Are Australian investors looking for metaverse opportunities on… the NSX?
A new year has dawned, and to celebrate Stockhead decided to check in on the 2021 machinations of the ASX’s smaller cousin, the National Stock Exchange (ASX:NSX).
Listed on the ASX itself, the NSX provides a buy/sell platform for around 50 companies spanning an array of industries with a focus on the Financials sector (resources stocks are especially light-on).
As outlined in this summary, trading volumes on the NSX are light compared to the depth and liquidity of the ASX.
Some companies trade consistently, while others only trade a couple of times a year and others are more illiquid (industrial stock I M Quarries hasn’t traded since 2012).
With that in mind, here’s a summary of the best (and worst) performing NSX stocks in 2021:
Leading the NSX with an annual gain north of 300% was fitness technology company OliveX (NSX:OLX).
The stock’s price action heading into the end of last year may be an indicator of how investors are on the lookout for metaverse investment opportunities.
Does that mean going to the NSX if they have to?
Among NSX companies OliveX has an interesting backstory, in that its shareholder base includes Animoca Brands — the crypto-adjacent firm that specialises in NFTs (non-fungible tokens).
Animoca was listed on the ASX until early 2020, when it got kicked off for being… a crypto-adjacent firm that specialises in NFTs.
Since then, it’s gone on to launch a successful crypto token in connection with The Sandbox virtual world game, among other activities.
In October last year, Animoca said it had raised another US$65m in private capital at an indicative valuation of US$2.2bn.
Around the same time, trading volume in OliveX spiked (Animoca owns a 31% stake in the company).
Between November 11 and December 31, OLX shares changed hands no less than 67 times. By NSX standards, that’s heavy volume.
The dollar amount of each trade ranged from around $5,000 to $50,000 in size, and by the end of the year OLX shares were changing hands at $1.95 — up from $1 prior to November 11.
That marks a solid gain from the company’s August 2020 listing price of 20c.
On its website, OLX flagged the pending launch of its ‘fitness metaverse’ — a marketing platform that aims to combine real-world fitness brands (including gyms and coaches) with new concepts such as augmented reality and online play-to-earn forums.
OliveX’s gaming stack includes Zombies, Run! — a platform that aims to provide a smartphone-based accompaniment to exercise (missions include ‘zombie attacks’ when you should run faster).
While tech led the way on the NSX this year, the other standout performers spanned an eclectic group of sectors.
Three other stocks posted triple-digit percentage returns:
PYX Resources Limited (NSX:PYX) – zircon mining
Endless Solar Corporation (NSX:ESC) – clean energy
Haodex Ltd (NSX:HAO) – China e-commerce
PYX is a producing zircon miner, with dual operations in Indonesia which it has run since 2015.
The stock appears to stand out among its NSX peers, in that it’s an established business which makes money.
In research at the start of this year, Goldman Sachs forecast “upside risk” for zircon prices, driven by a >10% fall in global supply due to mine depletion and production cuts, and a strong rebound in global demand for ceramics.
Found in mineral sands, zircon has a number of use-cases including the manufacture of ceramics and as a mould coating for titanium products.
Endless Solar Corp posted strong gains for the year in percentage terms, but that increase was achieved on low volumes as the stock last traded on March 19, 2021.
Lastly, ecommerce play Haodex outperformed following a busy finish to the year after it listed on December 9 at 20c per share.
By December 31, the stock had already traded 16 times and that consistent volume has continued into 2022, with another 25 trades so far in January.
(HAO shares closed yesterday at 48c, up from 45c on December 31).
Haodex’s website says it has three core projects including MonkeyKing Australia (in which it owns a 78% stake) — an “online e-commerce marketplace which enables merchants to distribute Australian products to consumers in Asia, mainly China”.
According to HAO’s prospectus, it also owns a 78% stake in separate omni-channel ecommerce platform BulkBuy, and a 100% stake in short-term Chinese accommodation hosting business, Franks Haus.
Haodex aimed to raise $1m from its NSX IPO — funds it said would be deployed towards working capital, strengthening its balance sheet and providing a liquid market for its shares.