Australia and New Zealand Banking Group Ltd (ASX: ANZ) has appointed a new customer fairness advisor.
ANZ shares climbed 0.41% on Tuesday, finishing at $26.69 at market close. The S&P/ASX 200 Financials Index (ASX: XFJ) also finished ahead today, up 0.99%. For perspective, the S&P/ASX 200 Index(ASX: XJO) fell 0.73%.
Let’s take a look at what ANZ announced on Tuesday.
New appointment
ANZ has appointed Evelyn Halls as its customer fairness advisor, the bank announced. Halls will report to the company’s CEO Shayne Elliott. Commenting on the appointment, Elliott said:
This is a crucial role for ANZ that we first established in 2016 and I’m confident Evelyn will build on the legacy of Colin Neave who served as ANZ’s inaugural Customer Fairness Advisor.
As ANZ’s services become even more digital, we’ll be particularly looking to Evelyn to help us use data responsibly and ensure our decision making is fair.
Halls recently served as lead ombudsman at the Australian Financial Complaints Authority. She has more than 25 years of experience in the legal and financial services sector.
In early March, ANZ also restructured its executive team to prepare for future growth. The retail and digital divisions of the bank have been combined, while a new commercial division has been created.
The ANZ share price also climbed yesterday amid concerns of rising inflation, as my Foolish colleague Sebastian reported.
The US Federal Reserve is due to meet this week when it is widely predicted interest rates will rise by 25 basis points, CNBC reported. The Australian Reserve Bank of Australia (RBA) often takes its lead from the US Federal Reserve, as my Foolish colleague Bernd has noted.
The other three of the Big 4 banks also finished higher on Tuesday. National Australia Bank Ltd (ASX: NAB) climbed 0.86%, Westpac Banking Corp(ASX: WBC) jumped 1.12%, while Commonwealth Bank of Australia(ASX: CBA) gained 1.75%. Macquarie Group Ltd (ASX: MQG)bucked the trend, finishing 0.44% lower.
ANZ on the ASX snapshot
The ANZ share price has shed 6.02% in the past 12 months but in the past week alone, it has jumped 6.76%.
In comparison, the benchmark financials index has leapt 7.26% in the past 12 months, gaining 7.47% in a week.
ANZ has a market capitalisation of about $74.8 billion based on its current share price.
Before you consider ANZ, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ANZ wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Macquarie Group Limited and Westpac Banking Corporation. 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 National Australia Bank Ltd (ASX: NAB) share price finished in the green on Tuesday.
NAB shares climbed 0.86% today, finishing at $30.64 at market close. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 0.73% today.
Let’s take a look at what is happening at NAB.
New sales targets
NAB is making headlines today amid a decision to bring back KPI [key performance indicator] sales targets for branch staff.
Internal documents reveal the bank is using the targets to sell credit cards, general insurance, and personal loans, The Agereported. Higher uptakes could lead to better earnings for the bank.
There are also targets for boosting home loan drawdowns, according to the ‘KPI Guide Performance Plans’ document seen by the publication. Bank staff reportedly hit their target if they can raise the drawdown by $39 to $60 million a year.
University of Sydney Business School senior lecturer Andrew Grant told the publication the sales targets could create a “cut-throat” culture.
In response to the reports, NAB said financial targets account for less than 20% of the performance of staff. NAB retail executive Krissie Jones added:
We regularly review our performance and reward frameworks so that they encourage the right behaviour to deliver good outcomes for customers
The S&P/ASX 200 Financials Index (ASX: XFJ) finished up 0.99% today. NAB makes up 22.1% of the total market cap of the financials sector on the ASX.
The Australia and New Zealand Banking Group Ltd(ASX: ANZ) share price climbed 0.41% today, Westpac Banking Corp(ASX: WBC) shares gained 1.12% while Commonwealth Bank of Australia(ASX: CBA) jumped 1.75%. Conversely, the Macquarie Group Ltd(ASX: MQG) share price dropped 0.44%.
NAB on the ASX recap
The NAB share price has rocketed 17% in the past 12 months, gaining 6% year to date.
In the past month, NAB shares have climbed 0.69% although they have jumped nearly 8% in the past week
NAB has a market capitalisation of about $99 billion based on its current share price.
Before you consider NAB, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Macquarie Group Limited and Westpac Banking Corporation. 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) had a pretty lousy day of trading this Tuesday. The ASX 200 ended up down by 0.73% and closed at just under 7,100 points. But no one seems to have told the Coles Group Ltd(ASX: COL) share price.
