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The Berkeley Energia Ltd (ASX: BKY) share price has exploded in the past month to its highest price since July 2021.

The company’s shares have skyrocketed nearly 157% since the market close on 24 February. The shares were swapping hands at 56 cents, up 21.74% at the close of trading today.

Let’s take a look at what has been going on with this ASX uranium miner.

This ASX uranium share is surging

The Berkeley share price has soared amid rising uranium prices. Trading economics data reveals the uranium price has surged 34% in a month and 97% in a year. Uranium futures hit more than US$59 a pound amid concerns over Russian supplies.

Berkeley has also explained possible reasons for the share price gains. On 17 March, the company responded to a price and volume query from the ASX.

The company said it noted recent rises in the trading of its shares on the Spanish Stock Exchange. Berkeley explained Russia’s invasion of Ukraine had led to high energy and uranium prices in Europe. Berkeley added:

There have been news articles in the Spanish and European press referring to nuclear power being assessed as a viable alternative to decrease Europe’s dependence on Russian energy.

This has already seen the French government order its state energy company, EDF, to establish new reactors as part of plan to strengthen France’s energy security and to sell more nuclear power into the European energy market, and other European governments commence reviews of their existing energy policies.

This has led to the significant strengthening of the uranium spot price.

Berkeley shares have surged nearly 186% since 24 February on the Spanish Stock Exchange. On the London Stock Exchange, the company’s listing has soared nearly 175%.

In H1 FY22 results on 15 March, the explorer reported a net profit of more than $3 million.

This compared to a $32.6 million loss in the prior corresponding period. The outlook for nuclear power improved during the half. Berkeley noted China is planning at least 150 new nuclear reactors in the next 15 years.

The company also noted a US congress infrastructure bill including US$6 billion for existing zero-carbon nuclear facilities. France is also planning to build more nuclear reactors, Berkeley reported.

Berkeley share price snapshot

The Berkeley share price has fallen 10% in the past 12 months, while it is up 146% this year to date.

In the past month, Berkeley shares have soared 163%, including a 69% rise in just the past week.

Berkeley has a market capitalisation of about $252 million based on the current share price.

The post This ASX uranium share has rocketed 157% in a month. What’s the deal? appeared first on The Motley Fool Australia.

More reading

• XTEK (ASX:XTE) shares rocket on ‘urgent supply of specialist ballistic armour’
• Look out Treasury Wine (ASX:TWE), there’s a new shiraz on the block
• Woodside (ASX:WPL) share price climbs as oil extends rally. What’s next?
• The Suncorp (ASX:SUN) share price has struggled in 2022. Could this be set to change?
• Analysts name 2 excellent ASX growth shares to buy and hold

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 Xtek Ltd (ASX: XTE) share price exploded today after the company provided a positive announcement to the ASX.

Xtek shares finished the day up 10.87% to 25.5 cents. This means that, in the past month alone, the defence contractor’s shares have risen by more than 45%.

What did Xtek announce?

Investors reacted positively to the company’s latest announcement, driving up the Xtek share price.

In its release, Xtek advised it received a purchase order for the urgent supply of specialist ballistic armour products. This came from an “undisclosed international customer”, suggesting it might possibly be for end-use in Ukraine.

Recently, the Australian government announced an expanded $21 million military support package for Ukrainian armed forces. This brings the total defensive military assistance for the former Soviet country to $91 million.

The latest Xtek order is valued at $3.2 million, with urgent delivery now underway.

The ultra-lightweight and high-performance body armour plates and ballistic helmets are manufactured in Columbus and Ohio. However, the patented XTclave capability is located in Adelaide, South Australia.

Most notably, the lightweight armoured plates are already being used by government agencies in Australia and Finland.

Commenting on the news driving up the Xtek share price today, CEO Scott Basham commented:

We supply these world-class, advanced personal protection ballistic products and solutions to militaries, law enforcement agencies, and first responder customers all around the world.

