This Explorer Is Finding Lots of Gold in the ‘Shadow of Its Headframe’

Source: Streetwise Reports   07/29/2020

Troilus Gold triples its gold resource to 8.25 million ounces in two years, and exploration continues.

Troilus Gold

Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) has taken to heart the old adage that the best place to find a mine is beside an existing mine. The Troilus Gold Mine, located in Quebec’s Frôtet-Evans Greenstone Belt and operated by Inmet Mining from 1996 until 2010, produced 2 million ounces of gold and 70,000 tonnes of copper. InMet’s corporate strategy shifted to focus on copper and in a declining gold price environment, it closed the mine in 2010. In 2013, First Quantum acquired Inmet, and subsequently Troilus Gold acquired the asset in 2017.

At the time of acquisition, the Troilus mine had a resource estimate of 2.05 million ounces of gold equivalent Indicated and 0.7 million ounces gold equivalent Inferred. Since then, the company has drilled more than 80,500 meters and just announced the Indicated mineral resource estimate had grown 142% to 4.96 million ounces gold equivalent and the Inferred mineral resource estimate had grown 350% to 3.15 million ounces gold equivalent.

“Troilus is well positioned to benefit from a rising gold price and the asset offers one of the best potential replacement vehicles for gold torque since KL’s acquisition of Detour Gold.” – Stifel GMP

This year, Troilus has continued to explore and has discovered an entirely new mineralized zone, the Southwest Zone, which contributed 583,000 ounces gold equivalent to the newest Inferred reserves. The company recently raised CA$25 million in a bought-deal financing, and all eight securities firms that follow the company have rated it a Buy.

Streetwise Reports sat down with CEO Justin Reid to learn more about the company. Reid explained the genesis of the Troilus gold project: “In the 1980s, gold companies traded on a real multiple, 2.5 times net asset value, 20 times forward cash flow, but a lot of the base metal companies traded at far reduced multiples. Inmet management wanted to get this higher multiple, so they went out and did a North America wide exploration campaign, and in 1986-87, they found Troilus. It was a low-grade bulk tonnage open pit deposit, and in three years they drilled off 5 million ounces in reserves. After that initial definition drilling, they handed the keys to the construction team to put it into production.

“From the moment that they did that, in the early 1990s, Inmet never drilled another exploration hole at Troilus,” Reid said. “They didn’t drill along the belt. They didn’t drill underneath the reserve shell; they never extended the strike of the deposit. Gold was $250. They put the mine into production, and their corporate objectives were elsewhere. But they got the multiple, and that was key. The mine produced for 14 years on a shoestring budget, made money every single year, and produced over 2 million ounces of gold, which was exceptional.”

The Troilus mine was shut down in 2010. “Inmet had found Cobre Panama, which is now the third or fourth largest copper mine in the world, and it was operating Las Cruces in Spain, which, despite some start-up issues, turned into an unbelievable asset,” Reid explained. “Troilus was the absolute nonpriority for Inmet. So Troilus was left with its reserve exhausted, no money to spend on new exploration in a terrible gold market with a strong Canadian dollar and certainly Canadian gold was not in vogue at the time.”

Reid, a geologist by training, also has worked in capital markets, as a senior mining analyst with Sprott/Cormark Securities and then managing director global mining sales at National Bank Financial. “I covered Inmet as an analyst, and had visited the mine a number of times, and our team was very intimate with the mine,” Reid said. “We thought there was a huge opportunity there because there were 2 million ounces below the main pit of low grade bulk tonnage. But other than that, there really wasn’t anything else.

“We signed a three year option agreement where we agreed we would spend a million dollars privately to put a framework of value around that underground and what we found during that time was that there’s just so much low hanging fruit, we had more questions than answers, and we had more zones that had never even had a drill in them. We thought this had to be an unbelievable opportunity, so we took it to market,” Reid said.

The company started trading in January 2018. “What has happened in those two and a half years has been pretty remarkable,” Reid stated. “The first year we drilled 32,000 meters, and we added over 2.5 million ounces. We had a 99% hit rate. What that showed was the underground continues to depth, but, as well, there’s all this open pit potential.”

In 2019, Troilus drilled another 35,000 meters. “All of a sudden we had 6.4 million ounces Indicated and Inferred, of which about 85% is Indicated. And then in the last six months, we’ve drilled another 8,500 meters and we’ve made a major discovery to the Southwest in an area just 3.5 kilometers away from the main pits that was never explored when the mine was in operation,” Reid said.

