Tag: Motley Fool

On Wednesday the S&P/ASX 200 Index (ASX: XJO) continued its remarkable run and charged higher once again. The benchmark index rose 0.6% to 6,683.3 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to edge higher.

The Australian share market is expected to edge higher this morning. According to the latest SPI futures, the ASX 200 is poised to rise 10 points or 0.15% at the open. This is despite it being a mixed night of trade on Wall Street. Late in the session the Dow Jones is down 0.45%, the S&P 500 is down 0.2%, and the Nasdaq is up 0.4%.

Virgin Money UK results.

The Virgin Money UK CDI (ASX: VUK) share price will be on watch following the release of its full year results. The UK-based bank reported a 77% drop in full year underlying pre-tax profit. This was driven by a 501 million pound impairment charge against an expected surge in bad loans in coronavirus-driven economic downturn. Virgin Money UK now has a total of 735 million pounds in provisions on its balance sheet.

Oil prices push higher again.

Energy producers including Beach Energy Ltd (ASX: BPT) and Oil Search Ltd (ASX: OSH) could be on the rise today after oil prices continued their recovery. According to Bloomberg, the WTI crude oil price is up 2.5% to US$46.04 a barrel and the Brent crude oil price has risen 2.1% to US$48.87 a barrel. A combination of COVID vaccine hopes and a drop in U.S. inventories have lifted oil prices.

Gold price flat.

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Ltd (ASX: NCM) will be on watch today after the gold price found some support. According to CNBC, the spot gold price is flat at US$1,804.20 an ounce. Weak economic data helped the gold price during overnight trade.

WiseTech Global AGM.

The WiseTech Global Ltd (ASX: WTC) share price could be on the move today when it holds its annual general meeting. The logistics solutions company is likely to provide investors with an update on current trading and its expectations for FY 2021. In August, WiseTech provided full year guidance for revenue growth in the range of 9% to 19% (representing revenue of $470 million to $510 million) and EBITDA growth of 22% to 42% (representing EBITDA of $155 million to $180 million).

More reading

• ASX stock of the day: Platinum (ASX:PTM) shares up 6%
• US markets hit record high, is the ASX 200 next?
• Why the Regis (ASX:RRL) share price is up today despite sliding gold price
• 2 quality ASX cyclical shares to buy today
• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Strike Energy Ltd (ASX: STX) share price was trading higher today following news of a new pipeline for the Western Australia gas market.

At close of trade today, the Strike Energy share price is up 1.92% to 26 cents. In comparison, the All Ordinaries Index (ASX: XAO) is 0.5% higher at 6,888 points.

What’s driving the Strike Energy share price?

The oil and gas explorer provided a business update following APA Group‘s (ASX: APA) pipeline announcement earlier today.

The APA Group advised it plans to invest $460 million to build a 580km gas pipeline. The 12″ pipeline will connect gas fields from the Perth Basin to the Goldfields region, forming an interconnected Western Australia gas grid. The project is due to become operational mid-2022, and will provide additional capacity to the whole network while increasing gas supply options.

Strike said APA’s move to build a new pipeline connection validated how large-scale and low-cost gas resources could benefit the wider state economy.

With Strike’s onshore gas assets located close to the Goldfields region, it can provide supply to the pipeline. This will reduce energy transportation costs for customers purchasing Perth Basin gas. The company estimates that with the new project, Strike’s geographical advantage will increase to 80% of the existing gas market in Western Australia.

Furthermore, the company noted that as gas became more readily available and affordable, it would take over its more expensive counterpart, electricity.

What did the managing director say?

Commenting on the new pipeline, Strike Energy managing director Stuart Nicholls said:

APA’s pipeline announcement is a significant endorsement in the potential of the Perth Basin to be a long term, competitive source of energy for the Goldfields.

Gas is the fuel of choice to replace diesel fired electricity in the Goldfields. It is reliable and affordable, has significantly lower emissions, and facilitates high penetration of complimentary renewable energy.

Strike Energy’s market access continues to grow. We look forward to engaging further in discussions with potential end users of Perth Basin gas.

