals new potential
The latest milestone that indicates this upside is the completion of a third high-resolution aeromagnetic survey that confirms the continuity of gas prospective geology.
This 6,011-line-kilometre survey covering 273 square kilometres over a selected portion of ER271 and ER38 that form part of the project, has linked three previous survey areas.
The total surveyed area of unprecedented geological detail now covers 965 square kilometres of gas-prone Main Karoo Basin sediments and while extensive, it represents only 21 per cent of granted exploration tenure being explored.
Kinetiko is highly encouraged as the major geological features visible in the data define six potentially gas-charged compartments in the survey area ranging in size from 5.7 to 22.5 square kilometres for a total of 77 square kilometres. This brings to 37 the number compartments covering 257 square kilometres.
These findings will guide the sequence of drilling evaluation of the gas compartment targets with the aim of bringing them progressively up to pilot field compartment status.
A similar approach has been used in ER56 to establish where pilot production is about to begin from the first two of 10 compartments in well KA-03PTR.
In mid-February JV company Afro, completed a workover program at well KA-03PTR along with well KA-03PT2.
After being granted a bulk gas production and removal permit by the Minister of Mineral Resources and Energy, JV company Afro Energy (Pty) Ltd, which is 49% held by Kinetiko and 51% by Badimo Gas (Pty) Ltd of South Africa began planning and preparing a short-term pilot gas production program.
This incorporates the production of up to 500 million standard cubic feet (MMscf) of gas annually for a two-year period from exploration rights ER56 and ER38.
It was also determined that the two wells should undergo workovers to maximise gas flow rates and recovery.
Advanced offtake discussions
Following the successful workovers in mid-February, Afro Energy has progressed negotiations with gas traders for potential offtake of small and intermittent gas production from KA-03PTR and possibly KA-03PT2.
It is proposed that they will purchase gas at an onsite transfer point, compress the gas to the required pressure utilising their own compression equipment and transfer this to their CNG trailers for transportation to existing gas-based industries in the Johannesburg and Witbank regions.
Flow rate and equipment testing of well KA-03PTR began immediately following the workover with the company intending to seek full production rights for ER56 as soon as possible after the start of production, which is expected this month.
Kinetiko will also seek certification of maiden gas reserves.
Achieving these operational milestones and imminent cashflow have been enhanced by the revitalisation of Kinetiko, including a recently refreshed board with the appointment of Tom Fontaine as a non-executive director adding coal bed methane (CBM) experience and strong technical skills.
This has also seen previous non-executive chairman Adam Sierakowski appointed executive chairman to reflect his increased role in operational and financial activities for the company.
The company is also well-funded to achieve its production and exploration aims in the next 12 months following a fundraising process in the December quarter where a majority of the unlisted A$0.03 options were exercised well before their expiry date of December 31, 2021.
A total of $1.26 million was raised following the conversion of options representing around 81% of all options exercised in that class.
First mover in region
Kinetiko is a first mover in the region and has a dominant exploration ground package with advantages including:
20 exploration core holes drilled to-date show gas shows in all holes;
Seven gas flow permeability test wells have been completed with strong flow rates achieved;
Low exploration costs with shallow drilling (around USD$200,000/well);
Easy access with long-standing landowner relations and support;
No fracking, and environmental approvals have been obtained; and
Nominal amount of water production with potential agriculture uses.
Existing funds and cashflow from production will support the company’s aims to help serve southern Africa’s urgent need for new energy sources by focusing on advanced shallow conventional gas and CBM opportunities.
The project is uniquely positioned to capitalise on growing energy demand.
Growing gas demand
South Africa has extensive gassy coal basins, extensive energy infrastructure and growing gas demand, making it an attractive area for investment.
Domestic gas prices in South Africa are among the highest in the world at between US$7-10 per gigajoule and the country’s energy crisis has been deepened by no capacity to increase gas imports.
Kinetiko’s strategy and plans are also enhanced by stronger global gas market fundamentals which are set to see improved prices.
