• ASX closes dead flat after struggling for traction all day
  • REITS, Insurers among the day’s very few winners
  • Guzman y Gomez makes a stellar debut, while Terra soars

 

The local benchmark index went limp in my hands on Thursday, curling over at the run of consumer stocks, healthcare and tech companies.

But. The headline ASX-debut of Mexican fast-food curator, Guzman y Gomez surprised on the upside at lunchtime with its sparkling $335mn initial public offering (IPO).

The S&P/ASX200 however has ended absolutely flat.

 

Via ASX

 

The ASX 200 drifted aimlessly, without the positive influence of US equity markets which were closed overnight for the Juneteenth holiday, says IG Markets analyst Tony Sycamore.

“With six trading days left until the halfway mark of 2024, the ASX 200 has gained only 2.30% this year, while the US NASDAQ 100 has surged 18.31% in the same period, boosted by substantial gains in tech shares like Nvidia, up an incredible +173.78% this year.”

The Guzman y Gomez (ASX:GYG) IPO was welcomed with ope arms onto the ASX on Thursday at – conveniently – lunchtime.

Shares in GYG opened 36% higher to $30.00

The $2.2 billion listing is one of the largest and certainly among the best promoted on the ASX since the eventual mess that has become Nuix (ASX:NXL), back in the days of social distancing.

GYG put up some $335 million worth of stock at $22 a pop, having initially suggested a float circa $242.5 million.

It’s been a tall glass of taco juice for much a thirsty and rapidly shrinking ASX, in just the past month Silver Lake Resources (ASX:SLR) merged with Red 5 (ASX:RED) and CSR (ASX:CSR) succumbed to France’s Saint-Gobain.

RED was the worst performing RED down 6.18% and 4.24% respectively. Over the last five days, the index is virtually unchanged, but is currently 1.89% below its 52-week high.

The newly-listed burrito business with added bling debuted to some exciting buying on a dull day.

This, despite boasting a price to earnings (PE) of 550 and a valuation of 32.5-times pro-forma EBITDA for the next financial year.

Troubled competitor Domino’s Pizza Enterprises (ASX:DMP) looks positively a a comparative steal, trading at a PE of circa 100.

Typically, your average P/E ratio is circa 20 to 25.

Anything below 30 might be considered a handy price to earnings ratio, whereas anything above would be not so handy.

OFC, different industries have different average ratios – the current Restaurants/Dining ratio for S&P500 companies, for example, is currently around 57.

Nevertheless, GYG shares opened 36% higher to $29.95.

So there may be more excitement for the fanfare of the event, rather than the full enchilada

Otherwise, REITS and the insurers and CBA were doing best on an ordinary Thursday of trade, after ASX200 Financial Sector hit a fresh s17 year high on Tuesday.

 

ASX Sectors on Thursday

Via ASX

 

Of the major property plays, Scentre Group (ASX:SCG) and GPT Group (ASX:GPT) were up a few per cent.

Stadium sponsors and insurance rivals, QBE Insurance (ASX:QBE) and Suncorp Group (ASX:SUN) were both up over 1% while the lesser known insurance broker Steadfast (ASX:SDF) was also in the money.

Helia Group (ASX:HLI) , Wednesday’s biggest bigger-than-small cap loser, came out of the blocks on Thursday as a rare target of buying, ending the session among the biggest winners. Tony says its 15.5% gain followed a favourable broker upgrade.

“The broker’s positive outlook is based on the belief that Helia will likely retain Commonwealth Bank (ASX:CBA) mortgage insurance business and gain Bankwest’s – currently with QBE.”

Engineering services company Worley saw its shares rise 1.4 per cent, coal miner Yancoal was up 1.8 per cent, and EBOS Group gained 1.4 per cent, to be the biggest large-cap advancers.

Consumer staples (down 0.5 per cent) were among the worst performers, with Treasury Wine Estates (down 1.1 per cent) leading the sector lower.

The healthcare sector (down 0.7 per cent) was also weaker, with shares of market heavyweight and hearing implants maker Cochlear losing 3.7 per cent.

Meridian (ASX:MEZ) was short more than 4% by the bell, while gold miner Evolution Mining (ASX:EVN) was down over 2.4%, both among the saddest of some depressed large caps.

