• ASX 200 ends 0.5pc higher despite a lagging Energy sector
  • Resources bad, IT and Healthcare good.
  • Small caps led by DEL, AYM and some other great Little Guys news

 

Local markets got one back on Tuesday thanks largely to solid wins among IT and Healthcare stocks which offset more losses in the world of Aussie resources.

By match out on Tuesday, the S&P/ASX 200 Index rose 39.40 points, or 0.5%, to 7971.10. Almost pound for pound where it began Monday.

Via ASX

Local markets, which fell in a bit of a heap on Monday, got back on the bike from the opening bell, but almost instantly plateaued, holding steady in the positive by near exactly 39 points.

If ASX traders appeared to be distracted on Tuesday it may be down to the sensational Pump and Dump scandal. It sounds a lot like your your troubled late-30’s relationships, but the reality is less painful and heaps more more schadenfreudy.

To catch you up: in what looks life a fab bit of corporate watchdoging, ASIC, the Aussie securities commission says it’s filed criminal charges against four alleged ring leaders of ‘a penny-stock pump-and-dump scheme’ run through the supposedly impenetrable Telegram messaging app.

ASIC says it all happened at the height of the COVID-19 lockdown, when people and stocks went nuts.

The matter is hitting Downing Centre today, although the four weren’t required to enter pleas. The charge is “conspiracy to commit market rigging and false trading in a market co-ordinated manipulation scheme.”

 

Meanwhile…

Here’s the ASX Resources (XJR) vs ASX200 Banks (XBK), year-to-date:

Via Google

 

On that note, the headline move among the majors today was probably Woodside Energy Group (ASX:WDS) which (you’d assume) rather reluctantly had to admit to a projected half a billion US dollar blow out in costs at its controversial WA Scarborough LNG project.

Since then  a gaggle of energy analysts have come out to suggest there’ll be more to pay for WDS long before production begins circa CY2026. the news comes a day after Woodside announced a deal to buy Houston-based Tellurian.

Commodity prices aren’t loving the new frugal China. The big policy factory of the Third Plenum last week generated nothing stimulatory for China’s hobbled economy except more political babble from president Xi Jinping.

Today, the worries around soft demand from China left copper futures holding below US$4.2o, nudging more than three month lows.

And let’s just leave iron ore for the day.

Sadly, there’s not a lot 24 hours can do to change that particular neck-chaffing albatross.

 

ASX Sectors on Tuesday at the close

Via MarketIndex

 

Not the ASX

After falling over the last few days Spot Gold prices look stable at around $2,400.

There’s a fair bit of stateside data around which traders can roll the dice – there’s a US Q2 GDP growth update as well as an upcoming June PCE price index. Being negatively correlated to the USD, which itself is so tied to interest rates make these bets a mug’s game.

Chinese stocks have fallen a day after the central bank moved to lossen the cash taps in a bid to unblock a festy property segment.

The People’s Bank of China (PBoC) lowered its 1-year loan prime rate (LPR), the benchmark for most corporate and household loans, by 10 basis points to 3.35%, while the 5-year rate, a reference for property mortgages, was trimmed by 10 basis points to 3.85%.

After lunch, the Shanghai Composite fell 0.5% and the Shenzhen Component dropped 1.3%. Add those to the growing pile of losses among mainland equitires. As mentioned, the policy vaccumm after last week’s Plenum won’t have been what investor sentiment needed.

There was a rally on Wall Street overnight, which saw the S&P 500 climb by 1.08%. The blue chips Dow Jones index rose a more modest 0.32%, and the tech-heavy Nasdaq led the way on a 1.58% gain.

Tech stocks, which had been having a hard time in New York last week, were back in a big way, as Eddy Sunarto reported this morning.

“Nvidia spearheaded the tech comeback after suffering significant losses last week, up by 4.76% last night.

“Chip maker ASML also climbed by 2.5%, while semiconductor manufacturer TSMC saw a rise of over 2%.

“Tesla gained 5.15%, and Alphabet rose 2.26% with both companies set to report their quarterly results later today.”

Thank you Eddy.

Wall Street will be wrestling with the stonking amount of easy money new US presidential candidate Kamala Harris attrcated over the last 24 hours.

