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#FCM First Class Metals PLC – 2023 Year-end Shareholder Letter

First Class Metals PLC (“First Class Metals” “FCM” or the “Company”) the UK listed metals exploration company seeking economic metal discoveries across its extensive Canadian Schreiber-Hemlo, Sunbeam and Zigzag land holdings is pleased to announce that a Shareholder Letter has been uploaded to the Company’s website at www.firstclassmetalsplc.com. The letter, a review of the major developments for the Company during 2023 and the outlook for 2024.


Dear Shareholders,

On this the last working day of the year I would like to take the opportunity to reflect on what an excellent year it has been in First Class Metal’s development: we rapidly advanced and completed on our commitment to bring four properties to a ‘Drill Ready Status’ and undertake a drill programme on one property in 2023. A number of key milestones were met during 2023, which are  summarised below. I have our highly experienced and dedicated team in Canada and the UK to thank for this significant progress and I am delighted to see their efforts come to fruition, in a positive way, with the results achieved. With further results from a number of programmes still awaited , we are determined to take this momentum through into next year.


2023 Key Milestones

First Nations  Agreements and Permitting

At FCM we are committed to working in harmony with the First Nations who have claims to traditional lands in which out properties sit. This open and co-operative attitude has manifested itself in the granting of five Exploration Permits in what has been a relatively short time. Furthermore, Exploration Agreements or MoU’s are in place with four First Nations groups which effectively cover the six Exploration Permits which FCM holds.

Obtaining new Exploration Permits across five properties and securing exploration agreements with support from First Nation partners  is a major milestone for our company in 2023.

The successful acquisition of these permits and agreements demonstrates our commitment to responsible exploration practices and building strong relationships with local communities. With these achievements, our portfolio now contains  six properties with valid exploration permits, positioning us for further growth and success. We remain dedicated to advancing our exploration activities in a sustainable and mutually beneficial manner.

Exploration Zigzag, Esa, North Hemlo, Sunbeam

In order to efficiently use investor funds for what is the most expensive outlay in exploration : drilling, we have focussed on understanding the geology (geochemistry and structure) of the four primary properties with I believe admirable success. To this end further drilling on the other three properties is more likely to achieve success.

A stack of black and white pipes Description automatically generated

Figure  1- Spodumene rich core from the recent drilling campaign on the Zigzag lithium property.

 A few men in the woods Description automatically generated

Figure 2-Summer 2023, First Class Metals CEO Marc Sale at the ‘Dead Otter Trend’ on the North Hemlo Property

James Knowles- Executive Chairmans End of Year Quote

2023 was a pivotal and transformative year for FCM. We set ambitious operational goals, including advancing four properties to drill ready status and successfully drilling on one. I would like to express my gratitude to Marc and his exceptional ‘in-country team’ for their dedication and achievements in completing this task.  On the corporate side despite challenging market conditions, we secured funding twice, a testament to the quality of our properties. I am excited to see this progress continue into 2024 as we have much to look forward to.”

Outlook for 2024

The outlook for First Class in 2024 is expected to mirror the high activity level experienced in 2023. With six permitted properties, including Zigzag, North Hemlo, Esa, and Sunbeam, four of which are now ‘Drill Ready’ or have undergone an initial drill program in the case of Zigzag, we are well-positioned for the year ahead.

Our focus for 2024 will entail a two-pronged approach. Firstly, we aim to enhance our geological understanding and the mineralisation of these properties to further increase their value. Simultaneously, we will explore opportunities to secure third-party investment through ‘earn-ins,’ joint ventures, or potentially even corporate transactions.

As we approach the end of 2023, we are pleased to share that we have received expressions of interest from various sources across our portfolio. These range from junior exploration companies with comparable standing to significant players in the industry. This interest validates the potential and attractiveness of our properties and bodes well for the opportunities that may arise in the coming year.

In addition to the ‘core four’ portfolio, we are strategically preparing a pipeline of projects from within our existing portfolio of assets, to further advance our exploration efforts. Two promising properties within this pipeline are the McKellar polymetallic property near Marathon and the Enable Gold project near Schreiber. Both of these properties have obtained the necessary permits, enabling us to move forward with focused exploration  plans. With the planned programmes in 2024, we aim to progress these projects to a ‘Drill Ready’ status. This will keep the momentum building and ensure properties of merit can move up the priority list when required, whilst always remaining cognisant of divestment opportunities.

We are actively seeking potential new mineral properties in Ontario, whether through staking or acquisition, alongside our existing portfolio. Our focus is on identifying properties that have the potential to move ‘up the value curve’ and contribute to our growth strategy. Through thorough research, engagement with industry networks, and strategic partnerships, we aim to acquire promising mineral properties. By continuously evaluating and augmenting our portfolio, we can ensure the ongoing success of our ‘project incubator’ model.

This year has seen First Class take several early ‘green field’ properties up through the value curve and we strongly believe that 2024 will continue on this trend as we enter into a transformative period for the Company. I would like to take this opportunity to thank all our shareholders, stakeholders, contractors, and Emerald Geological Services with a personal thanks to their Principle, Bruce A McLaughlin for the continued support of First Class Metals during this exciting period for us and wish you all a happy New Year.

#SVML Sovereign Metals – Company Presentation

Sovereign Metals Limited (Sovereign or the Company) (ASX:SVM, AIM:SVML) is pleased to advise that an updated Company presentation is available to download from the Company’s website at:https://www.investi.com.au/api/announcements/svm/22095baf-388.pdf.


Frank Eagar (South Africa/Malawi)
Managing Director

+61(8) 9322 6322

Sam Cordin (Perth)
+61(8) 9322 6322

Sapan Ghai (London)
+44 207 478 3900


Nominated Adviser on AIM and Joint Broker


SP Angel Corporate Finance LLP

+44 20 3470 0470

Ewan Leggat

Charlie Bouverat

Harry Davies-Ball



Joint Brokers



+44 20 3207 7800

Matthew Armitt


Jennifer Lee




Tavistock PR

+44 20 7920 3150

#SVML Sovereign Metals LTD – Initial Director’s Interest Notice

Initial Director’s Interest Notice


Information or documents not available now must be given to ASX as soon as available.  Information and documents given to ASX become ASX’s property and may be made public.

