Xero Ltd (ASX: XRO) shares have been absolutely smashed.

The cloud accounting software company’s share price has plunged 13.95% to $82.69, marking a fresh multi-year low. In early trade today, the stock briefly fell as low as $81.81.

To put this move into context, Xero has not traded at these levels since early March 2023.

For a company once valued close to $200 per share, this sell-off has been absolutely brutal.

Let’s dive right in and see what’s driving the fall.

Tech stocks are being hit hard

The biggest factor behind Xero’s plunge is not company-specific news.

Instead, the sell-off is being driven by a major slump across the technology sector. The S&P/ASX All Technology Index (ASX: XIJ) is down a mammoth 7.77%, reflecting heavy selling across ASX tech stocks.

Investors are growing increasingly nervous about artificial intelligence disruption. There is a fear that rapid advances in AI could undermine traditional software businesses by automating tasks faster and cheaper than existing platforms.

That concern has triggered sharp declines in technology stocks globally, particularly companies that rely on subscription software revenue.

This creates a challenge for Xero because, while it is a high-quality business, it is also a premium-priced software company.

Some market participants worry that AI-driven accounting tools could, over time, reduce the need for traditional accounting software. As a result, investors appear to be de-risking and moving money away from tech stocks until there is more clarity.

What the latest update showed

Earlier this week, Xero released an investor briefing outlining its growth strategy.

Management highlighted strong long-term opportunities from artificial intelligence, as well as continued expansion in the United States following its acquisition of Melio.

However, the company also acknowledged that Melio is not expected to reach adjusted EBITDA breakeven on a run-rate basis until the second half of FY28.

What brokers are saying

Despite the sell-off, many analysts remain positive on Xero’s long-term outlook.

Macquarie has retained an outperform rating and recently raised its price target to around $234 per share, citing Xero’s strong competitive position and long-term growth potential.

Jefferies is more cautious, cutting its price target to about $101 due to margin pressure and the slower path to profitability from the Melio acquisition. Even so, that target still sits above the current share price.

Overall, brokers largely agree that the sell-off reflects tech-sector fear rather than a collapse in Xero’s fundamentals, with long-term growth drivers still intact.

Foolish Takeaway

Xero’s fall highlights how quickly sentiment can turn against premium-priced technology stocks.

While AI fears are driving much of the selling, investors want clearer proof that Xero can turn growth into profits. Until then, volatility is likely to remain elevated.

The post Xero crashes 14% to a multi-year low. What on earth is going on? appeared first on The Motley Fool Australia.

More reading

• Why Xero shares are now back in the buy zone
• Why Hot Chili, Jumbo, PYC, and Xero shares are sinking today
• Why Appen, Imricor, Qoria, and Xero shares are storming higher today
• 3 super ASX 200 shares I would buy and hold until at least 2036
• Xero shares charge higher on big AI and US update

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Jefferies Financial Group, Macquarie Group, and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s not every day you see a stock recommended with a return this high, but the Macquarie team have had a good look at Image Resources Ltd (ASX: IMA), and they like what they see.

Firstly, to the company’s most recent news, Image Resources in late January published its quarterly report, which showed that heavy mineral concentrate (HMC) production was up 30% quarter on quarter to 73,000 tonnes.

The company said sales totalled just more than 70,000 tonnes and cash receipts were up 98% quarter on quarter to $31.5 million.

For the calendar year, the company said it had produced 174,5000 tonnes of HMC, which was a slight miss to guidance of 175,000 to 195,000 tonnes.

The company also said it had closing cash of $7.7 million.

Record quarter celebrated

The company’s Chief Executive, Patrick Mutz, said the result was a record quarter for its Atlas operations.

Ore processing and ore grade increased 15% and 18% respectively quarter on quarter, which resulted in record HMC production and HMC sales which increased 30% and 44% respectively quarter on quarter. The quarter was highlighted with monthly record results in December of 30k tonnes HMC production and 34k tonnes HMC sales. “Importantly, C1 cash costs and AISC were both lower quarter on quarter and on a YTD basis, both were below the lower end of guidance. Revenue also improved substantially quarter on quarter by 25% despite softer commodity prices.

