Day: March 9, 2022

Record $36bn in dividends could help ASX share market recovery

Happy young man and woman throwing dividend cash into air in front of orange backgroundHappy young man and woman throwing dividend cash into air in front of orange backgroundHappy young man and woman throwing dividend cash into air in front of orange background

A wall of cash from dividend payouts is expected to give ASX share market bulls extra firepower to buy the dips.

That’s the prediction of some market experts like Bell Potter strategist Richard Coppleson. He calculates that investors will reap more than $36 billion in dividends by April this year, according to reporting in the Australian Financial Review.

The collective value of dividends declared in the February reporting season was 40% higher than the same time last year.

Dividend windfall to support ASX share prices

“The dividends to be paid in March and April will be positive for retail sales and also the market, as some of this cash will be reinvested back into stocks in late March through to mid-April,” Coppleson told the AFR.

“If we see the US market re-test its January lows, which is still a big chance, many institutional investors will have cash flying in from mid- to late-March that they will be able to throw at the market.”

This month should see $26 billion in dividends hit shareholders’ bank accounts. There is a further $10.3 billion that will flow into shareholders’ pockets in April.

Cash to calm the volatility

If much of the cash is put back into the market, as Coppleson is predicting, it could help stabilise the S&P/ASX 200 Index (ASX: XJO) during this volatile period.

Russia’s attack on Ukraine, rising interest rates, and fears of stagflation have sent ASX shares on a rollercoaster ride.

Most of the dividend support is coming from resources shares thanks to strong commodity prices.

Top dividend-paying ASX shares

BHP Group Ltd (ASX: BHP) is the reigning dividend champ with a record interim payout of US$1.50 (A$2.08) a share. BHP alone accounts for nearly 29% of the total value of dividend payments in the latest reporting season.

The next best dividend-payer, and the only non-resource ASX share in the top 5 dividend payers, is Commonwealth Bank of Australia (ASX: CBA). Australia’s largest bank declared a $1.75 per share interim dividend. This totals $3 billion in dividends.

Fortescue Metals Group Limited (ASX: FMG) is in third spot despite cutting its interim dividend by 41%. Fortescue is paying out $2.6 billion. Rio Tinto Limited (ASX: RIO) is in fourth position with its $2.5 billion cash splash.

Woodside Petroleum Limited (ASX: WPL) rounds up the top five, forking out $1.4 billion in dividends.

Given the positive earnings outlook coming out of the February reporting season, plus the ongoing surge in commodity prices, the ASX dividend party may last a while longer yet.

The post Record $36bn in dividends could help ASX share market recovery appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns BHP Billiton Limited, Commonwealth Bank of Australia, Fortescue Metals Group Limited, and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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What happened to the Nickel Mines (ASX:NIC) share price today?

A woman holds her head and screams.A woman holds her head and screams.A woman holds her head and screams.

At first, it looked like the Nickel Mines Ltd (ASX: NIC) share price wasn’t going anywhere for the rest of Wednesday.

The company requested a trading halt during mid-afternoon trade following the tanking of its shares.

However, towards the back end of the day, Nickel Mines provided an update.

At market close, the low-cost nickel producer’s shares finished down 4.75% to $1.405 apiece. That’s in sharp contrast to the 22.71% in the red that Nickel shares were at before being halted, at $1.14.

Why were Nickel Mines shares put into a trading halt?

Following the dramatic turn in the Nickel share price, the company’s latest statement answered some questions relating to the trading halt.

Nickel Mines advised it is not aware of any information that could explain why the recent trading in its shares has been volatile.

However, the company did note that it recognised recent press speculation regarding a short position in the London Metal Exchange (LME) nickel held by Tsingshan group, and the implications this had on global markets.

Nonetheless, Nickel Mines pointed out the following to reassure shareholders:

  • Operations at the Hengjaya Nickel and Ranger Nickel projects are unaffected, as is commissioning at the Angel Nickel project and construction at the Oracle Nickel project.
  • Tsingshan has firmly assured Nickel Mines that it has no intention of selling any shares that it holds.
  • There has been no change in Tsingshan’s undertaking to purchase all of the nickel pig iron produced by the company’s RKEF operations.
  • There has been no impact on Tsingshan’s intention to receive Nickel Mines shares in the conditional placement for the company to acquire a 70% interest in the Oracle Nickel Project.

As my Motley Fool colleague Mitch Lawler pointed out, the nickel price accelerated to a record high of US$43 per kilogram overnight. This represents a mammoth 70% increase since the start of this month.

As a result, the LME decided to halt nickel trading and cancel trades last night.

The shock move came as government sanctions around the world have threatened to block the supply from key producer Russia.

Nickel is a key component in lithium-ion batteries, which is used in generating power for electric vehicles. It is able to produce a lot more energy into batteries than using cobalt. The latter is considered a more expensive metal and has fewer purposes across industries.

Nickel Mines share price summary

Over the past 12 months, the Nickel Mines share price has gained more than 4%.

Although, when looking at year to date, the company’s shares are down by almost 2%.

Nickel Mines presides a market capitalisation of roughly $3.86 billion with approximately 2.62 billion shares on its registry.

The post What happened to the Nickel Mines (ASX:NIC) share price today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Nickel Mines right now?