Introduced 30/9/2001.


Name of entity   Sovereign Metals Limited

ABN                    71 120 833 427


We (the entity) give ASX the following information under listing rule 3.19A.1 and as agent for the director for the purposes of section 205G of the Corporations Act. 


Name of Director

Francis (Frank) Eagar

Date of appointment

20 October 2023


Part 1 – Director’s relevant interests in securities of which the director is the registered holder

In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust


Note: In the case of a company, interests which come within paragraph (i) of the definition of “notifiable interest of a director” should be disclosed in this part.



Number & class of securities


500,000 ordinary fully paid shares


1,000,000 unlisted performance rights subject to the “Definitive Feasibility Study Milestone” expiring on or before 31 October 2025


500,000 unlisted performance rights subject to the “Grant of Mining Licence Milestone” expiring on or before 31 March 2026


700,000 unlisted performance rights subject to the “Final Investment Decision Milestone” expiring on or before 30 June 2026




Part 2 – Director’s relevant interests in securities of which the director is not the registered holder

In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust


Name of holder & nature of interest

Note: Provide details of the circumstances giving rise to the relevant interest.


Not applicable

Number & class of Securities







Part 3 – Director’s interests in contracts


Note: In the case of a company, interests which come within paragraph (ii) of the definition of “notifiable interest of a director” should be disclosed in this part.


Detail of contract

Nature of interest





Name of registered holder

(if issued securities)


No. and class of securities to which interest relates







Initial notification/Amendment




Place of transaction

Australian Securities Exchange (ASX)


ECR Minerals playing the big game – Andrew Scott talks to Andrew Haythorpe and Adam Jones

In a new June 2023 ‘on the ground’ interview, Andrew Scott talks to Andrew Haythorpe and Adam Jones about the exploration programme. Adam covers his schedule, boots on the ground at Hurricane (5-7 days) meeting the previous owner, and he will then be at Lolworth for the rest of June taking rock chips and sampling where the tantalum & niobium and rare earths were discovered last year. Andrew Haythorpe talks about the bigger picture for Lolworth in the back yard of Charters Towers, Pajingo etc, looks at the 1980s results, how the area is so unexplored and why the results, size and scale of the area offers so much potential. Both believe that very little would be needed to put the Lolworth discoveries on the scale of Charters Towers, given the 10km ridgeline, the specific area of interest 3.5 x 4km (12-20sq km), but there is also an overlap in the SE of the tenement with the same geology, which is totally untested, which could be 3x the size of the current ridgeline. Adam and Andrew then discuss the planning for Hurricane, putting in access tracks to the breccia veins with bulldozers and an initial RC drilling plan. Andrew explains how the current private landowners have been unable to exploit the asset, and how ECR are the first company with significant resources to get on the ground there.

Moving to Creswick, Adam touches on the underwhelming initial results, but points to the fact there is a 10k trend that remains to be tested, and the reasons why ECR has to work smarter. Adam looks at the geology of nearby Ballarat compared to Creswick – similar structure, narrow vein, anticlines etc, with some 30 veins already identified along the 10k strike. In summary, Andrew highlights the work Adam and the team have done with soil geochemistry and sampling and how they are ‘ranking’ the prospects to get the biggest bang for the ECR buck. In summary, the ECR team are are here to find good grades. Lolworth has some ‘smoking’ mineralisation and Andrew believes at Hurricane will deliver at 20-40-60m below surface, in other words a classicAustralian open cut mining start up which gives ECR a chance to play the big game.

ECR Minerals #ECR – CEO Andrew Haythorpe discusses exploration progress at Queensland & Victoria

ECR CEO Andrew Haythorpe discusses the latest exploration progress at Victoria and the transition to Queensland. Andrew discusses the potential he sees at Lolworth, with 30 different gold occurrences plus niobium and tantalum already at such an early phase. He then looks at the Hurricane project, and how the gold in veins at surface are consistently 1-5m thick (one was 60m thick), which leads to a consistent 1-5 g/t at surface, and the most recent project acquisition, the Blue Mountain project where there is a lot of alluvial gold. Andrew then covers how low cost work programmes including geophysics and geochemistry, RC drilling keep the costs down and will identify the biggest and best anomalies. On funding, there are plans for further asset sales, and he confirms ECR are fully funded for all QLD and Victoria exploration this year. In summary, Andrew believes the chances of pinning down a major find in Queensland is much better. ECR has the right people and right geology, plus there could be some major players keen on partnering in Queensland.

#GRX GreenX Metals LTD – Quarterly Activities Report March 2023

During the quarter, GreenX completed a Placing to issue 12.4 million new ordinary shares to raise gross proceeds of approximately £4.4 million (~A$7.7 million) from new and existing UK and European investors and some Australian investors (Placing) with net proceeds from the Placing to be used for:

exploration activities in Greenland;

business development through identifying other suitable business opportunities in the resources sector; and

administrative expenses while the Arbitral Tribunal (Tribunal) decision remains pending following the recent conclusion of the hearing for the international arbitration claims (Claim) against the Republic of Poland.

·    In November 2022, the hearing for the Claim against the Republic of Poland under both the Energy Charter Treaty and the Australia-Poland Bilateral Investment Treaty was concluded.

Combined arbitration hearing took place in front of the Tribunal in London under the UNCITRAL Arbitration Rules;

Damages of up to £737 million (A$1.3 billion / PLN4.0 billion) have been claimed including the assessed value of GreenX’s lost profits and damages related to both the Jan Karski and Debiensko projects, and accrued interest related to any damages; and

The Company has funded the Claim proceedings under its US$12.3 million Litigation Funding Agreement (LFA) with Litigation Capital Management (LCM). The Company has drawn ~US$10.4 million against the LFA, and the Company does not anticipate further material drawdowns now that funded costs relating to the Claim have been dispersed.

