Category: Stock Market

It’s safe to say that the pandemic had a significant impact on dividend investors around the world. Many ASX companies cut or completely suspended their payments during the pandemic, leaving shareholders with little to no income.

However, following a broad economic reopening, dividends are flowing back in record numbers. According to the latest Janus Henderson Global Dividend Index report, dividends for the 12 months ending March 2022 have reset record highs in Australia — reaching $97.9 billion in payments.

This is great news for dividend investors! Yet there is one key piece of information that every investor should be aware of…

A major risk to Aussie dividend investors

The good news for Australian dividend shares is there has been an incredible bounce back in the total value of payments made to shareholders. This phenomenon has played out at a global level in the last 12 months with dividends rising a further 11% in the first quarter of 2022 to a new record of $302.5 billion.

Notably, Australia joins a select group of seven countries that have now surpassed their pre-pandemic dividend levels. For reference, the $97.9 billion of profits paid to shareholders represented a bonkers increase of 82% from the prior year.

Without a doubt, this is all great news for income investors. But it also comes with an important consideration… sector concentration risk.

Based on Janus Henderson’s findings, around 94% of the recovery in Australian dividends is attributable to banking and mining. Furthermore, the two sectors constituted roughly 81% of the total sum of profits paid out over the 12-month period.

Possibly more concerning is the fact that BHP Group Ltd (ASX: BHP) made up 32% of the total $97.9 billion handed out to Aussie investors. This meant the diversified mining giant claimed the title of the world’s biggest dividend payer.

Janus Henderson highlighted the high reliance on a small number of ASX companies, stating:

Australia’s high level of dividend concentration leaves domestic investors far more heavily dependent on just a handful of companies for a very large portion of their dividend income than in any comparable country. What’s more, all the top five are in either mining or banking sectors.

Providing some caution, the asset manager mentioned this concentration puts domestic Australian investors at risk of dividend reductions related to company-specific incidents.

Shopping outside the miners and banks

While banks and mining companies featured prominently in the top 20 dividend shares, there were a few options for investors outside of these sectors. For example, other noteworthy ASX shares included:

• Wesfarmers Ltd (ASX: WES)
• Telstra Corporation Ltd (ASX: TLS)
• Woolworths Group Ltd (ASX: WOW)
• CSL Limited (ASX: CSL)
• Coles Group Ltd (ASX: COL); and
• Transurban Group (ASX: TCL)

Though these other ASX shares do not offer the same level of returns as their banks and mining counterparts.

The post Overexposed: What every Australian dividend investor needs to know appeared first on The Motley Fool Australia.

More reading

• Could ASX shares pay out $100b in dividends this year? Expert weighs in
• Looking for the world’s biggest dividend? You’ll find it right here on the ASX 200
• Better buy, BHP or Fortescue shares?
• Keen to bag the special BHP dividend? Here’s what you need to do
• Why is the Woodside share price having such a strong start to the week?

Motley Fool contributor Mitchell Lawler 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 CSL Ltd. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/All Ordinaries Index(ASX: XAO) is trading down on Tuesday, currently 5 basis points in the red at 7,394.

The All Ordinaries has crept down in recent weeks, having fallen from a high of 7,887 on 21 April and cooling off to its current level.

Meanwhile, these 3 shares have spiked past their multi-year highs in Tuesday’s session.

Yancoal Australia Ltd (ASX: YAL)

Shares of Yancoal have surged 130% higher in 2022 amid a bullish run for the price of coal.

The price of coal has surged another 27% in the past month of trade and has now eclipsed a 296% gain over the last 12 months.

This price action has inflected positively for Yancoal, seeing its share price cruise past its highest mark since 2018.

At the time of writing, Yancoal shares are fetching $6 apiece, meaning very patient investors have now been rewarded with a 200% gain in the last 12 months.

New Hope Corporation Ltd (ASX: NHC)

Shares of New Hope have charged more than 3% higher on Tuesday and now rest at $4.09 apiece.

The $3 billion company by market cap has seen its share price rally on the back of the coal price’s hefty run as well.

Not only that, but New Hope’s exposure to other energy resources such as oil and gas have helped lock in a 83% gain this year to date.

Each of natural gas and Brent Crude oil have surged 130% and 64% in the last 12 months respectively.

Given that New Hope is a price taker on these commodities the market appears to have looked favourably on the miner amid this commodity boom.

Much of the upside in these segments has stemmed from the conflict in Europe, sending concerns of a supply shock throughout global markets.

After its gain today New Hope now trades at its highest level in around 3 years.