Amersfoort is strategically positioned close to gas pipelines, high voltage transmission lines, road and rail as well as end-users (mining, industry, manufacturing, transport and domestic customers) as well as 10 major power stations within 300 kilometres.
“The Conservative party is still determined to support the economy and help steer it through these difficult times,” noted David Madden, analyst at CMC Markets.
“The hospitality sector has been given a boost as the reduced VAT rate, 5%, will remain for another six months. Whitbread, Marston’s and JD Wetherspoon shares are all up this afternoon. The planned increases in tax on beer and spirits has been pushed back too,” he added.
The OBS predicts UK GDP growth of 4% this year in the UK, down from 5%, but the 2022 forecast was lifted to 7.3% from 6.6%.
The FTSE 100 is currently up 34.41 points or 0.52% at 6648.16, while the FTSE 250 is outperforming the blue chip index, climbing 194.4 points or 0.92% to 21,372.31. The second tier index has been helped by a boost to Micro Focus International PLC (LON.MCRO), up 57.9p or 13.2% to 496.5p after the software group announced an agreement with Amazon’s web services arm.
Michael Hewson at CMC Markets UK said: “The FTSE 250 looks set to close at a one year high, as investors pile back into to an index that has underperformed markedly over the past 12 months.”
Back with the leading index, and BT Group PLC (LON.BT.A) is top of the pile, boosted by the Chancellor’s new investment tax super deduction policy. This allows companies investing heavily, like BT, to cut their tax bill by 130% on any cost of business investment.
Wall Street is still putting in a mixed performance, not helped by a lower than expected service sector update for February. The Institute for Supply Management’s services PMI came in at 55.3, well down on January’s 55.3 and confounding expectations of a slight improvement.
3.15pm : Proactive North America headlines:
District Metals Corp (CVE:DMX) (OTCMKTS:MKVNF) (FRA:DFPP) identifies another target at its Swedish project after receiving historic drill assays
Benchmark Metals Inc (CVE:BNCH) (OTCQB:CYRTF) identifies six high-priority drill targets for this year at Lawyers project
2.50pm: US private payrolls unsettle Wall Street
US markets have made a mixed start after the worst than expected employment data from ADP.
The Dow Jones Industrial Average is up 0.12% or 37.85 points at 31429.37. But the more broadly based S&P 500 is down 11.03 points or 0.28% at 3859.26 while the tech-heavy Nasdaq Composite has fallen 74.82 points or 0.56% at 13,283.97.
The latest ISM service sector survey is due shortly but is expected to come in rather uninspiringly at the 58.9 level for February, marginally up on the 58.7 reported the month before.
Later at around 7pm UK time comes the latest snapshot of the US economy from the Federal Reserve, the so-called Beige Book which is published eight times a year.
Michael Hewson, chief market analyst at CMC Markets UK, said: “[This] could well paint a more optimistic picture of the US economy than was the case in the previous survey, at the end of last year. The overall picture is also likely to see a rebound in retail sales spending if the recent retail sales data is any sort of guide, however we could also see signs of a rise in inflationary pressure if the latest prices paid data is any guide.
“With new stimulus measures also on their way, the latest Beige Book is likely to see a much more optimistic outlook than the one in January, especially given that vaccinations are now much more advanced than they were back at the beginning of the year.”
With the uncertain start on Wall Street and a drift lower following the Budget, the FTSE 100 is now up just 19.63 points or 0.3% at 6633.38.
1.30pm: Sunak finishes, US jobs disappoint
Away from the Budget, there have been some disappointing US jobs figures.
Ahead of the much-watched non-farm payroll numbers on Friday, private payroll numbers from ADP show that just 117,000 jobs were added in February. That is below expectations of a 225,000 figure and a sharp decline from the January level of 195,000, itself revised upwards.
As for the non-farms, they are expected to rise by 133,000 last month from a 49,000 increase in January.
The news has seen Dow Jones Industrial Futures come off their best levels, now showing a 0.3% increase after an earlier 0.7% increase.
Back to the Budget and Rishi Sunak has sat down after just over 50 minutes.