Xtek’s Ballistics Division is working at pace to manufacture our highly sought-after specialist ballistic products, and we are in constant discussions with many other international customers as they develop their ballistic armour requirements.

What does Xtek do?

Defence company Xtek specialises in a range of products for government agencies, law enforcement, military and space and commercial sectors.

Key products include ballistic armour, lightweight and tactical human load carriage equipment, robotic mechanical systems and unmanned crafts.

About the Xtek share price

Despite today’s strong gains, the Xtek share price has lost more than 50% in value over the last 12 months.

Its shares reached as low as 16.5 cents late last month, before rebounding to December 2021 levels today.

Based on valuation grounds, Xtek presides a market capitalisation of roughly $25.41 million.

The post XTEK (ASX:XTE) shares rocket on ‘urgent supply of specialist ballistic armour’ appeared first on The Motley Fool Australia.

More reading

• This ASX uranium share has rocketed 157% in a month. What’s the deal?
• Look out Treasury Wine (ASX:TWE), there’s a new shiraz on the block
• Woodside (ASX:WPL) share price climbs as oil extends rally. What’s next?
• The Suncorp (ASX:SUN) share price has struggled in 2022. Could this be set to change?
• Analysts name 2 excellent ASX growth shares to buy and hold

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 Bruce Jackson.

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The Treasury Wine Estates Ltd (ASX: TWE) share price finished in the red today amid news a rival could be coming for a Penfolds icon.

A Victorian winery has launched its own luxury shiraz and media are reporting it could compete with Penfolds Grange.

As of Thursday’s close, the Treasury Wine share price is $11.66, down 1.02% on the day.

For context, the S&P/ASX 200 Index (ASX: XJO) gained 0.12% today.

Let’s take a closer look at the newest entrant in Australia’s premium wine market.

Is Penfolds Grange facing new competition?

Move over Penfolds, another luxury shiraz is hitting the market. This time, it’s from Victoria.

Yarra Valley winery Levantine Hill Estate has launched what is expected to be Victoria’s most expensive new release wine – with an $800 per bottle price tag.  

It’s released the 2017 Levantine Hill Optume Shiraz and the 2017 Levantine Hill Optume Cabernet Sauvignon.

The wines are extremely limited. Only 65 dozen of the shiraz and 58 dozen of the cabernet sauvignon will be available to purchase.

And while Levantine Hill owner and founder Elias Jreissati describes the wine as the “polar opposite” of Penfolds Grange, he told The Australian it will compete with the South Australian icon on price point.

Optume is entirely created in the Yarra Valley. Though, the bottles it’s sold in are imported from France.

It’s made using the region’s best cabernet sauvignon and shiraz, creating what Levantine Hill managing director Samantha Jreissati describes as “the optimum expression of a GI-specific, cool climate wine”.

Though, Optume is still slightly cheaper than Grange. The most affordable bottle of Grange is priced at $950 while the most expensive retails at $2,500.

Not to mention, a bottle of Penfolds Grange Hermitage Bin 1 Shiraz 1951 was sold at auction for $157,624 in December 2021, making it the most expensive bottle of Australian wine ever sold.

Treasury Wine share price snapshot

It’s unlikely today’s comparisons between Penfolds Grange and Levantine Hill Optume have dampened the Treasury Wine share price.

Though, the company’s stock has been struggling on its own lately. It has fallen 6.3% since the start of 2022. For comparison, the ASX 200 has fallen 2.7% over the same time frame.

Though, the Treasury Wine share price is still 7.4% higher than it was this time last year. That’s not far off the benchmark index’s 8.8% gain.

The post Look out Treasury Wine (ASX:TWE), there’s a new shiraz on the block appeared first on The Motley Fool Australia.

