Tag: Motley Fool

The Xero Limited (ASX: XRO) share price is pushing higher on Monday morning.

At the time of writing, the cloud-based business and accounting platform provider’s shares are up 1% to $140.49.

This means the Xero share price is now up 78% over the last 12 months.

Can the Xero share price go higher?

One broker that believes the Xero share price can still go higher from here is Goldman Sachs.

This morning the broker retained its buy rating but trimmed its price target slightly to $153.00.

Based on the current Xero share price, this implies potential upside of 9%.

What did Goldman say?

Goldman Sachs has been looking into Xero’s recent acquisition of both Planday and Tickstar.

The broker views both acquisitions as positive and expects them to accelerate Xero’s platform strategy through the broadening of its product offering into workforce management.

In addition, it notes that they provide a platform for Xero to launch its core accounting product in Scandinavia, which its sees as an attractive potential market.

Goldman Sachs estimates that there is a total addressable market (TAM) of 2.2 million subscribers for its accounting software in the region.

The broker also feels that the region has favourable market characteristics. These include limited competition, high GDP/capita supporting pricing power, high digitisation, VAT compliance, and supportive E-invoicing regulations.

What else did Goldman say?

In addition to the acquisitions, Goldman has been looking into industry data to see how Xero has been performing. Positively, it believes Xero’s strong form has continued.

Goldman said: “We consider recent data points, which are collectively tracking well. These include: (1) Accounting partner numbers continue to grow strongly, with annualized growth of c.20% in key markets, while the announced BDO partnership (5th biggest practice globally, offices in 171 countries) is a meaningful positive; (2) the number of apps in the ecosystem continues to increase, growing at an annualized rate of 25-32% p.a. across AU/UK/US; (3) XRO/QBO pricing has increased, while Freshbooks launched in AU; (4) Google trends data for XRO is mixed, performing well in AU/UK but lagging in the US.”

Why has the broker reduced its price target?

Despite the many positives listed above, readers may have noted that Goldman’s target on the Xero share price has been reduced.

It explained that this was due largely to a reduction in US software as a service (SaaS) peer multiples, impacting its valuation.

It explained: “We revise our FY21-FY23 EBITDA by +2-7% (-1 to +1% constant currency) driven by (1) the inclusion of Planday/Tickstar; (2) Accelerated Scandinavia rollout, and (3) AUD FX upgrades. Our 12mf TP decreases by -3% to A$153/share, with the earnings upgrades offset by lower US SaaS peer multiples (2x reduction to 27X) updated spot A$/NZ$ (1.08, from 1.05) and increased share base.”

More reading

• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• 5 things to watch on the ASX 200 on Monday
• Why it looks like a V-shaped recovery for the Xero (ASX:XRO) share price
• 2 of the best ASX growth shares to buy now
• 5 things to watch on the ASX 200 on Friday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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.

The post Why the Xero (ASX:XRO) share price can go even higher from here appeared first on The Motley Fool Australia.

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The Booktopia Group Ltd (ASX: BKG) share price is climbing this morning after the company unveiled a new strategic partnership at the market open.

Why is the Booktopia share price climbing?

Online book retailer Booktopia has announced the finalisation of a deal with global online education technology company, Zookal.

Booktopia will become the exclusive supplier and fulfilment partner for Zookal as part of the new deal. The online retailer will source, supply and distribute all Zookal’s physical book orders from “a range of approximately 185,000 titles”.

Zookal is forecasting annual book sales revenue of approximately $22 million this financial year, with the Booktopia deal set to start on 1 May 2021. According to today’s release, the agreement is revenue and earnings accretive for FY2022.

The Booktopia share price has jumped more than 4 per cent higher on the back of the news. Booktopia also reported a new record for academic sales as universities and schools return to the classroom in 2021.

The coronavirus pandemic disrupted in-classroom learning in 2020 and challenged earnings. However, Booktopia has achieved total academic and corporate book sales of approximately $53 million in the year to date. That figure represents more than 30 per cent on FY2020 figures of $40 million.

Booktopia CEO Tony Nash welcomed the deal, saying:

Our partnership with Zookal will ensure we are continuing to grow our penetration into this sector. Zookal has established a strong reputation for holding an extensive range of titles.

Foolish takeaway

The Booktopia share price is climbing higher this morning on the back of the new partnership agreement. Shares in the Aussie online retailer have jumped nearly 5 per cent at the time of writing, with a market capitalisation of $326 million.