·    Cash balance as at 31 March 2023 of A$10 million


Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State

GreenX Metals Limited (ASX:GRX, LSE:GRX) (GreenX or the Company) is pleased to present its Quarterly Activities Report for the period during and subsequent to 31 March 2023.



In March 2023, the Company announced that it had successfully completed a bookbuild and secured commitments for 14.1 million new ordinary shares at a price of 31 pence (A$55c) per share for gross proceeds of approximately £4.4 million (~A$7.7 million) from new and existing UK and European investors.

The proceeds of the Placing ensure that GreenX retains a strong balance sheet position.

The net proceeds from the Placing will be used for:

·      exploration activities in Greenland;

·      business development through identifying other suitable business opportunities in the resources sector; and

·      administrative expenses while the Arbitral Tribunal decision remains pending following the recent conclusion of the hearing for the Claim against the Republic of Poland.


In November 2022, the Company reported the conclusion of the Claim against the Republic of Poland under both the Energy Charter Treaty (ECT) and the Australia-Poland Bilateral Investment Treaty (BIT) (together the Treaties). The hearing took place in London and lasted two weeks.

Following completion of the hearing, the Tribunal will render an Award (i.e., the legal term used for a ‘decision’ by the Tribunal) in due course with no specified date available for the Tribunal decision.

As previously advised, the arbitration and hearing proceedings in relation to the Claim are required to be kept confidential.

Details of the Claim

The Company’s Claim against the Republic of Poland is being prosecuted through an established and enforceable legal framework, with GreenX and Poland agreeing to apply the United Nations Commission on International Trade Law Rules (UNCITRAL) rules to the proceedings. The arbitration claims are being administered through the Permanent Court of Arbitration in the Hague.

The evidentiary hearing phase of the arbitration proceedings has now been completed in front of the Arbitral Tribunal. With completion of the hearing, the Arbitral Tribunal will render an Award in due course. There is no specified date for an Award to be rendered. The Company’s claims for damages against Poland are in the amount of up to £737 million (A$1.3 billion/PLN4.0 billion), which includes a revised assessment of the value of GreenX’s lost profits and damages related to both the Jan Karski and Debiensko projects, and accrued interest related to any damages. The Claim for damages has been assessed by independent external quantum experts appointed by GreenX specifically for the purposes of the Claim.

In July 2020, the Company announced it had executed the LFA for US$12.3 million with LCM. US$10.4 million of the facility has been drawn down to cover legal, tribunal and external expert costs as well as defined operating expenses associated with the Claim. The Company does not anticipate further material drawdowns now that funded costs relating to the claims have been dispersed. The LFA is a limited recourse loan with LCM that is on a “no win – no fee” basis.

In September 2020, GreenX announced that it had formally commenced with the Claim by serving the Notices of Arbitration against the Republic of Poland. In June 2021, GreenX announced that it had formally lodged its Statement of Claim in the BIT arbitration, including the first assessed claim for compensation. The Company’s Statement of Reply, the last material filing to be made by the Company for the BIT arbitration proceedings, was submitted in July 2021. The Statement of Reply addresses various points raised by the Republic of Poland in their Statement of Defence. The Statement of Reply also contains a re-evaluation of the claim for damages based on responses to Poland’s Statement of Defence.

GreenX’s dispute alleges that the Republic of Poland has breached its obligations under the applicable Treaties through its actions to block the development of the Company’s Jan Karski and Debiensko projects in Poland which effectively deprived GreenX of the entire value of its investments in Poland.

In February 2019, GreenX formally notified the Polish Government that there exists an investment dispute between GreenX and the Polish Government. GreenX’s notification called for prompt negotiations with the Government to amicably resolve the dispute and indicated GreenX’s right to submit the dispute to international arbitration in the event of the dispute not being resolved amicably.

GreenX’s investment dispute with the Republic of Poland is not unique, with international media widely reporting that the political environment and investment climate in Poland has deteriorated since the change in Government in 2015. As a result, there are a significant number of International Arbitration claims being bought against Poland.


The Arctic Rift Copper Project (ARC) is an exploration joint venture between GreenX and Greenfields Exploration Ltd (Greenfields). GreenX can earn 80% of ARC by spending A$10 million by October 2026. ARC is targeting large scale copper in multiple settings across a 5,774 km2 Special Exploration Licence in eastern North Greenland. The area has been historically underexplored yet is prospective for copper, forming part of the newly identified Kiffaanngissuseq metallogenic province.

The results of work program announced last year have demonstrated the high-grade nature of the known copper sulphide mineralisation and wider copper mineralization in fault hosted Black Earth zones and adjacent sandstone units. The exact position of a native copper fissure at the Neergaard Dal prospect was also identified.

Analysis of this information is underway and will be key to future planned work programs.


Financial Position

Following successful completion of the Placing, GreenX had cash of A$10 million as at 31 March 2023.

Link here to view the full report

ECR Minerals #ECR – CEO Andrew Haythorpe talks through Blue Mountain and other projects

ECR Minerals #ECR – CEO Andrew Haythorpe talks through Blue Mountain and other projects with Andrew Scott. The Blue Mountain project represents a wonderful opportunity in an accessible part of Queensland. With impressive recoveries there by previous operators, the project compliments other Queensland projects from a logistical. standpoint. Andrew also discusses Lolworth, and how the team are very keen to get back to discover the primary source for Nb Ta Li and Au before looking at the drill campaign at Creswick and the drill ready targets at Hurricane. Andrew the looks at his ongoing role as CEO and how ECR is a well funded company, although he reminds us that every overnight success takes a few years to generate!