Mr Mutz said the company was on track to repay its outstanding debt in the second quarter of 2026 and was looking to further development activities.

Beyond operations at Atlas, our Development Team continues to assess the Company’s options to extend mining and production in the Atlas area through mining at Atlas North or nearby Hyperion, and to advance future development options beyond Atlas at the Company’s 100%-owned deposits at Yandanooka, Durack, and other Eneabba projects, as well as at Bidaminna and further into the future, the McCalls project.

Gold project options being considered

Mr Mutz said the company also in early January declared a maiden gold resource estimate of 2.1 million ounces at its Erayinia/King project, and the company was now “undertaking a strategic review to assess options to unlock value for shareholders from this asset given the current very buoyant gold market”.

Options being considered include divestiture or other commercial arrangements for all of Image’s gold tenements, as well as options for the development of the Erayinia/King project, including potentially in-house.

Macquarie has had a look at the quarterly result and said that while the price the company was paid for its commodities was 20% weaker than expected, costs were also better to the tune of 20%.

They added:

Image Resources is a nimble pure-play mineral sands producer that presents growth potential with project development at Durack and Yandanooka in the medium term.

The Macquarie team has a price target of 10 cents on the stock, which would be an 81.8% return if achieved.

The post Macquarie says this mineral sands miner could deliver better than 80% returns! appeared first on The Motley Fool Australia.

More reading

• Forget Zip shares, I’d buy this fintech stock instead
• Xero crashes 14% to a multi-year low. What on earth is going on?
• This financial stock could deliver better than 60% returns, one broker says
• Why Xero shares are now back in the buy zone
• Why is the battered Bitcoin price tumbling again today?

Motley Fool contributor Cameron England 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Credit Corp Group Ltd (ASX: CCP) took a hiding earlier this week when the company announced its first-half results were in line with last year.

Some shareholders saw that as a sign that it was time to head for the exits, selling the stock down from $14.28 last Friday to just $11.74 today.

But the team at Morgans have run their ruler over the result and believes the company has been oversold.

Steady as she goes

Firstl,y to the results, the company, which provides financial services to “the credit-impaired consumer segment”, said its US collections were up 23% on the previous corresponding period, and its loan book had grown 7% over the half year.

The net profit of $44.1 million “was in line with the prior year”.

The company also said it expected to have a stronger second half, with full-year net profit guidance reaffirmed as likely to be 6% to 17%.

Credit Corp Chief Executive Thomas Beregi said, despite generally mixed US economic data, the company had not experienced any deterioration in collection performance.

He said:

US debt collection outcomes, including payment arrangement delinquency, have not show any deterioration since mid-2023 despite a modest increase in unemployment over the same period.

In the Australia and New Zealand markets, the company said refreshed marketing and improved operational execution had produced record half-year loan volumes, with new customer volume up 25% on the same period last year.

Confident of a positive full-year result

The team at Morgans analysed Monday’s result and said the $44.1 million net profit was about a 10% miss to consensus estimates.

They went on to say:

Despite full year guidance being reaffirmed in this result, the mix shift in ledger investment towards Australia whilst US investment was downgraded would have been a key area of concern for the market (notably the competitive tension around pricing), in our view.   

Despite this, given that Credit Corp retained its full-year guidance, Morgans made only minor changes to its forecasts for the company. While it lowered its price target to $19.35 from $21.50, this still represents an impressive 64.8% return if achieved.

Keep in mind that the company is also paying a trailing fully-franked dividend yield of 5.7%.

Morgans went on to say re the outlook:

Execution in the USA is required to return Credit Corp to delivering medium-term growth and improving investor sentiment more broadly. The management team has a solid long-term track record of execution and recent earnings and data points show improving delivery. We view improved execution along with a valuation de-rating from historic multiples as providing favourable risk reward.  

