GW pharma sees price action as Sativex approval finally looms

GW pharma (GWP) moved up around 10% early this afternoon but fell back to close up 5% at 128p. Although volumes were not dramatic on the buy side, this move is presumably linked to imminent Sativex approval in the U.K. and/or market makers adjusting bid/offer levels on a shortage of stock for a larger buyer waiting in the wings i.e. encouraging profit taking by smaller shareholders as their positions increased in value.

Coal of Africa raises additional funds

South African coal miner, Coal of Africa (CZA), yesterday raised £55 million through a placing at 110p. At only a 0.2% discount to the previous day's closing price this confirms institutional support for the Coal of Africa story.

The company will use the proceeds to provide Makhado mine bulk samples (US$7.5 million), Makhado Definitive Feasibility Study (US$6.5 million), potential acquisitions (US$15 million), U$20 million to repay the existing JPMorgan working capital facility and US$20 million for general working capital.

The shares closed down around 2% at 107p which gave a further opportunity to top up the holding. The company announced on Tuesday that the main market London listing and would be delayed until November to enable the required listing requirements to be met, in particular the 2nd quarter financial results.

Given the drift down in CZA's share price over the last 2-3 months back to the 105p+ level, hopefully the placing will now give a floor and enable a recovery back to £1.50 as production continues to ramp up.