The certainty provided by the Trump trade appears back on shaky ground.

At 4pm Tuesday AEST, US Futures were sitting in the red.

 

Via Fox

 

ASX SMALL CAP LEADERS

Here are the best-performing ASX small cap stocks:

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

Wordpress Table Plugin

 

Delorean (ASX:DEL) has lifted FY24 earnings guidance, though subject to audit. DEL says its strong financial results are largely thanks to   the strong performance of the divisions and Project delivery across the group.

• EBITDA of between $4.5m and $5.1mn
• Revenue for the year of between $27m and $28mn
• A record NPAT for the full year
• Cash at Bank as at 30 June 2024 of $8.8m

DEL’s Managing Director, Joseph Oliver says the audited FY numbers are due on 30 September, but what we’ve tasted is ‘cos of DEL’s “delivery of core projects in a cost efficient and timely manner.”

“Our current projects continue to demonstrate strong performance and we look forward to announcing audited results shortly,” he added, but didn’t need to.

Up a lot is Melodiol Global Health (ASX:ME1) which has signed a non-binding Letter of Intent (LOI) with Canada’s Nacerna Life Sciences Inc. to sell the Mernova production facility and land in the isolated but lovely, if occassionally chilly, Nova Scotia.

The agreement is for an initial $12mn in cash and CEO William Lay says the sale is expected to be a pivotal step in ME1’s trajectory.

“Upon closing, we would be in a position to significantly improve our balance sheet, and focus working capital on Health House and Creso Pharma Switzerland, while also attempting to maintain a level of sales from the Ritual brand in Canada.”

Let’s break it down with some bullies:

The LOI includes two earn-out provisions totalling $2.2mn, payable to ME1 on completion of each targets

Proceeds sufficient to repay all existing secured debt, significantly strengthening the balance sheet

Transaction expected to allow for working capital to be deployed to Health House and Creso Pharma Switzerland to aid in future growth

Melodiol to keep its highly-established Ritual cannabis brand and products and will attempt to continue selling in the Canadian recreational market via sourcing and branded resale of third party production

In H1 2024, Health House and Creso Pharma Switzerland delivered combined revenues of $5.6m, representing an annualised figure of $11.2m

Ritual brand (which ME1 retains) accounted for circa $6.9m (or 32%) of the Group’s total revenue in FY23

Quickstep Holdings (ASX:QHL) – Australia’s largest independent aerospace and composites company – has dropped a welcome update regarding its big restructuring – it’s all done QHL says. And successfully considering the entire “Structures Business Unit” operational changes,were only announced on 25 June/

The companys says it’s all been implemented… “delivering a reduction in direct production headcount of approximately 20% and a reduction in operational support headcount of a similar amount.”

Moreover and above: FY Revenue looks like beating previous guidance. AND they’ve trimmed the bottom line with a machete, culling jobs, among other things.

QHL does well in defence. It provides engineering, manufacturing, and aftermarket services to the defence, unmanned/autonomous, space, clean-tech and MRO markets. The spiel is: to deliver advanced composite solutions to make high-technology products lighter, safer, stronger, more cost-efficient and sustainable​.

On the personnel front the company says: “The key changes include transitioning from a 3 shift / 6-days a week operation to a 2 shift / 5-days a week pattern and the implementation of leaner Operations Leadership, Quality, Procurement and Engineering teams.”

QHL highlights:

  • Pricing and volumes finalised with Lockheed Martin for the C-130 program post MYIII contract.
  • A level loaded production plan for the Northrop Gruman F-35 program finalised.
  • Record drone production in Q4 FY24 from Geelong facility.
  • Full Year Group revenue at $99m (unaudited), exceeds guidance provided in April 2024 ($94m-$96m).
  • Services business unit revenue grew 94% year on year to exceed $10m.
  • Underlying EBITDA positive for FY24

And they’re still doing very well over at Chinese-Aussie shopping agent AuMake International (ASX:AUK), which was up on Monday morning following a non-binding three year strategic co-operation thing with a Chinese State-Owned Enterprise.

Yangtze River New Silk Road International Logistics, to “establish a comprehensive end-to-end supply chain network for Australian goods and services”.

