Author: openjargon

With just a few hours of trade left on Friday, the All Ordinaries Index (ASX: XAO) is up 0.6% for the week, with due thanks to three rocketing ASX All Ords stocks.

Which companies are we talking about?

I’m glad you asked!

Despite slipping today, the PYC Therapeutics Ltd (ASX: PYC) share price is up 18.2% since last Friday’s closing bell.

The Capitol Health Ltd (ASX: CAJ) share price has flown even higher, up 20.0% for the week.

And Pantoro Ltd (ASX: PNR) is also amply rewarding shareholders this week, with shares up 18.8% over the five trading days.

Here’s why investors have sent the ASX All Ords stocks flying higher.

What’s boosting these ASX All Ords stocks?

The last price-sensitive news out of PYC Therapeutics was back on 7 June.

At the time the clinical-stage biotechnology company reported on promising progress with its drug discovery program. That program is directed towards a severe neurodevelopmental disorder, Phelan McDermid Syndrome, which is caused by a loss of one functional copy of the SHANK3 gene.

Investor interest in the ASX All Ords stock was stirred when PYC Therapeutics said it had successfully restored the deficient protein and would now progress towards human trials, expected to start in 2025.

“This is a big step forward in this body of work. This is the data that the clinicians have been asking us to generate before we push into the clinic” PYC’s CEO Rohan Hockings said on the day.

Which brings us to the second ASX All Ords stock leading the charge this week, diagnostic imaging provider Capitol Health.

The Capitol Health share price gained 10.2% on Monday and another 9.3% on Tuesday after the company reported its board had accepted a takeover offer from Integral Diagnostics Ltd (ASX: IDX).

With the takeover offer representing a premium of some 33% to last Friday’s closing price, investors sent the stock soaring.

Commenting on the proposed acquisition, Capitol Health managing director Justin Walter said:

Today’s proposed merger announcement with Integral, represents an exciting opportunity for all our valued radiologists, technicians, and staff to be part of Australia’s largest pure-play publicly listed imaging company.

Ian Kadish, Integral CEO added, “The merger would create a scalable platform that would unlock significant value for stakeholders of both Integral and Capitol, including patients, doctors and shareholders.”

Which brings us to the third ASX All Ords stock shooting the lights out this week, Pantoro.

Shares in the Western Australian gold producer and explorer are marching higher for the fourth consecutive day today following the company’s growth announcement.

With a growth budget of $25 million, the miner said it could double the size of its exploratory drill campaign following initial drilling results. Management flagged 85,000 meters of combined diamond and reverse circulation (RC) drilling over four key targets in FY 2025 at the company’s Norseman project.

Commenting on the growth plan that put the ASX All Ords stock in the top gainers list this week, Pantoro managing director, Paul Cmrlec, said:

This is a very exciting period in the development of the Norseman goldfield. For the first time we are in a position to re-develop the Norseman Mainfield with an outstanding balance sheet position, and operations generating strong cashflow.

The post Why these three ASX All Ords stocks are leading the charge higher this week appeared first on The Motley Fool Australia.

More reading

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• Why Capitol Health, Infratil, Newmont, and Race Oncology shares are charging higher
• Why Capitol Health, Capricorn Metals, Credit Clear, and Telix shares are storming higher
• This ASX All Ords stock is rocketing 20% after accepting a takeover offer
• Why IDP Education, Novonix, PYC, and Regis Resources share are racing higher

Motley Fool contributor Bernd Struben 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 recommended Integral Diagnostics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a reasonably positive finish to the week. In afternoon trade, the benchmark index is down 0.2% to 7,787.2 points.

Four ASX shares that are failing to follow the market higher today are listed below. Here’s why they are falling:

Guzman y Gomez (ASX: GYG)

The Guzman y Gomez share price is down almost 5% to $28.58. Investors appear to have been taking profit on Friday after a very strong first session yesterday following the quick service restaurant operator’s initial public offering (IPO). Excitement over its IPO led to Guzman y Gomez’s shares opening 36% higher than its $22.00 listing price on Thursday. This gave the Mexican food chain a $3 billion valuation and meant that its shares were trading on a crazy multiple of 500x estimated FY 2025 earnings.

