Tag: Motley Fool

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Shares in WAM Capital Limited (ASX: WAM) are rising following the release of the equity manager’s investment portfolio performance for the 2021 calendar year.

At the time of writing, the WAM Capital share price is $2.20, up 0.92%.

Let’s take a look.

WAM Capital share price up on news of 17.1% portfolio gain

There was plenty to share in WAM’s update today. The company made these key announcements:

• Gain of 17.1% in WAM’s investment portfolio performance for the 2021 calendar year
• 15.5 cents per share annualised FY22 fully franked interim dividend
• 7.1% FY22 annualised fully franked interim dividend yield
• 7% total shareholder return in the 2021 calendar year
• Fully franked dividend of 7.75 cents per share announced today
• Annualised grossed-up dividend yield of 10.1% based on Thursday’s closing price of $2.18.

What else did WAM Capital announce in its update today?

WAM Capital advised it had a total shareholder return (capital gains + dividends) of 5.3% in the 6 months to 31
December 2021.

WAM Capital said in a statement that the gain mirrored “the company’s investment portfolio performance and the slight increase in share price premium to net tangible assets (NTA)”.

In further commentary, WAM Capital said:

In the same period, the investment portfolio increased 4.8% outperforming the S&P/ASX All Ordinaries Accumulation Index with an average cash holding of 12.9%. In the 2021 calendar year the investment portfolio increased 17.1% with an average cash holding of 10.9%.

These results led to an alpha generation above the S&P/ASX Small Ordinaries Accumulation Index of 0.2% for 2021 and 0.7% for the trailing 3-years of portfolio returns.

However, the portfolio lagged the All Ords by -0.6% after expenses, fees, taxes, and capital management initiatives.

It was also a busy period for WAM on the corporate finance side. In October for instance, the company acquired an unlisted investment company with net assets totalling around $36.3 million.

Perhaps the biggest update was WAM’s takeover bid for PM Capital Asian Opportunities Fund (ASX: PAF). This got the green light in late December last year.

Finally, in December, WAM Capital, Westoz Investment Company Ltd (ASX: WIC) and Ozgrowth Limited (ASX: OZG) announced they will merge under separate transactions. WAM started the party by aiming to buy Westoz in an all-scrip deal in the same month.

“We estimate the accretion from the corporate activities for FY22 will be approximately 1.9% and will generate over $34.0 million in value for WAM Capital shareholders,” the company said.

Management commentary

Speaking on the announcement, WAM Chairman and Chief Investment Officer Geoff Wilson AO said:

Pleasingly, since inception in August 1999, WAM Capital has consistently delivered returns to shareholders and has paid 269.50 cents per share in fully franked dividends.

WAM Capital Lead Portfolio Manager Oscar Oberg also said:

I am pleased with the performance of the investment portfolio for shareholders during the period as Australia emerged from coronavirus lockdowns and economies began rebounding. We remain focused on our investment process and are positive on small and mid-cap companies going forward.

What’s next for WAM Capital?

The ex-dividend date for the interim dividend is 6 June. Shareholders will be paid on 17 June.

After the proposed merger with Ozgrowth and Westoz, WAM says it “will grow its net assets to approximately $2.0 billion”. This will give WAM Capital a market capitalisation of over $2.3 billion.

“The Board of Directors believe the Proposed Transactions will provide WAM Capital shareholders with appealing benefits including the issuance of new shares at a premium to the Company’s underlying NTA, a reduced management expense ratio and access to greater on-market liquidity,” the release concluded.

WAM Capital share price snapshot

In the last 12 months, the WAM share price has barely moved, faltering by just 0.68%.

It is down 1.12% since 1 January compared to a 6.5% fall for the S&P/ASX 200 Index (ASX: XJO).

The post ‘Solid performance’: WAM Capital (ASX:WAM) share price spikes after portfolio update appeared first on The Motley Fool Australia.