Under the agreement, Yangtze River New Silk Road International Logistics, will “establish a comprehensive end-to-end supply chain network for Australian goods and services”. And that incliudes Yangtze buying  at least $100mn worth of Aussie goods via Aumake each year.

How’s that for a handy MOU. Doing math, AUK and I put the full value of the deal at a minimum of $300mn.

Aumake’s MD, Joshua Zhou, says it’s a milestone, the first of many.

“We continue to demonstrate our value as innovative and trusted partners in bridging China and Australia trade. Further opportunities in these key areas are progressing, which have the potential to broaden into more significant agreements over time.”

Spenda (ASX:SPX) wowed investors on Monday arvo with a cracking webinar. The stock is up 25% on Tuesday.

catching the eye was a bunch of new revenue streams due to come on line following the recent cornerstone investment from Capricorn which SPX says has strengthened its balance sheet and raised expectations of FY25 revenue.

The company says recurring revenues from the Capricorn channel will start feeding the pipes  in Q1 FY25 (which is the September quarter).

Here’s a few worthwhile highlights”

  • Record Q3 cash receipts from customers of $1.45m, up 77% on pcp and up 5% qoq
  • Pipeline of work at record highs, revenue ramp-up slower than expected, internal scale-up underway
  • Initial roll-out of new AirPlus facility to an initial 10 customers
  • Payment volumes up 140% on pcp, down 16% qoq. Q3 is seasonally weak for carpet sales
  • Cornerstone investment from Capricorn has strengthened balance sheet and cash balance to $10.5m
  • Clear pathway to revenue growth based on current pipeline of contracted work with existing partners

Among the diggers, Resolution Minerals (ASX:RML) released its quarterly report this morning, revealing that it spent $49,000 on exploration activities in the June quarter, leaving the company with $239,000 in the bank.

EV Resources (ASX:EVR) was up on yesterday’s news that surface rock chip samples of up to 71% Cu and 874g/t Ag demonstrated previously unknown copper and precious metals potential at the Khartoum project in northern Queensland, with the company reporting that the high-grade copper values include 10.9% Cu, 9.11% Cu, 8.6% Cu and 4.16% Cu.

And Vital Metals (ASX:VML) good good assays back from the final 24 drill holes completed in its 2023 resource definition exploratory work at its Tardiff prospect, with the program continuing to return shallow high grades including 53.5m at 1.5% TREO from 6.7m incl. 1.8m at 8% TREO within 15.8m at 2.6% TREO, and 27.45m at 1.5% TREO from 4.55m incl. 2m at 6.3% TREO.

 

ASX SMALL CAP LAGGARDS

Here are the least performing ASX small cap stocks:

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

Wordpress Table Plugin

 

TRADING HALTS

Buxton Resources (ASX:BUX) –  pending an announcement related to the ongoing drilling program at the Graphite Bull Project, WA.

BrainChip Holdings (ASX:BRN) – pending an announcement relating to a capital raise.

AD1 Holdings (ASX:AD1) – pending an announcement by the Company to the market regarding an acquisition and a supporting capital raise.

Novatti (ASX:NOV) – pending an announcement by the Company in connection with the Company’s interest in IBOA Group Holdings.

Elixir Energy (ASX:EXR) – pending an announcement with respect to a capital raising.

Arena REIT (ASX:ARF) – pending an announcement in relation to a proposed equity capital raising.

 

ICYMI – PM Edition

Brightstar Resources (ASX:BTR) has flagged up to 40.15 g/t gold in geotechnical drilling at Cork Tree Well within the Laverton gold project in
WA.

Comet Ridge (ASX:COI) has increased its footprint at the Mahalo Gas Hub in Queensland following the award of tenement ATP 2072, immediately
north of Mahalo East and west of Mahalo Far East.

Pilot Energy (ASX:PGY) has inked a $4.5m grant from the Federal Government to support its export-focused Mid West Clean Energy Project
in WA, 120km south of Geraldton.

Besra Gold (ASX:BEZ) has hit a 7m at 6 g/t gold intersection that betters the average gold grade at the Jugan prospect in Malaysia.

At Stockhead we tell it like it is. While Brightstar Resources, Comet Ridge, Pilot Energy and Besra Gold are Stockhead advertisers, they did not sponsor this article. 

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