KMD Brands Ltd (ASX: KMD)

The KMD Brands share price is down 6.5% to 36.5 cents. This has been driven by the release of a disappointing trading update from the retailer this morning. KMD Brands revealed that its second half group sales were down 8.4% through to the end of May. This reflects a 5.9% decline in Rip Curl sales, an 8.4% drop in Kathmandu sales, and a 21.8% fall in Oboz sales. As a result, the company now expects underlying EBITDA to be approximately NZ$50 million for the full year. This will be down over 50% from NZ$105.9 million in FY 2023.

Mineral Resources Ltd (ASX: MIN)

The Mineral Resources share price is down 6.5% to $56.11. This follows significant weakness in the lithium industry today after the battery making ingredient continued to fall. In addition, the mining and mining services company announced plans to close its Yilgarn Hub iron ore operation this week. Management notes that having carefully considered all options, an assessment confirmed that the continuity of the Yilgarn Hub is not financially viable beyond the end of 2024. It has made the decision to cease Yilgarn Hub iron ore shipments by 31 December.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is down 4% to $3.07. Investors have been selling the lithium miner’s shares following the release of the pre-feasibility study (PFS) for the expansion of production at the Pilgangoora Operation. Management revealed that its PFS determined that production capacity at Pilgangoora Operation could be expanded to more than 2 million tonnes per annum (Mtpa). This would come with an estimated capital expenditure of ~$1.2 billion. And while the study has a good NPV, it is based on long-term lithium price assumptions meaningfully above current levels and Goldman Sachs’ forecasts. Also, news of a potentially big increase in production is not necessarily good news when there are forecasts for a lithium surplus.

The post Why Guzman y Gomez, KMD, Mineral Resources, and Pilbara Minerals shares are sinking appeared first on The Motley Fool Australia.

More reading

• Nuclear power, debt and burritos
• Top 10 most traded ASX shares and US stocks in May
• Guzman y Gomez share price implodes 10% on ASX trading day 2
• Why is this ASX All Ords share crashing deep into the red on Friday?
• Pilbara Minerals shares drop on major P2000 lithium expansion news

Motley Fool contributor James Mickleboro 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 Scott Phillips.

I don’t need to tell you that social media can be an awful cesspit of mistruth, abuse and algorithmic manipulation. (Exhibit A: My name being used and my video being overdubbed in an attempt to scam people!)

But it can also be a great place to interact with people of good faith from right across the political and ideological spectrum.

As an example, I’d been wrestling with so many contradictory claims and counter-claims on Australia’s energy future (this was before the recent announcement by the Opposition Leader… I have no time for the politics of this!), and tweeted that I had come to a point where I thought that nuclear power might have to be part of the power mix, despite my misgivings.

And thanks to the good graces of my followers, climate activist (and Climate 200 political funding body convener) Simon Holmes à Court was tagged in a reply.

He told me why he thought I was wrong, and a conversation ensued… that ended up with Simon agreeing to be a guest on our podcast, The Good Oil. (It’s officially ‘The Good Oil with Scott Phillips’, because our podcast partners pointed out there were already a lot of pods called ‘The Good Oil’, but it always makes me cringe!).

And why am I telling you all this? Well, two reasons.

One, social media can be a pretty decent place for most (not all) of us if you cultivate a positive approach and some quality followers. 

Second, and more importantly in this context, we recorded that episode this week, and I reckon if you’re interested in the energy future of the country, you’ll get a lot out of having a listen to our conversation. I did!

You can find the episode here on Apple Podcasts, or just search ‘The Good Oil with Scott Phillips’ on your favourite podcast player.

—–

Speaking of public policy, the announcement this week was just the latest in a long list of the many and varied ways that our governments have found to spend taxpayers’ money.

Now, let me say that I’m very much in favour of government spending where there are goods or services (including safety nets) that aren’t adequately or better provided by the private sector.

But we heard this week that on top of the Federal Government debt heading to $1 trillion, the combined state debts are heading to $800 billion, with no signs of slowing down.

And that at a time when the RBA is trying to slow the economy!