Coles shares had a corker of a day. The grocery giant finished up a healthy 1.14% at $17.71 a share. But what’s more interesting is that Coles is now up more than 7% in roughly the past month. Yes, between February 18 and today, Coles has gone from $16.55 a share to $17.71.
So what’s happened with this company recently?
Well, unfortunately, it’s not entirely clear.
But we can rule out the impact from Coles’ half-year earnings report. Although the report delivered what you could describe as a mixed bag, Coles shares were lower during the first few weeks of March than they were before the report was delivered on 22 February. So it doesn’t look like that’s made much of a lasting impression.
Why are investors flocking to the Coles share price?
It has also seen some investors look for stability in light of the tragic war in Europe, and the global tensions that has caused.
So how does this relate to Coles? Well, Coles is arguably one of the most inflation-proof shares out there. We all need food, drinks, and household essentials, which is Coles’ bread and butter (no pun intended).
Thus, it’s fairly safe to say that most consumers will reluctantly accept price increases for these products. Thus, Coles can effectively pass on any inflationary effects to its customers without fear of losing them. This also makes Coles a fairly ‘defensive’ company by conventional logic, which in turn gives it a reputation for stability.
Also, Coles happens to be a strong ASX dividend share, one that managed to increase its dividend over the difficult years of 2020 and 2021. It currently offers a dividend yield of 3.44%, which comes fully franked.
Thus, it’s possible it’s for these reasons Coles shares have enjoyed some buying pressure over the past month or so. We can’t say for sure. But Coles certainly has a lot of qualities that arguably make it an attractive option in a more uncertain world.
At the last Coles share price, this ASX 200 grocer has a market capitalisation of $23.65 billion.
Before you consider Coles, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Coles wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 owns and has recommended COLESGROUP DEF SET. 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 All Ordinaries Index (ASX: XAO) is tracked lower today and now sits less than 1% in the red at 7,356 points at market close. After clawing back gains over the previous week, the All Ords is still down more than 2% for the month.
But one All Ords share is overtaking the pack in 2022 and is currently well on the way to nudging past its record highs.
Shares in Hotel Property Investments Ltd(ASX: HPI) are surging higher in 2022 and are now sitting almost 3% in the green since trading restarted on January 4.
Why is the HPI share price soaring higher?
The company posted a robust set of interim results last month that saw funds from operations (FFO) printed at $19.5 million for the period ending 31 December 2021.
This meant the group affirmed its FY22 distribution per share (DPS) guidance of 20.5 cents per share, signifying a 6% gain year on year.
Net tangible assets (NTA) also climbed by 16% to $3.82 following an active half for the company after it raised capital to finance transactions for two pubs.
The $36 million raised plus an additional $69 million injected into the portfolio via capital expenditures was surely a sign of this activity.
HPI also offloaded two property assets for approximately $30 million which equated to an ‘exit yield’ of roughly 5%, which was reinvested into other sections of the portfolio.
Not only that, but the S&P/ASX 200 Real Estate Index (ASX: XRE) is one of the best performing sectors this past week, having climbed 3%, after faltering hard in January.
The upside has analysts at JP Morgan noticing the stock, particularly after the group’s most recent earnings results.
The broker is overweight on HPI shares and values the company at $4 per share in a recent note to clients. It reckons the group’s enormous portfolio and income stream are attractive points in the debate.
“HPI owns a ~$1.2bn portfolio of 56 properties located predominantly in QLD. HPI has a~11-year WALE with minimal near-term expiry risk”, the firm said.
“We like HPI for its defensive income stream and long WALE and believe its book cap rate is too high given the security of its income and high fixed growth (lower of 4% pa or 2x CPI)”.
According to Bloomberg, 60% of brokers have HPI as a buy right now, whereas just 1 broker each have it as a hold and sell.
HPI share price snapshot
In the last 12 months this All Ords share has climbed more than 30% and has continued another 3% gain this year to date.
Over the past month, shares have climbed 8% and HPI is now in the green across all major timeframes.
Should you invest $1,000 in Hotel Property Investments right now?
Before you consider Hotel Property Investments, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Hotel Property Investments wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 owns and has recommended Hotel Property Investments Ltd. 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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In case you missed it, the price of nickel went vertical on 8 March and briefly topped US$100,000 per tonne for the first time ever.
