• Both ASX Small Cap and benchmark index are down about 0.5%
  • A bleak forecast from Covid-stricken China hits resources stocks
  • Appen in trading halt after jumping 30%  

 

Local markets took a turn for the worse on Thursday after Chinese Premier Li Keqiang sent the major diggers a glum message, warning the world’s second largest economy is in its worst shape since Wuhan 2020.

Overnight, Li a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council delivered an unusually blunt warning as the nation continues to wilt under the the unyielding Covid-lockdowns directed by President Xi Jinping.

Li’s extraordinary emergency meeting with hundreds, or likely thousands of local government officials, party cadres, state-owned companies and corporate leaders, doesn’t yet suggest a division of purposes between Li’s state council and Xi’s Communist Party, but it is certainly notable. The lockdowns are undoubtedly the very cause of the economic challenge Li is out front of.

Calling for a big sterling united push to stabilise growth, Li urged leaders to deal with their various personal issues and China’s disastrous youth jobless rate.

Meanwhile, China’s demand for thermal coal is likely to continue its downer through the rest of the first half, as Covid-lock ins continue to hit the broader economy.

The major producers like Whitehaven (ASX:WHC) have fallen sharply on news the (CCTDA) China Coal Transportation and Distribution Association expects demand to fall again over May and June after steep declines in April.

At home, the commodities, major miners and utilities are leading the retreat, while Appen shares were smoking, up some 30% ahead of an arvo trading halt, but are still yet to reconcile with the scope of the bid, which Stockhead’s Eddy Sunarto is literally still struggling with.

 

TODAY’S BIGGEST SMALL CAP WINNERS

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

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Technically artificial intelligence (AI) training data services Appen (ASX:APX) might not be the smallest cap in the cupboard, but it’s certainly been trying on sizes.

Mainly small ones – in the few months since Christmas APX has lost almost half its value – with the gentle scribes at the AFR referring to them as that ‘bombed out AI software company’.

Well now they’re a total takeover target after receiving an offer from Canadian based telco, Telus International.

At $9.50, the offer price was a huge 48% premium to Appen’s $6.40 closing price on Wednesday.

There’s totally going to be a bidding war. Our fave kind of war.

Reuben is like an incensed cat, the way he stalks these unsuspecting minnows, Ragusa Minerals (ASX:RAS) up on nothing new, other than another morning of outsized gains for this innocent lithe little lithium out at Litchfield, which picked up an additional 570sqkm in the regions luscious pegmatite belt in the NT on Monday.

Stockhead’s no. 2 deputy editor says $17m market cap stock is up some 35% over the past week to one year highs.

Like a fine chianti and a Golden Gaytime, the new ground snapped up on Monday goes very well with a similarly flavoured acquisition announced mid-March.

The virtual reality business  xReality Group (ASX:XRG) has raised $1.26m via a placement at NO discount to the last trading price. The share price has gone all Lawnmower Man – up 40% this morning.

BBX Minerals (ASX:BBX) says it’s hit “significant precious metals values” in Brazil. Its value is significantly more precious today and, wait for it, still moving heavenwards is Eden (ASX:EDE) thanks to an excellent offtake agreement.

 

TODAY’S BIGGEST SMALL CAP LOSERS

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

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ANNOUNCEMENTS YOU MAY’VE MISSED

Perpetual Resources (ASX:PEC) revealed it’s getting super-close to hitting the go button on its Upper White (UW) and Lower White (LW) sub-domains at Beharra. The company is sounding pretty positive ahead of assay results, bringing Perpetual closer to doing its bit to end the silica shortage that’s dividing semi-conductor manufacturing from demand.

Also on the topic of critical shortages, Australian Dairy Nutritionals (ASX:AHF) says it’s on track to start production of baby formula, after hitting a milestone of milk powder production at its new plant.

Global supply chain issues have sparked a serious issue in the world of baby formula – and ADN says its had some hiccups trying to get ingredients. Despite that, ADN says the milestone is boosting its confidence that it will have its Ocean Dairies organic A2 infant formula range onto sChemist Warehouse shelves in 2HCY22.

And a nice little taste of last minute news comes from Objective Corporation (ASX:OCL), which has secured a five-year contract to work with New Zealand Police to roll out the Arms Information System.

Objective says the program will use its Objective RegWorks platform to get the job done – and the company will pocket a handsome ~$12 million to help Constable Kiwi get his head firearms transactions in the short-term, while aiming to have a complete picture of all (legally-owned) firearms in NZ.

TRADING HALTS

Yancoal Australia (ASX:YAL) – trading halt, pending an announcement relating to a potential material transaction

Race Oncology (ASX:RAC) – trading halt, pending an announcement relating to the release of clinical results for the dose escalation phase of the 1b/2 Zantrene AML trial in Israel

Apiam Animal Health (ASX:AHX) – trading halt, pending an announcement regarding a capital raising

Crowd Media (ASX:CM8) – trading halt, pending an announcement regarding a capital raising

Oklo Resources (ASX:OKU) – trading halt, pending an ASX announcement regarding a change of control transaction

Predictive Discovery Limited (ASX:PDI) – trading halt, pending an announcement regarding a capital raising