Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) is on form again and on course to end the week on a positive note. In afternoon trade, the benchmark index is up 0.55% to 7,468.5 points.

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

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is up 7.5% to $17.10. This appears to have been driven by a broker note out of Morgan Stanley this morning. Its analysts were pleased with the lottery ticket seller’s performance during the first quarter. In response, the broker retained its overweight rating and $18.50 price target.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price has jumped 11% to $4.81. Investors have been buying the administration services company’s shares after it received a takeover approach from Carlyle Group. The private equity firm has made a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share.

News Corp (ASX: NWS)

The News Corp share price has surged 9% higher to $34.62. This follows the release of the media giant’s first quarter update. According to the release, News Corp reported an 18% increase in revenue to US$2.5 billion and a 53% jump in EBITDA to US$410 million during the quarter. One of the drivers of this strong result was its Dow Jones media segment. It recorded its highest quarter of revenue and profitability since acquisition.

REA Group Limited (ASX: REA)

The REA share price is up 5.5% to $176.52. This follows the release of the property listings company’s first quarter update. For the three months ended 30 September, REA delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings. Management also revealed that the second quarter has started strongly, with national listings up 16% year on year in October.

The post Why Jumbo, Link, News Corp, and REA shares are storming higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Why the Link (ASX:LNK) share price is surging 12% higher today
• News Corp (ASX:NWS) share price in focus as first quarter delivers growth
• Why the Link (ASX:LNK) share price could rocket higher today
• REA Group (ASX:REA) share price on watch after delivering strong Q1 growth

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. owns shares of and has recommended Jumbo Interactive Limited and Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended REA Group Limited. 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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The ETFS Semiconductor ETF (ASX: SEMI) has performed exceptionally since it was listed a little over two months ago. Since listing, the semiconductor-focused exchange-traded fund (ETF) has delivered a return of 5.3%. In contrast, the S&P/ASX 200 Index (ASX: XJO) fell 0.8% during that time span.

Even more impressive, the ETF has rebounded off a slight dip to climb over 14% in the last month. Such a high monthly return from an investment vehicle that contains 29 holdings is quite an achievement.

So, let’s find out more about this new ETF that is taking the market by storm.

What is the ETFS Semiconductor ETF?

Put simply, the SEMI ETF is an ASX-listed ETF offered by etf Securities that gives investors exposure to 29 companies involved in the production of microchips. This opens up the opportunity to capitalise on advancements in modern computing, artificial intelligence, cloud computing, and electric vehicles.

While the fund is dealing in a high-growth industry, there are no highly speculative microcaps within the ETF. In fact, a criterion for inclusion is a market capitalisation of more than US$1 billion and a minimum average daily trading value of US$1 million over 3 months.

Although the ETF contains 29 holdings, it is heavily weighted towards its largest 10, making up approximately 70% of SEMI ETF’s portfolio. You might recognise some of the names in the fund’s top holdings listed below in order of weighting (largest to smallest):

• ASML Holding NV (AMS: ASML)
• Nvidia Corporation (NASDAQ: NVDA)
• Taiwan Semiconductor Manufacturing Co Ltd (TPE: 2330)
• Intel Corporation (NASDAQ: INTC)
• Broadcom Inc (NASDAQ: AVGO)
• Texas Instruments Inc (NASDAQ: TXN)
• Qualcomm Inc (NASDAQ: QCOM)
• Advanced Micro Devices Inc (NASDAQ: AMD)
• Applied Materials Inc (NASDAQ: AMAT)
• Analog Devices Inc (NASDAQ: ADI)

As you might be able to tell from the holdings above, the ETF is heavily weighted towards companies based in North America. Meanwhile, nearly 20% are companies situated in Asia, with the remainder 12.8% being European companies.

What are the costs of the SEMI ETF?

As with all ETFs, there are costs associated with the management of the fund. The SEMI ETF is no different and currently carries a management fee of 0.57%. In other words, $10,000 invested in this ETF would incur a $57 management fee over a one-year period.

