CLOSING BELL: ASX tipped to win a Gold Logie, after acting all surprised by today’s RBA rate hike
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What started as a pretty sombre day on the markets got suddenly really bright, after the market put on a post-lunch rally to be as close to completely flat as you could ask for, just in time for the RBA to lift interest rates again.
The 25 basis point lift in 3.6% was widely expected – I heard Kevin the meth head who lives in the next apartment block over screaming about it, at considerable volume and length, around 4am this morning – but it was nice of the market to act surprised when it happened.
The Benchmark spiked 0.6% almost instantly, and that’s where it remained for the rest of the session.
Thank you linesmen, thank you ball boys.
The spike was almost universal across the spectrum of sectors, pushing Energy highest to +1.21% for the day, followed by Consumer Discretionary on +1.12 and its Staples stablemate on +0.95%.
The only Negative Nellie left behind was our beleaguered Materials sector, which did jump… but from a much softer position than everyone else so it only made it to -0.44%.
The day’s overall winner was Large Cap funeral provider Invocare (ASX:IVC), which blasted out a 34.4% jump that really turned its trade price around dramatically after a fraught few days of Tom Petty-esque freefall.
IVC released its earnings on 27 February, and the market reacted to the numbers with gusto, digging a 6-foot-deep grave (that’s $2.11, or ~19% in metric grave units) and tossing the company in head first.
That’s despite the company’s announcement loudly proclaiming that it had burnt nearly 100,000 Australia pets last financial year, which I really hope was business-related.
But, an unsolicited offer from TPG (not the local internet mob… a different one from America) to buy 100% of IVC dropped this morning, and – like former NRL great Glen Lazarus – IVC is now a lot fatter than it used to be, racing from $8.95 to $12.03 at the close of play.
Sayona Mining (ASX:SYA), the little big miner whose prices dances like a gross plastic shopping bag, caught in the wind and moving like Casper the Gassy Ghost the day after a spooky-hot Vindaloo.
Today, that movement was upwards, by 5.32%, as Sayona dug deep into the pockets of investors for CAD$50 million to go digging for lithium in Quebec.
I’m only including this because I have to, otherwise people will think I wasn’t paying attention, when I totally was: The RBA met today to hike interest rates.
We all knew it was coming, the analysts (including my meth-head neighbour, who gets all about the numbers when he’s tweaking away in his living room) almost-universally picked it – but for some reason, the market’s reaction to it was Quite Large.
RBA Governor Phillip “Keepin’ it on the Down” Lowe revealed that the board has pushed the official rate to 3.6%, and made it pretty clear that “there’s more of that where that came from, you miserable pricks” as he made hideous faces and shook his tiny balled-up fists at the TV news cameras.
I’m assuming that’s what happened. I didn’t watch the press conference. I was busy burning my mouth on the $3.50 frozen lasagna that I had for late lunch / early dinner, because every other kind of food in Australia is too expensive, due to… you know the rest.
But, interestingly, the eagle-eyed Michael Janda at the ABC has picked up on an interesting tweak in the Language of Lowe (which is kinda like the Language of Love, except heaps more of us are getting f-cked).
Last month, while signing off, Lowe clearly stated that “further increases in interest rates will be needed over the months ahead”, and he we are.
But today, Lowe left us with “further tightening of monetary policy will be needed to ensure that inflation returns to target”.
I don’t want to sinking into the mire of conspiracy theories and lose weeks of my life in online message boards, poring over the minutest of details for clues, but that does sound a leeeetle bit like The Board tipping its hand a little in terms of where their heads are at on whether we see another rise next month.
But for now, we’re off to Iran, where CNBC has breathlessly reported that a preposterously enormous “8.5Mt deposit of lithium” has been found in Hamedan, in the west of the country.
Huge news, obviously, which has been picked up and re-reported as far as the eye can see, because the numbers tell us that this one single Iranian deposit is larger than all of the many, many known and measured lithium deposits in Australia, by about 3Mt.
But, of course, it isn’t – Iran’s “8.5 million tons of lithium” is actually 8.5 million tons of lithium ore, as is clearly stated by Iran’s Foreign Ministry… and considering that lithium content from ore is generally calculated in terms of parts per million (ppm), it’s unlikely that Iran’s sitting on a world-changing deposit at all.
Still, any 8.5Mt lithium ore reserve is nothing to sneeze at – but it’s not “the second largest lithium deposit in the world” as CNBC (and every other outlet that copied the story without checking it) is saying, while sending certain other sections of the media into hilarious levels of garment-rending rage.
I look forward to being patted on the head by Media Watch next week. It’d be nice to be in their good books for a change.
Meanwhile, everybody’s gone a bit China Crazy today, probably because Beijing’s in the middle of The Great CCP GabFest, a time traditionally set aside for outrageous sabre-rattling and thinly-veiled diatribes about World Domination and Online Shopping.
The speeches that emerge from the National Party Congress during Presidential Ascension Season are always heavily laden with hyperbole and cartoonishly dramatic speeches – because they’re more an opportunity for senior party members to show that they’re being just the bestest party members they could possibly be.