The scores on the doors as he finished were as follows: the FTSE 100 is up 39.06 points or 0.59% at 6652.81 (14 points lower than when he started) while sterling is at virtually the same level, up 0.06% at $1.3962.
1.15pm: Market slips from best levels
Leading shares have come off the boil a little as the Chancellor gets to the tricky bit of paying for the amount spent on the pandemic.
He is putting up corporation tax for large businesses – but not small – from 19% to 25%. But this will not kick in until 2023 when the economy is forecast to be recovering.
Even so, the FTSE 100 has come off its best levels, up 41.77 points or 0.63% at 6655.52.
Housebuilders have moved higher after the confirmation of the extension of the stamp duty holiday, and a new mortgage guarantee scheme.
12.45pm: Market continues in positive territory
Leading shares are hovering in positive territory as the Chancellor steps up to deliver his Budget speech.
The FTSE 100 is up 53.22 points or 0.8% at 6666.97 and sterling is 0.05% higher at $1.3961 as he begins.
He starts by laying out a three part plan to cope with the pandemic and afterwards: to continue doing whatever it takes, to fix the public financess and to build the UK’s future economy.
The FTSE held firm as lunchtime approached, supported by expectations for early gains across the Atlantic on Wednesday, although some nervousness ahead of the impending UK Budget kept the UK index off its best levels.
With around 30 minutes to go until the Chancellor of the Exchequer stands up, the UK blue-chip index was ahead 65.36 points at 6,679.11.
US stocks are expected to rise on Wednesday, rallying amid fresh optimism for an economic rebound as the roll-out of coronavirus (COVID-19) vaccines steps-up and there is progress toward a deal on President Biden’s new stimulus package.
Futures for the blue-chip Dow Jones Industrial Average and the broader S&P 500 index were both 0.7% higher, while the tech-laden Nasdaq-100 index futures added 0.8%, all recovering after a weaker session on Tuesday.
Wall Street has been volatile in recent days but on Wednesday sentiment was buoyed by signals that the Democrats will seek to bridge differences over jobless benefits and other issues as they aim to complete the $1.9 trillion relief package in coming days.
And there was also a boost after President Biden said the US would have enough COVID-19 vaccines for all American adults by the end of May, two months earlier than had previously been expected.
The bond market has also calmed in recent days after a surge in yields rattled investors last week, leading to sharp declines in stocks. Top central bank officials have said the rise in yields reflected optimism about economic prospects.
Federal Reserve governor Lael Brainard said Tuesday that the recent tumult in the bond market is on her radar screen. However, she signalled that the Fed will not be dialling back on support for the economy until it is on a stronger footing, reiterating comments made by other officials.
Investors will eye data from the Institute for Supply Management on the US services sector, due at 10.00am ET. The figures are expected to show sector activity expanded for a ninth consecutive month in February. And the Fed’s beige book report, due at 2.00pm ET, will also offer the latest anecdotal evidence on the state of US businesses as they gear up for a reopening of the economy.
11.05am: Leading shares await Chancellor’s speech
As investors await the Budget and the goodies the Chancellor is reportedly planning for the various sectors hit hard by the pandemic, leading shares continue to be positive, albeit off their best levels.
The FTSE 100 is currently up 62.82 points or 0.95% at 6676.57, a little down on the day’s peak of 6705.3.
Edging lower in the leading index is Avast PLC (LON.AVST), the anti-virus and cybersecurity business. Its revenues rose 7.9% and earnings climbed 2.6% to $495.5m, but its forecast for the coming year looks a little on the low end of expectations.
Chief executive Ondrej Vlcek said: “The Group delivered another strong year of top line organic growth, high levels of profitability and cash flow generation.”‘In a year when more people and businesses turned to technology to keep their lives and their work enabled, Avast has played a vital role in safeguarding our customers’ digital data and privacy. I am proud of the way the Company has met the challenge of the pandemic head on, putting our duty to act as a responsible business at the heart of our approach.
“Underpinned by a strong prior year billings performance, we expect to deliver FY 2021 organic revenue growth in the range of 6 percent to 8 percent.”
The current consensus is 8% with UBS expecting 6.9%.
