The S&P/ASX200 is lower in late trade on Tuesday, dropping around 30 points or 0.4%, after iron ore futures plunged in Singapore.

The SGX March booking shed a full 10% after lunch (Singapore time) on reports Beijing has just had it with the steel-making ingredients’ latest awesome comeback and has called a meeting of those involved for some old school intimidation.

All the iron ore majors tumbled, led by China-specialist Fortescue Minerals (ASX:FMG) down about 5%.

The ASX Emerging Companies [XEC] was 1.7% down at 4pm in Sydney.

The brave goldies have arisen for a second day, as the shiny safe haven kept rumbling to an eight-month high, while the energy sector backtracked after leading the market higher on Monday.

Not because that particular problem has been solved — it’s just profit taking. There’ll likely be more of that to come…

Did you know Tuesday…

The global rejigging from fossil fuels to sustainable energy has certainly been mucking around with markets of late, and now – thanks largely to Russia’s seriously unsubtle sabre rattling – that energy volatility could be about to whack the global economy.

As the Bank of China’s head of fixed income Mark Todd observes, “with the world lacking in energy – and as the West decides on how to manage the Ukrainian situation – Russia’s President Putin might just be pondering how he can manage gas supplies to Europe.”

Since the Cold War the Soviet Union and its successors have shown a real willingness to use energy as a handy geopolitical weapon, great for prying apart its enemies.

Nord Stream — a pipeline named like a Finnish lullaby — has effectively secured German energy dependence on Russia.

By 2020 Germany was relying on the Russian pipeline for between 50% to 75% of its natural gas – and the left leaning Merkel government ensures the cleaner fuel is used not only to power industry but also for heating and to generate electricity across Germany.

Russian gas exports to Europe hit new and excitingly leverageable record level in 2021 – despite American efforts to ramp up exports of liquefied natural gas to Europe.

And now – not that I’m trying to freak everybody out with an End of Days scenario –  crude futures jumped when trading opened this week and off they went – building on Friday’s 3-4% higher settlements.

Meanwhile, the International Energy Agency (IEA) has warned that the looming “chronic underperformance” by the chronically underperforming OPEC + (the plus bit there is Russia and its proxies) in meeting its production targets is “expected to deepen.”

Happily late to the party

Founder of Vanda Insights, Singapore-based energy analyst Vandana Hari, told Stockhead that even if the week proves to be uneventful in terms of an invasion, crude is unlikely to cool off substantially until the tension does. Oil may remain on the boil for several more days.

From the IEA: “Coupled with OECD oil inventories languishing 255 million barrels below their five-year average and at the lowest levels in seven years, the market has been left with a “small cushion,” predicting Canada, Brazil and Guyana can add another 460,000 b/d between them.

Hari notes the Baker Hughes index recorded 19 net additional oil rigs brought into operation in the US last week, its biggest weekly jump in four years.

“But overall, the IEA report ended up supporting bullish oil sentiment,” she told Stockhead.

That’s because it costs a good deal more than before.

“Other than those who ride on two-wheeled transport, everyone knows a trip to the bowser is a grim experience,” Mark Todd (a notorious maestro on a moped) says.

This is not a stimulation.

The following chart is the active WTI contract.

“This is not stimulatory,” Todd assures.

“And it is likely to be another data point that the Fed must consider in its – “out of how many options” – playbook.”

Gareth Aird chief economist at the Commonwealth Bank is now saying the first RBA rate hike will come in June. Mr Aird sees the RBA hiking a full per cent by Christmas, followed by one further 25bp rate hike by March next year.

But let’s leave the adults there.

TODAY’S BIGGEST SMALL CAP WINNERS

(Stocks highlighted in yellow rose after making announcements during the trading day).

Scroll or swipe to reveal table. Click headings to sort.

Code Company Price % Volume
ALT Analytica Limited 0.002 100% 429,938
TKL Traka Resources 0.015 25% 737,800
AIQ Alternative Invest 0.125 25% 175
OAR OAR Resources Ltd 0.006 20% 26,891,794
PGD Peregrine Gold 0.67 18% 440,179
BRX Belararoxlimited 0.405 17% 438,898
ARO Astro Resources NL 0.007 17% 1,555,592
LNY Laneway Res Ltd 0.007 17% 1,002,511
MBK Metal Bank Ltd 0.007 17% 2,657,259
ROG Red Sky Energy. 0.007 17% 7,594,710
IS3 I Synergy Group Ltd 0.115 16% 9,691
RAN Range International 0.015 15% 1,248,572
AXP AXP Energy Ltd 0.008 14% 41,768,270
TSC Twenty Seven Co. Ltd 0.004 14% 39,851,483
SGM Sims Limited 17.04 14% 2,413,274
IEC Intra Energy Corp 0.025 14% 839,113
KNM Kneomedia Limited 0.017 13% 1,774,543
CV1 Cv Check Ltd 0.13 13% 327,373
DBO Diabloresources 0.13 13% 153,768
OEC Orbital Corp Limited 0.235 12% 387,420
ARC ARC Funds Limited 0.66 12% 20,941
LLO Lion One Metals Ltd 1.395 12% 12,059
PPY Papyrus Australia 0.068 11% 396,567
WGR Westerngoldresources 0.15 11% 29,278
FAU First Au Ltd 0.01 11% 820,161

Oar Resources’ (ASX:OAR) is up about 40% today, after revealing plans to start drilling a brief 8km from Chalice’s world-class Gonneville polymetallic discovery.