Worley Ltd (ASX: WOR)

Shares of Worley nudged past their highest mark since 2020 in early trade today, eclipsing the $14.96 mark just after the open.

They have since trended down across the day and now rest at $14.74.

Curiously, news of a strategic partnership with Avantium Renewable Polymers progressing to the next phase received a muted reaction from the market on 18 May.

Nevertheless, Worley had already clipped a 39% total return from the 12 months to that point anyway.

At the time of writing, it had risen 38% this year to date as well.

The post 3 ASX All Ordinaries shares smashing multi-year highs on Tuesday appeared first on The Motley Fool Australia.

More reading

• Why are ASX coal shares charging higher again today?
• 3 ASX 200 shares smashing multiyear highs on Wednesday
• Here are the best performing dividend shares in the ASX All Ords so far in 2022
• 3 ASX All Ordinaries shares hitting multi-year highs on Monday
• Why are these ASX coal shares having a top run today?

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 Scott Phillips.

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The National Australia Bank Ltd (ASX: NAB) share price has been a positive performer on Tuesday.

In afternoon trade, the banking giant’s shares are up 1.5% to $31.20.

Why is the NAB share price rising?

There appear to have been a couple of catalysts for the rise in the NAB share price today.

One is the release of a strong update from US bank JP Morgan overnight on Wall Street. The other is a bullish broker note out of Goldman Sachs this morning.

In respect to the latter, the broker has retained its conviction buy rating and $34.17 price target on the bank’s shares.

Based on the current NAB share price, this implies potential upside of 9.5% for investors over the next 12 months. This increases to approximately 14.5% if you include the $1.51 per share fully franked dividend the broker is forecasting in FY 2022.

What did the broker say?

After looking through recent updates in the sector, Goldman believes that bank margins may have found a bottom now. However, it suspects that volumes will start to slow, which means that cost cutting will become particularly important.

We think NIMs troughed in 1H21 and should start rising in 2H22E, supported by higher rates and the mix impact of less lower margin fixed rate mortgages. On volumes, we expect both system housing and business loan growth to experience a slowdown but overall remain elevated relative to pre-covid levels. We continue to see costs as a key determinant of relative sector performance particularly in light of inflationary pressures and higher investment spend.

In light of this, the broker believes NAB shares are the ones to buy in the sector right now.

We reiterate our Buy (on CL) on NAB and it remains our preferred sector exposure given: i) NAB’s balance sheet mix provides the best exposure to the domestic system growth we foresee over the next 12-18 months, which should favour commercial over mortgage lending, ii) NAB’s franchise is performing strongly, growing at or above system growth in most segments, iii) NAB’s disclosure on NIM leverage to higher rates is even more optimistic than we previously estimated.

The post 3 reasons this broker thinks the NAB share price is great value appeared first on The Motley Fool Australia.

More reading

• Why Allkem, NAB, Pushpay, and Virgin Money UK shares are rising
• Has the NAB dividend been growing?
• 3 cheap ASX shares set to boom with higher interest rates: Wilsons
• Can ASX 200 banks really see a 15% profit jump if the cash rate hits 1%?
• Why I think NAB shares could be the smartest big four ASX bank to buy

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.

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The Chalice Mining Ltd (ASX: CHN) share price remains in a trading halt this afternoon. This is despite the company providing an update in regards to its latest capital raising efforts.

At the time of writing, the mineral exploration company’s shares are frozen at $6.67.

Chalice launches institutional placement

The Chalice share price was halted this morning while the company prepared to make an announcement. In a statement to the ASX this afternoon, Chalice advised it is conducting a non-underwritten $100 million institutional placement.

The offer will see approximately 16.7 million new ordinary shares issued at a price of $6 apiece. This represents a 10% discount to the last closing price on 23 May.

The new shares to be issued under the placement account for roughly 4.7% of the company’s existing registry (355 million shares).

Chalice noted that it reserves the right to accept placement oversubscriptions within its capacity pursuant to ASX Listing Rule 7.1.

The proceeds received will be used to fund the company’s exploration activities over the next 18 months at Julimar in Western Australia. This includes advancing the Gonneville pre-feasibility study as well as undertaking reconnaissance exploration at West Yilgarn.

In addition to the $100 million, Chalice will tap into its own existing funds of $49 million to support expansion.

As such, $92 million will be allocated towards Julimar and $16 million to West Yilgarn.

Furthermore, $10 million is being set aside for corporate and $31 million for working capital and offer costs.

The new shares are expected to be allotted and issued on 30 May.

About the Chalice share price

Over the last 12 months, the Chalice share price has dropped 14%. It is also down 30% this year to date.

