The Peppermint Innovation Ltd (ASX: PIL) share price is surging 13% higher today after signing an Application Programming Interface (API) agreement with major Filipino bank Bank of the Philippine Islands (BPI).

The API agreement means BPI will start offering Peppermint’s bizmoto platform, an ecommerce and BPay-esque service, to its four million account holders.

Landmark agreement in key market

Peppermint’s service allows its customers to pay bills, conduct e-commerce, delivery and logistics, and mobile financial tasks through a mobile wallet. Customers can then top up and transact remotely. 

Peppermint will undertake a direct marketing campaign as part of the deal, promoting the bizmoto services. The agreement has a ‘go live’ date for the second half of this year.

Peppermint’s Managing Director and CEO, Chris Kain, said that forming an agreement with BPI was a landmark in the company’s expansion into the South-East Asian market.

“This is a significant agreement for Peppermint Innovation, and it’s a privilege to be able to do business with the Bank of the Philippine Islands, who were the first bank in the Philippines and South East Asia,” he said.

“BPI is such a respected institution in the Philippines and Peppermint’s proven capability and track record of working with other banking entities has positioned us well to do business with BPI. As soon as we can, we will execute targeted awareness and marketing campaigns in partnership with BPI to their over four million customer account holders.

“To put that in context, we currently have over 50,000 bizmoto agents so we have the potential to market and explain how our bizmoto platform works to almost 80 times the number of current registered agents.

“This is yet another step forward on our path to building out our range of bizmoto ecosystem of services across the Philippines and to tackling the problem of providing inclusive financial services to the people of the Philippines.”

Peppermint share price on sharp yearly incline

The Peppermint share price has risen more than 230% this year-to-date, with investors also realising the brand’s potential to capture the lucrative emerging ‘buy now, pay later’ market across southern Asia. 

While Peppermint’s bizmoto platform is currently based around mobile remittance — allowing customers to set up their own mobile businesses — the company has the potential to transition towards an end-to-end banking service.

This is the second major announcement for Peppermint this month, after the company revealed its micro-insurance product BizmoProtect on 3 March. 

At the time of writing, the Peppermint share price is swapping hands for 4.1 cents.

More reading

• Why the Peppermint (ASX:PIL) share price is bouncing today

Motley Fool contributor Lucas Radbourne-Pugh 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 Duratec Limited (ASX: DUR) share price is up this morning after the company announced 2 new defence contracts. The contracts are worth a combined $38 million.

The good news is timely for the engineering, construction, and remediation company. The Duratec share price has fallen more than 18% year to date and at the time of writing is trading at 48 cents, down 1.03%. 

Let’s look closer at the company’s announcement.

Defence works 

This morning, Duratec advised that it and its sister company DDRIC had each won a defence works contract, worth a combined $38 million.

The larger contract, won by Duratec, will bring in $25 million. While the contract won by Indigenous-owned DDRIC is worth $13 million.

Both works will take place in the third quarter of the 2021 financial year. The company said the works involved building refurbishment, electrical infrastructure upgrades, wharf remediation and specialist training facilities construction. They will take place across multiple defence sites.

The company noted that, while works will start soon, project lead times mean that most of the income from the contracts won’t reach Duratec and DDRIC until the 2022 financial year.  

According to the company, it has a presence on nearly half of all of Australia’s defence bases. It also has more than $200 million worth of defence tenders awaiting decisions.

Commentary from management

Duratec managing director Phil Harcourt commented on the importance of defence contracts for the companies:

The diversity and complexity of work type awards and locations demonstrates the experience, capability and national presence of Duratec which retains the agility of a local business. We understand the importance of maintaining Defence capability, security of the project work sites and satisfying the needs of all stakeholders.

Defence continues to be a key strategic focus for Duratec… The pipeline of opportunities in this sector, together with the resources sector (in particular), continues to grow for both Duratec and DDRIC.