“Today we are at 8.01 million ounces Indicated and Inferred, and we’re going to put our first engineering out within a few months,” Reid said. “We’ve put the first geologic model around the Troilus deposit and we’re now applying these new models to the rest of the belt.”

With Troilus having been an operational mine, the company benefits from significant existing infrastructure, which it has been upgrading. “We’ve inherited and significantly upgraded over $400 million in infrastructure; that’s going to have a massive impact on the value of the asset, the return to the shareholder, as we move to production,” Reid explained.

There are 40 kilometers of production road off of the main highway that Troilus has spent about $1.5 million upgrading over the last two and a half years to make it production ready. “That road would cost $1.5 million a kilometer to build from scratch. That 40 kilometer road, coupled with the 85 kilometers of power lines to our site, which would cost US$750,000 a kilometer to build, is our market cap,” Reid said.

“Our 50 megawatt substation, which we have completely upgraded with ABB, capable of running up to a 50,000-tonne-a-day mill, is production ready. We have the 60-man camp in place, we have all power, water, septic and all of the infrastructure required to run the mine. And probably most importantly, we have a 6.5 square kilometer tailings facility that’s fully permitted. At 20,000 tonnes a day, we would have six years of capacity without having to do a thing. All of that, if you were to build it in a grassroots development, would be US$400 million of infrastructure. But more than just capital costs, it’s two to three years of permitting that we’re not going to have to do. We are on an active mining lease; we will have to amend that lease to go back into production. But we’re not starting this from the starting line. We’re halfway around the racetrack,” Reid stated. The original mill on site was dismantled, so a mill will need to be built.

Troilus is the largest land holder, with more than 1,000 square kilometers, in Quebec’s Frôtet-Evans Greenstone Belt. The company recently acquired 68,000 hectares through staking and a claim purchase from O3 Mining Inc., and on July 21 announced the acquisition of another 422 claims, expanding its property by 23,000 hectares.

Figure 1

Reid stressed that the project offers flexibility. ‘We have an open pit production from J4 and J5, from Z87 and from Z87 South. We’ve extended the Z87 South ore body by 600 meters, from surface off the edge of the pit. At J4, we know that the underground ore body continues there, and part of our future exploration will be defining that as well.”

Looking ahead, Reid notes Troilus plans to release a preliminary resource estimate (PEA) in the fall. “The PEA will be the first framework of valuation that we’re going to put around Troilus. We expect it to be a low capex, long life, big volume producer, and we are excited to get that to the market in the coming months,” Reid said.

The company has 114 million shares issued and outstanding, and around 26 million warrants outstanding. “We’re incredibly proud of our ownership structure,” Reid said. “We have over 50 institutions on our register, comprising 80% ownership, and they don’t trade a lot but when we need capital, they’ve invested and they’ve been there over and over again. Some of our largest funds include Sprott Asset Management, Maple Leaf Funds, Ruffer, Gold 2000, Mackenzie, Goodman, Sun Valley and Delbrook. We’re also incredibly proud of our Quebec ownership, representing the major institutional Quebecois funds. Troilus insiders own another 10%; we bought all of our shares in the market.”

In June, Troilus closed an upsized, oversubscribed CA$25 million bought-deal financing that was led by Cormark Securities, Laurentian Bank Securities and Stifel GMP, and included Haywood Securities, Canaccord Genuity and Red Cloud Securities.

All of the eight brokerage firms cover Troilus have buy ratings on the company and target prices range from CA$1.80 to CA$4.50 per share. On July 7, Stifel GMP named Troilus as one of a handful of gold companies that offer “exceptional torque to a rising gold price,” and compared the company to Detour Gold, stating, “Troilus is well positioned to benefit from a rising gold price and the asset offers one of the best potential replacement vehicles for gold torque since KL’s acquisition of Detour Gold.”

Analyst Pierre Vaillancourt of Haywood Securities wrote, “Troilus Gold Corp. is well positioned among exploration peers with a strong balance sheet, a growing resource and pending economic studies. We look for the company to develop the Southwest zone into an open-pittable target that could complement the existing resource or possibly become a starter pit.”

