The RBA's lever pulling has hit the jackpot, with CPI falling sharply to 5.6% for the year in May. Pic via Getty Images.
CLOSING BELL: The RBA’s interest rate lever pulling finally pays off, sending the ASX up 1.1%
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- An already buoyant ASX boosted past +1.1% on happy CPI data for May.
- Consumer Discretionary just pipped by Real Estate, both up more than 2.1%.
- Stellar Resources takes line honours after hitting fresh zinc finds in Tassie.
A pleasing batch of CPI data has lifted the market’s mood today, after the Australian Bureau of Calculator Fanciers revealed that inflation has eased dramatically, falling to 5.6% for the year to May, down from 6.8% in April.
This made a lot of people very happy – most notably, everyone whose turnips have been thoroughly squeezed by the string of interest rate hikes by the RBA that dragged on longer than a Chinese military parade.
The ASX 200 was already cruising along nicely at around +0.5%, but the CPI date gave it a huge (albeit brief) nudge to above +1.3%, which eased quickly to end the day on a still-pleasant +1.1%.
No doubt RBA Chief Philip “Dressed like I shop at” Lowe’s is preparing to take the credit for the sharp CPI drop, given how much muscle he and his RBA Board cronies have been putting into yanking the interest-rate lever in an attempt to get it down.
The real test, of course, is whether it bounces again next month – but with retirement from the top job looming large for Mr Lowe, he’d be praying for things to just settle down nicely so that his farewell from the RBA office doesn’t involve a window. Or a catapult.
TO MARKETS
Sector-wise, things didn’t change a whole lot after lunch – Consumer Discretionary was top of the pops all day, up more than 2.1%, before it was pipped at the post by Real Estate (+2.1%) with Financials (+1.4%), Energy (+1.2%) , Industrials (+1.1%) and InfoTech (+1.0%) also on solid, profitable ground.
Utilities was really the day’s only sticking point, losing 0.2% despite the happy CPI news.
In off-market news, though, there are terrifying signs of a chocolatey bubble, after news broke last week that Australia’s beloved Fantales lollies are set to be discontinued by manufacturer Allens.
Because we’re all morons, a secondary market has opened up as available supplies dwindle, with the filling-pulling, tooth-destroying caramels on sale via Facebook Meerkatplace and eBay for as much as $80 a bag, or $2,000 for a box of 10.
I plan to make absolute bank buying $800 worth of bags, and selling them in a box for a $1,200 mark-up – and like all caramel cartel chiefs who have come before me, I will ruthlessly murder anyone who dares get in my way.
You have been warned.
TODAY’S ASX SMALL CAP LEADERS
Here are the best performing ASX small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Price | % | Volume | Market Cap |
|---|---|---|---|---|---|
| OAU | Ora Gold Limited | 0.0045 | 80% | 158,675,990 | $9,842,313 |
| CLE | Cyclone Metals | 0.0015 | 50% | 1,921,957 | $10,264,505 |
| DXN | DXN Limited | 0.0015 | 50% | 680,241 | $1,721,315 |
| WEL | Winchester Energy | 0.003 | 50% | 210,051 | $2,040,844 |
| GMN | Gold Mountain Ltd | 0.007 | 40% | 18,242,411 | $9,849,663 |
| TTT | Titomic Limited | 0.031 | 35% | 1,825,051 | $5,503,580 |
| ENT | Enterprise Metals | 0.004 | 33% | 475,154 | $2,188,413 |
| GGX | Gas2Grid Limited | 0.002 | 33% | 5,904,921 | $6,115,653 |
