• ASX 200 ends sharply lower on Monday, down 0.67%
  • All Sectors  close in the red, with InfoTech taking the worst of the damage
  • Small caps led by lithium minnows RR1, WC8 and VCM

Australian shares have joined most Asian markets in a retreat from the harsh light of looming central bank decisions this week.

The ASX Technology and Energy Sectors dragged the benchmark lower on Monday, with Wall Street losses on Friday night (new York) setting us up for similar action on Monday in Sydney.

The S&P/ASX 200 was down 0.67% at the close as all sectors traded in the red.

Tech stocks have been atrocious without the Nasdaq to hold their hands, the sector’s down -2.7%, easily its worst performance since mid August, with WiseTech Global (ASX:WTC) giving away another -2.5%

Local investors neither fought The Fed, nor bet against the BoE and a tricksy meet for the BoJ this week. Around the traps, markets in South Korea and in Hong Kong dropped sharply, while shares in Shanghai rose a little.

Japanese markets were closed for a holiday, lucky duckies.

At home, it’s been the kind of day where an errant San Mateo-based US private equity firm like Paine Schwartz Partners lobbed a new, second bid for control of the Aussie-listed Costa Group Holdings (ASX:CGC).

Only this week Paine Schwartz Partners have come back to the fruit and vegetable processor with an offer certain to disappoint.

What was $3.50 per share back in May, is now just $3.20 a share, the predatory group which specialises in sustainable food chain investing is now valuing Costa at $1.49bn, stripping a cool $100mn off the top line after some diligent due diligence which waited till Costa dropped a weaker profit outlook and a $30mn bad weather hit.

The Costa board is reviewing the lower offer and said it was still holding talks with Paine Schwartz about terms and conditions. It is still assessing whether the new offer is in the best interests of shareholders.

Costa Group has dropped 3.7 per cent on news that Paine Schwartz Partners has reduced its proposed takeover offer for the agricultural group to $3.20 per share.

Banks lost. Iron ore miners lost. Wallabies lost. Christian lost.

 

ASX Sectors on Monday                         Session   –   Week  –  Month  –  Year

 

Chart via MarketIndex.com.au

RIPPED FROM THE HEADLINES

They’re cleaning out in Beijing, again.

Since taking over from the now comparatively cuddly ex-President and once Chinese Communist Party General Secretary, Hu Jintao, (back in 2012), the now current Chinese President Xi Jinpng has repeatedly shown his preference for the old school purge as his go to tool, in a fairly limited political bag of tricks.

Under the guise of rooting out corruption or something similar, the purge is a powerful but blunt instrument best applied when securing power and removing dangerous pieces from the board.

If used properly, the purge need not be used again, and then only judiciously.

Which is why the total absence of China’s Defence Minister Lǐ Shàngfú (李尚福) for more than a fortnight is a bit of a worry. Especially for Lǐ Shàngfú.

A variety of credible media sources now report Li’s been placed under investigation by Communist Party authorities.

Li now joins former glamour Foreign Minister Qín Gāng (秦刚) – someone I’d’ve thought was a total cleanskin – who was yanked unceremoniously from his post in July. Under these two big fish, the last few months have been punctuated by a strong of lesser PLA and Party apparachiks who’ve been wiped from view (and memory) under ridiculously similar circumstances.

Which brings us to the unfortunately awful Chinese property giant China Evergrande and the more than U$330nbn of debt it’s been dragging around for the last few years.

The SCMP is reporting that late last week, Shenzhen police raided the debt-riddled developer’s subsidiary Evergrande Wealth, making off with several employees. Who’ll be out of sight for a while, undoubtedly sweated on in the most heinous fashion, and told which senior executive(s) to finger.

Shares in Evergrande crashed 25% out of the gates in HK this morning.

Shenzhen police released a statement saying several employees of Evergrande’s financial subsidiary have been arrested, but are naturally entirely mum about who, why or how many, nor what they may’ve done nor the charges against them.

But in the same release the police did ‘randomly’ ask the public to basically please keep an eye out and report any cases of suspected fraud.

I’m sure they’re unrelated issues and not an example of Xi’s adroit use of fear, paranoia and intimidation to attain a solution to a problem of any shape.

Evergrande, meanwhile just keeps stooping lower in what’s been a quite dizzying fall from the grace of being China’s biggest developer to the now rather dangerous ignominy of being the world’s most-indebted.

Xi’s rule has distinguished itself in Modern China, by his application of the never-ending purge. He started his corruption push from Day One of his presidency and frankly I’m always impressed there’s still any other candidates out there.

 

MONDAY’S ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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If you’d like a good read around Wildcat Resources (ASX:WC8) which is up about 85% for the day, I couldn’t recommend this thought piece from The Wildest Cat I know, Reuben Adams.