For comparison, the Vanguard MSCI Index International Shares ETF (ASX: VGS) has a management fee of 0.18% per annum. However, this ETF is far broader and larger which allows for it to charge a lower fee. For instance, this particular Vanguard fund has $25.4 billion worth of assets under management (AUM). The SEMI ETF, on the other hand, has only $54.3 million worth of AUM.

The post Why has the ETFS Semiconductor ETF (ASX:SEMI) leapt 14% in a month appeared first on The Motley Fool Australia.

More reading

• 3 high quality ETFs getting ASX investors excited
• Here’s why Vanguard MSCI Index International Shares ETF (ASX:VGS) could be a top passive investment idea
• 2 excellent ETFs for ASX investors
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) underperforming the ASX 200 lately?
• Own ASX ETFs? Why the ATO might be focusing on you

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. owns shares of and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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On Wednesday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and cut their price target on this pizza chain operator’s shares to $77.73. This follows the release of a trading update which revealed a sudden deterioration in the company’s performance in the Japan market. The broker believes this highlights just how difficult it is to forecast post-COVID sales. In addition, Credit Suisse has concerns over the availability of workers and suspects it could impact the company. The Domino’s share price is trading at $117.34 this afternoon.

Magellan Financial Group Ltd (ASX: MFG)

A note out of UBS reveals that its analysts have retained their sell rating but lifted their price target on this fund manager’s shares slightly to $29.50. This follows the release of Magellan’s latest funds under management update. UBS continues to see risks to fund outflows and pressure on its fees. Particularly given the ongoing underperformance of its global fund. The Magellan share price is fetching $35.19 today.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Analysts at Morgans have downgraded this biopharmaceutical company’s shares to a reduce rating with a $1.68 price target. The broker made the move largely on valuation grounds following a strong gain after the company was granted approval by the US FDA to undertake a major knee osteoarthritis major trial. In addition, Morgans has concerns that the trial may have been adjusted unfavourably in respect to marketability to gain approval from the regulator. The Paradigm share price is trading at $2.44 on Friday.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Top broker says Domino’s (ASX:DMP) share price is cheap after selloff
• Why Domino’s, Inghams, Kogan, and Paradigm shares are sinking
• ASX 200 (ASX:XJO) midday update: Zip’s record month, Domino’s crashes
• Why the Domino’s (ASX:DMP) share price is crashing 19% today
• 5 things to watch on the ASX 200 on Thursday

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 recommended Dominos Pizza Enterprises Limited. 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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The S&P/ASX 200 Index (ASX: XJO) is kicking off the last trading day of the week today on a positive note. At the time of writing, the ASX 200 is up a healthy 0.62% to 7,473 points. But this rising tide isn’t lifting all boats this Friday. A few ASX tech shares are proving to be a drag on the broader markets today. Let’s check out what’s going on.

Even though the ASX 200 is comfortably in positive territory so far today, a couple of prominent ASX tech shares are struggling and dragging down the broader market.

The Xero Limited (ASX: XRO) share price is one. It’s currently down 0.47% at $152.96 a share. But Afterpay Ltd (ASX: APT) shares are among the worst-performing ASX 200 shares today, with a nasty 3.2% drop thus far to $120.40 a share.

Of course, with an ASX 200 weighting of 1.46% for Afterpay and just 0.94% for Xero, these two companies’ fortunes don’t affect the ASX 200 too much. After all, if the big four banks have a good day, that’s usually enough for the ASX 200 to follow suit. Afterpay and Xero be damned.

But let’s dive into why these two companies are suffering today regardless.

Xero and Afterpay shares weigh on ASX 200

In Afterpay’s case, the answer is probably relatively simple. Ever since Afterpay agreed to be acquired by the US payments giant Square Inc (NYSE: SQ) back in August, this company’s fortunes have been tied to the Square share price.

That’s because Square put up an all-scrip deal. This will see existing Afterpay shareholders receive 0.375 shares of Square for every Afterpay share held. And we saw the Square share price take a bit of a hit overnight (our time) on the US markets.

Square shares fell 1.99% last night to US$247.46 a share. In after-hours trading, the drop was even steeper, with Square losing 3.03% at US$239.96 a share. So it’s perhaps no surprise the Afterpay share price is also taking a hit today, given the intertwined relationship the two companies’ share prices now have.

