Tag: Motley Fool

The Next Science Ltd (ASX: NXS) share price is falling today as the company announced a non-renewal agreement with 3M. The news has sent Next Science share price plummeting 9.24% to $1.13 during late afternoon trade. In comparison, the All Ordinaries Index (ASX: XAO) moved in the opposite direction, lifting 0.5% higher to 6,772 points.

What does Next Science do?

Based in Sydney, Next Science is a medical technology company developing and commercialising its Xbio technology. This patented product attacks biofilm structures by breaking metallic bonds that hold the extracellular polymeric substance together.

Bacterial biofilms are a leading cause of antimicrobial resistance. They can be found in almost all aspects of human health, industry and food production. With nearly 80% of all global bacterial infections associated with biofilm bacteria, Next Science aims to reduce the impact of biofilm-based infections.

What’s driving the Next Science share price lower?

Next Science advised that it has decided not to renew its distribution agreement with 3M for BlastX.

The deal was contracted for a term of 3 years, and required both parties to consider their future partnership by the year’s end. Being the second year of the agreement, Next Science and 3M opened discussions and decided not to renew the arrangement.

The company said that communication was ongoing as to how to transition BlastX back to Next Science in a timely manner. The plan will be to prioritise the continuous supply of BlastX and ensure no disruption to patient care. Next Science advised that it will update the market when further developments arise.

About the Next Science share price 

The Next Science share price has been a poor performer recently. Shares in the medical tech company have fallen from a 52-week high of $2.76 to $1.13 today. The drop represents a loss of more than 57% to investors who held onto their shares since February.

However, the company says elective surgeries have continued to increase from the second quarter to third. In addition, the company’s focus on driving market penetration of its SurgX product (sterile wound gel to reduce surgical site infection) may increase its revenue streams.

More reading

• Recce (ASX:RCE) share price shoots up 5% on new patent approval
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• The Auroch (ASX:AOU) share price rocketed 11% higher today. Here’s why.
• Look out for the Auscann (ASX:AC8) and Cannpal (ASX:CP1) share prices post trading halt
• Why the Global Health (ASX:GLH) share price is surging up today

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nexus Energy Limited. 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.

The post Why the Next Science (ASX:NXS) share price dropped 9% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fpQORO

The S&P/ASX 200 Index (ASX: XJO) went up another 0.3% today to 6,562 points.

Here are some of the highlights from the ASX:

Zip Co Ltd (ASX: Z1P)

Buy now, pay later business Zip released a trading update for the first four months of FY21.

Zip said that it continued to deliver record results across all regions.

The company said that its revenue in the 2021 financial year to date was $96.7 million, which was an increase of 91% compared to the prior corresponding period. The month of October saw revenue of $27.6 million.

When including Zip’s business segment, total revenue was $100.2 million, with $28.4 million of that generated in October.

Zip delivered record transaction volume in October of $401.1 million, which was 104% higher than the prior year. Zip’s transaction volume is now annualised at $4.8 billion.

Customer numbers increased 109% to 4.8 million and global merchants rose by 74% year on year to be more than 36,500.

Zip US, under the QuadPay brand, saw growth accelerate after the first quarter of FY21. October was a record across all key metrics with $160.6 million in transaction volume (up 200% year on year), $11.4 million in revenue and more than 2.5 million customers.

The company said that it became the first buy now, pay later business to launch a Chrome Extension, which will allow customers to pay later on any website utilising unique virtual card technology alongside a Google plug-in.

In Australia, monthly arrears – a forward indicator of future losses – reduced from 1.33% in June to 0.89% in October.

Larry Diamond, the CEO and managing director of Zip, said: “All regions are trading very strongly, and the US is now seeing more than 15,000 downloads per day.

“Whilst online trade is expected to be very strong this year, and Zip will enjoy its share, this season Zip expects to significantly lift its instore volumes. Our partnership with Visa and access to Apple Pay and Google Play wallets, unlocks everyday spend, providing our customers with more utility and choice. Zip is well on its way to becoming the first payment choice everywhere and every day.

The Zip share price went up 0.3% today.

Crown Resorts Ltd (ASX: CWN)

Casino business Crown announced how its operations will look with the latest Victorian changes to restrictions.

The ASX 200 casino business said that Crown Melbourne now has a total capacity limit of 1,000 patrons with a maximum capacity limit in each indoor space of the lesser of 150 patrons or the number permitted by the density requirement of one person per four square metres.