That’s despite the broader market struggling to maintain last week’s momentum. The S&P/ASX 300 Index (ASX: XKO) has edged 0.2% lower to 6,969 points at the time of writing.

More reading

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Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Booktopia Group Limited. 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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A new analysis paper has questioned whether encouraging those over retirement age to spend all their retirement savings in their lifetimes is a good idea.

In his analysis paper, Terrence O’Brien states that the Australian Government’s Retirement Income Review implies policy directions that will encourage retirees to spend their life savings, including the equity in their homes, during retirement.

At this point in time, the Government’s Retirement Income Review is just a report. It’s purely a proposal looking at forward-moving measures and there’s no promise that any proposed policies will be initiated just yet.

Let’s look closer at what information the government report and the analysis paper contain.

What does the government’s report contain?

The Australian Government’s Retirement Income Review is an overview of the Australian retirement income system. It has found the system to be effective and broadly sustainable. Though, it has offered a number of suggestions to strengthen it. 

Three of the report’s suggestions are as follows.

Firstly, the report notes that the rate of super paid to employees is sufficient. But, retirees’ income from their super should be taxed more. 

Next it states some of its contributors believe the equity in a retiree’s home should be taken into account when applying for the age pension.

Finally, it suggests retirees might purchase a longevity protection product to avoid running out of money in retirement. 

The report says people worried about outliving their savings may make financial decisions which diminish their quality of living. Instead, retirees could purchase longevity protection plans that would provide them with an income after a certain age. 

O’Brien says these measures come a long way from what is a common Australian belief – that owning a home allows you financial freedom in retirement.

Would these measures be fair? O’Brien thinks not

O’Brien states that, if adopted, policies within the Retirement Income Review would encourage retirees to spend their entire life savings.

It would do so by placing higher taxes on superannuation withdrawals and decreasing access to the age pension for those who own their own homes. Thus, encouraging retirees to purchase new longevity protection products and spend the equity in their homes.

According to O’Brien, these measures combined might diminish retirement savings and inheritances.

O’Brien says if a house’s equity is taken into account when applying for the age pension, accessing the equity within their homes may become a necessity for retirees.

Further, purchasing a longevity protection product would rarely be necessary if policies don’t encourage more spending. O’Brien said:

In effect, preferred policy directions would incline each generation towards consuming fully its own lifetime savings.

Policies would be shaped by the idea that retirement income of 65% to 75% of the average of post-tax income earned in the last 10 years of work is adequate for the final 30-or-so years of life.

O’Brien goes on to say the government’s attitude to saving and placing equity in property has changed in recent times. To outline this shift, O’Brien quoted Robert Menzies’ 1942 argument for frugality and homeownership: “Frugal people who strive for and obtain the margin above… materially necessary things are the whole foundation of a really active and developing national life.”

O’Brien’s criticisms outline a question for the future.

Are policies shifting away from the idea of the ‘forever’ home – one to leave to those we love? Maybe, in the future, retirees will routinely downsize early in retirement.  

More reading

• Why are the big ASX mining share prices slipping today?
• Better buy: Amazon vs. Kroger
• The Anteotech (ASX:ADO) share price is surging. Here’s why.
• Allegiance Coal (ASX:AHQ) share price is rocketing 14% today. Here’s why
• Antipa (ASX:AZY) share price jumps 7%. Here’s why

Motley Fool contributor Brooke Cooper 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 share prices of ASX mining giants BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are in the red today.

However, the share prices of all three major iron ore miners have slipped by less than 1% at the time of writing.

Moody’s Investors Service analysts expect the global metals and mining industry’s earnings before interest, tax, depreciation and amortisation (EBITDA) to increase 30% through early 2022. But S&P Global reported the market value of all three miners fell through March.

BHP’s market capitalisation fell by 8.5%, Rio Tinto’s fell by 10.6%, and Fortescue’s fell by a substantial 17% from February to March. The Newcrest Mining Ltd (ASX: NCM) market cap also fell by 1.8%. 

Moody’s bullish on miners despite falls

The market value declines weren’t limited to Australian companies. They were largely replicated across the global industry, with Chinese heavyweights Zijin Mining Group and China Molybdenum falling by double digits.