Before you consider Nickel Mines, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Nickel Mines wasn’t one of them.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Why did Race Oncology (ASX:RAC) shares bounce 14% higher on Wednesday?

Scientists working on a screen in laboratoryScientists working on a screen in laboratoryScientists working on a screen in laboratory

Shares in Race Oncology Ltd (ASX: RAC) soaring today to finish trading 14% higher in the green.

The Race Oncology share price flamed higher despite no market-sensitive information from the company’s camp, nor was there any major upsets in the wider sector.

Zooming out, we see that Race Oncology is down over 32% for the year, and 11% in the last month alone, which could be important information.

Why did Race Oncology shares flame higher today?

It’s not abundantly clear what’s sent Race’s share price further north today.

The S&P/ASX 200 Health Care index (XHJ) was also firmly in the green today, finishing up 0.29% at 38,796 points.

Trading volume of Race Oncology shares was also substantially higher than normal, above the 4-week average at 890,904 shares.

Looking a bit deeper at the order book and market depth monitor provided by Bloomberg Intelligence, it’s also clear that brokers filled more buy orders than sell orders today as well, when measured by volume.

In fact, at one point 74% of the order volume has stemmed from those asking to buy and another 22% from those offloading Race Oncology shares.

The first of these large orders was filled at around 11:58 am, just when shares really took off, as seen on the chart below which tracks Race’s performance on Wednesday.

TradingView Chart

There’s been a tug-of-war between buyers and sellers over the past two hours of trade but nonetheless, considering the laws of supply and demand, when there are more buyers than sellers – this tends to bid the price up in markets.

It remains to be seen exactly what’s got market pundits piling in today to secure a spot in the front row of Race’s growth story.

But with smaller ASX shares by market capitalisation, even modestly sized order volumes can cause large fluctuations in the share price.

Not to mention during market volatility, that’s when speculators and large trading firms tend to be most active, to capture price movements in each direction.

Race Oncology share price snapshot

In the past 12 months, the Race Oncology share price has lost 32% after collapsing from a high of $3.71 last year. This year to date, things aren’t any better and shares have tanked 27%.

At the current share price, Race Oncology has a market capitalisation of $419.5 million.

The post Why did Race Oncology (ASX:RAC) shares bounce 14% higher on Wednesday? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Race Oncology right now?

Before you consider Race Oncology, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Race Oncology wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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‘Plenty to say’ as Melbana Energy (ASX:MAY) races another 13% higher

Rumble share price A satisfield miner stands in front of a drilling rig, indicating a share price rise in ASX mining companiesRumble share price A satisfield miner stands in front of a drilling rig, indicating a share price rise in ASX mining companiesRumble share price A satisfield miner stands in front of a drilling rig, indicating a share price rise in ASX mining companies

Shares in Melbana Energy Ltd (ASX:MAY) soared into the green today and finished 13% higher at 12.75 cents apiece. At one point, Melbana was trading as high as 14.74 cents during the session.

Investors are reacting positively after a company announcement regarding an update on its drilling operations in Cuba. Let’s take a closer look at what was released today.

Melbana is pushing ahead in Cuba

The company provided a drilling update on the Block 9 ‘production sharing contract’ area in onshore Cuba.

The Cuba Block 9 contract area covers 2,380km2 onshore on the north coast of Cuba. According to Melbana, it is located within “a proven hydrocarbon system and along trend with the multi-billion barrel Varadero oil field”.

Melbana advised it paused drilling on the 6-inch hole section when it encountered a “high-pressure zone resulting in an influx of hydrocarbons into the wellbore and subsequent strong oil shows on the shakers”.

As such drilling will now push ahead full steam as oil is being fed through the choke and mud degasser and then being flared.

“Drilling ahead will continue once the mud system has been weighted up to approximately 1.88sg – the weight necessary to maintain well control while drilling ahead”, the company noted.

Speaking on the announcement, Melbana Energy executive chair Andrew Purcell said:

This well continues to have plenty to say to us and we’re enjoying hearing it. This strong showing, once again, of energetic hydrocarbons gives our geoscientists more to think about when considering what this may mean for
our understanding of the subsurface and the resource potential of Block 9.

What else could be at play?

The results announced today build on momentum in the hydrocarbons sector as oil prices surge to multi-year highs.

Brent Crude futures – of which more than 90% of oil contracts are priced off – nearly touched US$131 per barrel on Wednesday as the supply shock from US-imposed sanctions on Russian oil ripple through commodity markets.

It has now risen around 93% in the past year and is up 43% in the past month. The momentum has been positive for Melbana with its share price climbing more than 100% at the same time.

In fact, the Melbana Energy share price and the price of oil and oil futures tends to move remarkably similar seeing as the company is a price taker, meaning its shares will fluctuate alongside volatility in commodities.

TradingView Chart

Melbana Energy share price snapshot

In the last 12 months, the Melbana share price has soared more than 526%, with a 490% gain this year to date.

In the last month alone, shares have more than doubled and are up 51% during the past week of trading.

The post ‘Plenty to say’ as Melbana Energy (ASX:MAY) races another 13% higher appeared first on The Motley Fool Australia.

Should you invest $1,000 in Melbana Energy right now?

Before you consider Melbana Energy, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Melbana Energy wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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