Market Update & Important Indicators
US stocks have finished somewhat lower after a quiet day of trade with the Nasdaq lagging the other two indices following last week's surge. Stocks have made strides over the last week, helped by assurances of a go-slow approach to interest rates from the Federal Reserve. The gains have reversed much of an early-March pullback and have brought major stock benchmarks back to within striking distance of all-time records. The Dow Jones Industrial Average dropped 12 points, or 0.1%, to 18,116 and the S&P 500 lost 4 points, or 0.2%, to 2,104.
European stocks finished mixed as Greece's premier arrived in Berlin for more talks aimed at resolving the country's debt crisis, while London briefly hit another record peak before pulling lower. London's benchmark FTSE 100 index soared as high as 7,027 points in morning deals, extending its recent record run on a wave of investor optimism over the economic outlook. It closed at 7,038 points, up 0.22 per cent from Friday's close. Frankfurt's DAX 30 index slumped 1.19 per cent to 11,896 points and the CAC 40 in Paris dipped 0.65 per cent to 5,055.
Asian markets mostly advanced following rallies on Wall Street and in Europe, while the US dollar continued to struggle after the Federal Reserve dampened expectations for an early rate hike. Tokyo ended 0.99 per cent higher, adding 194 points, to 19,754 while Hong Kong added 0.6 per cent and Shanghai surged 1.03 per cent, marking a ninth straight gain. Seoul was flat, dipping 0.65 points to 2,037 and Sydney eased 0.32 per cent, or 19.4 points, to 5,956. With few catalysts to drive business early in the week, investors took their lead from their US counterparts who have been cheered by the Fed's dovish comments on rates.
Based metals on the LME were mostly higher with the exception of aluminium which finished 0.2% lower. Gold gained 0.6% to US$1,189.3/oz and WTI crude advanced 2.5% to US$46.85/bbl. The AUD is buying US$0.778.
Thought for the Day
In this Thought for the Day, we provide a brief update on two unique technology companies that have made recent progress towards commercialisation.
Alexium (AJX) | SPEC BUY
Market cap $181.5m
Recent newsflow: Alexium (AJX) announced yesterday an exclusive sales contract with a prominent US based outdoor fabric manufacturer. Under the contract, AJX will provide “Alexiflam-Syn” fire retardant solution for application to outdoor tenting fabric. Initial revenues are expected in 2Q CY15 and will comprise royalty payments on finished products in addition to chemical sales. Further, a joint pricing and marketing strategy is being negotiated which would include a co-branding campaign.
Implications:
• A sales contract with a leading US company validates AJX’s technology and drives the shift from the development to commercialisation stage. Revenue from this contract is imminent (in addition to other previously announced contracts)
• AJX’s fire retardant chemicals are versatile and have a wide range of applications. In addition to tents, the technology may be extended to other products in the outdoor fabric market such as marine fabrics, awnings, signs and outdoor upholstery. Other key markets include military, workwear, transportation, upholstery and interior furnishings
• The commercial market offers a significant opportunity. The US tenting market alone is estimated at $250m in 2015 and the global fire retardant chemical market is estimated to be around $7b. AJX only needs to capture a small percentage of the market to generate meaningful revenue.
Structural Monitoring Systems (SMN) | UNRATED
Market cap $38.5m
Recent newsflow: Structural Monitoring Systems (SMN), announced yesterday an MOU with Testia, an Airbus Group company. Under the MOU, Testia will become the key distributer/reseller and integrator of SMN products in Europe and will install, maintain, commercialise and promote the technology globally. Testia is a worldwide provider of non-destructive testing (NDT) and structural health monitoring (SHM) and will partner SMN to advance its comparative vacuum monitoring (CVM) technology which provides a method for in-situ, real-time monitoring of crack initiation and/or propagation.
Implications:
• Having the support of a large global player, such as Testia which is part of Airbus, is a game changer for the Company. The partnership has been ongoing for some time but the MOU will assist SMN in numerous ways, such as providing access to the Airbus Verification and Validation Centre, creating a distribution channel, promotion and identifying business opportunities
• Testia will support SMN in its efforts to achieve supplementary type certificates (STCs) and alternative means of compliance (AMOC) with potential customers which would enable SMN products to be sold, licenced, installed and maintained globally
• The announcement also notes that the Company is preparing for pending FAA approval. This would be key to the future success of commercialisation of the technology
Recent Contacts & Presentations
Beadell (BDR), Pacifico (PMY), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Helix Resources (HLX), Rift Valley Resources (RVY), West African Resources (WAF), Matrix (MCE), Austal (ASB), Ausdrill (ASL), TFS Corporation (TFC), Gage Roads (GRB), Austin Engineering (ANG), Buru Energy (BRU), OBJ Limited (OBJ), Strandline Resources (STA), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), MMA Offshore (MRM), Migme (MIG), Vmoto (VMT)
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