About the Strike Energy share price 

The Strike Energy share price has lifted more than 26% in the last 6 months, and is closing in on its 52-week high of 29 cents. The company has a market capitalisation $455.9 million, and trades at an average volume of 1.8 million shares daily.

More reading

• Here’s why the Clean TeQ (ASX:CLQ) share price tumbled 10% today
• APA Group (ASX:APA) share price flat despite major project news
• Why the Tower (ASX:TWR) share price is up 4% today
• Why the Next Science (ASX:NXS) share price dropped 9% today
• Recce (ASX:RCE) share price shoots up 5% on new patent approval

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX: NST) share price and the Saracen Mineral Holdings Limited (ASX: SAR) share price will be on watch on Thursday after the release of an update on their merger plans this afternoon.

What did they announce?

This afternoon the two gold miners jointly announced that all Northern Star financier consents and material Saracen facilities and relevant agreements consents required under their merger implementation deed have been obtained and are now satisfied.

This brings the completion of the mega merger a step closer, though it is far from being complete.

The scheme of arrangement, which will see Northern Star acquire 100% of Saracen, remains subject to a number of other remaining conditions. These include approval being obtained from Saracen shareholders and court approval.

Saracen is intending to circulate a scheme booklet to shareholders next month. This booklet contains information about the scheme, the independent expert’s report, and the basis for its board’s unanimous recommendation.

If all goes to plan and Saracen shareholders vote to approve the merger, the scheme is expected to be implemented in February 2021.

The scheme continues to be unanimously endorsed and supported by the Northern Star board, subject to no superior proposal for Northern Star emerging.

Why are the two gold miners merging?

When the merger was announced back in October, Northern Star’s Executive Chair, Bill Beament, stated his belief that the merger will create a lot of value for both sets of shareholders.

He explained: “Northern Star has only ever pursued growth when it will create value for shareholders, and this merger-of-equals will create an abundance of value for both Northern Star and Saracen shareholders.”

“This is significant value-creating M&A. Our position as joint venture partners at KCGM, the close proximity of the majority of the combined company’s assets and a host of other synergies makes this a unique opportunity exclusive to Saracen and Northern Star shareholders,” he concluded.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises more than 1% on Tuesday
• Why ASX, Kogan, Myer, & Northern Star shares are dropping lower
• Why ASX gold shares are the worst performers so far today
• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Australians are going so mad for Tesla Inc (NASDAQ: TSLA) shares that there are now more shareholders than customers in this country.

On one trading platform alone, Stake, more than 17,000 Australians have bought a stake in Tesla. Stake’s research suggests about 10,000 Australians actually own a Tesla car.

Stake chief executive Matt Leibowitz told The Motley Fool the electric vehicle sector is hot with Australian investors now.

“Tesla is undeniably the market leader with approximately 3 times larger market share than 2nd placed Volkswagen.”

More than $442 million has been transacted for Tesla shares through Stake this year. That’s 1840% up on last year’s $22.8 million.

Tesla’s cultural cache

The Tesla brand has built up a “cultural cache”, according to Leibowitz, and this stirs up passions that raw financial figures can never replicate.

“Whether it be selling Tequila or short-shorts for $69.420, it’s become the sort of brand that recruits loyal followers not just transactional customers — Apple-esque.”

Tesla shares started the year at US$86.05. It is now at $555.38 — multiplying 6.5 times in just 11 months, notwithstanding a COVID-19 market crash.

The incredible rise has made its boss Elon Musk the second wealthiest person in the world this week.

The Motley Fool asked Leibowitz how much higher the share price can go when the inflation is all based on potential future earnings.

“While the market prices in future potential, no one actually has a crystal ball,” he said.

“Tesla’s been driving itself for many years but now the category is taking on a life of its own. Modern players like Nio Inc (NYSE: NIO) and Electrameccanica Vehicles Corp (NASDAQ: SOLO) are creating excitement — these are also amongst Stake most traded — and this lifts the whole category.”

Electric vehicles finally take centre stage

Leibowitz said the public is only just starting to understand the potential market for electric vehicles.