S&P reported that overall, 11 of the largest 25 companies in the metals and mining sector decreased in market value during March. In brighter news for miners, every single company in the top 25 index had gained on its market value 12 months prior.

Moody’s believes the mining industry will continue to see revenue growth due to consistently high materials demand, as the global economy invests in stimulus measures following the coronavirus pandemic.

“The positive outlook for the global metals and mining industry stems mainly from rising demand and tight supplies for steel, iron ore and copper as economic activity picks up in the wake of the pandemic,” Barbara Mattos, a Moody’s senior vice president, said.

“Aluminum, nickel and zinc will remain in surplus in 2021, with aluminum seeing a slow recovery, while nickel and zinc supplies will grow as production levels normalise.”

Rio Tinto, BHP and Fortescue share price snapshots

At the time of writing, the BHP share price is falling 0.92% to $46.24 per share. It has gained nearly 10% in 2021 so far.

Rio Tinto’s share price is also down slightly to $115 per share, after gaining just over 1% in 2021. Fortescue is the only miner of the three that has increased its share price this month, up 0.5%.

However, it’s also posted the only loss in 2021, down more than 10%. The Fortescue share price is also falling today and is down 0.86%.

More reading

• Antipa (ASX:AZY) share price jumps 7%. Here’s why
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• 5 things to watch on the ASX 200 on Monday
• Is the BHP (ASX:BHP) share price a buy right now?
• 2 high yield ASX dividend shares rated as buys

Motley Fool contributor Lucas Radbourne-Pugh 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.

The e-commerce behemoth is clearly a more exciting company than the grocery store chain. On a risk-adjusted basis, however, both Amazon (NASDAQ: AMZN) and Kroger (NYSE: KR) have proven heroic over the course of the past year. The latter’s same-store grocery sales improved 14% in 2020, with the company answering the call by stepping up its online shopping and curbside pickup games. Amazon was of course already prepared for the demands of the pandemic, reporting top-line growth of 38% and nearly doubling the year’s net income. Both companies are expected to continue thriving going forward even if the most frenzied growth is in the rearview mirror.

If there’s only room for one of these names in your portfolio right now, it’s got to be Kroger. But not for the reasons you might think.

Why not Amazon?

Don’t misread the message. Amazon is still a juggernaut no retailer wants to tangle with. Kroger, for all its strengths, is still just a grocer. The industry doesn’t lend itself to great growth.

Stock-picking is all about balancing risk, growth, and price, and on a relative basis, investors may be overpricing Amazon by underestimating a couple of key risks ultimately working against its growth.

One of these risks is still gelling. That’s the effort to form a first-ever Amazon worker union for the 5,800 employees at a warehouse in Bessemer, Alabama. Those votes are being tallied right now.

The implications are enormous. If successful, those workers in Bessemer could embolden the creation of unions at more of Amazon’s facilities, changing working conditions in each of them in a way that costs the company more while potentially crimping current productivity. And even if Bessemer employees decide not to unionize, the effort to form unions at other Amazon warehouses has been growing. If not now, unionization could still happen later.

The other risk Amazon faces is more philosophical, although it’s becoming more tangible by the day. That is, the federal government is increasingly leaning on big corporations — and big technology companies in particular.

The movement is coming in lots of forms. President Biden, for instance, is looking to hike corporate tax rates from 21% to 28%. Moreover, some state courts now say Amazon itself can be held liable for damages caused by faulty or counterfeit goods sold via its e-commerce platform. Then there’s the headwind that never seems to go away — Amazon is still in antitrust regulators’ crosshairs, domestically and abroad. A national coalition of small businesses is renewing this scrutiny this very month.

None of these challenges are new to the company. But they’re seemingly gaining more traction than they had in the past. The risk to Amazon’s stock isn’t so much results that reflect these growing headaches but rather, results that fall short of expectations because of these complications.

Why Kroger

Meanwhile, Kroger faces no such headwinds. If anything, it enjoys support from consumers who appreciate what it does and how it’s doing it. Investors in the meantime are underestimating the potential growth in store once the impact of the pandemic wears off.

Like most other stocks, Kroger shares bounced out of the March 2020 market-wide lull once it became clear COVID-19 was a problem that could be worked around. Shares have strangely underperformed since then and are only up 32% from that low versus the S&P 500‘s 82% gain for that twelve-month stretch. Unlike most other stocks, Kroger shares are still trading below their 2016 peak. It’s a not-so-subtle sign that investors don’t see much growth in its future above and beyond the grocery industry’s inherent growth.

