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Crypto And Blockchain Acquisitions Hit Record High


Posted by Michael Kern

on Wednesday, 24 October 2018 08:05

crypto

As the cryptocurrency market continues to struggle to break free from bear territory, opportunists are looking at the slump as their chance to catch a deal. Blockchain and crypto M&A deals have surged this year, climbing from 47 in October 2017 to 115 currently. And according to JMP, it could reach as high as 145 by the end of 2018.... CLICK for complete article



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Wealth Building Strategies

Canadian Commercial Real Estate Trends: Altus Group Report


Posted by Hawkeye Wealth

on Tuesday, 23 October 2018 14:32

Commercial real estate

How is Investment Real Estate doing in Canada?

According to the latest snapshot report by Altus Group, a real estate consulting and data analytics firm, demand for investment property continues to be strong despite some roadblocks.

Every quarter, Altus Group surveys over 200 investors, owners, lenders, analysts and other market stakeholders and real estate professionals for their perspective on Canadian real estate investments.

As recent news (including one of our latest articles) already pointed out, the large availability of private capital is driving up prices in a number of assets across the investment spectrum. Real estate is no different, with some sectors seeing cap rates compressing more than others.

According to the report, overall capitalization rates compressed slightly to 5.03%, compared to 5.13% from a year ago. Cap rate compression is usually attributed to increased prices due to higher competition for properties. As more capital seeks investment real estate, prices are bid up even though properties haven't necessarily increased their Net Operating Income (NOI).

Consider the High-Grade, Class "AA" Office Sector for example. Altus reports that cap rates for Toronto and Halifax moderately increased, with most other markets marginally decreasing. Given strong demand for investment real estate, the high-quality office product in core markets becomes a more highly-competitive, scarce commodity driving investors to look for yields in other more attractive markets.

A similar effect happens in the multi-family sector. Higher prices for residential product amid the housing affordability crisis we are facing in major Canadian markets is driving cap rates down, forcing investors to seek opportunities in secondary and tertiary markets, while also forcing home buyers to postpone their decision to buy. The only markets not experiencing cap rate compression are Ottawa (which saw a marginal increase) and Halifax (which remained flat).

For industrial real estate, the investment environment is very attractive. Canada's eventful last week, with LNG Canada's final investment decision on a $40-billion project and the redrawing of the new NAFTA (USMCA) negotiations, will bring many benefits to the economy. Manufacturing and other industrial-real estate related properties stand to benefit the most from such current events.

Thus, it comes as no surprise that the top three product/market combinations advanced by Altus' survey are all multi-tenant industrial in Ottawa, Edmonton, and Calgary. Having the highest average cap rate across markets from all asset classes (at 5.58% for single tenant industrial), increasing rents across Canada due to demand outpacing supply, and advances in e-commerce should make for a great case for the sector.

What about the impact of interest rate increases? For the short to medium term, Altus notes that commercial real estate in Canada has not caught up entirely to the impact of the recent increases, so cap rates are expected to hold steady with moderate increases in certain markets. 

Strong demand outpacing supply and large availability of capital is great economic news for the country overall. Despite the cautious approach from investors in such a high-priced market, there is good reason for the large investment volumes seen in the recent quarters.

To access Altus Group's Investment Trends Snapshot, click here.
 
Sign up for Hawkeye's Newsletter for Market Updates, Upcoming Events and Private Offerings by clicking here.


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Stocks & Equities

Why Invest in a company looking for ‘pencil lead’?


Posted by A. Paul Gill

on Monday, 22 October 2018 14:02

There are times that investments look odd on the surface but make a lot more sense once you perform due diligence.  With debate circulating over the production of oil and pipelines in Canada, pencil lead might just be what we need to help move Canada to a ‘green economy’.

Graphite pencil lead is only one form of a very common substance – carbon.  Coal, another form of carbon shaped our modern Industrial Revolution and the coal-bearing areas of Ozark mountains made America an Industrial giant in the early 20th century.  Another form of carbon creates diamonds, one of the hardest and most beautiful gemstones in the world.  The picture below does not show diamonds, but its cousin flake graphite, taken as samples from Lomiko’s La Loutre property in Quebec.

pgilloct18-1

Graphite is best known as pencil lead, but it has an incredible array of new uses that make it a miracle material.  A primary use for graphite is to create refractories, which are heat-resistant materials used in manufacturing steel, molds and as insulating bricks in steel foundries.  In addition, graphite is useful as a dry lubricant in area liquids can’t be used, heat sinks in outdoor and stadium lighting, vehicle brakes, and as an additive in manufacturing.