Crown is allowed to commence the operation of its table games. There must be physical distancing between patrons and there must be the deactivation of every second electronic gaming machine and electronic table game. There must be a COVID-19 marshal present. The entertainment complex must also have enhanced hygiene protocols.

The business expects to commence operating under these new directions from Wednesday, 25 November 2020. Crown Metropol Melbourne is expected to re-open on 1 December 2020.

The Crown share price went up around 1% in reaction to this news.

Ampol Ltd (ASX: ALD)

Ampol announced today the completion of its property transaction for net proceeds of $635 million. This was higher than the previous guidance of approximately $612 million because of lower than estimated transaction costs.

Management decided to launch an off-market buy-back of $300 million.

Ampol CEO and managing director said: “We have delivered on our stated 2019 plan to unlock value through network optimisation and I am pleased the completion of the property transaction will further strengthen our balance sheet while allowing us to return capital and released franking credits.”

The Ampol share price went up around 3% in reaction to this news.

More reading

• Why Morgans just upgraded the Orica (ASX:ORI) share price to “buy”
• Is the US heading for a ‘double-dip’ recession?
• G8 Education (ASX:GEM) share price rebounds after lawsuit news
• Why Ampol, Cann, Fortescue, & Mesoblast shares are surging higher
• ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks

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 ZIPCOLTD FPO. 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.

The post ASX 200 rises again on Monday appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2J1t8ai

The TPG Telecom Ltd (ASX: TPG) share price received a boost today after the Australian Competition and Consumer Commission (ACCC) announced that it will not oppose a proposed buyout offer of Amaysim from Optus. This surprising announcement has now opened the door for TPG to make a counter offer for Amaysim’s prized business.

The TPG share price jumped by 4.81% today to $8.07 following the announcement. 

What’s the background behind this

Optus had offered $250 million to Amaysim’s shareholders to purchase its business. The proposal had been submitted to the ACCC for review, before being given the green light today by the competition watchdog.

Today’s decision was seen to be significant by market analysts, especially since the ACCC had earlier tried to block a merger attempt between TPG and Vodafone – a case the ACCC lost in the courts. 

The news means that the door is now wide open for a takeover battle over Amaysim. Analysts are expecting TPG to make a counter offer with respect to Optus’ $250 million proposal – which many believe is too low.

The market also believes that the proposal from Optus is unorthodox – as it wants to only buy the 1.19 million Amaysim customers and not take over the entire business. This means that Amaysim management must use about $100 million of the proceeds to wind up the company, leaving shareholders with only $150 million. 

Amaysim shareholders are due to vote on the deal in January 2021.

Why the battle for Amaysim

Amaysim is by far Australia’s leading low-cost mobile network reseller, known as the mobile virtual network operators (MVNO). It has 1.19 million subscribers or about 35% of Australia’s MVNO market. The company’s 10-year wholesale contract is due to expire in June 2022, which prompted Optus to make the bid. 

Analysts at Goldman Sachs have said that TPG would get a 30% earnings per share uplift even if it bought Amaysim for double the price Optus is offering. The broker says that Amaysim’s 1.9 million customers would give TPG’s newly launched low-cost mobile network Felix a boost against its competitors. 

TPG share price in 2020

The TPG share price has lost almost 10% since it listed on the ASX in June this year. On the first day of trading, the TPG share price closed at $8.90. It dropped to $7 at the beginning of November, before regaining ground to today’s price of $8.07. The company commands a market price of $14.3 billion. 

More reading

• Government declares 2021 as ‘Year of 5G’

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.

The post Here’s why the TPG (ASX:TPG) share price surged by 5% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35VdrKX

The Mesoblast limited (ASX: MSB) share price was a very strong performer on Monday.

The biotech company’s shares finished the day a massive 17.5% higher at $4.28.

Why did the Mesoblast share price rocket higher?

Investors were buying the company’s shares again on Monday in response to a positive announcement at the end of last week.

That announcement revealed that the company has signed a major deal with pharma giant Novartis.

Novartis has signed an exclusive worldwide license and collaboration agreement for the development, manufacture, and commercialisation of Mesoblast’s mesenchymal stromal cell (MSC) product remestemcel-L.

The deal, which is focused on its treatment of COVID-19 Acute Respiratory Distress Syndrome (ARDS), will see Novartis pay US$50 million upfront and then upwards of US$1.25 billion in milestone payments to Mesoblast.

One broker that responded positively to this news was Bell Potter.

What did the broker say?