“For example, cars aside, Business Wire have estimated the charging infrastructure market alone to be a US$112 billion business by 2027,” he said.

“This is one of those industries that is really poised to completely disrupt and overhaul its predecessors and when you’re at the beginning of that inflection point, potential growth is enormous.”

Taking advantage of the cult status of the brand, Stake has partnered with the official Tesla Owner’s Club in Australia to put on an electric vehicle time trial event on Monday.

The event is claiming to be a world first, and has ambitions to insert itself as an annual fixture in the Australian motorsport calendar.

“It’s these category-and-culture leading brands that can really stir the popularity of investors the world over.”

More reading

• Here are the US shares that CommSec customers are buying
• Tesla stock could surge 104% to $1,000, according to this analyst
• Elon Musk is now the world’s second richest person
• It’s official: Like it or not, millions will own Tesla stock soon
• Tesla (NASDAQ:TSLA) share price zooms 8% on S&P 500 news

Tony Yoo owns shares of NIO Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Crown Resorts Ltd (ASX: CWN) share price is trading higher today despite receiving a downgrade by ratings agency Fitch Ratings. Fitch has placed Crown Resorts’ BBB rating on ‘rating watch negative’, after the NSW gaming authority delayed the December opening of Crown’s Sydney casino until February 2021.

However, the Crown Resorts share price was up 5.93% at $10.19 in closing trade. Could shares in the company be buoyed by the opening of its Melbourne casino today?

Why Crown Resorts has been downgraded

Fitch Ratings said the downgrade reflected its opinion that the Sydney opening ban highlighted an “increased risk” of severe regulatory action being taken by the Independent Liquor and Gaming Authority (ILGA). The ratings agency said this risk could potentially include a loss of licence.

According to Fitch, the ban in NSW has also heightened the potential for further regulatory action by the Victorian and Western Australian regulators. That possibility would have a “significant” impact on Crown’s business, the company says. 

Fitch’s downgrade follows the steps of Moody’s Investors Services on 20 November, when it downgraded the issuer rating of Crown Resorts from Baa2 to Baa3. Moody’s also said that ILGA’s decision to delay the Sydney opening was instrumental in its decision to downgrade. 

In response to the Moody’s downgrade, Crown advised the ASX on Friday that interest costs associated with its Euro Medium Term Notes would subsequently lift by about US$1 million per annum.

What issues has Crown been facing

Crown Resorts has been on the regulator’s radar after it was revealed that the casino paid illegal junket operators to attract high rollers from mainland China. These accusations have been investigated by AUSTRAC, the Australian government intelligence agency set up to monitor money laundering, organised crime, and fraud. 

It is alleged that junket operators based in Macau and Hong Kong are suspected to have links with Chinese organised crime groups. Known as triads, they in turn are said to provide the junkets with capital, protection, drugs, prostitutes and debt collection services.

In response to allegations, Crown has suspended all junket relationships until mid 2021. The ongoing inquiry into Crown’s dealings will decide whether Crown is fit to hold a license in NSW. 

How did the Crown share price perform in 2020

The Crown Resorts share price has dropped by 15% in 2020. The share price began the year at $12.04 before dropping to $6 as the Government put COVID-19 lockdown restrictions in place. It has since risen to $10.19 today. The company commands a market cap of $6.5 billion.

More reading

• ASX 200 rises again on Monday
• Why the Crown (ASX:CWN) share price is dropping lower again today
• Why a2 Milk, Crown, Immutep, & Suncorp shares are dropping lower
• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bravura Solutions Ltd (ASX: BVS) share price was out of form on Wednesday and dropped lower.

The financial technology company’s shares fell 2.5% to $3.35.

Why did the Bravura share price drop lower?

Today’s decline appears to have been driven by concerns over the company’s ability to deliver on its guidance for FY 2021.

Yesterday at its annual general meeting, management revealed that it was facing sizeable headwinds due to the COVID-19 pandemic and Brexit and thus was forecasting a flat full year profit.

However, it was the significant weighting to the second half which is likely to have spooked investors.

