Tag: Motley Fool

As I’m sure we would all be aware of today, the vote counting for the US elections is still underway and unresolved. Neither incumbent President Donald Trump or his Democratic challenger, former Vice President Joe Biden, has yet been officially declared the winner of this week’s presidential election. Saying that, Joe Biden is on track to receive the most votes in the electoral college by the most recent vote counts. As such, it is looking increasingly likely that he will emerge the winner from this most extraordinary of elections, going off of the latest data.

So, if Mr. Biden does emerge victorious, what will a new president mean for global markets, and, of course, the S&P/ASX 200 Index (ASX: XJO) and ASX shares?

According to reporting in the Australian Financial Review (AFR), Joe Biden’s priorities (assuming he is sworn in as President of course) are likely to be focused on the coronavirus, economic recovery and healing the bitter divisions that will inevitably stem from the close election result.

These are all domestic American issues.

Bidenomics for the ASX?

However, the AFR article also notes that climate change and foreign policy will be secondary priorities for a Biden administration. On climate change, the article notes that Biden has stated that “if we don’t get this right, nothing else matters”.

As such, it expects Biden to quickly rejoin the Paris agreement on climate change and “pressure other countries to do more. Australia will be among them.”

That may indicate that a Biden presidency might not be too kind to fossil fuel extractors like BHP Group Ltd (ASX: BHP) and Woodside Petroleum Ltd (ASX: WPL)

The article also notes that a Biden administration’s foreign policy may seek greater engagement with China. It’s no secret that Sino-US relations under President Trump have deteriorated amid trade wars and tariff implementation.

The present relationship Australia has with China is also showing signs of being shaky. Just this week, China announced fresh import restrictions on some Australian goods, after flagging wine importation restrictions earlier in the year.

Although the AFR notes that “China will continue to be a central strategic and economic competitor” to the US, it also expects more “direct hard talking” between Washington and Beijing.

If this relationship thaws, we could see a concurrent thawing of our own relationship with China. This could be good news for ASX shares like Treasury Wine Estates Ltd (ASX: TWE) and other Australian companies exporting to China.

All in all, the article posits that a Biden presidency could bring modest changes in the economic sphere, but a dramatic change in the global diplomatic order. It will be interesting to see how these changes play out for Australia and the ASX.

More reading

• ASX 200 rises again on Friday
• The ASX 200 shares rocketing on takeovers, upgrades and low interest rates
• Why the Treasury Wine (ASX:TWE) share price is surging higher today
• OFX (ASX:OFX) and WiseTech (ASX:WTC) share prices rally on new partnership
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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ReadyTech Holdings Ltd (ASX: RDY) provides a software-as-a-service (SaaS) platform for a diverse range of applications. The ReadyTech share price will be on watch on Monday after the company announced a move to grow by acquisition. The company is currently in a trading halt while it makes announcements related to this acquisition.

ReadyTech has executed a heads of agreement and exclusivity agreement to acquire government-based software provider, Open Office. The deal is for an upfront consideration of $54 million and an earn out of up to an additional $18 million. 

Why will the ReadyTech share price be on watch?

Open Office is a leading government and justice case management SaaS provider with a customer base in Australia and the United Kingdom. It provides a platform to local and federal government for various applications including asset management, HR and payroll, community management, finance, and many other applications. 

At present, ReadyTech provides services for student management, HR and payroll, and management of work pathways. Accordingly, the company believes that the acquisition is consistent with its strategy to acquire complementary technologies, thus providing it with the opportunity to focus on new and attractive verticals and target higher value customers. 

The company will pay for this via a fully underwritten institutional placement for up to $25 million. This will be an offer with the ReadyTech share price at $1.88, a 6% discount to Thursday’s closing price. 

Management commentary

ReadyTech CEO Marc Washbourne said the acquisition opportunity is strategically compelling for ReadyTech:

Open Office is a high-quality business, providing solutions to 130 government and global justice clients, with a client retention rate of approximately 95%. It is a resilient market, with long-term government funding. Gaining access to government and justice clients allows ReadyTech to unlock the potential of servicing a new market and adding a third pillar to our operations.