The +880km tenement contains a whole whack of geophysical trends thought to represent rock sequences like those at Chalice Mining’s adjacent Julimar Complex.

A new survey is set along the eastern tenement area of Oar Resources’ Crown Nickel-Copper-PGE Project, including areas of historic mining activity. The Eastern Domain is characterised by a mixture of the targeted mafic, ultramafic, and granitic lithologies and has become the focus of OAR’s exploration activity.

OAR says the upcoming survey will seek to identify drilling targets for the first phase of drill testing, which will begin ASAP. 

TODAY’S BIGGEST SMALL CAP LOSERS

(Stocks highlighted in yellow fell after making announcements during the trading day).

Scroll or swipe to reveal table. Click headings to sort.

Code Company Price % Volume
EN1 Engage:Bdr Limited 0.001 -50.0% 303,431
CAQ CAQ Holdings Ltd 0.013 -48.0% 19,811
ANL Amani Gold Ltd 0.001 -33.3% 8,593,572
CCE Carnegie Cln Energy 0.002 -33.3% 5,648,115
9SP 9 Spokes Int Limited 0.006 -25.0% 8,751,845
BAS Bass Oil Ltd 0.0015 -25.0% 4,066,401
TEG Triangle Energy Ltd 0.016 -23.8% 7,067,394
HLF Halo Food Co. Ltd 0.1 -23.1% 8,858,132
SGQ St George Min Ltd 0.047 -23.0% 12,740,328
SIH Sihayo Gold Limited 0.007 -22.2% 980,001
CLE Cyclone Metals 0.004 -20.0% 3,253,351
GTG Genetic Technologies 0.004 -20.0% 613,144
NTL New Talisman Gold 0.002 -20.0% 5,952,720
OEX Oilex Ltd 0.004 -20.0% 6,131,195
BSX Blackstone Ltd 0.48 -19.3% 10,694,811
BOC Bougainville Copper 0.625 -18.3% 432,272
TAS Tasman Resources Ltd 0.02 -16.7% 3,456,515
TMK Tamaska Oil Gas Ltd 0.01 -16.7% 8,368,545
MAY Melbana Energy Ltd 0.066 -16.5% 105,424,336
LBY Laybuy Group Holding 0.105 -16.0% 4,057,038
LDR Lode Resources 0.185 -15.9% 966,272
ODM Odin Metals Limited 0.027 -15.6% 4,238,308
MCM Mc Mining Ltd 0.081 -14.7% 2,400
MRI Myrewardsinternation 0.094 -14.5% 2,564,030
ADY Admiralty Resources. 0.018 -14.3% 437,563

 

Laybuy letting go…

Hmm. Laybuy Holdings raised $40m at an all-in IPO in September 2020 at $1.41 per share.

The company closed today at 10.5c.

 

ANNOUNCEMENTS YOU MAY HAVE MISSED

Lakes Blue Energy (ASX:LKO) says drilling of the Wellesley-2 well is at 1,475m depth, just above the predicted reservoir section. Any significant gas show(s) will be tested once target depth has been reached, the company says.

A recently completed $1.6m placement means the company will be cashed up with $7.1m, significantly reducing funding that will need to be secured for drilling of the Wombat-5 gas well later in 2022.

Mark Creasy’s Yandal Investments is now a substantial shareholder in gold and lithium explorer Peregrine Gold (ASX:PGD). Yandal subscribed for 4.5m shares at $0.50 each to raise $2.25m.

Advanced Human Imaging (ASX:AHI) has announced co-founder and former CEO Dr Katherine Iscoe will be rejoining the leadership team as a non-executive director and CEO.  Furthermore, Nick Prosser has been appointed as the interim non-executive Chairman.

Prosser has served on the AHI board since 2018, is on the board of several ASX-listed companies and founder of Canberra Data Centres, which was acquired by Infratil and Commonwealth Superannuation Corporation for an enterprise value of $1.16 billion in 2016.

eSports and gaming technology company Emerge Gaming (ASX:EM1) has extended its voluntary suspension on the bourse as it spins out its major sales generator MIGGSTER.

Emerge said it was working to achieve a positive result for the company and shareholders through the divestment of the gaming platform MIGGSTER. The company is looking to update the market on or before February 21 and has requested a suspension until this time.

Matters of the heart

Heart specialist Anteris Technologies (ASX:AVR) has turned down a merger proposal with NASDAQ-listed special purpose acquisition company Medicus Sciences Acquisitions Corp (MSAC) with the “its me and not you line”.

The company said despite some advantages to the merger, “such as relatively expeditious access to US capital markets, the company’s board concluded the timing of the proposal was not in shareholders nor the company’s best interests at this point.”

TRADING HALTS

The following companies went into a halt on Monday and are expected to recommence trading over the next few days.

Bowen Coking Coal (ASX:BCB) – capital raise

Critical Resources (ASX:CRR) – capital raise

Advanced Human Imaging (ASX:AHI) – pending announcement