More reading

• Here’s why the Treasury Wine (ASX:TWE) share price is tipped to outperform
• Top brokers name 3 ASX shares to buy next week
• 5 ASX shares to ride out the 2022 volatility: expert
• Why has the Treasury Wine (ASX:TWE) share price surged 10% in a month?
• Broker names 3 of the best ASX 200 shares to buy in March

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates 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 Woodside Petroleum Limited (ASX: WPL) share price closed 2.79% higher today at $33.20.

Meanwhile, Brent Crude futures shot up midweek and had finished almost 6% higher by end of play on Wednesday. Brent now trades at US$121.44 per barrel on last check.

As oil extends its rally this week, hydrocarbons players such as Woodside have latched onto the momentum and are set to print solid fundamentals, some experts say.

Woodside share price spikes as oil extends rally

Brent Crude has slowed down today and is trading sideways. But momentum from a huge upswing these past few days is being felt in oil and gas stocks around the world, including the Woodside share price.

The United States Brent Oil Fund LP ETF (NYSEARCA: BNO) saw heavy inflows this week and had jumped 16.5% before US market open on Thursday, according to Bloomberg data.

Meanwhile, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA: XOP) has climbed more than 9% this past week and is up more than 34% this year to date.

Woodside has climbed more than 7% in a week and, if it continues at this pace, is well on track to surpass its 52-week highs of $34.41 on 7 March.

Shown on the chart below is its return against each of these benchmarks since November 2021.

Not to mention, natural gas futures have rallied hard this year and are now up 23% for the previous month of trade.

Oil prices have spiked again this week after Russia explained oil exports via a Kazakhstani pipeline feeding into the Black Sea might be slashed by around one million barrels per day, The Wall Street Journal reports.

According to the report, this represents around 1% of global aggregate oil demand. The halt could last up to two months, after it was reported the pipeline was affected by storm damage.

It’s yet to be seen what direction oil will head next – after all, it only has three options. The same can be said for the Woodside share price.

Woodside shares have climbed more than 37% in the past 12 months and are up 52% this year to date. During the past month of trade, they have spiked 15%.

The post Woodside (ASX:WPL) share price climbs as oil extends rally. What’s next? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• The Woodside (ASX:WPL) dividend is being paid today. Here’s what you need to know
• 5 things to watch on the ASX 200 on Wednesday
• Woodside (ASX:WPL) shares spike as oil rises back above $100/barrel
• 2 leading ASX 200 shares to watch as fundies rebalance portfolios

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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It’s been a rollercoaster week so far for the Block Inc CDI (ASX: SQ2) – formerly named Square – share price, and today is no different.

After gaining around 9.2% on Monday, the payment services provider’s stock tumbled 5.1% on Tuesday.

It turned its slip around on Wednesday to gain another 7.49%. Unfortunately, it’s handing back much of that today.

At the time of writing, the Block share price is $183.19, 2.61% lower than its previous close.

However, at its intraday low of $179.29, the Block share price was recording a 4.68% drop.

So, what’s weighing the company’s stock down today? Let’s take a look.

Why is the Block share price in the red on Thursday?

Block’s stock is suffering alongside many of its S&P/ASX 200 Index (ASX: XJO) peers.

The S&P/ASX Information Technology Index (ASX: XIJ) is the worst-performing ASX 200 sector today, having slipped 1.03%. Meanwhile, the S&P/ASX All Technology Index (ASX: XTX) is down 0.96%.

And while the sector struggles, Block is proving to be one of its biggest weights.

Its dip is only surpassed by the share prices of Life360 Inc (ASX: 360) and Megaport Ltd (ASX: MP1). They’ve fallen 2.74% and 2.61% at the time of writing.

On the opposite end of the spectrum, the EML Payments Ltd (ASX: EML) share price is the sector’s best performer, having gained 3.07%. Meanwhile, that of TechnologyOne Ltd (ASX: TNE) is up 0.48%.

Computershare Limited (ASX: CPU) stock is also in the green, having gained 0.08%.

And for comparison’s sake, given Block is the owner of former market-darling Afterpay, the Zip Co Ltd (ASX: Z1P) share price is suffering today.

