So, the Autumn Statement arrived, and we have all to pay the higher taxes we apparently wanted: either because this is the only way to reassure the financial markets after the mini-budget fiasco, or because it is a price worth paying to keep Government finances in order.
It is now all about seeing whether the cure is worse than the disease as far as businesses going to the wall, recession, and of course, the precious housing market.
FTX
Closer to the financial markets, and there was the fallout from both the FTX debacle and the Theranos sentencing. It is always noteworthy in the aftermath of such collapses, how financial journalism goes into schadenfreude / “I told you so” mode. At least, in general, we have been spared the celebration at the misfortune of others, that some commentators offer.
This is especially the case given it is normally sour grapes at their own lack of achievement which drives them. As far as FTX is concerned, everything seems to be centred on the regulation of the cryptocurrency area, and what happens if there are not fiat currency style systems in place.
Eco Atlantic
In fact, it would be very easy to knock Eco Atlantic Oil & Gas (ECO) in a “I told you so” basis. After all, we have seen a number of disappointing drill results this year, with perhaps Advance Energy (ADV) the most notable. The normal statistic to quote in these situations is a one in three change of success. The shares fell by more than half this week off the back of a Gazania-1 well setback. However, the company is not a binary bet situation and in fact, Gazania-1 is currently only one out of four. Those preferring to look on the bright side would say that the share price fall was overdone, given the remaining prospects.
Harland / Made Tech
On to the happier small-cap stocks in focus, this week and it could be said that there was a winner in Harland & Wolf (HARL), and the “21st century offshore and maritime engineering group, was ahead of the field by quite some distance. The shares were trading around 6p at the beginning of this month, and by some quirk of fate were rising well ahead of the big announcement of a joint £1.6bn contract.
They peaked at 28.5p on Thursday, if nothing else being one of the few examples this year of a stock which has gone up and stayed up for any significant period of time. In some ways, it can be regarded as ironic that such an old-fashioned/old-economy company, has managed to trump all the high-tech speculation that is such a feature of the small-cap space these days.
Another Government induced winner was Made Tech (MTEC) which was on the right side of a £10m Home Office contract. While one might wonder how this Government department is able to splash the cash in the middle of a cost of living crisis, as far as the minnows are concerned like MTEC, we can only be grateful.
Baron Oil
One of the big stock risers of earlier in the autumn was Baron Oil (BOIL), where speculation regarding its Chuditch and Dunrobin assets pushed the stock to as high as 0.36p, although the swiftness of the retreat would have left some punters caught high and dry.
The volume of trading after the #BOIL placing this week has been nothing short of amazing, the appetite of the private & retail investors has churned the placing shares through the marketplace & has already turned the SP into the positive gain territory. 📈pic.twitter.com/QtOOtdDaUK https://t.co/QMr0rCUQCy
— Share_Talk ™ (@Share_Talk) November 19, 2022
Presumably, the hope now is that now the inevitable fundraise is out of the way, up to £6m if one includes the REX £1m, we could see a return to recent glories. Certainly, the recovery got off to a good start with the shares closing at 0.155p versus the placing price of 0.12p. Given that over 4bn shares were placed, this is an impressive start given all the churn.
Asimilar
Moving into the more tech-focused area, one of the casualties in the small-cap space since the “bubble” of Q1 2021 are those entities exposed to the new economy. However, after an extended downturn, it may be the case that the worst is over. At the very least a bottoming-out process could be in place. This is a point witnessed by the near 50% rise in shares of technology and software investor Asimilar (ASLR).
One could say the group has two potential drivers for recovery, the re-listing of Dev Clever (DEV), and clarity on the fate of All Active Asset Capital. Even mildly positive news on either of these investments could turn around Asimilar significantly more.
Bonhill
Another stock where it can be said we are waiting on a positive denouement is Bonhill (BONH), with the media group having said at the beginning of the month that it has received a strong level of interest in its formal sales process. Presumably, the 50% rise in the share price over the past week means that we are due to hear something of substance quite soon.
Wishbone
Another stock where there may be a delayed positive reaction is Wishbone Gold (WSBN). Here the mining group doubled down on its exposure to the Paterson province, with the purchase of the Anketell project. It will issue 2.2 million new ordinary shares at 14.75p each, equating to £320,192.
This is all the more interesting give the way that the shares are currently trading around 7p. In the good old days of the bull market before this year premium placings were regarded as an indication of value, quite logically given that those paying up for stock are presumably still keen on turning a profit. It will be interesting to see if WSBN shares respond to the premium effect in coming weeks.
Blencowe
A situation which has stood as exactly the right way to fund a company in the current market is Blencowe (BRES). Last month the mineral exploration and development company announced it had raised £750,000 at 4p from Jangada (JAN), RAB Capital, and those lovely people at JUB Capital, all of whom one presumes knows a thing or two about mining. The cash was set to be used to fund the delivery of a 100 tonne bulk sample from Orom-Cross to China. The market has clearly given BRES and its friends the thumbs up with the shares closing this week at 6.65p.
Genedrive
Finally, a situation to watch out for tomorrow is Genedrive (GDR). The near-patient molecular diagnostics company will release its preliminary results for the year ended 30 June 2022 tomorrow. We will presumably find out whether the recent squeeze higher for the stock is just pre-emptive short covering, or if we may be at the start of a happier new era?
While not wishing to tempt fate, last month’s news that GDR has commenced engagement with the FDA to progress the regulatory approval of the Genedrive® MT-RNR1 ID Kit into the USA did not exactly sound insignificant.
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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