Bravura’s chief executive officer, Tony Klim, explained: “In October 2020, we also flagged that the second wave UK lockdowns and stalling Brexit negotiations have increased uncertainty and are slowing the progress of pipeline opportunities in the UK. As a result, Bravura expects FY21 NPAT to be weighted approximately 80% to the second half of FY21.”

Is this share price weakness a buying opportunity?

One broker that sees the weakness in the Bravura share price as a buying opportunity is Goldman Sachs.

This morning the broker retained its buy rating and $4.50 price target on the company’s shares, even though it expects it to fall short of its guidance.

It commented: “In conjunction with its 2020 AGM, BVS further specified that it expects FY21 NPAT to be c.80% weighted to 2H21. We forecast FY21E NPAT of A$38.2mn, down 5% from A$40.1mn in FY20E, comprised of A$10.9mn in 1H21E and A$27.2mn in 2H21E (71% weighted to 2H). Note, our forecasts exclude the impact of the Delta acquisition, which we previously published could be EPS accretive.”

Why does Goldman like Bravura?

The broker’s buy rating is based on four key reasons.

They are its strong market position in existing product offerings (with a high degree of recurring revenue), the emerging microservices ecosystem strategy, a net cash position that provides its with a buffer in uncertain times and flexibility to invest and pursue further acquisitions, and its undemanding valuation.

More reading

• Top brokers name 3 ASX shares to buy today
• Why Coles and this ASX dividend share are buys for income investors
• Here’s why the Bravura Solutions (ASX:BVS) share price raced higher today
• 2 cheap ASX shares to buy right now
• Fund managers have been buying Kogan (ASX:KGN) and this ASX share

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Platinum Asset Management Ltd (ASX: PTM) share price is on fire today, rising 6.71% at the time of writing to $3.89 a share. Platinum shares closed at $3.66 yesterday afternoon before opening at $3.79 this morning and climbed as high as $3.94 today before settling at their current level. By comparison, the S&P/ASX 200 Index (ASX: XJO) is also up today, but only by 0.73% to 6,692.8 points.

Today’s move caps off what has been a stellar week and month for the company. Platinum shares are up more than 11% over the past 5 trading days, and up more than 26% since the start of November.

Who is Platinum Asset Management?

Platinum is one of the most famous asset managers on the ASX, despite only starting out in 1994. Platinum made a name for itself by focusing on companies listed outside Australia’s ASX, one of the first ASX fundies to do so.

Platinum was co-founded by ASX investor and billionaire Kerr Neilson, with financial backing from the famous American billionaire (and the ‘man who broke the Bank of England’) George Soros.

Mr. Neilson sat at the helm of the company for almost 2 decades before stepping down as chief investment officer in 2013. He remained the chief executive officer of Platinum until 2018, when he handed the role to the current occupant Andrew Clifford. Mr. Clifford also serves as the current chief investment officer. Mr. Neilson remains at Platinum in the capacity of executive director though, and, according to the company, “remains fully engaged in the business and continues to work on the generation of investment ideas”.

Despite this blue-blooded reputation, Platinum has been struggling in recent years. The company’s shares were trading as high as $9 back in 2015, and as high as $8.72 as recently as 2018. That means Platinum shares are down almost 56% from these 2018 highs on current levels. That doesn’t compare well with other large ASX fund managers.

As an example, take another ASX fund manager, run by another famous billionaire investor in Hamish Douglass, and with a similar focus on global shares to Platinum – the Magellan Financial Group Ltd (ASX: MFG). The Magellan share price has risen close to 150% over the same period Platinum shares have fallen almost 56%.

So why has Platinum been underperforming so drastically in recent years?

Underperformance dogs Platinum

Platinum follows a ‘value investing’ philosophy in a similar vein to the legendary Warren Buffett. It offers a range of unlisted managed funds, as well as some listed investment companies (LICs).

The company describes its methodology as a “contrarian, long-term investing philosophy”, seeking out “companies whose true worth and prospects are yet to be fully recognised by the market”. Platinum tells investors that “we look beyond short-term market turbulence caused by events of a transient nature to seek out ‘unfashionable’ companies whose actual worth is greater than the value implied in their present share price.”