More reading

• Here are 3 ASX dividend shares with grossed-up yields over 5%
• WAM (ASX:WAM) share price unmoved despite victory in PAF acquisition fight
• Own WAM Capital (ASX:WAM) shares? Here’s how the share price performed in 2021

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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Key Points

• Boral shares tank 40% on capital return and ex-dividend date
• Eligible shareholders set to receive $2.72 per share
• Payment expected on Monday 14 February

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The Boral Limited (ASX: BLD) share price is by far one of the worst performers on the S&P/ASX 200 Index(ASX: XJO) today.

The building materials company’s shares are down a mammoth 41.04% to $3.85. This means that its shares are now trading at a 17-month low following the COVID-19 impact on Boral’s operations.

Why are Boral shares in freefall?

The Boral share price is sinking on Friday after going ex-dividend along with a massive capital return to shareholders.

Earlier this week, management announced a $3 billion return of surplus capital to shareholders following a string of asset sales.

In 2021, Boral offloaded its North American Building Products, 50% owned Meridian Brick businesses, and Australian Building Products businesses.

The company has been busy with its divestment strategy, focusing on strengthening core assets and delivering improved returns.

As of today, each eligible shareholder will receive a total cash distribution of $2.72 per share. This consists of a $2.65 per share equal capital reduction, totalling $2,923 million and an unfranked dividend of 7 cents per share, totalling $77 million.

The decision to distribute the proceeds follows the vote in favour at the company’s annual general meeting in late October.

Boral recently engaged with the Australian Taxation Office (ATO) in regards to the tax implications of the capital reduction.

As such, the ATO confirmed that no part of the capital reduction will be treated as a dividend for Australian taxation purposes.

Boral expects the ATO to issue a class ruling soon in respect to how the income will be treated.

Shareholders can expect to receive the return of capital and dividend on Monday 14 February.

Boral share price snapshot

Due to today’s significant drop, the Boral share price is down 27% over the last 12 months.

When looking at year to date, its losses extend to more than 35%.

Based on today’s price, Boral presides a market capitalisation of around $4.34 billion, with over 1.1 billion shares on its books.

The post Did the Boral (ASX:BLD) share price really just collapse 40%? appeared first on The Motley Fool Australia.

More reading

• Why Amcor, Boral, Nufarm, and Westpac shares are rising today
• Why Boral, Carsales, Credit Corp, and PointsBet shares are racing higher
• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return
• Boral (ASX:BLD) share price takes off amid $3b return of capital
• The Boral (ASX:BLD) share price is surging 5% on Friday. Here’s what might be going on

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Bitcoin (CRYPTO: BTC) takes a lot of criticism for its extensive energy use. According to Cambridge Bitcoin Electricity Consumption Index, Bitcoin uses about .29% of the globe’s energy . That is a whopping amount of energy, but this figure doesn’t tell the whole story.

This statistic tells us nothing about how Bitcoin uses the energy, the type of energy it is using, or any external effects this energy use has. Although it may seem counterintuitive, it could be argued it’s a good thing that Bitcoin uses as much energy as it does.

What is the energy actually used for?

In order to discuss Bitcoin’s usefulness, we need to cover what the energy is actually used for. Bitcoin has three strict rules that the energy is used for:

1. Keep the maximum supply of bitcoin at 21 million coins.
2. Produce a 1MB block roughly every 10 minutes to store transactions on the blockchain.
3. Don’t change the first two rules.

Ultimately, Bitcoin uses a significant amount of energy to secure and protect its network from an attack. An attack could theoretically stem from an entity that wishes to alter the core parameters of its protocol. This entity may try to alter three main things: the supply, the block size, or the block schedule.

This entity might want to change the block schedule — and thus the supply of Bitcoin — in order to profit from newly created Bitcoin. Or, someone may want to increase the block size, which would increase the number of transactions per second Bitcoin can handle (this has been flagged as a potential threat to Bitcoin’s decentralization, as doubling the block size would increase hardware requirements for node runners, which in turn would decrease the number of people that could run their own Bitcoin node).

As it turns out, the ruleset that was configured at Bitcoin’s launch were calibrated to maximize decentralization, If someone wanted to change the rules in any way, they would need to acquire more electricity than what the network is already using, and a massive fleet of computers.