The latest UK service sector survey shows an improvement last month after hitting an eight month low in January.
The IHS Markit/CIPS PMI came in at 49.5 in February, up sharply from the previous month’s level of 39.5. A reading below 50 indicates contraction, so we shouldn’t get too excited. The survey has been below this key level since November last year, but the survey did indicate the slowest decline in service sector output over this period.
IHS Markit said: “February data indicated that a degree of stability returned to the UK service sector after the sharp downturn in output at the start of 2021. Restrictions on travel, leisure and hospitality due to the national lockdown continued to curtail overall activity, but there were some pockets of growth in technology and business services.
“Staffing levels decreased at the slowest pace since the coronavirus disease 2019 (COVID-19) pandemic first hit employment numbers last March. Furlough arrangements again softened the degree of job shedding among consumer service providers, while there were also reports that improving optimism towards the business outlook had helped to stabilise employment. Vaccine roll out progress and confidence about the prospect of looser restrictions on trade resulted in a fourth consecutive monthly rise in business expectations across the service economy.”
Leading shares are holding on to most of their gains following the data. The FTSE 100 is currently up 77.79 points or 1.18% at 6691.54.
9.17am: Market optimistic about Chancellor’s statement
The FTSE 100 is holding on to its gains ahead of the Budget and the latest UK service sector survey.
With the US markets down on Tuesday but Europe and Asia in a positive mood, the London market is taking its cue from the latter, with the leading index now up 80.44 points or 1.22% at 6694.19.
Investors will be looking to the Chancellor to see whether his expected help for the beleaguered hospitality and travel sectors will be enough to cope with the continuing shutdown. Michael Hewson, chief market analyst at CMC Markets UK, said: “While a lot of what we can expect looks to have been pre-leaked, including the extension of the furlough scheme through September, we can still expect to see significant movements in the likes of house builders, travel, pubs and the retail sector as he outlines a series of measures to support those sectors that have borne the brunt of the three lockdowns, and who will need further assistance into the summer months, and possibly beyond that.”
Housebuilder PersimmonPLC (LON.PSN) is already on the way up, its shares climbing 71p or 2.62% to 2781p despite a 25% fall in full year profits after it said housing demand remained strong.
Richard Hunter, head of markets at interactive investor, said: “Despite a spike of 75% since the March lows of 2020 as the pandemic kicked in, the shares remain down by 5% over the last year, as compared to a decline of 1.5% for the wider FTSE100.
“However, immediate comparisons with the previous year will become easier and there is little question that Persimmon is seeing the benefit of continued momentum from a strong end to 2020. As such, the market consensus of the shares as a strong buy is likely to remain in place, having also recently strengthened to make Persimmon as the preferred play in the sector.”
8.43am: Leading shares off to a flier
The FTSE 100 made a storming start to proceedings ahead of the Budget, which, despite weekend reports of a tax grab, looks likely to be largely fiscally supportive of the pandemic-ravaged UK economy.
Events on Wall Street, which endured another soft session after last week’s inflation wobble, were shrugged off again by London traders.
Crude oil prices helped, as some poise was recovered after the sell-off ahead of OPEC+ meeting Thursday. Royal Dutch Shell (LON:RDSA) and BP (LON:BP.) rose 1.8% and 1.7% respectively.
Polymetal’s (LON:POLY) prelims appeared to please the market as the gold miner topped the Footsie with a 3.3% gain – but for how long with the price of the yellow metal continuing to drift?
Covid bounce-back stocks Whitbread (LON:WTB) and IAG (LON:IAG) were ahead 3% and 1.9% respectively.
Inspired Energy PLC(LON:INSE) has completed the acquisitions of BWS Holdco (Businesswise) and General Energy Management (GEM). The company said its corporate order book has risen above £73mln as a result of the acquisitions, which are expected to enhance earnings in fiscal 2021.
Jersey Oil and Gas PLC (LON:JOG) has reported key findings from a concept selection report for the proposed Greater Buchan Area project, in the North Sea, highlighting the potential for 172mln barrels of oil resources to be developed from a fully electrified platform.