Value investing not so valuable

However, value investing has faced many problems in recent years, having to navigate a market that has been more willing to reward a ‘growth investing style’, especially in the tech space.

We can see this reflected in the performance of some of Platinum’s flagship funds. For example, the Platinum Capital Ltd (ASX: PMC) LIC has returned an average of just 4.3% per annum over the past 5 years, compared with 8.5% p.a. for its benchmark, the MSCI AC World Net Index. The unlisted Platinum International Fund has fared even worse against the same benchmark, delivering just 0.1% in returns per annum over the past 5 years.

This underperformance is likely the reason why Platinum has been dealing with fund outflows for a while now, and presently manages just under $22 billion in assets. In contrast, Magellan now manages more than $100 billion.

My Fool colleague Tony Yoo reported on this phenomenon of value underperformance in September, and quoted Betashares senior investment specialist Cameron Gleeson:

Falling rates increase the present value of future cash flows, and this typically will have an especially positive impact for companies with strongly growing earnings… with the benefit of hindsight it’s perhaps not surprising that we have seen growth outperform value for over 10 years now.

What about the recent gains?

Although Platinum has evidently been struggling in recent years, the company’s recent share price performance would certainly be encouraging for investors.

In the company’s recent annual general meeting, Platinum reported that its funds under management had increased by 1.9% between 30 June and 31 October 2020. This was on the back of some recent good performance from its funds, as well as a rising tide on global share markets. Thus, it’s likely that investors who are watching the markets climb higher and higher this week are assuming the benefits will disproportionally benefit Platinum.

More reading

• US markets hit record high, is the ASX 200 next?
• Why the Regis (ASX:RRL) share price is up today despite sliding gold price
• 3 ASX shares with large dividend yields
• 2 quality ASX cyclical shares to buy today
• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Fund manager 360 Capital Group Ltd (ASX: TGP) today says it expects earnings to double in FY21, as the company aims to scale up its private equity business and expand its businesses across the investment strategies. The 360 Capital share price rose by 2.5% to 82 cents after the announcement.

What else was said by 360 Capital today?

360 Capital is forecasting a distribution of 4 cents per share in FY21. As such, the company expects its earnings per share (EPS) to be above 4 cents, but more clarity around these figures will be announced in its half year FY21 results in February 2021.

The company says its focus in FY21 is to continue to scale each of the funds under its management, and to start getting efficiencies from scaling up the platform.

360 Capital says its balance sheet remains in a strong (but inefficient) position with approximately $80 million in cash and no debt. The company aims to scale up investments on this free cash going forward, which it hopes will boost its earnings in FY21.

What is 360 Capital and what does it own?

360 Capital was established in 2006 by current chief executive, Tony Pitt. The company is a funds manager that invests in ASX-listed companies as well as private companies under its private equity business. The company has built its investment strategy around four key assets: real assets, private equity, public equity, and credit.

Some of the company’s achievements in the past have been the $300 million listing of Centuria Industrial REIT (ASX: CIP) in 2012, the $45 million initial public offering (IPO) of 360 Capital REIT (ASX: TOT) in 2015, and its own $71 million backdoor listing of 360 Capital Group via Trafalgar Corporate Limited in 2013. 

In its private equity business, the company currently owns stakes in four different companies. One of them is in a private company that owns a 19.55% stake in the E&P Financial Group Ltd (ASX: EP1).

Earlier this month, 360 Capital announced in a letter to shareholders that it sought to explain why it has acquired 19.55% of E&P, and why it has made a conditional offer to acquire the remaining shares with the intention of taking E&P private.

In that letter, 360 Capital argues that E&P should be privatised because it would give it greater flexibility to manage its capital base, and respond faster to opportunities by removing the complexities associated with public listing. Those discussions are still ongoing. 

How has the 360 Capital share price performed in 2020?

The 360 Capital share price has been one of the casualties of the 2020 pandemic, as its listed property investments were hit hard. The share price has lost more than 24% in 2020 and, at the current price of 82 cents, the company has a market capitalisation of $185 million. 

