Weekly review: April Fool’s day joke on AMP shareholders

April Fool's AMP ASX 2021
WEEKLY MARKET REPORT

Once again AMP (ASX: AMP) shareholders have been treated like April Fools – having to wait until first thing on 1 April to finally hear that ANZ deputy chief executive officer Alexis George would be AMP’s new chief executive officer.

This came hot on the heels of two earlier ASX announcements stating that chief executive officer Francesco De Ferrari remained in charge.

Now we know that he will hand over to Ms George by July, after which Mr De Ferrari will continue to work “in partnership” with the board to lead strategic initiatives, including continuing negotiations with US investment firm Ares.

Still, the announcement was enough to push AMP’s share price 4.74% higher when the market opened to $1.32. AMP then closed before the Easter break up 4.7% at $1.325.

Hopefully the well-respected Ms George will be able to end the litany of disasters that have befallen the shrinking AMP ever since it limped through the Hayne Royal Commission. Although there is still no word on whether the proposed sale deal with US based Ares will proceed or not.

Market off to a solid start for a new quarter

Just like AMP, the rest of the Australian share market overcame a lacklustre start to record a solid 0.6% rise on the ASX 200 to 6828.7 points, hitting a six-week high before the Easter break, with no trade until Tuesday.

That was a good first day of the second quarter after the first returned an impressive 3.1% and puts the index on track for getting into solid double digits this calendar year, if current performances continue.

It is a particularly good result when you consider that there has been a switch going on out of highly valued growth stocks and into stocks with more secure cash flows such as banks.

That resulted in financials being the strongest performing sector in the quarter, rising 11% at the same time as IT stocks fell 12%.

Iron ore still driving miners higher

Thursday’s trade kept up that trend, with the big iron ore stocks BHP (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue Metals (ASX: FMG) all strengthening and gold miners were also higher.

All of the big banks were stronger as were technology stocks, BNPL company Afterpay (ASX: APT) firming 4% to $105.52.

Macquarie Group (ASX: MQG) shares ended down 0.5% at $152.12 after its banking division was ordered to hold an extra $500 million capital for past breaches of intra-group funding.

US stocks love Biden’s stimulus but worry about rising taxes

Australian technology stocks had mirrored those in the US, with the Nasdaq beating the Dow and S&P 500 as President Joe Biden got ready to announce the first details of his highly anticipated infrastructure spending program.

While the US$2.25 trillion of spending over 10 years will be welcomed by markets, the US$1.60 trillion of corporate tax rises over 15 years will not be as welcome.

Small cap stock action

The Small Ords index fell 0.62% for the week to close at 3171.7 points.

April Fool's 1st 2021 ASX 200 chart
ASX 200 vs Small Ords

Small cap companies making headlines this week were:

Strategic Elements (ASX: SOR)

Pooled development fund Strategic Element’s investee Australian Advanced Materials achieved two milestones this week with its self-charging and flexible battery technology.

The company revealed the battery ink cells, which harvest electricity from the air or skin’s surface, can still successfully generate a 14-volt output with a reduced size.

Battery sizes were decreased from 1sq cm to 25sq mm.

Additionally, mechanical test work has revealed the self-charging battery can be bent more than 2,000 times providing strong potential for it to be a highly flexible power source.

RooLife Group (ASX: RLG)

China-focused e-commerce company RooLife Group has beat its previous guidance for the March quarter, revealing this week it was 40% higher than previously forecast.

The company estimates its revenue for the period will hit $3.5 million, which is an increase on the earlier $2.5 million estimate announced at the end of January.

RooLife managing director Bryan Carr said the higher than forecast revenue was due to accelerating product sales across a number of its contracts.

AVZ Minerals (ASX: AVZ)

Aspiring hard rock lithium producer AVZ Minerals has secured a further two offtake deals for its Manono project in the Democratic Republic of Congo.

The company started the week with news it had inked its first tin offtake agreement with industrial metals trader Kalon Resources agreeing to take about 43% of all tin concentrate available for sale from Manono – equating to about 600tpa of concentrate.

AVZ followed the tin news with a third offtake contract for spodumene from the project. Major Chinese lithium converter Yibin Tianyi Lithium Industry Co has agreed to purchase up to 200,000tpa of spodumene from Manono following the start of production for three years.

This contract includes an option to be extended for an additional two years.

Auric Mining (ASX: AWJ)

Drilling at Auric Mining’s Munda gold project in WA’s goldfields has continued to generate what the company says are “spectacular results”.

The company recently completed a 27-hole reverse circulation drilling program for 3,664m.

Assays from 14 holes have been received with the latest batch of seven revealing a 1m at 137.4g/t gold interval within a broader 13m intersection grading 14.62g/t gold.

Sovereign Metals (ASX: SVM)

Rutile explorer Sovereign Metals has discovered a “significant” area of high-grade rutile at the newly named Nsaru target.

Nsaru is only kilometres from Sovereign’s flagship Kasiya deposit in Malawi.

Wide-spaced hand auger drilling was undertaken with 39 holes completed for 371m.

Of these holes, more than 87% hit high-grade rutile within the top 8-12m of the weathering profile.

Highlight assays were 13m at 1.27% rutile, including 4m at 1.62%; 11m at 1.24% including 5m at 1.56%; 9m at 1.38% rutile, including 4m at 1.43%; and 12m at 1.15%, including 3m at 2.05% rutile.

Creso Pharma (ASX: CPH)

Creso Pharma progressed its psychedelic medicine strategy this week with acquisition target Halucenex executing a deal to purchase a custom-made supercritical extraction system.

The system will be able to generate high quality psychedelic extracts from psilocybin in-house for Halucenex and is anticipated to take up to eight weeks to build and install.

Creso followed up the psychedelic progress news with an announcement it has launched three CBD-based tea products under its cannaQIX brand.

The teas have been developed using Creso’s “ground breaking” technology which optimises CBD taste and content.

The week ahead

While the Easter holidays will shorten the week with the market closed on Monday, there will still be some things to watch out for including the Reserve Bank board meeting on Tuesday.

The meeting won’t bring about any change of policy to the current 0.1% official cash rate, but the commentary will be closely watched for any statements about the recovery in the jobs market and the booming property market.

Other things to watch out for include ANZ job advertisements, purchasing manager numbers, consumer confidence and the Reserve Bank’s six-monthly Financial Stability Review.

Overseas, there are a few things to watch out for including the minutes of the last US Federal Reserve meeting, inflation data out of China and US inflation expectations.

US jobless claims will also be released, while the March producer price index while reflect the situation with wholesale inventories, which are an early indicator of inflationary pressures.

This week’s top stocks

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