Jacob Willoughby of Red Cloud Securities wrote on July 29, “We expect the shares of Troilus to materially re-rate over the next 6–12 months as the company releases a PEA and demonstrates organic resource expansion potential along strike from the J Zone, Z87 and the new Southwest Zone areas.”

Cormark analyst Richard Gray wrote on July 29, “Troilus shares trade at just 0.31x NAV and an EV/oz of total resource $12/oz, valuations that leave the stock among the most undervalued in our developer coverage universe. While the shares are up 120% this year versus a 46% increase in the GDXJ and a 29% increase in the gold price, they remain attractively priced, especially when considering the project has the size and scope to be an attractive acquisition target for senior and mid-tier producers looking for large and undervalued resources in what is one of the safest jurisdictions in the world.”

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Troilus Gold. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Additional disclosures:

Disclosures from Stifel GMP, Precious Metals, July 7, 2020

Important Disclosures and Certifications
Each research analyst and associate research analyst who authored this document and whose name appears herein certifies that: (1) the recommendations and opinions expressed in the research report accurately reflect their personal views about any and all of the securities or issuers discussed herein that are within their coverage universe; and (2) no part of their compensation was, is or will be, directly or indirectly, related to the provision of specific recommendations or views expressed herein.

Company-Specific Disclosures:
1. Stifel Canada or an affiliate has, within the previous 12 months, provided paid investment banking services to the issuer.
2. Stifel or an affiliate act as corporate broker and/or adviser to the Company.
11. Stifel Canada or an affiliate managed or co-managed a public offering of securities for the subject company in the past 12
months.

Disclosures from Haywood Securities, Troilus Gold Corp, July 29, 2020

Haywood Securities, or certain of its affiliated companies, may from time to time receive a portion of commissions or other fees derived from the trading or financings conducted by other affiliated companies in the covered security. Haywood analysts are salaried employees who may receive a performance bonus that may be derived, in part, from corporate finance income.

Haywood Securities, Inc., and Haywood Securities (USA) Inc. do have officers in common however, none of those common officers affect or control the ratings given a specific issuer or which issuer will be the subject of Research coverage. In addition, the firm does maintain and enforce written policies and procedures reasonably designed to prevent influence on the activities of affiliated analysts.

Analyst Certification: I, Pierre Vaillancourt, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

Of the companies included in the report, the following Important Disclosures:
▪The Analyst(s) preparing this report (or a member of the Analysts’ households) have a financial interest in Troilus Gold.

▪ Haywood Securities, Inc. has reviewed lead projects of this company and a portion of the expenses for this travel have been reimbursed by the issuer.

▪ Haywood Securities Inc. or an Affiliate has managed or co-managed or participated as selling group in a public offering of securities for Troilus Gold (TLG-T) in the past 12 months.

Disclosures from Red Cloud Securities, Troilus Gold Corp., Exploration Update, July 29, 2020

Part of Red Cloud Securities Inc.’s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.

Company Specific Disclosure Details

3. In the last 12 months preceding the date of issuance of the research report or recommendation, Red Cloud Securities Inc. has performed investment banking services and has been retained under a service or advisory agreement by the issuer.
4. In the last 12 months, a partner, director or officer of Red Cloud Securities Inc., or the analyst involved in the preparation of the research report has received compensation for investment banking services from the issuer.

 

Analyst Certification
The Red Cloud Securities Inc. Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report; or any companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Disclosures from Cormark Securities, Troilus Gold Corp., Morning Meeting Notes, July 29, 2020

Analyst Certification: We, Richard Gray and Brandon Smith, hereby certify that the views expressed in this research report accurately reflect our personal views about the subject company(ies) and its (their) securities. We also certify that we have not been, and will not be receiving direct or indirect compensation in exchange for expressing the specific recommendation(s) in this report.

The Disclosure Statement Chart for Troilus Gold can be found on the website.

 

Week in review: Tech giants shine through chaos

By Lukman Otunuga, Research Analyst, ForexTime

The week kicked off with a bang as Gold charged through the 2011 record high of $1921 on Monday amid Dollar weakness, negative real yields and US-China tensions.

Interestingly, global equities pushed higher despite Gold prices making history as investors weighed expectations for another U.S stimulus package against the coronavirus menace.

King Dollar was beaten black and blue this week, depreciating against every single G10 currency and experiencing its worst monthly decline in 10 years! As doubts mount over the pace of US economic recovery in the face of rising coronavirus cases and pre-election jitters kick in, the Dollar could remain unloved and depressed.