However, graphite’s primary use and the reason it is considered a critical element by both the European Union and America is its crucial role in the green economy.  Demand for graphite is shown in the chart below as compared to other ‘green materials’.

pgilloct18-2

It exceeds copper in the ability to handle electrical current, and to conduct and contain heat.  Further, it is much easier to combine into 3d printing materials - a bright future in additive manufacturing.  However, the most exciting use is as an anode in a Lithium-ion battery, the most prevalent power system for Electric Vehicles.

pgilloct18-3

Electric vehicles will be 50% of the cars on the road by 2040.  The current EV technology depends on the Lithium-ion battery.   There is 15 times more graphite than lithium in these batteries.  Lithium has increased 4-fold in price due to demand.  The demand for graphite is now increasing as the price for battery grade graphite materials has doubled in the last 3 years and is slated to move higher.

pgilloct18-4

In 2012, China supplied 90% of the world's graphite but that percentage has been dropping every year until. In 2018 the number was 70%.  More graphite is being consumed by the Chinese lithium-ion battery manufacturing boom led by e-bikes, EVs and cellular phones and tablets.  Both the European Union and the United States have declared graphite a critical mineral which indicates there is no economic alternative.  This is good news for graphite companies in Canada.  Canada has a good reputation as a country which is able to supplant Chinese supply of graphite and provide secure supplies.  Quebec is especially important due to the proximity to Eastern American industrial centers and Quebec’s long-term and stable approach to mining industry.

pgilloct18-5

Graphite prices have increased 100% in the last 3 years to over $2,000/tonne.  If this were the gold markets, investors would be dancing in the streets.  However, in the battery materials space, we must see a multi-year, sustainable run to call it a bull market.  This will likely occur, as it did in the lithium market, as demand outstrips supply.  Speculative interest in the graphite market is already beginning to take off and this should help attract major customers or partners to Lomiko’s La Loutre Project.

pgilloct18-6.jpg

From the Editor

A. Paul Gill is the CEO of Lomiko Metals Inc. a Canada-based, exploration-stage company. The Company is engaged in the acquisition, exploration and development of resource properties that contain minerals for the new green economy.

Lomiko’s La Loutre is situated in the heart of Quebec’s graphite area with neighbours like Northern Graphite TSXV: NGC, Nouveau Monde TSXV: NOU and Imerys Carbon and Graphite, which has the only operating mine in North America.  Infrastructure is excellent as the project is 1.5 hours from the International Seaport of Montreal along a paved highway.  They are ready to drill their second resource in a high grade (10%+ Cg).  At present, the project is one of the most promising in the world.  The La Loutre Flake Graphite Property of 18.4 million Tonnes of 3.19% in the indicated category and 16.7 million tonnes at 3.75% Flake Graphite Inferred with a cut-off of 1.5% at the Graphene-Battery Zone. 

In 2018, Lomiko signed a deal to increase the ownership of the La Loutre Property to 100%.  Further, it was able to raise $ 1.5 million for development of the project and, in addition, launched several technology initiatives which will be going to the public markets in 2019.  

Lomiko plan’s to complete drilling at the Refractory Zone of the La Loutre Property concentrating on an area that produced 135 m of 7.74 metres and 110 metres of 14.56% to create a second resource, complete metallurgy and a 3D model of the property and by the end of the year 2019, a Pre-Economic Assessment (PEA) which will establish a book value for the project. 



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Stocks & Equities

Another Bull Throws In The Towel: Siegel Says Stocks Will Be "Flattish" In 2019


Posted by ZeroHedge

on Monday, 22 October 2018 08:27

siegel

With US stocks struggling to post their third day of gains in the last two weeks, more professional investors are apparently buying into the view that the Shocktober market rout represented an "inflection point" for US stocks. And the latest long-time bull to throw in the towel is none other than Wharton Business School professor Jeremy Siegel, who said during an interview with CNBC on Monday that price action in US stocks would be "muted" next year, as P/E ratios decline, tax cuts become baked in yoy comparisons, and rising interest rates, amplify debt servicing costs.... CLICK for complete article



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Energy & Commodities

America Has A Milk Problem


Posted by Fred Dunkley

on Monday, 22 October 2018 08:25

moo

Not only does America have milk—it’s got a surplus of over 8 million metric tons, forcing dairy farms to shutter and farmers to simply start dumping millions of gallons of milk that far exceeds domestic and foreign demand.... CLICK for complete article



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