On the wannabe bigger front, Special mention to founder Oleg Vornik’s drone killing DroneShield (ASX:DRO) – announcing yet another big contract win from yet another new customer

DRO’s share price is now trading at $1.65, a remarkable 82% increase from this time last month.

 

The UNASX

Wall Street was closed last night for Juneteenth celebrations, so instead of blaming our friends in New York for this morning’s lukewarm effort on the ASX, we’re turning to Europe to figure out why our local investors are in a sour and spiteful mood this morning.

Markets overnight in Europe were generally lower, as traders looked for new catalysts to sustain the recent tech-driven rally.

The benchmark European Stoxx 600 index slipped -0.2% following two consecutive days of gains. The French CAC40 also fell by -0.77%, while the UK’s FTSE 100 closed +0.17% higher.

Investors kept an eye on developments in France after the European Union criticised it for not adhering to the bloc’s deficit and debt rules. The French 10-year bond yields jumped by 4 basis points.

Around the traps today, regional markets were largely down without the Americans to spark encouragement.

The PBoC (People’s Bank of China) did keep= its one-year and five-year loan prime rates (LPR) unchanged at 3.45% and 3.95%, respectively.

The one-year LPR serves as a benchmark for most corporate and household loans while the five-year LPR serves as a peg for property mortgages.

Traders hit pause without the lead and ahead of Japanese inflation data and various PMIs set for Friday.

Equity markets were ordinary in New Zealand, Japan, Hong Kong and China, while the Kospi in Korea rose slightly.

 

US Futures

Via Fox

 

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

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Up 177% at the time of writing, Terra Metals (ASX:TM1), has taken off on news that early-stage drilling has hit multiple copper platinum group element (PGE) reefs from surface, only 15km down the road from BHP’s (ASX:BHP) $1.7 billion Nebo-Babel mine development.

The WA-focused critical minerals junior explorer reports early-stage drilling at the company’s Dante project in West Musgrave has confirmed the multiple “Platreef-style”  PGE reefs from surface.

The results hail from a further 14 wide-spaced, “first-pass reconnaissance” drill holes at Dante Reefs, and these are defined so far over 4.5km of the Reef 1 and 2 targets, with mineralisation open along strike and downdip.

Via ASX

The Dante project is considered by the company to have potential to host a large sulphide deposit of copper, gold, PGEs, vanadium and titanium – which is also considered the first of its kind in Australia.

The reefs themselves are a geological formation that Terra describes as “a series of gentle dipping, laterally extensive, mineralised layers (similar to a coal seam) which outcrop from surface and in total run for 42km”.

They’re about 10m thick, with a high-grade basal layer of about 5m.

 

Source: Terra Metals

 

Assays are pending from a further 16 drillholes covering an additional 4.5km of strike at Reef 2.

“We are excited to have discovered multiple Platreef-style copper-PGE sulphide reefs from a first pass-reconnaissance drilling program at the Dante project; the first of its kind in Australia,” managing director and CEO Thomas Line said.

“The discovery of similar style reefs in the Bushveld Province of South Africa has resulted in some of the world’s largest, longest running and most profitable PGE, copper, nickel, gold, vanadium and titanium mining operations with over 100 years of ongoing production.”

Up about 36% is Hexagon Energy Materials- HXG (ASX:) which has completed a funding round which it says takes the company to the FEED stage of its WAH2 low-emissions ammonia project.

The funding round of A$1 million (A$0.94 million net of fees) was completed with funds to be received by tomorrow – 21 June 2024.

HXG says to minimise dilution to existing shareholders, the funding was structured as a convertible note which references future share prices to allow Hexagon to achieve a higher effective issue price\ from any higher valuations after re-rating as announcements are made, whilst also guaranteeing a minimum conversion price of A$0.02.

The funding enables Hexagon to progress technical work, regulatory approvals and commercial negotiations with key service and offtake partners in readiness for WAH2 Project FEED-entry (a gateway in the development of the project at which strategic partners have indicated that they would enter into agreements with the HXG.