The post This financial stock could deliver better than 60% returns, one broker says appeared first on The Motley Fool Australia.

More reading

• Forget Zip shares, I’d buy this fintech stock instead
• Why Brainchip, Credit Corp, Graincorp, and Neuren shares are falling today
• Credit Corp share price crashes 14% following H1 FY26 result

Motley Fool contributor Cameron England 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.

Xero Ltd (ASX: XRO) shares are taking a tumble today.

Shares in the S&P/ASX 200 Index (ASX: XJO) business and accounting software provider closed up 2.6% yesterday trading for $96.10. During the Wednesday lunch hour, shares are changing hands for $83.59 apiece, down 13%.

For some context, the ASX 200 is just about flat at this same time.

However, ASX tech stocks are broadly under pressure today, with the S&P/ASX All Technology Index (ASX: XTX) down 6.2%. That looks to be partly driven by weakness in US tech stocks on Tuesday, with the Nasdaq Composite Index (NASDAQ: .IXIC) closing down 1.4% overnight.

With today’s intraday losses factored in, Xero shares are down a sharp 54% over the past 12 months.

But with the ASX 200 tech stock now having lost more than half its value over a year, Morgans’ Damien Nguyen views it as an attractive opportunity (courtesy of The Bull).

Here’s why.

Xero shares on the growth path

“Xero is a global accounting software provider,” Nguyen noted late last week. “It offers an attractive medium term growth opportunity as subscriber momentum improves and operating leverage begins to flow through the business model.”

Commenting on his buy recommendation on Xero shares, he said:

The business continues to expand its footprint across key geographies, with cloud accounting penetration still well below potential, providing a long runway for adoption. Recent cost discipline has strengthened margins.

With the ASX 200 tech stock having gotten hammered over the past year, Nguyen concluded:

Despite a softer macroeconomic backdrop, resilient revenue growth is supported by price increases and a broader ecosystem of adjacent services. We view the current share price as an attractive entry point for long term investors.

What’s the latest from the ASX 200 tech stock?

Yesterday, Xero released an announcement highlighting the potential benefits of its AI features along with the growth opportunities in the United States.

Xero shares closed the day in the green after the company reported that more than four million global customers are now using its platform. And the company said that some two million Xero subscribers are benefitting from its AI features.

“We are deeply focused on capturing the global AI and US accounting plus payments TAM,” Xero CEO Sukhinder Singh Cassidy said. “Xero is well positioned to shepherd SMBs into the AI era and take advantage of this technology.”

The company also reaffirmed that it remains on track to meet its full-year FY 2026 guidance.

The post Why Xero shares are now back in the buy zone appeared first on The Motley Fool Australia.

More reading

• Why Hot Chili, Jumbo, PYC, and Xero shares are sinking today
• Why Appen, Imricor, Qoria, and Xero shares are storming higher today
• 3 super ASX 200 shares I would buy and hold until at least 2036
• Xero shares charge higher on big AI and US update
• Xero highlights AI progress and Melio momentum in US market update

Motley Fool contributor Bernd Struben 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 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.

The Bitcoin (CRYPTO: BTC) price is sliding today.

Again.

In early afternoon trade on Wednesday, the world’s first and biggest crypto is changing virtual hands for US$76,619 (AU$109,097). That’s down 2.4% over the past 24 hours and down 14.5% since this time last week, according to data from CoinMarketCap.

This sees the Bitcoin price down 24.8% over the last year, and it puts the token within a whisker of setting new one-year lows.

It was only on 7 October, less than four months ago, that Bitcoin investors were celebrating the token’s all-time high of US$126,198. But with momentum largely shifting to the downside since then, the world’s biggest crypto is now down 39.3% from those highs.

You’re unlike to hear much celebrating from Ethereum (CRYPTO: ETH) investors either.

The world’s second biggest crypto is down another 4% over the past 24 hours to trade for US$2,258. This sees the Ethereum price down 29.2% in a month and down a steep 54.1% since the token notched its own all-time highs on 22 August last year.