But in the case of Xero, the answer is less clear on why it’s having a bad hair day this Friday. There is no news or announcements out of the company today. However, one possible explanation is some expert investor opinions. As my Fool colleague Tristan covered earlier this week, one broker isn’t too bullish on Xero right now.

Brokers at Macquarie Group Ltd (ASX: MQG) have recently rated Xero as a ‘sell’, with a 12-month share price target of $130. That implies a potential downside of almost 15% over the next 12 months. Macquarie reckons Xero is facing some fierce competition from its US competitor Intuit Inc (NASDAQ: INTU), which has been accentuated by Intuit’s recent acquisition of Mailchimp.

So the ASX 200 looks like it will finish up the week on a positive note. But even so, it would have been even better without Xero and Afterpay shares weighing it down this Friday.

The post Which tech shares are dragging down the ASX 200 on Friday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Own ASX BNPL shares? These were the best performers during October
• Afterpay (ASX:APT) share price set to tumble after Square’s shares sink
• Get ready for a 10% share market correction: expert

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Square, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Macquarie Group Limited, and Xero. 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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in a positive fashion. The benchmark index is currently up 0.6% to 7,471.7 points.

Here’s what is happening on the ASX 200 on Friday:

REA Group quarterly update

Investors have been bidding the REA Group Limited (ASX: REA) share price higher today after it released its first quarter update. For the three months ended 30 September, the property listings company delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings.

Link receives takeover approach

The Link Administration Holdings Ltd (ASX: LNK) share price is surging higher after it received a takeover approach from Carlyle Group. The private equity firm has tabled a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share. Link is considering the offer but hasn’t granted Carlyle with due diligence at this stage.

News Corp impresses

The News Corp (ASX: NWS) share price is rocketing higher following the release of an impressive first quarter update. The media giant reported an 18% increase in revenue to US$2.5 billion and a 53% jump in EBITDA to US$410 million. One of the drivers of this strong result was its Dow Jones media segment, which recorded its highest quarter revenue and profitability since acquisition.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Link share price with an 11% gain following its takeover approach. The worst performer has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price with a 16% decline. This morning Jefferies downgraded the biopharmaceutical company’s shares to a hold rating from buy.

The post ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer appeared first on The Motley Fool Australia.

More reading

• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Why the Link (ASX:LNK) share price is surging 12% higher today
• News Corp (ASX:NWS) share price in focus as first quarter delivers growth
• Why the Link (ASX:LNK) share price could rocket higher today
• REA Group (ASX:REA) share price on watch after delivering strong Q1 growth

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. owns shares of and has recommended Link Administration Holdings Ltd. The Motley Fool Australia has recommended REA Group Limited. 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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The Zip Co Ltd (ASX: Z1P) share price fell to a 10-month low this morning as a threat to its business model looms large.

Shares in the buy now, pay later (BNPL) company slipped 0.5% to $6.17 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

At least the decline isn’t as bad as its bigger rival. The Afterpay Ltd (ASX: APT) share price tumbled 4.3% to $119.10 at the time of writing.

Shine comes off Zip share price

The prospect of rising interest rates has taken the gloss off tech shares. But there’s another big risk factor to the Zip share price and to the sector.

This threat comes in the form of a surcharge. The Reserve Bank of Australia (RBA) recommended that BNPL companies cannot stop merchants from passing the cost of using such services to consumers.

Big risk to BNPL shares

UBS undertook a survey and most consumers said they would not use BNPL if they were slugged with extra fees. And who can blame them as the fees could be pretty high.

“71% of Afterpay’s customers surveyed agreed that they would not use it if charged a 4% fee, only 10% would (19% neither agreed nor disagreed),” said UBS.

“Users of BNPL services were generally unaware of BNPL’s cost to merchants: once made aware, 30% stated they would not use BNPL at small businesses and 23% at large businesses.”

Regulatory risk hangs over the Zip share price

The silver-lining here is that the fee-passthrough is only relevant in Australia. Both Zip and Afterpay are banking on the US and Europe for most of their growth.

On the flipside, one can’t rule out other jurisdictions making similar rules about fees. One has to wonder if consumers in other countries have a strong distaste for fees as we Aussies.

