“Bad News” Budget
So far I have not read on article on the forthcoming Budget that seems to understand what the Chancellor is really doing. For instance, in The Telegraph, admittedly not a great place to search for insight into a Labour government, Jamie Reuben’s article says. “Business is expecting nothing but bad news from the Budget. The Chancellor simply cannot afford to alienate and isolate both small and large British companies.” Unfortunately, Jamie, and almost everyone else who writes about this government still has not got the message that its aim is to destroy the private sector, both great and small. Why the message has not got through to journalists by now remains a mystery. It is almost as much of a mystery as how if you tax the rich that much how there will be no rich people left to fund the welfare state and the NHS? But that is a topic for another day.
Small Cap Underperformance
Since the beginning of last month the AIM All Share has declined from a peak of 800, to a Friday closing price of 749. Not impressive. Even less impressive after the FTSE 100’s recent record highs, which Sir Keith Starmer has been taking the credit for. However, we are in a post Bitcoin Treasury hangover, and if anyone is excited about buying small caps in the run up to a Budget which will undoubtedly hurt this section of the stock market more than most, they are a better person than I. We have ISA tinkering and of course, no positive changes in all the rules, regulations and costs to look forward to. We also have those happy to defame, discredit, and destroy small cap companies, due to their innate weakness, still roaming free in the blogosphere. Rather than doing anything about this, the powers that be allow their names to be used to scare investors out of their holdings. No doubt we are coming to a head as far as this state of affairs is concerned.
Brave Bison
It has to be said that Brave Bison (BBSN) has always seemed to be a cut above the rest as far as the small cap space is concerned. And it serves to remind us what to look for when we are sifting through the list of contenders on the stock market. The management were the first indicator of potential “greatness”, with backers such as Rupert Murdoch and Lord Ashcroft adding to the perception of future success. Indeed, there are not that many companies with such a pedigree, and logically, you do not need that many of these to be a successful investor. This week BBSN was in the news as the marketing and technology partner for global brands, said it noted recent press speculation and confirms that it has submitted a non-binding proposal to acquire the companies, trade and assets comprising M+C Saatchi Performance (“MCSP”) from M&C Saatchi plc for an enterprise value of £50 million. BBSN already has a market capitalisation of £80m plus. But one can be quite sure that whatever happens with its current target, this is a company which will be reward holders.
This Week’s Fallers:
One of the reasons that the small caps index was down this week was because of chunky losses in some of the more famous names. For instance, Buccaneer Energy (BUCE) was down nearly 40%, despite news of the spud of Allar #1. But then again as someone commented on X, this used to be Nostra Terra. Harsh. No news from Mali focused Cora Gold (CORA). But its shares were down 38% in the aftermath of Mali revoking more than 90 mining licenses. One would suggest that this is just another example of a tinpot, third world country acting to move the goalposts due to underlying corruption. But then one can simply point to Ed Miliband’s actions in the North Sea, a recent news regarding Shell there underlines. Although Mkango (MKA) said it was unaffected at the time (October 28) by an Executive Order by His Excellency Professor Arthur Peter Mutharika, President of the Republic of Malawi, regarding the prohibition of the export of raw minerals, the shares fell 28% this week. Also on the way down, clearly it was better to travel than arrive, has been Petro Matad (MATD). The shares fell 24% this week, even though it has brought Gazelle-1 into production in Mongolia. It was a similar story at both Rockfire (ROCK) and Rome (RMR), where recent positive news has been met with profit taking, rather than accumulation.
This Week’s Risers:
It may be worth starting with a serious real world deal announcement: Sulnox (AQSE:SNOX), the greentech company delivering lower fuel costs and emissions with zero capex, is announced that Spring Marine Group, a Greek ship management company, is expanding its use of Sulnox EcoTM across its entire fleet following two years of proven fuel savings and additional operational benefits. Spring Marine,operates a fleet of 28 Tankers and Bulk Carriers, first introduced Sulnox Eco on a number of its vessels in 2023. So another satisfied customer, and a satisfied stock market, with SNOX shares up 54% on the week.
Hydrogen Utopia (HUI) has since it came to market appeared to be a company where there is quite a battle between the bulls and the bears, and the feeling that a lid is deliberately being kept on the share price. That said, this week the buyers did prevail with the shares up over 50%. It would appear that the idea of the company being funded to the first InEnTec deal getting over the line, something which would be transformational for the company, is one that the market is embracing. This week saw news of KSA giving HUI an Investment Registration Certificate.
Catenai (CTAI) was back up at the top of its recent trading range as it paid off a £100,000 working capital loan. The market appears to be licking its lips regarding investee Alludium Ltd will launch its AI Agent collaboration platform at Web Summit in Lisbon from 10-13 November 2025. Everyone loves a good AI Agent collaboration platform.
In terms of breakthroughs this week, one has to say that the big one, after seemingly years of waiting was Asiamet (ARS). ARS said it has entered into a conditional sale and purchase agreement with Norin Mining to sell its interest in the KSK Project for gross consideration of US$105 million on a cash-free, debt-free basis. The sale introduces a well-funded copper producer with specialist skills in copper mine development and processing coupled with high-ESG standards, to advance the Project into mining operations. One could say quite fairly that it does not get much better than that. The shares celebrated with a weekly rise of 41%.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
