• The ASX 200 rose again, up 0.53% on lower than normal volume
  • ASX XEC also up 0.79%
  • 10 out of 11 sectors were in the green

 

The ASX 200 gained 0.53% today and so did the ASX XEC, which was up 0.79%, and a total of 10 out of 11 sectors were higher, led by Utilities (again) which rallied by 1.59%.

This week the Westpac-Melbourne Institute said the Leading Index of Economic Activity was 97.64 in November, down from a revised 97.77 in October – suggesting that the Australian economy will grow at a below-trend pace in the next 3 to 9 months.

“The growth rate of the Leading Index continues to hold in negative territory. November is the fourth consecutive month that the growth rate has been negative,” Dr Tim Robinson said.

“That first negative signal in August was consistent with a below trend growth pace in late 2022 and well into 2023. 

“The persistence of these negative prints confirms the sustained below trend outlook for the Australian economy in 2023.”

Dr Robinson says the Leading Index growth rate has seen a sharp turnaround over the last six months, going from running 0.66% above trend in May to 0.92% below trend in November. 

“Two components account for the 1.57ppt swing: the yield spread, which has seen a sharp narrowing as policy tightening has driven up short term rates (–0.86ppts); and commodity prices, which have seen a significant reversal in AUD terms (–0.74ppts),” he said.

 

NOT THE ASX

Chinese shares finished lower, yesterday as market sentiment remained weak due to the bleak economic picture caused by massive Covid outbreaks after a disorderly reopening. 

Although there is no nationwide shutdown currently, market participants and business owners are facing uncertainty after years of repeatedly stopping and restarting economic activities, wrote Robin Xing, chief China economist at Morgan Stanley, in an open column Wednesday.

Japanese stocks also ended lower, dragged by auto and real estate shares, as concerns grew about higher borrowing costs following the Bank of Japan’s move to loosen its yield control.

But European stocks made solid gains as Wall Street rose amid upbeat US corporate and economic news.

“Having just about closed in the green Tuesday, US markets have taken their cues from Wednesday’s positive European session and the reaction to last night’s numbers from Nike and FedEx, opening strongly higher,” CMC Markets analyst Michael Hewson wrote. 

“A strong US consumer confidence number for December has also helped, rising to its best level since April this year, which has helped push yields slightly lower.”

 

ASX SMALL CAP LEADERS

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The biggest winner was nickel, cobalt and manganese explorer NiCo Resources (ASX:NC1).

The company hit the bourse back in Jan with eyes on the pre-feasibility study for the Wingellina Project, which forms part of the larger Central Musgrave Project (spanning across Western Australia and South Australia) before the end of 2022.

And today they announced that PFS, which has confirmed Wingellina as a Tier 1 project capable of supplying decades of Nickel and Cobalt for the electric vehicle (EV) and energy storage industries for a minimum of 42 years. 

The PFS flagged a Capex of A$2.39bn plus contingency of A$0.52bn, results in a total capital cost of A$2.90bn (US$1.95bn). 

The company says the project could potentially be one of Australia’s largest nickel-cobalt mines with a production of approximately 40,000tpa of contained nickel and 3,000tpa of contained cobalt based on current ore reserves.

“We are delighted to release such a robust PFS which confirms Wingellina as a globally significant nickel and cobalt asset, generating A$60bn – A$80bn in revenues over the current 42-year reserve,” MD Rod Corps said.

“The study outlines a robust top-tier, low-cost, long-life operation producing c.40,000 tonnes of nickel and 3,000 tonnes of cobalt per year for over 40 years based on the current reserve only. The project can deliver excellent cash flows, with an exceptional 3-4 year payback period and a post-tax NPV8 of A$3bn (base case) – A$6bn (spot price). 

“We are also very pleased to incorporate the use of renewable power sourced from wind and solar within the PFS as we move along our pathway to net zero emissions.” 

Cyprium Metals (ASX:CYM) has signed an exclusive term sheet with Transamine SA for US$35mn in respect of a copper cathode offtake secured prepayment facility.

This is part of the targeted AUD$240mn to $260mn debt funding package to finance the restart of the Nifty Copper Project, which is expected to include senior secured financing and offtake financing.

With technical, legal, commercial, and financial due diligence activities wrapped up, CYM’s focus is now turning to completing the offtake and financing documentation for execution.

And Avecho Biotechnology (ASX:AVE) has received formal ethics approval of its pivotal Phase III clinical trial testing its oral CBD softgel capsule for insomnia. 

The study is the largest randomised, placebo controlled study being undertaken in Australia to support registration of cannabidiol as an over-the-counter medicine with the Therapeutic Goods Administration (TGA) and will produce relevant clinical evidence, which is applicable to support product registration with key global regulatory bodies including the TGA, the FDA and the EMEA. 

 

ASX SMALL CAP LAGGARDS

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TRADING HALTS

Kingwest Resouces (ASX:KWR) – pending a potential change of control transaction. 

Silver Mines (ASX:SVL) –  final approval procedures for the Bowdens Silver Project

Brightstar Resources (ASX:BTR) – a capital raising and potential change of control transaction

Dreadnought Resources (ASX:DRE) –  initial Yin independent JORC 2012 Mineral Resource

Range International (ASX:RAN) –  update on the ITO Amended Assessment relating to FY2018. 

 

 

 

 

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