It has fallen 6.08% at the time of writing despite no news released by the buy now, pay later company.

The Block share price’s slide comes after its New York listing tumbled 4.5% overnight.

The NASDAQ Index also suffered in yesterday’s session, slipping 1.32%.

The post Back to square one? Block (ASX:SQ2) share price gives back half of yesterday’s gains appeared first on The Motley Fool Australia.

More reading

• 3 beaten-down technology ASX shares to buy right now: expert
• Why is the Block (ASX:SQ2) share price going gangbusters today?
• Why Block, Calix, Carnarvon, and Imugene shares are racing higher
• Leading the pack! ASX tech shares storm higher on Wednesday
• ASX 200 (ASX:XJO) midday update: Block and Zip jump, Fisher & Paykel Healthcare sinks

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc., EML Payments, Life360, Inc., MEGAPORT FPO, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. and EML Payments. The Motley Fool Australia has recommended MEGAPORT 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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Shares in Suncorp Group Ltd (ASX: SUN) are edging lower on Thursday to now trade at $11.18 apiece in afternoon trade.

ASX financials have strengthened in 2022 and Suncorp is no exception. It has risen around 1% in that time, having surfed its way through a wavy run in that time.

Still, Suncorp is lagging the broader sector, with the The S&P/ASX 200 Financials index (XFJ) spiking harder than both names this year to date.

What are brokers saying about Suncorp?

Analysts at JP Morgan are neutral on the stock and value Suncorp at $13.30 per share in a note last week.

The firm refers to a recent update from Suncorp advising its assessment of the East Cost floods that occurred in the rollover fro February–March.

“Whilst [Suncorp] say perils and reinsurance allowances may increase for FY23, they [Suncorp] say there is upside expected on interest rates vs original expectations that offsets this,” the broker said.

“Uncertainty remains still on scope creep from the government’s cyclone pool that could affect how flood risks are dealt with in the future”.

Even though the broker says Suncorp appears to be in a “consolidation phase”, where margins are likely to benefit in FY22, it is still cautious due to headwinds in the bank’s personal lines business.

“We note, however, thatthe Australian personal lines business still faces challenges around achieving unit and price growth,” its analysts remarked.

“We think the bank is also operating in a challenging and competitive environment that will place pressure on its NIM [net interest margin] over the short and medium term,” it added.

“We are still of the view that SUN’s medium-term insurance margin and bank cost-to-income targets remain ambitious”.

Meanwhile, analysts at Citi reckon that Suncorp’s underlying business should improve, especially if interest rates rise to offset insurance-related costs.

Even though it trimmed FY22 EPS forecasts by roughly 2% in a recent note, it still remained firm on FY23 projections and retained its buy rating with a $13.60 price target.

Macquarie values the bank at $15 per share, whereas Morgan Stanley agreed with Citi, in that it likes the bank’s underlying business growth.

It too values Suncorp at $13.14 per share, slightly off consensus of $13.32 according to Bloomberg data.

Will the price performance change? Well, according to these brokers, it could do. But 25% of analysts covering the stock still have it as a hold right now, whilst 75% remain bullish, according to Bloomberg.

In the last 12 months, Suncorp shares have walked 12% higher and are now 1% in the green this year to date. Over the past month however, shares have slipped and are now 4% in the red.

The post The Suncorp (ASX:SUN) share price has struggled in 2022. Could this be set to change? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Magellan jumps on buyback news, travel shares take off
• Suncorp (ASX:SUN) share price dips amid rising flood claims
• ‘$2 billion cost’: How are the floods impacting ASX 200 insurance shares this week?
• Why Betmakers, Fortescue, Suncorp, and Tyro shares are falling
• Here’s why the Suncorp (ASX:SUN) share price is slipping today

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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Are you interested in making some long term investments in ASX growth shares? If you are, you may want to look at the two listed below that have recently been named as buys.