The Open Office acquisition provides ReadyTech with an opportunity to secure a strong foothold into all levels of government in Australia, with the benefits of long-term, sustainable client base with strong barriers to entry. Entering a market of this type requires the type of expertise for which ReadyTech is renowned.

Trading guidance

Aside from the acquisition, ReadyTech has reaffirmed FY21 guidance, with Q1 trading in line with guidance assumptions. Revenue retention for the first quarter of FY21 is maintained at 95%. In addition, gross new business remained at $14 million and the company is investing in sales and marketing to drive top line revenue. The ReadyTech share price is currently up by 11.7% year to date. 

More reading

• 3 ASX small cap shares you must add to your watchlist

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings 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 Iress Ltd (ASX: IRE) share price has been a stellar performer this week following a positive market update.

Shares in the technology company rose from a low of $8.90 on Monday to finish the week at $10.00. This represents a gain of over 12% in just five short trading days.

Let’s take a look at what pushed the Iress share price higher this week.

Q3 business update

On Wednesday, Iress provided its quarterly result to the market for the period ending September 30. The company said that financial performance was consistent with Q3 FY19, in which revenue and segment profit grew 3% and 2%, respectively.

Strong tailwinds in APAC reflected ongoing demand for Xplan and Super solutions. The segment saw an 8% growth in revenue for the first nine months of the year.

Mortgages were affected by the delay in a number of client projects due to COVID-19. However clear revenue momentum has since returned leading up to Q4.

Positive contributions were made from QuantHouse and O&M, which have been meeting management expectations. QuantHouse has now transitioned from a loss-making stream to a profit contributor in 2020.

Net profit after tax for year-to-date trading made a loss of 11% to 45 million. This included the OneVue one-off acquisition related costs of $1.4 million.

What did Iress Management say about the result?

Commenting on the excellent result, Iress Chief Executive, Mr Andrew Walsh was pleased with the business’ resilience. He said:

Iress has delivered a consistent performance in Q3. The strength of our recurring revenue model has been clearly demonstrated during 2020.

I am proud of the way the team has continued to perform, while mostly working from home. Although there are high levels of uncertainty around Covid-19 transmissions and government restrictions, we are continuing to prioritise the health and wellbeing of our people and delivering service continuity and major projects for clients.

We have delivered over 500 client conversions to Xplan this year and two mortgage clients went live in August. The projects to deploy our super administration technology and service are progressing well. QuantHouse is also performing well and has achieved profitability. Covid-19 is impacting the timing of projects and business activity, postponing the revenue growth we envisaged at the beginning of the year.

The outlook for Q4

The company expects its revenue streams to increase in the fourth quarter, improving overall profitability. In addition, a number of major client projects are underway and are predicted to benefit additional cost savings.

Iress said that the completion of the OneVue acquisition today will bring advice and investments closer together. The company stated that it’s working on a plan to deliver a more efficient service through the integration of its portfolio.

Furthermore, Iress revealed that its positive outlook remains supported by the shift to digitalisation in financial services.

Pleasingly, the company reinstated its profit guidance for the end of FY20. It is forecasting segment profit to be around $152 million, which is the same level as FY19.

More reading

• Iress (ASX:IRE) share price on watch after Q3 update

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended IRESS 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 Finbar Group Limited (ASX: FRI) share price closed marginally higher today following an update on its Civic Heart project.

Shares in the property developer closed only slightly in the green, up 0.69% at the close of trade. However, on release of the news earlier today, the Finbar share price jumped as much as 3.4% to 74.5 cents.

Earthworks development

According to the update, Finbar advised that earthworks on the company’s landmark Civic Heart project will commence in January 2021.

The decision by the company to begin significant works comes off the back of a strong sales momentum recorded across its portfolio. Finbar received 60 sales for Civic Heart apartments, worth $59 million, prompting it to begin development works.

