The Northern Star Resources Ltd (ASX: NST) share price has leapt into the green since trade commenced this week and now trades at $8.92 apiece.

Northern Star shares have been crawling higher these past few days after hitting a low of $8.26 last week, but they have still marched lower from $10 back in July.

Read on for more details.

Why is the Northern Star share price gaining today?

Whilst there’s been no market sensitive information for the gold mining company, it’s worth noting that the price of gold has popped higher since we started the month.

After trending downwards lately, the price of gold bottomed out at a low of US$1,723/t.oz on 30 September, surging to US$1,761/t.oz on the same day.

This US$38 per troy ounce intraday gain has certainly got investors’ attention and has pushed the ASX gold basket higher over these past few days.

And it’s come up again since this point, now trading at US$1,759/t.oz, at its February and April 2021 levels.

Northern Star is an ASX resources share that is in a unique position, in that it is in the business of mining and processing gold deposits.

As such, it must accept the spot and/or forward price of gold in the commodity markets, and is considered a price taker.

This means its share price can and does fluctuate with the volatility in the underlying commodity markets. In Northern Star’s case, the fluctuations in the price of the precious metal.

In light of the relationship between Northern Star’s share price and the price of gold, it starts to make sense why it is off to a good start this week.

However, it has a ways to go to reverse its recent performance, as the Northern Star Resources share price has slumped 8.5% into the red this past month.

Northern Star Resources share price snapshot

The Northern Star Resources share price has struggled this year to date and has missed its benchmarks completely.

It now trades 30% in the red since January 1, extending its gain over the past year to 35%. This is well behind the S&P/ASX 200 index (ASX: XJO)’s return of around 25% in this time.

The post Here’s why the Northern Star (ASX:NST) share price is having a good start to the week appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Why Evolution, Northern Star, Weebit Nano, & Whitehaven Coal are rising
• Here’s why the Northern Star (ASX:NST) share price has lost 11% in 2 weeks
• Why the Metalstech (ASX:MTC) share price hit a record high today
• 5 things to watch on the ASX 200 on Tuesday

The author Zach Bristow 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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The S&P/ASX 300 Index (ASX: XKO) is pushing upwards today, recovering lost ground from Friday’s 2% plunge.

At the time of writing, the ASX 300 is up 0.98% to 7,260.1 points. It’s worth noting that in the past month, the index has lost around 3.5%.

Here are some of the top movers on the ASX 300 today.

Yancoal Australia Ltd (ASX: YAL)

The Yancoal share price is picking up steam, up 15.33% to $3.46 despite no new company announcements.

The energy producer has seen its shares surge today as the spot price of coal has continued its impressive trajectory. The current price is fetching for a record high of US$228 a tonne, buoyed by severe power shortages across Asia.

China and India are facing a power crisis as coal stocks run dangerously low. India is said to have just 4 days’ worth of coal, down from 13 days of supplies in August.

Neighbouring China is also encountering issues with blackouts across the country, particularly as winter begins to set in.

Flight Centre Travel Group Ltd (ASX: FLT)

Following suit is the Flight Centre share price, up 8.60% to $23.73.

The travel agent has taken off since reporting its full-year results to the market in August, highlighting the worst has passed.

Australia’s accelerated vaccination program is on track, with selected international travel set to resume as early as next month. It appears investors are optimistic on Flight Centre shares, preparing for a strong comeback as a more agile business.

Paladin Energy Ltd (ASX: PDN)

Making headlines again is the Paladin share price, up 7.64% to 77.5 cents.

The uranium company also hasn’t released any market-sensitive news to the ASX.

However, its shares are rebounding after being sold off in the past week, down almost 7%.

The company’s share price is up by more than 560% since this time last year, and up 220% year-to-date.

In late September, Canaccord weighed in on Paladin shares, raising its price target by 70% to $1.02. Based on the current share price, this implies an upside of around 25%.

And the ASX shares in decline?

Novonix Ltd (ASX: NVX)

Heading south is the Novonix share price, down a sizeable 13.28% to $5.68.

The lithium company’s shares appear to be cooling off after registering a sharp upwards trajectory since August.