Westmount Energy Limited (LON:WTE, OTCQB:WMELF) awaits results of Exxon’s Bulletwood-1 exploration well offshore Guyana, as maritime reports reveal that the Stena Carron drillship is leaving the well site.
Genedrive PLC (AIM: GDR) said new clinical guidance on screening to prevent antibiotic hearing loss (AHL) in babies should drive demand for its breakthrough diagnostic device.
Allergy Therapeutics PLC (LON:AGY) posted record profits for the six-month stage as the group, which, as the name suggests, specialises in allergy treatments for conditions such as hay fever, emerged from the period in rude health.
PCF Group PLC (LON:PCF) said managing director Robert Murray is to retire at the end of this month after 27 years with the company. His duties will be assumed by Garry Stran, who was recruited in December to be the company’s chief operating officer.
IQGeo Group Plc (LON:IQG) has appointed geospatial industry veteran Richard Weiss as European regional manager.
Love Hemp Group PLC (LON:LIFE, OTCQB:WRHLF) notified investors that its name change from World High Life has become effective from today.
Evgen Pharma PLC (LON:EVG) said the open offer element of its fundraising concluded with all the available shares taken up. The fundraising remains conditional on shareholders approval at a general meeting at 10am today.
FastForward Innovations Ltd (LON:FFWD) is making a new corporate presentation available on its website today at http://www.fstfwd.co.
Tharisa PLC (LON:THS) will be hosting a live interactive presentation via the Investor Meet Company platform on Wednesday, 10 March at 3pm GMT. “In view of the significant increase in demand for the metals required for reducing global emissions, with platinum group metals playing a key role, the interactive presentation will provide investors with an opportunity to speak to the management of one of the largest producers of PGMs globally,” the company said.
4D pharma PLC (LON:DDDD) said members of its management team will present at three upcoming investor conferences: Chardan’s Virtual 3rd Annual Microbiome Medicines Summit on Monday March 8 at 11:45am ET (4.45pm GMT); the HC Wainwright Global Life Sciences Conference that is on-demand starting from Tuesday, March 9 at 7am ET (12pm GMT); and Oppenheimer’s 31st Annual Healthcare Conference on Tuesday, March 16 at 8.40am ET (12.40pm GMT).
6.50am: Index expected to extend gains
The FTSE 100 index is expected to extend its March gains on Wednesday, ahead of the big Budget announcement from Chancellor of the Exchequer Rishi Sunak this afternoon.
London’s blue chip equity index was being called 40 points higher by spread-betters on the IG platform, having added 25 points or 0.4% to finish at 6,613.75 the day before.
Overnight, Wall Street’s main indices all finished lower, with the Dow Jones down 0.5%, the S&P 500 falling 0.8% and the Nasdaq sliding 1.7%.
Allied to increasing coronavirus vaccine optimism, European and US stock futures are being lifted by hopes for the US stimulus package, after approval by the House and now awaiting a green light from the Senate.
“Most of the bets are on the positive side—meaning traders are hoping for support for the relief package from the Senate as well,” says Naeem Aslam at Avatrade.
Joe Biden has also assured Americans that the US will have a large supply of coronavirus available to help every individual in the country by the end of May, which also boosts confidence.
But in the UK the focus is all on the Budget.
“It is widely expected that the Chancellor will be using the budget to extend a vast package of covid-19 support, which is likely to last until the end of September. Of course, the Chancellor is betting on a hope that the economy will return from its coronavirus crisis by that time,” said Aslam.
“The furlough scheme was due to end in April, but now, it will run in its current form until the end of June. After that, it is expected to phase out slowly. The key idea over here is to avoid any cliff-edge by withdrawing the furlough support rapidly.
“Obviously, all of this means a higher bill for the Treasury. The Chancellor will maintain the need to balance the budget once the economy is back on the recovery track. Traders expect to see a future tax rise path that could help repair the damage that has occurred to public financing.”
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were higher on Wednesday as Australia’s GDP rose 3.1% in the December quarter.
The Hang Seng index in Hong Kong surged 2.01% while the Shanghai Composite in China rose 1.66%.