Here’s what’s been rattling crypto markets.

Why is the Bitcoin price going backwards?

Bohan Jiang, senior derivatives trader at FalconX, noted that frustrated crypto dip buyers are adding to the selling pressure (quoted by Bloomberg).

“A lot of the traders were trying to buy the dip, betting on a rebound above $80,000,” Jiang said. “As Bitcon drifts lower, a lot of those positions have been liquidated putting pressure on prices.”

Augustine Fan, partner at crypto options platform SignalPlus, pointed the finger of blame for the Bitcoin price rout at eroding investor sentiment.

“Crypto sentiment is hitting rock bottom,” Fan said. “Volatility has finally moved up after a yearlong move lower as traders scrambled for protection, with markets trading in bear-market mode.”

The Bitcoin price initially got a boost from the launch of various spot exchange-traded funds (ETFs) that directly tracked the token. But those ETFs now are adding to the selling pressure, with material outflows reported since November.

And, like most every risk asset, the token still remains highly sensitive to interest rate moves. With markets now pricing in fewer rate cuts from the US Federal Reserve (and the RBA moving to lift rates yesterday), the crypto looks to be facing added headwinds.

According to AirdropAlert.com’s Morten Christensen (quoted by Bloomberg), “Bitcoin still trades like a high-beta risk asset, not digital gold. That doesn’t mean the thesis is dead; it means it’s not there yet.”

The post Why is the battered Bitcoin price tumbling again today? appeared first on The Motley Fool Australia.

More reading

• What on earth is happening with the Bitcoin price?
• Is Bitcoin digital gold? It seems investors prefer the real thing
• How is Ethereum stacking up against the Bitcoin price so far in 2026?
• Bold calls, big risks, and what really matters for Bitcoin price in 2026
• Better Buy in 2026: XRP, Dogecoin, or Bitcoin?

Motley Fool contributor Bernd Struben 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 Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Northern Star Resources Ltd (ASX: NST) shares are surging on Wednesday, climbing 6.14% to $28.54.

The gains follow a sharp rebound in the gold price, which has lifted sentiment across the gold sector. Spot gold has pushed back above the key US$5,000 per ounce level after one of its strongest rallies in years.

That move has put Australia’s major gold producers back in focus, with Northern Star among today’s standout performers.

Gold back in favour

Gold prices jumped more than 2% overnight, extending a sharp rebound after recent volatility.

According to Trading Economics, spot gold is trading around US$5,018 per ounce, as investors returned to safe-haven assets amid geopolitical uncertainty and shifting interest rate expectations.

Gold’s recovery has been driven by a mix of factors. These include renewed tensions in global politics, expectations that interest rates may peak sooner than previously thought, and ongoing central bank buying.

Northern Star, one of Australia’s largest ASX-listed gold producers, is well placed to benefit from this environment. The company operates a portfolio of long-life assets across Western Australia and Alaska, giving it strong leverage to movements in the gold price.

Recent results still in focus

The share price lift also comes just days after Northern Star flagged a softer December quarter.

The company reported lower gold sales and slightly higher costs, which led to a trim in full-year guidance. That update weighed on the stock last month and triggered several broker downgrades.

However, today’s rally suggests investors are looking past near-term operational issues. With gold prices hovering near record highs, the focus has shifted back to longer-term earnings potential.

Northern Star is progressing with mill expansions and ongoing exploration across its core assets, which could support higher production and lower costs over time.

What brokers are saying

Broker views on Northern Star are mixed but broadly supportive. Several major investment banks continue to see upside from current levels.

Bell Potter recently reiterated a buy rating with a price target of $31.10, pointing to strong leverage to gold prices. Jefferies also maintains a positive stance, with a target of $30 per share.

On the more cautious side, UBS downgraded the stock to sell earlier this month, despite lifting its price target to $28.30. Other brokers, including Ord Minnett and Morgans, sit closer to neutral, citing cost pressures and recent operational challenges.

Overall, the average broker target sits around the $30 mark, suggesting the stock is fairly valued but still supported by gold’s strength.