Novonix shares have accelerated by almost 120% from the start of August, and are up 460% in a year.

Imugene Limited (ASX: IMU)

Also running at a loss is the Imugene share price, down 5.89% to 44.7 cents.

The Australian immuno-oncology focused biopharmaceutical company hasn’t released any market-sensitive news to the ASX since late last month. However, its shares have tumbled from reaching an all-time high of 51.5 cents on 24 September.

The post Which ASX 300 shares are on the move for the start of the week? appeared first on The Motley Fool Australia.

More reading

• Why is the Novonix (ASX:NVX) share price plunging 12% today?
• Why ASX 200 travel shares are having a bumper day
• Yancoal (ASX:YAL) share price flies 15% as coal prices surge
• Up 7%, the Flight Centre (ASX:FLT) share price is surging. Here’s why
• How did ASX healthcare shares perform in the FY22 first quarter?

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 recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Air New Zealand Limited (ASX: AIZ) share price is climbing today amid news the company’s chief operating officer has resigned.

At the time of writing, Air New Zealand shares are up 1.90% trading at $1.61.

We take a closer look at what could be lifting the airline operator’s share price.

Air New Zealand COO takes top job at peer company

In today’s release, Air New Zealand advised that chief operating officer Carrie Hurihanganui has resigned from her position.

Ms Hurihanganui will depart the airline for a new role as CEO at Auckland International Airport Ltd (ASX: AIA). The move will happen in early 2022, with Air New Zealand starting its process to appoint a replacement.

Ms Hurihanganui will replace Auckland Airport chief executive Adrian Littlewood who is scheduled to finish up on 12 November. The airport’s corporate services general manager Mary-Liz Tuck will fill CEO position in the interim.

What did management say?

Commenting on the news, Air New Zealand CEO Greg Foran said:

Joining over 22 years ago as an international cabin crew member and rising to lead more than 6000 people, Carrie has developed exceptional leadership skills and operational knowledge.

Carrie has done an exceptional job, especially since COVID began to impact our business. It was no small feat to keep our operations running across engineering, airports, airline operations, properties, supply chain, cabin crew and pilots during a constantly changing crisis…

The surprise personnel loss hasn’t deterred investors, with the Air New Zealand share price continuing to rise.

As Australia is considered New Zealand’s biggest tourism market, a climbing share price might be a reflection of Australia’s accelerated COVID-19 vaccination rollout finally opening the doors to international travel.

The Australian federal government is planning to resume international flights as early as next month.

Air New Zealand share price review

Over the past 12 months, the Air New Zealand share price has travelled more than 20% higher, while year-to-date remains flat.

Its shares ticked up a notch during mid-August just before the company’s earnings results for the 2021 financial year.

Air New Zealand presides a market capitalisation of roughly $1.81 billion and has approximately 1.1 billion shares outstanding.

The post Air New Zealand (ASX:AIZ) share price takes off amid resignation news appeared first on The Motley Fool Australia.

More reading

• Here’s why the Air New Zealand (ASX:AIZ) share price is up 10% in September

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 King Island Scheelite Limited (ASX: KIS) share price is slipping 6% into the red this afternoon and now trades at 16 cents each.

Kind Island shares are trending down today after the Australian mining company announced a key update earlier.

Here’s what we know.

What did King Island Scheelite announce?

King Island announced that it has secured funding commitments to proceed with the redevelopment of its wholly owned Dolphin Tungsten Project in Tasmania.

It also delivered an investor presentation on the raising, outlining the price.

Announced today was the completion of a $31 million equity raise at 14 cents per share, which also sees King Island investors’ share count diluted by 222 million shares.

There are 2 tranches to the placement, made up of a blend of sophisticated and institutional investors plus the company’s debt holders.

That price of 14 cents per share on which the equity raise was completed, represents a 19.4% discount to the company’s 15-day volume weighted average share price as per the release, and a 12.5% discount to its current share price.

Kind Island Scheelite has raised a total of $88 million in 2021 to finance the redevelopment of the Dolphin site, including a $10 million leasing facility currently in negotiations.

The company intends to fund the purchase of “key equipment, mobile mining equipment, processing plant development, civil/infrastructure construction, working capital associated therewithin” with the net proceeds.