While it is too early to panic, ASX investors should be watching the regulatory risks closely as this can have a big impact on the Zip share price and Afterpay share price.

Strong consumer awareness

Another saving grace is that consumer awareness for BNPL services is very high. UBS’ survey found that 88% of non-BNPL consumers have heard of the service in 2021. This compares to 2019 when only 79% of this group were aware and 2020 when 85% knew what BNPL was.

And if you were wondering which BNPL company had the highest mindshare, this would be Afterpay. Around 91% of non-users recognised the Afterpay brand.

This compares with 55% for Zip, 18% for Klarna and 17% for Humm Group Ltd (ASX: HUM).

Higher risk and lower profit

“The survey again indicates a bifurcation of BNPL customers like a credit card book, i.e, a portion of low risk, affluent users, and a riskier portion that use it as credit,” said UBS.

“We therefore see a risk ‘free-riders’ may use BNPL less if surcharged, causing adverse customer selection (higher credit risks) and lower sales volumes for BNPL businesses.”

UBS has a “sell” recommendation on the Zip share price and “neutral” on the Afterpay share price.

The post Expert highlights big threat to the Zip (ASX:Z1P) share price appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Own ASX BNPL shares? These were the best performers during October
• Afterpay (ASX:APT) share price set to tumble after Square’s shares sink
• Get ready for a 10% share market correction: expert
• 5 things to watch on the ASX 200 on Friday

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ASX cannabis shares were nothing short of a mixed bag last month. Several names did well but a large body of shares missed the benchmark completely.

For some context, the S&P/ASX 200 Health Care index (ASX: XHJ) regained steam over the course of last month. It came off a 3-month low to post a solid return of almost 5%. With that in mind, it was pleasing for investors to see several ASX cannabis shares lead the index.

So, without further delay, here are 3 of the best performing ASX cannabis shares in October.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal cannabis innovator Incannex climbed 34% in October, reaching a closing high of 47 cents at the end of the month. This was also a new 52-week high, with the share price coming off a low of 33 cents earlier in the month.

A suite of regulatory and company-specific tailwinds helped prop up the Incannex share price ahead of its peers.

For instance, it engaged drug manufacturer Procaps Laboratories S.A to develop its IHL-42X soft gel capsules. IHL-42X is Incannex’s proprietary cannabinoid formula and that is used to treat obstructive sleep apnoea (OSA). Incannex has filed patent protection in several jurisdictions for the drug.

In other news, studies have confirmed success in Incannex’s IHL-675A label. It has shown to be effective in reducing inflammatory-type symptoms in conditions like rheumatoid arthritis.

Incannex also filed for F-1 registration to list on the US NASDAQ exchange earlier in the year, which is akin to an initial public offering (IPO) in Australia.

Incannex shares have started the session poorly today, and are now trading 1% down at 52.5 cents apiece.

Creso Pharma Ltd (ASX: CPH)

After trading sideways for the majority of October, investors piled into Creso Pharma shares in the final days of the month after a suite of market updates.

The cannabis-focused biotech advised it had purchased Canadian life sciences entity ImpACTIVE for $217,000.

Creso intends to widen its territory in North America, seeking to penetrate those markets further with its product line.

Aside from this, Creso made a curious move in releasing a prospectus outlining the sale of bonus options to its shareholders.

Whilst the company stated this was in part a reward to shareholders for their support, it actually serves a deeper purpose. The options, if exercised in full, give Creso access to approximately $100 million in liquidity by earning 25 cents per option.

Not only that, the contracts are tradeable on any ASX exchange that permits derivatives trading. This gives investors the opportunity to participate in price discovery of these assets.

To cap off the month, Creso also reported its quarterly earnings, recognising a 92% year-on-year gain in revenue.

In early trading today, Creso Pharma shares are almost 4% higher at 14 cents each.

Althea Group Holdings Ltd (ASX: AGH)

Medicinal cannabis distributor Althea Group was also a net winner last month, with its share price rising 21%.

Despite no announcements from Althea early in the month, investors still bid up its share price from a low of 24 cents on 4 October.