Foolish Takeaway

Northern Star’s sharp rally highlights how quickly sentiment can shift when gold prices move.

Attention now turns to Northern Star’s first-half results on Thursday, 12 February 2026, where costs, production, and guidance will be closely watched.

The post This ASX gold stock is rocketing 6% today. Here’s why appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why Appen, Brightstar, Graincorp, and Northern Star shares are sinking today
• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 shares I would buy in February
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Wealth in the share market doesn’t usually come from one brilliant trade. In my experience, it comes from owning the right ASX shares early, sticking with them through the ups and downs, and continuing to invest along the way.

That’s why I’m drawn to smaller, high-quality ASX growth shares that still have long runways ahead of them. Not because they’re guaranteed winners, but because if they execute well over many years, the compounding can be powerful.

Here are three ASX shares that fit that mould for me.

Megaport Ltd (ASX: MP1)

Megaport is a good example of a business doing something essential rather than flashy. It provides on-demand connectivity between data centres, enterprises, and cloud providers. In simple terms, it helps move vast amounts of data quickly and flexibly across the world.

As cloud computing, artificial intelligence, and hybrid IT architectures become more complex, that flexibility matters more. What I like most is that Megaport isn’t standing still. The acquisition of Latitude has expanded it beyond connectivity into compute infrastructure, which deepens customer relationships and increases potential revenue per client.

This is still a relatively small company in the scheme of global digital infrastructure. If management executes and demand continues to grow, long-term shareholders could be rewarded. But it would likely be a journey with plenty of volatility along the way.

SiteMinder Ltd (ASX: SDR)

SiteMinder operates in a niche that quietly benefits from global travel without taking on the capital risk of airlines or hotels. Its software helps hotels manage bookings, pricing, and distribution across multiple channels.

What appeals to me here is the embedded nature of the product. Once a hotel relies on SiteMinder to manage room inventory and revenue, switching becomes inconvenient and risky. That creates stickiness and recurring revenue over time.

The global hotel market is enormous, and SiteMinder’s penetration remains relatively modest. If it continues expanding internationally and improving margins as it scales, the compounding effect over a decade or more could be meaningful. This isn’t about next quarter’s result. It’s about owning a platform that becomes more valuable as travel becomes more digital.

DroneShield Ltd (ASX: DRO)

DroneShield is probably the highest-risk name on this list, but also potentially the one with the most upside.

It develops counter-drone technology used by military, government, and critical infrastructure operators. As drones become cheaper and more capable, the need to detect and neutralise them grows. Unfortunately, this is not a problem that is going away any time soon.

What I find interesting is the mix of hardware, software, and increasingly recurring revenue through software upgrades and support. Defence procurement is lumpy, and share prices can swing wildly on contract timing. But if DroneShield continues to win credibility and expand its installed base, long-term value could build quietly behind the scenes.

Foolish Takeaway

I don’t buy ASX growth shares expecting instant results. I buy them because, over the long term, a small number of successful businesses can do an outsized share of the heavy lifting in a portfolio.

Megaport, SiteMinder, and DroneShield all operate in growing markets, are still relatively small, and have paths to becoming much larger businesses if things go right.

That doesn’t make them safe or certain. But for patient investors willing to invest consistently and think long term, these are the kinds of shares I believe can change the shape of a portfolio over time.

The post Could buying these ASX shares make me rich? appeared first on The Motley Fool Australia.

More reading

• These 2 ASX dividend shares are great buys right now
• 10 most traded ASX shares among 1 million Aussie investors last year
• Here are the top 10 ASX 200 shares today
• How DroneShield shares soared ahead of the benchmark in January
• These 3 ASX 200 shares have soared over 200% in a year!

Motley Fool contributor Grace Alvino has positions in DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield, Megaport, and SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small gain. The benchmark index is currently up 0.35% to 8,887.4 points.

