Exodus
The debate over the “death” of the London Stock Exchange continues. At the lower end we have an article in CityAM: “The Stark Reality of the London Stock Exchange’s Exodus”. Here we have the usual moan regarding companies either choosing to de-list, or those being taken over. This misses out the truth that part of the reason companies list is to get sold and extract value for their shareholders. The article mentions Peel Hunt, which says it is urging reforms. The question is where were Peel Hunt when the changes that have led to the current disastrous state of affairs were being made? The same could be said for ex LSE CEO, Xavier Rolet, who is asking the next government to save the stock market. He was also asleep at the wheel during the past couple of decades when the over-regulation and cost was being foisted on listed companies.
The Next Government
Of course, we are also assuming that the next government will be a Labour government, the one which will add 20% VAT to private school fees. Such a government is hardly likely to want to save one of the last bastions of elitism and privilege apart from posh schools, the stock market. Marxist vengeance has got us to where we are in London. Nothing has changed. Indeed, it is getting worse by the day as the market is regulated by those who hate people with money or those who want to make it, or have failed to make it themselves and want to sabotage others. Given that the regulators do nothing to stop those who defame small companies and leak placings, one would assume that they are quite happy with the current state of affairs. After all, the less listed companies there are, the less work they have to do.
Valuations
In terms of stock price valuations, it has become clear that the market maker price fixing cartel is not fit for purpose, given the massive undervaluations we see both in small caps, as well as the premiums when companies are taken over. Put simply, you cannot sell stocks in size, and if you try and buy the price is marked up ridiculously, only to be marked back to where it was before you bought. A matched bargain system would at least be more fair and functional. But then again, unlike others I am not trying to change the market, as I know nothing will be done. This is especially from a mere Sunday morning blog.
Colin Bird
As far as real life in the City and those actually working to get the stock market flourishing again, there are some people actually doing this. Colin Bird has several listed companies on the London market, mostly in the mineral exploration area. On Wednesday he delivered a presentation focusing on the importance of copper, and how the metal’s time have finally come. Given its massive bull run of late, Bird appears to be on the money for his companies which include Xtract (XTR), Galileo (GLR) and Kendrick (KEN). We await the trickle down to the small cap area, especially as exploration plays have been on the back foot of late. I interviewed Colin Bird on Thursday.
Georgina Energy
But it is not just mining veteran Colin Bird who provides evidence of a turnaround. This week we saw evidence of a renewed appetite in the space, with Golden Metal Resources (GMET) rising to new heights, as its main investor Power Metal (POW) also feeling the benefit. We have also had news that Georgina Energy has had a successful £5m raise, with the helium / hydrogen group looking to follow on from the recent successes of Helix (HEX) and Pulsar Helium (TSX-V: PLSR).
Graft Polymer
As far as the positive highlights of the week, the best by far was Graft Polymer (GPL), a company which has been transformed by City stalwart, Nicholas Nelson. Here drug delivery patent news was the driver, something which has the ability to transform the current £1.3m market cap – even after the 700% rise on the week. Moroccan client news helped Quadrise (QED) jump 50% on the week, while Genflow (GENF) jumped on grant news, and Katoro (KAT) felt the benefit of narrowed losses.
Tirupati
On a more controversial note we are just days away from a denouement as far as the requisition at Tirupati (TGR). The pendulum here has swung quite violently between the two sides. A co-founder of the company siding with the requisitioners has perhaps been counteracted by the appointment this week of an ex Ernst & Young heavy hitter as Non-Executive Chairman of the Company. It will be interesting to see whether Michael Lynch-Bell’s arrival is not a tad late to placate shareholders.
Premier African
As far as the downside was concerned, despite the AIM index actually being up on the week, there were some painful fallers. Further delay saw Premier African (PREM) down nearly a quarter. Perennial bear / defamation target Tern (TERN) saw its shares down a quarter. The shorters have finally got the upper hand after the stock hit 4.65p earlier this month, versus 2.5p. They must be relieved. Shares of medical cannabis producer Celadon (CEL) were down nearly 20%, despite the company having already raised cash earlier this month, and shipping to the US. It is a shame CEL has not been expert in communicating its positive aspects.
This week’s interviews were led by Howard White from Hydrogen Utopia (HUI), as the company sought to clarify regarding the Essential Energy deal.
Finally, I also spoke with EQTEC’s (EQT) CEO, David Palumbo, as the recent financing hopefully starts a new chapter of recovery at the technology innovator.
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