ASX Small Cap Lunch Wrap: Who’s rising up from the ashes this morning?

Definitely not England (appropriate headline for the cricket: Who’s getting buried underneath the Ashes this morning?)

To ashes of a more serious nature – assessment flights are underway as authorities try to gauge the damage from the massive underwater volcano explosion, which took place over the weekend off the coast of Tonga.

Damage to an undersea cable has disrupted the country’s global communications pathways, making it harder to get a definitive read on the fallout from tsunami waves and huge clouds of ash over the Pacific island, which is home to around 100,000 people.

It’s not the first recent blast from the Hunga Tonga-Hunga Haʻapai volcano, which also erupted in 2015 — an event which created the formation of a new regional island which rose out of the water.

Scientists initially thought it would re-submerge but seven years later, it’s still going strong. In fact, a separate eruption in December resulted in falling ash which materially increased its size (by up to 50%).

The easiest segue to that intro would be to advise readers that the ASX is also on the rise. And technically that’s true — although barely.

Local stocks eked out a Monday gain with the ASX 200 fractionally higher into midday trade, following a more positive session for big US tech stocks on Friday night.

Sentiment is leaning towards ‘risk-off’, with defensive sectors such as healthcare and utilities outperforming alongside energy stocks, as Brent crude oil climbs above US$85/barrel.

Tech stocks are trading flat after coming under pressure last week, while a new tech debutant — the BNPL-adjacent BeforePay (ASX:B4P), which provides up-front funding for customers to get paid their salary early — fell by more than 30% in the wake of its 11am listing.

In crypto markets, Bitcoin continues to consolidate in the US$40-US$45,000 range after bouncing off its recent lows last week.

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for January 17 [intraday]:

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Explorer Lunnon Metals (ASX:LM8) led at the opening bell and held its gains into midday trade.

Investors responded to a positive drilling update, which turned up strong results including 7m @ 9.22% nickel only 120m below surface at its Baker Shoot prospect, an emerging discovery within the Kambalda nickel project.

Among stocks with news, the Monday winner’s list was dominated by resources stocks. Get the full rundown in today’s edition of Resources Top 5.

Elsewhere, fintech lender Prospa (ASX:PGL) bounced off recent lows beneath $1, after providing a December quarter trading update.

The B2B lender said it booked record quarterly loan originations of $186.6m, up 45% from the December quarter where it booked $128.5m.

Prospa said that will flow through to core earnings of around $9m for the first half-year, up from $4.1m in H1FY21.

At above 90c this morning, PBL shares are still well off their June 2019 listing price where the company raised $109.6m at $3.78.

ASX SMALL CAP LOSERS

Here are the worst performing ASX small cap stocks for January 17 [intraday]:

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BeforePay comfortably led today’s laggards, as the pay-on-demand platform fell significantly from its listing price after raising $35m from investors at $3.41.