It is, I hope you’ll agree, deeply irresponsible. And perhaps worse, none of the various oppositions in those parliaments are making any signs of wanting to hold the incumbents accountable, or to promise more fiscal responsibility, so there’s not much hope of change at the political level, whichever way the electoral winds blow.

No, I’m not really surprised. I do remember a time, though, when both sides of politics actually considered responsible Budget management an important part of governing in the national interest.

And if you’re wondering why it matters… we have to pay the interest on that debt; money that can’t be spent on other things. And the higher the debt goes, the riskier our balance sheet becomes, and the less we’re financially prepared to handle the next crisis.

Oh sure, we can just print money… but that’s kinda part of what got us into this inflationary mess. Actions, unfortunately, have consequences.

—–

The other money printing? That might just be the existing shareholders of burrito chain Guzman y Gomez (ASX: GYG), now an ASX-listed company, who’ve printed some very nice profits by taking the company public.

From an IPO price of $22 (50% higher than Morningstar publicly said it was worth), the shares closed at $30. That’s… a spicy burrito (sorry!) if ever there was one. How spicy? The company now has a market cap of $3 billion and a profit last year of $3 million.

I’ll save you the maths.. That’s a P/E of 1,000 times!

Now, investors are never buying last year’s profits – we’re looking forward and hoping to harvest future profits. The company is forecasting a decent lift next year, and has ambitious growth plans well past that.

This might be stating the obvious… but it’ll need to!

Can it get there? Maybe. I do love the company’s food, but I’m not sure this is a risk/reward worth chasing. It wouldn’t be the first company to blow away expectations… or the first one to leave investors feeling as flat as a tortilla!

Have a great weekend. 

Fool on!

The post Nuclear power, debt and burritos appeared first on The Motley Fool Australia.

More reading

• Guzman y Gomez share price implodes 10% on ASX trading day 2
• Would I be crazy to buy Guzman y Gomez (GYG) shares at $30?
• Why Bigtincan, DroneShield, Guzman Y Gomez, and Helia shares are racing higher
• Who owns Guzman y Gomez shares?
• Guzman y Gomez shares rocket 36% on IPO day

Motley Fool contributor Scott Phillips 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 Scott Phillips.

BHP Group Ltd (ASX: BHP) and ANZ Group Holdings Ltd (ASX: ANZ) were the top two most traded ASX shares last month among investors using the SelfWealth trading platform to buy and sell stocks.

Among the 10 most traded shares were eight ASX 200 companies and two from the All Ords.

Let’s take a look.

Top 10 most traded ASX shares in May

Here are the top 10 most traded ASX shares in May, according to data from Selfwealth Ltd (ASX: SWF).

Rank	ASX shares	Percentage of buy orders
1	BHP Group Ltd (ASX: BHP)	57.6%
2	ANZ Group Holdings Ltd (ASX: ANZ)	53.3%
3	Fortescue Ltd (ASX: FMG)	54.6%
4	Woodside Energy Group Ltd (ASX: WDS)	67.7%
5	Telstra Group Ltd (ASX: TLS)	75.1%
6	Pilbara Minerals Ltd (ASX: PLS)	47.6%
7	Westpac Banking Corp (ASX: WBC)	47.8%
8	Vulcan Energy Resources Ltd (ASX: VUL)	54.5%
9	Woolworths Group Ltd (ASX: WDS)	75.4%
10	Mesoblast Ltd (ASX: MSB)	55.4%

As you can see, ASX consumer staples share Woolworths shares received the strongest buyer interest among the top 10 most traded shares in May.

Top broker Goldman Sachs has a conviction buy rating on Woolworths with a 12-month share price target of $39.40.

Based on the Woolworths share price of $33.70 on Friday, this implies a potential upside of 17% for investors in FY25 if they buy today.

Telstra shares had the second strongest buying activity during the month.

Goldman has a buy rating on the ASX telecommunications share with a $4.25 price target.

The Telstra share price is $3.66 at the time of writing. Goldman’s target, therefore, implies a potential upside of 16% in FY25 on this stock.

On Friday, the S&P/ASX 200 Index (ASX: XJO) is trading 0.21% higher at 7,785.8 points. Meantime, S&P/ASX All Ordinaries (ASX: XAO) shares are up 0.19% to 8,027.7 points.