Investors started buying in rapid succession, sending its share price north in almost vertical fashion over a 2-week period. The resulting 32% gain corresponded with the performance of the broader S&P/ASX 200 Health Care index.

Unfortunately for Althea shareholders, the steam was let out at express-pace after the company released its quarterly update.

Although it posted a record quarter with 116% year-on-year growth in customer receipts — up 57% on the prior quarter – investors were quick to exit their positions. This created a wave of selling pressure on Althea’s share price. It fell sharply by about 10% in the final 2 weeks of October.

The Althea share price is flat today at 27 cents.

A quick rundown on medicinal cannabis

There is no special type of cannabis plant (also known as marijuana) that is medical. Medicinal cannabis is just regular old cannabis.

Cannabis has been used as medicine for thousands of years in many cultures. It is only relatively recently that the plant has gained traction as a mainstream treatment for various ailments.

Medicinal cannabis production is highly regulated in order to comply with Australian medical standards. Our standards are (correctly so) some of the tightest in the world.

The plant’s primary active compounds are cannabinoids called delta-9 tetrahydrocannabinol (also known as THC), terpenes, and cannabidiol (CBD).

It is these three ingredients that contain the medicinal properties of the cannabis plant.

They work by binding to the body’s own cannabinoid receptor sites – yes, we have our own internal cannabinoid system – to produce a range of therapeutic effects. These include pain relief, anti-nausea and appetite enhancement.

They can even stabilise uncontrolled body movements in neurological disorders like Parkinson’s disease.

The post These were the best performing ASX cannabis shares in October appeared first on The Motley Fool Australia.

More reading

• Own biotech shares? These were the best performers during October
• Why the Creso Pharma (ASX:CPH) share price is lifting today
• Creso Pharma (ASX:CPH) share price spikes on bonus options issue
• Here’s why the Creso Pharma (ASX:CPH) share price is leaping 9% today
• Incannex (ASX:IHL) share price leaps 6% on manufacturing update

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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The Sigma Healthcare Ltd (ASX: SIG) share price is pushing higher on Friday. This comes after the company provided an update on the current proposal to merge with Australian Pharmaceutical Industries Ltd (ASX: API).

At the time of writing, Sigma shares are fetching for 56 cents apiece, up 2.75%.

Sigma pulls out of API bidding war

In today’s statement, Sigma advised that it has decided not to proceed with the merger proposal of API. It’s worth noting that this leaves the door open for Wesfarmers Ltd (ASX: WES) to secure its bid.

In late September, the company submitted a non-binding proposal, offering $1.57 per share to acquire 100% of API. Essentially, this valued the pharmaceutical chain at around $773 million.

The mostly-scrip offer would have seen API shareholders walk away with 35 cents cash and 2.05 Sigma shares for every API share owned.

The Sigma board noted that $45 million worth of annual synergies could be created if the deal went through.

Sigma chair, Ray Gunston touched on the merger proposal, saying:

Sigma believed it made economic, commercial and strategic sense to pursue the merger proposal between Sigma and API on the terms we presented. However, after further assessment, and in the context of the competitive bid process with its changing transaction and economic considerations, Sigma has made the decision not to proceed with this current proposal.

Mr Gunston went on to talk about the company’s future, adding:

Sigma remains confident of our growth prospects without a merger with API and the Board and management have continued to focus on longer term growth in our core operations. The Sigma team will keep on working to finalise the completion of our infrastructure upgrade, including our ERP project, and to remain focused on leveraging our infrastructure to create greater shareholder value.

Review on the Sigma share price

Over the last 12 months, Sigma shares have traversed mostly sideways with a few hiccups along the way. Its shares are up just around 5% over the period but are down more than 10% when looking at year-to-date.

Based on today’s price, Sigma presides a market capitalisation of roughly $577.31 million, with approximately 1.06 billion shares outstanding.

The post Sigma (ASX:SIG) share price edges higher on API merger proposal update appeared first on The Motley Fool Australia.