There hasn’t been this kind of calamity on commodities exchanges since previous crises for tin, oil and gold back in the 70s and 80s.
The London Metal Exchange (LME) promptly halted trading after prices went parabolic, as brokers struggled to fill orders and collect margin calls from traders being liquidated en masse. Billions were lost from short sellers as the price eventually spiked 250% in around 24 hours.
Afterwards, trading of the metal could only occur within European hours and with a 10% cap on volatility.
Obviously, the conflict in Europe has the market jittery over supply concerns on the industrial metal, that is used in applications ranging from batteries to steel production.
Nickel had already been strong for more than 12 months prior to the conflict. However, Russia is the world’s largest supplier of nickel and the events sparked a frenzy on the LME last week.
At the time of writing, Nickel is fetching US$48,226 as things have ‘settled’ and trading has somewhat returned to normal.
But there’s a bit more at play than just the forces of supply and demand in this case. Firstly, it appears to be more market mechanics instead. And second, there wasn’t that much of a spread between buyers and sellers in early March anyway.
There was, however, a large amount of short interest on the price of nickel from one particular steel and nickel juggernaut out of China, Xiang Guangda.
Guangda is the owner of Chinese steel and nickel giant Tsingshan Holding Group Co. The company is actually a large buyer of the metal, being the world’s largest steel producer, but held a large short position in nickel futures as well.
It’s not entirely clear if this was as a hedge against falling nickel prices or if there was some speculation involved, now that some time has passed and more details have emerged on the matter.
Instead, what happened was a classic but rare ‘short squeeze’ – not unlike that seen in the GameStop Corp.(NYSE: GME) saga in early 2021.
Back then, GameStop shares rose from around US$17 to US$325 per share in less than a month as retail traders squeezed out hedge funds that held large positions on the company.
In other words, we’ve seen this movie before. But what is a short squeeze? And will it impact ASX shares? Let’s take a look.
What is a ‘short squeeze’?
Those holding a short position in the futures markets are either protecting against price movements or wagering that prices will fall.
Obviously, those speculators will see their capital evaporate if prices suddenly shoot up, if they aren’t hedged themselves.
In a squeeze, rising prices put these speculators in between a rock and a hard place. In order to stay in the trade, they (or their brokers) must buy (or go long) on the asset in a process known as ‘covering the short’.
However, if the short interest is high enough, the process forms a negative feedback loop – as prices rise, the huge wager forces the trader to buy more of the asset — pushing prices up even further, and compounding losses on the short side.
The same happened with GameStop stock, albeit in a more architected fashion. This time, however, it was with nickel, a global commodity that is essential to our day-to-day lives.
Not to mention it’s requisite in the future of energy production and the likes.
So as prices began to rise, the short seller had to cover his position by buying nickel, sending prices higher. Other speculators joining in may have also helped the rise.
What actually happened?
It was a fairly interesting set of affairs. As the events unfolded on 8 March, many in the industry were talking of an all-out meltdown in nickel markets.
If we backtrack a bit just before the jump, we see that nickel has been in an uptrend with strong support. Despite the gain in price, Tsingshan was able to meet its margin calls at that time, Bloomberg reported.
It wasn’t until the enormous surge began on 7 March that LME brokers began to feel nervous and started ringing their clients to post more margin in their accounts. Margin is just a cash balance that futures traders must maintain as they trade on leverage.
Tsingshan got a margin call for $3 billion, according to Bloomberg, meaning it had exposure to more than 150,000 tonnes of nickel.
The problem for Tsingshan was that $3 billion was a little too much for this steel giant’s bank account. Plus, no banks were going to answer their calls to lend that amount on credit.
Unfortunately, it’s the brokers who first have to pay the margin calls, but to the exchange. They then receive the margin top-up from their clients.
In this case, the banks and brokers were paying, but receiving no margin top-up from their client. These banks had “offset their deals with Tsingshan by placing their own short positions on the LME”, according to Bloomberg reports.
“Now they had to pay big margin calls on the exchange while receiving no margin from their client,” Bloomberg said.
Some of these banks started to rapidly buy back nickel contracts in order to cover themselves, and this sent prices soaring even higher.
“It was a classic short squeeze, as the pain for Tsingshan, its brokers, and other shorts created a self-reinforcing cycle,” Bloomberg said.
The LME promptly intervened and froze the price of nickel at US$80,000 per tonne, afterwards cancelling all trades that took place on the Tuesday morning – almost $4 billion, according to Bloomberg.
