ASX Small Caps Lunch Wrap: Which major climate conference is turning into a circus this week?
Local markets are… iffy this morning. I think that’s the right word for it… because “flat” is boring, and the benchmark certainly isn’t going anywhere in a hurry today.
InfoTech is out in front early, but the Energy sector is having a shocker, down a long way compared to the rest of the market, to a large enough extent that it’s effectively negating any gains being made elsewhere.
It’s kinda tough to pinpoint precisely why the Energy sector’s in the toilet this morning – but it’s entirely possible that noted climate warrior Andrew “Twiggy” Forrest’s eyebrow-raising outburst on the sidelines of the COP28 summit have had some kind of effect.
Twiggy’s used the global climate summit to call for oil and gas bosses’ “heads on spikes” for murdering poor people with “lethal humidity”.
“If you can’t cool yourself you’re actually an oven burning around 100 watts all the time,” Forrest said. “If you can’t get rid of that heat energy, you cook.
“And when these deaths occur — and they’re occurring now, but when they occur at much larger-scale — I want these so-called people who are very smart to be held to account.
“It’s their heads which should be put up on spikes because they wilfully ignored and they didn’t care.”
Bonus points if those heads are sporting Akubra hats, no doubt.
The “lethal humidity” Forrest is alarmed about is an actual thing – under the right (or wrong, depending on your outlook) conditions, it becomes impossible for the human body to sweat sufficiently to cool down.
According to a PowerPoint presentation that Forrest’s Fortescue released earlier this year, lethal humidity is “going to be the next pandemic”, is “already here”, and there’s “no vaccine” and “no cure”.
But far from being overtly alarmist, or eschewing nuanced debate in favour of pandering to base-instinct politics, the prezzo offers an entirely reasonable, measured look at the issue.
The COP28 Summit itself was already in pretty clear danger of turning into a circus before Twiggy started calling for the public display of murdered energy executives.
The very fact that the chair of the conference is Sultan Al Jaber – who is the boss of the United Arab Emirates’ national oil company ADNOC when there aren’t any UN climate conferences to host – was curious.
He’s unlikely to want to get into too much of a fight with Twiggy, as his comments at the SHE Changes Climate online conference on November 21 illustrate.
“I’m not in any way signing up to a discussion that is alarmist,” he said.
The fact that he backed that up by saying “I am factual and I respect the science, and there is no science out there, or no scenario out there, that says that the phase-out of fossil fuels is what’s going to achieve 1.5 (degrees),” suggests something different.
Also, I said “the Energy sector is having a shocker”. In case you missed it.
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Local markets are muted today, as investors take a breather after yesterday’s +1.6% jump and follow Wall Street’s soft lead overnight.
News that Australia’s trade balance grew less than expected in October certainly isn’t helping matters this morning, after data revealed that Aussie exports haven’t made any decent recovery from sharp declines in recent months.
On top of that, there’s been a drop in imports as well, giving economists pause over concerns of shrinking domestic demand – which really shouldn’t be a surprise, given the ongoing national gripe about the soaring cost of living.
Across the ASX, it’s definitely a tale of mixed fortunes – while the tech sector is doing well, with the XTX All Ords Tech Index pointing 0.67% higher at lunchtime, the currently beleaguered Energy sector is taking a beating.
The fact that crude prices have tumbled to a five-month low probably has a fair bit to do with it – prices fell by over 4% overnight, with WTI trading below US$70 at US$69.24 a barrel.
There are some big names taking big hits among the ASX’s energy players. Woodside is down 2.2%, Paladin’s lost 5.5%… in fact, it looks like the sell-off on Energy stocks has hit just about every corner of that market, except for coal.
Yancoal is bucking the downward trend, up 0.41% and Whitehaven has added 0.92% this morning.
And the morning’s early Small Caps leader, way out in front of the rest of the market, was an energy player as well. Invictus is close to 33% better off this morning – I’ll explain why shortly.
Wall Street phoned it in last night, which saw the S&P 500 fall by -0.39%, the blue chips Dow Jones index down by -0.19%, and the tech-heavy Nasdaq slip by -0.58%.
It’s not hard to see that Wall Street’s got one eye firmly on the fact that Holiday Season is just around the corner. That, plus falling crude prices, saw travel-related stocks rising sharply.
Carnival Cruise Lines rose 6%, and Norwegian Cruise Line gained 3%, while US airlines were also flying high, with Delta Air Lines up by nearly 5%.
Advanced Micro Devices fell 1% despite unveiling new accelerator chips that it said will be able to run AI software faster.
Meanwhile, Earlybird Eddy Sunarto reports fresh signs of a softening in the US labour market, as the ADP gauge on private payrolls missed expectations. Private payrolls increased by just 103,000 last month, versus estimates of 130,000.
In Asia, Japan’s Nikkei is down 1.33%, Shanghai markets are 0.28% lower and Hong Kong’s Hang Seng is slipping, down 0.70% in early trade.
Here are the best performing ASX small cap stocks for 7 December [intraday]:
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Out in front of the pack this morning is microcap gold explorer EMU, which announced the results of its maiden reconnaissance field survey conducted during July and August 2023 at the Georgetown Project in Queensland.
It’s early doors, of course, but the results look promising, with the company laying claim to 15.4g/t gold assay results recorded from its first reconnaissance rock samples in the NE Dagworth area, ~19km east from Camp Oven Creek.
The company also reports rock samples returned 36.1g/t gold and 25.6g/t gold respectively from the Sandy Creek prospect, just south of Georgetown.
As mentioned earlier, Invictus Energy is flying high this morning as well, on news that the gas explorer has had a solid find, reporting that four hydrocarbon samples have been returned to surface in the Mukuyu-2 well at its 80% owned and operated Cabora Bassa Project in Zimbabwe.
“The Mukuyu-2 discovery, 7km away and 450 meters updip of the Mukuyu-1 well, which can subsequently be classified as a discovery, provides confirmation of the large potential of the Mukuyu field which has a structural closure of over 200km2,” Invictus MD Scott Macmillan said.
“With additional hydrocarbon bearing reservoirs ahead, the focus now is to complete the drilling and evaluation program and obtain further wireline data including fluid samples to declare an additional discovery from the Lower Angwa formation.”
Gold Hydrogen (ASX:GHY) is on the move, after announcing the receipt of firm commitments for a $14.8 million institutional placement at $0.75 per share to existing and new institutional and sophisticated shareholders.
“This successful placement sets Gold Hydrogen up for an exciting 2024. We are thankful for the ongoing support from our existing shareholders and welcome our new shareholders on this very exciting journey,” Gold Hydrogen MD Neil McDonald said.
“We are looking forward to continuing our exploration campaign and undertaking further analysis of our recent drilling results which has to date validated and confirmed the historical results by finding hydrogen up to 73.3% purity, as well as incredibly high helium concentrations of 6.8% (raw gas).”
And also worth noting this morning, Redcastle has dropped news of further gold discovery at its 100% owned Queen Alexandra prospect near Leonora, Western Australia.
The fresh drilling has returned some tidy, if slightly thin, mineralisation results, including 1m @ 27.6g/t from 44m, and 3m @ 12.51g/t from 17m including 1m @ 25.7g/t from 17m.
It’s worth noting that the top 5m of the drilling hasn’t been included in the assay results, due to surface rights for the area belonging to prospectors.
Here are the most-worst performing ASX small cap stocks for 7 December [intraday]:
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