Power Metal Resources #POW – Major Shareholding

TR-1: Standard form for notification of major holdings


NOTIFICATION OF MAJOR HOLDINGS (to be sent to the relevant issuer and to the FCA in Microsoft Word format if possible)i

1a. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attachedii:

Power Metal Resources plc

1b. Please indicate if the issuer is a non-UK issuer  (please mark with an “X” if appropriate)

Non-UK issuer

2. Reason for the notification (please mark the appropriate box or boxes with an “X”)

An acquisition or disposal of voting rights


An acquisition or disposal of financial instruments

An event changing the breakdown of voting rights

Other (please specify)iii:

3. Details of person subject to the notification obligationiv


Mohamed Zafar Quraishi

City and country of registered office (if applicable)

4. Full name of shareholder(s) (if different from 3.)v


City and country of registered office (if applicable)

5. Date on which the threshold was crossed or reachedvi:


6. Date on which issuer notified (DD/MM/YYYY):


7. Total positions of person(s) subject to the notification obligation

% of voting rights attached to shares (total of 8. A)

% of voting rights through financial instruments
(total of 8.B 1 + 8.B 2)

Total of both in % (8.A + 8.B)

Total number of voting rights of issuervii

Resulting situation on the date on which threshold was crossed or reached




Position of previous notification (if



8. Notified details of the resulting situation on the date on which the threshold was crossed or reachedviii

A: Voting rights attached to shares

Class/type of

ISIN code (if possible)

Number of voting rightsix

% of voting rights


(Art 9 of Directive 2004/109/EC) (DTR5.1)


(Art 10 of Directive 2004/109/EC) (DTR5.2.1)


(Art 9 of Directive 2004/109/EC) (DTR5.1)


(Art 10 of Directive 2004/109/EC) (DTR5.2.1)


Ordinary Shares







B 1: Financial Instruments according to Art. 13(1)(a) of Directive 2004/109/EC (DTR5.3.1.1 (a))

Type of financial instrument


Conversion Period

Number of voting rights that may be acquired if the instrument is


% of voting rights




B 2: Financial Instruments with similar economic effect according to Art. 13(1)(b) of Directive 2004/109/EC (DTR5.3.1.1 (b))

Type of financial instrument


Conversion Period

Physical or cash


Number of voting rights

% of voting rights






9. Information in relation to the person subject to the notification obligation (please mark the

applicable box with an “X”)

Person subject to the notification obligation is not controlled by any natural person or legal entity and does not control any other undertaking(s) holding directly or indirectly an interest in the (underlying) issuerxiii


Full chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held starting with the ultimate controlling natural person or legal entity
xiv (please add additional rows as necessary)


% of voting rights if it equals or is higher than the notifiable threshold

% of voting rights through financial instruments if it equals or is higher than the notifiable threshold

Total of both if it equals or is higher than the notifiable threshold


10. In case of proxy voting, please identify:

Name of the proxy holder

The number and % of voting rights held

The date until which the voting rights will be held

11. Additional informationxvi

Place of completion

Hayes, UK

Date of completion


ECR Minerals #ECR Interview – Creswick Results and 2023 Operating Plan

February 2023: Andrew Scott talks to Andrew Haythorpe and Adam Jones. The high grade results from Creswick are first on the agenda, and Adam discusses the un mined high grades discovered in the adits (tunnels) at ECR’s Brewery Lane property, and the grades from the rock chip sampling at Mills Reef on the new tenement 4km to the south. The rig will be moved to the Brewery Lane property and a diamond drilling will commence.

Andrew discusses how the core resampling last year and the results from sampling means the team can plan drill targets with real confidence – ” a real opportunity as soon as we can get the drill rig onsite”. He confirms that there have been no JV approaches or conversations yet.

Andrew then discusses Blue Moon – while the mineralised grades were lower than hoped, there are a couple more assays to come and a further hole left to complete.

Adam then discusses the lab used by ECR in Ballarat, which now turns samples around in 2-2.5 weeks, before turning to Tambo, where some initial data analysis is underway ahead of an initial field visit.

Andrew and Adam then discuss Lolworth, a potentially ‘world class’ discovery, where lithium, niobium and tantalum have been discovered along with an extraordinary amount of gold. The 10km ridgeline sits to the north of the lithium anomalies and represents a fantastic opportunity – potentially a company building asset.

Andrew then discussed the new Hurricane project awaiting completion of due diligence and approvals, and then talks through the imminent arrival of the 2nd drill rig and its likely deployment.

The team finally summarise the operating plan, possible asset disposals and the level of commitment across the company. The last word is from Andrew – “with 20yrs experience in the industry, ECR has the best portfolio of assets I have seen over that time”

Ken Baksh – February 2023 Investment Monthly

FEBRUARY 2023 Market Report

Investment Review

During the one-month period to 31st January 2023, major equity markets, as measured by the aggregate FTSE All – World Index, rose moderately, by nearly 6%, in dollar terms, one of the best January performances in recent years. Chinese equities and related emerging markets, NASDAQ and Continental European indices led the advance. The UK and Japanese indices underperformed but still rose by 4% in local currencies. The VIX index fell, finishing the period at a level of 19.28.
Government Fixed Interest stocks also rose over the month. The UK 10-year gilt ended the month on a yield of 3.33% with corresponding yields of 3.64%, 2.29% and 0.49% in USA, Germany, and Japan respectively. Speculative and lower quality bonds, also, rose in price terms. Currency moves featured a weaker US dollar. Commodities were mixed on the month, the Chinese re-opening story prompting large moves in the industrial metals.
Monthly Review of Markets
Global Equities rose strongly in January, gaining over 5.98% in dollar terms, in aggregate, led by NASDAQ and China, and related. Amongst the major indices Japan and the UK lagged, though still each gaining over 4%. Reflecting the greater “risk on “mood the VIX index fell below 20 to a level of 19.28.
UK Sectors
Sector moves were mixed and quite large over the month, the difference between the best and worst FTA sub sectors near 20% over just one month. Travel and Leisure and retail stocks gained over 15% while non-life insurance, pharma and tobacco fell in absolute terms. Telecommunication and bank stocks were reasonably firm, partly on takeover rumours. The FTSE100 underperformed the All-Share Index for the first time in many months. By IA sectors, UK active unit trusts are matching benchmark indices, trackers etc, over the short one-month period, with small company funds about 1% behind. “Balanced” funds, by IA definitions, rose by about 3% to 3.5%, depending on the equity content.

