C is for Cookie, and for Concussion. Pic via Getty Images.
ASX Small Caps Lunch Wrap: Who’s willing to risk it for a biscuit this morning?
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Australian markets have opened higher this morning, with the benchmark reaching a peak of around +0.4% before retreating like the abject coward that it is, just before lunch.
Most of the market is reporting a very ordinary morning, but there’s a strong pocket of profit among Materials and Energy stocks – but we’ll get to that later.
First, there’s some research that landed with an audible clunk in my inbox this morning that has revealed that there’s a massive market for leveraged trading, but most of the interest in that sort of trading product is coming from the poorest nations on Earth.
A “comprehensive study” was performed by Leverage Trading, a website that offers tutorials to help investors “increase your return up to 10x, 50x, and even 100x”, with researcher Anton Palovaara looking through Google Analytics to see who is searching for “Leverage Trading”.
It would probably be massively uncharitable of me to suggest at this point that the “research” was simply a case of someone Googling their own company name to find out which markets they need to be targeting… but I’m going to anyway, because it’s abundantly clear that’s what happened.
There are some interesting factoids among the research, though – including the finding that searches for leveraged trading “are highest in African countries with the highest poverty rates such as Nigeria, Kenya, Ghana, and South Africa”.
I’m as shocked as you are. Truly. Who woulda thunk it that people who are desperately poor would be looking for ways to turn the pennies they’ve got into dollars with a high risk, x100 leveraged punt?
I mean, we’ve all thought about it at some point – and the lure of leveraged trading can be pretty strong the first time someone finds out that it’s even a thing.
So it’s little shock that African countries have “5 times more Google searches for leveraged trading products than the United States”, as the email says – and Google searches for forex leverage in those countries are 25 times higher, compared to the US.
But wait… it gets better. Or worse, depending on your outlook.
“African countries, specifically Nigeria, South Africa, and Ghana, dominate Google searches for ‘trade crypto’, with Nigeria having four times higher search rates than the United States,” the report says.
Which is fine, if you’re into that kinda thing – here at Stockhead, we’re not into kink shaming… unless it’s something super-weird, in which case you could bet your bottom Bitcoin it’s going to get made fun of.
Or, if you’re someone famous – say, a Hollywood director with a history of blatantly ripping off other people’s work and calling it a “homage”, but the only real difference is that you’ve managed to cram more than 30 solid minutes of lingering shots of your leading lady’s feet into the film – then we are 100% going to have a bit of a laugh at your expense, Quentin.
Anyway… where the search data gets a bit curly is this: Nigeria is the second-highest country in the world for searches related to crypto leverage, with an emphasis on transactional searches such as “how to leverage trade crypto?”
And that’s a phrase that is sure to generate cold sweats and chest pains among even the most seasoned of market gamblers.
But if you’ve wondering why all that crypto you’ve been sending to your Nigerian prince penpal has gone, it’s a safe bet that he’s been gambling it all away on heavily leveraged crypto punts, like the absolute degen he is.
TO MARKETS
After a mixed bag from Wall Street overnight, the ASX 200 March futures contract was pointing down by 0.10% but, predictable as ever (ha!), Aussie markets went hiking up Mount Gains, thanks to a surge in Energy and Materials.
Materials is charging hardest, up 2.40% at lunch, with Energy in hot pursuit on 1.33%, while the rest of the market is sleeping like the NSW Government through a housing crisis, with Consumer Staples hardest hit at -1.69% and InfoTech down 0.85% as well.
Up the tippy top of town, South32 (ASX:S32) is up 5.0% this morning, in the midst of a buyback that is really starting to put a dent in the company’s Christmas budget.
It’s currently trading around the $4.70 mark as shareholders seek to wring maximum value out of the process.
At the opposite end of the scale, Pilbara (ASX:PLS) is in the grip of a sell-off, sinking 4.2% this morning for no apparent reason.
NOT THE ASX
Overnight, Wall Street posted modest losses as the S&P 500 finished 0.50% lower and tech-heavy Nasdaq fell 0.7%, while the Dow finished flatter than a gassed out fighter, on +0.02%.
