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Shares in gold exploration company Pacgold Ltd (ASX: PGO) are booming today and have now surged 61% into the green. They’re now trading at 79 cents a share.

Investors are responding positively to a company announcement on its Alice River Gold Project in North Queensland before market open today.

Shares spiked from the opening bell and have been riding high every since. Let’s take a closer look.

Why is the Pacgold share price charging higher?

Pacgold provided an update on drilling assay results following completion of the diamond (DD) and reverse circulation (RC) drill programme at its Alice River Gold Project, west of Cooktown.

The project consists of 13 tenements, comprised of eight mining leases and five exploration tenements. They cover an area of 377 km.

A total of 39 holes were completed at the site, comprised of 2,007m in the DD programme and 5,018m via RC drilling.

Pacgold has received results for 25 holes, with results pending for the remaining 14 holes, including 7 holes targeting the “newly discovered high-grade gold zone”.

New assay results from drilling at the zone that lies below and along strike of the historical open pit have extended the high-grade gold zone reported in late 2021, according to the company’s announcement.

The company says that “high-grade intersection in [hole] ARDH026 is drilled 60m below the recent PGO drill intersection of 26m @ 3.6g/t Au from 104m incl. 3m @ 21g/t Au from 126m and shows a strong increase in gold grade and width of mineralisation from surface to a depth of at least 210m”.

It also advised that “multiple visible gold occurrences (results pending) [were] intersected in drilling 130m along strike from ARDH026”. The company announcement says assay results for a further 7 holes completed into the zone are expected to be received over the next 5 weeks.

Pacgold notes that drilling success to date and “confirmation of [its] mineralisation model unlocks enormous scope on the Project, with significant potential for the system to define a large-scale resource”.

The company now believes that the high-grade gold zone could extend over 700m in strike from greater than 100m depth below the surface and remains open in all directions.

Management commentary

Speaking on the announcement, Pacgold Managing Director Tony Schreck said:

This excellent result in drill hole ARDH026 represents a pivotal advance for our Alice River Project, providing compelling indications we have just intersected the top of a large, high-grade gold system only 100m below surface. We have achieved rapid success applying the gold mineralisation model based on the tier-1 Donlin gold deposit in Alaska, which suggested potential higher grades as we transition deeper into the system. Results are pending for an additional 7 drill holes completed over 250m strike, targeting the zone between 100m to 320m below surface. All 7 holes intersected broad zones of alteration and veining associated with the target, including a 1m interval (ARDH027) with strongly disseminated visible gold.

The Pacgold share price has climbed more than 35% this year to date and has rallied 192% in the last 12 months.

The post 61% spike: This just caused the Pacgold (ASX:PGO) share price to hit new peaks appeared first on The Motley Fool Australia.

More reading

• Australasian Metals (ASX:A8G) share price leaps 20% on big lithium news
• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded
• Could Macquarie (ASX:MQG) become Australia’s second-biggest bank in 2022?
• Here’s why the Immuron (ASX:IMC) share price is rocketing 31% today
• Exactly who will own Sydney Airport (ASX:SYD) following its takeover and why does it matter?

The author has no positions 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) has bounced back and is charging higher. The benchmark index is currently up 0.85% to 7,453 points.

Here’s what is happening on the ASX 200 today:

Afterpay-Block takeover approval

The Afterpay Ltd (ASX: APT) share price is charging higher today after the Bank of Spain approved Block’s takeover of the buy now pay later provider. This means the deal can now complete and Afterpay’s shares will be suspended from trade later next week. They will then be replaced with ASX-listed Block CDIs which will trade under the SQ2 ticker code.

Fortescue shares downgraded

The Fortescue Metals Group Limited (ASX: FMG) share price is falling on Wednesday. This follows the release of a broker note out of Citi which revealed that it has downgraded the mining giant’s shares to a sell rating with a $17.20 price target. The broker made the move largely on valuation grounds.

