Good Evening,

Welcome to Equity Espresso

We’re here to catch you up on all the day’s news in Australia and abroad.

Here’s a sample of what you may have missed today:

1. 🔋 Gina's Lithium Leap

2. ⬇️ Viva Energy on Alert

3. 🤑 Is IPO Season Upon Us?

4. 🚗 Tesla’s Ambitious Price Target

5. 🥜 Select Harvest's Bright Forecast

The Recap

ASX on the Upswing: Liontown Attracts New Potential Partner

The ASX200 index finished higher for the second day on the trot, closing 14.6 pts. higher to 7,206.90, with six of the 11 sectors finishing higher, led by Materials (+0.89%) and Health Care (+0.78%).

The price of Iron Ore rose today, with the futures contract set at $US118.65 per tonne, the highest point since March. New bank loan data from China released today came in above expectations, which drove a more positive economic sentiment.

Energy (-1.4%) took a tumble as Woodside (-1.5%), Santos (-1.3%) and Ampol (-1.3%) all finished lower.

The NAB business survey for August was released today, showing that business activity remains resilient despite rising rates and caution on the Chinese economy.

Labor's major housing bill has received the support of the Greens, who negotiated an additional $1 billion to be allocated to social housing. While initially requesting a nationwide rent freeze, the Greens have since revised their position.

The proposed legislation intends to establish a $10 billion fund for social and affordable housing development. This fund will not directly finance construction but will instead be invested by the Future Fund. The investment profits, estimated at $500 million annually, will be directed towards housing projects to create 30,000 homes over five years.

ASX200 Stock Snapshot

Wall Street

The S&P500 (+0.14%) and NASDAQ (+1.14%) rose overnight ahead of an important week of economic data that will shape how the Fed Reserve approaches next week’s meeting in deciding what to do with interest rates.

Consumer Discretionary and Communication Services led the gains, while Energy and Industrials fell.

Tech stocks rose with Tesla, the big mover overnight, rising by more than 10% as Morgan Stanley said its Dojo Supercomputer may boost value by up to $500 billion. The broker set a price target of $400 per share. Tesla closed normal hours trading at $273.58. ↘️ 

Qualcomm's stock rose 3.9% following the announcement that they will provide Apple with 5G modems for their smartphones until 2026.

Economic News

• NAB's monthly survey showed that business conditions rose 2 points in August, continuing a run of resilience despite a slowing economy. Trading conditions, profitability and employment all rose, with a broad-based increase across most industries.

• The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 1.5% in September to 79.7. Although concerns about interest rates eased, negative sentiment remained. Mortgage holders were more confident, but renters saw a decline in confidence.

Sponsor

Become a Better Investor in
5 Minutes a Day

Bite-sized investing ideas, wisdom, news, and trends you need to grow your dough!

Join legendary traders, investors, and entrepreneurs at the Daily Dough!

Quick Singles

🪃 Local News

• Late yesterday, Gina Reinhart led Hancock Prospecting announced that they hold a 7.72% stake in Liontown Resources, which is currently subject to a takeover offer from Albemarle. Hancock has not ruled out launching a takeover bid for the WA-based Lithium miner. Liontown finished the day slightly above Albermale’s offer price of $3.00 per share.

• Imugene announced the grant of a new patent by the Japanese Patent Office related to Imugene’s immunotherapeutic PD1-Vaxx, a first-in-class programmed death-1 (PD1) vaccine currently in clinical development for non-small cell lung cancer (NSCLC).

• Select Harvest released a market update today stating it anticipates a good 2024 crop. Fiscal 2023 profit is expected to align with consensus, with annualised gains of $21 million. However, almond prices are expected to remain steady until there is more information on the size and quality of the Californian crop. For the 2023 crop, Select Harvest forecasts net sales prices between $6.30 and $6.50 per kg. Over the next ten years, prices will increase to $8.26. Select Harvest ended the day up 10.4%

• Splitit and AliExpress now offer their "Pay After Delivery" service in the United States. This service, already available in Europe, allows customers to pay for their purchases after delivery. The companies announced in a news release on Monday that this feature is embedded in the AliExpress checkout process, providing customers with a custom-branded experience.