Case in point: China’s new foreign minister Qin Gang took to the podium to let the world know that relations with the US have “left a rational path”, and China will 100% be at war with America unless the US “hit the brake”.
Which sounds hugely alarming, except that we have been hearing this exact sentiment from Beijing for years – a fact that seems to have escaped a few people, because the day’s headlines from other bits of the media have been about how badly we’re gonna be boned when… not if… China decides that it needs another island that it’s going to find difficult to control.
Here are the best performing ASX small cap stocks:
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In the Wonderful World of Small Caps, today’s winner is Surefire Resources (ASX:SRN), which has gone booming after revealing that they’ve had an independent contractor in to have a poke around the place, to calculate an Exploration Target Estimate (ETE).
The numbers were crunched, and the end result is actually quite staggering, with the ETE for Surefire’s Victory Bore vanadium project as having a lower and upper limit range of 682 Mt to 1,190 Mt @ 0.2% to 0.43% V2O5.
This, obviously, is Good News, which Surefire says puts its deposit safely within the World Class category. The market has agreed, and Surefire’s up 34.4% for the day.
In second place, it’s Caprice Resources (ASX:CRS), coming out of a four-day trading halt with news that the company has done pretty well with exploratory drill work at its Northampton polymetallic project, located in the Northampton Mineral Field of Western Australia, hence the name.
The company says it’s returned “exceptional results from the first hole of the Lady Sampson RC drilling”, which look like this:
And in third place, easing somewhat from this morning’s Small Caps market-leading charge, is cloud-gaming tech mob Pentanet (ASX:5GG), dropped a double-whammy of announcements, and been handsomely rewarded by investors dropping loot boxes chock-full of Very Rare, Exotic and Legendary gains.
Pentanet has inked a deal with Optus to deliver the NVIDIA GeForce NOW cloud gaming service to Optus customers, as 5GG remains the sole Australian distributor of that particular cloud gaming service in Australia.
The two companies will work together on a program that enables enhanced experience for GeForce NOW users on Optus SubHub, with a specific focus on 5G and the GeForce NOW user management platform, CloudGG, which is great news for everyone except Fortnite players, because mobile gamers are terrifyingly annoying n00bs.
For those who don’t agree with that assessment of mobile gamers, I have the following message: “I will clap you in Fortnite. 1v1 me”.
(That’s the thing the cool gamer kids are saying, right? God, I’m lame.)
Here are the least best performing ASX small cap stocks:
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QEM (ASX:QEM) has locked up a source of vanadium-rich waste that could be upcycled into battery grade vanadium pentoxide under an agreement with Sun Metals Corporation.
Under the agreement, the company will take all the vanadium-bearing spent catalyst from Sun Metals’ operations in Townsville for five years with an option to extend for a further five years.
This spent catalyst will be processed using standard, tested methods to extract high grade vanadium pentoxide with greater than 99% purity, which is the grade required to produce electrolyte for vanadium redox flow batteries (VFRB), at the Queensland Government’s $75m Critical Minerals facility.
It comes as Queensland moves to acquire CopperString 2.0, a 1,100km transmission line that is designed to connect Mount Isa and the grid in Townsville.
Queensland Premier Annastacia Palaszczuk says that the government is prepared to use $500 million in coal royalties to help get the $5 billion project up and running, with the aim of unlocking vast reserves of critical minerals like copper, zinc, cobalt and – importantly for QEM – vanadium, which the world is demanding to procure batteries and renewable energy as part of a decarbonisation plan.
Meanwhile, Aussie gold miner Mithril Resources (ASX:MTH) has entered into a non-binding term sheet with Newrange Gold Corp. (TSXV: NRG) for the business combination of the two companies via a “friendly merger”, which honestly sounds just delightful.
The non-binding term sheet is conditional upon a number of standard conditions, including completion of satisfactory due diligence by each of the parties on each other, the negotiation and execution of a formal Scheme Implementation Agreement and the acceptance of the Proposed Merger by Mithril Resources shareholders and the TSX Venture Exchange.
When the deal goes ahead, because of the rules of the TSX Venture Exchange, the deal will be classified as a “reverse takeover”, which sounds like an enormously difficult gymnastics manourve manuver move, but isn’t.
“This is an exciting development for the growth of Mithril’s principal asset with additional upside from Newrange Gold’s highly regarded management and its Red Lake district properties,” Mithril CEO and managing director, John Skeet said
“The proposed merger will result in a new Americas and precious metals focused exploration and development company with a considerably experienced management team, enhanced market presence, a solid resource foundation, and significant growth potential.”
Variscan Mines (ASX:VAR) – Capital raising.
Aurumin (ASX:AUN) – wheeee… it’s a capital raising.
Family Zone Cyber Safety (ASX:FZO) – … another capital raising.
Sequoia Financial Group (ASX:SEQ) – Oooh! it’s a “partial subsidiary divestment”, which is a lot more interesting than “another bloody capital raising”, so thank you SEQ, for brightening up my otherwise hugely tedious afternoon.