During October, Finbar had secured the sale of 47 apartments to the value of $31.3 million. This translates to more than $1 million in sales per day. The company noted that the sales achieved in October reflect its highest on record since 2017. This is extremely positive news, according to the company, given the circumstances of how COVID-19 has affected the Western Australian housing market.

The Civic Heart project is located on a site 8,208 metres squared, situated in one of South Perth’s most anticipated mixed-use developments.

Once finished, the building will feature two towers housing 309 residential apartments, four penthouses, and 25 ground floor commercial tenancies.

The entire project’s end value is estimated to be around $408 million.

What did Finbar’s Managing Director say?

Finbar Managing Director, Mr Darren Pateman, made comment on Perth’s rental market, which has seen its lowest vacancy levels in 30 years. Mr Pateman said that while this was driving buyer demand, investors were cautiously returning to the market.

After a prolonged absence from the Perth market, we are currently seeing the return of investors as a result of the tight rental market and more buoyant conditions across the market in the wake of the pandemic.

This rental market tightening coupled with record low interest rates is also encouraging tenants to enter the market as buyers which is helping with the sale of our entry level product.

The return of investors is also a key element in addressing the current rental shortage across Perth which is predicted to increase in 2021.

In addition, Mr Pateman went on to talk about the improved sales activity across the sector as a result of new and existing arrivals. This includes returning West Australians, interstate and overseas migrants seeking a COVID-free state.

Finbar share price summary

The Finbar share price has been climbing higher over the past few weeks, gaining more than 15%. Shares in the property developer fell to 52 cents in March after achieving a 52-week high of $1.01 in February. The company has a market capitalisation of $202.7 million and a price-to-earning (P/E) ratio of 31.

More reading

• Why the Finbar (ASX:FRI) share price is moving today

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 Bellevue Gold Ltd (ASX: BGL) share price charged higher today, closing out the day 10.16% higher. That far outpaces the 0.8% gains posted by the S&P/ASX 300 (INDEXASX: XKO) at this same time.

Bellevue Gold shareholders have had little to complain about since the company began trading on the ASX in June 2018.

Which is not to say the gold miner escaped the ravages of the COVID-19 market selloff earlier this year. It didn’t.

From 24 February through to 19 March, Bellevue’s share price plummeted 56%. But it came roaring back from there, with shares rocketing 377% higher from the March lows.

Year-to-date the share price is up 147%, currently trading at a new record high of $1.35 per share.

What does Bellevue Gold do?

Bellevue Gold is a gold explorer advancing the historic Bellevue Gold Mine in Western Australia, approximately 30 kilometres north of Leinster. From 1986–1997 this was one of Australia’s highest-grade gold mines. But it was shuttered until 2017, when Bellevue became the first company to apply modern exploration techniques.

Since commencing work, Bellevue has discovered numerous high-grade deposits. The company anticipates further discovery success as it continues to drill with multiple rigs during 2020.

Why is the Bellevue Gold share price up 10% today?

The Bellevue Gold share price looks to be rising on 2 factors.

First, the price of gold has gained 3.8% since last Thursday, 29 October. And it’s up 2.0% over just the past 2 days.

Gold miners’ share prices tend to rise – and fall – significantly more than the price of the yellow metal they dig from the ground. That’s why we see a number of other ASX gold shares trading higher today. Like the Resolute Mining Limited (ASX: RSG) share price, up 8.9%. And the St Barbara Ltd (ASX: SBM) share price, up 7.6%.

Investors may also be drawn to Bellevue Gold’s shares today following the release of the company’s Inaugural Sustainability Report.

Environmental, social, and corporate governance (ESG) issues are becoming increasingly important to a growing number of retail and institutional investors.

In its report, the company notes that as it continues to move its Bellevue Gold Project towards production, that a key feature will be identifying opportunities to minimise any adverse environmental impacts of its activities, including reducing emissions that could cause climate change.

