MORNING MARKET REPORT

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1 FRIDAY, 6 APRIL 2018 SUMMARY Will the S&P/ASX 200 bulls take the re-challenge beyond 5,800 threshold? Overnight, the S&P/ASX 200 Futures bulls kept in a secure group, following the initial gains from yesterday keeps in check for a potential re-challenge of 5,800 this morning. It is still considered that our call from yesterday will again be questioned today to whether the market bulls can retake the reins and lead prices beyond 5,800. If so, then this may represent a firmer bullish stance in the market and potential see the market climb back to the highs seen around 5, It is anticipated that the market bulls are slowly building a base/camp from the lows of 5, A recap of yesterday - The Fab Four (banks) The Financials (sector) have been the main driving force of gains today as the local share market witnessed the Fab Four (banks) all recording renewed advances. The best performer was the Commonwealth Bank (CBA) which ended up by +1.4%, along with the National Australia Bank (NAB) climbing +1.3%. Westpac Banking Corp was third, up by +1.10, with ANZ Bank (ANZ) last, at +1.02%. Strength in consumer staples was marginal after being led by improvements in Treasury Wine Estates (TWE), which was up +1.77% and a 0.82% lift in Wesfarmers (WES). With most sectors heading into positive territory, weakness in materials, Resources, Telcos, and utilities kept a lid on new gains in the broader market, and to the 5,800 level for the benchmark S&P/ASX 200. Miners are being weighed by weakness in iron ore prices which slipped - slightly -0.43%. Our Titans, BHP and Rio Tinto (RIO) were both weaker by -0.7% and 1.2% respectively with Fortescue knock lower to -3.21%. Mineral producers Orocobre posted the most significant loss, down -9.5% to $4.74 after it downgraded its lithium production guidance for this financial year by 10%. Mineral MARKET OVERVIEW ASX200 5, % SPI Futures (Jun 18) 5, % S&P 500 2, % Nasdaq 7, % Oil (WTI) $ % Iron Ore $ % Spot Gold US$1, % AUD/USD US$ % BTC/USD $6, % Lithium production at its flagship Olaroz project was 2802 tonnes over the March quarter, down -29% from the previous quarter, which the company in a statement to the ASX blamed on bad weather. The good news is that June quarter output is expected to be "significantly higher," the company said. Orocobre has previously announced FY18 lithium production would be about 14,000 tonnes. AGL Energy (AGL) is declined 1.75% as continued speculation on the lifespan of its coal powered power station. AGL is looking to close the plant in 2022, but the Federal Government is insisting the energy provider sell the plant for it to continue operating past Medical Developments International (MVP) +1.28% Granted sale of its Penthrox product in Germany, one of the groups most important markets, and one of the largest opioid pain relief consuming countries in Europe. Penthrox is a non-opioid alternative for rapid pain relief treatment. Wattle Health (WHA) +4.81% The company has signed a term sheet with International Supplies and Distribution Company (ISDC) for the supply of standard cow infant formula. Blue Sky slumped over % to $5.62 after US short seller Glaucus slammed the company's defence as inadequate. Blue Sky has disputed Glaucus' allegations. Scentre Group (SCG) +0.77% announced on-market security buy-back program of up to $700m. The buy-back is active management of capital structure and will not hinder the group s ability to fund developments in the pipeline. The Finish - BRN +9.38%, RFG %, APT +2.65%, WTC +5.19%, ELD +5.00%, CGC +4.21%, QUB +2.30%, FND %, IMF -5.30%, BSL -2.59%, BLA %, NVT -3.85%, CLQ -2.54%, RMD -2.08%,

2 In the Markets The Dow Jones industrial average rose points, or +0.99% to 24,505.22, with Boeing and DowDuPont as the best-performing stocks. The S&P 500 gained +0.69% to close at 2,662.84, with materials leading ten sectors higher. The Nasdaq composite advanced +0.49% to 7, Bulls happy to stay as Wall Street extends rebound rally The U.S. stock markets closed modestly higher early this morning as tech shares rose following a roller-coaster ride in the previous trading day. Tech stocks helped lead the move higher, with Facebook jumping +2.73% and gains of more than +1.5% in Netflix and Amazon. Facebook's move came after CEO Mark Zuckerberg told reporters he had not seen a noticeable change in user behaviour in the wake of the Cambridge Analytica data scandal. Globally, concerns remain high to a potential trade war between China and the U.S. after China announced new tariffs on 106 U.S. products, including cars, whiskey, and soybeans, less than 24-hours after the U.S. administration issued a list of Chinese imports that it would target. The news initially sent stocks lower before bouncing back as the Trump administration tried to play down trade-war worries. In economic news, overnight, the weekly jobless claims totalled 242,000, more than the