A task like that would prove difficult even for the largest of nations .

What the energy is not used for

The energy bitcoin uses is not directly used to process transactions. The network will use the energy to produce a block (or a packaged set of transactions), regardless of whether or not there are transactions within the block. Processing transactions is a byproduct of block production, not the purpose.

The type of energy Bitcoin uses

The Bitcoin Mining Council estimates that around 58.5% of the network is powered by renewable energy . Bitcoin miners routinely search for the cheapest forms of energy because they can make more money.

Bitcoin incentivizes miners to find cheaper forms of energy production because to mine Bitcoin, all that is required are computers that run on electricity. The cheaper the energy, the less the miner spends mining blocks. When a miner mines a block, they’re rewarded with BTC, which they can then sell to recoup the cost of energy. This often leads miners to deploy their operations next to renewable energy sources such as hydroelectric, wind, and solar. These renewable energy farms can sell electricity cheaper than non-renewable sources which means Bitcoin mining companies can make more money.

A buffer for the grid

Bitcoin’s heavy energy usage, therefore, creates more demand for these renewable forms of energy. Bitcoin can actually be a 24/7 buyer-of-last-resort for these energy farms, when retail and industrial buyers might be offline, asleep, or when the energy would have otherwise just been dumped (known as curtailment) . This allows bitcoin to act as a buffer for the grid, and smooth out energy production — and profits. This leads to more profitability for both bitcoin mining farms and green energy providers. The profits can then be used to reinvest in new green energy projects, accelerating the rate at which the globe transitions to a greener energy grid.

An acknowledgement of waste

Bitcoin is not perfect by any means. It is run by computers which have their own carbon footprint to produce. The solar, hydro, and electric energy sources also have an environmental cost to produce. Lastly, around 41.5% of Bitcoin’s energy use still comes from non-renewable sources, such as coal and fossil fuels. But every useful industry produces waste of some sort; no one is exempt. But, Bitcoin is about transitioning to a more sustainable and reliable financial system. And it could be argued that this is accelerating the rate at which more sustainable sources of energy production is used for such processes.

Bitcoin puts the energy to good use

Bitcoin uses energy to protect the integrity of the network, ultimately securing about $1 trillion worth of bitcoin. But there are also positive externalities that come from bitcoin using as much energy as it does. It buys energy from suppliers that may not otherwise have a buyer. It prefers cheaper, and therefore greener energy sources, aiding in the necessary rapid transition to a greener grid. So, many are comfortable with bitcoin using as much energy as it does.

They would also argue it’s a good thing to have bitcoin use this energy to secure their investments, and everyone else using the network to store, save, and transact value. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Bitcoin using lots of energy actually a good thing? appeared first on The Motley Fool Australia.

More reading

• Bitcoin price slides again. Here’s what crypto investors are watching
• Why these five cryptos could leave Bitcoin in the dust in 2022
• What are Stablecoins and how do they differ from other cryptocurrencies?
• Here’s why the leading cryptocurrencies are ticking higher
• Bitcoin has crashed 45%: but its fundamentals remain the same

Keegan Francis owns Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin. The Motley Fool Australia owns and recommends Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Key Points

• Carnaby Resources share price lifts off on copper gold discovery
• The results indicate extension potential of the deposit
• Further exploration is ongoing

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The Carnaby Resources Ltd (ASX: CNB) share price is off to the races today, up 33% to $1.80 per share.

Below, we take a look at the ASX resource explorer’s drill results that look to be stoking investor interest today.

What exploration results were announced?

The Carnaby Resources share price is rocketing after the company reported a major copper gold discovery at its Nil Desperandum Prospect, within the Greater Duchess Copper Gold Project, located in Queensland.

According to the release, a reverse circulation (RC) drill hole (NLRC066) intersected a strong 50 metre down hole zone of copper sulphide mineralisation from 250 metres to bottom of hole. Based on visual estimates, the zone contains up to 30% chalcopyrite. Assay results are pending.