In Japan, the Nikkei 225 gained 0.51% and South Korea’s Kospi rose 1.03%.
Shares in Australia were up, with the S&P/ASX 200 closing 0.82% higher.
Orthocell Ltd (ASX:OCC) has received notification from the Australian Government Department of Health that CelGro® Dental has been included on the Australian Prostheses List.
Auroch Minerals Ltd (ASX:AOU) has signed a drilling contract with Seismic Drilling Services Pty Ltd that locks in a drill rig for the next 12 months to be used across Auroch’s three high-grade nickel sulphide assets in Western Australia.
Lake Resources NL (ASX:LKE) (OTCMTS:LLKKF) has appointed SD Capital Advisory Limited and GKB Ventures Limited as joint financial advisors to structure and arrange project finance, with a focus on Export Credit Agencies (ECA’s) for the development of the company’s flagship Kachi Lithium Brine Project in Argentina.
PolarX Ltd (ASX:PXX) (FRA:PX0) has successfully staked and registered 96 new federal lode claims to consolidate tenure at Humboldt Range Project in Nevada, USA, more than tripling the size of the land under tenure in the Fourth of July area.
Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) (FRA:7OR) is focusing its strategic intent on taking the next step at Big One Deposit within Mt Oxide Project in northwest Queensland’s world-class Mt Isa copper-belt and is starting to prepare the groundwork to potentially recommence mining operations.
Alcidion Group Ltd (ASX:ALC) has signed a contract with New Zealand’s Te Manawa Taki (TMT) region District Health Boards (DHBs) for a pilot implementation of Better’s OPENeP Electronic Medication Management solution.
AVZ Minerals Ltd (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) has received further strong results from several new mineralised zones outside the life-of-mine open pit design at the Manono Lithium and Tin Project in the Democratic Replic of Congo.
Meanwhile, Tony Danker, director general of the CBI, said that hiking the corporation tax to 25% in one leap “sends a worrying signal to those planning to invest in the UK”.
“The government must now have a laser-like focus on the UK’s competitive position in the round, including fundamental reform of the unfair business rates system,” he said.
ING Economics said that the measures to protect jobs should help minimise the rise in unemployment to 6-6.5%, “though inevitably some workers and firms will slip through the cracks meaning a full economic recovery will take time”.
“The fact that the Treasury has opted against ending the scheme in June when social distancing restrictions are set to end, suggests they are keen to avoid a repeat of last autumn, where firms started making redundancies in advance of the original furlough expiry date,” they commented.
1.35pm: Wrapping up
Rishi Sunak has concluded his statement and Keir Starmer is now addressing the Commons.
The Labour leader said that the UK needed a budget to fix the foundations of the economy but instead it got “a budget that papered over the cracks”, with little attention for social care.
A press conference will follow thereafter.
1.20pm: Focus on green projects
The government is establishing its first-ever green bank with initial capitalisation of £12bn supporting an estimated £40bn of infrastructure projects, with a focus on offshore wind.
The Treasury also unveiled a new retail savings product to give all UK savers the chance to support green projects, following the launch of the sovereign green bond.
Meanwhile, small and medium-sized businesses will be able to get management training through a new set of UK-wide ‘Help to Grow’ schemes.
Small businesses will receive free training for the transition to online operations as well as discounts on software.
To support scientific development, Sunak allocated an extra £1.6bn for the COVID-19 vaccine rollout and future preparedness alongside new visa reforms to attract high-skilled migrants.
The pension industry will be given more flexibility to invest in growth projects and to encourage more companies to list in London.
Sunak also revealed the establishment of freeports, which are special economic zones with rules to make it easier and cheaper to invest.
They benefit from measures such as infrastructure funds to improve transport and tax breaks to encourage activity.
It will be a UK-wide policy but Sunak has listed eight locations in England on Wednesday’s announcement.
They are intended to boost the economy and employment of former industrial hubs.
1.15pm: Only 10% of companies expected to get 25% corporation tax hike
The Chancellor announced two measures in terms of fiscal decisions to ask for help from “those who can afford it”.
