The great thing about falling share prices is that it boosts the dividend yield on offer from ASX income stocks.

Choosing the right businesses could lead to a resilient cash flow for investors during uncertain times.

Dividends and distributions are not guaranteed, but some look more stable to me than others.

With that in mind, I like the look of these two income stocks.

Rural Funds Group (ASX: RFF)

Rural Funds is one of the most interesting real estate investment trusts (REITs) in my opinion.

It owns a portfolio of farms across Australia. Diversification is important, so it’s good to know that the farms are diversified across climactic conditions and by farm type. It owns almond farms, macadamias, cattle, vineyards and cropping (sugar and cotton).

The Rural Funds share price has dropped around 30% since early June 2022, which has pushed up the prospective distribution yield.

Rural Funds expects to pay a total distribution of 12.2 cents per unit in FY23. That translates into a forward yield of 5.7%.

The ASX income stock has a goal to increase its distribution by 4% per year for investors. This growth is funded by a combination of organic rental increases at the farms and productivity improvement investments at the farms.

It’s currently trading at a 23% discount to the adjusted net asset value (NAV) of $2.78 at 31 December 2022, which gives investors a good margin of safety.

Nick Scali Limited (ASX: NCK)

Nick Scali has been hit very hard since it reported its half-year earnings in early February this year, down 26%. Shares in the furniture retailer have also fallen more than 40% since November 2021.

The ASX income stock reported a 70% increase of earnings per share (EPS) to 74.8 cents, while the interim dividend per share increased 14.3% to 40 cents per share.

But, for January 2023, Nick Scali said that its Nick Scali brand written sales orders were 12.1% below January 2022 and 22.9% above pre-COVID-19 January 2020.

The company expects to open four new Nick Scali stores in the second half of FY23, in addition to the two that opened in the first half of FY23.

I think the business has a number of positive tailwinds including a store rollout, range expansion and growth of profitable online sales.

It’s not a surprise to think that sales and profit are going to be lower in the 2023 calendar year compared to 2022. But, I don’t think pessimism will be widespread forever, so I think this time of fear is a good time to consider investing.

Commsec numbers suggest Nick Scali could pay a total dividend of 59 cents per share in FY24, translating into a grossed-up dividend yield of 9.2% despite expectations of a large cut.

The post I reckon these are 2 of the best ASX income stocks to buy in March appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ords directors buying up their company shares recently
• Top ASX small-cap shares to buy in March 2023
• How I’d aim to replace an entire salary with passive income from ASX dividend shares
• Buy Westpac and this high-yield ASX dividend share: analysts
• Buy these ASX dividend shares now: analysts

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 positions in and has recommended Rural Funds Group. 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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US futures, including S&P 500 Index (INDEXSP: .INX) futures, have jumped in response to a plan to save depositors of the failed Silicon Valley Bank (SVB)

Readers unfamiliar with the recent SVB collapse can check out today’s article from the Motley Fool’s Scott Phillips article here.

Basically, SVB is a United States-based bank with a niche working with tech companies and others of that nature. It also provided loans to start-ups. It reportedly worked with about half of US venture-backed tech and life science businesses.

SVB was one of the largest 20 banks in the US. Last week, the bank collapsed and US officials took over its operations. This reportedly represents the largest US bank failure since the GFC.

Investor confidence returns

According to reporting by CNBC, futures – which give an indication of whether the share market is going to open up or down – have reacted positively to the news that all depositors of SVB are going to get their money back. S&P 500 futures are up 1.4%.

All the SVB depositors will get access to their funds on Monday, according to a joint statement from the Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC).

In order to provide confidence to the rest of the banking system, regulators are making additional funding available to other banks with a new bank term funding program. It will offer loans of up to one year to banks, savings, saving associations, credit unions and other associations, according to CNBC.

Regulators also stepped in to close Signature Bank – reportedly one of the main banks for the cryptocurrency industry. At 31 December 2022, it had US$110.4 billion in total assets and US$88.6 billion in total deposits.

Depositors of Signature Bank will get their money as well. But, it was noted by regulators that no losses would be borne by taxpayers.

In other words, shareholders and bondholders at both Signature Bank and SVB are being “wiped out”, according to a Treasury official, CNBC said.