Liontown offtake agreement

The Liontown Resources Limited (ASX: LTR) share price was up as much as 13% this morning after returning from its trading halt. This was driven by the announcement of the lithium developer’s first offtake agreement. Liontown will supply one of the world’s premier battery manufacturers, LG Energy Solution (LGES), with 150,000 dry metric tonnes (dmt) per annum of spodumene concentrate when production commences at Kathleen Valley. This is almost a third of its start up production.

Best and worst ASX 200 performers

The best performer on the ASX 200 today has been the Nickel Mines Ltd (ASX: NIC) share price with a 6.5% gain. This follows a strong rise in the nickel price overnight. It rose 5.5% to US$21,986 per tonne. Going the other way, the worst performer has been the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price with a 3% decline on no news.

The post ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded appeared first on The Motley Fool Australia.

More reading

• Here’s why the Liontown (ASX:LTR) share price is rocketing 13% higher
• Why this top broker says the Fortescue (ASX:FMG) share price is overinflated
• Afterpay-Block takeover approved: Here’s what happens to your shares
• 2 ASX 200 shares that could be top buys for dividends
• 5 things to watch on the ASX 200 on Wednesday

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 Afterpay Limited. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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Capping off a tremendous year on the chart, shares in Macquarie Group Ltd (ASX: MQG) are in hot focus for investors as we ease into the first quarter of 2022.

Although the S&P/ASX 200 Financials Index (XFJ) has slipped less than 1% in the red over the last week of trading, it remains up 3% for the month. Macquarie has lagged the broad index in that time and is up just 1.5% at the time of writing.

Macquarie nudged past several milestones last year. For instance, it eclipsed the illustrious $200 per share mark in October and has since climbed more than $5 per share to today’s session.

This momentum permeated an impressive hallmark for the bank, positioning it as the 4th largest bank in Australia by market cap.

Macquarie now replaces ANZ in the notorious “big 4 of banking” group that has held the mantlepiece for all these years.

And with several of the banking majors facing stress both in operations and on stock prices already this year, it begs the question – could Macquarie become Australia’s second-biggest bank in 2022? Here’s what the experts think.

What’s in store for Macquarie in 2022?

Fundies are constructive on the Macquarie share price too. The bank is a core holding across several managed accounts.

For instance, Medallion Financial managing director Michael Wayne previously told Tony Yoo of The Motley Fool that his team continues to hold Macquarie shares for many clients.

Although, Wayne also reckons that “It is hard to be a buyer at these levels, and our preference would be to buy after a decent pullback”.

Perennial Value Management’s Stephen Bruce also told The Motley Fool that Macquarie is one holding that the firm would keep for many years into the future.

“If you continue on with the green and energy transition theme, Macquarie largely invented it”, Bruce says when estimating what Macquarie’s outlook might be in 4 years time.

Citi is also bullish on Macquarie and values the bank at $226 per share. The firm was unfazed by Macquarie’s recent share purchase plan (SPP) that garnered considerable open interest from shareholders.

Macquarie will accept the SPP applications in full, and “expects to issue approximately 6.8 million fully paid shares for $1.3 billion” says Citi.

Meanwhile, each of JP Morgan, Morgan Stanley and Jefferies reckon Macquarie is a buy right now. In fact, in a list of analysts covering the bank provided by Bloomberg Intelligence, 61.5% of coverage has it as a buy whereas just 1 firm advocates to sell.

Could it reach the number two spot?

In terms of market capitalisation, Macquarie is the ‘smallest’ entrant into the big 4 group at a fully diluted market value of $78 billion.

Commonwealth Bank of Australia (ASX: CBA) closes out the group on a $173.6 billion market capitalisation and therefore holds the top spot.

Macquarie would therefore need to surpass National Australia Bank Ltd. (ASX: NAB)’s market value of circa $95 billion to claim the silver medal.

Macquarie has more than 353 million basic shares outstanding and a fully diluted share count of 381.4 million shares.