What’s happened to ASX shares since?
The fallout has been that the price of nickel is now at unprecedented highs and those nickel producers, such as ASX shares Nickel Mines Ltd (ASX: NIC), Poseidon Nickel Ltd (ASX: POS) and BHP Group Ltd(ASX: BHP), each incurred losses in the days following.
With Nickel Mines, it was due to the association with Tsingshan, such that the company released a statement after its shares were placed in a trading halt. The trading halt came after the Nickel Mines share price had slumped 22%.
Aside from that, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) also took a sharp downturn on the same day and has fallen more than 9% since – even as many commodities surge to decade-long highs.
Much of the reason why ASX commodity shares – particularly those involved with nickel – haven’t received the news well boils down to how these markets operate.
One might presume higher prices is a huge positive for miners and producers, for instance.
However, that’s not necessarily the case. Miners, manufacturers, producers and the like each use futures markets to place short trades, in order to hedge their exposure to the commodity.
Nickel miners, for example, want to ensure that, when it comes time to sell their product, they can get the best price. If prices fall, they are out of pocket.
That’s why they short futures to effectively ‘lock-in’ the price they can sell at if this were to occur — an insurance of sorts. Buyers of nickel will do the opposite except to lock in a buying price.
Both sides will even ‘carry’ the trade forward, so to keep the hedging position active as time rolls on.
But when the market makes huge moves in the opposite direction – as it did on March 8 – they will be hit with margin calls or requests to put down more cash to keep the trades open.
No one is immune. It’s not just the traders and speculators. It’s the largest commodity players each having to scramble to cover their bases.
With this most recent saga, ASX nickel producers who participate in these markets are going to see some impact from the calamity at the earnings level, seeing as their short positions were more than likely taken out with the price surge.
Plus there’s no certainty the gain in price will equate to higher sales figures for the companies involved. Sales have to be realised at these record prices for anything to occur.
In other words, it’s not all just about demand and supply with commodities – it boils down to factors of hedging, speculation and market mechanics as well.
Thankfully, zooming out and scoping the wider market, there doesn’t appear to have been a large spillover into other pockets of the ASX outside of the mining sector.
The S&P/ASX 200 Index(ASX: XJO) is trading sideways and is actually up 1% for the month, while the S&P/ASX 200 Financials Index (ASX: XFJ) has soared around 7.5%.
Before you consider ASX shares, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ASX shares wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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When it comes to choosing an exchange-traded fund (ETF) to invest in, the preferred choice by far for ASX investors is the Vanguard Australian Shares Index ETF (ASX: VAS). We know this because VAS has just under $10 billion in assets under management. Its closest competitor for the dollars of Aussie investors, the iShares S&P 500 ETF(ASX: IVV), has just under $5 billion.
But if you’re a fan of ASX tech shares, and you either own VAS or are looking at owning it, then you might be in for a nasty shock. This ETF owns almost any public Australian company you can think of. Its top shares include names like Telstra Corporation Ltd(ASX: TLS), Commonwealth Bank of Australia(ASX: CBA), and Woolworths Group Ltd(ASX: WOW).
Yet if you look at this ETF’s top 10 holdings, you will see not one ASX tech name.
Indeed, you won’t see any tech if you look at its 20 largest holdings. Our first tech name comes up at number 27 on VAS’s latest portfolio data – Block Inc(ASX: SQ2). And that’s not even technically an Australian company. It’s only on our ASX due to its recent acquisition of the homegrown buy now, pay later (BNPL) company Afterpay.
Overall, the Tech (or Information Technology) sector only makes up 3.9% of VAS’s total weighting. Compare that to Materials at 24.3% or Financials at 27%.
VAS ETF: Why are ASX tech shares missing in action?
So what’s going on? Why doesn’t this ETF invest even $4 in every $100 it receives into tech?
Well, it’s not VAS’s fault. The Vanguard Australian Shares Index ETF is, well, an index fund. That means it has to mirror the composition of the S&P/ASX 300 Index (ASX: XKO). And the ASX 300, in turn, has to rank the top 300 companies on our share market purely on market capitalisation (size). It just happens that our largest public companies here in Australia tend to be banks and miners. Thus, these are the ASX 300’s (and VAS’s) largest holdings too. The ASX’s tech shares are all there. But they just don’t occupy a huge presence in VAS’s portfolio.