Early ASX share market reaction

The Commonwealth Bank of Australia (ASX: CBA) share price is up around 0.3%, while other ASX bank shares have dipped slightly in mid-morning trade.

At the time of writing the National Australia Bank Ltd (ASX: NAB) share price is down 0.17, the Westpac Banking Corp (ASX: WBC) share price has slipped 0.32% and the ANZ Group Holdings Ltd (ASX: ANZ) share price is 0.59% lower.

As a whole, the S&P/ASX 200 Index (ASX: XJO) is down around 0.6%.

It will be interesting to watch whether other small-to-mid US banks are facing similar issues. Various stakeholders will want to understand why SVB collapsed, and so rapidly.

The post S&P 500 futures lift as regulators shore up SVB deposits appeared first on The Motley Fool Australia.

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More reading

• 3 reasons the 8% NAB dividend yield looks safe to me
• 5 things to watch on the ASX 200 on Monday
• Buy Westpac and this ASX dividend share next week: analysts
• How to make $50,000 of retirement income with ASX shares
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks

Motley Fool contributor Tristan Harrison 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 Westpac Banking. 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted ASX share despite its short interest easing to 11.8%. Revenue margin headwinds may be causing concerns.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest ease slightly to 11.2%. This may be due to competition and cash burn concerns.
• Sayona Mining Ltd (ASX: SYA) has 10.4% of its shares held short, which is down slightly week on week. Falling lithium prices have been weighing on the sector.
• Core Lithium Ltd (ASX: CXO) has short interest of 9.7%, which is down week on week. The sustained weakness in spot lithium prices appears to be spooking investors.
• Zip Co Ltd (ASX: ZIP) has short interest of 9.3%, which is up week on week. This may be down to short sellers doubting Zip’s ability to achieve its profitability goals.
• Megaport Ltd (ASX: MP1) has seen its short interest ease to 9%. Short sellers will have been pleased to see this network as a service provider’s shares sink last week after the shock exit of its CEO.
• Liontown Resources Ltd (ASX: LTR) has short interest of 8.5%, which is up week on week again. This appears to be due to major cost blow outs at the Kathleen Valley Lithium Project and lithium price weakness.
• Pointsbet Holdings Ltd (ASX: PBH) has returned to the top ten with short interest of 7.2%. Concerns about the sports betting company’s cash burn could be behind this.
• JB Hi-Fi Limited (ASX: JBH) has arrived in the top ten with 7% of its shares held short. This may be due to fears over the impact of the cost of living crisis on consumer spending.
• Nextdc Ltd (ASX: NXT) has also entered the top ten with short interest of 6.8%. There may be fears that the economic environment could delay major contracts for this data centre operator.

The post Here are the 10 most shorted ASX shares this week appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ords directors buying up their company shares recently
• The highest-paying term deposit right now offers 4.5% interest. Here are 3 ASX dividend shares paying way more
• 5 things to watch on the ASX 200 on Monday
• Here are the 3 most heavily traded ASX 200 shares on Friday
• When will Flight Centre shares resume paying dividends?

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 Betmakers Technology Group, Megaport, and Zip Co. The Motley Fool Australia has recommended Betmakers Technology Group, Flight Centre Travel Group, and Megaport. 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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March is becoming an eventful month amid the drama created by the failed US Silicon Valley Bank. I think in this environment, there are a number of All Ordinaries (ASX: XAO) shares that could be ones to watch.

Silicon Valley Bank’s collapse represents the largest US bank failure since the Global Financial Crisis. Time will tell how this plays out.

However, there are some All Ordinaries ASX shares that could be compelling buys this month.

MyState Ltd (ASX: MYS)

MyState describes itself as a diversified financial services business, consisting of MyState Bank and TPT Wealth, a trustee and wealth management company.

It wouldn’t surprise me to see this business hit a 52-week low this week amid all the banking uncertainty.

The business recently announced its FY23 half-year result for the six months to 31 December 2022, which showed net interest income rose 21.3%, while earning per share (EPS) increased 18% to 18.6%. New to bank customers increased 54% on the prior corresponding period.

It’s benefiting from the higher interest rate environment. The All Ordinaries ASX share currently offers a grossed-up dividend yield of 8.8%, which is a solid dividend return in my opinion.