Top 10 most traded US stocks in May

Here are the top 10 most traded US stocks in May among SelfWealth traders.

Rank	US stocks	Percentage of buy orders
1	GameStop Corp (NYSE: GME)	43.8%
2	Faraday Future Intelligent Electric Inc (NASDAQ: FFIE)	55%
3	Tesla Inc (NASDAQ: TSLA)	63.8%
4	NVIDIA Corp (NASDAQ: NVDA)	66%
5	Advanced Micro Devices, Inc. (NASDAQ: AMD)	59.6%
6	Apple Inc (NASDAQ: AAPL)	43.5%
7	Amazon.com Inc (NASDAQ: AMZN)	69.9%
8	Alphabet Inc Class A (NASDAQ: GOOGL)	66.1%
9	Microsoft Corp (NASDAQ: MSFT)	73.4%
10	Marathon Digital Holdings Inc (NASDAQ: MARA)	53.4%

Microsoft shares received the strongest buyer interest among the top 10 in May.

Microsoft is the biggest company in the United States, with a market capitalisation of $3.31 billion.

However, earlier this week Nvidia briefly overtook Microsoft when its market cap reached $3.34 billion.

Nvidia underwent a 10-for-1 stock split last week. It closed overnight at US$130.78 per share.

The post Top 10 most traded ASX shares and US stocks in May appeared first on The Motley Fool Australia.

More reading

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• Pilbara Minerals shares drop on major P2000 lithium expansion news
• 3 top ASX 200 stocks that could create lasting passive income into retirement
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• Telstra shares: Buy or sell?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bronwyn Allen has positions in Anz Group, BHP Group, Mesoblast, and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Goldman Sachs Group, Microsoft, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The artificial intelligence (AI) boom is creating a ripple effect in the unexpected area of the industrial properties market.

AI applications require immense computational power to process vast amounts of data. The AI boom drives the need for more data centres due to the extensive data processing, storage, and real-time analysis requirements of AI technologies.

As AI continues to evolve and integrate into various sectors, the demand for advanced data centre infrastructure will only increase.

The trouble is that this will add pressure to the ongoing shortage of industrial properties near metropolitan areas, led by the consumer shift to online shopping.

Industrial property powerhouse Goodman Group Ltd (ASX: GMG) has been a major beneficiary, with its shares surging 74% over the past year.

But could Brickworks Limited (ASX: BKW) shares be a cheaper alternative to benefit from this industry trend?

Converting warehouses to data centres

Goodman Group boss Greg Goodman estimated a $50 billion opportunity in data centres in his recent interview with Australian Financial Review. Goodman Group aims to capture this golden opportunity with large-scale developments, as Goodman explained in the shareholder update:

We continue to develop large-scale, high value, data centres, and expand our global power bank to address growing data centre demand as AI usage and cloud computing expands.

This has led to optimism from analysts, with Citi expecting double-digit earnings growth.

After the recent surge, Goodman Group shares are trading at a price-to-earnings (P/E) ratio of 30x and a price-to-book (P/B) ratio of 3.2x based on FY25 estimates by S&P Capital IQ.

Brickworks as a cheaper alternative?

With that in mind, Brickworks shares might present a more affordable entry point for those looking to capitalise on this angle. Although Brickworks is not as prominently recognised as Goodman in the industrial property sector, the company has steadily built a substantial and growing portfolio.

Traditionally known for its building products, Brickworks has strategically diversified into the industry property sector through its joint ventures with Goodman Group.

Brickworks’ two joint ventures focus on developing and managing prime industrial real estate. This partnership leverages Goodman’s expertise and Brickworks’ strong land holdings, creating a robust platform.

Brickworks shares are trading at a P/E ratio of 19x and a P/B ratio of 1.1x on FY25 estimates by S&P Capital IQ, much cheaper than Goodman Group.

While Goodman Group remains a leader in the sector, Brickworks offers a diversified revenue stream from its building products business and its holding in other listed shares, providing additional stability.

For investors looking to capitalise on the industrial property boom at a more reasonable price, Brickworks could be a promising option in my view.

