• Benchmark down, small caps up
  • Utilities ahead 1% and well, the energy sector is on fire
  • And why early buyer James Gerrish from Market Matters was never bearish on WHC 

The ASX Emerging Companies (XEC) index has closed 0.6% higher and the Aussie benchmark ASX 200 (XJO) is 0.6% lower.

I guess we should talk about coal first.

This a five year coal chart. I think five years is around the time investors started to take this energy transition seriously…

Via Trading Economics

I guess that hasn’t gone to plan.

I spoke with Market Matter’s senior investment adviser and also senior person at Shaw and Partners James Gerrish today and he said – when referring to buying a bunch of Whitehaven (ASX:WHC) when it was 300% less than it is today – that copping a barrage of cranky emails about a sound investment is why the best investors stick to their guns. An astute observation for today.

Coal couldn’t be bought with a ten foot pole there for a while – lookit that price (above) just flatline into 2020!

Well, today the coal train keeps firing, backed to the hilt by a further rally in Chinese commodity futures.

Whitehaven, the choice of Gerrish back when, added another 6% today. It already busted through an 11-year high yesterday, but expectations of a $3bn profit will do that, too.

On this trade Gerrish told me: do your work, arrange your thoughts, but then make the decision.

“We bought in at $1.78, at the time I just had to accept that I’d get shot by a lot of people.”

I’ll write up that interview this week, it was unreal.

Worth mentioning lithium still has some nice running legs, Lake Resources (ASX:LKE) is 13% higher.

 

The rest of Tuesday…

On June 5, the Reserve Bank of Australia added 50 basis points to take our cash rate to 1.35%.  Once the dust has settled and they know there’s not been a I like the RBA minutes. They’re a good read over a long time. As in, they tweak the tea leaves so it’s a bit like reading a comic and looking for Easter eggs.

I imagine Phillip Lowe as an unreliable narrator with near-omnescient powers and we don’t know if he’s a goodie or a baddie yet.

For today, though, this is all you need to know about what the RBA thinks… rocket science it is not:

Members agreed that further steps would need to be taken to normalise monetary conditions in Australia over the months ahead.

The size and timing of future interest rate increases will continue to be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labour market, including the risks to the outlook.

The Board remains committed to doing what is necessary to ensure that inflation in Australia returns to the target over time.

Elsewhere today, the new ANZ-Roy Morgan’s consumer confidence measurement suggests we’re a tad more confident now the jobless rate is at a 48 year low, but still, not very confident. The weekly reading was up 0.2% which is still below the four-week average of 83 and way, way down on the monthly average of 112.2.

If you must know, we’re at around 81 points, which means there’s a lot of self-doubt, bordering on self-loathing, we don’t like what we see in the mirror and there’s not much hope.

But we’re going to soldier on.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for July 19 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

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X2M Connect (ASX:X2M) says orders across the X2M group are already bringing in revenue ifor the first half now exceeding $9.6 million.

A lovely new South Korean contracts provide water monitoring and control to 9,754 households with installation to be completed within six months, while four other new contracts have cracked X2M’s maiden half century of customers.

X2M’s technology connects devices such as water, gas and electricity meters and other utility sensors to the internet, enabling data exchange and the remote control of these devices. X2m generates its revenue selling hardware and monthly subscription fees under a sassy Software as a Service thingy.

Shares in medical business Mesoblast are up nearly 12 per cent to 96c just before noon AEST following positive results from a US clinical study related to its cell therapy product rexlemestrocel-L (Revascor), which may lead to its broader application for heart failure patients.

Killing it, for a medical business that is – Aussie breakout Mesoblast (ASX:MSB) which says its treatment of heart condition with rexlemestrocel-L, its allogeneic “off-the-shelf” candidate for the treatment of chronic heart failure, has had some great results – specifically – in the pre-specified analysis of left ventricular ejection fraction (LVEF). I could go on, but I’m pretty unqualified on this one.

Fortunately Eddy would go. He says, Rexlemstrocel-L is being studied to assess its impact on the high degree of inflammation in the heart and in the circulation that is present across the spectrum of patients at risk of heart failure with reduced ejection fraction (HFrEF).

Same ball park: HeraMED (ASX:HMD) says its HeraBEAT smart foetal HR monitor is accurate, and contributed to the effectiveness of maternal-foetal telemedicine.

The study found remote telemedicine foetal assessment, which included the usage of the HeraBEAT, is feasible and time-saving.

On the lets dig stuff up front, the value of minerals explorer Element 25 (ASX:E25) has shot up faster than ticket prices to an oversold scalper convention, stuffing an extra 20% into the pockets of investors.

Harmoney (ASX:HMY) has added 19% on news that it’s hit profitability in FY22 on proforma Cash NPAT, which it says is all down to its consumer-direct business model, and the market looks like it’s getting behind new kids on the block Oceana Lithium (ASX:OCN), which is up 29.0% so far today.

 

ASX SMALL CAP LOSERS

Here are the best performing ASX small cap stocks for July 19 [intraday]:

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Having a rough run is coal miner Allegiance (ASX:AHQ), which issued a pair of reports this morning that sent the share price into a deep, black funk, down a horrifying two-thirds by lunch.

 

WHAT YOU MAY’VE MISSED BECAUSE LIFE’S TRISTE

In a bit of a halt from this morning, Pendal Group (ASX:PDL) has confirmed it is in talks with Perpetual regarding ‘a potential transaction.’

Lots of speculation over this one, and I love the intensely non-committal release:

“Discussions are highly conditional and incomplete and there is no certainty that they will result in a transaction,” the company said.Also, an enormous quantity of the news releases today (seriously – there were TEN of them…) were about David George taking the reins at Magellan (ASX:MFG).

Mr George arrives at a time when Magellan’s mostly been on our radar for the wrong sort of reason, so it’ll be interesting to see if he’s able to help Magellan navigate its way back into better fortunes.

Also in “It’s a new CEO” news is Life Sciences tech firm, AnteoTech’s (ASX:ADO) revelation that it will have a new Big Cheese at the pointy end of the conference room, when David Radford kicks off his new role as MD and CEO, effective from 4 October 2022.

The fact that Radford’s tenure starts on the first day after the October long weekend could well be a good omen, if only because he’ll no doubt be all lovely and relaxed after a three-day break and be absolutely raring to go.

And lastly for today, solar-powered security firm Spectur (ASX:SP3) says it’s raised $1.862 million at $0.036 per share, pursuant to a share placement to sophisticated and
professional investors.

The next step for SP3 is a targeted $500,000, with capacity to accept over-subscriptions for up to $1.15m, via a Security Purchase Plan offer at $0.036 per New Share, together with one free attaching Bonus Option for every two New Shares subscribed.

The company is keen to drop its crisp, fresh new dollars on exciting things like market expansion, marketing efforts and new inventory.

 

TRADING HALTS

Quantum Graphite (ASX:QGL) – Capital Raise.

First Au (ASX:FAU) – See above.

Almonty Industries (ASX:AII) – Sounds like Almonty’s found something juicy – there’s a mineral resource announcement up the spout.

Pendal Group (ASX:PDL) – See above too.

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