Autumn Budget
As the cliff edge of the Autumn Budget approaches on October 30, we have nuggets of information with regard to what nasties are on their way, especially as far as the stock market is concerned. Of course, ahead of previous budgets there are always briefings to the press. The rule is that the good ones, say, abolishing Inheritance Tax, never happen. But the bad ones, tax hikes, are always delivered. So far, it would appear that the hint that Capital Gains Tax, will be brought in line with income tax, looks like will is a dead cert. This is even though the basis of CGT being lower that income tax is the risk that the investor is taking versus the reward. For instance, this is why betting and financial spread betting are not taxed, as proportionately there are no gains worth taxing. What is the remedy for this? The simple answer is not to invest, and to sell up shares or for instance, second properties asap. Or of course, open up a financial spreadbet account if you still wish to trade the markets. There is margin, cost of carry, and the perils of leverage. But none of this is worse than say a 40% tax. On second properties, keep holding and hope someone reverses Labour’s policy. Good luck with that.
AIM / IHT
But it gets worse. The AIM All Share Index is down so far 2.5% this year. It was down 5% last year and 31% in 2022. It is difficult to imagine it will be up in 2024, or even next year if removing the IHT exception to AIM stocks is delivered. How could it not be. “Working people” do not invest in the stock market, do they? The goal of a socialist government is to ensure that there are as many working people as possible, and to deny the routes to social mobility and wealth creation. This leads to dependency on the State. The more dependency, from cradle to grave, the bigger the State.
Of course, since Labour came to power, and the £22bn black hole was found, the rich have already been leaving the country. The lucky ones can head off to Monaco and Dubai. Others to an EU country. Anywhere where the locals do not stand for the vindictive nonsense of class based fiscal policy. But even those looking to do a 1970s style runner may have to watch out. An exit tax has also been mooted. Perhaps soon there will have to be banana republic style exchange controls?
Greatland Gold
As far as the stock market is concerned, it remained quiet, as if those who have been on holiday during the summer continued to stay away. A major focus of interest though, remains Greatland Gold (GGP). Having sucked in so many at much higher share prices, the Havieron mine focused company has just got away a massive raise of $325m, and in turn, massive dilution. To the outside observer there are some questions. For instance, if Havieron is so good, why would Newmont be selling it. Was there any less dilutive way of raising the cash? Will even more cash have to be raised? Are the timelines on the project even suitable for a listed company?
On the positive side, the shares so far have actually held up relatively well, sentiment / hype seems strong, helped along by a record gold price. But we are still in a market which is not kind to exploration / development plays, and even now not great on companies in production. The horror at GGP would be the risk of delays / further fundraises. But one can at least acknowledge a giant killing deal.
Metals One
The pros and cons of exploration / development are well illustrated as far as Metals One (MET1) is concerned. The company, which is advancing strategic minerals projects in Finland and Norway, announced earlier this month that its Råna Project partner and operator, Kingsrose Mining has satisfied the conditions regarding its staged earn-in to the Råna Project. Perhaps rather surprisingly given the progress being made, shares of MET1 have continued to drift. Once again, we are reminded that the market does not enjoy the waiting game, even when like MET1 all the correct boxes are being ticked. That said, with the market cap now down to just £1.5m, the company has a call option share price.
Fulcrum Metals
Fulcrum Metals (FMET) is a company which I have interviewed on several occasions, and CEO Ryan Mee clearly a safe pair of hands. Just how safe will be revealed after the latest fundraise from the company in which it raised £643,500, with director participation. The cash will be used for the development of the Teck-Hughes and Sylvanite gold tailings projects. What the market tends not to understand is how quick a route to production tailings projects are. Hopefully, in the case of FMET it will in coming months.
Hemogenyx
After drifting for much of the year to date, we were treated to an announcement from Hemogenyx (HEMO), which strengthened the share price. The company revealed the successful completion of the development of a clinical-grade assay designed to assess FLT3 protein expression in acute myeloid leukemia cells. While this may sound like something of a rocket science type of development, it may indicate that over the near term there will be more newsflow to get the share price on an upward trajectory. It also allows scope for another fundraise as the company moves to advance its HEMO-CAR-T product candidate.
Cizzle
Sticking with the biotech space, and Cizzle Biotechnology, the UK based diagnostics company focused on developing a cost-effective biomarker test to help detect early-stage lung cancer. It announced that it has been selected by the Moffitt Cancer Center, the number one cancer hospital in Florida and the Southeast USA, to test patients with suspicious lung nodules in a clinical evaluation using the Company’s proprietary CIZ1B biomarker assay. Although one swallow does not make a summer in this area, the market clearly enjoyed the ongoing validation the company is attaining, especially in the all important US market.
Avacta
It can be said that Avacta (AVCT), the life sciences company developing targeted cancer treatments, has been and continues to be one of the most followed stocks at the small cap end of the stock market. We are in the run up to unaudited interim results on 30 September 2024 from the company. What is pleasing from a technical perspective is that the share price appears to be squeezing higher ahead of this event, delivering a weekly close above its 200 day moving average at 73p for the first time in months. Having called up the stock here on a charting basis from close to 40p versus 75p, the prospect is for some more upside over the next couple of weeks. The top of a July rising trend channel is 85p plus. Ideally we stay above the 50 day moving average at 70p in the meantime.
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