Fixed Interest
Major global government bonds rose 2.2% in price terms over January, the UK 10-year yield for instance finishing the month at a yield of 3.33%. Other ten-year government bond yields showed closing month yields 3.52%, 2.29% and 0.49% for US, German and Japanese debt respectively. See the Bloomberg graph below to compare the “January “bond performances over the last 30 years UK corporate bonds also rose, outperforming gilts, and more speculative debt also finished the month on lower yields.
Check my recommendations in preference shares, selected corporate bonds, fixed interest ETF’s , zero-coupons, speculative high yield etc. A list of my top ideas from over 10 different asset classes is also available to subscribers.

Foreign Exchange
A stronger pound and weaker US Dollar were the main moves, where cable (£/$), for instance, rose by 2.3%The Chinese Renminbi strengthened by 2.8% against the greenback. The Japanese Yen initially showed appreciation as a follow through from December’s yield control mechanism tweak, but more nuanced Bank of Tokyo statements during the month, reversed some of the gain. Interestingly,adjusted for FX moves,UK,Japan and USA all rose by between 3% and 4% on the month.

Industrial metals copper, aluminium and iron ore showed the largest monthly move, while natural gas and several soft commodities declined in actual terms. Gold rose modestly but other PGM’s showed little monthly change.

Over the recent month, there have been few major changes to formal aggregate economic growth projections, with most commentators pointing to the “management” of the US slowdown, nature and timing of the Chinese re-opening and the Russia/Ukraine conflict as being key determinants of forward-looking estimates. At regional level however, more optimism is apparent in Continental Europe.
At the same time, key data inflation indicators (headline rates, factory gate and commodity prices, shipping rates,) suggest that headline price growth is set to slow in coming months, although labour compensation developments must be watched carefully.
Recently announced inflation indicators showed December headline CPI of 6.5%, lower than estimates. The November PCE,the Fed’s preferred inflation metric rose at an annualised rate of 5.5% still over double the Fed target. Fourth quarter preliminary GDP growth of 2.9% (3.2% in third quarter), annualised, while higher than estimates, concealed a slower consumers’ expenditure. This relative weakness has also been backed up by consumer sentiment indicators, retail sales, housing activity, construction figures and the Empire States Survey. The Fed’s own forecasts expect GDP growth of 0.5% for 2023, and core PCE growth of 4.8% and 3.5% respectively for 2022 and 2023.The employment situation remains relatively resilient overall, despite the headline grabbing news of cutbacks in the technology sector.
At its final 2023 meeting on 14th December, the Federal Reserve raised its benchmark policy rate by 50 basis points and signalled its intention to keep squeezing the economy next year as central banks on both sides of the Atlantic enter a new phase in the battle against inflation. The new target range is 4.25% to 4.5%. Latest Fed projections below. At this time of writing we are waiting for the latest Fed move, probably 25bp increase, and the accompanying statement.

There is growing concern (again) that the US government may hit its ceiling for debt issuance this summer and spark speculation about a looming default. This “ritual” has of course been played out many times in the past, but coming this year, when the Central Bank is trying to reduce its balance sheet, there could be reasons to expect bouts of bond market volatility over coming months.

The European Central Bank raised interest rates by half a percentage point on December 16th taking the deposit rate to 2%, while also warning that inflation would remain above 2% for a considerable time meaning it would have to keep up rate hikes. The simultaneous announcement that the ECB would start QT from March reinforced the more “hawkish” message from the meeting. In a more detailed presentation than previous meetings, Christine Lagarde differentiated US inflation more driven by an overheating economy and tight labour market, and the ECB price levels, more driven by soaring energy and food costs.
European GDP growth estimates have, however, stabilised over the recent period, and indeed one or two sub-country third/fourth quarter releases have been marginally above expectations e.g German 2022 GDP growth of 1.9% and various more recent indictors such as PMI confidence readings and the ZEW survey, in Germany. Warmer than expected weather, government consumer and business support and resurgent Chinese demand often being cited as the main reasons.
Current ECB staff projections foresee economic growth of 3.4% for calendar 2022 and a “shallow and short recession” over the current period., taking the likely full year 2023 figure to around +0.5%. Inflation and fuel shortages remain key determinants. Some independent economic forecasters are now attaching a non-insignificant chance that Europe may avoid a recession.
December Eurozone inflation, of 9.2% (core 5.0%) was lower than expected. At the ECB meeting (above) 2023 inflation projections were raised to 6.3%

The GDP figures, shown below (source: CLSA, CEIC) show 2022 and 2023 growth projections for the Asia excl Japan region. Growth in 2023 is likely to slow slightly amid weakening domestic and external demand after 2022, the fastest since 2012, but overall, the situation still compares favourably by international comparison The reasons include a “better” Covid experience, selective commodity exposure, tourism, continued FDI Investment (especially China related) and better initial fiscal situations (compared with late 90’s for example) and limited direct connections with the Russia/Ukraine situation. The forecasts do not assume a total easing of Chinese covid rules.ASEAN,which includes Indonesia,Malaysia,Philippines,Singapre,Thailand and Vietnam expect aggregate economic growth of 4% for 2023.
Headline inflation of around 5% currently (core 3%) also compares favourably and is expected to drop to nearer 4% by end 2023 led by commodity disinflation.
The 5.5% official GDP growth target for 2022 was predictably missed, the actual figure emerging at around 3%. Official historic data showed weakening trends in consumer spending, fixed asset investment and construction activity while more recent (December)t “live” tracking data e.g., mobility, cement production and electricity use also showed subdued economic activity. In addition, very weak trade data was released mid-December. The major historic negative issues of a very restrictive anti-Covid policy and major disruption within the property market have now been supplemented by increasing US restrictions on the production/export of certain key electronic products.

