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ASX Small Cap Lunchtime Wrap: Slow and steady wins the race to recovery, analysts say
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Analysts and investors are increasingly hopeful of a global economic recovery as COVID-19 lockdowns in major economies are slowly lifted.
Ben May, director of global macro research at Oxford Economics, says that the pace of contraction for major economies in Q1 “is quite well correlated with the average stringency of their domestic lockdown restrictions in Q1 as a whole”.
This points to a gradual revival in economic activity in Q3 as restrictions are eased. Emphasis on gradual.
“Any lifting of restrictions will likely be followed by a period of close monitoring of COVID-19 statistics before the rules are relaxed further,” May says.
“Indeed, while much has been made of the steps by policymakers to begin the normalisation process in places such as the US, Austria, Denmark, Germany, and Norway, the shifts have so far been cautious, as they were in China.
“Even if April does prove to be the peak month for lockdowns at a global level and therefore the low point for activity, the revival from here is likely to be steady rather than spectacular.”
It’s going to be an eventful day/ week for Australian investors, as the government decides how to reopen the economy:
A busy day on the political & economic front. Treasurer Josh Frydenberg will speak at the National Press Club, the #RBA will meet to discuss interest rates & the National Cabinet meeting with NZ PM Jacinda Ardern, easing of some restrictions to be decided Fri #ausbiz #auspol
— CommSec (@CommSec) May 5, 2020
The local bourse is now up for the second day in a row, with the benchmark ASX 200 index improving ~80 points or 1.5 per cent to 5400 points by lunchtime Tuesday.
SMALL CAP WINNERS
Here are the best performing ASX small cap stocks at 12pm Monday Tuesday 5:
Swipe or scroll to reveal the full table. Click headings to sort.
| CODE | COMPANY | PRICE | CHANGE | MARKET CAP |
|---|---|---|---|---|
| NVU | Nanoveu | 0.175 | 257.14% | $21.2M |
| XST | Xstate Resources | 0.002 | 100.00% | $1.4M |
| AXE | Archer Exploration | 0.31 | 67.57% | $66.9M |
| FGO | Flamingo | 0.002 | 50.00% | $1.1M |
| AWV | Anova Metals | 0.012 | 50.00% | $8.3M |
| ASN | Anson Resources | 0.026 | 44.44% | $10.8M |
| CMT | Metalicity | 0.003 | 50.00% | $1.5M |
| MBK | Metal Bank | 0.01 | 42.86% | $8.8M |
| ACB | A-Cap Energy | 0.017 | 41.67% | $14.8M |
| HLX | Helix Resources | 0.007 | 40.00% | $3.4M |
| ADV | Ardiden | 0.004 | 33.33% | $7.2M |
| KEY | Key Petroleum | 0.004 | 33.33% | $6.8M |
| SCL | Schrole | 0.017 | 30.77% | $14.3M |
| MNW | Mint Payments | 0.005 | 25.00% | $4.6M |
| ABV | Advanced Braking Technology | 0.025 | 25.00% | $9.5M |
| CHK | Cohiba Minerals | 0.006 | 20.00% | $4.0M |
| RIM | Rimfire Pacific Mining | 0.006 | 20.00% | $9.1M |
| GED | Golden Deeps | 0.006 | 20.00% | $1.7M |
| NSX | Nsx | 0.12 | 20.00% | $26.9M |
NANOVEU (ASX:NVU) +250%
In mid-April, telecom tech company Nanoveu said it was running tests to assess the effectiveness of an antiviral smartphone case and screen protector that had shown promising results against the coronavirus.
This saw the company’s shares rise from crisis lows beneath 3c to more than 6c.
This morning, Nanoveu had some early but positive results — its antimicrobial technology was “demonstrated to be effective against a coronavirus strain emerging from mice, which is a surrogate for human coronaviruses”.
ARCHER MATERIALS (ASX:AXE) +65%
The ASX’s only quantum computing stock, Archer Materials (ASX:AXE) has signed a non-monetary agreement with computing behemoth IBM.
Archer is now an “ecosystem partner” in the invitation-only ‘IBM Q network’, a global community of stakeholders led by IBM seeking to advance quantum computing towards commercialisation.
METAL BANK (ASX:MBK) +42%
Gold explorer Metal Bank has defined a 7sqkm target at its Eidsvold project in southeast Queensland with “similar scale and geophysical response” to the historic Mt Leyshon deposit.
Mt Leyshon produced more than 3 million ounces of gold and substantial amounts of silver, mostly between 1987 and 2001.
SMALL CAP LOSERS
Here are the worst performing ASX small cap stocks at 12pm Tuesday May 5:
Swipe or scroll to reveal the full table. Click headings to sort.
| CODE | COMPANY | PRICE | CHANGE | MARKET CAP |
|---|---|---|---|---|
| RFN | Reffind | 0.001 | -50.00% | $1.0M |
| XTC | Xantippe Resources | 0.002 | -33.33% | $6.7M |
| FPL | Fremont Petroleum | 0.003 | -25.00% | $5.0M |
| RAG | Ragnar Metals | 0.004 | -20.00% | $1.3M |
| AZI | Alta Zinc | 0.004 | -20.00% | $8.8M |
| JXT | Jaxsta | 0.04 | -20.00% | $9.9M |
| APC | Australian Potash | 0.064 | -16.88% | $25.7M |
| MTH | Mithril Resources | 0.006 | -14.29% | $2.9M |
| SXA | Strata-X Energy | 0.036 | -14.29% | $4.5M |
| EGR | Ecograf | 0.055 | -14.06% | $16.8M |
| ODM | Odin Metals | 0.032 | -13.51% | $8.1M |
| LCT | Living Cell Technologies | 0.013 | -13.33% | $7.4M |
| PDI | Predictive Discovery | 0.061 | -12.86% | $39.3M |
| ECG | eCargo Holdings | 0.022 | -12.00% | $13.6M |
| IVX | Invion | 0.008 | -11.11% | $44.0M |
| TOE | Toro Energy | 0.008 | -11.11% | $20.9M |
| GWR | GWR Group | 0.065 | -10.96% | $16.6M |
A few companies fell on cap raise announcements, including Australian Potash (ASX:APC) and popular gold explorer Predictive Discovery (ASX:PDI).