Consequently, the Dolphin tungsten project is expected to produce its first concentrate in the March quarter of 2023, as per the release.

Investors don’t appear to be impressed by the moves, perhaps given the King Island Scheelite share price’s performance this year to date.

Plus, an additional 222 million shares on issue means that current shareholders will be diluted by that amount.

As such, the value of their holdings will diminish slightly as the company’s equity value is re-adjusted from the share issuance.

What did management say?

Speaking on the announcement, King Island Scheelite’s executive chairperson Johan Jacobs said:

Our strategy has allowed us to move forward with our plan to redevelop King Island’s Dolphin Tungsten Mine, which hosts one of the few remaining high quality tungsten deposits in the Western world. Having secured commitments for the funding, we can now continue to execute on our vision to develop world class tungsten mining operations in Tasmania.

King Island Scheelite share price snapshot

The King Island Scheelite share price has booked outsized returns over this past year to date, climbing 60% since January 1.

As such, shareholders have clipped the ticket on a whopping 167% gain over the past 12 months, more than 6x the return of the S&P/ASX 200 index (ASX: XJO)’s climb of 25% in that time.

The post King Island Scheelite (ASX:KIS) share price slips 6% following cap raise appeared first on The Motley Fool Australia.

More reading

• Why the King Island Scheelite (ASX:KIS) share price rose 6% today

The author Zach Bristow 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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ASX 200 bank shares are charging higher but the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is still a woeful underperformer.

The ANZ share price jumped 2% to $27.98 during lunch time trade, which is twice the gain of the S&P/ASX 200 Index (Index:^AXJO).

Other bank shares are also performing strongly. The Commonwealth Bank of Australia (ASX: CBA) jumped 4.1%, while the Westpac Banking Corp (ASX: WBC) share price and National Australia Bank Ltd. (ASX: NAB) share price added around 1.5% each.

The ANZ share price is lagging the pack

But before shareholders in ANZ rejoice, the bank is the only big four that’s nursing a loss over the past six months.

The ANZ share price is down around 1.5% over the period. In contrast, the CBA share price rallied 21.1%, NAB share price advanced 5.4% and Westpac share price increased 4.5%.

The ANZ share price fell out of favour as it’s the only one of the big banks that is losing market share in mortgages.

Can falling market share be offset by better margins?

This is despite strong demand for residential property during the COVID-19 pandemic with banks launching aggressive cash-back campaigns to win mortgage customers.

But ANZ resisted going down that path to arrest its declining share of the market. This should mean the bank will report stronger net interest margins when it hands in its full year results later this month.

If its better margins can offset the expected decline in mortgages, the ANZ share price could play catch-up.

ANZ share price looking overvalued

However, the market isn’t yet willing to make this bet. It doesn’t help that the bank’s valuation isn’t seen as a bargain despite its share price underperformance.

Citigroup took a close look at the sector’s valuation, and it found the ANZ share price and CBA share price are overvalued.

You can understand why CBA looks expensive due to its strongly rising share price. It’s more disturbing to have ANZ classified in the same category.

Which ASX big bank shares to buy and sell today

The broker used cost of equity (COE) and the more traditional return on equity (ROE) measure as a valuation yardstick.

“We believe that [ANZ’s] underlying ROE is expected to fall by ~70bps over FY21 to 9.8%,” said the broker.

“However, its share price has also recovered strongly over the past 12 months, up to ~$28 from ~$18. The market appears to be pricing in a significant recovery in underlying ROE.”

Citigroup has a “sell” recommendation on the ANZ share price and CBA share price.

The only big bank shares that it thinks is worth buying is the Westpac share price.  

The post Why the ANZ (ASX:ANZ) share price has lagged the ASX 200 appeared first on The Motley Fool Australia.

More reading

• Why ASX 200 travel shares are having a bumper day
• CBA (ASX:CBA) share price jumps following $6 bn share buy back completion
• A budget blowout and a volatile ASX 200. Scott Phillips on Weekend Sunrise
• Is the ASX open and trading today?
• If you invested $1,000 in Flight Centre (ASX:FLT) shares a decade ago, here’s what it would be worth now

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking Corporation. 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 Novonix Ltd (ASX: NVX) share price has come off recent highs and is trading 12.82% down today at $5.71 apiece.

