CLOSING BELL: ASX closes higher to end week, materials leading bourse upwards

ASX closes up 0.78%, while XEC rises 1.91% following global markets higher
Morningstar warns of possible start of US recession next week spanning 3 quarters, but talk of pause in Aussie rate hikes ‘premature’
Hubify subsidiary Broadland Solutions inks new five-year deal to sell Optus Enterprise Services

Happy Friday! Aussie shares have closed higher, tracking stocks in New York.

The S&P/ASX 200 closing 0.78% to 7177.80 points, while the S&P/ASX Emerging Companies index (XEC) – a benchmark for Australia’s micro-cap companies – was up 1.91%.

All sectors were in the green except energy, which dropped 0.94%. Leading the winning sectors was materials up 1.89%, followed by healthcare which rose 1% and real estate which added 0.88%.

But don’t get all excited just yet. Morningstar head of equities research Peter Warnes is warning of the possible start of a US recession next week.

“Next week could be the start of a US recession spanning at least three consecutive quarters,” Warnes wrote in his weekly note.

He said a soft or harder landing is now debatable.

“Soft, skin damage, harder perhaps broken bones?” he said.

He said the commercial real estate sector is now of concern with tightening of credit policies by small and mid-tier banks, which provide 70% of the funding to the sector, to bring into question valuations.

“Loan quality will be put under a microscope and the concerns will shift from deposits to underlying assets.

Warnes said the timing of the failure of Silicon Valley Bank and subsequent related events are “a fly in the ointment of central banks”. He said they now have two identified targets on their radar screens.

“The first inflation has almost emptied the firing chambers of their interest-rate drone,” he said.

“The beast is wounded, but still requires close monitoring.

Warnes said the second is the restoration of financial stability involving macro- prudential policy, requiring a very different approach to contain a possible contagion.

“The clear message from the central banks is they will not be distracted from winning the battle against inflation by the unwelcome fly.”

What does Warnes think the Reserve Bank of Australia will do with rate hike at its April meeting on Tuesday?

“While the board is dying to pause there is not enough evidence to move to the sideline just yet,” he said.

“While the CEOs of banks are pleading for a break in the hiking cycle as is Harry Triguboff, Gerry Harvey, and Solly Lew, a headline CPI still between 6 and 7% and the trimmed mean near 6%, suggests a pause is premature.”

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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Hubify (ASX:HFY) announced that subsidiary Broadland Solutions has entered a new five-year deal with Optus to sell Optus Enterprise Services to Aussie businesses.

The new deal will enable HFY to increase focus on the Enterprise Market segment with revenue estimated at ~$12m based on the current run rate.

HUB will exit from Optus Small Business Program from May 1, 2023 and get a $2.28m termination payment.

Gold and base metals mining and exploration company Aurelia Metals (ASX: AMI) is also ending the week on a high after announcing the process for a new credit facility to fund the Federation mine development is progressing well.

AMI said commercial terms are largely agreed, subject to final and binding documentation. n FY23, AMI is expecting to produce 83,000 ounces of gold at All-in Sustaining Costs (AISC) of A$2,300 per ounce in FY23.

ASX SMALL CAP LAGGARDS

Here are the worst performing ASX small cap stocks:

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Code	Company	Price	%	Volume	Market Cap
MRQ	Mrg Metals Limited	0.002	-33%	2,774,709	$5,957,756
PNX	PNX Metals Limited	0.002	-33%	3,879,778	$16,141,874
CLZ	Classic Min Ltd	0.0015	-25%	37,696,222	$4,874,879
PAB	Patrys Limited	0.016	-24%	30,362,708	$43,202,636
LRL	Labyrinth Resources	0.011	-21%	180,002	$13,432,823
RBR	RBR Group Ltd	0.002	-20%	312	$3,996,012
NMR	Native Mineral Res	0.037	-18%	252,398	$5,406,243
AEE	Aura Energy	0.245	-17%	3,445,139	$152,455,272
AD1	AD1 Holdings Limited	0.005	-17%	410,000	$4,204,388
CTN	Catalina Resources	0.005	-17%	1,313,756	$7,430,921
ENX	Enegex Limited	0.02	-17%	25,000	$4,053,984
CLT	Cellnet Group	0.021	-16%	348,465	$6,089,866
ADX	ADX Energy Ltd	0.006	-14%	2,024,294	$24,742,372
EX1	Exopharm Limited	0.012	-14%	94,714	$2,200,961
GTG	Genetic Technologies	0.003	-14%	660,540	$40,395,804
ICN	Icon Energy Limited	0.006	-14%	17,337	$5,376,096
ALY	Alchemy Resource Ltd	0.013	-13%	1,703,204	$17,671,144
KLI	Killiresources	0.06	-13%	185,042	$2,316,675
ADR	Adherium Ltd	0.0035	-13%	620,000	$19,985,753
ATH	Alterity Therap Ltd	0.007	-13%	3,944,342	$19,519,181
SHN	Sunshine Gold Ltd	0.014	-13%	700,000	$12,315,564
TAS	Tasman Resources Ltd	0.007	-13%	313,447	$5,701,354
USL	Unico Silver Limited	0.15	-12%	72,648	$42,390,719
MBX	My Foodie Box	0.015	-12%	50,328	$627,610
ZEU	Zeus Resources Ltd	0.015	-12%	721,200	$7,451,100

LAST ORDERS

Sky Network Television Limited (ASX:SKT) is taking advantage of lower markets and announced that it expects to start a $15 million on-market share buyback program on April 6.

“As outlined at Sky’s 2022 annual meeting and reiterated at the time of the company’s Interim Results announcement, the board believes that Sky’s shares are significantly under-priced, and are yet to reflect the company’s improved results and outlook,” SKT chair Philip Bowman said.

“As such, buying back shares represents an attractive investment opportunity.”

Bowman said the balance sheet of the provider of multi-channel, pay and free-to-air TV services in New Zealand remains strong and it has demonstrated earnings momentum.

Copper, gold and silver explorer Duke Exploration (ASX:DEX) has announced Philip Condon has resigned as managing director and is leaving the company from today.

DEX said Condon had been instrumental in completion of its full Bundarra copper exploration development program in Queensland and subsequently bringing the True North Copper (TNC) transaction to the board and progressing it to an advanced state.

“Under the TNC transaction as previously advised, Mr Condon was to step down from the board on completion of the transaction and as all transaction paperwork is well advanced it has been mutually agreed that it was now an appropriate time,” DEX said in a statement.

Shriro Holdings (ASX:SHM) has found a buyer for its Omega kitchen appliances wing, offloading it to Residentia Group, effective as of today’s date.

SHM said the brand represented 80% of its FY23 kitchen appliances sales year to date, but was due to be wound down and eventually shuttered – however, the sale of it’s entire Australian Omega inventory, display assets, intellectual property, spare parts, and warranty obligations to Residentia provides “an improved, faster, and more certain result in this financial year”.

TRADING HALTS

Olympio Metals (ASX:OLY) – Pending release of an announcement regarding a potential farm out by the company.

Meteoric Resources (ASX:MEI) – Pending release of an announcement regarding transaction to dispose Juruena Gold Project.

Hartshead Resources (ASX:HHR) – Also pending release of an announcement regarding a potential farm out by the company.

Paradigm Biopharmaceuticals (ASX:PAR) – To analyse biomarker, structural and clinical data relating to its phase 2 PARA_008 clinical trial and prepare an announcement.

Aston Minerals (ASX:ASO) – Pending announcement of executive and management team appointments.

Aura Energy (ASX:AEE) – Pending announcement regarding news of recent decisions by the Swedish Government.