Duratec share price snapshot

Despite the positive news, the Duratec share price opened at 49 cents and immediately slipped 1.03% to 48 cents.

It is down by 21.31% over the last 12 months.

The company has a market capitalisation of around $115 million, with approximately 237 million shares outstanding.

More reading

• Why the Duratec (ASX:DUR) share price is up 10% this afternoon

Motley Fool contributor Brooke Cooper 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 South32 Ltd (ASX: S32) share price is outpacing gains on the broader market after a broker upgraded its shares.

The diversified miner jumped 3.3% to $2.84 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) gained 0.4%.

South32 share price leading the pack

While ASX mining shares are leading the charge higher, few of the majors can keep up with the South32 share price.

The BHP Group Ltd (ASX: BHP) share price, Rio Tinto Limited (ASX: RIO) share price and Fortescue Metals Group Limited (ASX: FMG) share price increased by less than 2% each.

Asset sale and broker upgrade

South32 announced today that the transfer of its shareholding in South32 SA Coal Holdings (South Africa Energy Coal) to Seriti Resources Holdings Proprietary Limited is expected to be completed by the end of this month.

The news will please shareholders concerned about their exposure to climate change. But that is probably not the main reason for the South32 share price outperformance.

An upgrade by Macquarie Group Ltd (ASX: MQG) is a more likely driver for the shares. The broker lifted its recommendation on South32 to “outperform” from “neutral”.

Why the South32 share price was upgraded to “buy”

Macquarie’s decision came after it revised up its price forecasts for a range of commodities that South32 produces. This included manganese, silver and aluminium.

As a result, the South32 share price is trading on a free cash flow yield that’s close to 10%.

“The earnings upgrades for S32 are driven by a combination of the more bullish outlook for silver and aluminium, and near-term increases in our manganese and zinc-price expectations,” said Macquarie.

“Our FY21 and FY22 earnings estimates rise 51% and 49%, respectively. S32’s medium-term earnings also see solid upgrades of 12% for FY23, 11% for FY24 and 9% for FY25.”

Other ASX mining shares on the upgrade path

The South32 share price jumped by 52% over the past year. That’s roughly on par with the BHP share price, while the Fortescue share price doubled and Rio Tinto’s up 26%.

Macquarie’s 12-month price target on South32 is $3.10 a share.

But South32 isn’t the only miner to be upgraded by Macquarie on the back of the broker’s commodities price upgrades.

The Jupiter Mines Ltd (ASX: JMS) share price was boosted to “outperform”, while the Alumina Limited (ASX: AWC) share price was lifted to “neutral”.

More reading

• Why AVZ, Betmakers, Santos, & South32 shares are storming higher
• Why the News Corp (ASX:NWS) share price is one to watch today
• More Aussies now think shares are better than real estate
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Macquarie Group Limited, Rio Tinto Ltd., and South32 Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie 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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In morning trade, the S&P/ASX 200 Index (ASX: XJO) was on course to start the week with a strong gain before quickly giving the majority of it back. At the time of writing, the benchmark index is up 0.1% to 6,833.6 points.

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

AVZ Minerals Ltd (ASX: AVZ)

The AVZ share price is up over 4% to 21 cents after announcing a new offtake agreement. According to the release, AVZ has signed a binding three-year offtake agreement for the sale of 600 metric tonnes per annum of tin concentrate to Kalon Resources from its Manono Lithium and Tin Project. This represents ~43% of its expected tin concentrate production.

Betmakers Technology Group Ltd (ASX: BET)

The Betmakers share price has jumped 8% to $1.09. This follows the release of an investor presentation this morning. That presentation gave investors a breakdown of the betting technology company’s growth plans. Particularly once the game-changing acquisition of Sportech’s Tote and Digital businesses completes. Management advised that the acquisition is on track with no material issues having emerged during the completion period and through integration planning. The acquisition remains on target to complete during the fourth quarter of FY 2021.

