There were hints of a Christmas rally in small cap stocks as some of the year’s favoured stocks pushed up to new 52 week highs. Tech investor All Active (AAA) lead the way with a push above 9p – versus sub 0.25p earlier in 2020. The news that the company had completed the second tranche of a recent placing cleared the log jam in the stock with buyers returning to the fray.
Sticking with the tech investor space, and it was the turn of Pires (PIRI) to announce an investment in the currently red hot area of decentralised finance, otherwise known as DeFi. The company said that it has conditionally entered into a share subscription agreement to subscribe for 1,765 new shares in DeTech Studio.
Another bear trader nemesis also hit new highs, well over 40p and well over the £1bn market level, as investors waited on M&A news regarding the Russian palladium play Eurasia Mining (EUA). Given that £1bn is around £1bn more than some cynics regard the value of the company, and continue to call the share price down, it was to be assumed that some of the ongoing strength in the stock is the result of short covering. In the meantime, Eurasia updated on its West Kytlim asset, with the news being that the Definitive Feasibility Study has been approved by the working meeting of the Russia State Committee on Reserves.
There was a further re-rate for energy investor Kistos (KIST). With the shares having climbed by over a third in recent sessions, it was difficult not to conclude that the initial valuation of the company near to £40m and 100p was far too low. This is especially the case given the pedigree of the management who were at the helm of one of the more successful oil plays of the recent past with last summer’s £243m takeover of Rockrose Energy.
Another stock re-rating in a healthy fashion was Brandshield Systems (BRSD), after the cybersecurity group formerly known as Two Shields saw its shares admitted to the AIM market earlier in the week. The company had previously raised £3.2m at 20p, hoping to take advantage of a market which is currently growing at 20% a year, boosted by the work from home / online boom seen in the wake of the pandemic.
Jubilee Metals (JLP) was also making an impression, as the metals recovery group continued its rally, one that has taken the stock from below 2p to nearly 9p so far this year. The recent driver for the shares has been the backing of star fund manager Gervais Williams of Premier Miton Group, as well as the company announcing total revenue for the year increased by 132 %, to £ 54.8 million, and earnings growth of 162 % to £ 18.3 million.
After the vicious rug pull in the wake of the farm out news regarding Barryroe earlier in the week, there was an element of regrouping in the stocks most affected by the news. Lansdowne Oil & Gas (LOGP) was the better bouncer, having fallen to pre-farm out support near 1.30p after a decline from 2.5p. Given that the run up to the news from the SpotOn consortium had become such a crowded trade, it was clear that recovery in both Lansdowne and Providence Resources (PVR) would only take place once the more flaky of retail investors had jumped ship.
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