The post Are Brickworks shares about to benefit from an industrial property boom? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee has positions in Brickworks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Goodman Group. The Motley Fool Australia has positions in and has recommended Brickworks. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Three S&P/ASX 200 Index (ASX: XJO) shares could do a lot of the heavy lifting to help boost the benchmark index in the year ahead.

That’s according to the analysts at UBS, Morgan Stanley and Jarden Securities.

Here’s why the brokers are increasingly bullish on these big-name Aussie companies.

(Broker data courtesy of The Australian.)

Three ASX 200 stocks with boosted outlooks

The first ASX 200 share getting a broker upgrade is Lovisa Holdings Ltd (ASX: LOV).

Shares in the jewellery retailer are up 0.1% at the time of writing, trading for $33.29 apiece. That sees the Lovisa share price up an impressive 81% in 12 months. The stock also trades on a partly franked trailing dividend yield of 2.4%.

The Lovisa share price has now almost fully recovered from the sell-off in early June that followed the announcement that CEO Victor Herrero is stepping down on 31 May 2025. Herrero is seen as the driving force behind Lovisa’s strong growth.

But with John Cheston, currently the CEO of Smiggle, taking over the reins, confidence in the company’s growth potential looks to have returned.

While UBS has kept its neutral rating on Lovisa shares, the broker raised its price target by 18% to $32.50 a share. That’s well above the $29.74 that shares closed at on 4 June, though below the current share price.

The second ASX 200 share earning a broker upgrade is Treasury Wine Estates Ltd (ASX: TWE).

Shares in the global wine company are up 0.6% today, changing hands for $12.51 apiece. That sees the stock up 9% in a year. Treasury Wine shares also trade on a partly franked trailing dividend yield of 2.7%.

Treasury Wine shares have leapt 12.6% since market close on 30 May amid increasing enthusiasm for Chinese markets reopening to Aussie wine imports. The company also impressed a number of brokers with yesterday’s Penfolds update.

Jarden Securities envisions some more share price growth ahead. The broker raised Treasury Wine share to a buy rating with a $14.50 price target. That represents a potential upside of 16% from current levels.

Which brings us to the third ASX 200 share earning a broker upgrade, Woolworths Group Ltd (ASX: WOW).

Shares in the supermarket giant are up 2.0% today, trading for $33.67 apiece. That leaves the Woolies share price down 16% over 12 months. Woolworths shares also trade on a fully franked trailing dividend yield of 3.1%.

Woolworths shares could get a boost with the stage three tax breaks set to boost Aussie’s take home pay.

Morgan Stanley has a bullish outlook for the supermarket chain. The broker raised its rating to overweight with a $37.00 price target. That’s 10% above the current share price.

The post These 3 top ASX 200 shares just earned substantial broker upgrades. Here’s why appeared first on The Motley Fool Australia.

More reading

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• Up 78% in a year, is it too late to buy Lovisa shares?
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a small gain. At the time of writing, the benchmark index is up 0.1% to 7,777.4 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are pushing higher:

Botanix Pharmaceuticals Ltd (ASX: BOT)

The Botanix Pharmaceuticals share price is up 1.5% to 34 cents. This has been driven by news that the US Food and Drug Administration (FDA) has approved its Sofdra product as a prescription medicine used to treat primary axillary hyperhidrosis (excessive underarm sweating) in adults and children 9 years and older. Botanix notes that there are approximately 10 million people in the United States with primary axillary hyperhidrosis, with few effective treatments available for patients. The company also raised $70 million through an institutional placement at 30 cents per new share.

Strike Energy Ltd (ASX: STX)

The Strike Energy share price is up 2.5% to 22 cents. This morning, this energy producer announced that it has reached an agreement with Macquarie Group Ltd (ASX: MQG) for the refinancing of its existing debt package. This will allow the company to fund production upgrades, as well as pre-development and development costs across its Perth Basin portfolio of assets. Provision of the $153 million five-year financing package is subject to execution of the definitive financing documentation.

Talga Group Ltd (ASX: TLG)

The Talga Group share price is up 10.5% to 63 cents. This has been driven by news that the battery materials and technology company has entered into an earn-in agreement with lithium giant Sociedad Quimica y Minera de Chile S.A (NYSE: SQM). The agreement relates to the company’s Aero Lithium Project in Sweden. Under the binding agreement, Talga has granted SQM the right to sole fund exploration expenditure of up to US$19 million over the next 7 years for up to a 70% ownership interest in the project.