Santos Ltd (ASX: STO)

The Santos share price is up 2% to $7.30. Investors have been buying the energy producer’s shares this morning after a strong rise in oil prices on Friday night. Traders were bidding oil prices higher amid concerns that the Suez Canal blockage could last for weeks and have a big impact on supply.

South32 Ltd (ASX: S32)

The South32 share price is up 3% to $2.83. The catalyst for this gain appears to be a broker note out of Macquarie this morning. According to the note, the broker has upgraded the mining company’s shares to an outperform rating with a $3.10 price target. It made the move in response to increasing demand for manganese and aluminium. It notes that at current spot prices, South32 is positioned to deliver bumper free cash flows.

More reading

• Why the South32 (ASX:S32) share price is outperforming today
• Here’s why the AVZ Minerals (ASX:AVZ) share price is charging 7% higher
• Why the BetMakers (ASX:BET) share price is worth watching
• Santos (ASX:STO) share price rises on production update
• 5 things to watch on the ASX 200 on Friday

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 Betmakers Technology Group Ltd. 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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AMP Ltd (ASX: AMP) shares are edging lower in morning trade following two market updates from the financial services giant. At the time of writing, the AMP share price has slumped 0.37% to $1.34. 

Let’s take a look at what the S&P/ASX 200 Index (ASX: XJO) company announced. 

Joint venture update

On Friday 26 March, AMP drew ASX 200 investor attention when it reported a potential joint venture (JV) with Ares Management Corp (NYSE: ARES).

Under the proposed deal, Ares would have had a 60% stake and management control of the JV. AMP, in turn, would have received $1.55 billion cash (before associated costs) for its private markets businesses, which cover its unlisted property and infrastructure funds.

The AMP share price is on the slide today after the company reported this morning that the 30-day exclusivity period with Ares for the proposed transaction has concluded.

The company said Ares has expressed an interest in acquiring 100% of the private markets businesses. It added that while it is still working with Ares towards a potential transaction, there is “no certainty that a transaction will proceed”… including the particular terms and size of a potential deal. Shareholder approval of any deal would also still be required.

What else did AMP announce?

In a separate ASX release this morning, AMP reported it is ending its management agreement with Precinct Properties New Zealand Ltd (NZE: PCT), enabling Precinct Properties to internalise the management of its business.

The New Zealand listed real estate investment trust (REIT) will pay NZ$215 million (AU$197 million) for 100% of the management interests. AMP Capital has a 50% interest in management company AMP Haumi Management Limited and has managed Precinct since the REIT first listed in 1997.

AMP reported it expects to receive roughly AU$80 million in profit from the deal “subject to foreign currency and other adjustments” for its 50% share. The company said Precinct will no longer pay management fees after the deal is complete, stating that impact was “not material to AMP Capital’s ongoing earnings”.

AMP share price snapshot

Over the past 12 months, the AMP share price is flat. That compares to a 32% gain on the ASX 200.

Year to date AMP shares are down by around 14%. AMP pays an annual dividend yield of 3.1%, 90% franked.

More reading

• More Aussies now think shares are better than real estate
• The ASX 200 keeps climbing, TPG drops on Teoh departure, AMP still has a CEO
• AMP (ASX:AMP) share price takes wild ride on CEO’s future
• 5 things to watch on the ASX 200 on Friday
• Dexus (ASX:DXS) share price rises on proposed $15 billion fund merger

Motley Fool contributor Bernd Struben 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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Last week TPG Telecom Ltd (ASX: TPG) dropped a bombshell when it announced the surprise resignation of its Founder and Chairman, David Teoh, with immediate effect.

This news led to the TPG share price crashing lower and the Telstra Corporation Ltd (ASX: TLS) share price pushing higher.

Is this good news for the Telstra share price?

Analysts at Goldman Sachs have been looking into the implication of Mr Teoh’s resignation and see positives for Telstra and the telco industry.

In respect to industry pricing, Goldman believes this news will be a big positive.