At the time of writing however, a property “rescue” package has been implemented, while on the Covid front, various relaxation measures are taking place to alleviate some of the issues above. The removal of the quarantine requirement for inbound travellers from January 8th signalled the end of the zero-Covid system that transformed China’s relationship with the outside world. Independent medical statistics and anecdotal evidence (crematorium activity,chrysanthemum sales!) show a rapid increase in Covid cases and deaths, probably exaggerated by the Chinese New Year, but a positive economic momentum is starting to build. First manifestations are starting to appear in Chinese travel and leisure statistics while a manufacturing revival will take much longer, especially in the face of slowing US demand.
At a recent cabinet meeting, premier Li Keqiang vowed to make consumption(currently only about 40% of GDP) the “driving force” of the economy, unleashing some of the savings amassed during the Covid years.

The Japanese economy contracted 1.2% on an annualized basis during the third quarter of 2022, missing forecasts of 1.1% growth, and considerably weaker than the 4.6% expansion recorded during the second quarter. This was the first down quarter of the year reflecting weak domestic consumption, a slowdown in business investment and an acceleration in imports. Estimates for the full year seem to fall mainly within the 1.5%-2.0% band. Inflation, while still well below international peers, rose by 4.0% in December, the highest in 41 years, driven by currency weakness. Headline CPI is expected to remain around this level in coming months through a combination of import prices and elevated consumer expectations. Wage developments should be watched carefully over coming months and although the Fast Retailing (UNIQLO) 40% increased wage offer was a one-off, there will be focus on the upcoming spring labour negotiations which could have large implications for inflation, interest rates and consumer expenditure. The Bank of Japan changed its yield control policy towards the end of December surprising many investors and causing immediate drops in bond prices and gain in the Japanese Yen. Although denied by the BOJ,there is growing speculation that Japan may ease back on its ultra-loose monetary policy in spring 2023 when the BoJ leadership changes.


Within the UK, live activity data (e.g January Gfk data) continues to show a weaker overall trend, especially within the services sector. According to this survey, released mid-January, covering the mid-month period, consumer confidence remains very low (near a 50 year low), amid the cost-of-living crisis. This followed the publication of figures showing a drop in total 2022 retails sales of over 6%. Unemployment, however, is still at a relatively low level.
According to ONS statistics, GDP fell by 0.3% between the second and third quarters, slightly more than expected, and leaving the economy 0.8% below the “pre pandemic” level. The “increase” of 0.1% in the monthly November figure may be partly due to the “World Cup” effect. The saving ratio was 1.8% during the quarter, and banks report increases in credit card borrowing.

Inflation rose at 10.5% in December a slight improvement on the November figure, with core inflation at 6.5%. Latest earning growth around 6.5% is still a concern for BoE policy makers.
The PSBR is still hovering near all-time records, with the 2022/2023 figure expected to be about £50 billion higher than the 2021/2022 figure, already a record high.
Despite some relief with the recent energy price package, until April at least, (but not other utilities-see below), shop price inflation, greater Council Tax “freedom”, upward interest/mortgage rate pressure, falling house prices, accelerating rents, insolvencies/evictions, legacy Brexit issues and strike activity, will continue to be headwinds and the outlook for economic growth over coming quarters is highly uncertain. The Bank of England expects recessionary conditions to last for a few quarters though a recent Andrew Bailey statement hinted at a less severe slowdown than forecast around the time of the ill-fated mini Budget.

Experts at consultancy EY-Parthenon, insolvency specialist Begbies Traynor and, more recently, data from Insolvency Services to December 2022 all point to a huge increase in the number of distressed companies, predominantly in the small and medium size company area. While consumer facing sectors continued to be most affected EY said that “stress” was deepening across all sectors.
Monetary policy has tightened from a 0.1% interest rate in December last year to the current level of 3.5% warning that further hikes are likely. Markets are expecting rates to be above 4.0% by mid-2023.One particularly worrying development is the number of fixed rate mortgages that must be renegotiated over next quarters at much higher rates.

Looking Forward
Given the scope for geo-political, economic uncertainty from known factors summarized above plus the “black swan” allowance for unknown developments, plus the valuation risks, more prominent in certain asset classes than others, the first message for 2023, should be diversification, and the second should clearly be scaling your positions according to your risk profile.

scaling your positions according to your risk profile.
KEN’S TEN-2023
• Keep an overweight position in renewable/infrastructure.
• Favour value over growth generally-trade has further to run.
• Stay neutral/overweight in UK equities relative to your benchmark (page15).
• Overweight Far East,including China,Japan and other Asia (pages 16-19).
• Start switching large cap to small cap-valuation/performance.
• Start diversifying away from strong dollar.
• Overweight uranium relative to your commodity benchmark (page 21).
• Amongst UK sectors overweight telecom, health equipment, defence, tobacco and energy (pages 13-14),”not too ESG friendly,I am afraid”.
• Amongst UK sectors underweight luxury, motor related, most capital goods, consumer brands and food retail (pages 13-14).
• Within UK Fixed Interest prefer corporate bonds, preference shares, and zeroes to conventional gilts (page 21)-start rebuilding some fixed interest exposure, especially for cautious and balanced risk profiles.

For equities generally, the two medium term key questions will be when rising interest rates eventually cause equity derating/fund flow switches, government, corporate and household problems, and how the rate of corporate earnings growth develops after the initial snapback. Going forward, withdrawal of certain pandemic supports, uncertain consumer and corporate behaviour and cost pressures are likely to lead to great variations by sector and individual company. Investors will need to pay greater than usual attention to the end 2022 figures and accompanying forward looking statements.