The business is focused on growing its market share on a “profitable and sustainable basis”, with a target of “reducing its cost to income ratio to less than 60% in the medium term and creating cumulative return on equity (ROE) and EPS growth of 30% over the next three years”.

Best & Less Group Holdings Ltd (ASX: BST)

Best & Less describes itself as a leading value apparel specialty retailer with an omnichannel sales network comprising 245 physical stores and an online platform. It aims to be the “number one choice” for mums and families buying baby and kids’ ‘value apparel’ in Australia and New Zealand, both through its own brand in Australia and Postie in New Zealand.

In an environment where household budgets are tightening, I think Best & Less could be one of the businesses that may see resilient demand, or even growth.

The business is planning to keep opening new stores to help its growth, while investing in the business in a number of ways which should help the business become more efficient in the next few years.

In the first seven weeks of the second half of FY23, the All Ordinaries ASX share saw total sales growth of 3.8%, which is useful for the company in my opinion.

Commsec numbers suggest the Best & Less share price is valued at 8x FY23’s estimated earnings and 6x FY25’s estimated earnings. The prediction is that the grossed-up dividend yield could be 12.9% in FY23.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara says it makes software in a bid to protect families from cancer. The idea is that healthcare providers use Volpara’s software to better understand cancer risk and guide recommendations about additional imaging, genetic testing, and other interventions.

The AI-powered image analysis enables radiologists to quantify breast tissue and help technologists produce mammograms.

A new US federal regulation has just been finalised by the US Food and Drug Administration (FDA) “requiring mammography facilities across the country to inform patients whether their breasts are composed of dense tissue”.

Within the next 18 months, by September 2024, all patient reports and summaries must include certain language about breast density.

I think this is very positive for Volpara considering it’s one of the leaders of breast screening technology in the US. This could enable ongoing average revenue per user (ARPU) growth, which is useful considering the gross profit margin is above 90%.

The business is aiming to achieve positive cash flow as soon as possible, which could be a boost for investor sentiment about the All Ordinaries ASX share. The Volpara share price is down 55% since early February 2021.

The post 3 ASX All Ordinaries shares I’m watching like a hawk in March appeared first on The Motley Fool Australia.

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More reading

• Why Arafura, Myer, Volpara, and Xero shares are zooming higher
• Best & Less share price soars 10% on result, improving outlook

Motley Fool contributor Tristan Harrison 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 Volpara Health Technologies. The Motley Fool Australia has positions in and has recommended Volpara Health Technologies. 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 Xero Limited (ASX: XRO) share price has started the week in the red.

In morning trade, the cloud accounting platform provider’s shares are down 3% to $84.06.

Why is the Xero share price falling?

Investors have been selling Xero shares today amid broad weakness in the technology sector following the collapse of Silicon Valley Bank (SVB) on Friday.

This has led to the S&P/ASX All Technology Index falling 2.5% this morning.

As SVB has a strong presence in the sector, investors appear concerned what ramifications this will have on this area of the economy.

Xero’s exposure

The good news is that Xero’s exposure to the collapse of SVB is minimal.

This morning, the company attempted to ease investor nerves by revealing that “it does not have a material exposure” to the collapsed bank.

It highlights the following:

As at 10 March 2023 Xero’s total exposure to SVB was approximately $5m USD, reflecting Xero’s local transactional banking relationships with SVB in the US and UK. That amount represents less than 1% of Xero’s Cash and Cash equivalents as at September 30 2022.

Is this a buying opportunity?

According to a note out of Morgans on Friday, its analysts are recommending that investors snap up Xero shares.

In response to its cost cutting plans, the broker has retained its add rating with an increased price target of $97.00. Based on the current Xero share price, this implies potential upside of over 15% for investors.

Morgans commented:

The focus has moved to reducing costs and driving disciplined growth. This means XRO now trades closer to a Growth At a Reasonable Price (GARP), where previously it was Growth At Any Price (GAAP). This realignment of investment priorities should open XRO to a much broader range of potential investors.

The post Xero share price dips 3% amid Silicon Valley Bank fallout appeared first on The Motley Fool Australia.

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More reading

• These ASX tech shares have exposure to the Silicon Valley Bank collapse
• Top brokers name 3 ASX shares to buy next week
• Morgans names the best ASX 200 growth shares to buy in March
• Brokers name 3 ASX shares to buy now
• Is the new leaner, meaner Xero stock a buy right now?

Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 Pilbara Minerals Ltd (ASX: PLS) share price has already seen plenty of movement this year. Could the ASX lithium share see a crash this year?

Between the start of 2023 and 25 January 2023, it rose 36%. However, since then it’s down by 24.5%. That means since the start of the year it is only up by 3%.

It’s not surprising that the share price of a commodity business can move up and down so much. The profitability of commodity businesses is highly dependent on the resource price – if costs don’t change much month to month, then any extra revenue for that production is largely just extra profit.

But, the same is true in reverse, if the resource price falls then it can wipe off the profit.

We have already seen a crash in the Pilbara Minerals share price this year. I’d certainly call a fall of around 25% in less than two months a crash.

But, in terms of the lithium price, there is a weakening sentiment according to some experts.

Citi downgrades outlook

As reported by The Australian, the broker Citi has suggested that lithium prices are going to be weaker than expected in the short-term because of “perceived weakness in electric vehicle demand in China” and destocking by other players in the lithium value chain.

It’s worth mentioning what has been happening in China for Tesla Inc (NASDAQ: TSLA). The electric vehicle giant decided to cut prices for all versions of its Model 3 and Model Y cars in China by between 6% to 13.5% in January, according to reporting by Reuters.

But, it was also noted by Reuters that in February, Tesla increased prices of ‘performance’ and ‘long-term’ versions of its Model Y mid-size sports utility vehicles (SUV) in China.

Getting back to Citi’s prediction, lithium prices had fallen 30% this year and Citi thinks the price will be US$40,000 per tonne in the next three months compared to the previous forecast of US$60,000. In the next six to 12 months, the lithium price is expected to drop to US$50,000, down from its previous prediction of US$55,000, according to The Australian reporting.

It’s no wonder the Pilbara Minerals share price is weakening if analysts are suggesting that the lithium price is going to be weaker than forecast.

Citi explained:

We believe the bear run in lithium prices is likely to continue for few more weeks before stabilising.

Most of the large battery producers have strong production plans for 2023 which suggests battery companies are likely to restock from 2Q’23 onwards. This should provide eventual support to lithium prices.

My thoughts on the Pilbara Minerals share price

I don’t think the ASX lithium share is going to go back down to around $2. But, for Pilbara Minerals to return to trading above $5 this year I think we’ll need to see a recovery of the lithium price.

The company has a promising future in my opinion, with its plans to become more involved in the lithium value chain.

The post Will the Pilbara Minerals share price crash in 2023? appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why are ASX 200 lithium shares falling so hard today?
• Why Atlantic Lithium, CBA, Piedmont Lithium, and Pilbara Minerals shares are dropping
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Tristan Harrison 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 Tesla. 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 Neuren Pharmaceuticals Ltd (ASX: NEU) share price is starting the week very positively.

In morning trade, the ASX All Ords biotech company’s shares are up 27% to a multi-year high of $9.74.

Why is the ASX All Ords biotech stock jumping?

Investors have been scrambling to buy the ASX All Ords company’s shares this morning after the United States Food and Drug Administration (FDA) gave the thumbs up to its treatment for Rett Syndrome.

According to the release, the company’s North America partner Acadia Pharmaceuticals (NASDAQ: ACAD) has been given FDA approval for Daybue (trofinetide) for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.

The good news is that it won’t be long until revenue generation commences, with Acadia expecting Daybue to be available by the end of April 2023.

Daybue is the first and only approved treatment for Rett Syndrome. It is a rare genetic neurological and developmental disorder that affects the way the brain develops.

What does this mean for Neuren?

The release notes that Neuren will receive US$40 million following the first commercial sale.

It is also entitled to royalties on net sales, potential sales milestone payments, and one third of the market value of the Rare Pediatric Disease Priority Review Voucher (PRV). The latter is estimated to be worth US$33 million.

In respect to royalties, the two parties have agreed a tiered royalty rate. At the bottom end, it will receive 10% of net sales under US$250 million, whereas at the top end it will receive up to 15% of net sales above US$750 million.

Similarly, sales milestone payments have also been agreed. This includes US$50 million for sales greater than US$250 million and US$350 million (in total) for sales above US$1 billion in a calendar year.

And as no royalties or similar costs are payable by Neuren to third parties, this means that Neuren’s revenue from Acadia will flow through to pre-tax profit.

