Market Highlights: Porsche to list, RBA awaits, and 5 ASX small caps to watch

The ASX will open higher today
The RBA will announce its interest rates decision at 2.30pm
Porsche is set to list in Frankfurt later this year

Local shares are set to rise this morning and at 8am AEST, the benchmark ASX 200 September futures contract was pointing up by 0.10%.

Later today, the RBA will announce its interest rates decision at 2.30pm. While forecasts vary, most experts predict another 50bp bump which will take the cash rate to 2.35%.

Overnight, Wall Street was closed for Labor Day holiday but European sharemarkets slumped amid the worsening energy crisis.

The German Dax index was down 2.2%, the CAC 40 fell 1.2%, and the FTSE was up 0.1%.

European countries have been left scrambling for energy supply after Russia’s Gazprom said on Friday it would shut down the Nord Stream 1 pipeline indefinitely.

The decision conveniently came hours after the G7 agreed to a price cap on Russian oil.

“Many would argue it was only a matter of time until the decision was taken, with Europe having been squeezed over a number of months for one reason or another,” said OANDA analyst, Craig Erlam.

“A painful winter lies ahead,” he added.

The Euro has now retreated to a two-decade low, trading now below par at US99c. A monetary policy decision by the European Central Bank (ECB) on Thursday could unleash more anguish to Europeans who are already struggling with high inflation.

Across the English Channel, the UK Conservative Party has named Liz Truss as leader, paving the way for her to become the next prime minister.

In company news, Volkswagen said that it would go ahead with listing its premium brand Porsche on the stock market this year.

A VW statement said: “The Board of Management of Volkswagen AG today resolved to pursue an initial public offering of the preferred shares of Porsche AG, with the target to list them on the regulated market of the Frankfurt Stock Exchange… at the end of September/beginning of October 2022.”

In other markets, Brent crude is trading at US$95.30 a barrel, while gold continues its trajectory towards US$1,700, trading now at US$1,710 an ounce.

“While $1,700 looks like a psychological barrier, $1,680 is key. A break of that could signal further pressure on gold, especially if accompanied by more aggressive tightening from central banks,” said Erlam.

Bitcoin meanwhile is trading at US$19,765.

The much anticipated “Merge” for Ethereum is expected to happen tomorrow, where the crypto’s blockchain will transition from proof of work (POW) to proof of stake (POS). Experts predict this change will reduce the coin’s carbon footprints by as much as 99%.

And looking ahead today, Australia’s balance of payments for the June quarter is scheduled to be released.

5 ASX small caps to watch today

Good Drinks (ASX:GDA)
GDA announced that its board, senior management team and their families alongside existing shareholders have recently acquired a total of 4.3m shares through an on-market trade at $0.75 per share (total value $3.23m). The company says this financial commitment reflects a shared belief in the attractiveness of the company’s valuation at these prices.

Southern Cross Electrical Engineering (ASX:SXE)
The company announced that its Heyday subsidiary has been awarded an electrical services design and construct contract for the Atlassian Australian HQ building development in Sydney. The project is located at 8-10 Lee Street adjacent to the Central Rail Station, and has a value of over $35m.

Lykos Metals (ASX:LYK)
Two polymetallic shear zones have been identified in outcrop at Zekil-Erak Prospect at the company’s 100%-owned Sinjakovo and Cajnice projects in Bosnia-Herzegovina. Up to 12.61g/t gold equivalent was returned from Erak 1 shear zone, and up to 2.89g/t gold equivalent was returned from Erak 2 shear zone.

Revolver Resources (ASX:RRR)
Revolver has identified multiple priority conductive anomalies across numerous areas within the tenement following the completion of the Heli-EM survey, using the NRG “Xcite” system, specifically flown for the Dianne Project in far north Queensland’s Hodgkinson Province. The results will provide strong further upside to the company’s 2022 drill program.

Pantoro (ASX:PNR)
Pantoro says practical completion of construction of the new one million tonne per annum processing plant at the Norseman Gold Project has been achieved. EPC contractor GR Engineering Services (ASX:GNG) has completed construction on time and on budget. Ore commissioning of the processing plant is now underway.