West African Resources Ltd (ASX: WAF)

The West African Resources share price is up almost 3% to $1.50. This morning, the gold miner advised that it has now fully drawn the US$265 million secured loan facility from Sprott Resource Lending Corp. and Coris Bank International SA. These funds will be used for the development of the company’s Kiaka Gold Project in Burkina Faso and other corporate purposes. Kiaka’s construction is now 50% complete, with 75% of costs now committed and fixed.

The post Why Botanix, Strike Energy, Talga, and West African Resources shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• Botanix shares jump on FDA approval and $70m capital raising
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• Guess which high-flying ASX All Ords stock was just halted ahead of a key FDA decision
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) energy shares could be set for some longer-term tailwinds amid a looming national gas crisis.

Here’s how these top three ASX 200 energy shares are tracking at the time of writing on Friday:

• Woodside Energy Group Ltd (ASX: WDS) shares are up 0.7%
• Santos Ltd (ASX: STO) shares are up 1.7%
• Beach Energy Ltd (ASX: BPT) shares are up 1.5%

For some context, the ASX 200 is down 0.1% at this same time.

This comes as Australians are warned that a period of low winds has impacted wind power generation along the East Coast. Coupled with cold weather that’s seeing people turn up their heaters, the Australian Energy Market Operator (AEMO) cautioned that the eastern and southern states could face a gas crunch through September.

ASX 200 energy shares eyeing gas squeeze

The looming gas squeeze comes despite Australia sitting on enough on and offshore gas deposits to meet domestic needs for many decades to come.

But a range of state and federal restrictions have limited the ASX 200 energy shares from bringing that gas online. Domestic supply is also impacted by LNG exports.

“In the shorter term, … we need to have a balance of renewables and gas coming into the system. That’s a balance which other countries are pursuing,” shadow treasurer Angus Taylor said this week (quoted by The Australian Financial Review).

The government moved to assure Aussies that their lights and heaters won’t be going out this winter.

“Today’s [AEMO] notice is about a potential risk, not a risk that has eventuated. AEMO and the market are taking steps to ensure the risk is mitigated ahead of time,” a spokeswoman for Energy Minister Chris Bowen said.

Australian Pipelines and Gas Association chief executive Steve Davies pointed to the need for more supplies. Should that eventuate, it could offer some ongoing support for ASX 200 energy shares like Woodside and Santos.

According to Davies:

The extreme lows in renewable generation, particularly wind yields, have meant gas-powered generation has picked up a significantly larger load to keep the lights on and ensure electric homes can remain heated…

But you can’t have gas generation without supply.

Woodside seeks to avoid domestic shortfalls

Liz Westcott executive vice president of Australian operations at ASX 200 energy share Woodside, addressed the Energy Club WA on Tuesday.

Westcott said:

Cost-of-living pressures and the focus on energy security are contributing to growing public awareness of the importance of new gas supply…

It may mean a shift in expectations of our industry: to develop Australian natural gas resources in a timely fashion to avoid looming shortfalls. And in doing so, to support the economy and our community…

At a time when our society is increasingly polarised in a way that can stymie progress, we may have an opening here to work with various stakeholders to find common purpose and a commonsense approach.

In a statement on AEMO’s gas crunch warning, Woodside said it’s “taking steps to support the gas market in eastern Australia”.

According to the company, “We are working with the operator to maximise gas production from the Gippsland Basin and offering all available volumes to market.”

If the looming gas crisis tips the scales of public opinion and paves the way for new projects and streamlined approval systems, I can see some longer-term tailwinds emerging for ASX 200 energy shares.

The post ASX 200 energy shares smashing the benchmark amid national gas crisis appeared first on The Motley Fool Australia.

More reading

• 3 top ASX 200 stocks that could create lasting passive income into retirement
• 5 things to watch on the ASX 200 on Friday
• Buy these top ASX 300 dividend stocks today for an income boost
• Own Woodside shares? Here’s how much your company paid in Aussie taxes in 2023
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bernd Struben 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 Scott Phillips.