Novonix shares have marched downwards in the past week, after rallying almost 200% from July until the end of September.

Read on for more details.

What’s pushing Novonix shares lower today?

Novonix shares have been trending down since 29 September and have given away 17% in gains during this time.

There hasn’t been any market-sensitive news for the company. However, we can track the performance of the Novonix share price with the spot price of lithium, the battery metal that Novonix has exposure to.

Not much can be said about the price of lithium in 2021 other than it has shot out of the park over the last 12 months.

Prices for lithium contracts in the commodities markets have soared over 320% since this time last year to now trade at over US$25,000/tonne.

A huge up-step occurred in August, when lithium prices surged a further 80% to reach all-time highs of US$27,300 (at the current exchange rate) on 29 September.

Novonix’s share price correspondingly jumped to its all-time high of $6.86 on 29 September, after storming higher from its 2 August price of $2.83.

The correlation between Novonix’s share price and the price of lithium boils down to the fact that Novonix is an ASX resource share that produces a commodity.

That means it is a price-taker, in that it must accept the offered market prices (or forward prices) of the commodities it sells – in this case, lithium.

Lithium pricing has made a reversal of US$1,705/tonne since its highs on 29 September, which isn’t a small number in absolute or relative terms by any means.

Cross-checking this with Novonix’s share price chart, it’s easy to see the corresponding downward move on 29 September as the price of lithium began its descent.

This downward trend has rolled into the start of trade this week and, in light of this, would help explain why Novonix shares have slipped 11% into the red.

Novonix share price snapshot

The Novonix share price has been a tremendous outperformer on the ASX this year, booking gains of over 380% since 1 January.

This extends its gains in the past 12 months to over 475%, several times the return of the S&P/ASX 200 Index (ASX: XJO) rise of 25% in the same time.

The post Why is the Novonix (ASX:NVX) share price plunging 12% today? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX lithium shares in September
• Why the Novonix (ASX:NVX) share price rocketed 47% higher in September
• Which ASX 300 shares are leading the way mid-week?
• Why the Novonix (ASX:NVX) share price is climbing among a sea of red on Wednesday
• Which ASX 300 shares are the top movers today?

The author Zach Bristow 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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The Regional Express Holdings Ltd (ASX: REX) share price is taking off despite silence from the airline.

However, news of Australia’s borders has been hitting the headlines over the weekend, spurred by an announcement made by Prime Minister Scott Morrison on Friday.

Late last week, Morrison declared Australia’s international borders would reopen in November – one month earlier than expected.

While the news may not affect Rex, which only operates domestic flights, it’s good news for the broader travel sector.

Additionally, the reintroduction of home quarantine may have boosted the market’s confidence in the reopening of domestic borders, many of which remain firmly shut due to ongoing outbreaks in parts of Australia.

No matter the reason, Rex’s stock is soaring today. At the time of writing, The Rex share price is $1.73, 8.81% higher than its previous close.

That’s significantly better than the broader market’s performance today. Right now, the S&P/ASX 200 Index (ASX: XJO) is up 1%, as is the All Ordinaries Index (ASX: XAO).

Let’s take a closer look at the news that might be boosting the market’s sentiment in the travel sector.

Rex share price soars on Monday

The Rex share price is soaring today despite no news from the airline.

In fact, it’s a good day for the ASX travel sector broadly. Perhaps the market is responding to the recent news from Prime Minister Scott Morrison.

On Friday, Morrison announced Australia will move to Phase C of the government’s roadmap out of COVID-19 within weeks.

Phase C will see vaccinated Australians free to travel in and out of the country. Morrison anticipates returning vaccinated travellers and those unable to be vaccinated will be able to quarantine at home for 7 days on their arrival following a trial currently being conducted in New South Wales and South Australia.

Additionally, all travel caps will be abolished and the federal government will facilitate flights to states undergoing home quarantine trials.

Unsurprisingly, the Rex share price isn’t the only ASX travel share to be well and truly in the green today.

