Australia

• With the review period nearly complete, there could be one change for the S&P/ASX 50 Index and one change for the S&P/ASX 200 (AS51 INDEX) in December.
• Both deletes are also deletions from a global index next week and there could be short-term buying/covering opportunities on a drop in the stock price.
• There has been a buildup of cumulative excess volume in all stocks over the last few months. There has been no increase in positioning in CAR Group (CAR AU) recently.

• North American hard-rock lithium plays Piedmont Lithium (PLL AU) and Sayona Mining (SYA AU) are to combine in all-stock merger with a ~50%/50% ownership split on a fully diluted basis.
• Sayona will be the ultimate/surviving parent, via issuing 5.27 Sayona ordinary shares for each Piedmont share. Various equity raisings will also take place, before and after the merger.
• EGMs for both Sayona and Piedmont shareholders are expected to be held in 1H25, with expected completion also in the 1H25. 

• DigiCo REIT (DIGICO AU) aims to raise over US$1bn in its Australian IPO.
• DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
• In this note, we talk about the not-so-positive aspects of the deal.

• In this insight, we take a look at our final expectations for index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We do not see any index changes for ASX 20 and ASX 100.
• We expect one change for ASX 50 and one change for ASX 200.

• DigiCo REIT (DIGICO AU) aims to raise over US$1bn in its Australian IPO.
• DigiCo REIT (DREIT) aims to be a diversified owner, operator and developer of data centres, with a global portfolio and broad investment mandate across stabilised, value-add and development opportunities
• In this note, we talk about the positive aspects of the deal.

• Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• In this note, we look at the updates since our last look-through and share our thoughts on valuation.

• RaaS has published an update report on 3D spatial data solutions group Pointerra (ASX:3DP) following its Q1 FY25 results in which it reported a 50.4% increase in cash receipts to $3.08m, the highest recorded since Q3 FY23.
• Operating cash flow for the quarter was positive $0.31m, a $0.801m turnaround on the previous corresponding period (pcp) and $0.494m uplift on Q4 FY24.
• Pointerra ended the quarter with $2.994m in cash.

• Minres board admitted to not disclosing related party transactions two years ago, a strike against the board
• Bald Hill operations will go into care and maintenance, impacting 300 employees with some redeployment efforts
• Decision to shut down due to cost-saving measures, with potential for quick restart if market conditions improve

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Neuren Pharmaceuticals (NEU AU) announced a share buy-back program worth up to A$50M (~3M shares, representing 2.4% of total shares on issue). The 12-month buyback will commence on December 2.
• As of September 30, 2024, Neuren has a cash balance of A$210M and the company’s R&D expenses for 1H24 were A$18M. Interest income more than covers Neuren’s corporate expenses.
• The buyback announcement follows Neuren’s recent entitlement of one-off income from the sale of partner’s Priority Review Voucher and Daybue’s record high sales in 3Q24.  

• RaaS is initiating coverage of engineering, asset management, and infrastructure and training services group Verbrec (ASX:VBC) with a DCF-based valuation of $0.40/share, representing potential capital upside of 196% on the current share price.
• FY24 was a turnaround year for Verbrec under new management with a clear strategy of carving out costs, improving operating and risk management disciplines, selling under-performing businesses and finalising legacy projects.
• The business is now recapitalised, profitable, cash generative and, in our opinion, poised for further growth with a favourable macro environment in both VBC’s traditional engineering projects and particularly its areas of sustainable focus, led by the energy transition that is underway in Australia.

• Paladin Energy faces water supply disruptions from NAM Water in Namibia, leading to a drop in guidance for Langer Heinrich uranium mine.
• The company has adjusted its FY25 uranium production guidance from 4-4.2 million pounds to 3-3.6 million pounds.
• Despite the challenges, Paladin Energy remains confident in meeting customer delivery obligations and has flexibility in contracts to manage the situation.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The Auswide Bank (ABA AU) IE has considered Mystate Ltd (MYS AU)’s all-scrip merger offer in the best interests of the Auswide shareholders. However, the opinion comes with caveats.  
• The offer is conditional on Auswide shareholder and regulatory approvals (ACCC, Treasury). The scheme meeting is on 2 December.
• Vote risk is low due to the lack of substantial shareholders and the disinterested retail base. At the last close and for 18 December payment, the gross/annualised spread was 1.6%/10.3%.  