That’s a stance, however, that underestimates Kroger’s plan for the post-pandemic environment.

The company laid this plan out with some decent detail a week ago, explaining during a virtual investor day event how fresh foods will be a focal point going forward; digital sales will remain a key growth engine; and more private-label goods are in the works. Investors collectively shrugged. Analysts weren’t exactly thrilled either. Shares actually fell following the presentation, yet at $37 they still linger above the consensus price target of $35.71.

That doubt in Kroger’s future is a big mistake — for a couple of reasons.

First, there’s arguably no name better at the private-label grocery business than Kroger. Of last year’s top line of $132.5 billion, $26.2 billion of it came from homegrown “Our Brands,” like Simple Truth and Private Selection. These in-house brands can be on the order of 25% to 30% more profitable than national brands.

Second, while more and better fresh food may not seem a game-changer in the grocery business, it’s a part of the business that’s become surprisingly important. An effort to eat healthier was well underway before COVID-19 took hold. Deloitte notes that between 2000 and 2017, fresh fruits and vegetables saw the most sales growth among all food categories. The pandemic only accelerated interest in smarter diets. Meanwhile, fresh meat sales are projected to grow on the order of 7% through 2025, snapping the segment out of a long-lived lull. That’s huge for the food business.

Point being, Kroger is pressing consumers’ most important buttons.

Kroger looks appetizing

If you own Amazon and don’t particularly want to swap it out for Kroger, don’t sweat it. As was noted, both companies are winners in their own right.

However, if you’re looking for an underappreciated consumer staples name to fill a void in your portfolio, Kroger is it. You’re collecting a 2% dividend while you wait for everyone else to connect the dots.

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

More reading

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• Tesla and GameStop were some of the most popular US shares last week

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Better buy: Amazon vs. Kroger appeared first on The Motley Fool Australia.

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

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The Anteotech Ltd (ASX: ADO) share price surged 8% higher at the open after a key update on European regulation for its rapid COVID-19 test.

At the time of writing, the AnteoTech share price is trading at 27 cents, up 6%.

Why is the AnteoTech share price surging?

AnteoTech announced that it had received Conformite Europeenne (CE) Mark registration for its EuGeni Reader and in vitro rapid diagnostic test, COVID-19 Antigen Rapid Test (ART).

The EuGeni COVID-19 ART is a single-use rapid test for health professionals to test for suspected COVID-19 infection. The proprietary test has an overall sensitivity of 97.3% and specificity of 99.6%, according to AnteoTech.

The CE Mark registration means the EuGeni Reader and the COVID-19 ART conform with health and safety standards for the European Economic Area (EE) and the United Kingdom. It’s an important step forward for the Queensland-based Aussie biotech company.

That’s been reflected in the AnteoTech share price surge we’ve seen this morning. Thanks to the CE Mark registration news, shares in the biotech company have rocketed 8% higher at the open.

What it means

With the latest approvals, AnteoTech can now sell its EuGeni Reader and COVID-19 ART. The company hopes to “deliver a high performing and high sensitivity test”.

AnteoTech CEO Derek Thomson said the company was “delighted to have achieved this significant milestone in our strategy to become a legal manufacturer of rapid tests”. There are also other strategic plans in the works. AnteoTech hopes to support sales with a “saliva use case and new COVID-19/Flu A/Flu B Multiplex test”.

The AnteoTech share price has continued to search higher amid the pandemic. Before Monday’s open, shares in the Aussie biotech had surged 1,228.9% higher to $0.25 per share. That includes a 31.6% surge in the last month amid strong testing results for its proprietary detection tests.

Foolish takeaway

The AnteoTech share price has been surging higher to start the year. This morning is no exception on the back of receiving approvals for its EuGeni COVID-19 ART for sale in Europe and the United Kingdom.

More reading

• AnteoTech (ASX:ADO) share price rockets 9% on major project news
• Why Anteotech, EROAD, Jindalee Resources, & Kogan are pushing higher
• These ASX shares have doubled in value in 2021
• Why AnteoTech, Crown, Dotz Nano, & Galan Lithium are zooming higher
• Why the AnteoTech (ASX:ADO) share price is surging 15% today

Motley Fool contributor Ken Hall 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 Allegiance Coal Ltd (ASX: AHQ) share price is rocketing this morning after the company announced that global investment house Global Energy and Resources Limited (GEAR) has taken a $15.5 million private placement in the company.