Right now, the Flight Centre Travel Group Ltd (ASX: FLT) share price is up 9.06%. While Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) shares are gaining 2.1% and 4.64%, respectively.

The post The Regional Express (ASX:REX) share price is booming 8%. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why has the REX (ASX:REX) share price gained 6% so far this week?
• Regional Express (ASX:REX) share price takes flight despite extended stand-downs

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 owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Archer Materials Ltd (ASX: AXE) share price has come out of a trading halt today to backtrack mid-afternoon. This comes after the materials technology company provided an update on its recent equity raise.

At the time of writing, Archer shares are swapping hands for $1.60, down a sizeable 7.78%

Archer completes placement

One catalyst for today’s fall in the Archer share price could be investor concerns over an impending share dilution.

According to its release, Archer announced it has received firm commitments for its institutional placement to raise $15 million before costs. The company highlighted that it has strong support from both domestic and offshore institutional investors.

The offer will see approximately 10.3 million new ordinary shares issued at a price of $1.45 apiece. This represents a 16.4% discount to the last closing price of $1.735 on 30 September (before going into a trading halt).

Archer Materials will use its existing placement capacity to create the new shares. Under listing rule 7.1, this allows the company to issue up to an additional 15% of its total shares without shareholder approval.

The company will primarily use the proceeds to develop its CQ quantum computing chip and lab-on-a-chip biochip technologies. In particular, Archer will allocate the funds to:

• Progressing its world-first technology development, including its CQ chip and Biochip
• Utilising technology development infrastructure and facilities, R&D, people, and IP, to support pre-market development of the company’s technologies
• Protecting intellectual property assets such as patents and international patent applications
• Establishing and strengthening new and existing commercial partnerships in Australia and abroad
• General working capital

Settlement of the new shares is expected on Thursday 7 October, with allotment scheduled for the next day.

In addition, Archer will launch a non-underwritten share purchase plan (SPP) of $5 million to be offered to eligible investors. The terms will be the same as the institutional placement.

The SPP closes on 28 October, with allotment of the new shares on 4 November.

About the Archer share price

Despite today’s falls, Archer shares have gained around 233% in the past 12 months. However, the company’s share price is around 50% off its all-time high of $3.08 from mid-August.

Based on valuation grounds, Archer presides a market capitalisation of $395.07 million, with almost 227 million shares outstanding.

The post Archer Materials (ASX:AXE) share price dives on capital raising update appeared first on The Motley Fool Australia.

More reading

• Why is the Archer Materials (ASX:AXE) share price halted?
• The Archer Materials (ASX:AXE) share price is down 5% on Tuesday
• Archer Materials (ASX:AXE) share price soars 29% on US patent

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 S&P/ASX 200 Index (ASX: XJO) is up more than 1% right now, but the ASX 200 travel shares are having an even stronger start to the week.

Looking at the gains, the Flight Centre Travel Group Ltd (ASX: FLT) share price is up more than 8%, the Corporate Travel Management Ltd (ASX: CTD) share price is up over 3%, the Webjet Limited (ASX: WEB) share price went up more than 5% and the Qantas Airways Limited (ASX: QAN) share price is up over 2%.

An even stronger reaction has been for the Helloworld Travel Ltd (ASX: HLO) share price, which is up around 12%.

What’s happening with the ASX 200 travel share?

There is an ongoing global recovery for the worldwide travel industry, with investors bidding up prices.

Internationally, global travel shares saw a large rise of share prices on Friday. For example, the United Airlines Holdings Inc (NASDAQ: UAL), share price increased around 8%, the Booking Holdings Inc (NASDAQ: BKNG), the Hilton Hotels Corporation (NYSE: HLT) share price rose 4.6% and the Marriott International Inc (NASDAQ: MAR) share price increased 5.3%.

Prior to some hopeful healthcare news, which I’ll get to later, the ASX 200 travel industry was already seeing a recovery, which was getting stronger as the months go on.

For example, Webjet said at the end of August that vaccine rollouts were underway and directly correlated to travel recovery. Management said the USA and UK vaccine rollout programs are well advanced, with the North American and European markets starting to open up. It also said that vaccine rollouts were expected to help in the 2022 calendar year, particularly in the US and UK, although the timing of removal of border restrictions is still uncertain.

