A few weeks ago I suggested my Buy Bonfire Night, Sell Valentine’s Day rule for the stock market. Alas, it has so far worked very well for the US and German markets, amongst others, but not the UK market. This is hardly surprising given the ongoing political / economic drag in the UK. Especially so if anyone is looking for Labour being elected next year. Indeed, even the prospect of interest rate flattening in 2024 is not yet enough for buyers to go long here. That said, we had a glimmer of hope on Thursday when the FTSE 100 briefly pushed through 7,700.
On the small cap front all the structural problems of the LSE and Aquis are still running: the cost and red tape of being listed, the lack of liquidity, tax barriers to investing, and our culture of loving real estate over everything else. But what we have seen are reasonable cash raises in recent days, Jubilee (JLP) and Atlantic Lithium (ALL), being of note. A good story will still get backing.
However, the only way it seems out of the dirge is to deliver an exciting / compelling story. This week it came in the form of former Tesla operatives knocking on the door of DG Innovate (DGI), news worthy of the best bull market. Software developer Smartspace (SMRT) bagged after being on the receiving end of a hostile takeover bid, and premium spirits group Distil (DIS) felt the love of the market as its fundraise last month received the thumbs up from shareholders.
There were also some more esoteric risers. As we know a stock can rise sharply on unexpected good news, but it can also head for the sky by averting negative scenarios. This is especially when it sidesteps the bears. There have been few stocks having to do this more than Eurasia (EUA), where will we wait for the big sale, we learn that the company has settled with Gowling, a former adviser. Shares of EUA were up 56% off the back of this news. Perhaps they should have more runs ins with Gowling to get the share price up?
Those who like seeing the bears squirm will have enjoyed the 66.8% rally in RegTech Open Project (RTOP), the specialist technology business. The market clearly welcomed the appointment of Paul McFadden as RTOP’s Compliance Officer, as announced early this month. The lesson here is that ranting about management, or character assassination does not always get the share price down for shorters.
Mindflair (MFAI), the old Pires Investments, felt the benefit of change of name being as good as a rest. The new trendy name saw the stock rise just over 50%, even though our friends at Peterhouse Capital announced they were now down below 3% on the shareholder register.
Marula / Unicorn
Having met and interviewed Jason Brewer on a number of occasions, I can say that my first impression is that the man is a force of nature. This has proved to be the case, as much in the share price rise of Marula (MARU) over the past year, as well as the goings on at Shuka (SKA), and after the successful IPO at Neo Energy (NEO) last month. This week there was more action, in the form of Unicorn Mineral Resources (UMR) appointing Brewer as executive director of the company, with a £537,000 fundraise thrown in as well. Not surprisingly, shares of UMR were up over 100% on the week.
Powerhouse Energy (PHE) was also up 50% on the week, helped by director share buying, and the acting CFO getting a permanent role. This underlines how in current stock market conditions providing confidence to investors, especially with cold, hard, cash, can never be underestimated. It looks as though there is a new phase at the company, with the old guard replaced by management who have the bit between their teeth. The company’s Technology Centre will be key for 2024.
It was also a good week for Rockfire Resources (ROCK), the Greece focused mineral exploration group. Here the stock was up nearly 40%, as it managed to get the paperwork to secure a $2m return of its funds. This is a chunky number to help the company develop its Molaoi deposit.
Of course, when the chips are down for many companies, just revealing how well you are doing is a decent way of conquering the malaise. Synectics (SNX), the security and surveillance systems group, was able to announce that it would beat current stock market expectations. The order book rise, and plenty of cash at hand suggest that the recent share price jump could still have legs.
Finally, it is time to go for an almost weekly look at Wildcat Petroleum (WCAT), in the run up to its AGM on Friday. Expectations continue to be high that the company will be able to pull off the well trailed production sharing agreement with the Sudanese government, with some assuming that this could be revealed around the time of the AGM. This is particularly on the hope that the company may pull this off even though the much larger company Savannah Energy (SAVE) announced this week that we may have to wait for as long as February for its Petronas deal in South Sudan to be delivered. Fans of WCAT point to it possibly being the giant killer, rather than SAVE, especially given the way that in June it said it had access to up to $25m from a potential investor should its deal be pulled off.