• While markets fell on Friday, the ASX Emerging Companies Index still rose 0.55% for the week
  • Slightly lower Aussie inflation figures for October buoy markets as signs of slowing rate rises in US
  • Shares in biotechs Jayex Technology and Microba soar this week on positive announcements

As we head into December both the big end of town along with the small and mid caps are up in a positive start to the last month of what has been a volatile year for the Australian and global equity markets.

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 top 200 ASX listed companies by float-adjusted market capitalisation.

So just how did the two do this week? Well by 4pm AEDT on Friday the ASX XEC was up 0.55% for the past five days.  In a further  positive sign the ASX XEC was up 4.84% in the past month, on the road to recovering some of the 2022 losses, down ~21% year to date.

The XJO fared  slightly better up 0.58% for the week and 6.47% for the month. It could do still do with a Christmas rally though to further reduce some of the losses this year, down 3.79% year to date.

Source: CommSec

Materials led the gainers, up 4.37% in the past five days followed by the IT sector up 2.45% and communication services, which rose 2.06%.

Leading the laggards was the energy sector which was down 3.26% in the past week, followed by consumer discretionary which fell 1.06% and utilities, down 0.83%.

On a positive note, inflation figures came out for October this week and were slightly better than analysts’ consensus, adding to expectations that the rate of price rises may be nearing their peak.

The Australian Bureau of Statistics reported headline consumer price index for October was 6.9%, slowing from the 7.3% pace reported for September.

The trimmed mean tally was 5.3%, the RBA’s preferred measure that trims away large price movements, lower than the 5.4% pace recorded in September.

Furthermore, US Federal Reserve chair boss Jerome Powell signalled the pace of rate hikes in the US will slow down starting this month.

Powell said US inflation remains too high, but rate hikes must be slowed down because prior rate increases have yet to take their full effect.

US bond yields were down more than 16bp for the week on the back of Powell’s more dovish comments.

Oil was up for week with Brent rising 6.26% to US$81.03 per barrel. Iron ore was higher by 6.06%,  while metal prices were also mostly up for the week with gold rising 2.39%, copper up 4.09% and silver up 4.09%.
 

ASX SMALL CAP LEADERS:

Here are the best performing ASX small cap stocks for November 28 – December 2:

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Jayex Technology (ASX:JTL) announced it had completed a thorough review of its operations by newly appointed CEO Rob Hadley.

The review will result in significant cost savings across all aspects of the e-health SaaS healthcare platform business. Total savings are expected to be in the order of $195,000 per month or $2.34 million per year.

Jayex said the restructure was necessary to capitalise on growth opportunities in the UK, where Jayex serves approximately 3,000 GP clinics.

Diagnostics giant  Sonic Healthcare (ASX:SHL) said it will purchase a 19.99% stake at 26 cents/share (~$17.8 million) in small cap Microba Life Scienes (ASX:MAP) sending its share price higher.  Sonic also seeks to acquire options for a further 5% stake.

Microba focuses on gut health with a revenue-generating business in microbiome testing. The company sells these testing products to healthcare practitioners and gets paid on a fee-for-service basis.

Microba and Sonic have agreed on the terms to deliver the microbiome testing technology into Australia, New Zealand, Germany, United Kingdom, Belgium, Switzerland and the United States.
 

ASX SMALL CAP LAGGARDS:

Here are the least performing ASX small cap stocks for November 28 – December:

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Shares in lightweight wheelmaker Carbon Revolution (ASX:CBR) tumbled this week  in its return to trading on the ASX after a one-month suspension with the identity of a US buyout partner emerging and the company revealing it needed $30 million in short-term funding.

CBR  announced that Twin Ridge Capital was the US special purpose acquisition company intending to buy the company and list it on the NASDAQ. However, it said that it needed $30 million in  bridge funding before the deal can be finalised in the June quarter of 2023.

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