The Carnaby Resources share price could also be getting a boost from the company’s report that the visual intercept confirms that the copper mineralisation in the adjacent drill hole (NLDD044) “has a similar dip to shallower parts of the deposit and therefore downhole widths are close to true width intersections for both NLDD044 and NLRC066”.

As the company reported on 29 December, NLDD044 intersected 41 metres at 4.1% copper.

This morning, Carnaby also highlighted that results from the first 3 new lines of Induced Polarisation (IP) southwest of NLDD044 have “outlined a continuous 300-metre-long with the copper sulphide mineralisation in NLDD044”.

Commenting on the discovery, Carnaby Resources’ managing director, Rob Watkins said:

It is highly encouraging and exciting to confirm that the high-grade copper gold mineralisation intersected in NLDD044 and now in NLRC066 are over exceptional true widths. This gives us great confidence in the plunge extension potential of the high-grade Nil Desperandum breccia shoot.

This is especially significant given that the results from the first three extensional lines of IP all show strong and continuous chargeability anomalies, which we know is vectoring us to high grade copper gold mineralisation as seen in NLDD044.

Carnaby said that extensive drilling and IP surveys are ongoing. The explorer expects to report results from another 3 lines of IP “shortly”.

Watkins said his team is looking forward to the next IP and drill hole results “with incredible anticipation”.

Carnaby Resources share price snapshot

The Carnaby Resources share price is up an eye-popping 567% over the past 12 months. For comparison, the All Ordinaries Index (ASX: XAO) has gained 5% over the same time.

So far in 2022, Carnaby Resources shares are up 15%.

The post Boom! Carnaby Resources (ASX:CNB) share price rockets 33% on ‘major discovery’ appeared first on The Motley Fool Australia.

More reading

• Here’s why the Carnaby (ASX:CNB) share price is rocketing 33% today
• Why is the Carnaby Resources (ASX:CNB) share price melting 22% today?

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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Key points

• CBA shareholders dip into buy now, pay later-style home loans
• Many first home buyers can’t afford the required deposit
• OwnHome plans to buy 200 homes for approved customers

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Commonwealth Bank of Australia (ASX: CBA) has reported a new investment in the home loan space.

If you own CBA shares, you’ll want to know about rent-to-own start-up, OwnHome.

What investment did CBA announce?

CBA, via its wholly-owned subsidiary x15ventures, said it has joined with SquarePeg to invest in OwnHome’s Series A fundraising round. Funds will be used to drive OwnHome’s growth ambitions.

With house prices soaring, particularly in proximity to the capital cities, many new home buyers can’t afford the required deposit for a new mortgage — usually 20% of the purchase price.

That’s where OwnHome steps in, enabling “approved, credit-worthy customers” to move into a home and pay for their deposit over time via monthly payments. They then have the option to buy that home at a pre-set price after 3–7 years. And they can use the deposit they’ve been paying towards the purchase.

Not unlike purchasing your new bedroom set with a buy now, pay later (BNPL) service.

Commenting on CBA’s investment, Toby Norton-Smith, managing director of x15, said: 

Housing affordability is a challenge for many Australians, particularly young people and their families. We believe OwnHome will provide an alternative path to home ownership, particularly for first home buyers who are responsible savers but aren’t able to rely on the bank of mum and dad for help with the deposit.

Angus Sullivan, CBA’s group executive retail banking services, added:

As Australia’s largest lender to first homebuyers, innovating and improving the home buying journey is the cornerstone of what we are doing to help our customers and today’s investment in OwnHome will provide greater choice to those who dream of home ownership but seek a different route to the traditional rent-and-save approach.

OwnHome currently has some 3,500 applicants on its waiting list. The company intends to buy 200 homes for approved customers over the next 2 years.

How have CBA shares been tracking?

Over the past 12 months, CBA shares have gained 7%, outpacing the 5% gain posted by the S&P/ASX 200 Index (ASX: XJO).

So far in 2022, the CBA share price is down 9%.

The post Own CBA (ASX:CBA) shares? Here’s how the bank is investing in BNPL-style home loans appeared first on The Motley Fool Australia.

