Existential Crisis?
The tug of war continues between the reports in the financial media, and indeed, a Goldman Sachs warning about the London stock market, and the FTSE 100 going to new all time highs. The UK index has finally managed – after 25 years – at hitting the highs. Of course, rather than this being a cause for celebration, the newspapers have doubled down, with teenage scribblers, and non achievers doing their best to talk the stock market down. I continue to be amazed at how bad the writing regarding the stock market is, and how poor the quotes and the commentary is. But maybe I should not complain too much as otherwise I might not have this particular little forum.
So what is the way forward? It is that we should keep enjoying the doomsters as they have managed to squeeze the market higher. I am guessing that Goldman Sachs are short London, and look forward to new companies joining the market. This month we had Energy Green Transition (EGT) and Helix Exploration (HEX), both decent companies with decent management. Next week we shall be treated to Electric Guitar (ELEG), focused on the digital marketing and advertising industry. Its 3radical SAAS software has a great chance of being a contender against the big tech giants, and having interviewed CEO John Regan during the week, I am sure he will lead the company to a market cap many times the initial £4.7m.
Fly By Night
Apart from the stock market being talked down, there is still the enormous problem that small caps have in not being able to get their message out successfully. This is hardly surprising given the way that they very often succumb to service providers that are either cowboys, used car salesman, or gangsters. Sometimes even a combination of all three. The result is the service provider does well, but the small cap in question is left high and dry – meaning in this case, the share price is down as everyone has received the wrong impression of what the company does or where it lies. All of this causes me not a small degree of irritation, as someone who has had over 35 years experience of the stock market, as broker, journalist, PR and social media. This contrasts with many of the fly by night operators, who for some reason find it really easy to promote themselves in many cases via official stock market venues, and of course, brokers. They prey on CEO’s who will often do anything to try and get their share price up or a raise away. As most of us know, most brokers are not necessarily experts in financial communications, or these days, even raising money.
Neo Energy Metals
Part of the experience I have is regularly going to company presentations, just for the sake of it, so that I can maintain my goal as being one of the more knowledgeable people in the space. A highlight this week was attending a presentation by Sean Heathcote, CEO Neo Energy Metals (NEO), which listed in the autumn. I have interviewed the man before, but a face to face is always the big reveal. He is clearly a man of experience and one can believe he will get the uranium explorer and developer over the line. The company initially had a market cap of £15m at 1.25p. Now it is half that. The reason, despite uranium being one of the hottest commodities around is that the market (a.k.a. London’s share pricing cartel) believed that there would be sellers after the IPO. It also did not and still not does not understand that the flagship Henkries project is near surface, and what we know from 20th century data may just amount to 10% of what the final quantum of Henkries may be. In addition, the company is well bankrolled by cornerstone shareholder Quinton van der Burgh, if or when the cash required to develop Henkries is required. Going forward we are in the run up to NEO’s capex and opex estimates. One would also imagine that last month’s appointment of Jason Brewer as Executive Chair, and director share purchases signals that the bottom has been reached in the stock in the 0.55p zone.
Oracle Power
Another timely interview and share price reaction came in the wake of the Oracle Power (ORCP) Q1 shareholder update early last week. The company swiftly followed this with news from international project developer, announce that the Environmental and Social Impact Assessment study report for the proposed 1.3 GW renewable power plant in Jhimpir, Sindh Province, has been submitted to the Sindh Environmental Protection Agency for review, with a No-Objection Certificate expected. This of course, sounds like a big deal, and the share price has so far responded well.
East Star Resources
I also interviewed Alex Walker, CEO of East Star Resources (EST), a company which is still riding the wave of revealing that it is entertaining offers for its Verkhuba copper deposit. In the wake of the Anglo American (AAL), we have been reminded that finally there is going to be a copper frenzy as the long promised production deficit finally arrives.
Mast Energy
A company that caught the eye at the end of the week was Mast Energy (MAST). It has to be said that until relatively recently looked like it was heading to the great small cap listing in the sky, seems to have pulled its finger out with CEO Pieter Krügel. There is undoubtedly a long way to go, and many in the market rightly or wrongly get slightly squeamish when they know a company is negotiating with Riverfort (RGO), but the signs are better than they have been for quite some time.
Terry And June
Finally, you know when you are in an Orwellian and Kafkaesque nightmare, when Terry and June have a trigger warning. What a time to be alive. Steve Deacon and I discussed those dearly departed suburban revolutionaries Terry and June in the latest Weekend Markets.
Author