So if you want outsized exposure to the tech sector, you’ll either need to buy the shares yourself, or else find an index ETF that mirrors a different index with a heavier weighting to the tech space. The IVV iShares S&P 500 ETF that we mentioned earlier is also an index ETF, but this one covers the US markets, not the ASX. In stark contrast, IVV has a 27.21% weighting to tech shares, since it is dominated by companies like Apple Inc(NASDAQ: AAPL), Alphabet Inc(NASDAQ: GOOG)(NASDAQ: GOOGL), and Amazon.com Inc(NASDAQ: AMZN).
But there are tech-specific ETFs that cover ASX shares too. One example is the BetaShares S&P/ASX Australian Technology ETF(ASX: ATEC).
So, like with any investment, make sure you know what you’re buying before you buy it. You might get a surprise you weren’t preparing for!
Before you consider VAS, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and VAS wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 owns Alphabet (A shares), Amazon, Apple, and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Amazon, Apple, and Block, Inc. 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 owns and has recommended Block, Inc. and Telstra Corporation Limited. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and iShares Trust – iShares Core S&P 500 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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The Metalstech Ltd(ASX: MTC) share price had a stellar day on the market today. The micro-cap ASX mining share surged 13.95% to close at 24.5 cents.
So why did this miner of lithium, cobalt, and gold have such a good day?
Let’s take a look.
Gold update
The Metalstech Ltd(ASX: MTC) share price exploded today. Investors appeared to react positively to an update released before market open this morning.
The company provided a drilling update from its 100%-owned Sturec gold mine in Slovakia.
Metalstech said diamond core drilling is continuing to “progress well” during the Slovakian winter. Explorers are completing a drill hole known as UGA-30 within drill chamber three. Metalstech said the drilling has targeted areas “both within and outside” the existing mineral resource boundary.
The company expects to report a “significant batch” of drill results in the future. Construction of a fourth drill chamber is also underway.
In the announcement that drove up the Metalstech share price today, the miner said:
The company is currently working with an independent consultant to model a JORC exploration target for the historic mineralisation identified outside the current Sturec Mineral Resource Estimate area, including Wolf, Katerina, Volle Henne and Vratislav where extensive historical drilling and production has occurred.
The company has also engaged Measured Group to complete a scoping study based on a high grade, low impact, bulk underground mining operation at Sturec focussing on the higher grade zones within the mineral resource estimate.
Metalstech said this scoping study is going well and earmarked for completion in April. Finally, the company provided an update on the gold price.
It said the gold price is trading above US$1,980 per ounce. The company noted multiple analysts are increasing long-term forecasts to more than US$2,000 per ounce.
Metalstech share price snapshot
The Metalstech share price has leapt 90% in a year but has fallen nearly 14% year to date.
In the past month, Metalstech shares have slipped by nearly 6%, while they are surging 28% over the past week.
MetalsTech has a market capitalisation of about $41.7 million based on its current share price.
Before you consider Metalstech, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Metalstech wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
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 Bitcoin(CRYPTO: BTC) price is up 1.6% since this time yesterday.
The world’s first digital token is currently trading for US$38,797 (AU$53,998). That gives it a market cap of just over US$736 billion.
The muted reaction of the Bitcoin price to the European Union’s voting down of banning proof of work (PoW) crypto mining may come as a surprise to some enthusiasts.
How the EU vote could have impacted the Bitcoin price
As Euro News reported, yesterday (overnight Aussie time) the European parliament’s economic and monetary affairs committee voted down a last-minute amendment to its draft Markets in Crypto Assets (MiCA) legislation.
That amendment would have all but banned the type of PoW mining activity that Bitcoin relies on.
When China banned crypto mining last year, the Bitcoin price fell more than 45% between May and August. Prices then recovered into November when Bitcoin reached all-time highs.
The global annual energy use of Bitcoin mining using PoW is approaching the annual energy use of all of Australia. And in sustainable focused Europe, that’s been drawing some heat amongst legislators.
Still the amendment failed to make it onto the draft crypto regulation legislation, which passed on to the next stage without the PoW mining ban.
What the industry insiders have been saying
eToro’s crypto expert Simon Peters warned of “huge” implications if the amendment were to pass.
The bill would have required “miners to submit environmental sustainability compliance plans. Failing to submit them would prevent their operation within the EU. The implications of this are huge – the EU is a major jurisdiction for crypto mining and crypto more generally, with over 10% of global bitcoin hash power emanating from the region,” Peters said.