Market Arithmetic

UK Equities continue to remain a relative overweight in my view, based on several conventional investment metrics (see above), longer term underperformance since the Brexit vote, style preference (value overgrowth) and international resource exposure although be aware of the numerous domestic headwinds I have highlighted above.
Value should be favoured over growth, and the FTSE 100 favoured over the FT All-Share. Apart from the style drift, remember that the non-sterling element of leading FTSE 100 companies and sectors is relatively high

By sector, Oil and Mining equities continue to benefit from above average yields, strong balance sheets, dollar exposure and secular demand e.g copper,lithium, cobalt for electronics, construction, electric vehicles etc. Current moves regarding Chinese re-opening the economy would be another positive for this sector.
Remain overweight in pharmaceuticals and health equipment, expect more corporate activity
Telecom-moving to overweight this area after many years of disappointment. Valuations are attractive, many tariffs have an element of index linking, windfall tax risk is low and sector consolidation is increasing.
Defence-a relatively small stock market sector in UK terms but increased global defence spending, negative PMI correlation, high barriers to entry and corporate activity will continue to lift this specialist area.
Tobacco-ESG factors aside, there is undoubted value in this sector (both major UK stocks yield around 7%). Negative correlation with PMI’s and emerging market volume growth still strong.
Banks may enjoy some relative strength from rising interest rates but continue to monitor the recession/loan growth and default risks. These mixed trends were very evident in the recent third quarter figures. Preference Shares as well as ordinary shares have attractions in this area.

Utilities- underweight in non-renewable utility stocks which may suffer from consumer and government pressures, and no longer trade on yield premia, especially against the backdrop of higher gilt yields. Infrastructure may fare better than distribution.
Housebuilders and real estate-expect depressed activity and remember that the rising interest rates have not yet been fully factored into bricks and mortar property yields. Industry data and anecdotal news from both housebuilders and REIT’s suggest further weakness to come.
Retailers are in general suffering from a combination of falling sales and rising costs and clear trends in consumers “trading down” are apparent. Anecdotal evidence shows a clear switch in consumer spending away from discretionary items such as electronics, furniture and certain clothing items. Certain on-line operations e.g Asos additionally are suffering from an element of post-Covid comparison. Food retailers are additionally facing stiff competition from discount “disruptors”. The British Retail Consortium expects another tough year for the sector looking for sales growth of just 2.3% to 3.5% i.e., volume declines.Share price performance over January has been very mixed.

Luxury Goods-Currently highly rated in stock market terms but could be vulnerable, in recessionary conditions and seem to have a strong correlation with property prices, which are expected to decline. However, renewed Chinese interest may help sector.
Domestic Breweries/pubs etc are having a hard time with stalling consumer’s expenditure, supermarket competition and rapidly rising costs.
In general, extra due diligence at stock level more generally will be required as I expect a growing number of profit warnings and downbeat forward looking statements.
However, takeover activity is also clearly increasing with, for example, private equity snapping up UK-listed companies at the fastest pace for more than twenty years. Foreign takeover, stake building is also increasing, current weak sterling being a factor, with Vodafone under scrutiny by a French (who already have BT interest!) investor. Biffa (waste management),MicroFocus(technology),Aveva(software) and RPS(professional services) have all succumbed to foreign takeovers in recent months, much by “strong dollar” American or Canadian organizations.

JAPANESE EQUITIES also remain an overweight in my view, although my recent comment re hedging may “nuanced “now following the extreme currency weakness and surprise intervention/policy change. The prospective price/book ratio of 1.2 is attracting interest of corporate and private equity buyers, while the prospective yield of 2.7% is above the world average and compares very favourably with USA (1.7%). Corporate governance is rapidly improving with diverse boards, reduction of cross holding, higher dividends etc. There are clear signs that inward investment attracted by the pro-growth, pro-deregulation agenda and relatively low costs (average Japanese annual wage $30000 compared with $75000 USA) is increasing. The political agenda is likely to include a more active defence policy,and a shift in income distribution more in favour of middle-class households. Private equity stake building interest in Toshiba and growing activity in the property sector (discount on a discount in a cheap currency) demonstrate the search for value in Japan. Investors may wish to remove currency hedges.
On a valuation basis (see table above) the forward market PE multiple of 11.9 is at a considerable discount to the world, and especially US average (16.7) and certain Japanese investment trusts yield more than UK peers.

EMERGING MARKETS– Very difficult to adopt a “blanket” approach to the region even in “normal times”, but especially difficult now, with so many different COVID, commodity, sectoral mix, debt, geo-political and increasingly natural disaster variables. See chart below The IMF recently warned that several emerging nations could disproportionately suffer from a combination of COVID and adverse reaction to “tapering” by developed counties e.g., FX/Interest rate pressures. Six countries have already defaulted during the pandemic, and the IMF is currently in various stages of bail-out discussions with Pakistan,Argentina,Zambia,Sri Lanka,Ghana,Tunisia and Egypt.

Within the emerging/frontier universe I continue to have a relatively positive view on Asia. The economic fundamentals were discussed on page 16 above, and the forward-looking multiples and dividend growth metrics appear relatively attractive in a global context. Any move by China to open more fully after their severe Covid lockdown, would of course additionally help. Exposure to the entire area can be achieved through several ETF’s and also investment trusts currently on discounts.
If a country-by-country approach is adopted, I have a longer-term positive view on Vietnam
where, the nation is supported by positive demographics, with a population of near 100 million, an emerging middle class, and a recipient of strong foreign direct investment. Qualconn,an Apple supplier, Intel(semi-conductors),Lego and Samsung(mobile phone plant) have all recently invested in new capacity in the country. Other big names moving chunks of production from China to Vietnam include Dell and HP (laptops), Google(phones)and Microsoft (Games Consoles) The economy is expected to grow at around 6.5% this year (7.7% Q2 2022) and approximately 6% in 2023 while current inflation is running at about 3.5%. One more rate hike of 50bp towards the end of the first quarter should mark the end of the tightening cycle. On a relatively low prospective PE based on forecast earnings growth over 20%, Vietnamese equities appear good value.
India, although quite highly rated and a major oil importer, warrants some inclusion in a diversified portfolio although recent corporate scandals(Adani?) require watching. Indonesia, the last of my current Asian ideas benefits from a commodity boom, strong domestic market, low debt, relatively stable currency, forecast 5% GDP growth and 5% inflation.