Here’s what you need to know about these ASX growth shares:

Adore Beauty Group Limited (ASX: ABY)

The first ASX growth share to look at is Adore Beauty. It is an integrated content, marketing and e-commerce retail platform that partners with a broad and diverse portfolio of approximately 270 brands and 11,700 products.

Adore Beauty has been growing at a strong rate over the last decade and continued during the first half of FY 2022. The company reported a 18% increase in revenue to $113.1 million and a 13% lift in active customers to 876,000. It also reported a 5% improvement in annual revenue per active customer to $224, which equates to an annual run rate of $196.2 million.

This is still only a very small slice of the Australian beauty and personal care (BPC) market, which is currently estimated to be worth $11.2 billion. So, as more sales shift online, Adore Beauty appears well-placed for growth in this niche but lucrative market.

The team at Shaw and Partners is very positive on Adore Beauty’s future. The broker currently has a buy rating and $3.50 price target on its shares.

Webjet Limited (ASX: WEB)

Another growth share for investors to look at is online travel agent, Webjet.

For obvious reasons, it has been hit incredibly hard by the pandemic. But it is worth remembering that so were its competitors, with many not faring anywhere near as well as Webjet.

Goldman Sachs is very positive on the company’s future. It believes Webjet will come out stronger on the other side of the pandemic with growth potential both in the B2B and B2C spaces. And while the pandemic isn’t over just yet, Goldman highlights that Webjet has the balance sheet capacity to ride out the storm until late 2023 on zero activity.

Not that it expects this to be necessary. Goldman is forecasting a return to profit in FY 2023, with dividends even recommencing with its final dividend of that financial year.

In light of this, the broker believes investors should be buying its shares now with a long term view. Goldman currently has a buy rating and $6.90 price target on Webjet’s shares.

The post Analysts name 2 excellent ASX growth shares to buy and hold appeared first on The Motley Fool Australia.

More reading

• Why has March been such a lousy month for the Webjet (ASX:WEB) share price?
• Why has the Webjet (ASX:WEB) share price surged 9% in two weeks?
• 2 retailer ASX shares ready to make you rich: experts
• These are the 10 most shorted ASX shares
• Goldman Sachs tips Webjet (ASX:WEB) share price to rise over 20%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Webjet 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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It is another painful day for the Zip Co Ltd (ASX: Z1P) share price. It is down by another 7%, meaning it’s close to the price last seen in the March 2020 ASX share market crash when it went under $1.30.

Long-term Zip shareholders may not want to read the following two sentences. Over the last six months, the Zip share price has fallen almost 80%. In the 2022 year to date, Zip shares are down 64%.

What’s happening to the Zip share price?

The buy now, pay later (BNPL) business has seen a significant sell-off as investors reassess the growth and profit potential of the company.

Rampant inflation in the US is causing the US Federal Reserve to reassess how much it needs to increase the interest rate in 2022.

The boss of the Federal Reserve, Jerome Powell, recently spoke of how the Fed could raise rates by more than 25 basis points next month:

The labor market is very strong, and inflation is much too high.

We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting, or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.

Zip is planning to buy BNPL competitor Sezzle Inc (ASX: SZL). Sezzle has seen its share price drop 78% over the past six months.

The broker UBS thinks that it is going to take even longer for Zip to reach cash flow breakeven and that the business will be less profitable than previously expected. UBS has a Zip share price target of just $1.

Warning of lower cash profitability

Zip told investors in its FY22 half-year result that its unit economics were suffering.

During the six months to December 2021, Zip said that the cash transaction margin declined to 2.1%, down from 3.7%. The lower margin was due to rising bad debt costs with the current credit headwinds as well as an increased weighting towards the rest of the world.

How is Zip tackling this? It is addressing its risk decisioning policies and collections and recoveries processes to manage the credit performance immediately. Management also said that it’s well funded with available financing to support its global growth plans.

Zip share price snapshot

In the past year, the Zip share price has fallen 81%. According to the ASX, its market capitalisation has almost fallen below $1 billion.