Four ASX shares that have failed to follow the market higher today are named below. Here’s why they are falling:

Hot Chili Ltd (ASX: HCH)

The Hot Chili share price is down 3.5% to $1.87. This follows news that the gold developer has raised $40 million at a discount of $1.65 per new share. The company notes that upon completion of the capital raise, it will be well funded in 2026 to deliver strong growth and development milestones for the Costa Fuego copper-gold project, which is located in the coastal range of Chile. Hot Chili’s managing director, Christian Easterday, said: “We are delighted by the overwhelming support received from new and existing institutional investors, as well as our top three major shareholders, in the Placement. The strong participation from these groups highlights the confidence in our strategy to continue driving Hot Chili’s re-rate into a rising copper market.”

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is down 6% to $9.91. Investors have been selling this online lottery ticket seller’s shares despite it delivering a strong half-year update this morning. The company revealed that revenue is expected to rise 29% to $85.3 million in the first half, after total transaction value (TTV) increased 15.7% to $524.7 million. Underlying EBITDA is expected to be $37.5 million for the first half. This will be up 22.6% from $30.6 million in the prior corresponding period. This strong performance was achieved despite the broader lottery environment being relatively weak.

PYC Therapeutics Ltd (ASX: PYC)

The PYC Therapeutics share price is down 6% to $1.50. This has been driven by the completion of an institutional placement. The precision medicine company has attracted strong support from new investors and existing institutional shareholders. This saw PYC receive commitments for a total of $537 million at an offer price of $1.50 per new share. The financing has extended its cash runway through to 2030. This will allow PYC to deliver important human safety and efficacy data for all four of its drug development programs.

Xero Ltd (ASX: XRO)

The Xero share price is down 13% to $83.05. Investors have been selling this cloud accounting platform provider’s shares following a brutal selloff in the tech sector on Wednesday amid AI disruption concerns. This has seen the S&P/ASX All Technology Index sink over 6% this afternoon. Not even a number of bullish broker notes have been able to stop Xero shares from crashing. One of those was from Macquarie Group Ltd (ASX: MQG), which has retained its outperform rating with an improved price target of $233.80.

The post Why Hot Chili, Jumbo, PYC, and Xero shares are sinking today appeared first on The Motley Fool Australia.

More reading

• Why Xero shares are now back in the buy zone
• ASX 300 stock tumbles despite 22% profit jump
• Abacus Storage King weighs management internalisation: What investors need to know
• How many Macquarie shares do I need to buy for $1,000 of annual passive income?
• Why Appen, Imricor, Qoria, and Xero shares are storming higher today

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 Jumbo Interactive, Macquarie Group, and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. The Motley Fool Australia has recommended Jumbo Interactive. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Bellavista Resources Ltd (ASX: BVR) were surging higher on Wednesday after the company announced a significant capital raise at a discount.

This is unusual, as a company’s share price tends to head south when a decent capital raise is announced, but the explanation might lie in news that came out earlier in the week.

Deal flow enticing shareholders

Bellavista announced on Monday that it had struck an agreement with fellow gold company FireFly Metals Ltd (ASX: FFM) to acquire 70% of the Pickle Crow gold project in Ontario, Canada, and to exercise the option to increase that interest to 80% subject to some conditions.

The Pickle Crow project has an inferred mineral resource of 2.8 million ounces of gold at a grade of 7.2 grams of gold per tonne, the company said on Monday.

Bellavista added in its statement on Monday that it believed there was “immense exploration upside” at Pickle Crow and other landholdings in the Uchi and Wabigoon belts in Canada, and it would be kicking off an “aggressive” exploration campaign.

Firefly said in its release on Monday that it would be paid 60 million Bellavista shares and 50 million performance rights for the Pickle Crow project, with an aggregate value of $86.1 million.

The $1.5 billion company would then distribute these shares to its own shareholders by way of a pro-rata, in-specie distribution.

Well-funded for exploration

Back to the capital raise, Bellavista said it would have $32 million in cash after raising the new money at 75 cents per share, with the proceeds to be used to exercise the Pickle Crow earn-in and to fund exploration programs in Canada and at its Brumby project in Western Australia.