Junior uranium and goldie Haranga Resources (ASX:HAR) main game is in West Africa, primarily Senegal. The company’s portfolio spans Senegal, Cote d’Ivoire, and Burkina Faso, covering 2,702sqkm across seven tenements.

HAR upgraded uranium resources at its Saraya project in West Africa to 16.11 million pounds, with the majority of this within 140m from surface.

More specifically, the upgraded Mineral Resource Estimate (MRE) reveals an Indicated Mineral Resource of 6.04 million pounds of eU3O8 at a grade of 752 ppm eU3O8, and an Inferred Mineral Resource of 10.1 million pounds of eU3O8 at a grade of 484ppm eU3O8, totaling 16.11 million pounds at 558ppm eU3O8 (cut-off grade of 250ppm).

About 80% of the resource is near surface and suitable for open pit mining, with mineralisation extending along strike, down-dip, and down-plunge.

The company notes that laboratory assay results from 29 RC holes completed in Q1 will inform further updates.

Control Bionics (ASX:CBL) was also moving quickly on Thursday morning, after revealeding that its autonomous wheelchair module, DROVE, has been officially included as a Class 1 Medical Device in the Australian Register of Therapeutic Goods, which means CBL can now commence commercial sales of the DROVE module in Australia.

And Aldoro Resources (ASX:ARN) was the next best performer, climbing nicely after announcing that the company has picked up some crackerjack rock chip samples at its Kameelburg carbonatite project.

Results from 74  newly collected samples are in and those highlight the REE-rich nature of the carbonatite with TREO(+Y) assays ranging from 1.16 to 9.89%. The most notable niobium assays revealed up to 10.38% Nb2O5 and 9.89% TREO.

The broad mapping operation is now nearing completion and preparations are reportedly being made for a maiden diamond drilling campaign.

 

ASX SMALL CAP LAGGARDS

Today’s best performing small cap stocks:

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TRADING HALTS

InteliCare (ASX:ICR)  pending an announcement to the market regarding a capital raising.

Western Mines Group (ASX:WMG) – pending announcement of a capital raising.

Mayur Resources (ASX:MRL) – pending an announcement in relation to the capital funding requirements for its Central Lime Project.

Radiopharm Theranostics (ASX:RAD) – pending an announcement in relation to a potential capital raising.

 

IN CASE YOU MISSED IT

Belararox’s (ASX:BRX) geological mapping has uncovered a second porphyry system at the Tambo South target in addition to the Malambo system at its Toro-Malambo-Tambo project Argentina.

Felix Gold (ASX:FXG) has defined a maiden inferred resource of 25Mt grading 0.58g/t gold for 467,000oz of contained gold for the NW Array prospect within its Treasure Creek project in Alaska.

Green Technology Metals (ASX:GT1) has appointed its executive director and co-founder Cameron Henry to the role of managing director. His appointment comes as the company prepares for critical milestones in permitting, financing and project development for the Seymour lithium project this year.

Haranga Resources (ASX:HAR) has substantially increased the confidence of its Saraya uranium resources in Senegal with more than a third of it – 6.04Mlbs at 752ppm eU3O8 – now included in the Indicated category.

James Bay Minerals (ASX:JBY) has started field work activities on its Aqua asset in Canada’s prolific James Bay region. The work will investigate high-priority lithium-caesium-tantalum pegmatites.

Lycaon Resources (ASX:LYN) has started a heritage survey to pave the way for drilling at its Stansmore niobium-REE project in the booming West Arunta exploration province.

Prospect Resources (ASX:PSC) has completed lithium exploration at Step Aside and Omaruru projects. It will now focus on its new Mumbezhi project in the Zambian Copper Belt.

Terra Metals’ (ASX:TM1) early stage drilling has confirmed the discovery of multiple ‘Bushveld style’ copper-PGE reefs at its Dante project in Western Australia.

Western Yilgarn (ASX:WYX) has entered into a binding farm-in and joint venture agreement with Bellpark Minerals to augment the Ida Holmes Junction asset.

 

At Stockhead, we tell it like it is. While Belararox, Felix Gold, Green Technology Metals, Haranga Resources, James Bay Minerals, Lycaon Resources, Prospect Resources, Terra Metals and Western Yilgarn are Stockhead advertisers, they did not sponsor this article.