Bellevue stated it is “also committed to best practice when considering human capital and good governance in its operations”. The company announced its intention to form a dedicated Sustainability Committee.

Bellevue’s ESG credentials will likely only make the company more appealing to many ASX investors. But, as with all gold explorers, the price of the yellow metal – and how much they uncover – will be the biggest factors determining Bellevue Gold’s future share price.

More reading

• RED 5 (ASX:RED) share price in focus as gold production nears
• Why the Bellevue (ASX:BGL) share price is dropping lower

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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Although the New Energy Solar (ASX: NEW) share price fell today, it rose around 12% this week. There appear to be a number of reasons for the action in the New Energy share price lately, not the least of which is a potential takeover by a US fund. 

New Energy Solar is an investment fund that buys develops and operates solar-powered generation plants. This includes operating assets in Australia, Nevada, California, North Carolina, and Oregon.

What’s moving the New Energy share price

On 26 October New Energy announced it had completed the initial phase of a strategic asset review it launched in September. 

According to a report in Renew Economy, New Energy’s head of investor relations Fleur Jouault said the ‘strategic review of the company’s portfolio would seek to identify how New Energy Solar can maximise the value of the business for its security holders, and to ensure that the company’s security price was better aligned with the business’ value’.

The strategic review has found the New Energy share price impeded predominantly by two issues. First, the current structure of the company, and second the limited support for the listed renewables sector in Australia. Moreover, the review noted that the Australian assets are in a mature operational state. Meanwhile, the US-based portfolio has yet to reach optimal operational performance. Fortunately, it identified material interest in the underlying solar assets from both domestic and international investors. 

As a result, the board of New Energy Solar has decided to sell the two Australian assets. Accordingly, proceeds from the sale of assets will be available for a range of capital issues. These may include security buybacks, capital returns, and debt reduction.

Asset sales and takeovers

Thus far, there has been a lot of interest in New Energy’s Australian assets. The Australian reports that Palisade Investment Partners, Lighthouse Infrastructure, First Sentier, and the Dutch Infrastructure Fund are believed to be among those lining up to buy New Energy Solar’s Australian assets.

However, this is at a time when the national energy operator, AEMO, has warned against the rapid growth of solar power. In South Australia, there’s even been some discussion about potentially banning any new installations. Australia is a world leader in the adoption of rooftop solar power, and according to the AEMO, this has created an “invisible and uncontrolled” power source that risks destabilising electricity grids. 

More reading

• 3 small cap ASX dividend giants

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.

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The S&P/ASX 200 Index (ASX: XJO) went up again today, it rose by around 0.8% to 6,190 points.

The counting of ballots for the US election still isn’t finished, though it’s nearly over.

Here are some of the highlights from the ASX today:

Tabcorp Holdings Limited (ASX: TAH)

Tabcorp made an announcement to the ASX today, referring to an article in today’s edition of The Australian called “Private equity and Matthew Tripp circle Tabcorp in potential break-up deal for wager giant”.

In response to that article, Tabcorp said it’s not aware of, and has not received, any proposal in respect of the company or its businesses.

Reportedly, Matthew Tripp has been approached by two private equity consortiums in recent weeks. One of those private equity groups wants to buy the entire Tabcorp business for a total value of around $9 billion. The other prospective bidder is interested in Tabcorp’s betting segment, which it values at around $3 billion.

The outfit that’s thinking about buying the entire Tabcorp business is in the advanced stages of planning, and has been looking at Tabcorp for months, including informal talks with Tabcorp executives or representatives.

The Tabcorp share price was one of the best performers in the ASX 200, rising around 16% today.

News Corporation (ASX: NWS)

News Corp released its FY21 first quarter update today.

It said that revenue dropped 10% to US$2.12 billion. However, it generated net income of US$47 million, compared to a net loss of US$211 million in the prior year, which included non-cash impairment charges of US$273 million.

Total segment earnings before interest, tax, depreciation and amortisation (EBITDA) was $268 million, up from $221 million last year.