In our mid-week technical outlook, we discussed the possibility of the Dollar Index (DXY) slipping below the 93.00 support level. Prices are trading around 92.80 as of writing.

As widely expected, the Federal Reserve held interest rates steady in July. However, the central bank left investors feeling uneasy after warning about the fate of the economy depending ‘significantly on the course of the virus’. To worsen matters, the US economy shrunk the most in post-war history by contracting by 32.9% in the second quarter of 2020.

On the bright side, four of the largest US technology companies announced colossal earnings, against the backdrop of slowing global growth and instability caused by COVID-19.

Apple’s revenues defied expectations, rising 11% to a new record in Q2 despite the disruptions and store closures. Amazon’s revenues were breath-taking, increasing by a whopping 40% as consumers across the globe turned to the online retail giant during lockdown. Even Facebook’s revenues increased by 11% despite the advertising boycott over hate speech in July.

Overall, corporate earnings have not been as bad as initially feared with S&P 500 companies beating expectations at a steady pace. However, it is still early to come to any meaningful conclusions.

As we head into the August, markets may remain volatile and highly sensitive to not only coronavirus related developments but US election uncertainty.

S&P 500 challenges 3280

After experiencing gut-wrenching losses all the way back in Q1, the S&P 500 has clawed back those losses and is currently trading 0.5% higher year-to-date.

Looking at the technical, the Index is bullish on the daily timeframe as there have been consistently higher highs and higher lows since April 2020. A solid breakout above 3820 could encourage an incline towards the yearly high at 3393.52.

Bitcoin finds comfort above $11000

Bitcoin has spent most the trading week above the $11000 resistance level. If bulls can secure a weekly close above this level, this could signal a move higher towards $11500. Technical lagging indicators such as the moving averages and MACD favour the bullish outlook.

However, a decline back under $11000 may inspire bears to attack $10000.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

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Quarterly reports will be published in the US today – 31.7.2020

By IFCMarkets

Top daily news

In July, the dollar index decline was the highest over 10 years. The rise in silver prices in July was the most significant in more than 40 years, and gold – in 4 years. The largest hedge funds fear the negative consequences of the global central banks’ monetary emissions, which are intended to help the economies of developed countries hit by Covid-19. It should be noted that the demand has so far applied to precious metals only. Commodity futures quotes remain stable.

Forex news

Currency Pair Change
EUR USD +0.08%
GBP USD +0.27%
USD JPY -0.08%

The US dollar index has not yet been able to reverse upward and today again updated the minimum since May 2018. In July 2020, it plunged 5.3%, the highest monthly decline in the past 10 years. The main reason for this is the risk of new, additional Fed emissions (their volume may amount to $ 1-3.5 trillion) to support the American economy, affected by the coronavirus. Meanwhile, at the end of March, the US authorities already allocated $ 2 trillion for the same purposes. So far, the impact has been weak. Q2 GDP fell by 32.9%. Unemployment remains high. Eurozone GDP data is now available. It decreased by 12.1% in the Q2, which is markedly better than in the US. This difference supports the EURUSD rate. Two indicators, PCE Price and Michigan Consumer Sentiment,  are due in the US today. The forecasts look rather negative.

Stock Market news

Indices Change
S&P 500 -0.38%
Dow Jones Index -0.85%
Nasdaq 100 +0.43%
GB 100 Index -0.05%
FR 40 +0.21%

On Thursday, there was no single trend in the American stock market. Relatively weak GDP data for the 2nd quarter (-32.9%) and weekly unemployment (1,434 thousand Initial Jobless Claims) were offset by strong quarterly reports of the largest Internet companies: Apple, Amazon.com, Alphabet (Google) and Facebook … As a result, the Nasdaq rose, while the Dow and S & P500 declined. Merck & Co, Exxon Mobil, Chevron, Caterpillar and a number of other large companies of the “old” economy will report their quarterly results today. Their reports may disappoint investors, as can the macroeconomic data on consumer sentiment and spending.

Commodity Market news

Commodities Change
Brent Crude Oil +0.42%
WTI Crude +0.6%

Today oil quotes continue to drop. Investors fear a decline in oil demand due to the growing number of Covid-19 cases in the US. At the same time, OPEC + is going to increase oil production by 1.5 million barrels per day from August 1. Arabica coffee prices continued their growth and reached their 3-month high. Robusta has updated its  7-month maximum. Nestle and Starbucks notice an increase in global coffee demand.