In a note released on Friday, Bell Potter said it believes this is a “fantastic deal” for Mesoblast and notes that it provides greater certainty in regard to the manufacturing and commercialisation of the product for COVID-19 ARDS.

In addition to this, it feels Novartis brings a lot to the table strategically. This includes expertise in respiratory indications and cellular therapy.

Where is the Mesoblast share price heading?

While the broker advised that it was reviewing its recommendation, as things stand, it has a (speculative) buy rating and $7.00 price target on the company’s shares.

Based on today’s Mesoblast share price, this price target represents 63% upside over the next 12 months.

However, given that its current forecasts don’t include any upfront royalties for COVID-19 ARDS, it notes that this deal represents immediate upside to its estimates. This could mean it bumps its valuation higher upon review.

More reading

• Why Ampol, Cann, Fortescue, & Mesoblast shares are surging higher
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• Here are the 10 most shorted shares on the ASX
• These were the best performing ASX 200 shares last week
• ASX 200 ends flat on Friday

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.

The post Why the Mesoblast (ASX:MSB) share price rocketed 17% higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2HtXMJ6

The Healius Ltd (ASX: HLS) share price edged higher today. This comes after the company announced the successful completion of its medical centres business. At the time of writing, the Healius share price is up 0.5% to $3.55.

Completion of sale

According to the release, BGH Capital has acquired Healius’ medical centres business, Healius Primary Care. The deal includes 69 medical centres, 13 medical practices and 62 dental clinics.

Healius received cash proceeds of $483 million. This represents $500 million as enterprise value when adjusted for future earn-outs, movements in working capital, separation and completion costs. Furthermore, a deferred consideration of $75 million for the dental business was received due to its strong trading following COVID-19.

The company advised it will continue to operate its existing pathology collection centres and imaging clinics. These are located within the medical centres under long-term leases at market rates. In addition, Healius will provide its sold-off business certain services on commercial terms for roughly 12 months.

Healius noted that the proceeds of the sale will be used to strengthen its balance sheet and support growth initiatives in its pathology and imaging and its day hospitals businesses. The company stated that it’s on track to streamline its portfolio through corporate cost base initiatives.

What did management say?

Healius managing director and CEO, Mr Malcolm Parmenter, commented on the sale, saying:

This transaction simplifies our portfolio and allows us to focus on our market leading diagnostics and day hospital businesses, delivering on our mission of sustaining life-enhancing healthcare through people who care. It is a positive step for Healius, strengthening the company, reducing our net debt and freeing up capital for investment.

Backed by the financial strength and expertise of BGH Capital, I am confident that the business will thrive as a standalone entity, expanding its critical role in frontline care in Australia.

How has the Healius share price performed?

The Healius share price has been has been a solid performer since COVID-19 hit the Australian healthcare sector. Shares in the company sank to as low as $1.92 in March and have steadily been gaining traction. Reaching its 52-week high last month of $3.85, the Healius share price fell just short of its 5-year record of $4.04 achieved in 2017.

Investors look to be remaining bullish on Healius shares, with the company’s share price rising more than 51% in the last 3 months alone.

More reading

• 4 top ASX share picks to buy
• Top brokers name 3 ASX shares to buy next week

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.

The post Why the Healius (ASX:HLS) share price edged higher today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kRacbr

The Webcentral Group Ltd (ASX: WCG) share price is surging today, up 34.92% at the time of writing to 42 cents a share. Webcentral shares closed at 30 cents on Friday afternoon last week, but opened at 32 cents this morning before rocketing as high as 49 cents today, a new 52-week high for the company.

Webcentral shares have had an inversely parabolic year in 2020 so far. The company’s shares were riding high at the start of the year (trading at 38 cents in February), but were hit hard in the March market crash, and slid as low as 6 cents a share soon after. That means that, on current pricing, Webcentral shares are up 600% from these lows.

Even so, Webcentral has been giving investors a tough time in recent years. The company’s shares are down more than 77% over the past 5 years and more than 76% since this time 10 years ago. 

So who is Webcentral? And why are the company’s shares surging today?

Webcentral: an introduction

Webcentral is a company that has been around for a while, albeit under a different name – Melbourne IT Group. It was founded back in 1996 and first listed on the ASX in 1999, but has never quite seen the sky-high share price of ~$14 that the then-dot.com boom was giving out at the time since.

Webcentral describes itself as “Australia’s largest full-service digital services partner for small and medium business.”

According to the company, it supports the growth of over 300,000 Australian businesses. It does so by providing internet domain registration, email and office applications, cloud services, security services and digital marketing. On the former, it was apparently the first Australian company to offer internet domain registry services.