Reported earnings per share (EPS) was US$0.06, compared to a loss per share of US$0.39 last year. Adjusted EPS was US$0.08, doubling from US$0.04 last year.

The News Corp share price went up around 14%, making it another of the day’s best performers.

Macquarie Group Ltd (ASX: MQG)

Global investment bank Macquarie released its FY21 half-year result today.

It reported that it generated $985 million of net profit which was down 32% on the prior corresponding period and down 23% on the second half of FY20.

Macquarie reported credit and other impairment charges of $447 million, up from $139 million in the first half of FY20, primarily related to a deterioration in the current and expected macroeconomic conditions due to the COVID-19 pandemic.

The ASX 200 investment bank said that 68% of its total income came from international sources.

Macquarie’s assets under management dropped to $556.3 billion, this was down by 7% compared to 31 March 2020.

Management were pleased that its financial position was comfortably higher than regulatory minimum requirements with a bank CET1 capital ratio of 13.5%.

Macquarie declared an interim dividend of $1.35 per share, representing a dividend payout ratio of 50%.

The Macquarie share price went up around 2.3% today.

REA Group Limited (ASX: REA)

The real estate tech business released its FY21 first quarter numbers today.

REA Group said the result was excellent despite COVID-19 impacts. Revenue after broker commissions was down 3% to $195.7 million. Operating expenses reduced by 18% to $71.9 million.

The EBITDA actually rose by 8% to $123.8 million whilst free cashflow declined by 2%.

REA Group said that overall national residential listings declined 2%, largely due to the 44% reduction of listings in Melbourne in the quarter because of COVID-19 restrictions. However, Sydney showed a 23% increase in listing.

For October, national residential listings were down 1% with increases in Melbourne and Sydney of 14% and 2% respectively, offset by declines in other markets.

There wasn’t much movement from the ASX 200 share, the REA Group share price fell 0.5% today. 

More reading

• The ASX 200 shares rocketing on takeovers, upgrades and low interest rates
• Why the Treasury Wine (ASX:TWE) share price is surging higher today
• Tabcorp (ASX:TAH) share price rallies 16% on takeover rumours
• Macquarie (ASX:MQG) share price under pressure after 32% profit drop
• OFX (ASX:OFX) and WiseTech (ASX:WTC) share prices rally on new partnership

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended REA Group 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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Every week, there are very interesting moves among the management of ASX listed companies. These can sometimes be attributable to poor performance but are also often due to genuine retirement or the seeking of new opportunities. Here are a number of ASX shares to keep an eye on because they either have a sudden executive vacancy, or because they have just filled a vacancy with somebody of note. 

Moves in consumer ASX shares

Late last month, Mr Michael Butler retired from his role as chair of Adairs Ltd (ASX: ADH). Mr Butler is a veteran of many boards. In 2010 he was the chair of AMP Superannuation, a subsidiary of AMP Limited (ASX: AMP). Since then, he has enjoyed appointments as director of Metcash Limited (ASX: MTS) and Total Tools before taking the helm at Adairs. Whilst there, Mr Butler oversaw Adairs’ ASX listing, a transition of CEOs, the acquisition of Mocka, and navigation of the transformational COVID-19 pandemic.

Among other news in ASX retail shares, was the resignation of Myer Holdings Ltd (ASX: MYR) chair, Mr Garry Hounsell. In a particularly rancorous affair, Mr Hounsell resigned mere hours before the company’s annual general meeting (AGM). Mr Hounsell had been fighting a rearguard action against the chair of Premier Investments Limited (ASX: PMV), Solomon Lew.

With 10.8% ownership of Myer shares, Premier Investments, and in particular Mr Lew, became vocal after the annual report when the company posted a loss of $172.4 million. However, once Geoff Wilson, of Wilson Asset Management, declared his opposition to the chair’s re-election, Mr Hounsell resigned. Wilson Asset Management owns 7.8% of the company. 