The post The Zip share price is down 7%, close to March 2020 lows appeared first on The Motley Fool Australia.

More reading

• Why Aurelia Metals, Janus Henderson, ResMed, and Zip shares are dropping
• ASX 200 (ASX:XJO) midday update: Brickworks impresses, Uniti confirms takeover approach
• Why is the Zip share price getting smashed so much more than other BNPL stocks in 2022?
• Leading the pack! ASX tech shares storm higher on Wednesday
• ASX 200 (ASX:XJO) midday update: Block and Zip jump, Fisher & Paykel Healthcare sinks

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. 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 S&P/ASX 200 Index (ASX: XJO) is having another positive, if bouncy, day of trading on the markets today. At the time of writing, the ASX 200 is up by a tentative 0.13% at just under 7,400 points.

But let’s dive deeper into these market moves and take a glance at the companies that are currently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Nickel Mines Ltd (ASX: NIC)

Nickel Mines is our first ASX 200 share up this Thursday. This nickel miner has had a substantial 15.75 million of its shares trade on the share market thus far. There’s not much to report on out of the company itself. however, Nickel Mines shares have suffered some volatility today and are currently down by a noticeable 2.21% at $1.31 a share at the present time. It’s probably these two factors that are responsible for this elevated trading volume that we are seeing. 

Whitehaven Coal Ltd (ASX: WHC)

Coal miner Whitehaven is next up today. This ASX 200 resources company has had a notable 16.25 million shares change owners so far this Thursday. Not only has Whitehaven been buying back its own shares of late, which would boost trading volumes in itself. But the company is also having a stellar day of performance today. Whitehaven shares are currently up an impressive 5.18% at $4.136 a share, just a whisker off of the new 52-week high of $4.41 that we saw earlier today. It’s this combination that is almost certainly responsible for this high trading volume. 

AVZ Minerals Ltd (ASX: AVZ)

Our final and most traded ASX 200 share for today thus far goes to lithium hopeful AVZ Minerals. An eye-catching 34.66 million AVZ shares have found their way around the markets at the current time. Like Whitehaven, AVZ has had both a pleasing share price gain today, as well as a new 52-week high. AVZ shares are presently up a whopping 7.3% at $1.10 a share after hitting a new high watermark of $1.14 a share earlier this afternoon. Again, it’s probably this combination that has resulted in AVZ Minerals topping the ASX 200’s volume charts as it currently stands. 

The post These 3 ASX 200 shares are topping the volume charts on Thursday appeared first on The Motley Fool Australia.

More reading

• 5 ASX mining shares smashing 52-week highs today
• The AVZ Minerals (ASX:AVZ) share price has boomed a whopping 36% in a week. What’s the deal?
• Top broker tips Nickel Mines (ASX:NIC) share price to rise 40%
• Is the Appen (ASX:APX) share price on the comeback trail?
• ASX 200 (ASX:XJO) midday update: Brickworks impresses, Uniti confirms takeover approach

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 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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If you own Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares, you own part of the first Australian bank to launch – and transact with – its own cryptocurrency.

The stablecoin created by ANZ is called A$DC and is pegged to the Aussie dollar. That means it won’t be subject to the wild volatility experienced by most cryptos, including Bitcoin (CRYPTO: BTC), the world’s first.

What are stablecoins?

Not all ANZ shareholders will be familiar with stablecoins.

In a nutshell, they’re a type of crypto that, if they behave as intended, closely mirror the value of a fiat currency they’re linked with. Or potentially a basket of fiat currencies.

Stablecoins are valued not for their potential to make crypto investors outsized gains, but rather for their stability. Crypto investors might use them to invest in Bitcoin, Ethereum (CRYPTO: ETH), or any of the wide range of altcoins in virtual circulation, as well as non-fungible tokens (NFTs).

Stablecoins, as we’ll see with ANZ’s maiden transaction below, can also be used to send large amounts of money internationally quickly, and at very low costs.