While not turbocharging the Bitcoin price today, the failed passage of the amendment will come as welcome news to many crypto enthusiasts, including those at crypto wallet provider Ledger.
Prior to the vote, the company said (quoted by Euro News):
Individuals and organisations should be free to choose the technology most appropriate to their needs. Policymakers should neither impose nor discriminate in favour of a particular technology. This is deeply concerning and would have serious consequences for Europe.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
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The Archer Materials Ltd (ASX: AXE) share price sunk on Tuesday, closing 7.37% in the red at 88 cents.
Investors offloaded Archer shares at a trading volume almost double the company’s 4-week average with more than 961,000 shares changing hands.
Today, the materials technology company released an announcement regarding its “operations and growth”. The post was labelled non-price sensitive although investors didn’t appear to react positively to it.
What did Archer announce?
The premise of the announcement was to provide shareholders with an update on the company’s progress on its operations and growth, Archer said.
The company raised $25 million in October to execute its growth strategy which involves “domestic and international capabilities in advanced semiconductor design, fabrication, and prototyping”.
Archer also noted it has proceeded to gain access to the Australian Nanofabrication Facility, UNSW Sydney node.
The facilities should help Archer transition from single device-oriented research and development towards small-batch, high-resolution fabrication of nanodevice prototyping.
As part of its biochip development, the company’s researchers are preparing for “automated testing” across various other genomic facilities in Sydney.
It also recently expanded its Sydney offices to include “The Quantum Terminal”. According to Archer, the terminal is a co-working space that houses organisations within quantum technology, high-performance computing, and artificial intelligence technology spaces.
As well, it will be attending the AusMedtech conference in Melbourne during May 2022 and the BIO international conference in San Diego, scheduled for June 2022.
The market appears to have reacted poorly to the update with investors continuing to offload shares until the closing bell.
Aside from that, the ASX tech sector continued its weakness today, with the S&P/ASX All Technology Index(ASX: XTX) finishing down less than 1% today, taking it 24% lower year to date.
This sector weakness also appears to be plaguing Archer’s share price as part of a longer-term downtrend.
Archer Materials share price snapshot
The Archer Materials share price is down more than 14% in the past 12 months and 22% this year to date.
It’s fallen 16% in the past month alone.
At its current share price, the company has a market capitalisation of $219 million.
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Investors owning Wesfarmers Ltd (ASX: WES) shares may want to know about the progress that the company is making towards acquiring the Australian Pharmaceutical Industries Ltd (ASX: API) business.
API shareholders are headed towards a meeting later this week to vote on the offer by Wesfarmers to buy the whole business. This meeting will be held virtually because of COVID-19.
In the absence of a superior proposal and subject to the independent expert continuing to conclude that the scheme is in the best interests of API shareholders, each API director recommends that API shareholders vote in favour of the scheme and intends to vote in favour of the takeover.
What’s the latest on the votes on the Wesfarmers bid for API?
According to reporting by the Australian Financial Review, close to a third of API’s register had voted at the start of this week, with most shareholders being in favour of the deal. However, a few institutional investors have suggested that the takeover offer could have been higher.
Reaching the 30% of shares voted milestone implies that API and Wesfarmers are around halfway through the 60.5% needed for the deal’s approval due to the fact that Wesfarmers owns 19.3% of API.
There is still a bit of uncertainty about the overall total because other shareholders include fund managers which may decide “at the last minute” and there are also pharmacists within the voting blocks.
Last month, the Federal Court of Australia approved a meeting of API shareholders to consider and vote on the scheme. In February 2022, it was also announced that the ACCC would not oppose the API acquisition because of the ongoing competition from players like Chemist Warehouse, Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW)
How much is the bid?
The initial takeover offer from Wesfarmers was an offer of $1.38 per share. However, that was then raised to $1.55 per share in September 2021.
Wesfarmers and API have entered into a scheme implementation deed that allows for the payment of fully franked dividends up to a maximum of $0.05 per API share, which included the 2 cents per share final dividend declared by API for FY21. The cash consideration of $1.55 would be reduced by the cash component of any such dividends.
The record date for the proposed special dividend date is 25 March 2022.
Why is Wesfarmers buying API?
For Wesfarmers, this acquisition will provide an “attractive opportunity to enter the growing health, wellbeing and beauty sector.”
The giant ASX retail share sees opportunities to invest in and strengthen the competitive position of API and its community pharmacy partners by expanding ranges, improving supply chain capabilities and enhancing the online experience for customers.
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