Webcentral has four main brands: Netregistry, WME, Melbourne IT and Domainz. Netregistry is the brand behind Webcentral’s domain, marketing and hosting services. WME specialises in search engine optimisation (SEO), social media marketing, and web design. Melbourne IT offers domains, online security and website design, while Domainz is the company’s New Zealand business, offering similar services that the other three brands provide across the ditch.

Interestingly, Webcentral has recently been the target of a takeover by 5G Networks Ltd (ASX: 5GN), which has a lot to do with the company’s recent share price performance.

Why are Webcentral shares surging today?

The 5G Networks takeover is effectively underway, with 57% of shareholders accepting the offer, according to reporting in the Australian Financial Review (AFR). The offer was reportedly a 1-for-12 all-stock bid, which the AFR alleges could be worth as little as 14 cents a share.

The company said the following on this development: “5GN has long considered the Webcentral Group a valuable enterprise in need of funding and direction.”

Webcentral recently announced to the ASX a capital raising program, partly in order to fund the merger with 5G Networks, which resulted in the shares being suspended from trading.

Following the successful shareholder vote, 5G is reportedly already moved to install its own CEO Joe Demase as a director of Webcentral, alongside the appointment of other executive positions.

Investors are evidently giving a vote of confidence to 5G Network’s plans for the company, which is likely behind the Webcentral share price’s dramatic surge today.

More reading

• Here’s why the 5G Networks (ASX:5GN) share price is zooming higher
• Why 5G Networks, Cedar Woods, SEEK, & Tyro shares tumbled lower today

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. 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.

The post ASX stock of the day: Webcentral (ASX:WCG) shares surge 34% appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3nLJN0G

The Bubs Australia Ltd (ASX: BUB) share price is trading flat on Monday following the release of its annual general meeting presentation.

In afternoon trade, the infant formula, baby food, and vitamins company’s shares are fetching 71 cents.

What happened at the Bubs annual general meeting?

At the meeting the company warned shareholders that FY 2021 would be a challenging year because of the pandemic.

Nevertheless, it did have a success Double 11 (Chinese singles’ day) promotional period.

Bubs recorded Double 11 sales growth of 174% compared to the prior corresponding period. Management notes that sales on its Tmall Flagship store exceeded last year’s sales in the first hour of its campaign.

Bubs also revealed that it enjoyed significant growth on other platforms such as JD.com, VIP.com, and Kaola. So much so, Bubs Goat is now the number 3 imported Goat infant milk formula brand on Kaola ahead of the company’s two largest international competitors.

What about the future?

Management believes Bubs is well positioned to deliver sustainable long-term growth as it navigates through the disruption of the COVID-19 macro-environment.

It also notes that demand remains strong for its products “as Chinese parents continue to trade up to premium and authentic infant nutritional products.”

Looking further ahead, management believes the company is well-placed to achieve its long term growth targets.

It commented: “We have a clear vision across our three growth horizons to realistically aspire to a business turning over $400 million in five years’ time – a vision shared by our institutional investors who oversubscribed to the recent Share Placement.”

What happened with the shareholder votes at the annual general meeting?

While management has spoken very positively about the future, many of Bubs shareholders don’t appear pleased with the way the company has been run in recent times.

And while there are still some votes open and usable, as things stand, Bubs is about to narrowly avoid receiving a first strike against its remuneration report. According to the presentation, 20.21% of votes have been made against the renumeration report.

Furthermore, approximately 10.4% of votes have been made against the re-election of executive chairman, Dennis Lin, and 13.2% of votes were made against the issuing of options to CEO, Kristy Carr.

More reading

• 3 ASX shares targeting huge growth in the 2020s
• Why Bigtincan, Bubs, Carsales, & Western Areas are dropping lower
• Bubs (ASX:BUB) share price tumbles lower on sales drop and cash burn
• Got $1,000? You should buy one of these 8 ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. 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 Here’s what happened at the Bubs Australia (ASX:BUB) AGM appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3o0xrSH

Last week, Commonwealth Bank of Australia (ASX: CBA) saw its share price rise 8.11%, more than any other of the big four banks. Furthermore, the Australian Prudential Regulation Authority (APRA) announced it was reducing the bank’s capital charge by 50%. This means that Commbank has to hold $500 million less capital as risk mitigation. This helped the CBA share price to rise by 1.43% on Friday alone. 