The company’s share price reached a 52-week low of $5.17 earlier this month before rebounding higher.

On valuation metrics, Chalice commands a market capitalisation of roughly $2.37 billion, with 355.02 million shares on issue.

The post Chalice share price remains frozen despite capital raise update appeared first on The Motley Fool Australia.

More reading

• Why is the Chalice Mining share price on ice today?
• These were the best performing ASX 200 shares last week
• 3 ASX mining shares that went gangbusters on Friday
• Why BHP, Chalice Mining, IGO, and Life360 shares are storming higher
• Here’s why the Chalice Mining share price is jumping 15% today

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 Scott Phillips.

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Well, the S&P/ASX 200 Index (ASX: XJO) is having a topsy-turvy kind of day so far this Tuesday. After initially opening into green territory this morning, the ASX 200 has whipsawed around, and is currently pretty flat, having lost just 0.03% for the day as it currently stands.

But one ASX exchange-traded fund (ETF) is faring far worse. That would be the BetaShares Nasdaq 100 ETF (ASX: NDQ).

Even though the ASX 200 hasn’t gone far today, NDQ units are presently down a nasty 0.93% at $26.72. So what’s going on with this ASX ETF?

Why is the BetaShares NDQ ETF struggling today?

Well, to answer that, let’s go through what this ETF actually invests in. NDQ is an index fund. But one that only covers the US NASDAQ-100 (INDEXNASDAQ: NDX) Index. The Nasdaq 100 is a US-only index that houses most of the US’ big tech shares. You’ll find famous names like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN) on this index. Some other notable Nasdaq names include Google owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Netflix Inc (NASDAQ: NFLX) and Tesla Inc (NASDAQ: TSLA).

NDQ is an index ETF that mirrors the Nasdaq 100. Thus, the Nasdaq’s largest holdings – Apple, Microsoft and Amazon – are also NDQ’s largest portfolio holdings.

Last night on the US markets, the Nasdaq 100 actually rose by 1.68%, as did Apple and Microsoft shares. However, it was a far different story during after-hours trading. Many US tech shares, including the three named above, plunged during after-hours trading. This seemed to be sparked by the social media company and owner of Snapchat, Snap Inc (NYSE: SNAP), giving quite a pessimistic update to its investors, which we discussed in detail today.    

As it currently stands, futures markets are pointing to some significant selloffs for the Nasdaq 100 in this Tuesday’s trading session. So it’s probably for this reason that the BetaShares Nasdaq 100 ETF is struggling on the share market today. 

The post Here’s why the BetaShares Nasdaq 100 ETF (NDQ) is sinking today appeared first on The Motley Fool Australia.

More reading

• Are these 2 sold-off ASX growth shares now cheap bargains?
• 2 high quality ETFs for ASX investors to buy after the market meltdown
• VAS: Were you better off buying the Nasdaq ETF?
• 3 ETFs for ASX investors in May
• 2 ASX shares to consider amid the share market sell-off

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Netflix, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, Netflix, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares) and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has failed to follow the lead of Wall Street and is edging lower. In afternoon trade, the benchmark index is down 0.1% to 7,142.7 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

Nufarm Ltd (ASX: NUF)

The Nufarm share price is down 14% to $5.01. The catalyst for this is news that a major shareholder has sold down its position in the agricultural chemicals company. Sumitomo Chemical Company has decided to sell its 15.9% shareholding in Nufarm for an average of $5.38 per share. This was a 7.8% discount to its last close price.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is down a further 12% to 20.7 cents. This lithium explorer’s shares have come under pressure since the release of a disappointing pre‐feasibility study (PFS) for the North American Lithium operation in Canada. That PFS found that the project has a pre‐tax net present value of A$1 billion, which was a lot lower than many were expecting.

Tabcorp Holdings Limited (ASX: TAH)

The Tabcorp share price is down 81% to 99.7 cents. The catalyst for this was the demerger of its lottery and Keno businesses into a separate listed entity – The Lottery Corporation Limited (ASX: TLC). This will leave Tabcorp with its wager and media and gaming services businesses. The good news is that the combined market capitalisation of Tabcorp and The Lottery Corporation is more than Tabcorp was valued at yesterday. So, investors are still better off despite this huge decline.

TechnologyOne Ltd (ASX: TNE)

The TechnologyOne share price is down 1.5% to $10.23. This follows the release of the enterprise software company’s half-year results. While TechnologyOne reported a 19% increase in revenue to $172.5 million and a 44% jump in SaaS annual recurring revenue (ARR) to $225.1 million, its earnings fell short of expectations. This was driven softer than expected margins.

