Closing Bell: ASX closes higher, XEC index hits 5 month high and AI player nabs Japanese deal
The ASX 200 managed a 0.44% gain today, with 7 out of 11 sectors higher, led by Real Estate which gained 1.82%.
The XEC small cap index saw a 0.43% gain and is now at its highest point since August last year and is up 9.91% for the year-to-date.
Among the notable small caps news today was ‘digital human brand’ UNITH (ASX:UNT) who focus on developing facial movement deep learning, audio machine learning, and conversational design (NLP) to generate the first customizable, interactive avatar.
And they’ve just signed a binding Heads of Agreement (HOA) with NVISO Japan K.K – a subsidiary of AI player NVISO SA – to integrate behavioural analytics into digital humans in conversational settings for deployment into digital kiosks in Japan.
UNITH’s Talking Head platform will be integrated into NVISO’s holistic platform which features predictive analytics tied to emotional and transactional outcomes.
The integrations will be designed to deliver interactive digital avatars that are able to understand various behavioural and emotional facets of its interactors through eye tracking and facial detection.
Not creepy at all.
UNITH (#ASX: $UNT) is pleased to announce it has entered into an agreement with @NVISO to integrate #behaviouralanalytics into #digitalhumans for digital kiosks in #Japan. #artificialintelligence #AI Read more: https://t.co/FjfREFhPLK pic.twitter.com/vtdM60hVj7
— UNITH (@Unith_AI) January 24, 2023
“The Japanese market is well established for automation through computer-to-human interactions with digital characters and NVISO’s presence and expertise in Japan brings significant added value to the partnership,” UNITH CEO Idan Schmorak says.
“By deploying a digital avatar to a kiosk and humanising it with behavioural detection, we will deliver an AI solution that can know how a human is feeling, understand their attentiveness and facilitate an outcome accordingly.
“This step is consistent with UNITH’s distribution strategy to scale the reach of the Talking Head technology while developing the platform.”
For context, the end-user expenditure on AI systems (including software, services, and hardware) in Japan stood at US$2.1 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 24% until 2026, which would value the market at more than $6.1 billion by 2026.
“US markets have started the week in the same way they ended last week, with the Dow lagging behind the S&P 500, while the Nasdaq has moved to one-month highs after yet another tech company announces a series of cost-saving measures and job cuts,” CMC Markets analyst Michael Hewson wrote, referring to music-streaming company Spotify’s announcement of 600 layoffs.
Areas of the market hardest hit in last year’s selloff have led the rally in the new year as the prospect of slowing rates gave investors’ confidence to pick up shares of companies promising growth in the future.
Technology stocks have climbed, with the Nasdaq Composite up roughly 8% in 2023.
Though traders are betting the Fed will cut rates later this year, some money managers are predicting rates could stay higher for longer as the central bank has more work in store to tame inflation.
Daniel Morris, chief market strategist at BNP Paribas Asset Management, said that is one reason why the firm is taking a cautious stance on stocks. It is also betting that two-year Treasury yields will rise relative to yields on six-month bills, which could happen if market forecasts for interest rates pick up again.
“Inflation isn’t going to slow down as fast as the market expects,” Mr. Morris said.
Here are the best performing ASX small cap stocks:
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The biggest winner was graphite explorer Lincoln Mines (ASX:LML) who was placed in bourse purgatory way back in September 2020 because it had no cash and was doing bugger all exploration.
LML spent 2021 doing mostly nothing, but woke up in 2022 when it received an unsolicited takeover offer from fellow South Australian project developer Quantum Graphite (ASX:QGL).
The initial all share offer (1 QGL share for every 40 LML Shares held, valuing the company at ~$6m) was rejected by the board and substantial shareholders in the company, but QGL has today extended its offer again for the third time.
What’s changed? The QGL share price, which is now ~70% higher since the offer was first made September last year (although well down on the high of 70c from earlier this month).
$167m market cap QML says LML’s Kookaburra Gully project has synergies with its own mothballed, century-old ‘Uley’ graphite mine in South Australia, one of the largest high-grade natural flake deposits in the world.
But like LML, QGL doesn’t have a great track record of success.
QGL first suspended operations at the struggling Uley mine in late 2015, before entering administration in July the following year.
The share price tumbled from highs of 70c to 11.5c prior to suspension.
It relisted on the ASX in late September 2018 after three years of ostensibly sorting out its debts and finances.
It was suspended again in 2020 after the ASX required further info relating to its Annual Report, and then reinstated in December the following year.
Kids smartwatch developer Spacetalk (ASX:SPA) had a decent Q2 FY23, with a $3.3m improvement in Q2 FY23 free cash flow as compared to Q1 FY21 – the first time Spacetalk has had a positive quarterly cashflow since Q3 FY21.
Compared to the pcp, the $3.3m cash inflow was a fantastic transformation vs the outflow of $2.9m in Q1 FY21.
During the quarter, Spacetalk exited a lower profitable product line (budget watch) in favour of a more profitable alternative.
The company also underwent a significant cost reduction program, with $2m slashed over Q3.
The search for a CEO is still progressing but has reached the final stage, and the company says it’s hoping to to announce something to the market shortly.
They had $4.2m cash in bank at the end of the period.
Here are the worst performing ASX small cap stocks:
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Cipherpoint (ASX:CPT) – capital raising
Native Mineral Resources (ASX:NMR) – capital raising
K-TIG (ASX:KTG) – a material acqusition
Tech company Optima Technology Group (ASX:OPA), which also was previously known by another name Bill Identity, has received a cash boost, today announcing it has received a research and development tax cash refund of more than $1.3 million.
The company said the refund is in addition to its cash balan of ~$7.2 million as at December 31, 2022. OPT offers automated and secure data management solutions now focused on net zero reporting along with bill management and procurement planning.
Tech company Netlinkz (ASX:NET) has announced Macquarie Group has become a substantial shareholder.
Netlink’s virtual secure network (VSN) Network-as-a-Service (NaaS) solution allows for secure data transmission.
The company recently announced it would provide its services to the Thailand market and has also signed an agreement with Space X to be only one of 10 global resellers of Starlink terminals.
ETF issuer Global has announced it will soon be launching the first fully systematic index tracking covered call products in the Aussie market. The three covered call strategies to be launched on the ASX include:
AYLD – Global X S&P/ASX 200 Covered Call ETF
UYLD – Global X S&P 500 Covered Call ETF
QYLD – Global X Nasdaq 100 Covered Call ETF
Global X said it has been running covered call strategies in the US for a decade with QYLD and UYLD set to track two of its most successful strategies. QYLD US is its biggest fund in the US with US$6.6 billion in AUM whilst XYLD.US, which it will launch as UYLD on the ASX, has US$2.2 billion in AUM.
QYLD and XYLD have paid monthly distributions for the last eight and nine years running, respectively.