Gold Market News

Metals Change
Gold +1.49%

Gold quotes resumed their growth today amid the weakening dollar. Gold rose in price by 10.7% in July 2020,  which was the maximum growth over 4 years. The monthly growth of silver quotes by 33% was the highest since 1979. The main reason for this was the purchases by major hedge funds against the background of the world central banks’ monetary emissions to stimulate their economies, affected by Covid-19.

By IFCMarkets

Japanese Candlesticks Analysis 31.07.2020 (GOLD, NZDUSD, GBPUSD)

Article By RoboForex.com

XAUUSD, “Gold vs US Dollar”

As we can see in the H4 chart, the uptrend continues. After finishing a Harami pattern not far from the resistance level and reversing, XAUUSD has returned to the level. Later, the price is expected to continue trading upwards. In this case, the upside target may be at 1995.00. At the same time, an alternative scenario implies that the pair may correct towards 1920.00 after updating the highs.

XAUUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD, “New Zealand vs. US Dollar”

As we can see in the H4 chart, the ascending tendency continues. After forming a Harami pattern close to the support level, NZDUSD has started reversing. At the moment, the price is expected to correct a little bit from the resistance area and then resume growing to reach 0.6740. Still, there is another scenario, which suggests that the instrument may correct towards the support level at 0.6620.

NZDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

As we can see in the H4 chart, the pair is still forming the ascending tendency. After forming a Shooting Star pattern close to the resistance level, GBPUSD has started reversing. At the moment, the price is expected to correct a little bit and resume growing. In this case, the upside target is at 1.3220. However, there might be another scenario, according to which the price may reverse and start a more significant pullback towards 1.2985.

GBPUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Fibonacci Retracements Analysis 31.07.2020 (BITCOIN, ETHEREUM)

Article By RoboForex.com

BTCUSD, “Bitcoin vs US Dollar”

As we can see in the daily chart, BTCUSD has slowed down its growth at 76.0% fibo (11480.00) and may start a new correction, which is confirmed by the divergence on MACD. The key correctional target may be the long-term 50.0% fibo at 8880.00. However, if the asset breaks 76.0% fibo at 11480.00, the instrument may continue trading upwards to reach the fractal high at 13857.20.

BTCUSD_D1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

The H4 chart shows that after breaking the high at 10505.60, the rising impulse has reached the post-correctional extension area between 138.2% and 161.8% fibo at 10964.46 and 11325.01 respectively. one may assume that the correction may return the price to 10505.60.

BTCUSD_H4
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

ETHUSD, “Ethereum vs. US Dollar”

As we can see in the daily chart, after breaking the high at 288.98, Ethereum is moving towards the post-correctional extension area between 138.2% and 161.8% fibo at 365.00 and 411.85 respectively. The current slowdown may indicate a possible pullback to return to 288.98. The key support is at 240.90, a breakout of which may result in a reversal.

ETHUSD_D1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H4 chart, the divergence made the pair start a new correctional decline. The correctional targets may be 23.6%, 38.2%, and 50.0% fibo at 315.92, 299.69, and 286.36 respectively. The resistance is the local high at 342.60. if the price breaks this level, the asset may continue trading upwards to reach the post-correctional extension area between 138.2% and 161.8% fibo at 365.00 and 411.85 respectively.

ETHUSD_H4

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

It’s a myth that companies must put shareholders first – coronavirus is a chance to make it stop

By Donncha Kavanagh, University College Dublin and Jeroen Veldman, City, University of London

The COVID-19 crisis has led many to argue that the current crisis has exacerbated the inequalities inherent in the current economic order. There is a general sense that a new form of social contract is urgently required, even from places where you might not have expected to see such arguments, such as The Economist and the Financial Times.

But what has tended to be overlooked is how such a new social contract may also require fundamental changes to the nature of companies. Concerns about this are part of a broader discussion that is more than a decade old.

Many argue that companies need to focus more on the long term, and take account of all their stakeholders’s interests. We’ve heard this, among others, from BlackRock chief executive Larry Fink, Bank of England chief economist Andy Haldane, and the US Business Roundtable.