Earlybird Eddy reports that US stocks fell after a rise in ISM manufacturing data, which suggests the argument for more rate hikes is still very much relevant.
US Fed (Atlanta Chapter) loudmouth Dr Raphael Bostic is sticking to that script and calls for ongoing rate hikes.
“I think we will need to raise the federal funds rate to between 5% and 5.25%, and leave it there until well into 2024,” Bostic said, while the rest of us were saying “I think you should probably stop saying stuff, because you’re making people very unhappy”.
It was a rough night for EV manufacturers, after Rivian crashed 18% when its vehicle deliveries came in 20% below estimates in FY23.
At the same time, NYSE-listed Chinese EV maker Nio fell 6% after providing weak revenue guidance.
It was a less-than-ideal lead in for Elon Musk’s presentation at Tesla’s first Investor Day event from its gigafactory in Austin, Texas – but that didn’t stop His Mercurial Majesty from promising (yet another) world-changing announcement.
At the time of writing, the Tesla people are still trying to explain their plans for world domination. We’ll bring you a wrap-up of it later today, once we’ve picked through the bullsh-t to see if there’s anything digestible to share.
Meanwhile in Japan, the Nikkei has crept up 0.06% after investors were finally offered a solution to a major family expense.
The Japanese school year is set to start soon, and all students are required to lug 100-and-something kilos of school books around in ridiculous, boxy leather backpacks called randoseru, because “tradition”.
The thing is, randoseru backpacks are horribly expensive, setting families back about 56,000 yen (roughly 600 of our pointless Kangadollars), which puts a ton of strain on a young family’s budget.
So, an enterprising distributor of these leathery spine mutilators has come up with a solution – a rental service, as this cheerful video explains:
A fantastic idea for any family who wants to send their kid to school wearing an entire dead cow on their back, without the parents having to endure the kind of familial shame that would normally end with both parents committing ceremonial Hello Kitty by disembowelling themselves in the kitchen.
**edit** – My apologies… I’ve been informed that the correct term is harakiri. My bad.
In China, results are mixed this morning, with the Hang Seng down 0.94% and Shanghai rising 0.14% in very early trade.
Over on the crypto desk, new licencing rules around crypto trading look set to turn Hong Kong back into an international hopium den, despite the ongoing frowny-face that the Chinese government seems to wear whenever crypto comes up on conversation.
Rob “Slow Boat to China” Badman has analysis and other fancy words over at Mooners and Shakers, which you should read because he worked really hard on it.
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for March 2 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap RXL Rox Resources 0.23 59% 14,201,997 $32,531,368 CCE Carnegie Cln Energy 0.002 33% 3,551,473 $23,463,861 OAU Ora Gold Limited 0.004 33% 104,550 $2,952,694 YPB YPB Group Ltd 0.004 33% 72,512 $1,219,638 HLX Helix Resources 0.0075 25% 11,077,561 $13,938,875 OLI Oliver'S Real Food 0.03 25% 980,001 $10,577,566 IXU Ixup Limited 0.025 25% 225,000 $20,591,439 ARE Argonaut Resources 0.0025 25% 1,851,467 $12,723,743 VMC Venus Metals Cor Ltd 0.165 22% 1,877,855 $24,040,622 SBR Sabre Resources 0.033 22% 188,082 $7,870,127 VAR Variscan Mines Ltd 0.018 20% 228,600 $4,000,980 CT1 Constellation Tech 0.006 20% 268,000 $7,356,002 MCT Metalicity Limited 0.003 20% 1,001,000 $8,761,348 ADN Andromeda Metals Ltd 0.049 20% 19,050,581 $127,510,346 GTG Genetic Technologies 0.0035 17% 2,019,628 $34,624,974 RML Resolution Minerals 0.007 17% 142,998 $6,478,477 REC Recharge Metals 0.145 16% 18,681 $4,974,375 VR1 Vection Technologies 0.058 16% 3,443,416 $56,329,448 PWN Parkway Corp Ltd 0.011 16% 2,618,180 $21,026,164 NWM Norwest Minerals 0.037 16% 211,602 $7,107,436 FRX Flexiroam Limited 0.052 16% 1,822,559 $28,886,097 BAT Battery Minerals Ltd 0.0045 13% 332,000 $11,740,969 MRD Mount Ridley Mines 0.0045 13% 1,101,091 $31,139,531 MMM Marley Spoon 0.185 12% 644,500 $64,904,355
The morning’s clear – and well-deserved – winner is Rox Resources (ASX:RXL), which has stunned the market with a bonanza grade hit at its Youanmi South project in Western Australia.