expected 225,000. Still, claims remained near their lowest levels since the 1970s. Later, Wall Street also will be looking to Friday's jobs report (Non-Farm Payroll) release at 22:30 (Sydney time). The given forecast expects the U.S. economy to have added 188,000 jobs in March, with the previous release seen at 313,000. We also have the Average Hourly Earnings m/m, previous was +0.1%, with the forecast holding at +0.3%. The unemployment rate forecast is seen lower to 4.0%, from 4.1%. Also, later Federal Reserve Chairman Jerome Powell is expected to give a speech and defend the central bank s consensus that a gradual rate hike path this year remains appropriate despite much chatter about the risk of an overheated economy from luminaries like his predecessor, Janet Yellen. Safe-haven demand slowly diminishes But beware, bulls still lurk in the shadows! It has been a very volatile week for the precious yellow metal, with the ranges gaining and losing around dollars! Early, the bears returned in larger groups after the demand vanished since hitting a high of $1,348, since then the market has gravitated to a $1,322 low this morning. The decline was triggered by the ongoing trade war fears as the market slowly digests the new tariffs announced by China and the U.S. However, the ongoing negotiation still appear mixed, even though President Trump tweeted: "We are not in a trade war with China, that war was lost many years ago." The U.S. Treasury Department s decision to extend the initial 30-day consultation period to 60 days was a sign that the U.S. side has already left room for negotiation. China recently announced tariffs on 106 U.S. products, after the Trump administration on Tuesday provided details on the $50 billion of Chinese goods that could be subject to 25% duties unless China makes a trade and investment concessions. Larry Kudlow, director of the White House National Economic Council, suggested the U.S. was willing to strike a deal with Beijing. Our intention is not to punish anybody. Our intention is to open markets and investments and lower barriers that s the deal, Kudlow said. However, Kudlow comments were in sharp contrast to that of White House trade adviser, Peter Navarro, who said Wednesday The expectation is that at the end of 60 days there will be tariffs imposed. From a technical perspective, we continue to see spot gold prices remain in the broad range between $1,300 (bullish foundations) to $1,360 (bearish camp).

3 West Texas Intermediate (WTI) remains indecisive since posting a Dragonfly Doji candlestick. West Texas Intermediate (WTI) prices overnight lacked direction and closed relatively unchanged this morning. The price action from the previous day posted a Dragonfly Doji candlestick. A Dragonfly Doji is a type of candlestick pattern that signals indecision among traders. The Dragonfly Doji can be seen, as a bullish reversal, (hence it was in front of the $61.00 uptrend). The Dragonfly Doji is similar to that of the Long Legged Doji and the Hammer candlestick patterns, (mainly indicating indecisiveness) Although we still need confirmation to support this signal, otherwise the risks will negate this candlestick pattern (bullish signal) and instead turn back to re-challenge the uptrend now risen to $ In the last 24-hours, Crude futures gave up early gains after hitting an intraday high of $64.09 following a report from energy provider Genscape showing crude stockpiles at the Cushing storage hub in Oklahoma rose to 2.5 million barrels for the week to April 3, according to traders who saw the data. Investor remains concerned over signs pointing to an uptick in U.S. crude stockpiles come just a day after inventories of U.S. crude fell by million barrels last week, confounding expectations for a rise of 1.4 million barrels, according to data from the Energy Information Agency (EIA). Iron ore takes a two-day public holiday In observance of Tomb Sweeping Day. As the trade wars linger with China and the U.S., iron ore spot markets will be quieter due to the two-day public holiday In observance of Tomb Sweeping Day. Losses in the futures earlier in the week accelerated into to close after China revealed new tariffs on U.S. imports. The price for benchmark 62% fines declined mildly early after falling -0.43% to $62.67 a tonne. The critical support has risen from $59.00 to $ It will be interesting to see if the bulls will defend this region or see prices slip to $55.00, around June 2017! Is the Australian Dollar outlook still bearish? At present, our call to the Australian Dollar is bearish as the current pattern of the recent decline holds since the rejection above the handle. The immediate target holds to US$ , with the foreseeable broader call holding to a measured move of US$ , before any expectation of position squaring/profit-taking. The supply area (sellers) is expected to continue (if revisited) around the region of US$ As of writing, the Australian Dollar is buying US$ cents.