What is at stake in this debate is the notion that the corporation’s purpose is to maximise shareholder value – sometimes known as the “shareholder primacy model”. As the current calls for social reform in the wake of the COVID-19 crisis again show, it is widely felt that this model induces managers to focus on enhancing short-term market value at the expense of the longer term.

‘At your service’.
Mikael Kristenson, CC BY-SA

This enables companies to prioritise short-termist shareholder payouts in the form of dividends and share buybacks. Not only is this short-termism likely to damage the corporation’s long-term viability, it also creates a situation in which upside gains are typically allocated to shareholders, while downside risks are pushed onto employees and states.

This short-termism has also been routinely identified as one of the main contributing factors in the global financial crisis of 2007-09, as well as rampant inequality, climate change and the collapse of ecosystems around the world.

The shareholder myth

The notion that a corporation’s primary purpose is to look after its shareholders is widely believed and taught, but is in fact a myth with no basis in corporate law. The corporation is a separate legal entity. Because ownership of assets and liabilities are attributed to this entity, corporations are not “owned” by shareholders.

Instead, shareholders have limited legal rights, which do not include the right to directly control directors’ or managers’ behaviour. Indeed, shareholders have no special claim on a corporation’s economic returns. Their right to dividends is the same as a waiter’s right to tips: an expectation that is unlikely to be enforceable in court.

When you realise these things, it gives you a different view of company ownership and control. The idea that the authority structure does not originate with the shareholders delivers a picture in which boards balance interests between many stakeholders – with different agendas, time horizons, powers and responsibilities – all connected to the distinct legal entity that is the corporation. Importantly, this allows us to reimagine the corporation, its supporting institutions, and the processes by which stakeholders can meaningfully be represented.

The pandemic has shown how reforms are possible in the corporate world. The unprecedented government financial support has come with conditions such as companies not using it for dividends or share buybacks, and having to be domiciled and make tax payments in the country in question. Regulators and company law specialists have also responded with impressive speed to the needs of companies during the crisis, adapting insolvency rules and enabling virtual annual general meetings.

Meanwhile, responsible investors have stepped up to the plate by stating that their long-term interest is with healthy companies, rather than immediate dividends and buybacks. Funds that trade indices of companies with good environmental, social and governance (ESG) rankings have been doing well during the crisis. This has led some to argue that socially responsible investment is not just necessary for sustainability, but also an effective strategy for managing risk.

What next

On the back of these welcome developments, it is now time to comprehensively rethink corporate governance. One example is the Corporate Governance for Sustainability statement that was published earlier this year by a group of leading academics, including Jeroen Veldman. The statement proposes, for example, that companies would be legally required to implement a corporate sustainability strategy and disclose risks around not meeting ESG standards, and that directors would have a duty to meet these obligations.

Beyond theory, we also need to identify viable institutions that allow such reforms to be implemented in practice. The good news is that we see intriguing initiatives emerging to deal with disputes around corporate governance.

The Workplace Relations Commission in Ireland is an independent, statutory body that promotes good workplace relations by offering mediation, conciliation, facilitation and advisory services to companies. Where disputes do escalate, Ireland’s labour court seeks to ensure they do not go to a court of law by providing impartial, non-binding adjudication based on employment law.

In the Netherlands, the Enterprise Chamber, which is part of the Amsterdam court of appeal, adjudicates in disputes between corporate stakeholders including the board, corporate officers, shareholders and employees. Works councils can bring a case before the chamber if they are not informed in a timely manner about important changes. Stakeholders, including trade unions, shareholders and the company, can all request that the chamber carry out an inquiry.

When no agreement can be reached, the chamber has far-reaching powers to solve the problem. It can nullify company resolutions, suspend or dismiss directors, appoint temporary directors, allow temporary deviations from a company’s articles of association, temporarily transfer shares, and even dissolve the company.

Both are examples of institutions that help acknowledge stakeholder interests and get directors to fulfil their fiduciary duties to the corporation as a whole. If we are to create a new social contract as we emerge from COVID-19, institutions like these will be important building blocks.The Conversation

About the Author:

Donncha Kavanagh, Professor of Information & Organisation, University College Dublin and Jeroen Veldman, Senior research fellow, City, University of London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

The Analytical Overview of the Main Currency Pairs on 2020.07.31

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.17814
  • Open: 1.18462
  • % chg. over the last day: +0.47
  • Day’s range: 1.18383 – 1.19088
  • 52 wk range: 1.0777 – 1.1781

The US dollar continues to lose ground against its main competitors. EUR/USD quotes have reached the round level of 1.1900. The greenback is still under pressure after the biggest decline in US GDP ever. In the second quarter, the country’s economy slowed down by 32.9%. According to the Statistical Office of the European Union, the region’s economy collapsed by 12.1% in the second quarter of 2020. The US currency has the potential for further decline. Positions should be opened from key levels.

