Tech sector continues 2023 rally in June, up 30.9pc so far this year
The S&P ASX 200 Information Technology index continued its 2023 rally in June, rising 3.52% and is up an impressive 30.9% YTD, outpacing other ASX sectors.
The Tech sector was surpassed only by the S&P ASX 200 Materials sector in the last month of the Aussie 2023 financial year, which rose 4.8% after a fall in April.
On Wall Street the tech-heavy NASDAQ composite index has had the best first half since 1983. The NASDAQ rose 6.6% in June and has surged 31.7% for the six months of CY23.
It’s a welcome recovery to a lacklustre 2022 performance where Tech fell heavily and was a casualty of rising inflation and interest rates on a global scale as the cost of money became more expensive.
This year global enthusiasm for the emerging field of artificial intelligence (AI) is leading the uptick in Tech among the big names on the NASDAQ, which is flowing through to the sector in general globally.
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Employee wellbeing software company Limeade (ASX:LME) led the ASX tech winners in June, up 243% after announcing its complete acquisition by WebMD Health Services, a US-based company and part of WebMD Health Corp. The acquisition will be an all-cash deal, valuing LME at ~$112 million.
WebMD will acquire the entirety of LME’s shares or Chess Depositary Interests (CDIs) for a cash amount of 42.5 cents per share/CDI.
The offer price represented a premium of 325% compared to the last traded price of Limeade on the ASX on June 8 and a 217% premium over the 30-day volume-weighted average price until June 7, 2023.
Major shareholders signed binding voting and support agreements, as disclosed by the company.
The merger will be governed by Washington State Law instead of the Australian Corporations Act, and its completion is subject to approval from the majority of LME shareholders/CDI holders, along with other conditions specified in the deal. LME anticipates the transaction to be finalised in the third quarter of 2023.
According to the website of WebMD Health Services, the company has been involved in designing well-being programs for employers and health plans for over two decades.
Additionally, it offers a WebMD health information platform, which provides medical content, tools, and resources to healthcare professionals and the general public.
“We are confident that the combination will bring together WebMD Health Services human expertise and Limeade technical innovation into a comprehensive solution that will have a positive impact on people and companies worldwide,” CEO Henry Albrecht said in an ASX announcement.
Second on the winners list was Advanced Health Intelligence (ASX:AHI), which had lots happening in June.
AHI went into a trading halt on June 13 before before announcing a $5 million private placement with international institutional investor Orca Capital GMBH.
The company will issue 20 million new shares to the venture capital firm at a price of 25 cents/share representing a 194% premium to the closing AHI share price on June 9 of 8.5 cents/share.
Furthermore, AHI announced it had entered its first partnership in the Middle East, signing a Letter of Intention (LOI) with UAE-based e-script medicine management company Pharmak Pharmacy LLC (Pharmak Direct).
AHI said Pharmak Direct offers a comprehensive platform that enables payers, doctors, and patients to seamlessly manage prescription compliance, delivery and adherence electronically.
Under the terms of a Letter of Intention (LOI) Pharmak Direct will integrate the AHI Biometric Health Assessment (BHA), enhancing the e-script patient experience and facilitating cost-effective medication and health management solutions within the Pharmak Direct ESPS.
EPS said the companies are targeting January 2024 as the initial launch of the combined solution and until such time AHI doesn’t expect to see any revenue.
Pharmak Direct expects to achieve a minimum e-script order volume in 2024 of 100,000 e-scripts per month in the UAE and a further 100,000 e-scripts per month in Saudi Arabia.
AHI also announced a ratio change of the company’s American Depositary Shares (ADSs) to its non-traded ordinary shares from the previous ratio of one ADS representing seven ordinary shares to the new ratio of one ADS representing 28 ordinary shares came into effect on June 30, 2023.
On June 27, 2022, AHI announced that it received notification from NASDAQ regarding non-compliance with the requirement to maintain a minimum bid price of $1/share.
“As a result of the change in ADS ratio, the price of its ADS is expected to increase proportionally, although AHI can give no assurance that the ADS price after the change in ADS ratio will be equal to or greater than 4 times the ADS price before the change,” AHI said in an announcement.