4 New Stock Picks The Arena is set for a green week! ASX Listed Green Companies This week, we have chosen a listing of companies listed on the ASX that involve solely in the green arena, covering waste recycling, water, wind energy, biogas & biofuels, green building materials, transport technologies or carbon management. STOCK PICKS Company Buy / Sell Called at Last Price Price Target % from call Time Frame SCG Buy $3.83 $3.92 $ % Medium Term LER Buy $0.059 $0.075 $ % Short Term IFN Buy $0.585 $0.61 $ % Short Term PEA Buy $0.535 $0.535 $ % Short Term SGM Sell $14.44 $14.13 $ % Medium Term SLX Sell $0.305 $0.28 $ % Short Term PHK Sell $0.27 $0.27 $ % Medium Term HRL Sell $0.147 $0.14 $ % Medium Term Stock Picks on our Radar (Some stocks have fallen off the radar Now scanning for new shares!) Previous week s radar picks - Paladin Energy Limited (PDN) remains as a potential buy. The Bulls Stocks tipped to rise (From the radar) Company Overview - Scentre Group (SCG) is involved in ownership, development, design, construction, asset management, leasing and marketing activities with respect to its Australian and New Zealand portfolio of retail properties. The Company was created in June 2014 through the merger of Westfield Retail Trust and Westfield Group's Australian and New Zealand management business Technical outlook The bullish pattern has gradually increased over the past few days for Scentre Group, and now supports a potential challenge to the region of $4.10. We believe that any pullback will be limited with the support viewed from $3.70. Company Overview Leaf Resources Ltd (LER, formerly Leaf Energy Ltd) is an Australian company with a simple vision, turning waste biomass into cellulose derivatives, bioplastics, and green chemicals through Leaf Resources Glycell Process. The Company target markets are USA and Australia. Technical outlook The recent decline to this share has now put the technical implications back into oversold territory. What has caught our attention is that the both (Moving average convergence divergence (MACD) and the Relative strength index (RSI)) appear to be forming a potential base, that should provide a possible bullish trend, (also adding, mild bullish divergence that is emerging). As this pattern unfolds gives scope to the region of cents. Support is viewed from $0.04.

