S&P 500was down by 9.08 points or 0.49% to 1857.44 on Monday. U.S. stocks fell for a second day as economic data signaled a slowdown in American manufacturing. Sanctions imposed by the U.S. and the European Union are pushing Russia toward a recession as the intensity of their economic penalties increases after the annexation of Crimea earlier this month.

U.S. President Barack Obama, who has imposed personal sanctions against some of Russian President Vladimir Putin's political and business allies, began crisis talks with his European allies over how to respond in the biggest East-West conflict since the Cold War. European stocks fell on Monday, trimming last week's lofty gains as concern over events in Ukraine and China's flagging manufacturing activity pegged a key index back from the top of its recent range.


S&P 500 Daily Chart   (Source – Thomson Reuters)

S&P ASX 200 was up 8.8 points or 0.16% and closed at 5346.90 points on Monday. AGL Energy is once again going head to head with the competition regulator over a contested acquisition, lodging an appeal against the watchdog’s veto of its $1.5 billion takeover of NSW power producer Macquarie Generation.
Macquarie Grouphas significantly bolstered expectations for its earnings in the year ended March 31, saying profit would rise as much as 45 per cent subject to the completion rate of pending transactions. Hopes that Beijing will use the latest batch of weak Chinese economic data as a prompt for some kind of stimulus helped to support the Australian dollar on Monday.



S&P ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:-
 

Code	Name	Price	Change	%Change
KMD	Kathmandu	$3.45	$0.35	11.29%
TSE	Transfield Services	$0.84	$0.06	7.69%
BDR	Beadell Resources	$0.68	$0.03	4.62%
UGL	UGL Limited	$6.88	$0.30	4.56%
OZL	OZ Minerals	$3.31	$0.13	4.09%

 
Stock of the Day – LYNAS (LYC)

Lynas Corporation is engaged in integrated extraction and processing of rare earth minerals, primarily in Australia and Malaysia, and development of rare earth deposits. The company is engaged in commercial production and shipments of Rare Earths products. The company has temporary operating license for its Lynas Advanced materials plant (LAMP).

Lynas reported a loss of A$59.3 million for the interim period to December 2013. The reported loss included A$14.7 million contribution from a payment made by the ATO. In its latest release Lynas indicated that additional funding would be required over the next 12 months to meet debt repayments. This funding would take for, of a combination of: equity, additional debt or some refinancing or restructuring of the existing facilities.


Source - Lynas
 
We note annual phase 1 costs are expected to be A$215million which means current cash balance of $75 million provides funding for 4 months of operation. The cash will also need to be used for paying A$45 million in maturing Sojitz debt this year.


Lynas Daily Chart  (Source - Thomson Reuters)
In our view the key remains the production rates at the LAMP. In the recent release management indicated that the production is expected to progressively increase and LAMP should achieve full Phase 1 capacity sometime in the June 2014 quarter. We believe it is unlikely that the market will be positive on the stock until the company can demonstrate the plant is operating at capacity. The risks around the balance sheet have increased with the company yet to reach Phase 1 capacity. We will monitor the stock for any further developments and review the stock again at a later date.

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