Weekly Small Cap and IPO wrap: Small caps lead ASX higher so let’s just have a cautiously optimistic little party

• ASX higher this week with small caps leading way, up 4.41% in past five days
• With a high profile leadership team Gold Hydrogen makes its ASX debut today
• Iceni Gold soars ~60% this week after announcing discovery of gold nuggets at Goose Well

If investors are wanting a reason to bounce happily into the weekend then week two of trading on the ASX for 2023 might just be one with the local bourse up and showing signs of optimism.

The S&P/ASX Emerging Companies (XEC) is a benchmark for Australia’s micro-cap companies. It contains up to 200 stocks that ranked between 350 and 600 by float-adjusted market capitalisation at the time of their index inclusion.

S&P/ASX 200 (XJO) is Australia’s leading benchmark index, home to the the top 200 ASX listed companies by float-adjusted market capitalisation.

By 4pm (AEDT) on Friday the XEC was up 4.41% for the past five days and in a positive sign has risen 5.48% in the past month.

The XJO is up 3.74% for the past five days and 2.05% for the month.

All 11 sectors were in the green except utilities which dropped 0.52% for the past five days. Leading the winners was energy up 4.68%, real estate up 4.46% and materials 3.81%.

Weekly economic overview

It’s been a case of good news and bad news on the economic front this week. Let’s start with the good news, which came in overnight from the US with a pull back in inflation in the world’s largest economy for the sixth straight month in December.

The headline CPI index for December fell from 7.1% to 6.5% as energy prices tumbled. Gasoline prices fell 9.4% on a monthly basis, declining by 1.5% from a year ago.

US markets rallied overnight as US bond yields sank (bond prices higher) after the CPI report with signs the US Federal Reserve’s rate hikes in 2022 are starting to make an impact and the central bank make not need to be as hawkish this year.

But in Australia the latest CPI figures released by the Australian Bureau of Statistics (ABS) were not so positive.

The monthly consumer price index (CPI) rose 7.3% over the year to November, which was back up from 6.9% in October to the same level recorded in September, a 32-year high and has prompted concerns of further interest rate hikes in 2023.

There were notable price hikes included housing, groceries, travel, dining out and takeaway food

As Deakin University behavioural finance academic and Morningstar analyst Erica Hall told Stockhead this week “the party is over” with the “halcyon days of ultra-cheap money well and truly over”.

ASX IPOs this week

GOLD HYDROGEN (ASX:GHY) 

Listed: January 13

IPO: $20m at $0.50

Chaired by the country’s longest serving foreign minister Alexander Downer, as well as resources exploration expert Luke Titus and managing director Neil McDonald GHY started trading today.

Gold Hydrogen holds the largest tenure position over naturally occurring hydrogen in Australia on South Australia’s Yorke Peninsula and Kangaroo Island and is looking to play a part in the country’s low carbon and low-cost energy mix.

‘Gold hydrogen’ is hydrogen that occurs naturally via geological processes, which offers significant cost and emissions advantages relative to other means of production.

A treasure trove of data detailing accidental natural hydrogen discoveries by South Australian Department geologists in the 1930s is what led the decision of GHY’s team of energy experts to jump into the fast-moving hydrogen space.

ASX Small cap winners:

Here are the best performing ASX small cap stocks for January 9-13:

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Gold explorer Iceni Gold (ASX:ICL)  is this week’s biggest winner after as Stockhead’s Reuben’s Adams reported picking up a bagful of gold nuggets at Goose Well, part of the 14 Mile Well gold project in WA.

The target area hosts a so-called ‘syenite’ intrusion, which ICL said are linked to major regional gold deposits.

Winsome Resources (ASX:WR1)  is also one of the big winners this week after releasing some impressive maiden assay results from its flagship Adina lithium project in Quebec, Canada.

Hole AD-22-055 returned an impressive 107.6m intercept grading 1.34%, which includes an “exceptionally high-grade” intersection of 2.21% Li2O over 30m. Hard rock lithium mines usually grade between 0.8% and 1.5%.

ASX Small cap losers:

Here are the worst performing ASX small cap stocks for January 9-13:

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

Eastern Resources (ASX:EFE) is among the biggest losers this week. As Stockhead’s Emma Davies reported EFE and Yongxing Special Materials Australia have incorporated a JV company – EFE Yongxing – to seek lepidolite lithium projects in Australia.

Eastern Resources has 60% interest by contributing $100,000 and YSMA has 40% interest by contributing $900,000.