The post Why Nufarm, Sayona Mining, Tabcorp, and TechnologyOne shares are falling appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most traded ASX 200 shares on Tuesday
• Here’s what you need to know about the Tabcorp demerger
• The Lottery Corporation share price debuts on the ASX boards
• Here’s why ASX 200 tech shares are under pressure on Tuesday
• ASX 200 midday update: Nufarm, Tabcorp and TechnologyOne tumble

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.

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The Lynas Rare Earths Ltd (ASX: LYC) share price is shifting higher on Tuesday and now trades at $9.645, up 1.53%.

The gain marks a 15% increase since 10 May when the stock bounced from a low of $8.37 – its lowest point in six months.

By comparison, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) has gained 6.6% over the same period and is up 0.44% on the day so far.

What’s up with the Lynas share price?

Lynas shares have been creeping higher lately despite no market sensitive updates from the company.

Noteworthy, however, is the price of rare earth neodymium that has climbed almost 7% over the past month, bringing its increase to 90% in the past 12 months.

Neodymium had been trading at record highs in February 2022 before reversing course and bottoming in April.

Since then, prices for the rare earth have been climbing again.

Neodymium is predominantly used in products such as microphones, headphones, computer hard disks, electric motors, and many electrical goods.

With a surge in demand for electronic appliances over the last few years, prices for rare earths such as neodymium have also risen.

According to a report from Market Research Guru, this trend is set to continue, reflecting positively on rare earths stocks such as Lynas.

The report found:

The global Electrical Appliances market was valued at US$8.55 billion USD in 2021 and will grow with a [compound annual growth rate] CAGR of 4.12% from 2021 to 2027.

Meanwhile, further research submits that “[t]he global household appliances market is expected to grow from $502.28 billion in 2021 to $557.70 billion in 2022 at a CAGR of 11.0%”.

Lynas is actually the only rare earths processor outside of China, putting it front and centre in the race to keep up with global demand.

The company said that its “biggest challenge right now is to grow as fast as the market,” as quoted by Reuters. It added that simply keeping “pace with the market” isn’t enough.

Lynas has also received nearly $15 million in federal funding “to commercialise an improved process for producing rare-earth carbonate,” as outlined in the federal government’s 2022 Critical Minerals Strategy.

The post The Lynas share price has surged 15% in 2 weeks. What’s the deal? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why is the Lynas share price powering ahead today?
• Falling ASX 200 mining shares ‘an opportunity to invest in sector leaders’: broker
• Why is the Lynas share price storming higher today?
• The Lynas share price has plunged 6% today! What’s going on?

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 Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down slightly to 7,143.4 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Allkem Ltd (ASX: AKE)

The Allkem share price is up 4% to $13.53. Investors have been buying lithium shares today amid optimism that demand will continue to outstrip supply for some time to come. This could lead to lithium prices remaining higher from longer.

National Australia Bank Ltd (ASX: NAB)

The NAB share price is up 2% to $31.36. This appears to have been driven by a broker note out of Goldman Sachs this morning. According to the note, the broker has retained its conviction buy rating and $34.17 price target on the bank’s shares. Goldman believes that NAB’s balance sheet mix provides investors with the best exposure to the domestic system growth the broker is forecasting over the next 12-18 months.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price has jumped 14% to $1.28. This follows news that the donations technology company has received a takeover proposal from BGH Capital and Sixth Street. While no details have been provided, the suitors appear to mean business. They have already accrued a combined 20% interest in Pushpay recently.

Virgin Money UK (ASX: VUK)

The Virgin Money UK share price is up 3% to $2.65. This follows an even stronger gain by the UK-based bank’s London-listed shares during overnight trade. This was despite there being no news out of Virgin Money. Though, it is worth noting that banks performed positively on Wall Street and elsewhere last night following a strong update from JP Morgan.

The post Why Allkem, NAB, Pushpay, and Virgin Money UK shares are rising appeared first on The Motley Fool Australia.

More reading

• Pushpay share price jumps 17% amid BGH Capital and Sixth Street takeover approach
• Why are ASX 200 lithium shares kicking goals today?
• ASX 200 midday update: Nufarm, Tabcorp and TechnologyOne tumble
• Pushpay share price halted following takeover approach
• Has the NAB dividend been growing?

Motley Fool contributor James Mickleboro has positions in Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has positions in and has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The shakiness of the S&P/ASX 200 Index (ASX: XJO) seems to be continuing for investors thus far on Tuesday. The ASX 200 has been bouncing around all day but is presently down by a paltry 0.06% at around 7,150 points.