Neuren CEO Jon Pilcher commented:

Many people have shown great determination over the long journey to reach this historic outcome. The greatest has been shown by the Rett syndrome community and I am delighted for them. For Neuren, this is a transforming milestone that places us in a position to make the most of the opportunities ahead of us, as we work with the communities to make a difference in four other neurodevelopmental disorders.

The post Guess which ASX All Ords stock is rocketing 27% on a new FDA approval appeared first on The Motley Fool Australia.

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More reading

• Will the Pilbara Minerals share price crash in 2023?
• 3 reasons the 8% NAB dividend yield looks safe to me
• Why is the Carsales share price sinking 7% today?
• These ASX tech shares have exposure to the Silicon Valley Bank collapse
• Understanding the collapse of Silicon Valley Bank

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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National Australia Bank Ltd (ASX: NAB) shares currently offer investors a dividend yield of more than 8%. And I think this will continue for at least the next few years.

There is much concern in global share markets after last week’s largest banking collapse in the US since the Global Financial Crisis.

In Australia, bank share prices have been going backwards so this week could be very volatile.

At the moment, Commsec numbers suggest NAB shares could pay a dividend per share of $1.72, which would be a grossed-up dividend yield of 8.5%. The dividend is expected to grow slightly in FY24 and again in FY25.

I don’t know what the NAB share price is going to do, but I believe the NAB dividend will be consistent and possibly grow in the next few years for three key reasons.

Achieving profit growth

Dividends are paid from profit and if the net profit is rising, I think that gives the bank much more justification and support for the dividend to be maintained and even increased.

In the FY23 first quarter in the three months to December 2022, the bank generated $2.15 billion of cash earnings. That represents a year-over-year increase of 18.7%, while cash earnings before tax and credit impairment charges went up by 27%.

The bank said, excluding markets and treasury, revenue rose 12% thanks to higher margins and volume growth. Expenses only increased by 4%. Its residential mortgage book increased by around $3 billion over the quarter to $113.7 billion.

Profit growth can be an important driver of the NAB share price and the NAB dividend over time.

Low loan arrears

In that latest quarterly update, the bank said that the ratio of loans that are overdue by at least 90 days decreased by another 4 basis points (0.04%) to 0.62%. Arrears were higher than that in both FY21 and FY22.

In other words, borrowers are, overall, currently still doing well with their loans despite the huge rise in interest rates.

I think there are only two things that could derail NAB’s dividend progress, with arrears being one of them. Intense competition is the other.

While I wouldn’t expect arrears to stay at this low point forever, the Reserve Bank of Australia (RBA) is getting closer to pausing interest rate hikes, whatever rate level that is. But, that was true after the first hike last year.

NAB is focusing on the basics

NAB’s CEO Ross McEwan said that the bank is “in good shape for this environment”, with capital and provisioning remaining “strong”. Its group common equity tier 1 (CET1) ratio was 11.3%.

The bank said that it continues to target productivity benefits of approximately $400 million in FY23, which helps the bank’s profitability.

Even with increased competition in the banking space, NAB’s focus is on “getting the basics right”,  “maintaining cost discipline”, and “improving customer and colleague outcomes to deliver sustainable growth and improved shareholder returns”.

I think this suggests that the bank wants to maintain and, hopefully, grow its dividend.

NAB share price snapshot

Using the current market capitalisation, NAB is worth just under $94 billion according to the ASX.

The post 3 reasons the 8% NAB dividend yield looks safe to me appeared first on The Motley Fool Australia.

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• Why are ASX 200 bank shares like CBA being annihilated today?
• Here’s how much I’d need to invest in NAB shares to generate a $200 monthly income
• Own NAB shares? Here’s why the ASX 200 bank is facing Federal Court action
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Motley Fool contributor Tristan Harrison 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 Carsales.Com Ltd (ASX: CAR) share price has returned from its trading halt and dropped deep into the red.

In morning trade, the auto listings company’s shares are down 7% to $21.10.

Why is the Carsales share price sinking?

The Carsales share price is falling on Monday after it announced the completion of its institutional entitlement offer.

According to the release, the company raised approximately $380 million at the offer price of $19.95 per new share. This represents an 11.9% discount to the Carsales share price prior to the halt.