As such, using some back of the envelope calculations, Macquarie would need to trade at $249 per share in order to surpass NAB in terms of market capitalisation and take second place, according to those stipulations.

With a 12-month price target of $212 per share, the bank might find some difficulties getting there, but time and market mechanics will certainly tell.

Either that or the NAB share price needs to take a big step backwards and trade well below its current levels for the same outcome.

In the last 12 months, the Macquarie share price has soared to new peaks and climbed more than 50% in that time. In the past month, it is up more than 3% and has started the year in the green as well.

The post Could Macquarie (ASX:MQG) become Australia’s second-biggest bank in 2022? appeared first on The Motley Fool Australia.

More reading

• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• These were the top 5 ASX 200 bank shares in 2021
• How the Macquarie (ASX: MQG) share price went in 2021
• Christmas highs: 3 ASX 200 shares hitting record highs today
• The ASX share I’d hold onto no matter what: expert

The author has no positions 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 Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Immuron Ltd (ASX: IMC) share price is shooting out the lights on Wednesday following a positive update from the company.

At the time of writing, the biopharma company’s shares are swapping hands for 12.2 cents, up 31.18%.

A clinical-stage medical company, Immuron is focused on the development and commercialisation of a novel class of specifically targeted polyclonal antibodies. The company researches and develops hyperimmune products for markets in Australia, the United States, and Canada.

Product sales comprise Travelan and Protectyn, used for the prevention of travellers’ diarrhoea.

Let’s take a look at the company’s latest news…

What did Immuron announce?

Investors are buying up Immuron shares after the company announced funding on a new research agreement.

According to its release, Immuron advised it has been awarded funding from the United States Department of Defence for Travelan. This will be aimed at examining a dosing regimen of the oral immunotherapeutic for use by the military.

In total, US$4.45 million (A$6.2 million) will be allocated to conduct a controlled human infection model (CHIM) clinical trial.

Up to 60 volunteers will be enrolled in the study. They will be randomly selected to receive either a once-daily dose of 1200 mg of Travelan or placebo.

The results of the trial will also provide information on dosing in the future Phase 3 registration trials.

Immuron noted that a project meeting has been scheduled for the end of January with the US government sponsors.

Infectious diarrhea is the most common illness reported by travellers visiting developing countries and among US troops deployed overseas. The morbidity and associated discomfort stemming from diarrhea decreases daily performance, affects judgment, decreases morale, and declines operational readiness.

While the first line of treatment for infectious diarrhea is the prescription of antibiotics, this has waned over the last decade. Several enteric pathogens have evolved to become increasingly resistant to commonly prescribed antibiotics.

Immuron CEO Dr Jerry Kanellos commented:

This new project expands our clinical development program and represents the first of several significant clinical trials which the company expects to undertake with the US Military in 2022.

…The new funding is testament to the value proposition our hyperimmune bovine polyclonal colostrum technology offers to benefit the U.S. Military as well as the civilian international travelling population.

Immuron share price snapshot

A disappointing 12 months has led Investors to recorded losses of almost 60% on the Immuron share price. In the past month alone, the company’s shares have declined around 20%, highlighting a strong downward trend since July 2020.

Based on today’s boosted share price, Immuron has a market capitalisation of roughly $28 million, with approximately 227 million shares on issue.

The post Here’s why the Immuron (ASX:IMC) share price is rocketing 31% today appeared first on The Motley Fool Australia.

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• Exactly who will own Sydney Airport (ASX:SYD) following its takeover and why does it matter?
• Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover
• Will the Treasury Wine (ASX:TWE) share price get back to its pre-COVID levels?
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• Why is everyone talking about ASX value shares and how do you find them?

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 takeover of Sydney Airport (ASX: SYD) is likely preparing to take off early next month. Shareholders are set to vote in a ballot on 3 February.

If all goes to plan, the takeover will see one of the globe’s major airports taken from public boards and placed among private investment firms. Having said that, it will still be in the hands of regular Australians.