At the time of writing, the Allegiance Coal share price is up 14.2%, trading at 12 cents.

GEAR has also agreed to provide US$27 million in funding to New Elk Coal Company, a wholly-owned subsidiary of Allegiance Coal located in the US state of Colorado.

The Allegiance Coal share price is 10.5 cents at the time of writing.

Allegiance Coal is an Australia-based company engaged in the acquisition and exploration of coal tenements. The company’s projects include Telkwa Metallurgical Coal, Tenas Metallurgical Coal, Back Creek Project, New Elk Mine, and the Kilmain Project.

Allegiance Coal and GEAR’s partnership

GEAR’s US$27 million funding for New Elk Coal is for the reconstruction of the 27-mile rail spur from a main rail line to the New Elk Mine.

Allegiance Coal says this is a crucial investment, as it removes the restriction on production tonnes allowed to be trucked on the road and instantly reduces cash costs by US$6 per tonne.

These investments underwrite Allegiance’s growth plans for the New Elk Mine. They are currently budgeted to be funded from retained earnings generated from the first production unit, which is expected to start mining later this month.

GEAR’s $15.5 million placement in Allegiance Coal is priced at $0.09 per share.

Funds raised under the placement will be used to accelerate production at the New Elk Mine and, in particular, to refurbish the second production unit, which would have otherwise been funded from retained earnings.

What Allegiance Coal management said

Allegiance Coal chair Mark Gray welcomed the investment, saying:

I am delighted to announce this investment, and welcome GEAR as a shareholder, in our company.

While we are fully funded in our plans to recommence mining at New Elk, the insurance that GEAR’s investment and commitment provides our company in terms of its growth and development, is of enormous comfort to the board.

Allegiance Coal share price snapshot

The Allegiance Coal share price has returned 52% over the past 12 months and is up 13% against the basic materials sector. It’s also up 26% against the S&P/ASX 200 Index (ASX: XJO). 

More reading

• Antipa (ASX:AZY) share price jumps 7%. Here’s why
• Fatfish (ASX:FFG) share price jumps 12% on BNPL acquisition update
• Why the ResApp (ASX:RAP) share price is down 9% today
• Here’s why the AVZ Minerals (ASX:AVZ) share price is sinking today
• Why the Vulcan (ASX:VUL) share price is on watch

Motley Fool contributor Lucas Radbourne-Pugh 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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Antipa Minerals Ltd (ASX: AZY) shares are on the move this morning following news of a significant expansion of the company’s exploration program. At the time of writing, the Antipa share price has jumped 7.29% to 5.15 cents.

The mining company, along with its joint venture (JV) partner Rio Tinto Limited (ASX: RIO), has more than doubled the exploration budget of the Citadel JV project.

Additionally, Rio Tinto has met funding targets, allowing it to increase its holding in the project.

Let’s take a closer look at this morning’s news from Antipa.

What’s driving the Antipa share price?

The Antipa share price is surging higher after the company announced this morning its Citadel JV project’s exploration program has been significantly expanded. The program’s budget has grown from $13.8 million to $25.5 million.

The additional funds will be used to drill another 6,000 to 7,000 metres, targeting gold, copper and silver deposits.

Drilling with a diamond drill rig is currently underway at Citadel, with a second diamond drill rig arriving this month.

A gradient array induced polarisation (GAIP) geophysical survey is expected to commence this month.

Changing interests in Citadel JV project

Rio Tinto has now contributed over $25 million to the project, meeting the expenditure requirement to increase its holdings in Citadel. Rio Tinto now holds a 65% interest in the project.

Antipas’ interests in Citadel have, in turn, decreased to 35%.

Antipa now has 30 business days to decide whether to continue its contributions to the JV.

If Antipa elects not to contribute, Rio Tinto may choose to solely fund the project, contributing another $35 million over the next three years. In exchange for doing so, its stake in the project would increase to 75%.

If Rio Tinto chooses not to solely fund the project, Antipa and Rio will continue to contribute to the JV in proportion to their current interests.