The third biggest crypto by market cap is in fact a stablecoin. Tether (CRYPTO: USDT) is closely aligned to the US dollar and has a total market valuation of US$80.9 billion.

There’s also rival stablecoin USD Coin (CRYPTO: USD), which ranks as the fifth-largest crypto in virtual existence with a market valuation of US$52.6 billion.

Own ANZ shares? Here’s why the bank launched its own crypto

Commenting on ANZ’s decision to launch its own crypto, Nigel Dobson, banking services portfolio lead at ANZ, said (quoted by The Australian Financial Review): “We anticipate the digital asset economy will accelerate and a foundational element will be a digital Aussie dollar.”

According to Dobson:

Our customers want to buy digital assets and seeing a digital Australian dollar minted by a large ADI like ANZ will make them confident they can transact with us, and use the coin domestically. This means they don’t have to flip in and out of US dollar coins, taking exchange risk in an elongated process.

As the AFR reported, ANZ’s maiden crypto transaction with A$DC enabled investment company Victor Smorgon Group to send $30 million to Zerocap, a crypto asset platform.

The advantage of using ANZ’s new crypto?

The transaction that would have taken a number of days using traditional financial systems was completed in 10 minutes.

It also saved currency conversion costs, negating the need to convert Aussie dollars into greenbacks, as Zerocap makes use of USD Coin to transact in cryptos like Bitcoin and Ethereum.

And if that’s not enough for you, A$DC is also programmable.

Dobson explained:

We see our digital coin will be programmable for our customers’ needs. Where our coin needs to speak to, or understand, communications from other smart contracts, we have an ability to design that code, to communicate with a tokenised physical asset.

While ANZ’s institutional customers will be the first to have access to A$DC, the bank said the token will eventually be listed on a crypto exchange for wider use.

What the experts are saying on the ANZ crypto launch

Global exchange Kraken’s managing director for Australia, Jonathon Miller, said: “It’s commendable, and rational, for ANZ to use the most utilised public blockchain, Ethereum.”

Miller continued:

It proves that these open source protocols are alternate financial services networks which offer many advantages over traditional closed source rails. In particular transparency, composability/programmability and ultimately greater utility for individuals and businesses.

Miller said the Reserve Bank of Australia would do well “to replicate similar openness” in its proposal for a retail central bank digital currency (CDBC).

Ian Lowe, CEO of crypto wealth management platform Dacxi, said: “It was only a matter of time before we saw banks in Australia follow other Western markets with this kind of stablecoin offering, and we definitely welcome the move as it will continue to drive mainstream adoption of cryptocurrency.”

Lowe added:

We believe that continued adoption of blockchain technology by mainstream institutions indicates that tokenisation, where assets such as gold and silver are made available as digital investments on a blockchain, is also headed for more widespread adoption, vindicating our ongoing investment in the space.

Daniel Sekers, managing director of crypto trading platform YourPortfolio, was also enthusiastic about ANZ’s crypto launch.

“It’s fantastic to see a big four ADI adopting web3.0 technology. There is no doubt that stablecoins are going to play a big part in our future and we will likely see multiple AUD-backed stablecoins as the future of our nation’s currency,” he said.

Sekers continued:

I have no doubt that off the back of ANZ’s announcement we will likely see a flurry of new stablecoins announced. This will be the beginning of multiple transactional on-and-off ramps that will change the payments space for the better.

The key questions consumers should be asking themselves before they dive into any stablecoin is who is behind it? Is it truly asset backed? And what is its utility to me as a consumer?

How have ANZ shares been tracking?

ANZ shares are down 0.6% today, as the S&P/ASX 200 Index (ASX: XJO) struggles back to a 0.1% gain itself.

So far in 2022, the ANZ share price is down 1.0%, compared to a loss of 2.7% posted by the ASX 200.

The post Own ANZ shares? The ASX 200 bank just became the first to launch its own crypto appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns 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 Bruce Jackson.

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