It’s to be taken over by the Sydney Aviation Alliance – a consortium of superannuation funds. That means many Aussies will see their super balance grow on the back of the airport.

But will the delisting of Sydney Airport prove to be positive for day-to-day Australian investors?  

Right now, the Sydney Airport share price is $8.69. That’s slightly lower than the consortium’s takeover bid of $8.75.

What does Sydney Airport’s takeover mean for retail investors?

The Sydney Airport might be in its final weeks as a listed entity.

It’s set to be purchased in part by the consortium’s leader IFM Investors – owned by 23 pension funds.

Global Infrastructure Partners ­– on behalf of its managed funds and clients – is also expected to have a tight hold on the consortium.

Meanwhile, super funds AustralianSuper, QSuper, and UniSuper, will each hold interests ranging from 7.5% to 18%.

Super funds are effectively run to benefit Australians. But will the delisting of a major Australian stock be a hit to retail investors?

Association of Superannuation Funds of Australia CEO Martin Fahy isn’t worried. He told The Age Sydney Airport’s takeover doesn’t mark the start of a “great delisting”:

Aussie Super and IFM taking a company off the ASX boards is effectively putting it into the hands of ‘mom and pop’ investors. Other investors might not see it like that, but that’s effectively what it is.

Though, Wilson Asset Management chair and chief investment officer Geoff Wilson isn’t so optimistic.

He said, while super funds snapping up companies ultimately sees them owned by Australians, there’s a downside to the privatisation of Australian companies. The Age quoted Wilson:

[A]s an investor in the stock market, I’d like more companies, more opportunity, and more variety.

Australians have a very high participation in investing in the stock market, and it’s unfortunate if they don’t get that opportunity.

While the takeover is likely to see Sydney Airport taken from the ASX – at an aggregate price of $23.6 billion – it’s also boosted its share price.

Since the consortium’s initial $8.25 per share bid was first posted, the airport’s stock has gained 49%.

The post Exactly who will own Sydney Airport (ASX:SYD) following its takeover and why does it matter? appeared first on The Motley Fool Australia.

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• Why is the Sydney Airport (ASX:SYD) share price worth keeping an eye on?
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• 5 best ASX 200 travel shares of 2021
• 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021
• These 3 ASX 200 shares are topping the volume charts this Thursday

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 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.

What happened?

Many of the most-watched cryptocurrencies are seeing interest rebound today, as investors continue to digest macro data and adjust their portfolios according to the aggregate risk profile the market is comfortable with. Top tokens Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) appreciated 1.8% and 3.5%, respectively, over the past 24 hours as of 11 a.m. ET.

These moves generally aligned with the overall crypto market, which surged 3% higher over this same time frame. These moves also correlated with the price action we’ve seen in recent days, which shows Bitcoin as a lower-beta play relative to the overall market on up days and down days as well.

For meme token Dogecoin (CRYPTO: DOGE), a surge in risk-on appetite from traders has propelled this token 4.8% higher over the past 24 hours. Additional support for Dogecoin from talking heads such as [American entrepreneur] Mark Cuban, and wider acceptance of Dogecoin as a means of payment from various corporations, has continued to spur interest in this meme token over the past day.

So what?

Today marks the first day in a while where we’re seeing cryptocurrencies really diverge from risk assets in the stock market in terms of returns. The directional moves of these top tokens do not align with most high-growth stocks today, which are down as of late morning. Accordingly, perhaps crypto bulls asserting that digital tokens could be viewed as a market hedge have a leg to stand on.

It appears investors are once again focusing on the relative risk-reward of cryptocurrencies relative to equities today. As investors continue to diversify their portfolios, allocations toward digital currencies appear to be holding steady. Currently, the entire crypto market continues to hover around the $2 trillion mark, with these three tokens collectively making up more than half of the overall market.

Now what?