ASX 200 travel share Corporate Travel said that it’s seeing momentum building in the northern hemisphere, with July delivering a record revenue result during this COVID era. The company also noted that domestic travel was quickly recovering in the UK, and the trend is expected to accelerate across Europe after the summer holiday period.

The “lucrative” trans-Atlantic and intra-European segments are opening or were expected to re-open in the first half of FY22.

Healthcare news

The ASX 200 travel share industry investors may also be taking into account an announcement regarding a potential COVID-19 treatment.

According to global media, such as reporting by the BBC, a new drug for treating COVID cuts the risk of hospitalisation or death by around half. It was reported that the tablet, called molnupiravir, was given to patients twice a day that had recently been diagnosed with the disease. This could be the first authorised oral antiviral medication for COVID-19.

The BBC reported that:

US drug-maker Merck said its results were so positive that outside monitors had asked to stop the trial early.

It said it would apply for emergency use authorisation for the drug in the US in the next two weeks.

Merck’s vice-president of infectious disease discovery, told the BBC: “An antiviral treatment for people who are not vaccinated, or who are less responsive to immunity from vaccines, is a very important tool in helping to end this pandemic.”

Time will tell how the ASX 200 travel share responds to this over the longer-term.

The post Why ASX 200 travel shares are having a bumper day appeared first on The Motley Fool Australia.

More reading

• Up 5%, the Webjet (ASX:WEB) share price is back to March 2020 levels. Here’s why
• Up 7%, the Flight Centre (ASX:FLT) share price is surging. Here’s why
• A budget blowout and a volatile ASX 200. Scott Phillips on Weekend Sunrise
• Is the ASX open and trading today?
• If you invested $1,000 in Flight Centre (ASX:FLT) shares a decade ago, here’s what it would be worth now

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 shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Helloworld Limited, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Yancoal Australia Ltd (ASX: YAL) share price is soaring into the green during afternoon trade today and is currently changing hands 15% higher at $3.45 apiece.

Yancoal shares have rallied to 2-year highs from a previous low of $2.37 in late September, driven by strengths in the coal markets.

Read on for more details.

What’s causing Yancoal shares to rise lately?

The Yancoal share price has jumped 28% in the past few days as prices have skyrocketed in the spot and futures markets for coal.

One tonne of coal now commands a premium of US$228/tonne, which is a new all-time high– a record that has continuously been broken in linear fashion since May of this year.

Since 24 September, coal pricing has made another upside move, climbing another 26% – or $47/tonne – in a matter of days.

The uptick in coal pricing now marks a 290% year on year increase for the fossil fuel, spurred on by supply headwinds from China and shifting investment trends into renewables.

Couple this with the recent surge in natural gas prices throughout the UK and Europe, and the fact that coal is still the biggest source of electricity power to both China and India – 35% of the world population – then it creates a richly-flavoured recipe for coal pricing.

Yancoal is in a unique position in this regard, in that it is an ASX pure-play coal producer, meaning its entire revenue stream comes from the production of coal.

As such, it is considered a price taker, and its share price can and does fluctuate in direct correlation with the price of coal in the commodity markets.

So if the price of coal goes up, so too will the Yancoal share price, and vice versa, as is the case with most ASX resource shares that produce a commodity.

With this in mind, and with the recent jump in coal that’s set another new record high, it starts to make sense as to why Yancoal shares may be trading higher these past few days.

Yancoal share price snapshot

It’s been quite a robust year for the coal company, with a market capitalisation of almost $4 billion, on the back of these strengths in coal pricing.

The Yancoal share price has now climbed 43% since January 1. It’s rallied 46% this past month, and another 36% in the last week alone.

As such Yancoal’s shareholders have enjoyed a return of 72% this past year, ahead of the S&P/ASX 200 index (ASX: XJO)’s gain of around 25% in this time.

The post Yancoal (ASX:YAL) share price flies 15% as coal prices surge appeared first on The Motley Fool Australia.

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The author Zach Bristow 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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