• SGX IO Futures fell for the second consecutive week, closing USD 4.15/ton lower at USD 101.70/ton on 18/Oct, with a trading range of USD 9.75/ton.
• Short-Term moving averages signaled a bearish reversal, with a downward 9-day moving average and failure to break above key pivot points.
• Heavy selling pressure and expanded China stimulus measures disappointed market expectations, signaling continued bearish trends with a potential test of USD 97.5/ton support.

• Fenix Resources (FEX AU) is a small-cap iron ore miner/logistics provider with massive upside based on an increasing sales profile from 1.3 to 4 million tons over FY25/26. 
• The company is also positioning itself as a logistics provider with the potential to transport 10 million tons of material through the Geraldton Port with its infrastructure in place. 
• Trading at 5.4x FY25e PE with a 1.8 EV-EBITDA, >38% of the market cap in cash, this is a stock worth exploring.

• There could be two or three Aussie names that are deleted from global passive portfolios in November. In each of the cases, there is a lot to sell from passives.
• One name is very high probability while the deletion of the others depends on the day of the week chosen.
• Shorts have been built up on the stocks and there are strong indications of positioning. But the extent of the positioning varies, and the stocks could have differently.

• Neil Chenoweth wrote a detailed investigative piece on Min Res founder Chris Allison and former top executives, alleging a tax evasion scheme using shareholder funds.
• The scheme involved buying machinery with inflated prices from a company named Far East Equipment Holdings in the British Virgin Islands.
• Min Res stock dropped 13% in response to the article, with implications on leadership and governance of the company.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• On the 19th August, MyState Ltd (MYS AU), Tassie’s largest bank, entered into a merger agreement by way of a Scheme with Queensland-based Auswide Bank (ABA AU).
• MyState will issue 1.112 new shares for every share held by Auswide shareholders, with MyState/Auswide investors holding 65.9%/34.1% ownership in the MergeCo.  
• The Scheme Booklet is now out, with a Scheme Meeting to be held on the 2nd December Expected implementation on the 18th December. The IE (Kroll) says fair & reasonable.

• In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We currently do not see any index changes for ASX 20 and ASX 100.
• We continue to expect one change for ASX 50. However, our expectations for ASX 200 have changed since our last insight (link).

• RaaS Research Group has published an update report on advanced materials manufacturing group Amaero International (ASX:3DA) following its Q1 result in which it reported first commercial revenues of $1.0m, marking its first quarter of material commercial revenue from its Tennessee operation.
• The revenue includes approximately $0.6m from powder sales and $0.45m from PM HIP manufacturing.
• The powder sales made during the quarter included test material to ADDMAN Group, with which the company has a five-year preferred supplier agreement, as well as custom atomisation of C103 for a NYSE-listed materials company, custom atomisation of C103 for a US government-funded laboratory and custom atomisation of a development refractory alloy for another US government-funded laboratory.

• After a brief spell of iron ore prices rising to 108 USD/ton, prices have retraced to 102 USD/ton (-3% WoW) but remain broadly in the 95-130 USD/ton band.
• Investors were disappointed with China’s announced stimulus measures, citing their vagueness and lack of a specific timetable, resulting in the positive sentiment waning over the last two weeks.
• We update investors on Vale’s (VALE US) recent proposal to the government to settle the Mariana Dam disaster.

• This week the S&P/ASX 200 INDEX entered WEEKLY OVERBOUGHT status intra-week, peaking at 8384.50, then pulling back to 8283.20 at Close.
• In this insight we will examine resistance levels the index will have a hard time to clear, without pulling back first at least 1 week.
• According to our quantitative models, a pullback is highly likely to happen this week, or the next.