JoAnne Stephenson has been appointed acting chair whilst a global search is underway.

Mining changes

Rio Tinto Limited (ASX: RIO) non-executive director, David Constable, will be stepping down from the company, effective 31 December. Consequently, he will be moving to take up a role as chief executive of engineering giant Fluor Corp (NYSE: FLR). Mr Constable has held various roles with Fluor from 1982 to 2011, including group president, operations and group president of the power business.

Meanwhile, Sandra Dodds has joined the board of ASX share OceanaGold Corp (ASX: OGC) as a non-executive director, effective immediately. Sandra Dodds is a very experienced non-executive director with a career spanning over 25 years thus far. As well as OceanaGold, Sandra is a non-executive director for Snowy Hydro Limited, and Maca Ltd (ASX: MLD).

In other mining news, director Darren Yeates has resigned from the board of ASX share Emeco Holdings Limited (ASX: EHL) after accepting an executive role at Peabody Energy Corporation (NYSE: BTU). The Emeco board will seek to appoint a new director. Yeates is the new executive vice president and chief operating officer at Peabody Energy, effective 1 November. He has been on the Peabody board since February 2020 and will remain as a non-independent director.

More reading

• ASX copper miners brush off latest Chinese tariff threat
• 3 ASX dividend shares rated as buys by brokers
• These are the 10 most shorted shares on the ASX
• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• How La Nina will create unexpected ASX stock winners and losers

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended ADAIRS 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.

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The DigitalX Ltd (ASX: DCC) share price is surging today, up 18.33% at the time of writing to 7.1 cents a share.

DigitalX shares closed at 6 cents yesterday and opened at 6.6 cents this morning before surging to the current level. It’s been both a great month and a great year for DigitalX investors. The shares started 2020 at just 3 cents a share. That means they are up 137% year to date, and up 77% over just the past month.

So what does DigitalX do? And why the massive 18% surge today?

Who is DigitalX?

DigitalX is a company involved in the blockchain and cryptocurrency space. It describes itself as “specialising in blockchain application development and digital asset management services.” It has two primary operations: blockchain solutions and asset management.

The blockchain solutions division works with companies and organisations to ‘unlock’ the potential of blockchain. The asset management division works by allowing investors to invest in cryptocurrencies like bitcoin through a managed fund structure.

If you weren’t aware, blockchain refers to a technology that forms the ‘infrastructure’ of a cryptocurrency. It works by creating a decentralised, digital public ‘ledger’, which can be used to process cryptocurrency transactions and ownership, amongst many other potential applications.

Interestingly, DigitalX is (according to the company) also working on solutions for an upcoming re-structure of the ASX’s ageing CHESS system. The ASX has used CHESS (which stands for Clearing House Electronic Subregister System) for around 25 years now. But the ASX is working on a new system to replace CHESS based on distributed ledger technology (DLT). This is built on blockchain technology.

Why is the DigitalX share price surging today?

Today’s dramatic move in the DigitalX share price can likely be put down to an update for the quarter ending 30 September 2020, which the company released last week. There has been no major news out of the company since. 

This update was arguably very positive. DigitalX announced that the value of the company’s ‘liquid assets’ (which includes cash and cryptocurrencies) increased by $0.9 million (or 8.56%) against the levels of the previous quarter. The company notes that this was vastly assisted by the price of bitcoin rising more than 13% over the period. That helped DigitalX’s Bitcoin Fund and the Digital Asset fund return 14.11% and 23.32%, respectively, during the quarter.

Additionally, the company reported that its cash outflows decreased by 2.3% to $339,000 over the same period.

Other ventures deliver

DigitalX also announced that development of its “first DLT application” was commenced during the quarter. DigitalX expects this to be completed by early November. At that time, the company will begin commercial application. It also notes that this process has helped it “deepen the expertise of its product development team for the purpose of offering greater capabilities to customers in the blockchain consulting and development market.”