But rather than trying to get our heads around all that, let’s instead check out the ASX 200 shares that are currently sitting at the top end of the market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Nufarm Ltd (ASX: NUF)

ASX 200 chemicals manufacturer Nufarm is our first share to check out today. So far this Tuesday, a hefty 14.12 million Nufarm shares have been bought and sold on the markets today.

This is almost certainly a consequence of the company’s painful share price loss today. Nufarm shares are currently down by a nasty 14.4% at a flat $5. This slump follows news that Nufarm’s largest investor, the Japanese Sumitomo Chemical Co Ltd, has dumped its 15.9% stake in Nufarm for a heavy loss. NUF said.

Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals is our next company to have a look at this Tuesday. So far, a sizeable 15.77 million of this ASX 200 lithium producer’s shares have been thrown around the ASX.

There’s been no news out of Pilbara today that might explain this high volume. However, the company is still up a pleasing 4.1% so far today at $2.92 a share. It’s this strong rise that is the likely cause of these volumes we are seeing.

Tabcorp Holdings Limited (ASX: TAH)

ASX 200 gaming giant Tabcorp is our final and most traded share of the day as it currently stands. A whopping 100.56 million Tabcorp shares have so far swapped hands. This is almost certainly the result of the demerger that has occurred with Tabcorp shares today.

No, the company is not down 80%, as is suggested in some corners. Instead, Tabcorp has completed the ASX spinoff of The Lottery Corporation Limited (ASX: TLC), which has debuted on the ASX today. Shareholders received one Lottery Corp share for every Tabcorp share owned. So while Tabcorp has dropped in value, investors have also got some shiny new shares to admire.

The post Here are the 3 most traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

More reading

• The Pilbara Minerals share price has surged 15% in 2 weeks. What’s happening?
• Here’s what you need to know about the Tabcorp demerger
• Looking for the world’s biggest dividend? You’ll find it right here on the ASX 200
• The Lottery Corporation share price debuts on the ASX boards
• Why are ASX 200 lithium shares kicking goals today?

Motley Fool contributor Sebastian Bowen 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.

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The S&P/ASX 200 Materials Index (ASX: XMJ) has fallen 3.6% in a month, but this ASX lithium share is surging ahead.

The Lithium Energy Ltd (ASX: LEL) share price has soared 44% from market close on 22 April to its intraday high of $1.43 on Tuesday. At the time of writing, it had settled at $1.36, up more than 7% on the day.

Let’s take a look at what has been helping this ASX lithium share.

Lithium demand

ASX lithium shares, including Lithium Energy, are rising amid ongoing lithium supply concerns.

Other ASX lithium shares to rise today include Mineral Resources Limited (ASX: MIN), up 2.62%, and Pilbara Minerals Ltd (ASX: PLS), up 4.09%. Meanwhile, the Allkem Ltd (ASX: AKE) share price is 3.85% higher while Liontown Resources Limited (ASX: LTR) is ahead 3.47%.

The surge coincides with a release of a new International Energy Agency Global EV report. It warns while electric car sales are breaking records, mineral supply constraints are looming. The report highlights lithium prices in May 2022 are seven times higher than at the start of 2021.

The report said:

Unprecedented battery demand and a lack of structural investment in new supply capacity are key factors.

The rapid increase in EV sales during the pandemic has tested the resilience of battery supply chains, and Russia’s war in Ukraine has further exacerbated the challenge.

Lithium Energy is exploring the Solaroz Lithium Project in Argentina and the Burke Graphite Project in Queensland.

On 9 May, the company advised it is finalising high priority drill targets at the Solaroz project. The company said it aims to define a maiden JORC Mineral Resource of lithium from a 12,000 hectare concession area. The company is conducting passive seismic surveys to find out the depth of the underlying basement rock.

Commenting on the exploration activities, executive chairman William Johnson said:

The commencement of exploration activities on Lithium Energy Solaroz concessions is a very exciting phase in the growth of the company.

In a presentation to a conference in Sydney on 3 May, Lithium Energy highlighted the Solaroz project can be found in the ‘prolific’ lithium triangle. This is said to be home to the “world’s largest reserves of lithium”.

Share price snapshot

The Lithium Energy share price has skyrocketed 180% in the last 12 months while it has soared 47% year to date.

In the past week alone, it has surged more than 18%.

For perspective, the benchmark  S&P/ASX 200 Index (ASX: XJO) has climbed 1.44% in the past year.

Lithium Energy has a market capitalisation of about $62 million based on today’s share price.

The post Why has this ASX lithium share surged 40% in a month? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX mining shares leapt more than 10% on Friday
• Here’s why the Lithium Energy share price is shooting 16% higher

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.

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