The news feed on 2020.07.31:
  • – Personal spending in the US at 15:30 (GMT+3:00).
EUR/USD

Indicators point to the power of buyers: the price has fixed above 50 MA and 100 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy EUR/USD.

Stochastic Oscillator is near the oversold zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.1835, 1.1790, 1.1720
  • Resistance levels: 1.1900, 1.1950

If the price fixes above 1.1900, further growth of EUR/USD quotes is expected. The movement is tending to 1.1940-1.1960.

An alternative could be a decline in the EUR/USD currency pair to 1.1790-1.1750.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.29848
  • Open: 1.30877
  • % chg. over the last day: +0.76
  • Day’s range: 1.30686 – 1.31445
  • 52 wk range: 1.1466 – 1.3516

GBP/USD quotes continue to show a steady bullish trend. Since the beginning of this week, the British pound has added more than 350 points in price. At the moment, the GBP/USD currency pair is testing the 1.3145 mark. The 1.3070 mark is a local support. In the near future, a technical correction of the trading instrument is possible. Positions should be opened from key levels.

The news feed on the UK economy is calm.

GBP/USD

Indicators signal the power of buyers: the price has fixed above 50 MA and 100 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which also indicates the bullish sentiment.

Trading recommendations
  • Support levels: 1.3070, 1.3015, 1.2950
  • Resistance levels: 1.3145, 1.3200

If the price fixes above 1.3145, further growth in GBP/USD quotes is expected. The movement is tending to 1.3200-1.3230.

An alternative may be a decline in the GBP/USD currency pair to the round level of 1.3000.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.33399
  • Open: 1.34243
  • % chg. over the last day: +0.61
  • Day’s range: 1.34048 – 1.34357
  • 52 wk range: 1.2949 – 1.4668

The USD/CAD currency pair is consolidating. There is no defined trend. At the moment, the local support and resistance levels are 1.3400 and 1.3450, respectively. Investors expect additional drivers. Important economic releases from Canada are in the spotlight today. We also recommend paying attention to the dynamics of “black gold” prices. Positions should be opened from key levels.

The news feed on Canada’s economy is calm.

USD/CAD

Indicators signal the power of buyers: the price has fixed above 50 MA and 100 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy USD/CAD.

Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.3400, 1.3375, 1.3335
  • Resistance levels: 1.3450, 1.3480, 1.3500

If the price fixes above 1.3450, further growth of USD/CAD quotes is expected. The movement is tending to 1.3480-1.3500.

An alternative may be a decline in the USD/CAD currency pair to 1.3370-1.3350.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 104.906
  • Open: 104.714
  • % chg. over the last day: -0.18
  • Day’s range: 104.186 – 104.860
  • 52 wk range: 101.19 – 112.41

Sales still prevail on the USD/JPY currency pair. The trading instrument has set new local lows again. At the moment, USD/JPY quotes are consolidating in the range of 104.20-104.80. The demand for greenback remains at a quite low level. Nevertheless, a technical correction is possible in the near future. We recommend paying attention to the dynamics of US government bonds yield. Positions should be opened from key levels.

Today, the news feed on Japan’s economy is calm enough.

USD/JPY

Indicators do not give accurate signals: the price is testing 50 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/JPY.

Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 104.20, 104.00
  • Resistance levels: 104.80, 105.30, 105.65

If the price fixes above 104.80, USD/JPY quotes are expected to recover. The movement is tending to 105.20-105.50.

An alternative could be a decline in the USD/JPY currency pair to 104.00-103.80.

by JustForex

Dollar descends deeper into the abyss

By Lukman Otunuga, Research Analyst, ForexTime

There was no love for the Dollar this week as economic prospects improved outside of the United States while surging coronavirus cases across the country raised doubts about the pace of economic recovery.

Over the past few weeks, the Greenback has gone from hero to zero thanks to a range of factors including, shaky macro fundamentals, jitters ahead of November’s presidential election and the Federal Reserve pumping massive amounts of Dollar liquidity into markets.