Bitcoin and Ethereum remain the two top tokens most crypto investors watch closely. The daily price action of these tokens drives much of the sentiment across the broader crypto markets. That being said, the outsize moves some smaller tokens such as Dogecoin are making today provide an interesting bull thesis for those looking to take on additional risk.

Given this macro environment, adding more risk to one’s portfolio does seem like a dicey game to play. However, the divergence we’re seeing once again among crypto assets relative to stocks does add to the intrigue of this sector for investors.

As always, investors looking to put some money to work in cryptocurrencies should be aware of the risks, and they should practice proper portfolio discipline in sizing positions appropriately and ensuring risk management protocols are in place.

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

The post Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover appeared first on The Motley Fool Australia.

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• Why Bitcoin, Ethereum, and Dogecoin plunged today
• Forget Bitcoin! These were the 5 crypto assets you wish you’d held in 2021
• Bitcoin and Ethereum are crashing: Is now the time to invest?
• Could Shiba Inu Surpass Dogecoin in 2022?
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Chris MacDonald owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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

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The Treasury Wine Estates Ltd (ASX: TWE) share price has had a difficult time in recent years.

On Wednesday, the wine giant’s shares are up 1% to $12.19.

While this means the Treasury Wine share price is almost 35% higher year on year, it is still a long way from its pre-COVID levels of ~$18.00.

Will the Treasury Wine share price ever get back to its pre-COVID levels?

Firstly, it is worth remembering that a lot has changed for the company since COVID-19 hit markets.

For example, late in 2020 the Treasury Wine share price was sold off when it was effectively kicked out of the lucrative China market after regulators slapped extreme duties on its portfolio.

Following an anti-dumping investigation, China’s Ministry of Commerce put a duty rate of 175.6% on Treasury Wine’s Australian country of origin wine in containers of two litres or less imported into China. This essentially means that a $50 bottle of wine would cost Chinese consumers $137.80 after duties have been applied.

As the China market was a big one for the company, this created a huge gap in its earnings. This makes it much harder for the Treasury Wine share price to reach its previous levels.

But management is certainly working hard to get there and is looking to reallocate this wine to other markets in order to fill the earnings gap. In addition, it recently announced a major acquisition that looks set to boost its earnings in the coming years.

Will it get there?

One leading broker that isn’t expecting much from the Treasury Wine share price in the near term is Goldman Sachs.

According to a note this week, its analysts have reviewed its recent acquisition of Frank Family Vineyards and retained their neutral rating and lifted their price target slightly to $11.80. This implies potential downside of 3.2%.

Goldman commented: “We believe that this acquisition remains positively aligned with the longer term portfolio strategy in the Americas and in terms of changing consumer channel preferences. However, we remain conservative in the potential for FFV to become a margin accretive channel for wine currently used in lower margin brands.”

“As a result, our forecasts remain conservative vs. the prior 3 year volume CAGR of +7.7% into FY24 and beyond. We update our earnings outlook to include this acquisition, resulting in +1.7% and +3.8% increases to the Group EBITS. In line with management guidance, our forecasts imply that leverage is likely to remain elevated into FY23, before returning to the 1.5x-2.0x range,” it added.

The post Will the Treasury Wine (ASX:TWE) share price get back to its pre-COVID levels? appeared first on The Motley Fool Australia.

More reading

• Here are Scott Phillips’ top 5 ASX shares for 2022. Is it time to buy?
• 5 things to watch on the ASX 200 on Monday
• What brokers are saying about the Treasury Wine (ASX:TWE) share price
• Analysts tip A2 Milk (ASX:A2M) and this share as buys
• How did the Treasury Wine (ASX:TWE) share price perform in 2021?

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 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 performance of S&P/ASX 200 Index (ASX: XJO) banks could be impacted by one particular factor during 2022.

In 2021, the loan market was subject to intense competition in terms of pricing. There were some loans that had an interest rate that started with a 1.

However, all of the major banks – Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) – have increased their interest rates for borrowers a few times in the last few months.