More reading

• Hunting for ASX shares? Experts say to avoid this sector in 2022
• What can the Westpac results tell us about the outlook for ASX 200 bank shares?
• Top brokers name 3 ASX shares to sell today
• Why these brokers think that the CBA (ASX:CBA) share price is a sell
• How are ASX bank shares responding to the RBA’s interest rate call?

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 Telstra Corporation Ltd (ASX: TLS) share price has been on form this week.

This follows a positive response from the market to its new $1.6 billion “nation-building” projects.

The first project is building ground-based infrastructure (satellite base stations) and the fibre network/backhaul connecting those base stations across Australia. This will create the “largest-scale satellite solution deployment in the nation’s history.”

Whereas the second project involves a ~6x upgrade to Telstra’s extensive inter-capital fibre network. This will enable “ultrafast connectivity between capital cities and improved regional connectivity.”

What are analysts saying about the projects?

A number of analysts have been looking at Telstra’s bold plans and have given their verdict on them.

Goldman Sachs commented: “We are positive on the Viasat contract, which drives incremental near-term earnings. However, the returns on the intercity fibre investment are less clear.”

While the broker believes the latter will allow Telstra to “capitalize on the significant demand for dark fibre services from Cloud Service Providers,” it believes the “investment is in response to competing network builds such as HyperOne, which would negatively impact TLS existing intercity earnings.”

Goldman Sachs has a neutral rating and $4.40 price target on Telstra’s shares.

What else is being said?

The team at Morgans has also given its opinion on Telstra’s plans.

Its analysts said: “These two projects are largely around expanding TLS’s already extensive fibre network to increase coverage and capacity across Australia. Both projects are, to some extent, fibre backhaul upgrades across the country and have, in our view, some duplicate uses (eg base stations may need inter-capital fibre).”

“It can be argued that much of Project#2 is business as usual as TLS needed to upgrade its legacy inter-capital networks to meet growing data requirements from customers. Offsetting this, management expects to derive net new business (incremental earnings streams) from Project#2,” it added.

Morgans has an add rating and $4.56 price target on its shares. This implies potential upside of almost 14% based on the current Telstra share price.

The post What are analysts saying about Telstra’s (ASX:TLS) $1.6bn ‘nation-building’ projects? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Thursday
• Energy stocks surge and RBA hoses down the chances of a rate rise. Scott Phillips on Nine’s Late News
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Why Aussie Broadband, BrainChip, Talga, and Telstra shares are pushing higher
• Telstra (ASX:TLS) share price climbs on new $1.6 billion ‘nation-building’ projects

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Following Meta Platforms‘ (NASDAQ: FB) flop of an earnings report last night, shares of rival social media stock Snap (NYSE: SNAP) suffered a sympathetic crash. As of 11:20 a.m. ET Thursday morning, Meta stock was down 24.5%, and Snap was down 20.5%.

So what

Meta Platforms missed on earnings, only barely beat on sales estimates for the fourth quarter of 2021, and predicted as much as a 10% sales miss for the first quarter of 2022. And that poor performance appears to have upset investors in Snap as well.  

One investor in particular, investment bank KeyBank, announced this morning that it is cutting its price target on Snap stock by more than half, and it pointed to Meta Platforms’ earnings report as part of the reason. As TheFly.com reports, KeyBank cut its Snap price target to $36 per share, and despite maintaining an overweight rating on the stock, it sees “ongoing ad measurement headwinds” driving shifts out of social media, and warns that Snap will also suffer “margin pressure from investment.”

Now what

What KeyBank really seems to be saying here is that it worries investors won’t pay as high a multiple for Snap’s sales — not that it doesn’t like the stock. Indeed, it bears repeating that KeyBank still considers Snap stock a buy, and that even the banker’s lowered price target still implies 40% upside.

Is that likely to happen? Perhaps. While Snap remains deeply unprofitable based on generally accepted accounting principles (GAAP), the company is finally approaching break-even free cash flow (FCF), burning only $7 million in cash over the last 12 months — versus more than $700 million burned in 2018, for example.

Analysts forecast Snap to report that full-year FCF finally turned positive in 2021, and will grow rapidly toward $3.1 billion in real cash profits by 2025 — meaning that Snap stock currently costs only about 13 times its cash profits three years from now.