• Bellevue Gold shares fell 1% despite reporting “exceptional high-grade” gold at its Decon Main mine in WA. CEO Darren Stralow said: “These great results provide more strong comfort about the outlook for the start of mining at Bellevue.”

🌏 Around The Globe

• UBS is cutting hundreds of jobs in Asia due to slow activity following its acquisition of Credit Suisse and China's economic slowdown.

• From November, Google will require political ads to disclose if they use AI-generated "synthetic content" to create fake videos or audio clips.

• Brazilian financial company Nubank saw a rise of over 8% in its U.S. traded shares following an upgrade by JPMorgan from neutral to overweight. JPMorgan noted to its clients that Nubank is expected to gain a larger market share in Brazil for several years, with the current stock price decline presenting an excellent opportunity to enter the market.

• Tech giant Meta saw a 3.2% increase following reports from the Wall Street Journal that they are developing a new A.I. system. This system is said to be as capable as OpenAI's most advanced model and even more powerful than their recently released Llama 2 model.

• Alibaba shares fell 1.5% after news that CEO Daniel Zhang would unexpectedly leave the company's cloud business.

₿ Crypto Corner

• A court filing on Monday unveiled that FTX has $1.16 billion worth of Solana tokens. This amount constitutes over one-third of the company's total liquid crypto portfolio, valued at $3.4 billion. FTX's crypto portfolio includes Bitcoin as its second-largest asset, worth $560 million. Ethereum is the third-largest, worth $196 million, while Aptos, the 36th largest crypto asset by market capitalisation, accounts for $136 million.

• According to Coin Metrics, the fees for Ethereum transactions have decreased to their lowest levels since 2022 due to a decrease in on-chain activity related to NFT sales and meme coin trading. Currently, the average fee for Ethereum transfers is $1.83, while the cost of exchanging tokens through Uniswap is around $4.17 per Etherscan data.

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Recommendation

Movers and Shakers

✅ Biggest Gainers

Novonix's (NVX) share price rose 3.4% following the results from external consulting firm Hatch, which completed an Engineering Study on Novonix’s All-Dry, Zero-Waste Cathode Synthesis Process. Novonix provides battery materials, equipment, and services to the lithium-ion battery market in North America.

Novonix has developed an innovative cathode synthesis process that uses Dry Particle Microgranulation. This technology is more efficient than traditional methods as it involves fewer steps and produces no sodium sulfate. Additionally, it reduces facility cooling water usage by approximately 65% and eliminates the need for water in core materials processing.

According to a study by Hatch, Novonix's approach has the potential to reduce power consumption by about 25% and significantly minimise waste byproducts in comparison to the conventional process. These factors may result in a cost reduction of roughly 50%, excluding material feedstock expenses.

Delta Lithium (DLI) announced a change in its board of directors. Chris Ellison, the founder of Mineral Resources, has been appointed as the new non-executive chairman. Mineral Resources now holds a 17.44% stake in Delta, making it the largest shareholder. Joshua Thurlow, currently the Chief Executive at Mineral Resources, will also join the board as a non-executive director. Due to this reshuffle, the executive chairman, David Flanagan, will step down from the board.

Delta Lithium's Mt. Ida Lithium Project in Western Australia's Goldfields region is still on track for approval later this year. The company announced the results of gold drilling adjacent to its lithium mine.

Delta Lithium shares ended the day up 6%

🔻Biggest Fallers

Shares of Viva Energy (VEA) experienced a 7.2% decline following the publication of an article on AFR Street Talk. The article claimed that Vitol, a Swiss-based company and majority owner of the company, was potentially looking to reduce its stake in a $500 million block trade. Vitol had been listening to pitches from equity capital markets teams and was weighing the option of trimming its stake soon. Vitol currently owns 633 million shares in Viva, which are valued at approximately $2 billion.

There was no announcement from Viva Energy today as at market close.

Post of The Day

Will history repeat?

Deep Dive

Brace for the IPO Resurgence:
2023-2024 Set to Revive Market?

An Initial Public Offering (IPO) boom may be coming soon, which markets have eagerly anticipated for nearly two years. Historically, a booming IPO market has made the primary market more attractive, as positive sentiment tends to lead to more investor bids on new offerings.

