Newsletter – 7 February 2021

Australian share market updates for the week ending 7 February 2021

Contents:

  • Chart of the week;
  • Upcoming and recent IPOs;
  • Director trades;
  • Buybacks; and
  • Short sales.

Chart of the week

The Reserve Bank has announced it will purchase a further $100 billion in government bonds. With the cash rate close to zero, the RBA is using bond buying to inject liquidity into the economy. The aim is to keep interest rates low, making it cheaper for governments, businesses, and households to borrow, and putting downward pressure on the AUD to help exporters. Wage growth is low and unemployment high, resulting in an inflation rate below the RBA’s target

Upcoming Initial public offerings (IPOs)

Companies that have recently applied to the ASX for listing. Click here for a full list of upcoming ASX IPOs.

DDH1 Ltd (ASX: DDH) provides drilling technologies to obtain spatially accurate representative geological information for the discovery, assessment, and extension of economic mineral occurrences.

Firebird Metals Ltd (ASX: FRB) will explore and develop it’s 100% owned Oakover project, which is prospective for manganese. The company has option agreements to purchase two additional prospective manganese assets – Disraeli and Hill 616 in the Pilbara region.

Peregrine Gold Ltd (ASX: PGD) holds the Pilbara Gold Project, which comprises seven tenements covering approximately 636km² in the gold prospective Pilbara region of Western Australia.

Companies that commenced trading this week.

Mamba Exploration Ltd (ASX: M24) has projects in the Ashburton and Great Southern Range that are prospective for gold and in the Kimberley and Darling Range that are prospective for base metals such as copper, nickel and manganese.

M24 raised $7,000,000 by the issue of 35,000,000 shares at an issue price of $0.20 per share.

The company listed on Friday at $0.325 and finished the day at $0.305.

Director trades

Director buys can be a sign that those with the most insight into a company view its shares as undervalued. Knowledgeable “insiders” are the best placed to know what a share is really worth. One or two trades may not be significant, but a larger number by different directors can warrant further investigation.

Click here to purchase a spreadsheet of on-market ASX director trades for the last six months.

Companies with two or more directors buying and no sells in the last 30 days, not mentioned in previous newsletters.

Anova Minerals Ltd (ASX: AWV) is an ASX listed and Nevada focused gold explorer at the Big Springs Gold Project.

Buybacks

A buyback, also known as a repurchase, is the purchase by a company of a portion of its outstanding shares. This reduces the number of shares on issue so increases the earnings per share, all else being equal. A company will usually buy shares back when they see them as good value. Click here for the latest buyback announcements.

Thorney Opportunities (ASX: TOP) is a Listed Investment Company (LIC). The company invests in listed and unlisted businesses.

Thorney will buy back up to 10% of issue over twelve months with existing cash.

Short positions

Shorting a share is betting the price will decrease. It can pay to check short positions in a share you are considering purchasing.Click here for a full list of shorted ASX shares.

The below table shows the twenty most shorted shares on the ASX. Data is lagged 4 days.

Highlighted companies are new entrants to the list from last week.

“People who invest make money for themselves; people who speculate make money for their brokers.” – Benjamin Graham


 

Please note the information contained in this newsletter does not constitute financial advice. Information relating to any securities mentioned is not a buy or sell recommendation. You should always conduct your own investigations and make up your own mind regarding any course of action you may wish to take. The information presented has been obtained from original and published sources believed to be reliable, but its accuracy cannot be guaranteed. The entire contents are copyright. Reproduction in whole or part is strictly forbidden without the approval of the author. This information is not financial advice and does not take into account your personal situation and we accept no responsibility for any claim, loss or damage as a result of the information in this newsletter or our website.

Sharp Investor owns ASX listed stocks: ACR, ARL, ALQ, BRV, CDX, CDXO, COL, CYP, DDR, DHG, EVN, EXR, FBR, FID, FRI, GGG, GOR, IGO, IRI, MGX, MNY, OZL, PRO, SBM, SRG, SXE, VXR, WSA, WTL

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