5 Company Overview Infigen Energy (IFN) is a developer, owner and operator of renewable energy generation assets in Australia. Infigen has an operating capacity of 557 megawatts (MW) comprising six wind farms, the 89 MW Alinta wind farm in Western Australia (WA), the three Lake Bonney wind farms in South Australia (SA) with capacities of 81 MW, 159 MW and 39 MW respectively, and the 141 MW Capital and 48 MW Woodlawn wind farms in New South Wales (NSW). Technical outlook Bullish divergence is a powerful signal. Sometimes a technical indicator will disagree with the actual price direction of the stock you are assessing. These disagreements are strong signals and rather useful for the trader(s). Divergences can be an important warning signal that a bullish or bearish trend is coming near to an end. Divergence appears when a technical indicator (oscillator) begins to establish a trend that disagrees with the actual price movement. In this instance, bullish divergence is evident for this share. If this pattern holds then, we believe a potential rebound is within days. If so, then this would suggest that the bears are slowly losing momentum and that the bulls are ready to take control of the reins once again. We would first have to wait for the break above $0.61, before the bullish opportunity arises to provide the upside access (momentum) to $0.68. Reassess from there. Support holds from $0.55. Company Overview Pacific Energy Limited (PEA) is a power generation project developer and owner, headquartered in Perth, Western Australia. PEA is focused on the development, ownership, and maintenance of mine site and renewable energy power stations. Currently, PEA operates two main businesses namely Kalgoorlie Power Systems and Victorian Hydro Generation. Technical outlook After three recent bearish attempts on the lower side of this year s range from $0.50, the bullish defense holds. It is envisaged that further demand should emerge and eventually overcome the bears. The bullish measured move holds to a goal of $0.65. Reassess from there. The Bears Stocks tipped to fall Company Overview - SIMS Metal Management Limited (SGM) is the global metals and electronics recycling company, involved in the buying, processing, and selling of ferrous and non-ferrous recycled metals and providing solutions for the disposal of post-consumer electronic products, including IT assets recycled for commercial customers. The company operates in North America, Australasia, and Europe. Technical outlook Sims Metal Management Recycling company (SGM) A present, we have seen a pause to the upside strength since staging a firm rejection from the near-term cap of $ It is envisaged that the current pullback holds to a potential target of $13.40 before encountering initial demand. Resistance holds from $ Company Overview - Silex Systems Limited (SLX) (OTCQX: SILXY) ( Silex") is an Australian high-tech company focused on the delivery of the unique and disruptive SILEX Laser Enrichment Technology as the next generation technology for the global uranium enrichment industry. Technical outlook Silex Systems (SLX) Since the late 2017, this share has lacked momentum and at present holds to a potential target of $0.24 cents to which demand is likely to emerge. It is at this level that a rebound should initially send this share back to a corrective pattern and target the region of $0.45 cents. Reassess from there, as we could see an extension to 0.55 cents. Company Overview - Phoslock Water Solutions Limited (PHK) provides water technologies and solutions for lake restoration, reservoir management and water quality management in stormwater ponds. Technical outlook Phoslock Water Solutions (PHK) At the beginning of the year, this share slowly accumulated bullish momentum from 0.22 cents and has now recently peaked at $0.33 cents. From a technical point, the bearish structure is expected to show further supply and aim at $ support region. Resistance is seen from $0.34 cents.

6 Company Overview - HRL Holdings Ltd (HRL, formerly Hot Rock Limited) is an environmental services company with operations in Australian and New Zealand. The company specialised in integrated field sampling, laboratory analysis, and cloud-hosted asset management. Its services include- HAZMAT services, Geotechnical services, and Software services. Technical outlook Hot Rock Company (HRL) At the beginning of the year, this share stabbed a $0.20 cent high and since then has not been able to uphold any renewed gains. Viewing the recent price action, this share has stabbed at the $0.14 region (support) and is slowly weakening. From the technical prospects, the bearish structure holds towards the area of $0.08, before viewed as a potential buy. ECONOMIC CALENDAR Friday, April 6 Financial markets in China will be closed for a holiday. Canada is to publish its latest employment report. The U.S. is to round up the week with the nonfarm payrolls report for March. Disclaimer: Kaz Direct s services are provided by Kaz Capital Proprietary Limited ABN Australian Financial Services License No , Level 6, 88 Foveaux Street, Surry Hills NSW For information relating to our financial services you should refer to Kaz Capital s Financial Services Guide. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. There are risks involved in any financial investment and the value of any investment can and does fluctuate and may even become valueless. This research is based on information obtained from sources believed to be reliable but we do not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. Kaz Capital does not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. Unless otherwise noted, market and stock price outlook is taken from a technical perspective and seen from the oscillator s pattern being (Stochastic, MACD, RSI, and momentum), with no fundamental influence taken to these views.