V-Con: Small Cap Showcase Part 2 – Finding strong companies in a weak market
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V-Con is Stockhead’s investing focused video conference series, bringing you expert insights, panel discussions and presentations from leading analysts, listed small caps and industry players.
From an investor’s perspective, it certainly has been an exciting 2022 thus far. As always when the storm breaks, ASX-listed small caps have been at the eye of volatility.
For anyone with a taste for adrenaline, plague, war and famine should have provided rich sustenance – if not income.
And with the ongoing inflationary fears, geopolitical instability and with record fast interest rate rises rippling through markets worldwide, equity capital markets are another key indicator of where the mood is taking markets.
And the big question is, where will this lead ASX small caps?
Take it back a step, and measure where we are in the context of our own equity capital markets.
2021, in the words of Argonaut’s executive director Liam Twigger was probably one of the best ever for local equity capital markets – a record year for initial public offerings, with a total of 204 IPOs on the ASX, raising a combined $13.4b.
“In the mining space, you could raise money for anything,” Twigger said.
In H2 21, IPO volumes surged even harder raising almost three-quarters of the total.
Twigger describes that burst in equity raising activity to the little turtles charging off the beach and into the wide ocean.
Fast forward through January and a very different market and a very different sentiment emerges. The taps turn off.
Inflation, then interest rates rise. Confidence and then global markets fall. The economy slides toward recession. Australia’s equity capital markets raise just $9.3 billion in the first half of 2022, down 60% compared to the first half of 2021.
Like the All Ordinaries and the 11 sectors across the ASX 200 where they’d hope to hatch, Aussie IPOs are facing an increasingly tougher environment, one which nicely reflects the dire twists wrenching our current macroeconomic mix.
Where are the safe positions? Which are the sectors that outperform in a weak market? Where is the opportunity?
Speaking with emerging companies and the very best of Australian small cap specialists and sector experts, Stockhead is trawling the oceans for the best, brightest and strongest turtles which can survive and thrive wherever the current market takes them.
Sky News and CNBC business journalist Oriel Morrison interviews Liam Twigger and Ron Shamgar.
Liam has over 30 years of experience in the fields of investment banking and corporate finance and is the executive director and deputy chair of Argonaut.
Ron is passionate for value investing and a systematic approach to research and businesses evaluation, leading as the head of Australian equity strategies at TAMIM Asset Management.
American Rare Earths (ASX:ARR)
Chris Gibbs, Managing Director & CEO
American Rare Earths is an Australian explorer focused on cementing itself as a key player in the development of critical high value scandium and rare earths in mining friendly Arizona in the US.
Telix Pharmaceuticals (ASX:TLX)
Dr Christian Behrenbruch, Managing Director & CEO
Telix is a biopharmaceutical company focused on the development and commercialisation of diagnostic and therapeutic products using molecularly targeted radiation (MTR).
MoneyMe (ASX: MME)
Clayton Howes, Managing Director & CEO
Neal Hawkins, Chief Financial Officer
MoneyMe offers a range of award-winning and innovative digital credit solutions for consumers and businesses, aiming to provide faster, more convenient, and simpler access to credit direct from their mobiles.
Neuroscientific Biopharmaceuticals (ASX:NSB)
Matt Liddelow, Managing Director & CEO
Neuroscientific Biopharmaceuticals is an Australian company developing novel peptide-based pharmaceutical products that target a number of neurological disorders and diseases of the eye that have high unmet medical needs.