| BME | Blackmountainenergy | 0.02 | 33% | 10,033 | $2,748,363 |
| SRZ | Stellar Resources | 0.013 | 30% | 7,206,713 | $10,059,642 |
| RDN | Raiden Resources Ltd | 0.009 | 29% | 56,409,512 | $14,386,883 |
| AN1 | Anagenics Limited | 0.014 | 27% | 313,745 | $4,021,820 |
| OZM | Ozaurum Resources | 0.039 | 26% | 741,878 | $3,937,000 |
| IBX | Imagion Biosys Ltd | 0.015 | 25% | 14,549,408 | $14,011,989 |
| MHC | Manhattan Corp Ltd | 0.0075 | 25% | 4,755,357 | $17,617,672 |
| CVR | Cavalierresources | 0.15 | 25% | 329,272 | $3,819,470 |
| DCX | Discovex Res Ltd | 0.0025 | 25% | 31,043 | $6,605,136 |
| PUA | Peak Minerals Ltd | 0.0025 | 25% | 2,667,050 | $2,082,753 |
| YPB | YPB Group Ltd | 0.0025 | 25% | 102,400 | $1,238,498 |
| EMC | Everest Metals Corp | 0.205 | 24% | 1,995,526 | $21,356,463 |
| SKY | SKY Metals Ltd | 0.041 | 24% | 1,561,281 | $15,000,374 |
| GLH | Global Health Ltd | 0.135 | 23% | 42,187 | $6,380,372 |
| ENR | Encounter Resources | 0.325 | 23% | 14,309,641 | $104,814,332 |
| FLN | Freelancer Ltd | 0.23 | 21% | 242,384 | $85,673,828 |
| KGL | KGL Resources Ltd | 0.145 | 21% | 296,182 | $68,075,024 |
There’s been a shuffle on the Small Caps leaderboard this afternoon, with Stellar Resources (ASX:SRZ) up 30% after the Tassie-based explorer reported hitting a significant 38.6m-long Zn-Pb-Cu mineralised zone at ‘North Scamander’ in Tasmania, from 130m depth.
The exploration hole had reached a depth of 360m on 23 June with a planned EOH depth of 750m, according to Reubs this morning.
“The significant Zn-Pb-Cu vein and breccia mineralised zones intersected in NSD005 are interpreted as being separate from Zn-Pb-Cu-Ag-Sn mineralised breccia-hosted intersections in historic drilling, highlighting the presence of a significant new Zn-Pb-Cu mineralised zone,” the company says.
In second place is Imagion Biosystems (ASX:IBX), which got as high as +33% on news that it has expanded its collaboration agreement with Siemens Healthineers but has since dropped back to around +16% as the session winds down.
In addition to extending the existing agreement, the companies have agreed to collaborate in the United States through the far less aggravatingly-named Siemens Medical Solutions USA, in anticipation of Imagion’s undertaking a multi-site Phase-2 study for its MagSense HER2 breast cancer imaging agent.
Siemens dates back to its early roots in 1847 to a small family business in Berlin, co-founded by Werner von Siemens, who is no doubt spinning in his grave faster than a magnet in an MRI.
Whichever marketing genius came up with “Healthineers” should be put in stocks in the town square, so all of Werner von Siemens can pelt them with rotting vegetables.
And in third (worth mentioning – there’s a lot of companies banking zero-news, 20%+ gains today) is Cavalier Resources (ASX:CVR), up 25% after an extensive soil geochemical program at the Ella’s Rock Li-Au-Ni project hit paydirt.
The company says it’s found three Lithium-Caesium-Tantalum (‘LCT’) bearing geochemical target areas, covering a combined 350ha, which the company has delightfully named after prominent Ellas we all know and love: Hooper, Fitzgerald and (my favourite) Baché.
But the Stockhead crew would like to know why Aussie Rugby Union legends Mark, Gary and Glen Ella didn’t get a look in on this one. Or their cousin, Parramatta Eels great Steve Ella, for that matter.