Reuben is bona fide legit. His spot-on Nostradamian description of WC8 almost one month ago is both well-written and downright creepy – a rare but most enjoyable cross-genre combo.

As Reub’s says – Wildcat is one of the most interesting small cap lithium stories on the ASX and it has delivered with the drill bit in an awfully big way.

 

WC8’s Monday share price action comes after drilling into a “major lithium discovery” at its Tabba Tabba prospect in WA.

It’s a littany of good-lookin’ lithium hits:

  • 85m at 1.1% Li2O from surface (TARC086) (down-hole length)
    • including 59m @ 1.5% Li2O from surface
  • 218m at 0.8% Li2O from 16m (TARC089) (down-hole length)
    • including 22m at 1.0% Li2O from 31m
    • including 23m at 1.0% Li2O from 152m
    • including 51m at 1.5% Li2O from 183m to end of hole
      • Estimated true width is approximately 53m

That’s the results from the central cluster WC8 drilled, and the second cluster isn’t as good, but it’s still pretty decent, with highlights such as 21m at 1.1% Li2O from 42m, and 20m at 1.3% Li2O from 20m.

Just 2km east of Delta Lithium’s Malinda Prospect, Bubalus Resources (ASX:BUS) has snapped up a few tenements prospective for lithium mineralisation in the Gascoyne Region of Western Australia.

The area’s never been the subject of a serious lithium hunt before, BUS says, which is exciting in and of itself – and the location means that Bubalus can now work year-round, as its other major projects are all a lot further north in the NT, and subject to closure during The Wet.

Climbing in arvo trade is a third Li2O vebture, Venus Metals (ASX:VMC). Venus has informed the ASX it’s mapped two new zones with outcropping LCT pegmatites, south from Lithium-rich pegmatites (reported previously on 24 August 2023), which are reportedly replete with as much as 4.6% Li2O.

 

In the bag: Massive Petalite at VMC East Zone (sample 2309018; 3.62 %LiO2).

Via Venus Metals (ASX:VMC) – Up on news it’s mapped two new zones with outcropping LCT pegmatites, boasting up to 4.6% Li2O. Via VMC

 

And sticking to the lithium theme, absolute Li2O minnow, Reach Resources (ASX:RR1) has jumped about 29%% to 0.018 cents a pop this arvo
after recent mapping at its 100% owned Morrissey Hill Lithium Project, in Yinnetharra WA has revealed a bunch of previously unrecognised, wide and strike extensive pegmatite swarms.

“Individual pegmatites extend up to 2km in strike length and over 30 metres in width.,” the company says.

The majority are hosted within mafic volcanics (basalts/greenstones) and/or mafic sediments of the Leake Springs
Metamorphics Group, – and you know what sports fans? That’s right They’re the same sequence as the one’s which host Monday’s most famous deposit – Delta Lithium’s neighbouring Malinda Lithium (ASX: DLI).

Combining the potential strike length of the Bonzer Pegmatite Field with these new target areas suggests a total strike length of prospective pegmatites at Morrissey Hill to be in excess of 10km… However, this does not include the potential for additional strike from “blind” pegmatites which have been proven to be on site through the recent maiden drill program, RR1 adds.

 

MONDAY’S ASX SMALL CAP LAGGARDS

Here are the best performing ASX small cap stocks:

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TRADING HALTS

Magnetic Resources (ASX:MAU) – In relation to a proposed capital raising.

OzAurum Resources (ASX:OZM) – In relation to a proposed capital raising.

Alderan Resources (ASX:AL8) – Pending news relating to a material acquisition and associated capital raising.

New Age Exploration (ASX:NAE) – Pending news in connection with a material capital raising.

Alligator Energy (ASX:AGE) – Pending an announcement in relation to a proposed capital raising

Thor Energy (ASX:THR) – Pending an announcement to the market in relation to a capital raising.

Strickland Metals (ASX:STK) – Pending an announcement in relation to a new gold discovery at its flagship Yandal Gold Project

BBX Minerals (ASX:BBX) – Pending an announcement to the market in relation to a capital raising

Synlait Milk (ASX:SM1) – “Synlait Milk Limited has become aware of new information it has received in relation to a material contract with a third party customer. The trading halt is being requested to provide Synlait Milk Limited with additional time to properly consider the new information and to inform the market.”

SUSPENDED FROM QUOTATION

Proteomics International Laboratories Ltd (ASX:PIQ) (the Company) requests the voluntary suspension of its securities pending the release of an announcement regarding the application for regulatory approval of the PromarkerD test in Australia and the reimbursement payment rate for the PromarkerD test in the United States.

The Company estimates that it will be able to lodge an announcement on or before the commencement of trading on Wednesday, 20 September 2023.

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