If that’s how things actually turn out, I suspect that come 2025, investors will look back at KeyBank’s “buy” call on Snap stock today and realize it was right. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Snap stock just collapsed appeared first on The Motley Fool Australia.

More reading

• Why is the PlaySide Studios (ASX:PLY) share price on pause today?
• Hunting for ASX shares? Experts say to avoid this sector in 2022
• Here’s why the PointsBet (ASX:PBH) share price is charging higher today
• REA (ASX:REA) share price higher after smashing first half expectations
• Why Meta shares cratered on Thursday

Rich Smith has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Key points

• PlaySide Studios in a trading halt following BEANS Web 3.0 non-fungible token (NFT) launch
• Follows collaboration with an independent third party to issue and mint NFT collections
• BEANS social media Discord channel growing its member base at a fast pace

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The PlaySide Studios Ltd (ASX: PLY) share price isn’t going anywhere on Friday.

This morning the company requested its shares be placed in a trading halt before the market open.

At yesterday’s closing bell, the video game developer’s shares finished the day at $1.015 apiece. It’s worth noting the company’s shares have gained more than 18% in value in the past week.

Why is PlaySide Studios in a trading halt?

PlaySide Studios requested the trading halt while the company prepares an announcement.

The company says it is planning to release a statement on or before Tuesday 8 February. The request for the trading halt relates to the results of its BEANS Web 3.0 non-fungible token (NFT) launch.

Metaverse & Web 3.0 PlaySide previously commenced research and development efforts for the Metaverse and Web 3.0 initiatives.

Over the course of the last few months, Playside used its original IP technology and expertise to develop an NFT-based project. The goal is to link NFTs to multiple products and environments, creating a unique experience for its member base.

At 4am today, the new series called BEANS was launched, which is based on the Dumb Ways to Die brand.

PlaySide Studios has been engaging with an independent third party to issue and mint the NFT collections, as well as manage the sale and proceeds.

The BEANS social media Discord channel has amassed more than 79,000 followers since launching on 6 January.

About the PlaySide Studios share price

Since this time last year, the PlaySide Studios share price has gained almost 200% in value.

However, in 2022, the company’s shares are down by a tad over 7% following the broader market sell-off.

Based on valuation grounds, PlaySide Studios has a market capitalisation of roughly $146.45 million. There are approximately 144.29 million shares outstanding.

The post Why is the PlaySide Studios (ASX:PLY) share price on pause today? appeared first on The Motley Fool Australia.

More reading

• PlaySide Studios (ASX:PLY) share price climbs on record revenue
• 2 growing small cap ASX shares to watch
• Playside Studios (ASX:PLY) share price rockets 18%. What’s going on?
• 2 exciting ASX tech shares that actually jumped last month

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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Key points

• As inflation rises, and interest rates are expected to follow, many market watchers are looking to big banks
• However, T. Rowe Price’s Nick Vidale believes investors should be “cautious” of the banking sector
• He worries about the sector’s earnings and banks’ ability to cash in on interest rate increases

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It’s been an interesting start to 2022 for ASX shares. With inflation rising and talk interest rates might follow, there’s one sector many market watchers have firmly in their sights – S&P/ASX 200 Index (ASX: XJO) banks.

But T. Rowe Price investment analyst Nick Vidale isn’t buying what the big banks are selling in 2022.

Here’s why the expert is warning investors to be cautious of the major banks this year.

Are ASX bank shares a buy for 2022?

Many might be scratching their heads as to why a professional might be bearish on banks during a time of potentially rising interest rates. Particularly as ASX 200 banks have been performing notably well lately.

Over the past 12 months, the only big bank to underperform the ASX 200 is Westpac Banking Corp (ASX: WBC), which has fallen 3%.

The index has gained 4% in that period. Meanwhile, the share prices of National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Commonwealth Bank of Australia (ASX: CBA) have gained 13%, 9%, and 7% respectively.

But Vidale has a number of good reasons as to why T. Rowe Price is keeping an eye on the sector.