After a quieter period in 2022, IPOs might be returning en masse in 2023-2024. The primary market has seen a flurry of activity in recent months, with a series of consecutive public offerings about to enter the market

2022 saw a significant drop after a flurry of activity in 2021. There were 89 IPOs on the ASX, down from 202 in 2021. 76 of the 89 listings were in the energy and materials sector.

In the United States, there were 181 IPOs in 2022. This was 82.5% lower than the 1,035 IPOs in 2022, which is an all-time record. ⬇️ 

We take a look at three IPOs about to be listed on the U.S. market

Instacart

Instacart is a personal shopping service that enables individuals to buy various products from numerous stores and have them delivered to their homes. The company is expected to go public this month.

On Monday, it set a target valuation of up to $9.3 billion on a fully diluted basis, much lower than the price it had received in its previous funding round. Instacart and some investors who want to reduce their ownership size plan to raise $616 million by offering 22 million shares priced between $26 and $28 each.

Instacart was valued at $39 billion two years ago during its last funding round. ⬇️ 

Klayvio

Klayvio provides personalised marketing solutions for e-commerce brands, with operations in the U.K. and Australia.

Klaviyo is seeking a fully diluted valuation of up to $8.4 billion in its IPO in the United States, offering 19.2 million shares at $25 to $27 apiece and is aiming to raise $518.4 million at the top end of the range. This valuation is a climb down from the $9.15 billion pre-money valuation at which Klaviyo last raised capital in 2021.

Klaviyo posted 51% growth in revenue to $164.6 million for the three months ended June 30.

Arm Holdings

Arm is the leading technology provider of processor IP, offering the broadest range of processors to address every device's performance, power, and cost requirements.

Arm, owned by Soft Bank, is seeking up to $51 per share, potentially valuing it at more than $50 billion - the most valuable company to list on the U.S. stock exchange since electric carmaker Rivian Automotive debuted in 2021.

Demand for Arm has been strong, with the IPO reportedly five times oversubscribed, where it’s expected the price will land at the upper end of the price range of $47 - $51 a share, possibly even higher than that.

Arms’ current owner, SoftBank, plans to sell 10% of its stake in the company through a Nasdaq listing. Initially, the company hoped to value Arm at $70bn.

Daily Quiz

Test Your Knowledge

Initial Public Offerings

Yesterday’s Daily Quiz Question: In what year was the G20 founded?

Answer: 1999. The most popular answer with 50% of you getting it correct.

The G20 was founded in 1999 after the Asian financial crisis as a forum for Finance Ministers and Central Bank Governors to discuss global economic and financial issues.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of September 6

1. Flight Centre (FLT) - 10.22%

2. Pilbara Resources (PLS) - 9.88%

3. Syrah Resources (SYR) - 9.45%

4. Elders Limited (ELD) - 9.08%

5. IDP Education (IEL) - 8.72%

6. Brainchip (BRN) - 7.47%

7. Select Harvests (SHV) - 7.32%

8. Mesoblast (MSB) - 7.28%

9. LandLease Group (LLC) - 7.20%

10. Core Lithium (CXO) - 7.20%

11. Sayona Mining (SYA) - 7.13%

📊Broker Ratings

What do the brokers have to say?

1. Platinum Asset Management (PTM) - Upgrade to Neutral from Sell (UBS)

2. Sims (SGM) - Upgraded to Neutral from Sell (Citi)

👨‍💼 Director Transactions

What are the insiders doing? (On-market only)

💲Dividends

Companies trading ex-dividend today

1. Bluescope Steel Ltd (BSL)

2. Diverger Ltd (DVR)

3. Lovisa Holdings Ltd (LOV)

4. News Corporation (NWS)

5. Perseus Mining Ltd (PRU)

6. PSC Insurance Group Ltd (PSI)

7. Regis Healthcare Ltd (REG)

8. Sequoia Financial Group Ltd (SEQ)

9. TPG Telecom Ltd (TPG)

10. Westpac Banking Corporation (WBCPK)

📅 Economic Calendar

Data to keep an eye on this week

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.