• Small caps: after a June of pain, here is a 1.3% gain
  • Regional markets whacked by deteriorating sentiment
  • OCN IPO goes stellar, ignores risk off and rather forlorn market conditions

 

Hard week, tough month. Great day. The small cap index (XEC) is up 1.3% for July already!

The ASX 200 has bucked a regional trend after shoddy work overnight in the States. The benchmark index is giving back earlier headway but looks like it could start the new fiscal ahead for change, if only slightly.

Elsewhere across the brow beaten Asia-Pac, regional markets have largely been on the retreat. At around 3.30pm Sydenham time, the Nikkei 225 in Japan was down by almost 2% on Friday arvo, while the Topix gave back 1.5%.

It’s the first day of the new quarter and the new fiscal year. Although regional investors are chewing over the latest Caixin factory read and all its welcome positivity, the fact is the last five days have been a torrid economic mind snap.

It’ll take the Americans a few long looks in the mirror to recover their sense of fun and mirth after 1H 2022 became the worst six months on Wall Street since Richard Nixon was the yardstick for awful Republican presidents.

This week saw US inflation – as measured by the core private final consumption deflator -be pretty deflating, as one might expect.

It fell again in May but its still high at 4.7% year-on-year and trimmed mean underlying inflation rose a further few bips to 4% yoy.

So, the fall in May is still unlikely to see the  trigger itchy team at the US Federal Reserve ease up on the rate hikes.

At home June was equally awful for local markets, the Emerging Companies (XEC) index gave away about one-fifth of its strength last month, falling almost 19%.

The good news is that here in small cap land – very much like the human heart – the gravity is light and nothing stays low forever when a stiff drink and a cheap gag are near at hand.

 

IPOs this week

Oceana Lithium (ASX:OCN)

Listing: 1 July

IPO: $6m at $0.20

The blood and woe which has whacked IPOs of late has been washed away by today’s sterling debutante Oceana Lithium (ASX:OCN), which in the carefully chosen words of Gregor has strutted out onto the ASX stage like a bedazzled diva.

Oceana’s oversubscribed IPO and the small caps market’s insatiable appetite for mood-stabilising lithium saw the company’s price shoot up an almighty 60%.

Oceana has two lithium projects – the Solonopole project in Brazil and the Napperby project in the NT. Solonopole’s permits cover historic artisanal mining sites previously mined for lithium, Coltan (tantalum and niobium) and tin.

Napperby is in the Pine Creek Pegmatite province – which hosts Core Lithium’s (ASX:CXO) Finniss project.

 

Sarytogan Graphite (ASX:SGA)

Listing: 30 June, but didn’t quite yet…

IPO: $8.5m at $0.20

We’re actually still waiting on Sarytogan Graphite to make its debut, with the exact time/date not specified.  The explorer has its eyes on the Sarytogan Graphite Project in Central Kazakhstan where drilling kicked off late last month.

Kazakhstan is an established mining jurisdiction right in the middle of the largest battery manufacturers in Europe and China.

The project already has a mineral resource of 209 Mt at 28.5% total graphitic carbon (TGC) for 60 Mt contained graphite.

 

ASX SMALL CAP WINNERS:

Here are the best performing ASX small cap stocks for June 27 – July 1:
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It was a sterling week for 4D Medical (ASX:4DX), which has just kept rising like an inflated pulmonary system after news of a national contract with the I-MED Radiology Network grabbed investors by the excitement buttons and squeeeezed.

On top of the new contract, 4DX is joining forces with I-MED and will create a Lung Centre of Excellence, which is excellent news for lungs.

Dr Andreas Fouras the 4DMedical Managing Director and CEO told us this, we think it’s worth italicising:

“I am delighted to announce today’s landmark agreement for 4DMedical which represents a significant milestone for the Company. Expansion of our proven capability nationwide means many more people will be able to access the latest technology in respiratory imaging. Beyond putting our innovative technology in the reach of more people, this deal represents a significant opportunity to drive revenue for the Company. Additionally, this agreement creates a framework for the rapid commercialisation of future 4DMedical products.”

Voila.

He also told Stockhead earlier in the week that the deal opens up poss delivery of 4DMedical’s lung imaging technology at I-MED’s Australia-wide network of more than 250 clinics.

Also ahead this seek by about 100%, is HRL Holdings Limited (ASX: HRL) which says it’s on the happy end of an unsolicited, non-binding indicative offer from ALS Limited (ASX:ALQ) to acquire 100% of the ordinary shares of HRL for $0.16 cash per share.

And that is where the share price sits late on Friday.

HRL, a diversified environmental and laboratory service provider says talks are only preliminary and no agreement has been landed and there’s no guarantee one will. So keep your hair on – and honestly – what’s the rush when your stock is up about 70% on the chatter.

In response to the NBIO bid, the stock formerly and better known as Hot Rock entered into a Process Deed on 7 June under which ALS is being provided with the opportunity to undertake due diligence and negotiate transaction documentation on an exclusive basis to 20 July 2022.

HRL has agreed to certain due diligence, exclusivity, notification and break fee provisions during this period.

So it’s open up the hood and see what makes the lab services company tick.

 

ASX SMALL CAP LOSERS:

Here are the best performing ASX small cap stocks for June 27 – July 1:

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