ASX Small Caps Lunch Wrap: Who’s lack of due diligence has cost them their job this week?
Local markets are smashing it this morning, with the ASX 200 benchmark up 1.15% by midday and the goldies extending their gains from last week as the market price for the shiny metal continued to surge this morning.
In a bit of a “stop press” moment, I’ve just had an alert from a leading expert that gold has pushed through US$2,100 per ounce as demand from Asian markets this morning has hit fever pitch, which is all terribly exciting.
It also follows on from a pretty decent end to the week in New York on Friday, which saw Wall Street’s major indices close higher with a distinctly positive vibe in the air.
But… then there’s this:
This rally reminds me of some of the great 1980s and 1990s rallies where rates would go down and stocks would soar. I am not sure people realize how truly powerful this rally is. It is extraordinary…
— Jim Cramer (@jimcramer) December 1, 2023
If Cramer’s calling it, then you know that it doesn’t matter what you want to call this rally, or why it’s happening – but you can pretty much bank on it turning to sawdust now that CNBC’s resident 1,000-year-old infant is reminiscing about decades long gone.
I’ll get into the market stuff shortly, but first there’s a lesson to be learned from the story of a senior government official in Paraguay, who has been forced to resign after signing his country up to a memorandum of cooperation with a country that doesn’t exist.
Arnaldo Chamorro is – or rather, was – chief of staff to Carlos Alcibiades Giménez Díaz, Paraguay’s agriculture minister, and had been tasked with meeting a delegation of representatives from the “United States of Kailasa”.
Chamorro has admitted that he took the meeting, listened to what I can only assume were some very persuasive presentations – resulting in an official document proclaiming that the government of Paraguay should do everything it can to establish full diplomatic relations with the United States of Kailasa and “support its admission as a sovereign state to various international organisations, including the United Nations.”
The document also specifically salutes “the honourable Nithyananda Paramashivam, sovereign of the United States of Kailasa” and praises his “contributions to Hinduism, humanity and the Republic of Paraguay.”
Aside from the small problem that the United States of Kailasa isn’t a real thing, it turns out that its leader, is none other than Nithyananda Paramashivam.
For those of you who are out of the loop when it comes to the who’s who of cult leaders, Paramashivam is a self-proclaimed “Supreme Pontiff of Hinduism” who is doing his darndest to get his entirely made-up country recognised by as many governments around the world as he can.
Which sounds like a fool’s errand, but apparently it’s going quite well – if Kailasa’s official website is to be believed, the Paraguayan ministry of agriculture is only the latest government body to be fooled.
Paramashivam claims to have received “114 proclamations and congressional certificates of recognitions from government leaders across 11 countries” – but it’s still an unfathomably terrible mistake for the Paraguayan official to have made.
Even the most cursory Google search of the country’s name turns up some alarming results – Paramashivam is wanted for questioning on the usual raft of cult leader crimes, including rape and child abuse allegations.
If only he’d been more like Cramer, and done his due diligence before spouting off about how great everything is…
It’s a far happier day for local investors this morning, with the benchmark up and the lion’s share of our market sectors pumping out some very handy gains indeed.
Leading the way are some very strong performances among InfoTech, Real Estate and the Materials sector, each of them well into positive territory this morning.
And at a more granular level, there is plenty of excitement among the goldies, which has pushed the XGD All Ords Gold Index out to +3.5% this morning, well ahead of the benchmark which is hovering around +1.15% so far today.
It’s all down to the price of gold, which broke through US$2,100 this morning, and not showing any immediate signs of slowing down, leaving the locally-listed stocks with exposure to gold in a very happy place indeed.
One shining example today is Chalice, which is showing a +16% climb this morning, despite not having any solid news to report since early last week.
The other boost to positive sentiment locally is the market’s expectations that the RBA is highly likely to keep interest rates on hold when the board meets for its monthly dive into the lunch trough tomorrow.
As resident economics guru Earlybird Eddy Sunarto puts it: “Australia’s cash rate is still well below other advanced economies – as the UK, US and NZ cash rates all sit above 5% – and overall, the economy is proving resilient to the hikes, with unemployment still quite low at 3.7%.”
Eddy was also busy this morning wrapping up what happened in the US on Friday, where Wall Street put in a decent day’s effort to end the week on a high.
The S&P 500 rose by +0.59%, the blue chips Dow Jones index was up by +0.82%, and the tech-heavy Nasdaq rose by +0.55% – all of which helped add to the local markets’ feel-good vibes this morning.
In US stock news, Tesla fell 0.5% after its long-awaited Cybertruck started arriving in customer driveways to some very mixed reviews.
I could happily spend hours and hours being snide about how utterly ridiculous that vehicle is – but I won’t, because I’m already well behind schedule this morning, so you’re going to have to wait until tomorrow.
(Ed: It’s actually awesome. And tomorrow is too late, so you’ll have to move on sorry.)
Meanwhile, Pfizer fell 5% as the drugmaker said it won’t move forward with trials for its twice-daily regimen of its weight-loss pill, danuglipron, which was intended to compete with Ozempic and other weight loss drugs in the market.
Other notable movers include Alibaba, which slipped -1% after Morgan Stanley downgraded the e-commerce stock, citing slower turnaround in customer management revenue (CMR).
In Asia, Japan’s Nikkei has slipped 0.44% this morning, Shanghai’s markets are up 0.2% and Hong Kong’s Hang Seng is 0.58% better off in early trade.
Here are the best performing ASX small cap stocks for 4 December [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Nominally at the top of the winner’s list this morning is DiscovEX, which is showing a 100% jump – but the only ‘news’ I can find is a very boring bit of paperwork about a tranche of expired options from last week.
However, right alongside it is local med-tech Compumedics, which has some stellar news from the United States, where its Somfit medical device has been cleared for sale in the US by the FDA.
Compumedics reckons the market in the US is worth about US$110-180 million, and that the company is targeting a relatively modest 10%-30% of that market over the next 12 months.
The company has been hard at work with the commercialisation of Somfit here in Australia, and has previously reported some success, with $1.2 million worth of orders already on the books from local buyers.
Boab Metals is surging this morning, despite no fresh news since telling the market about assays from early drill work at its 75% owned Sorby Hills Lead-silver-zinc project in WA, back in early November.
Those results were pretty good – and they were really just the initial findings from exploration work at the site, with further results looming on the horizon.
And Noble Helium has plucked a 31% jump this morning on news that its Mbelele-2 wireline logging and sampling program has been successfully completed, with some happy results from the company’s 100% owned North Rukwa Helium Project in Tanzania.
“Multiple data points throughout the drilling campaign point to a prolific helium system: a probable 10-15 metre column of nitrogen and helium at the crest, helium-rich downhole samples calculated at 2-3% helium in exsolved gas and helium-rich gas bubbles in the drilling mud at multiple depths in both wells,” Noble said this morning.
Here are the most-worst performing ASX small cap stocks for 4 December [intraday]:
Swipe or scroll to reveal full table. Click headings to sort: