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ASX Small Caps Lunch Wrap: Monday morning rise proves life after inflation
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From a lovely chilly Monday morning in Launceston, it appears stocks on the ASX have almost universally rebounded from a grim week – which, you’ll recall, ended in some ugly Friday’s losses.
The good news is that’s done and dusted and we’ve opened with some strength after higher-than-expected inflation in the States and at home killed the buzz on the local bourse last week.
Just before 1pm, the S&P/ASX200 was up 53 points or 0.70% to 7,629 points.
US futures have continued to climb throughout the morning in Sydney and that’s the kind of no-holds-Rammy-Staggy-Bully testosterone-fuelled wet dream that Wall Street likes to wake up to.
The latest high may be a brief one, after the latest inflation reading in the US eased neggy-neg emotions which had been coagulating around the promise of a yet-more hawkish Fed ahead of the FOMC meeting later this week.
Ten out of 11 sectors are out of bed and making money on Monday. Property stocks are flavour of the morning in Sydney.
Real estate investment trusts were the strongest performers after shares rose 1.5% while consumer staples was the only sector trading in the red.
One stock worth watching – for the schadenfreude of it all – is Star Entertainment Group (ASX:SGR), which is up an exciting 2% after schlepping in current boardie, Anne Ward, into the vacated Chair’s chair effectively immediately.
Anne’s job is to fumigate the scent of the previous executive chairman (David Foster) who failed to de-scent the rank failures of SGR under the former CEO Robbie Cooke who exited in March.
ASX Sectors at Lunch on Monday
Resources are wobbling, however, which is odd because the World Bank says the era of falling materials prices is over, which means energy and commodity prices won’t be helping dampen inflation in the near future… which will probably hobble in no small way the dimming powers of central banks to get on top of this reinflationary business we’ve been seeing.
The bank says it’s been a fine few years of falling commodity prices, lots of war, uncertain supply and increasing demand for industrial metals (not to mention a fumbling but more determined attempt at an energy transition) all of which kept materials pricing down. That muffling effect could be done, but we’ve not seen a response yet from the resources-heavy ASX200.
All up, global commodity prices lost circa 40% of combined value between mid-2022 and mid-2023.
The bank says that alone sucked 2 percentage points out of the searing pace of global inflation during that period.
Both the Small Ords (XSO) and the XEC Emerging Companies indices were higher at lunchtime.
ASX Indices at 1pm on Monday
NOT THE ASX
Also helping local fans of money – the near 300 points (1.8%) that the Hang Seng’s added already ahead of lunch in Honkers.
That’ll be a sixth straight session of gains.
And a six-month high, with almost all sectors ahead.
The Hang Seng continued to be lifted by hopes that China will roll out more expansionary policies to spur robust recovery this year following a mixed picture during the first three months of 2024. On the trade front, exports and imports in Hong Kong rebounded in March, and the annual inflation rate in the city edged lower to 2% in March from the prior 2.1%.
Wall Street surged on Friday in New York, led by the big tech names as earnings numbers continued to surprise on the very upside.
The S&P500 snatched a further 1% and the tech heavy Nasdaq went more nuts, adding 2% to make it a 4.2% gain for the week.
The Dow Jones closed 0.40% up.
The S&P and tech heavy ran up their their best week since November with the S&P500 adding 2.7%
On the corporate front, it was Mega Tech to the fore, encore.
Wall Street rallied strongly in pursuit of cracking Q1 earnings data from Google-Daddy, Alphabet.
That led to GOOG’s first-ever dividend and a US$70 billion buyback. Why it doesn’t just buy Anglo-American out from under BHP and then have a night out on the change is a question for the absurdly endowed.
Likewise, Microsoft (MSFT) dropped strong fiscal Q3 results, upo 2% after a fine three months for its growing cloud segment.
US Sectors sere led by comms and ahead this week we still have bombshell results from Magnificent 2 – Apple (APPL) and Amazon (AMZN).