The money would be raised in two tranches, with $16 million of the new raise requiring shareholder approval.

Bellavista Managing Director Glenn Jardine said the capital raise was well-received.

We are extremely pleased with the level of support for the Company and the proposed acquisition of up to an 80% interest in the Pickle Crow Project and additional exploration tenure in Ontario, Canada from FireFly Metals, as shown by this highly successful capital raising. Bellavista will emerge well-funded to aggressively explore the Pickle Crow project (subject to completion of the Acquisition) which has seen limited exploration since 2023. We believe the project has significant exploration upside with the large, high grade gold resource remaining open along strike and down dip and we have ambitious growth plans with the right team in place to drive that growth.

Bellavista shares were 8.2% higher at 85.5 cents at about noon on Wednesday.

The company was valued at $80.4 million at the close of trade on Tuesday.

The post Why are shares in this gold developer heading higher after a capital raise? appeared first on The Motley Fool Australia.

More reading

• ASX All Ords shares smashing 52-week highs today

Motley Fool contributor Cameron England 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.

Yesterday, amid resurgent inflation, ASX investors were faced with the first RBA interest rate hike since November 2023.

That was back when Australia’s central bank lifted the official cash rate to 4.35%.

Which is where rates remained until February 2025, when the RBA delivered its first cut since November 2020. And in case you’ve forgotten, in November 2020, the cash rate was cut to a rock bottom 0.10% in an, erm, effort to spur ‘stubbornly missing’ inflation.

Careful what you wish for!

Following two more rate cuts in 2025, the benchmark interest rate stood at 3.60% on Tuesday morning. But on Tuesday afternoon, the RBA board announced in a unanimous decision that it was boosting the cash rate to 3.85%.

“The board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures,” the board noted.

And ASX investors hoping for a reprieve later in the year may be left wanting.

“The board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target,” the RBA noted. The board now doesn’t expect inflation to return to its 2% to 3% target range until 2028.

The big question now is not so much when Australia’s central bank may move to cut interest rates, but rather if you should be buying ASX shares with the prospect of another rate hike on the horizon.

The RBA’s next two rate-setting meetings are on 17 March and 5 May.

With that question in mind, we turn to the economists at Commonwealth Bank of Australia (ASX: CBA).

What is CBA forecasting for RBA interest rates?

“Inflation is simply too high for the RBA at this stage, and the central bank has signalled a stronger resolve to bring it back within target,” CBA head of Australian economics Belinda Allen said.

“This is ultimately a fine‑tuning exercise. But unless inflation materially undershoots in the March quarter, the RBA is unlikely to pause in May,” she added.

CBA expects the RBA to hold tight in March, with the official interest rate then likely to be lifted by another 0.25% at the central bank’s May meeting.

According to Allen:

As previously flagged, the risk always sat with a second rate hike to bring inflation back towards target and the economy back into balance. With the labour market now in a better position than a few months ago, and an increased resolve from the RBA, on the balance of probabilities we now see the RBA hiking again in May to take the cash rate to 4.10%.

Of course, a May rate hike is not locked in.

Allen concluded:

It would take a material undershoot in inflation in the March quarter for them to not hike the cash rate again in May. But this is a close call and will also depend on other data flow, particularly the labour market as well as high frequency indicators.

With yesterday’s rate hike largely expected, the S&P/ASX 200 Index (ASX: XJO) closed the day up 0.9%.

The post Buying ASX shares? Here’s what CBA says to expect from interest rates following Tuesday’s RBA hike appeared first on The Motley Fool Australia.

More reading

• Why are shares in this gold developer heading higher after a capital raise?
• Buy, hold, sell: A2 Milk, ARB, and Wesfarmers shares
• 2 strong Australian stocks to buy now with $5,000
• Here’s what Bell Potter is saying about PLS shares in February
• Why are shares in this biotech charging higher after a capital raise?

Motley Fool contributor Bernd Struben 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.