In other positive news, APRA has indicated it may also remove the cap on bank dividend payments. Additionally, Commbank CEO, Matt Comyn, noted last week that the housing slump risk to the economy had passed. A combination of factors fuelled the CEO’s optimism. These included strong surplus savings of $100 billion, very strong housing application figures, and robust consumer confidence.

Adding to this is the motivation for house buyers, with the Reserve Bank of Australia (RBA) recently reducing interest rates to historically low levels. Lastly, the government proposes to relax responsible lending laws. With all of these factors at play, could the CBA share price be headed into calmer waters? There are, however, challengers in the mortgage space.  

Challenges facing the CBA share price

Into the mix of factors that could possibly impact the CBA share price, is the planned IPO of one of Australia’s leading non-bank lenders, Liberty Financial Group. Started in 1997, Liberty boasted an $11.7 billion loan book at 30 June. In addition, Liberty delivers a stronger return on assets than any of its bank or non-bank lending counterparts.

Credit Suisse Group (NYSE: CS) is expected to manage the institutional book build, floating 20% of Liberty’s value on the ASX at a price of $363 million. This values Liberty at approximately $1.815 billion with a price-to-earnings (P/E) ratio of 11 times the lender’s forecast net profit after tax and amortisation (NPATA). This P/E is lower than any other ASX listed non-bank lender.

For instance, non-bank lender Resimac Group Ltd (ASX: RMC) has seen its share price rise by nearly 45% in the past month. It is currently trading at a P/E of 14.47. Stablemate MyState Limited (ASX: MYS) has seen an almost 22% rise in its share price over the past month and has a current P/E of 15.13. Meanwhile, sector minnow, Auswide Bank Ltd (ASX: ABA), has seen a 19.6% rise in its share price over the same period, and trades at a P/E of 13.65.

Does the CBA share price have a moat?

A moat is Warren Buffet’s term for an unassailable competitive advantage, invoking an image of a medieval fortress. And in the case of the CBA share price, one could argue it does have a moat against its non-bank lending counterparts.

First is the manner in which all companies obtain capital to lend. Non banks rely on a range of mechanisms. In the case of Resimac, for instance, it uses low interest warehouse funding for short-term capital and a global securitisation program for long-term funding.

Securitisation is where the company will add together dozens, if not hundreds, of mortgages and float them on the debt markets. Resimac has been a regular issuer of Residential Mortgage-Backed Securities (RMBS) since 1987. Currently, it pay 130 basis points, or 1.3% for capital it secures in this manner.

Commbank, however, is able to secure capital at far lower rates. For example, CBA is an authorised deposit-taking institution. It takes in deposits and loans them out at higher interest rates. This is the core of the bank’s business model.

Second, banks have access to the Reserve Bank of Australia’s (RBA) $200 billion term funding facility (TFF). This is a facility that provides banks access to funds at the very low current cash rate of 0.1%. This is 1.2% lower than a lender like Resimac can access. 

Outside of consumer lending, Commbank has a range of other products and service lines that provide it with additional revenue streams and help to set it apart from some of its competitors. For example, Commbank is the largest digital payments provider in the country. Secondly, it owns 50% of the Klarna buy now, pay later platform in Australia and new Zealand. 

Foolish takeaway

Despite looming competition in the mortgage sector, the CBA share price appears to have some notable tailwinds. The APRA changes on capital holdings and potential dividend caps are a positive development, as is the uptick in the housing market CEO, Matt Comyn, has observed. But ultimately, could it be the bank’s access to low priced capital that helps set it apart from the rising tide of non-bank lenders? Only time will tell. 

More reading

• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• Top brokers name 3 ASX shares to sell next week
• ASX 200 ends flat on Friday
• What would it take for the ASX 200 to hit 7,000 again?
• ASX 200 up 0.1%: CBA’s APRA update, Mesoblast rockets, Oil Search sinks

Motley Fool contributor Daryl Mather 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.

The post Will the Liberty IPO damage the Commonwealth Bank (ASX:CBA) share price? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2J1fX9B

The GME Resources Limited (ASX: GME) share price has rocketed today following the release of a drilling update by the company. At the time of writing, the GME share price is up 35.71% to 5.7 cents per share, giving the company a market capitalisation of around $23 million.

It was an even better story earlier in the trading day as well. The GME share price opened at 7.1 cents this morning and spiked to 8.8 cents at one point. That spike represented a new 52-week high for the company. At that level, GME shares were up almost 70% from last week’s closing price.

What’s driving the GME share price today?

So what’s behind the dramatic surge in the GME share price today? Well, the company released a market announcement to the ASX this morning before market open. This announcement probably explains why investors are fighting to get a hold of GME shares today.