The RateCity.com.au research director, Sally Tindall, noted that these hikes are really adding up. For example, NAB’s 3-year fixed rate loan is now around a full percentage point higher than it was a few months ago.

Ms Tindall said:

We expect fixed rates to keep on rising in 2022, creating a very different landscape to what we’ve become accustomed to. Next year there’s going to be a lot of mortgage holders coming off a fixed rate starting with a ‘1’ who are going to get the shock of their lives when they discover just how far prices have climbed.

However, there could be another factor that’s even more important in 2022 for borrowers when it comes to picking an ASX 200 bank.

Loan processing times a focus

One of the online-only leaders, Lendi, thinks that home loan processing times will be an important factor for borrowers in 2022, according to reporting by The Australian.

Lendi boss David Hyman said:

Processing times have fluctuated significantly over the last two years due to increased demand, particularly for refinances, in the ultra low-rate environment and COVID-related disruption.

However, many lenders have been working hard to improve their service level agreements because the customer experience is just as important as price to many borrowers.

Indeed, ANZ recently attributed its failure to process applications at a good pace as a key reason why its market share recently fell. ANZ said that it took urgent action to fix those processing issues by materially increasing its assessment capacity as well as simplifying and automating processes.

ANZ chair Paul O’Sullivan said about its processing of mortgage applications:

Let me be frank, we got it wrong. Although we expanded capacity, we didn’t expand capacity enough. And as a result, we lost market share to those who could process it.

We have spent a lot of time at board and management understanding this issue. There has been significant work done to bring in new processes, new ways of handling things and to look externally at best practice, so we can learn from that and improve.

The big four ASX 200 bank has been working hard on improving its performance with loan applications.

Differences in loan processing times could lead to different growth rates of the loan book for the ASX’s banks. It’s not just the big four banks wanting to win market share, there are others including Macquarie Group Ltd (ASX: MQG), Bank of Queensland Limited (ASX: BOQ), Suncorp Group Ltd (ASX: SUN) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

While loan book growth helps the banks’ net interest income, many of them have been warning of a deterioration of the net interest margin (NIM).

For example, CBA said that its NIM was “considerably lower” in the first quarter of FY22 because of impacts like home loan price competition, customers switching to lower margin fixed rate loans and the impact of a low interest rate environment.

RateCity.com.au’s research director Ms Tindall thinks that the variable interest rates could see some volatility from banks too:

Banks are still trimming variable rates, but the cuts have largely been to their basic loans and almost always reserved for new customers.

While we expect more cuts to variable rates in the next few months, we could see some lenders hike later this year ahead of the RBA, if the cost of funding continues to escalate.

The post Could this impact the performance of ASX 200 banks more than interest rates in 2022? appeared first on The Motley Fool Australia.

More reading

• What made the NAB (ASX:NAB) share price so appealing in 2021?
• These were the top 5 ASX 200 bank shares in 2021
• Why the CBA (ASX:CBA) share price jumped 23% in 2021
• Why did the Westpac (ASX:WBC) share price significantly underperform the other big banks in 2021?
• Analysts name 2 ASX 200 dividend shares to buy

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. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ASX share market is a dynamic world for investors. Sectors go in and out of fashion, individual companies rise to stardom and fall to the wayside.

Usually, specific groupings of shares sway between being embraced and shunned over the years. For instance, growth shares have held a prominent place in portfolios over the years as interest rates have crept lower and lower.

However, more recently, growth shares — such as tech names — have lost some of their shine in the eyes of investors. In their place, the more matured and less premium valued shares on the ASX have gained heightened focus.

So, why have value shares become more appealing than growth recently?

Rising rates give ASX value shares a new life

The ultra-low interest rate environment that has dominated the past several years has enticed more investors into growth shares. This could be a result of people being forced to move higher along the risk curve to find their desired return. Simultaneously, lower rates make future profits more attractive — benefitting the more forward-looking investments.

