Torrid times?

Traders have had to battle with torrid markets for the second week as the Greek crisis began to spread it’s tendrils far and wide, even among AIM’s most hardened investors, the word bleak has been heard many times this week with reference to the future of PIGS . Just as an informative piece have a read of this article. Gives quite an honest opinion as to what is currently fueling stocks at the moment.

As always, however, there have been a few bright sparks.

For example IPSO Ventures, the micro-cap intellectual property company, saw shares rocket (up 2p, about 120 per cent today, at 3.6p) after the Cedar Assets Group took a 25 per cent stake in the company.

IPSO has been in the doldrums since the financial crisis put the squeeze on early stage technology businesses. Almost three years ago the shares were worth over 80p. Now, priced below 3p it seems this new investor sees a brighter future ahead.

Eurozone fears: The Greek crisis has dampened investors’ appetite

Friday’s other movers included hedge fund manager RAB Capital (up 1.4p today, at 9.5p), which plans to de-list and go private through a management buy-out. Meanwhile consultancy firm WYG (down 6.5p, about 76.5 per cent today, at 2p) unveiled plans for a capital reorganisation, which includes a dilutive £32 million cash call.

The rest of the market has been swept away in a sea of red, as falling commodity prices and Eurozone fears spooked investors.

The FTSE AIM100 index lost 2 per cent, in the past five trading days. Now standing at 3,818, London’s small-cap index is at its lowest level so far for 2011. It has fallen almost 10% in six months.


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‘It’s been a torrid week,’ said Nick Searle, a senior trader at Evolution Securities. ‘We’ve seen a lot more people taking risk off the table.

‘Even on the AIM market most things have been focused on the macro-picture, and Greek concerns continue to weigh on anyone thinking about buying UK shares.” In particular the trader pointed to weakness in the resource sector, which is of course a big sector for the junior market.

One of Thursday’s casualties was technology group Seeing Machines (unchanged today, at 1.875p), whose technology is improving health and safety in mining vehicles.

The shares dropped as much as 30 per cent after a trading update disappointed investors, as it warned of a delayed installation that will cause full year results to fall below market expectations. The timing of this set-back is particularly unfortunate, as current chief executive Nick Cerneaz is set to leave the firm next month.

Despite the miss, Seeing Machines emphasised that it remains confident that it will deliver growth through the 2012 financial year – helped by the receipt of delayed revenues as well as a series of orders won in the current period.

Mongolian oil explorer Petro Matad (up 12.5p today, at 108p) revealed that a five well winning streak had come to an end on Thursday. The DT-6 well failed to find hydrocarbons but chairman Douglas McGay described the drilling programme’s first dry well as a ‘statistically acceptable’ result.

Nonetheless against the backdrop of a weak market it is no surprise that investors hit the sell button, and the shares shed almost 25 per cent.

Investors in Chariot Oil & Gas (up 13.25p today, at 155.75p) got a glimpse of some long awaited news, as the Namibian explorer struck a deal to farm-out two of its licenses. In total the junior oil firm has eight licences, which are estimated to have 15.5 billion barrels of oil.  Talks are still underway to farm-out a third licence.

Chariot said it’s pleased with the deal, but as talks are ongoing the details remain confidential. It seems investors weren’t impressed with the ambiguity, as the shares slid almost 20 percent on Thursday.

Wednesday saw Mediterranean Oil & Gas (up 0.125p today, at 11p) and Hardy Oil & Gas (up 3p today, at 225p), rise 13 per cent and 12 per cent respectively. The former signed a £12 million off-take deal for the Guendalina gas field, which it is developing alongside ENI, while Hardy announced a new gas discovery off the east coast of India.

Moving in the opposite direction was GMA Resource (unchanged today, at 0.75p), which tumbled over 30 per cent after an independent consultant said the group’s main project, Tirek-Amesmessa, is a high-risk venture. Instead he advised GMA refocus on opportunities that offer more realistic chances of success.

Junior Russian oil firm PetroNeft (up 0.5p today, at 28.375p) plunged 20 per cent after it slashed its production targets following disappointing drilling results. Earlier this week Independent Resources (unchanged today, at 43.5p) was the most notable riser after it shot up over 45 per cent on Monday. The move followed Italian press reports that claimed the firm’s Rivara gas storage project was going to get environmental approval.

Rivara may ease the strain on Italy’s gas supplies by adding more than 20 per cent to ‘peak deliverability’, the group said
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