Wednesday is when the US Federal Reserve astounds with its next rate decision.
As we said, US futures are still climbing after a great week in a cray-cray few months.
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for 29 April [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
CODE COMPANY PRICE % TODAY VOLUME MARKET CAP FAU First Au Ltd 0.003 200% 2,100,074 $1,661,993.28 CBY Canterbury Resources 0.053 66% 2,007,211 $5,495,708.67 HLX Helix Resources 0.0045 50% 7,913,698 $6,969,437.53 ERL Empire Resources 0.003 50% 200,000 $2,225,869.83 TD1 Tali Digital Limited 0.0015 50% 1,309,179 $3,295,155.63 OPL Opyl Limited 0.023 44% 3,637,680 $2,709,482.54 IS3 I Synergy Group Ltd 0.007 40% 1,800,000 $1,520,401.84 ADG Adelong Gold Limited 0.004 33% 150,463 $2,641,466.87 HCD Hydrocarbon Dynamic 0.004 33% 180,737 $2,425,747.09 KPO Kalina Power Limited 0.004 33% 249,311 $6,630,384.03 MXO Motio Ltd 0.02 33% 236,080 $4,022,975.19 GLL Galilee Energy Ltd 0.06 28% 742,949 $15,967,998.22 RCR Rincon 0.088 28% 30,728,247 $15,259,444.12 MCT Metalicity Limited 0.0025 25% 191,178 $8,970,107.59 MKL Mighty Kingdom Ltd 0.005 25% 1,130,656 $9,323,732.14 WNR Wingara Ag Ltd 0.017 21% 250,000 $2,457,595.06 PVT Pivotal Metals Ltd 0.018 20% 47,498 $10,561,774.28 GSM Golden State Mining 0.012 20% 188,312 $2,793,706.30 LNR Lanthanein Resources 0.006 20% 23,781,114 $9,774,544.52 NAG Nagambie Resources 0.012 20% 427,513 $7,966,356.77 OAU Ora Gold Limited 0.006 20% 7,721,642 $29,030,004.46 TAS Tasman Resources Ltd 0.006 20% 200,000 $3,563,346.44 EXP Experience Co Ltd 0.185 19% 526,310 $117,405,894.99 FRS Forrestania Resources 0.019 19% 193,598 $2,588,571.89 PPL Pureprofile Ltd 0.019 19% 1,985,583 $18,549,994.53
Last week Our Garimpeiro went looking during the week for juniors in the copper porphyry space and got frothy when it came to a little thing he covered years ago – Canterbury Resources (ASX:CBY).
It was trading mid-week at a princely 2.8c a share for a market cap of $4.8 million.
Today CBY is at 4.8% and worth about double what it was at 10am.
If it was scratching around the back blocks of Mt Isa for a small but high-grade copper discovery, Garimpeiro would suggest its modest market cap gave it lots of leverage to the upside for exploration success.
But it has bigger ambitions, he says.
CBY’s focus is on its shares with the big end of town – the discovery of Tier 1 copper-gold porphyry deposits.
“It has stuck to its task over the years and has some 1.8Mt of copper and 3.16M ounces of gold in resources spread across projects in Queensland and PNG, all of which are the subject of joint ventures with deep-pocket partners.”
The strategy for the company has been to generate potential Teir 1 exploration opportunities and then form earn-in partnerships with others to mitigate the risk and cost of playing in the high risk-high reward deep end of the pool.
Canterbury has exposure to two upcoming drilling programs funded by others seeking to convert the early promise reflected in that copper and gold resource base mentioned above in to genuine Tier 1 development opportunities.
Should the Tier 1 potential pan out – and potential is all that it is at this stage – Canterbury would end up holding 20-30% of the project depending on which joint venture we’re talking about.
Nothing wrong with that given the value of Tier 1 discoveries are measured in multi-billions of dollars.