The road ahead for the Dollar is likely to be filled with many obstacles, especially after the US suffered its worst economic decline on record by contracting by 32.9% in the second quarter of 2020. As July slowly comes to an end, the Dollar Index (DXY) is on the verge of experiencing its worst month in 10 years!

Looking at the technical picture, prices have tumbled almost 5% this month – dragging the DXY towards the 92.50 support level. A monthly close under this point could encourage a decline towards 92.20 and 91.50, respectively.

EURUSD slams into 1.1900.. what next?

A broadly weaker Dollar has injected Euro bulls with enough inspiration to charge towards the 1.1900 resistance level.

The last time the EURUSD touched such levels was back in August 2018. Prices remain heavily bullish on the daily charts with a strong close above 1.1900 opening a path towards 1.1200. If 1.1900 fails to budge, then prices could retrace to 1.1830 and 1.1780, respectively.

AUDUSD eyes 0.7300

Expect the AUDUSD to push higher in the week ahead if a weekly close above 0.7150 is achieved. Such a move may open the doors towards 0.7300 which is roughly 150 pips away.

Pound smiles into the weekend

Surprisingly, the Pound has appreciated against every single G10 currency this week despite the uncertainty surrounding Brexit negotiations.

The GBPUSD looks mighty bullish on the daily charts with the upside momentum potentially taking prices towards the 1.3200 resistance level.

Commodity spotlight – Gold

Gold is on route to concluding the trading week almost 4% higher thanks to a broadly weaker Dollar, dovish Federal Reserve, pre-election jitters and rising coronavirus cases in the United States. Buying sentiment towards the precious metal may remain robust in the near term as negative themes fuel risk aversion. Looking at the technical picture, Gold is trading less than $30 away from the psychological $2000 level. A weekly close above $1950 may open the doors to fresh all-time highs in the week ahead.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

After the Fed: the EUR/USD to attack 1.2000 due to further USD weakness?

By Admiral Markets

Economic events calendar

Source: Economic Events July 31, 2020 – Admiral Markets’ Forex Calendar

In our last technical piece for the EUR/USD we wrote:

[…]That said, the Euro should continue to outperform the US dollar and with US yields about to break lower, the path up to 1.1700/1800 in the days to come seems levelled.[…]

and as the chart below illustrates, the currency pair did indeed make its way straight up towards this region.

And after the Fed rate decision and press conference on Wednesday, it seems likely that the US dollar will continue to underperform, particularly against the Euro. The Euro should see further strength after EU leaders reached a deal in regards to a post-pandemic recovery package to support the EU economy, in addition to nearly unlimited monetary support from the ECB.

Besides the fact that the Fed held interest rates steady, as expected, its statement wrote that:

“Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year”,

expressing a commitment to maintain its QE program, and the array of lending and liquidity programs associated with the virus response which were extended to, at least, the end of 2020, as announced before the Fed meeting on Tuesday.

A translation: expect the Fed to continue to weaken the US dollar and aim to put further pressure on US yields, with 10-year US yields to be expected to go for a run as low as 0%.

Disappointing US economic projections (such as today’s personal spending data at 1230pm GMT) could accelerate this development, even though, from a technical perspective, the EUR/USD seems quite extended on the upside.

While we consider the chances of a consolidation between 1.1600 and 1.1800 to be elevated, we’d prefer a short-term correction towards 1.1400/30 since this would deliver a more attractive risk-reward ratio for a trading setup.

Technically, the mode stays bullish on a daily time-frame as long as we trade above 1.1150/1200:

EUR/USD daily chart

Source: Admiral Markets MT5 with MT5-SE Add-on EUR/USD Daily chart (between May 31, 2019, to July 30, 2020). Accessed: July 30, 2020, at 10:00pm GMTPlease note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the EUR/USD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that after five years, it was down by 7.3%.

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Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
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By Admiral Markets

$100 Silver On Its Way

By TheTechnicalTraders

Chris Vermeulen and Kerry Lutz talk Gold and Silver in today’s video podcast of Financial Survival Network. Listen to Chris and Kerry talk about Gold, Silver, Bitcoin, and Oil. Silver is on its way to $100 once it passes resistance at $44.

Stay in the know with our latest research and alerts on Gold, Silver, Oil, and Equities at TheTechnicalTraders.com