Further, DigitalX also provided an update on its xbullion venture, of which it owns a 15% stake in. Xbullion is a service offering “digitally transferable ownership of physical gold bullion”. DigitalX told investors that the product was launched in September, and has been “successful’. Thus, the company is now looking at a “roadmap of enhancements” for xbullion.

Finally, DigitalX’s management provided a positive outlook for the company going forward. It notes the recent adoption and expansion of cryptocurrency use by US payments giants Square Inc (NASDAQ: SQ) and PayPal Holdings Inc (NASDAQ: PYPL) as being extremely positive for its long-term business outlook:

Recent global entrants such as Square Inc. and Paypal Holdings have shifted the view of Bitcoin from a speculative investment and nascent technology to becoming a reliable long-term treasury asset as well as legitimised payment protocol

It’s these factors that seem to be behind the surging DigitalX share price today.

More reading

• PayPal’s buy now, pay later service is surging
• Meet Afterpay (ASX:APT)’s latest BNPL challenger
• Tesla (NASDAQ:TSLA), Fastly (NYSE:FSLY) among most popular US shares last week
• PayPal to offer bitcoin, cryptocurrency payments

Sebastian Bowen 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 PayPal Holdings and Square and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. 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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Today has seen a number of S&P/ASX 200 Index (ASX: XJO) shares jump in value by as much as 16% in trading so far. The share market opened stronger today following the fourth straight day of gains on Wall Street. Earlier in the week, the Reserve Bank of Australia announced it was dropping rates to 0.1%, and indicated they would likely remain at around these levels for up to three years. Furthermore, last night United States Federal Reserve chair, Jerome Powell, signalled that US interest rates would be kept near zero and that bond buying would continue at the current price. Let’s take a look at some highlights of today’s share price moves.

ASX 200 share price rises

ASX 200 gold mines

Gold mining companies have seen a solid day of trading so far. Continuing low interest rates have caused a number of ASX 200 resources companies to see strong improvements in share price. 

For example, Saracen Mineral Holdings Limited (ASX: SAR) is up by 6.72% at the time of writing, and merger partner, Northern Star Resources Ltd (ASX: NST) has seen its share price rise by 6.93%. Moreover, mid cap ASX 200 resources companies have also seen share price gains. For example, St Barbara Ltd (ASX: SBM) has risen by 7.92%. In addition, we have also seen the Gold Road Resources Ltd (ASX: GOR) share price rally by 6.67%. 

Takeovers

The big news in takeovers today has been a story of two private equity firms circling Tabcorp Holdings Limited (ASX: TAH). In trading so far today, the Tabcorp share price has risen by 16.1%. Reported by The Australian, the deal is rumoured to be worth up to $9 billion. The betting business of this ASX 200 company is also the target of a separate private equity firm in a deal being valued at $3 billion.

Investors Mutual chief, Anton Tagliaferro, holds approximately 3% of Tabcorp and is likely to be happy with the share price movements given his agitation for change earlier in the year. 

Broker upgrades

The Treasury Wine Estates Ltd (ASX: TWE) share price has shot up by 8.11% at the time of writing. This followed an upgrade from Citigroup Inc (NYSE: C) from ‘hold’ to ‘buy’. However, the company also provided a ‘high risk’ warning based on threats from China. Unsaid in all of the hype over Chinese trade issues is that Treasury saw its sales in China rise by approximately 25% in the first quarter of FY21 compared to the prior corresponding period.

The ASX 200 company has also paused its divestment of the valuable Penfolds brand in the US. Choosing instead to trade through the pandemic, deal with the Chinese dumping accusations, and restructure the US business. 

More reading

• Why the Treasury Wine (ASX:TWE) share price is surging higher today
• Tabcorp (ASX:TAH) share price rallies 16% on takeover rumours
• 5 things to watch on the ASX 200 on Friday
• ASX 200 shoots 1.3% higher on Thursday
• Why Domino’s, Estia Health, Pendal, & Treasury Wine shares are dropping lower

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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