$1.6BN cybersecurity spending, SSX makes first listing, Uber soars and the ASX small caps to watch
This is an older exclusive article for FinFeed subscribers which is now opened up. If you'd like to see new exclusive articles every week, please subscribe to our newsletter.
This week Prime Minister Scott Morrison announced an increase in cybersecurity spending to $1.6 billion over the coming decade, whilst flagging expanded powers for the Australian Criminal Intelligence Commission.
The aim is to boost community awareness and preparedness of their cybersecurity requirements, including assessing the vulnerability of critical infrastructure providers and their networks.
Police could also be given extended powers and additional funding to counter criminal activity on the dark web.
The announcement follows the $748m in new cybersecurity initiatives announced in late June.
This week’s commitments expand that package.
It will include further funding for the AFP to investigate and counter cyber threats, along with measures to help fortify small and medium businesses, universities and households against cybercrime.
Small and medium-sized businesses will be supported to upgrade their cyber security systems.
The Federal government will work with large companies and service providers to help small businesses to "secure services" and provide in-depth information about threat blocking and antivirus training.
Home Affairs Minister Peter Dutton standing alongside Prime Minister Scott Morrison said: "the threat now online is as real as it's ever been.
"Criminals are scamming money off our elderly by stealing their internet banking details. Businesses are being locked out of their systems by ransomware attacks.
"And some foreign governments are using the internet to steal health data and have the potential to turn off banking or energy systems."
There is also a safety net being built-in for other vulnerable demographics.
"If you're a paedophile you should be worried about these powers, if you're a tourist you should be worried about these powers, if you're committing serious offence in relation to trafficking of drugs, of ice, for example, that's being pedalled to children, you should be worried about these powers as well," Mr Dutton said.
There is certainly a growing awareness of cyber issues and requirements as evidenced by WhiteHawk’s (ASX:WHK) recent US federal government CISO (Chief information Security Officer) contract win.
As Finfeed previously reported: The contract will provide continuous monitoring, prioritisation, and near real-time mitigation of an enterprise’s teammates, vendors, or supply chain’s cyber risks over time, including the identification and prioritisation of a risk mitigation strategy.
There seems to be an appetite for cyber stocks.
The WHK announcement resulted in a substantial increase in the company’s share price as it soared approximately 50%— a near 14 month high. The company has continued to climb and, at time of writing, was trading at 17.7 cents.
International stocks to watch
eToro’s Adam Vettese has again provided us with his take on international stocks to watch:
T-Mobile (NASDAQ: TMUS)
Having just completed the integration of the T-Mobile and Sprint brands, T-Mobile reported quarterly earnings on Thursday, where analysts probed management on aggressive promotional pricing and the progress of its 5G network rollout. The company’s share price is up close to 40% in 2020, taking its market cap to $134BN. Wall Street analysts lean towards a buy rating on the company’s stock, despite the pandemic
Uber (NYSE: UBER)
While many tech stocks have soared during the pandemic, which accelerated trends that played in their favour, Uber has been on the receiving end of recent disruption, as lockdowns decimated ride requests. Analysts will be probing for signs of recovery as many economies are now reopening, and the company’s food delivery business will be a key point of focus. During the quarter, Uber announced a deal to buy rival food delivery service PostMates, after failing to secure a deal to acquire GrubHub. Despite the disruption, Uber stock is up 11.6% year-to-date, and analysts overwhelmingly rate the stock as a buy.
Bristol Myers Squibb (NYSE: BMYE)
New York-based pharmaceutical company Bristol-Myers Squibb reported earnings on Thursday, the day after securing a patent win for it and Pfizer, which have a profit sharing agreement on a blood-thinning drug. A judge found that products made by multiple firms had infringed upon the patents. BMQ stock surged 5% in after-hours trading as a result, taking its year-to-date return to negative 7%.
2 Aussie small caps to watch
Vulcan Energy (ASX:VUL)
Vulcan looks to be continuing its ascent. On Friday, the company began the day at 54.5 cents, climbed to 60 cents before finishing at 58 cents, a gain of 6.42% on the day.