It commented: “We see this as a clear positive for industry rationality, noting that the TPM Board had a track record of targeting market share growth through aggressive pricing. Consequently, following the merger between TPG and VHA, there has been an elevated risk that this price-led strategy would become evident within the new TPG mobile business, and disrupt the current market repair.”

“Hence we view this announcement as a clear positive for rationality in the Australian mobile market, reducing the tail-risk of an aggressive price-led strategy from TPG.”

This is particularly the case given that the appointment of Canning Fok as Mr Teoh’s replacement means the old Vodafone Australia team has control of the business now.

Goldman explained: “In our view, Fok’s appointment as Chair of the TPG board cements control of the business with Vodafone & Hutchinson, who now represent: (1) 50.1% of the TPG equity; (2) both CEO & Chair of the business; and (3) 5 of the 10 board members (5 VHA, 3 TPM, 2 Independent).”

Should you buy Telstra shares?

In light of the above, Goldman Sachs has reaffirmed its buy rating and $4.00 price target on Telstra’s shares.

Based on the current Telstra share price of $3.39, this implies potential upside of 18% over the next 12 months. And with Goldman forecasting a 16 cents per share fully franked dividend for the foreseeable future, the total potential return stretches to almost 23%.

The broker concluded: “Overall this announcement supports our positive view on the Australian Telco Sector into 2021, given the expected return to growth in mobile revenues and completion of the NBN margin headwinds in fixed. Our preference remains for Telstra (Buy, A$4.00 TP) as we outlined in our 2021 Outlook, given our expectations for a re-rating of the business as it becomes a ‘simple’ telco again, along with the potential upside in its infrastructure assets.”

Goldman Sachs has retained its neutral rating and $7.10 price target on TPG’s shares.

More reading

• Is the Telstra (ASX:TLS) share price a buy today?
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• Top brokers name 3 ASX shares to buy next week
• These were the worst performers on the ASX 200 last week
• The ASX 200 keeps climbing, TPG drops on Teoh departure, AMP still has a CEO

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 SelfWealth Ltd (ASX: SWF) share price is failing to respond today after the company announced a new CEO and board restructure. At the time of writing, the online brokerage company’s shares are swapping hands for 60.5 cents.

About the new CEO

Investors appear unfazed by the company’s latest update, leaving the SelfWealth share price unchanged in morning trade.

According to this morning’s release, SelfWealth has appointed Cath Whitaker as its new CEO, effective 20 April 2021.

The company highlighted that Ms Whitaker has more than 20 years of experience in global financial services. In her most recent role, Ms Whitaker held the position of global leader of digital transformation at Marsh Inc. This saw Ms Whitaker oversee the development and implementation of Marsh’s digital and data strategy for risk management and corporate divisions.

Marsh Inc. is a wholly-owned subsidiary of international professional services firm, Marsh McLennan Companies Inc (NYSE: MMC). The parent company was founded in 1871 and is headquartered in New York. The group has an annual revenue turnover of $17 billion.

SelfWealth selected Ms Whitaker to lead its next growth phrase, after a successful 24 months. The company is focused on delivering ongoing product innovation, and digital best practices.

SelfWealth managing director Rob Edgley commented:

Our current team, together with founder and former CEO Andrew Ward, have done a fantastic job in building a fast-growing business with a trusted brand, an engaged community of traders and an innovative product offering.

We are delighted to welcome Cath as the new CEO of SelfWealth. Her impressive track record in implementing global digital transformation programs is completely aligned with the growth strategy of SelfWealth.

SelfWealth share price summary

Over the past 12 months, the SelfWealth share price has gained over 500%, and is up around 7% year to date.

On valuation grounds, SelfWealth commands a market capitalisation of roughly $124.2 million, with 205.3 million shares outstanding.