The personal threshold for taxes will be frozen until 2026, while the VAT registration threshold will remain at £85,000 until 2024.
The second step will see a 25% increase in corporation tax, which Sunak said will still keep the lowest rate among G7 countries.
It will not take effect until 2023, when the economy is expected to have recovered.
It will only be charged on profits so companies that are struggling should not be affected.
Small businesses making profits of £50,000 or less will be charged at the lowest rate of 19%.
Only businesses with profits of £250mln will be taxed at the full rate, so only 10% of companies will pay the highest tax.
Tax treatment on losses will also be more generous to help with cash flow. Companies will be able to claim additional refunds of up to £760,000.
Firms that invest can reduce the tax bill by 130% with a ‘super reduction’ which is expected to boost investment by 10% to £20bn per year.
The planned increases in duties of spirits like scotch whiskey wine cider will all be cancelled to help the hospitality industry, while all alcohol duties will be frozen.
The fuel duty is also cancelled, Sunak announced.
1pm: Sunak announces grants, loans and VAT cuts for businesses
Direct cash grants are coming to an end this month, but a ‘restart grant’ will be introduced in April while individual businesses will be able to apply to new loans.
The Treasury has allocated £5bn in new grants for non-essential retailers and the personal care sector, while the arts, culture and sporting sectors will receive £700mln in grants.
Business rates holiday will remain in place until the end of June and then it will be discounted by up to two-thirds based on each company’s economic situation, for a £6bn tax cut for businesses.
In the hospitality sector, the 5% VAT will remain until September 30, rising to 12.5% for another six months and returning to the 20% standard rate from April 2022.
Looking at the housing sector, the stamp duty holiday has been extended until June 30, then the cap will remain £250,000 until September, returning to £125,000 from October onwards.
Sunak also unveiled a new policy with government-backed 95% mortgages being offered from this month to support first-home buyers.
Today’s announcement amounts to an extra £75bn measures implemented this year and next, so the total COVID-19 support package is £362bn, for a total of £407bn fiscal help from the government throughout the pandemic.
12.45pm: Businesses to contribute to furlough scheme from July to September
Sunak said that recovery has been “swifter and more sustained” than expected in November.
Economy is forecast to return to pre-covid levels by mid-2022, six months earlier than expected. However, it will be 3% smaller than it would have been in five years’ time.
OBR forecast growth of 4% this year and also said that government interventions to protect jobs have worked.
Furlough scheme to be extended until the end of September with no change of terms for employees.
Businesses will be asked for a 10% contribution in July, rising to 20% in August and September.
Self-employed people will receive grants measured on how much their turnover has fallen. Newly self-employed will also qualify.
The £20-week support for low-income households will continue for another six months and the minimum wage threshold will also be raised.
12.35pm: Rishi Sunak begins the announcement
The Chancellor has begun his announcement in the House of Commons.
He said the government will do “whatever it takes” to support the country.
11.50am: Furlough to be extended until September
It is understood that Rishi Sunak will extend the furlough scheme until the end of September, way beyond the end of all lockdown measures earmarked for June 21.
It is a surprising move as recent media reports suggested June would be the end of the scheme, where the government covers 80% of staff salaries to avoid redundancies.
The Chancellor is expected to allocate £10bn for the renewed furlough scheme, as part of measures worth at least £30bn designed to protect jobs.
An extra 600,000 newly self-employed workers will also become eligible to receive financial support.
Hospitality, travel and leisure names, which have relied heavily on such schemes to keep people into work, were among the FTSE 350 risers on Wednesday late morning.
The Treasury is expected to unveil measures that should be welcomed across the board, including a £15bn support package to extend the furlough scheme and Self-Employment Income Support scheme.
There will be sector-specific measures such as VAT cuts and business rates holidays for hospitality players, while housebuilders will be boosted by initiatives to support first-home buyers, such as a more generous ‘Help to Buy’ scheme.
KR1 PLC (LON:KR1), the digital asset investment company, has invested US$75,000 into Strange Loop Labs AG, which trades as LazyLedger Labs.