More reading

• 6 major events for ASX shares this week
• Why the Evans Dixon (ASX:ED1) share price is up 7% as the All Ords slides

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Clean TeQ Holdings Limited (ASX: CLQ) share price is down 10.3% today. This as the company emerges from a 2-day trading halt to announce a $19 million capital raising via a private share placement.

Although well down from its 8 September 2020 highs of 38 cents per share, at today’s 26 cents, the Clean TeQ share price remains up 18.2% year-to-date.

By comparison, the All Ordinaries Index (ASX: XAO) is up 1.3% so far in 2020.

What does Clean TeQ do?

Based in Melbourne, Clean TeQ Holdings provides services in metals recovery and industrial water treatment. The company applies its proprietary continuous ion exchange technology via its wholly owned subsidiary, Clean TeQ Water.

Clean TeQ also owns 100% of the Clean TeQ Sunrise Project in New South Wales. The company counts this amongst the largest cobalt deposits outside of Africa. It also has some of the largest and highest-grade accumulations of scandium on the planet.

Why did the Clean TeQ share price plummet today?

Co-chair Robert Friedland and CEO Sam Riggall told the ASX today that a private placement at 25 cents per share had been subscribed for institutional and sophisticated investors out of Australia, Asia, Israel and North America.

The share placement, which will raise $19 million in capital, comes at a 13.8% discount to Clean TeQ’s 29 cent share price at market close on Friday. Clean TeQ was in a trading halt this week on Monday and Tuesday and expects settlement to occur this Friday, 27 November.

Management also announced that eligible shareholders would be able to apply for up to $30,000 worth of shares at the 25-cent placement price. Clean TeQ’s roughly 7,000 shareholders will be able to do so without paying any brokerage or other transaction costs.

Among other allocations, the new capital will be used to fund ongoing development and growth of the company’s water purification business.

The capital will also fund additional mineral exploration at the company’s tenements. These include the Phoenix Platinum Zone beneath the Sunrise laterite and the Minore Project in New South Wales. Clean TeQ is progressing a six-hole diamond core drill program targeting platinum group metals.

More reading

• APA Group (ASX:APA) share price flat despite major project news
• Why the Tower (ASX:TWR) share price is up 4% today
• Why the Next Science (ASX:NXS) share price dropped 9% today
• Recce (ASX:RCE) share price shoots up 5% on new patent approval
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The APA Group (ASX: APA) share price has had a mixed day of trading today after the company announced a new project in Western Australia. Shares in the gas distributing giant are currently trading flat at $10.59, the same price as yesterday’s close. However, the APA Group share price was as high as $10.78 in early morning trade.

What is the new project?

The APA Group announced an investment of up to $460 million to construct a 580km, 12″ pipeline in Western Australia. The new pipeline will connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid.

The company said the new pipeline would be connected to its existing pipeline. In doing so, this would create a gas pipeline system in WA covering 2690km. Called the Northern Goldfields Interconnect (NGI) pipeline, the project is expected to be operational around mid 2022. 

As part of the NGI commitment, APA Group advised it would divest 50% of its share in the Mid West Pipeline, to be advanced in the coming months. The transfer is not expected to have a material impact on APA’s financial performance or operations.

What management said

APA Group CEO Rob Wheals said:

Having developed an interconnected gas grid on the East Coast that flexibly and seamlessly moves gas throughout eastern Australia, we are thrilled to now be creating one for Western Australia.

By connecting existing pipelines, our investment decision to build the NGI will not only add capacity to the system but will also increase gas supply options for customers. This will open up new regions for development supporting thousands of jobs both during and post-construction.

About the APA Group share price

Shares in the natural gas transmission company dropped as low as $8.06 in the March COVID-19 market crash. The APA Group share price has recovered somewhat, down 4.25% since January. In comparison, the All Ordinaries Index (ASX: XAO) is up 1.28%.

More reading

• Why the Tower (ASX:TWR) share price is up 4% today
• Why the Next Science (ASX:NXS) share price dropped 9% today
• Recce (ASX:RCE) share price shoots up 5% on new patent approval
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Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of APA Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post APA Group (ASX:APA) share price flat despite major project news appeared first on Motley Fool Australia.

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