Commentary from management

Antipa managing director Roger Mason commented on the expanded exploration program, saying:

The recent increase in the Citadel JV’s 2021 budget is a testament to the joint venture’s strong belief in the potential of this project. The 2021 programme will be the largest yet and we look forward to continuing to advance the high potential Calibre and Magnum resources as well as test numerous greenfield targets.

Antipa share price snapshot

The Antipa Minerals share price has been rocketing recently. Over the course of last week, it rose 60% following news of high-grade mineral discoveries at its 100% owned Minayari and WACA mines.

Currently, the Antipa Minerals share price is up nearly 29% year to date. It’s also up more than 157% over the last 12 months.

The company has a market capitalisation of around $120 million, with 2.5 billion shares outstanding.

More reading

• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• Telstra (ASX:TLS) and 2 other ASX dividend shares offer yields over 5% today
• The new race between US and China is good news for these ASX shares
• Why the Rio Tinto (ASX:RIO) share price is in focus
• Here’s why the Antipa Minerals (ASX:AZY) share price is up 37% today

Motley Fool contributor Brooke Cooper 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 Fatfish Group Ltd (ASX: FFG) share price has started the week in a positive fashion.

In morning trade, the tech venture company’s shares are up over 12% to 13.5 cents.

Why is the Fatfish share price rising?

The Fatfish share price was given a boost this morning from the release of an acquisition announcement.

According to the release, the company has entered into a binding agreement to acquire a strategic 85% stake in Malaysia-incorporated Forever Pay. It is a licensed corporate entity that holds a money lending license awarded by the Malaysian government.

Following the acquisition, Fatfish intends to enter into the retail buy now pay later (BNPL) and other consumer-oriented digital financing markets via Forever Pay. It also plans to develop potential synergies and collaboration with its existing BNPL business, Smartfunding.

Management notes that acquiring Forever Pay will allow Fatfish to further position the company as a comprehensive BNPL player in the Southeast Asia region.

What is Forever Pay?

The release notes that Forever Pay was incorporated seven months ago in September 2020 and has been awarded a Money Lending License by the Ministry of Housing And Local Government of Malaysia.

This Lending License allows financing operations for consumers and corporates to be conducted, including retail BNPL services.

Fatfish will acquire its 85% stake in Forever Pay for a total purchase consideration of A$870,000.

From this, A$450,000 of the consideration will be paid in cash, while the remaining A$420,000 will be paid via the issue of 3 million Fatfish shares. The cash portion of the consideration will be paid over a duration of 12 months from existing reserves.

The company notes that the current shareholder of Forever Pay is VNP Technology and is not related to Fatfish or its directors.

More reading

• Why the Fatfish (ASX:FFG) share price is soaring today
• Fatfish (ASX:FFG) share price jumps 9% on positive update
• Down 20% with no news, what’s with the Cirralto (ASX:CRO) share price?

Motley Fool contributor James Mickleboro 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 ResApp Health Ltd (ASX: RAP) share price has returned from its trading halt and sunk lower.

At the time of writing, the digital health company’s shares are down 9% to 6.2 cents.

Why was the ResApp share price in a trading halt?

ResApp requested a trading halt last week so that it could undertake a capital raising.

This morning the company announced the successful completion of its capital raising after receiving firm commitments from institutional and sophisticated investors to raise $5.5 million before costs.

According to the release, these funds will be raised through the issue of 94,827,588 new fully paid ordinary shares at an issue price of 5.8 cents per share. This represents a 14.7% discount to its last close price.

Its existing substantial shareholder, Fidelity International, has agreed to cornerstone the capital raising with a $1.5 million investment.

Why is ResApp raising funds?

The release advises that the funds raised from the capital raising provide ResApp with the financial flexibility to progress a number of initiatives.

This includes the hiring of key personnel, allowing the company to grow its commercial partnership pipeline and expedite product development initiatives. Funds will also be used for general working capital purposes.

ResApp’s CEO and Managing Director, Dr Tony Keating, said: “We are very pleased to have generated such strong interest in the placement. I would like to welcome a number of new institutional investors to our register and also express our thanks to our existing shareholders who have continued to support the company.”

“Funds secured from the placement will provide ResApp with a very solid footing to execute on our commercial strategy in telehealth and emerging markets, continue to innovate in areas such as COVID19 screening and management, and further expand the opportunity to provide solutions to large pharmaceutical companies for clinical trials and disease management,” he added.

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Motley Fool contributor James Mickleboro 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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