The first: Banks’ earnings. Many banks downgraded their earnings at the start of the COVID-19 pandemic, often due to net interest margin compression and impairments.

While much of their earnings have recovered, the expert isn’t convinced of their stability.

“The earnings composition of the banks now, compared to 2 years ago, is much more driven by low impairments,” said Vidale. “So, the quality of the earnings now is lower.

“And this leads us to be cautious because, if and when we move into an impairment cycle, the downgrades could be more pronounced than we saw previously.”

Are banks ready for interest rate rises?

Rising interest rates normally spell good news for banks as it allows them to reprice loans. But Vidale worries ASX 200 banks might not be able to capitalise on increasing interest rates this time around.

“Much of the discussion around rising interest rates comes back to how the banks will benefit from that,” he said. “But actually, we think this doesn’t take into consideration what’s happening with the major banks at an industry level.”

Previously, 15% to 20% of Australian home loans were fixed-price loans, leaving banks able to reprice 80% to 85% of mortgages quickly when rates rise.

Over the course of the pandemic, however, borrowers have taken advantage of a low-interest-rate environment with more opting for fixed-rate mortgages. In fact, in the second half of 2021, 35% of Australian home loans were fixed-rate loans. Vidale continued:

This creates 2 problems. The first is, it reduces banks leverage to rising interest rates. The second is, it could potentially create customer churn 2 to 3 years down the track when customers come up to refinance their mortgage.

As customers look to refinance their mortgages in 2 years’ time, we’re going to get a lot of customer churn and we think that will put pressure down on net interest margins.

[F]rom industry structure perspective, even though rates are good for banks, is it possibly going to be negated by the competitive pressures that take place within the banking sector.

The post Hunting for ASX shares? Experts say to avoid this sector in 2022 appeared first on The Motley Fool Australia.

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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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The PointsBet Holdings Ltd (ASX: PBH) share price has been a strong performer on Friday morning.

At the time of writing, the sports betting company’s shares are up 4% to $5.09.

Why is the PointsBet share price pushing higher?

The PointsBet share price is rising today following the release of an update on its North American operations.

According to the release, the company’s wholly-owned PointsBet Canada business has officially been approved by the Alcohol and Gaming Commission of Ontario as a licensed sportsbook in Ontario. This license will become effective on 4 April 2022.

PointsBet notes that Ontario is Canada’s most populous province and its second largest geographically. It covers more than 1 million square kilometres and is home to Ottawa, Canada’s capital. Ottawa has a population of over 14.8 million people and a host of professional sports teams.

“A momentous step”

PointsBet Canada’s Chief Executive Officer, Scott Vanderwel, appeared delighted with the news.

He commented: “Since day one, we have remained genuine to our promise of building a Canadian sportsbook, with Canadian employees, for the Canadian market. Today’s approval of PointsBet Canada as a licensed sportsbook in Ontario effective April 4, 2022, is a momentous step in unveiling our authentically Canadian gaming experience to the province. In just 60 days, PointsBet Canada’s unmatched speed and ease of use, unrivalled in-game betting capabilities, and unique local partnerships will bring Ontario sports fans a new, responsible, and dynamic form of sports betting and entertainment.”

This sentiment was echoed by PointsBet Canada’s Vice-President, Legal, Compliance & People, Chantal Cipriano.

She said: “We are proud to be one of the first iGaming operators regulated by the Alcohol and Gaming Commission of Ontario. It demonstrates the confidence that regulators have in our ability to deliver an innovative, safe, and responsible experience to Ontario consumers. We look forward to applying our expertise from Australia and the United States to help build a trusted, competitive, regulated iGaming market in Ontario, establishing an important foundation for our nation.”

The post Here’s why the PointsBet (ASX:PBH) share price is charging higher today appeared first on The Motley Fool Australia.

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• Why Boral, Carsales, Credit Corp, and PointsBet shares are racing higher
• Broker says PointsBet (ASX:PBH) share price could have 90% upside
• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return
• These were the worst performing ASX 200 shares in January

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. owns and has recommended 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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