KR1 took part in LazyLedger’s seed funding round alongside Cosmos’s Interchain Foundation, Binance, Dokia Capital, Maven 11 and other respected investors, KR1 told investors.
LazyLedger is described as a distributed data availability ledger where the blockchain is optimised for solely ordering and guaranteeing the availability of transaction data.
KR1 said the founding team of LazyLedger are highly respected decentralised systems engineers and researchers, who were part of the founding team of Chainspace, a blockchain project acquired by Facebook, as well as contributors to Ethereum 2.0 and Cosmos’s Tendermint.
“LazyLedger is a great project and an opportunity to bring better data availability to blockchains, which reduces bloat and increases performance. We believe that LazyLedger is going to play a big role in the next generation of scalable blockchain architectures,” said Keld van Schreven, the managing director and co-founder of KR1.
Shares in BT Group PLC (LON:BT.A) jumped after the Budget announcement from chancellor Rishi Sunak including a surprise policy that will allow companies to cut their tax bill if they increase investment.
Under the two-year investment “super deduction” policy, businesses investing in new plant and machinery assets will be able to reduce their tax bill by 130% of the cost of investment.
In other words, the super deduction will allow companies to cut their tax bill by 25p for every £1 they invest.
BT is expected to be a big beneficiary as its Openreach arm is investing millions to upgrade its UK broadband network to full fibre optic cable run right up to the door, known as FTTP.
Neil Wilson, chief market analyst at Markets.com, said: “BT has emerged as one of the big winners from the budget as the super deduction tax relief will allow it to offset its fibre infrastructure spending.”
He added: “Any capital intensive projects should be winners.”
BT shares rose 7% to 134.48p in afternoon trading.
Oil companies should also benefit from the investment-based tax break, said Derek Leith, EY’s global oil and gas tax leader.
“It would be an unusual Budget if the Chancellor didn’t find some space for an oil and gas measure: oil and gas has only been absent from a UK Budget on two occasions in the past 25 years. Budget 2021 didn’t disappoint with a specific clarification on the detailed rules for oil and gas decommissioning relief. There are also some knock-on effects of the Chancellor’s announcements on the corporation tax rate, the super deduction for investment, and the extended loss carry-back.”
Other winners from the Budget include banking stocks, which all reacted positively, with Barclays (LON:BARC) rising almost 4%, Lloyds (LON:LLOY) and NatWest (LON:NWG) up 2%, and HSBC (LON:HSBA) increasing 1.6% to 430p.
“A stronger near-term economic outlook than previously expected bodes well for the sector,” said AJ Bell.
An announcement of the first ever UK Infrastructure Bank to drive a ‘Green Industrial Revolution’ and support public and private projects, with an initial £12bn capitalisation and expected to support £40bn of projects, saw only a muted reaction from renewable infrastructure funds, with John Laing Environmental Assets edging just 0.6% higher to 114.7p, Greencoat UK Wind up 1.2% to 130.1p and The Renewables Infrastructure Group just 0.3% higher to 130.2p.”
The Chancellor also extended the stamp duty holiday until June and then said it would be staggered and only return to its pre-pandemic stating level of £125,000 from 1 October.
“Extending the stamp duty holiday until the end of June, then phasing it out until September should help avoid a sudden downturn in prices caused by the much-feared cliff-edge end,” said Ian Mackenzie from the Guild of Property Professionals.
“With the zero-rated stamp duty limit extended to £250k until the end of September and the average UK house price being £252k, it means that thousands of people can benefit from this incentive – particularly first and second-time buyers.”
Banking sector trade body UK Finance added: “We welcome the certainty an extension to the Stamp Duty holiday and a phased approach to its ending brings for buyers and sellers.
“This will help prevent a cliff edge, reduce the risk of house sales collapsing and will prove beneficial for all parties involved in the housing market.”
“The banking and finance industry supports innovation in the mortgage market, particularly measures which enable borrowers to realise their dream of homeownership, through lower deposits.
Persimmon PLC (LON:PSN), the UK’s largest housebuilder was one of the best risers on the FTSE 100 market, adding 5% to 2,852p following good results this morning.