Vulcan is aiming to become the world’s first Zero Carbon LithiumTM producer by producing a battery-quality lithium hydroxide chemical product with net zero carbon footprint from its combined geothermal and lithium resource, which is Europe’s largest lithium resource situated in the Upper Rhine Valley of Germany.
It recently, successfully completed initial bench-scale test work on Upper Rhine Valley geothermal brine using adsorbent-type direct lithium extraction (DLE) technological approaches.
AusQuest had a great day on Friday. It began the day at 2.7 cents, climbed to 3.6 cents before settling at 3.4 cents (up 25.93% on the day). It has been a solid performance since March for the company, having doubled its share price between March and July. It is poised to commence drilling potential gold-copper targets at the Gunanya Project in the Paterson region of Western Australia.
Best and worst performing sectors this week
The All Ordinaries Index has been slightly bullish this week, with nearly all sectors in the green. At time of writing on Friday, Materials was up over 6 percent with BHP and S32 rising strongly together with a number of other miners. Energy turned its fortunes around – up over 5 percent. Information Technology was up nearly 3 percent. The worst performing sectors include Financials, which is just in the red, followed by Industrials and Consumer Discretionary – up around 1 percent.
Of the ASX top 100 stocks, Incitec Pivot was up over 15 percent, Ampol was up around 10 percent, with Santos and BHP both up over 8 percent. At the other end Resmed, down over 8 percent, Scentre Group and Flight Centre, as they are both down over 5 percent, followed by NAB, down over 3 percent.
So what's next for the Australian share market?
Wealth Within’s Dale Gillham says, “This week seems like déjà vu, given that over the past few weeks the All Ordinaries Index has tended to trade higher earlier in the week only to fall away on Friday. Last Friday, the market fell nearly 2 percent, eroding all of the gain from earlier in the week. Therefore, it will be interesting to see if the Australian market can hold up and close above 6,200 points this week.
“As I have mentioned previously, the market has been moving cautiously and this week is no exception given that it has risen strongly for two days and been indecisive or down for two days. There is an old saying that the amateurs open the market and the professionals close it, therefore, where the market closes at 4pm today will be critical in understanding how it unfolds next week. A high close means the market will likely trade up while a low close means the slow drift down will continue.”
And finally ...SSX’s first listing
The Sydney Stock Exchange (SSX), Australia’s alternative tier-one listing venue, announced its first listing this week.
CEO Michael Go welcomed junior resources company Torque Metals in a bell ringing ceremony on Tuesday at SSX headquarters in Sydney. Mr Go said the listing was the first under the exchange’s new strategy and that several more companies were well advanced in the listing application process.
“Last year we announced we were focusing on providing a flexible, efficient alternative for growth companies to list and further their ambitions,” he said. “That’s exactly what Torque Metals is doing and I’m delighted that we can support them, and the other companies getting ready to list, as part of a thriving Australian financial ecosystem.”
Torque Metals MD and resources veteran Ian Finch said SSX had provided an excellent venue for the company to raise capital to further its exploration plans.
“Junior resources companies have found it increasingly difficult to float in recent years, but listing remains an excellent path to growth,” he said. “SSX have been very supportive and helpful as we have brought Torque to market.”
Mr Go said while 2020 had presented plenty of challenges, SSX was anticipating several more listings by the end of the year.
“We’ve been very focused on our plan – to help Australian growth companies succeed, and that’s especially true now in the pandemic,” he said. “Every company we can help to grow will add a little bit to the COVID recovery and support the Australian economy, and that’s more important to me now than ever.”
SSX offers a six-week listing process focused on Australian companies. The exchange is the only venue in Australia with a dedicated ESG board, and the exchange expects listings to go live on that board in the last quarter of 2020.
When the experts at Next Investors have a stock pick, it may pay to listen.
The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.
They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.
Click the link below to see what they are currently investing in.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.