Caution is required in many South American markets with poor COVID-19 situations, deteriorating fiscal balances, weak investment, low productivity (see below) and governments in a state of transitioning e.g Brazil. However, some stock market valuations currently appear interesting in the region, which, so far, has been relatively unaffected by events in Ukraine. Commodity exposure, deglobalization beneficiary, valuation and recovery from a very low-level account for some year-to-date stock market relative out- performance. Many of these countries also raised interest rates at an earlier stage, allowing relative currency strength, compared with say the Euro,Yen or Sterling.

COMMODITIES– Gold spiked to over $2000 in March 2023, a recent high, when Russia invaded Ukraine, and although currently staging a modest rebound is still only $1924. Central Banks have been aggressively topping up their holdings during 2022.The longer-term prospects for more cyclical plays, however, continue to look brighter. Increased renewable initiatives, greater infrastructure spending as well as general growth, especially from Asia, are likely to keep selected commodities in demand at the same time as certain supply constraints (weather, labour and equipment shortages, Covid, transport) are biting. Current relaxation of the Chinese Covid policy, has certainly provided a boost to copper, aluminium and iron ore.
• Wheat and other grain prices have fallen from the levels reached following the Russian invasion of Ukraine, but the current grain shipment complications, planting/harvesting schedules within the region and extreme global meteorological conditions are expected to lead to further price volatility. If the conflict is prolonged it will affect millions of people living in such places as Egypt, Libya, Lebanon Tunisia, Morocco, Pakistan and Indonesia that could have political consequences. There has been renewed interest in agricultural funds as well as the soft commodities themselves.
• URANIUM-I remain positive on the outlook for nuclear energy (stable base load,carbon-friendly,government U-turns,high energy output) while being aware of some of the well know issues(time, cost and waste disposal).Uranium is expected to experience a material market deficit over the next few years (estimates range between 10% and 30% of global demand).Nearly half of current world mined supply comes from Kazakhstan/Russia. The current price of 50 cents per pound could easily rise to 60c to 70c,as a result of geopolitical tension and a sharply rising cost curve. Apart from capital good companies exposed to the reactor construction/maintenance, I strongly recommend some exposure to my favoured investment trust.

UK FIXED INTEREST-selective exposure now recommended, especially for cautious/balanced risk mandates.

The graph below plots the progress of the UK 10 year gilt yield, which is at 3.33% at the time of writing. The two key things to note are firstly, the extremely low yields prevailing, just a year ago, partly reflecting a prolonged QE programme, and secondly the “panic” level reached at the end of September as domestic and international investors briefly took flight at the prospect of the short-lived Truss/Kwarteng mini budget proposals. Translating this into price terms, the I share all gilt index fell over 35% from the beginning of the year to late September before bouncing about 13% to current levels. This is huge volatility for an asset class often regarded as haven quality!
Having been negative on gilts for several years, I am now recommending gradually re-introducing selected fixed interest stocks to balanced portfolios, especially for cautious and balanced risk mandates.
Gilts themselves will have to contend with huge supply issues over coming quarters. While not falling as much as gilts and having completely different supply/demand dynamics, selected preference shares also fell to reach yield levels of approximately 7%, while good quality corporate bonds now offer yields around 6%. For the more adventurous, annual income yields around 10% and the prospect of capital gains are also also offered on more speculative grades.

GLOBAL CLIMATE CHANGE remains a longer-term theme, and will be built into the many infrastructure initiatives, being pursued by Europe, USA, and Asia. The Russia/Ukraine conflict is accelerating the debate, and hopefully the action. There are several infrastructure/renewable investment vehicles which still appear attractive, in my view, combining well above average yields and low market correlation with low premium to asset value. The recent volatility in natural gas prices has highlighted both risks and opportunities in the production and storage of energy from alternative sources. My favoured vehicles {solar,wind,storage and infrastructure) in the UK investment trust space have delivered capital returns of approx. 10% and additional dividend income of between 5% to7% over 2022 and are expected to continue to deliver healthy total returns.

The MSCI/IPD Property Index showed a further fall in the total return across all properties in December, the decline of 3.3%), taking the full year 2022 decline to 10.1% (capital –14.2%, Income +4.7%). The monthly decline which started in July has affected all sub-sectors with industrial properties faring the worst over the full year. Rental growth however has been positive at with a 3.2% annualized gain in December taking the full year growth to 4.2% Several analysts are down grading their estimates for the sector following the rapid move in UK longer and shorter-term interest rates. Property asset valuations take time to materialise where there is a lag between balance sheet date and results publication in the listed area. Live traded property corporate bonds, however, have already moved sharply lower.
Quoted property giants British Land and Land Securities both reported deteriorating conditions writing their third quarter statements, expecting further valuation declines following rising yields.

Full asset allocation and stock selection ideas if needed for ISA/dealing accounts, pensions. Ideas for a ten stock FTSE portfolio. Stock/pooled fund lists for income, cautious or growth portfolios are available. Hedging ideas, and a list of shorter-term low risk/ high risk ideas can also be purchased.
I also undertake bespoke portfolio construction/restructuring and analysis of legacy portfolios.
Independence from any product provider and transparent charging structure
Feel free to contact regarding any investment project.
Good luck with performance!
Ken Baksh Bsc,Fellow (UK Society of Investment Professionals)

1st February ,2023
Important Note: This article is not an investment recommendation and should not be relied upon when making investment decisions – investors should conduct their own comprehensive research. Please read the disclaimer.
Disclaimer: Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The author is not acting in an investment, tax, legal or any other advisory capacity. This is not an investment research report. The author’s opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies’ regulatory filings, and consult a qualified investment advisor. The information upon which this material is based was obtained from sources believed to be reliable but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication and are subject to change without notice.The author may hold positions in any of the securities mentioned
The author explicitly disclaims any liability that may arise from the use of this material.


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