In this announcement, GME told investors that drilling at its Fairfield gold site has intersected a high-grade deposit of gold ore. The most promising result from the drilling was an ore sample containing 4.8 grams of gold per tonne of ore. The best sample ever recorded at Fairfield was reportedly 9.9 grams of gold per tonne of ore.

The company stated the following in the announcement:

Drilling has confirmed the presences of two moderate to high grade shoots and associated broader zones of low to moderate-grade, supergene, gold mineralisation within near surface weathered host rock… Of particular interest is the drilling interception of shallow moderate to high-grade gold mineralisation at the northern end of the deposit. This mineralisation is open both along strike to the north and down dip and opens up potential for extension of the deposit to the north which is untested.

The company tells us that “further work” is currently being planned to test the extent of the discovery of these drilling results. GME stated that “resource modelling and subsequent technical and economic studies will be pushed back until further drilling has been completed”.

What does GME Resources do?

GME is a mining company. Its primary project is the NiWest Nickel-Cobalt project in Western Australia, of which it owns 100%. NiWest is estimated to house 830 kilotonnes of nickel and 52 kilotonnes of cobalt. The company tells us that its resources are developed into ‘battery-ready’ form. Rechargeable lithium-ion batteries (especially larger ones) use substantial amounts of both nickel and cobalt in their manufacturing process.

GME also owns the Fairfield gold deposit in the northeastern goldfields region of Western Australia. Interestingly, this deposit has been mined at various times for gold dating back to 1912.

More reading

• JobKeeper saved 700,000 jobs, reveals RBA
• Why the Whispir (ASX:WSP) share price is storming higher
• Why Morgans just upgraded the Orica (ASX:ORI) share price to “buy”
• Fundie names 5 ASX shares with good growth prospects
• HomeCo Daily Needs REIT (ASX:HDN) on debut today as largest IPO in 2020

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.

The post Here’s why the GME Resources (ASX:GME) share price is up 36% today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/33bjEAq

A Reserve Bank study has found the Federal Government’s JobKeeper subsidy has prevented 700,000 Australians from losing their jobs during COVID-19.

“Our baseline estimate is that 1-in-5 JobKeeper recipients would not have stayed employed during this period had it not been for JobKeeper,” read the RBA report.

With 3.5 million receiving JobKeeper, that equates to 700,000 jobs directly saved. It’s likely saved many more indirectly.

“Overall employment losses would have been twice as large over the first half of 2020 without JobKeeper.” 

The program saw the government hand out $1,500 per fortnight to companies, to be eventually passed onto employees. The amount has since reduced to $1,200 and will be phased out in the first half of 2021.

All up the government will end up spending about $100 billion on JobKeeper.

The RBA report warned that the benefits were short term and that policymakers shouldn’t assume it would last.

“Indeed, the international literature suggests that wage subsidies, if maintained too long, can have adverse effects on incentives and impede the reallocation of labour.”

ASX companies accused of misusing JobKeeper  

While the effectiveness of the support to the Australian economy has now been quantified and confirmed, some ASX-listed companies have been criticised about how they’ve used the assistance.

Last month an Australian Taxation Office commissioner warned employers to stop pocketing JobKeeper then fattening up bonuses to its top executives.

“The quid pro quo in the community’s mind is that large corporates, in particular but not limited to those who accessed these schemes, will pay their share and improve their approach to tax,” said ATO second commissioner Jeremy Hirschhorn.

“Yes, follow the tax law, but also follow the spirit of the law.”

Several publicly listed businesses have provoked outrage among taxpayers for receiving JobKeeper then paying out millions in bonuses to its leadership.

For example, Premier Investments Limited (ASX: PMV) disclosed that $49 million of JobKeeper payments propped up its balance sheet as of July. Then it granted a $2.5 million bonus to its chief executive officer.

In September, unions won a Federal Court case against Qantas Airways Limited (ASX: QAN) for keeping JobKeeper money that should have been passed onto workers.

More reading

• Why ASX shares are in awesome shape vs overseas markets
• Qantas (ASX: QAN) share price on the rise as more flights resume
• Why the Helloworld (ASX:HLO) share price is climbing higher today
• Revealed: Shares that’ll shoot up with a COVID-19 recovery
• Analysts name 2 of the best ASX shares to buy now

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia owns shares of and has recommended Premier Investments 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.

The post JobKeeper saved 700,000 jobs, reveals RBA appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fmB8Pp