Another strong day on the markets despite China and Bank levy news

The Dow Jones Industrials finished up 72 today at 12,233 and the FTSE 100 closed up 40 at 6,091 after a sluggish start.

The poor start on the FTSE was triggered by news that the Chinese central bank raised its one year lending rate to 6.06pc from 5.81pc and the deposit rate to 3pc from 2.75pc. It was the third increase in interest rates since October. Sentiment was not helped by the additional £800 million of bank levy announced by Chancellor, George Osborne, this morning.

But good results from miner Xstrata soon overcame any negative fallout from the Chinese news. It announced revenue increased from $22.7billion ito $30.5 billion between 2009 and 2010 and profit before tax rose to $7.11bn in 2010, excluding exceptional items, from $1.87bn, as a result of increasing prices, production and the benefits of restructuring. Net debt fell 38% to $7.6bn. The shares rose 1.7% to £14.92.

Next Contrarian Investor UK stock review?

I am gearing up to my next stock review, with lots of research piled up.

So far on the table are:

Gulf Keystone Petroleum (GKP)
Range Resource (RRL)
Arian Silver Corp (AGQ)

Which one then readers???? Or perhaps another????

Unfortunately time is short, so one only.

ARM Holdings short closed

A quick trade on ARM Holdings (ARM) closed today with the 2.5% drop for a small profit. Need to deploy cash elsewhere in RKH and XEL. Xcite is the place to be with rig deadline 3 days away and rumours starting to build. Nice turnaround in the XEL share price in the last part of the day and reasonable volume as again we bounce of 355p. Let that be the bottom!!!

Catcher failure in North Sea and lack of shareholder nerve rocks Rockhopper

Rockhopper (RKH) got a bit of a battering today with a fall of nearly 5% to £3.67. No news from the company itself but as I posted earlier, AIM oil stock sentiment was hit by the North Sea Catcher field disappointment (http://contrarianinvestoruk.blogspot.com/2011/02/catcher-north-sea-failure-hits-aim-all.html).

A good excuse for the nervous to sell, for the market makers to mark the price down and for larger institutional buyers to fill their boots with cheaper stock. Some big late trades illustrate the point that a seller was in the background picking up shares and with a big budget:

£742,314 371.16p 200,000 16:43 Buy O
£559,500 373.00p 150,000 16:00 Buy O
£498,616 373.13p 133,630 16:22 Buy O
£373,468 373.47p 100,000 16:45 Buy O
£1,477,868 369p 400,000 16:54 Buy O

With buys of over £3.8 million after the market close, someone is clearly optimistic about the latest 14/10-3 well drill.  The spud date of this well was 13th January with expected 38 days to reach target depth, making it 18th February but it would be surprising if news was that far away given the rumours circulating in the Falklands.

CMC markets change may impact AIM this week

From CityAM.
Trading in small caps set to be volatile this Friday
Tuesday, 8th February 2011

Trading on London’s Alternative Investment Market (Aim) may be volatile on Friday because this is when CMC Markets will close out any Aim share bets made by its clients.
CMC delisted trading in the junior index with no new positions opened via its trading platform on Aim shares after 21 January .

Any Aim bets by CMC clients that remain open will be closed out at the closing price on 11 February.
CMC’s decision follows its move last year to stop trading in stocks below a certain market capitalisation and reflects the firm’s switch to a new technology platform and its focus on core liquid markets.
“It could be a very interesting day for the Aim market and Aim shares as the CFDs get closed out,” Atif Latif, director of trading at Guardian Stockbrokers, said.

The closing of CFD trades will have an influence on the physical Aim market as providers of the financial instruments have to hedge the trades by holding the actual stocks to protect their positions.
Latif said as much as 50 per cent of Aim market positions could be held via CFDs.

Catcher North Sea failure hits AIM oil stock sentiment

AIM oil stocks have been taking a beating this morning after Nautical Petreoleum (NPE) and Encore Oil (EO) announced a poor result from their Catcher North Sea field (majority owned by Premier Oil). Encore is currently down 17% and Nautical is down14.5% on the news that the well had encountered gas rather than oil with a poor reservoir quality making it borderline economic. Nautical and Encore both own 15% of the Catcher field.

The bad news in the North Sea was accompanied by a disappointing update fromNighthawk Energy (HAWK) ( a previous holding from 2010 which was fortunately dumped early on as poor data began to be announced) from their Jolly Ranch project in the U.S.where oil recovery had been weaker than expected due to maintenance and well optimisation work. HAWK is currently down 8% today.

So my holdings in Bowleven, Xcite and Rockhopper are all suffering as a result of this negative sentiment. The difference with all these holdings is that they have substantial proven resources, and with the exception of Rockhopper, are derisked (though it still has £200 million in the bank for further appraisal wells and proven reserves of 200 million barrels at Sea Lion). Xcite encountered a larger than expected oil column and top end flow rates in December and reserves are likely to be confirmed of 160-250 mm barrels when the full CPR is published in late February or early March. As they say, there are AIM stocks, and there are AIM stocks!! - not for Widows and Orphans.

Some naughty treeshakes today on Rockhopper

Classic tree shake on Rockhopper this morning to tempt the weak to sell. Price recovered but still down. Similar on Xcite energy. Topped up a little on RKH, too good an opportunity to pass up. Naughty Market makers!! But how obvious it would happen, now it really makes me think good news is coming. Fingers crossed!!

Weatherley International operations update February 8th 2011

RNS just released from Weatherley (WTI), I'll look at the new presentation at http://www.rns-pdf.londonstockexchange.com/rns/8296A_1-2011-2-7.pdf with great interest. Explains the 7.5% increase yesterday, clearly a leak. Looks like everything is progressing to plan.

TIDMWTI

RNS Number : 8296A

Weatherly International PLC

08 February 2011

Weatherly International Plc ("Weatherly" or the "Company")

Central Operations Update and Investor Relations Presentation

Central Operations
As previously announced on 12 January 2011, mining activities have resumed at both the Otjihase and Matchless mines with ore being blasted and stockpiled awaiting commissioning of the concentrator. The commissioning of the concentrator is progressing well and the plant will resume normal operation in accordance with the programme. Weatherly expects to have sufficient quantities of concentrate to commence transport to Walvis Bay in March with the first revenues to be realised from concentrate sales shortly thereafter.

Both the Matchless ore haulage and Otjihase concentrate haulage contracts have been awarded to local company, Kraft Holdings, which now completes the award of all outstanding major contracts.

Forward Sales of Copper
Further to the previous announcement on 14 January 2011, Weatherly announces that its wholly owned subsidiary, Ongopolo Mining Limited ('Ongopolo'), has entered into an additional forward sales contract with Louis Dreyfus Commodities Metals Suisse S.A. ('Louis Dreyfus Commodities').

Weatherly has contracted with Louis Dreyfus Commodities for an additional 950 tonnes of contained copper to be delivered progressively over a 17 month period commencing in May 2011 at a fixed price of US$9 750/tonne. In total, Weatherly has therefore contracted forward sales for a total of 1,925. This represents approximately 20% of anticipated production over the period covered by the two contracts.

Investor Relations Presentation
Weatherly is pleased to provide shareholders with the Company's latest presentation which is being made available today at the Mining Indaba conference in Cape Town, South Africa.

To view the full presentation, please paste the following link into your web browser:

http://www.rns-pdf.londonstockexchange.com/rns/8296A_1-2011-2-7.pdf