Rox has reported continuous bonanza grades from its RC drilling program, with the highlight from hole RXRC45 looking like this:
- 28m @ 34.81g/t Au from 204m, including;
- 18m @ 51.96g/t from 207m, including;
- 10m@ 79.55g/t from 211m, including;
- 3m @ 138.07g/t from 218m.
Mmmm… chunky.
Rox is trading 58.6% higher at lunch time, while its joint venture partner in the Youanmi project, Venus Metals (ASX:VMC) is also up on the same news (of course… duh…) adding 22.2% to its trading price this morning.
Meanwhile, Oliver’s Real Food (ASX:OLI) is back after a very lengthy stint in the wilderness, and climbing 20.8% this morning.
Oliver’s was unceremoniously purged from the trading floor in February 2021 after the ASX raised serious concerns about the company’s working capital, which sparked a long and difficult fight for the company to allowed back in the door.
Well, the fight was finally over yesterday, with the stock reinstated and investors jumping on board this morning to greet the prodigal Oliver’s with a boost in price, which is really nice of them.
Lastly, Andromeda Metals (ASX:ADN) is up 19.5% after announcing that it has received approval from the South Australian Department for Energy and Mining (DEM) for the Program for Environment Protection and Rehabilitation (PEPR) for its Great White Project.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for March 2 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap XST Xstate Resources 0.001 -33% 1,500,000 $4,822,772 GLV Global Oil & Gas 0.0015 -25% 5,227,687 $6,857,615 MTB Mount Burgess Mining 0.003 -25% 16,233 $3,532,684 NET Netlinkz Limited 0.01 -23% 13,761,807 $45,394,925 PNT Panthermetalsltd 0.125 -22% 15,000 $4,920,000 G88 Golden Mile Res Ltd 0.017 -19% 1,562,333 $4,296,385 CLT Cellnet Group 0.022 -19% 8,550 $6,577,055 ASQ Australian Silica 0.05 -17% 60,000 $16,899,623 CLZ Classic Min Ltd 0.0025 -17% 27,443,660 $3,777,791 MTH Mithril Resources 0.0025 -17% 50,000 $9,789,271 SGC Sacgasco Ltd 0.01 -17% 5,104,888 $7,361,429 CRS Caprice Resources 0.041 -16% 19,492 $5,036,178 Z2U Zoom2Utechnologies 0.072 -14% 33,437 $11,759,132 R3D R3D Resources Ltd 0.052 -13% 187,834 $6,745,506 SRI Sipa Resources Ltd 0.026 -13% 475,510 $6,844,744 PPY Papyrus Australia 0.031 -11% 302,079 $16,627,866 ATH Alterity Therap Ltd 0.008 -11% 661,128 $21,747,766 ASO Aston Minerals Ltd 0.1075 -10% 1,364,827 $133,623,712 MRL Mayur Resources Ltd 0.175 -10% 5,750 $57,633,515 YRL Yandal Resources 0.079 -10% 6,206 $13,886,671 TOR Torque Met 0.135 -10% 74,552 $9,467,993 AMD Arrow Minerals 0.0045 -10% 1,800,000 $14,289,455 LSR Lodestar Minerals 0.0045 -10% 369,222 $8,692,187 SW1 Swift Networks Group 0.009 -10% 54,999 $5,927,967 VAL Valor Resources Ltd 0.0045 -10% 1,697,000 $18,865,174