More reading

• What’s going on with the Wesfarmers (ASX:WES) API takeover bid?
• Wesfarmers (ASX:WES) share price dips as API battle heats up
• Wesfarmers (ASX:WES) share price struggles amid latest API speculations

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 owns shares of and has recommended Wesfarmers Limited. 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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The AIC Mines Ltd (ASX: A1M) share price has returned from its lengthy suspension on Friday and is rocketing higher.

At the time of writing, the copper miner’s shares are up 60% to 36 cents.

Why is the AIC Mines share price rocketing higher?

This morning the AIC Mines share price returned to trade for the first time since August after completing a $40 million capital raising.

AIC Mines’ shares were suspended in August whilst it sought approval for mining investment company FMR to acquire a 28% to 30% interest in the company as part of a related deal.

Under section 606 of the Corporations Act, unless an exception applies, an entity is prohibited from acquiring a greater than 20% interest in the voting shares of a listed company without making a takeover offer.

However, one of the exceptions is for the transaction to be approved by shareholders. That approval was duly granted at a shareholder meeting late last month after 99.91% of votes were cast in favour of the resolution.

Why did AIC Mines raise $40 million?

AIC Mines raised $40 million at 25 cents per new share in order to fund the acquisition of the Eloise Copper Mine from FMR.

Management believes the deal heralds a new and exciting stage for the company. It notes that it creates a new growth-oriented ASX-listed copper mining company with strong free cashflow and the ability to add value through exploration success, resource growth, operational reliability, and regional consolidation.

AIC’s Managing Director, Aaron Colleran, commented: “Considerable effort has gone into completing the Eloise transaction and I am very thankful for the herculean efforts of both the AIC and FMR employees who have assisted with the completion process and ownership transition. The opportunity ahead of us is very exciting.”

“We can now turn our attention to capturing the potential which we believe exists at Eloise. AIC’s exploration strategy for Eloise will focus on both extensions to the known resource areas and the discovery of new satellite lodes within the Eloise tenements. There is clear potential to extend the mine life well beyond five years,” he added.

The post Why the AIC Mines (ASX:A1M) share price is rocketing 60% higher today appeared first on The Motley Fool Australia.

More reading

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• Antisense Therapeutics (ASX:ANP) share price tumbles 8% amid capital raise
• Green Technology Metals (ASX:GT1) shares are about to hit the market. Here’s what you should know
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• Why the Link (ASX:LNK) share price is surging 12% higher today

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 Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price is in the red in late morning trade, down 1.6% to $22.61 per share.

This comes as the S&P/ASX 200 Index (ASX: XJO) is marching higher, up 0.5% at the time of writing. And Woodside’s share price doesn’t look to be getting much reprieve from its oil and gas reserve update, released this morning.

What reserve update was reported?

The company’s announcement that the 1P total reserves and resource estimates across the Greater Pluto region have increased hasn’t boosted the Woodside share price this morning.

According to the release, the 1P total reserves at Pluto, located offshore in Western Australia, increased by approximately 10% following a just-completed review. 1P refers to proven reserves.

Investors may be focused on the 2P total reserves, which include both proven and probable reserves. Following the review, the 2P total reserves decreased by approximately 10%.

Woodside’s CEO Meg O’Neill said:

The 4D seismic survey undertaken in 2020, together with the performance of the wells in these fields, has enabled us to narrow the 1P and 2P reserves range.

The Greater Pluto region is a significant and valuable resource for Woodside. Having already produced more than 440 million barrels of oil equivalent from the Pluto and Xena reserves since start-up in 2012, the Greater Pluto region has 2P total reserves of approximately 360 million barrels of oil equivalent for production in the years ahead.

The Woodside share price, along with the other ASX 200 energy shares, has also come under some pressure this week as oil prices edged lower.

Following a strong run higher, which saw Brent crude still trading for US$84.71 per barrel on Monday, Brent is currently trading at US$80.54.

The 5%, 5-day drop in the benchmark oil price has seen the Woodside share price fall 2.7% since Monday.

Woodside share price snapshot

Despite this week’s retrace, the Woodside share price remains up 23% over the past 12 months. That just beats the 22% gains posted by the ASX 200 in that same time.

Over the past month, Woodside shares are down 10%.

The post Woodside (ASX: WPL) share price slides following mixed reserve update appeared first on The Motley Fool Australia.

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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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