But nothing lasts forever — as the United States Federal Reserve looks to lift interest rates to fend off high inflation. The mere expectation alone has put a dampener on high-flying growth shares. Taking a look at the performance of some high profile ASX growth shares in recent times, we can see this:

• Afterpay Ltd (ASX: APT) down 35% in the last six months
• Xero Limited (ASX: XRO) down 8% in the last six months
• Kogan.com Ltd (ASX: KGN) down 26% in the last six months

Overnight, US Federal Reserve chair Jerome Powell noted he won’t refrain from increasing rates more if required. This strong signal from Powell has ASX value shares back on the radar of many investors, given that the Reserve Bank of Australia may follow suit.

How does an investor find a value opportunity?

Value investing is reliant on some basic fundamental analysis. As such, the first critical characteristic of a traditional ‘value share’ is profitability.

From there, investors will take a closer look at the price-to-earnings ratio (P/E) — a metric that indicates what multiple the market is willing to pay for the company’s profits. If the P/E ratio is notably lower than its peers in the given industry then value investors might consider it to be a buying opportunity based on its value.

Often a solid ASX value share will boast a sturdy balance sheet, primed with plenty of cash. The combination of profitability and backup cash means that these shares are capable of paying attractive dividends to investors as well.

The post Why is everyone talking about ASX value shares and how do you find them? appeared first on The Motley Fool Australia.

More reading

• Will the Treasury Wine (ASX:TWE) share price get back to its pre-COVID levels?
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• Here’s why the Liontown (ASX:LTR) share price is rocketing 13% higher
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The Liontown Resources Limited (ASX: LTR) share price has returned from its trading halt and is zooming higher.

In morning trade, the lithium developer’s shares are up 13% to $1.75.

Why is the Liontown share price zooming higher?

The Liontown share price is rising today after investors responded very positively to the release of an announcement.

According to the release, the company has made a major step towards the development of its flagship Kathleen Valley Lithium Project in Western Australia after executing its first binding offtake term sheet.

The release reveals that Liontown has signed its offtake agreement with one of the world’s premier battery manufacturers, LG Energy Solution (LGES). It is a major electric vehicle (EV) battery supplier for leading global automakers and is continuing to rapidly expand its business amid growing demand for lithium-ion batteries from the EV sector globally.

Liontown will supply LGES with up to 150,000 dry metric tonnes (dmt) per annum of spodumene concentrate produced at Kathleen Valley when production commences in 2024. This represents approximately one-third of the project’s start-up SC6.0 production capacity of ~500ktpa.

Under the offtake term sheet, pricing will be determined by a formula-based mechanism linked to market prices for Lithium hydroxide. Positively, based on today’s market pricing for lithium hydroxide, the contract terms would deliver a price outcome greater than the pricing assumptions used in its DFS.

Another positive is that the company revealed that it is continuing to progress negotiations with other potential Tier-1 global customers which would complement its off-take strategy.

“A fantastic outcome”

Liontown’s Managing Director and CEO, Tony Ottaviano, was very pleased with the agreement.

He said: “The signing of this historic first Offtake Term Sheet for Kathleen Valley represents a fantastic outcome for our shareholders and marks a very satisfying result for the Liontown Board and team. We have been steadfast in our strategy to negotiate terms that we believe accurately reflect the significance of our position in the global lithium market, as well as the quality and location of our Kathleen Valley resource to ensure that we extract the best value for our shareholders.”

“Not only is this Offtake Term Sheet consistent with our strategy, it also represents a strong validation for the Tier-1 credentials of the Kathleen Valley Project as one of the world’s premier new spodumene projects. Having a customer of the calibre and standing of LGES endorse the Project, by signing up to become a foundation customer, represents a significant vote of confidence in Kathleen Valley and in Liontown’s ambition to become a globally significant provider of battery materials for the clean energy market,” Mr Ottaviano added.

The post Here’s why the Liontown (ASX:LTR) share price is rocketing 13% higher appeared first on The Motley Fool Australia.

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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 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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