Also rising like a prodigy, is Rincon Resources (ASX:RCR).
The mini-cap stock is now up 210% since uncovering a ‘bullseye’ target at its project in the West Arunta region of WA “of similar size and character” to WA1 Resources’ (ASX:WA1) Luni carbonatite, and IOCG deposits like Prominent Hill and Ernest Henry.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for 29 April [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap AXP AXP Energy Ltd 0.001 -50% 5,000,213 $11,649,361 MRD Mount Ridley Mines 0.001 -33% 3,752,207 $11,677,324 OAR OAR Resources Ltd 0.0015 -25% 225,000 $6,306,622 FZR Fitzroy River Corp 0.115 -23% 225,000 $16,193,138 KNB Koonenberrygold 0.016 -20% 1,255,856 $2,754,229 TIG Tigers Realm Coal 0.004 -20% 734,614 $65,333,512 WBE Whitebark Energy 0.013 -19% 656,072 $3,072,005 OZZ OZZ Resources 0.035 -17% 159,324 $3,886,265 EXL Elixinol Wellness 0.005 -17% 204,165 $7,806,444 NGS NGS Ltd 0.005 -17% 1,543,763 $1,507,364 PUR Pursuit Minerals 0.005 -17% 5,599,713 $17,663,828 ZNO Zoono Group Ltd 0.046 -16% 469,990 $11,754,823 CNQ Clean Teq Water 0.31 -16% 10,440 $24,112,408 FRM Farm Pride Foods 0.105 -16% 10,050 $17,982,232 MXR Maximus Resources 0.032 -16% 1,726,820 $12,195,939 GBZ GBM Rsources Ltd 0.011 -15% 2,256,067 $15,036,956 OLY Olympio Metals Ltd 0.04 -15% 9,696 $3,302,301 BET Betmakers Tech Group 0.12 -14% 1,657,218 $135,077,126 GGE Grand Gulf Energy 0.006 -14% 225,067 $14,666,729 SFG Seafarms Group Ltd 0.003 -14% 622 $16,928,097 AGD Austral Gold 0.026 -13% 13,603 $18,369,341 1AD Adalta Limited 0.027 -13% 2,032,230 $16,300,236 E33 East 33 Limited. 0.014 -13% 96,300 $8,593,419 EE1 Earths Energy Ltd 0.014 -13% 1,424,000 $8,479,427 SP8 Streamplay Studio 0.007 -13% 7,008,466 $9,204,990
ICYMI – AM EDITION
ICYMI for Lunch Wrap April 29
Hillgrove Resources (ASX:HGO) continues to ramp up production at its Kanmantoo underground copper mine in line with its ramp-up plan with output increasing from 589t in March to 719t in April.
Operational metrics in the processing plant continue to improve, with increases in plant throughput and copper recovery.
Upcoming commissioning of the regrind mill expected to further enhance recovery rates.
Miramar Resources (ASX:M2R) has secured Western Australian state government Exploration Incentive Scheme (EIS) funding for drilling to test its district-scale Bangemall project in the Gascoyne for Norilsk-style nickel, copper, cobalt and platinum group element mineralisation.
The co-funding will pay for half of the drill costs up to a cap of $180,000, validating the company’s exploration model.
Prior to drilling, M2R will complete heritage surveys where required and carry out systematic rock chip sampling.
Strickland Metals (ASX:STK) is progressing exploration of its Yandal project in WA with assays pending for the first three diamond drill holes and an induced polarisation survey due to start imminently.
Reverse circulation diamond at the project within the prolific Yandal greenstone belt is continuing.
Assays are also awaited for two holes that were recently drilled at the company’s new Rogozna gold project in Serbia with further drilling expected to begin in June.
At Stockhead, we tell it like it is. While Hillgrove Resources, Miramar Resources and Strickland Metals are Stockhead advertiser, they did not sponsor this article.