TODAY’S ASX SMALL CAP LAGGARDS
Here are the least best performing ASX small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Price | % Today | Volume | Market Cap |
|---|---|---|---|---|---|
| OPNR | Oppenneg | 0.002 | -80% | 1,147,648 | $7,976,284 |
| IXC | Invex Ther | 0.215 | -53% | 4,576,133 | $34,195,001 |
| LYK | Lykosmetalslimited | 0.065 | -35% | 110,258 | $6,240,000 |
| KEY | KEY Petroleum | 0.001 | -33% | 250,000 | $2,951,892 |
| TD1 | Tali Digital Limited | 0.001 | -33% | 16,000 | $4,942,733 |
| FRS | Forrestaniaresources | 0.105 | -30% | 9,989,770 | $12,752,031 |
| CCO | The Calmer Co Int | 0.003 | -25% | 460,365 | $1,779,110 |
| CYQ | Cycliq Group Ltd | 0.006 | -25% | 3,000,000 | $2,780,133 |
| PVS | Pivotal Systems | 0.006 | -25% | 2,655,938 | $4,276,950 |
| QXR | Qx Resources Limited | 0.0195 | -22% | 6,937,358 | $22,421,558 |
| GNM | Great Northern | 0.024 | -20% | 1,560,416 | $4,638,121 |
| SIO | Simonds Grp Ltd | 0.12 | -20% | 13,164 | $53,985,968 |
| DDT | DataDot Technology | 0.002 | -20% | 166,666 | $3,027,382 |
| TEM | Tempest Minerals | 0.0155 | -18% | 2,617,170 | $9,629,611 |
| AUA | Audeara | 0.035 | -17% | 284,104 | $6,018,600 |
| LML | Lincoln Minerals | 0.015 | -17% | 7,045,722 | $10,349,706 |
| CPT | Cipherpoint Limited | 0.005 | -17% | 541,685 | $6,955,450 |
| HLX | Helix Resources | 0.005 | -17% | 5,110,079 | $13,938,875 |
| MBX | Myfoodieboxlimited | 0.005 | -17% | 1,602,650 | $222,768 |
| SI6 | SI6 Metals Limited | 0.005 | -17% | 201,127 | $8,972,368 |
| MGA | Metalsgrovemining | 0.105 | -16% | 115,000 | $4,650,063 |
| ICE | Icetana Limited | 0.038 | -16% | 10,000 | $8,969,779 |
| LDX | Lumos Diagnostics | 0.011 | -15% | 799,138 | $4,022,461 |
| AIV | Activex Limited | 0.017 | -15% | 140,193 | $4,310,052 |
| GPR | Geopacific Resources | 0.018 | -14% | 65,000 | $17,245,013 |
LAST ORDERS
Hot Chili (ASX:HCH) has come out of its trading halt with news that the company has executed a binding US$15 million Investment Agreement with Osisko Gold Royalties, in return for a 1.0% Net Smelter Return (NSR) royalty on copper and a 3% NSR royalty on gold across the Company’s Costa Fuego copper-gold project, 600km north of Santiago, Chile.
The cash injection will raise Hot Chili’s cash holdings to around $26 million, and has a built-in clause covering any change of control events in the next 4 years, which would lower the Osisko NSR to 0.5% NSR royalty on copper and 2.5% NSR royalty on gold if invoked.
News of the investment came at the same time as Hot Chili announcing a Preliminary Economic Assessment (PEA) for the project, which the company says “outlines one of the world’s lowest capital intensity, major copper developments”.
The PEA was delivered on an 8% discount rate and long-term metal price assumptions of US$3.85/lb copper and US$1,750/oz gold.
Meanwhile, Blue Star Helium (ASX:BNL) has asked for its trading halt called on Monday 26 June to be extended out to 05 July, with an update to its gas processing agreement apparently on its way.
It’s unclear from the release whether that’s for its maiden Voyager helium development or the parallel Galactica/Pegasus project, but the smart money (ie, our journo Bevis) says its most likely to be for Voyager, where the company is aiming to hit production in August.
If he’s wrong, he owes me a hamburger.
Xtek (ASX:XTE) has informed the market that its Technology Division has achieved the third key project milestone in performance of the $26.9m Defence SUAS order announced to the ASX on 01 December last year, with the shipment and revenue recognition of $3.6m of equipment and project related contract deliverables.
The company is “very pleased to be able to continue to support Defence with the provision of world-leading SUAS technology,” says boss man Scott Basham.
“All of the deliverables expected to be achieved before the end of FY23 for this SUAS contract, have now been completed, and $25m (93%) of the $26.9m contract value has been recognised to date.”
The reminder of the project deliverables for this contract will be completed in H1 FY24, he added.
And last one for today, Damstra Holdings (ASX:DTC) has announced a three year contract extension agreement (with three further one year options) with Coronado Global Resources (ASX:CRN).
Damstra provides an Enterprise Protection Platform (EPP), a “cloud-based SaaS platform [that] offers actionable insights that enables and automates business processes and data flows related to your security, training, and safety requirements”, according to the company’s website.
The new deal will see Coronado upgrade from Damstra’s legacy system to the new EPP, covering about 2,500 users, for a total of around $1.2m over the three year period from 01 July, 2023.
TRADING HALTS
Jervois Global (ASX:JRV) – Capital raising.