More reading

• TPG Chair resignation: Is this good news for the Telstra (ASX:TLS) share price?
• Up 13% this year, the Pointsbet (ASX:PBH) share price reflects expansion into new markets
• Why is the Zip (ASX:Z1P) share price down 30% this month?
• These are the 10 most shorted shares on the ASX
• Treasury Wine (ASX: TWE) share price sinks lower on China update

Motley Fool contributor Aaron Teboneras 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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ASX corporate bookmaker Pointsbet Holdings Ltd (ASX: PBH) has been expanding at breakneck speed recently. Just look at the announcements Pointsbet has released to the market this year alone.

Towards the end of January, Pointsbet announced that it had obtained approvals to launch operations in Michigan. Just days later, the company signed basketball legend Shaquille O’Neal as its Australian brand ambassador.

Two weeks later, it announced that it was entering into a strategic marketing and betting partnership with the American National Hockey League (NHL). A month after that, Pointsbet revealed that it was acquiring Dublin-based risk management company Banach Technology Limited. And then, just last Friday, Poinstbet announced that it had been granted access to online sports betting markets in Pennsylvania and Mississippi.

Oh, and in the midst of this flurry of activity, Pointsbet also released its first-half FY21 financial results, in which it reported a 174% jump in revenue versus the prior comparative period (to a little over $75 million).

What about the losses?

However, the results also revealed that signing all these contracts doesn’t come cheap – losses for the half-year ended 31 December blew out to almost $86 million, up from $32.3 million a year ago.

First-half FY21 sales and marketing expenses were triple what they were for the first-half FY20, as the company invested in a series of growth initiatives. However, personnel, technology, and administration expenses were also all up substantially too.   

Currently, Poinstbet is happy to absorb these losses. It still ended the year with a strong balance sheet thanks to a massive capital raise completed in September injected an additional $353.2 million in cash into the company. Cash and equivalents were almost $390 million at 31 December 2020, and the company’s net asset position was $513.2 million.

This rapid growth trajectory has also translated into some incredible share price movements. Since listing on the ASX back in June 2019 at a price of just $2, Pointsbet shares have skyrocketed over 570% to $13.46 as at the time of writing.

This includes gains of more than 160% made in 2020 – a pandemic year in which many major sporting leagues and key events worldwide were either postponed, cancelled, or modified.

About the Pointsbet share price

Compared to its peers, Poinstbet was a bona fide market darling of the COVID-19 era. Shares in fellow bookmaker Tabcorp Holdings Limited (ASX: TAH) ended 2020 down about 10% after never really recovering from a massive selloff during the March 2020 crash. It is only just edging up towards pre-COVID prices now.

Pointsbet’s aggressive growth strategy – targeting the US market in particular – has delivered some impressive shareholder returns. Just be sure to keep an eye on those ballooning marketing costs.

The Pointsbet share price is trading at $13.40 at the time of writing.  Pointbet shares are up 13% year-to-date and have increased by 609% over the past 12 months.

More reading

• The ASX 200 keeps climbing, TPG drops on Teoh departure, AMP still has a CEO
• Why the PointsBet (ASX:PBH) share price will be on watch this morning
• Compared! How are ASX gaming share prices performing?
• ASX 200 crash anniversary: 5 of the best performing shares of the last 12 months
• Bell Potter thinks the PointsBet (ASX:PBH) share price could go 40% higher

Rhys Brock owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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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:

• Webjet Limited (ASX: WEB) is the most shorted ASX share despite experiencing a small reduction in short interest to 10.4%. Concerns over a third wave of COVID-19 in Europe and the floods in NSW and Queensland could be weighing on its shares.
• Tassal Group Limited (ASX: TGR) has seen its short interest slide to 10.3%. Weak salmon prices and concerns over the Australia-China trade war have hit investor sentiment.
• Inghams Group Ltd (ASX: ING) has 8.25% of its shares held short, which is up week on week. This morning the poultry company announced the surprise exit of its CEO with immediate effect.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise to 8.2%. As with Webjet, this appears to have been driven by rising COVID-19 cases across the world despite the rollout of vaccines.
• Metcash Limited (ASX: MTS) has seen its short interest rise to 7.2%. It appears as though some investors aren’t convinced by the wholesale distributor’s recently announced growth strategy. This may be due to its notably higher than expected capex plans.
• Resolute Mining Limited (ASX: RSG) has seen its short interest reduce week on week to 6.9%. Short sellers will have been celebrating last week after the gold miner’s shares crashed lower. This was due to news that the Ghanaian government has terminated its Bibiani mining license.
• JB Hi-Fi Limited (ASX: JBH) has entered the top ten with short interest of 6.8%. Short sellers may believe JB Hi-Fi’s shares have peaked after a very strong gain over the last 12 months.
• InvoCare Limited (ASX: IVC) has 6.6% of its shares held short, which is down slightly week on week. Allegations of anti-competitive conduct in the funeral sector and speculation the company is losing market share could be behind this high level of short interest.
• A2 Milk Company Ltd (ASX: A2M) has entered the top ten with short interest of 6.1%. There are concerns that weakness in the daigou channel and a resurgence in Chinese infant formula brands could weigh heavily on a2 Milk’s performance for some time to come.
• Alkane Resources Limited (ASX: ALK) has joined the top ten with 5.9%. This gold miner’s shares are down 28% since the start of the year. However, short sellers appear to believe they can still go lower. Though, it remains unclear why they are targeting the company.  

More reading

• Here’s why the Inghams (ASX:ING) share price is in focus
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• These were the worst performers on the ASX 200 last week
• Here’s why the Food Revolution (ASX:FOD) share price jumped 8% today
• Top broker tips Resolute Mining (ASX:RSG) share price to rise 180% from here

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and InvoCare 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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Zip Co Ltd (ASX: Z1P) shares have slipped ~30% in March and almost 50% from their February all-time record high of $14.53. While the Zip share price remains positive in year-to-date returns, how did things go so sour for the leading buy now, pay later (BNPL) provider?

What’s been impacting the Zip share price?

Pending update for potential US listing 

A potential catalyst for the significant run back in the Zip share price in late-January may have been the rumours surrounding the company’s secondary listing in the United States. Zip management spent several days in front of US investors, highlighting the company’s growth story in the world’s largest economy and attracting US investor interest. US tech shares typically fetch a higher valuation and a secondary listing could benefit the Zip share price. 

Two months on, however, and the market has yet to receive any clarification about a secondary listing. 

“Grim near-term outlook” 

Macquarie Group Ltd (ASX: MQG) released a research report on 24 March for Afterpay Ltd (ASX: APT) titled “Buy Now Pay 2030”. The report mapped out a 10-year flightpath for the BNPL industry, including key inflection points and key triggers. 

The report noted that: 

The BNPL industry has seen explosive growth in the past few years and quickly gained popularity as a payment alternative, but as with many other such trends experienced in the past (China Commodities in 2015, China Autos in 2018), we think an excessive number of participants has entered the industry in the near term resulting in industry overcapacity.

We expect this to be followed by a few years of industry consolidation (i.e. pain for all players) before industry normalisation at a healthier supply/demand equilibrium.

A relevant example could be ASX lithium shares that have experienced a similar boom, bust and consolidation cycle.

Despite the grim outlook, the commentary sees the industry become healthier at the end of the cycle, with the “strong getting stronger and the weak losing out”. 

Broader weakness for ASX tech shares 

The Zip share price slump since mid-February has largely coincided with the weakness across the broader tech sector. The S&P/ASX 200 Info Tech Index (ASX: XIJ) reached an all-time record high on 10 February, before falling ~17% to a 5-month low. This compares to the S&P/ASX 200 Index (ASX: XJO) which is relatively flat over the same period. 

More reading

• Are there any bargains when everyone knows everything?
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• 5 things to watch on the ASX 200 on Monday
• 2 of the best ASX growth shares to buy in April
• How does the Afterpay (ASX:APT) share price size up against US-listed Affirm?

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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