The offer was well supported by eligible institutional shareholders with a take-up of approximately 96%. Furthermore, a bookbuild for shares not taken up in the offer cleared at a price of $21.75 per new share. This represents a premium of $1.80 to the offer price.

The company will now push ahead with the retail entitlement offer, which aims to raise a further $121 million.

Why is Carsales raising funds?

This capital raising was undertaken to support the acquisition of an additional 40% of Webmotors for approximately A$353 million. Webmotors is the number one automotive digital marketplace in Brazil.

This agreement will see Carsales increase its stake in Webmotors to 70%, with Banco Santander retaining a 30% stake.

Carsales expects that the equity change will allow Webmotors to benefit further from its expertise in digital marketing, customer experience, products, and services within the digital automotive ecosystem.

Carsales CEO, Cameron McIntyre, was pleased with the response from institutional investors. He commented:

We are very pleased by the strong level of support received from institutional shareholders and their endorsement of our strategy. The acquisition of a further 40% interest in webmotors is an exciting opportunity for carsales and we look forward to continuing to grow the business in the attractive Brazilian automotive market alongside Banco Santander (Brasil) who, following successful completion of the acquisition, will be a 30% shareholder and partner in the business.

The post Why is the Carsales share price sinking 7% today? appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy now
• 5 things to watch on the ASX 200 on Thursday
• Carsales share price on ice amid $500m cap raise and acquisition news
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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Carsales.com. 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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On Friday, the United States’ 16th largest bank, Silicon Valley Bank (SVB), collapsed following a bank run.

Given that SVB had a big presence in the tech sector, a large number of ASX tech shares were customers and had funds in its bank accounts.

With the bank now falling into insolvency, it is unclear what will happen to these funds and what ramifications it will have on their operations and access to capital.

Though, the good news is that no ASX tech shares appear to have put all their eggs in one basket, underlying the importance of diversification and limiting their exposure to this collapse.

Here’s a summary of tech shares with SVB exposure:

Bigtincan Holdings Ltd (ASX: BTH)

This sales enablement platform provider revealed that it has no material exposure to SVB.

Life360 Inc (ASX: 360)

This location technology company is a little more complex than others but estimates that its exposure is US$5.6 million. However, Life360 acknowledges that it also has US$75.4 million in shares of money market mutual funds invested in short-term, AAA-rated U.S. Government Treasury and Government Agency securities that are in SVB custodian accounts. It believes that these accounts were not co-mingled with SVB’s assets.

Nitro Software Ltd (ASX: NTO)

This document productivity software company has US$12.2 million of its cash reserves held on deposit at SVB. This compares to its cash balance of US$28 million at the end of December. Positively, though, the company revealed that this development has not impacted its takeover approach from Potentia.

Redbubble Ltd (ASX: RBL)

This struggling ecommerce company estimates that its cash exposure to the SVB collapse is $1.3 million. However, it had a first-half closing cash balance of $97 million, so this is immaterial.

Sezzle Inc (ASX: SZL)

This buy now pay later provider had limited exposure to SVB. Just US$1.2 million of its US$68 million was held at the collapsed bank.

Siteminder Ltd (ASX: SDR)

This travel technology joined in on the bank run on Friday and “had success in transferring some of its cash holdings to other banking partners.” However, cash holdings of up to A$10 million were not able to be transferred. The company also revealed that it has an undrawn US$20 million revolving credit facility with SVB. Nevertheless, it currently has A$58 million in cash outside SVB to fund its operations.

Xero Limited (ASX: XRO)

This cloud accounting platform provider revealed that its total exposure to SVB is approximately US$5 million. This represents less than 1% of its most recent cash and cash equivalents balance.

Latest development

In the last few minutes, the US government has announced that it will be stepping in.

According to CNBC, depositors at both SVB and Signature Bank in New York, which has also just closed, will have full access to their deposits on Monday.

A joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen, and FDIC Chair Martin Gruenberg, said:

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system.

The post These ASX tech shares have exposure to the Silicon Valley Bank collapse appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Morgans names the best ASX 200 growth shares to buy in March
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Motley Fool contributor James Mickleboro has positions in Life360 and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bigtincan, Life360, Redbubble, SiteMinder, and Xero. The Motley Fool Australia has positions in and has recommended Bigtincan and Xero. 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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