24 January 2022 - Subdued Equity Capital Markets

As we choppily move into the final week of January to commence closing out the first month of 2022, capital raising activity remained subdued with only 6 companies raising via placements on the market.

January is usually slow to start with capital raising activity in general but the onset of challenging macroeconomic factors has become the focus of investors.

Market Summary

Global markets saw heavy declines across the board as concerns about rising inflation, monetary tightening and the ongoing economic disruption from COVID-19, placed downwards pressure on markets over the last week.

2022 YTD Performance:

• Bitcoin: -23.14%

• Nasdaq: -13.04%

• S&P 500: -8.31%

• S&P/ASX 200: -5.92%

Investors look ahead to a statement from the US Federal Reserve on Thursday (27 January) following its monthly monetary policy meeting to collate information on when interest rate hikes will begin. Whether this has been effectively priced into current market sentiment is what investors are looking to gauge.

The RBA will also release inflation data in the quarterly consumer price index meeting which will provide further information about the future state of the cash rate and the central bank's plan for 2022 and onwards.

Placement Breakdown

We saw an increase in activity from last week with 6 placements raising a total of $86.2m. This came from 2 different sectors, although materials remained the frequency leader with 5 placements accounting for $84m of the week's capital raising.

An institutional placement from Centaurus Minerals Limited (ASX:CTM) for $75m accounted for 87% of the week's capital raising activity by itself. Proceeds from the placement are to be used towards:

• Completion of a Definitive Feasibility Study (DFS) at the Jaguar Nickel Sulphide Project in Northern Brazil

• A 90,000m Drill Program in 2022

• Predevelopment and Financing Activities of the Project

• Improvement of Balance Sheet to $83m in Cash

You can read more about this placement here, and the company's website.

90 Days Post Placement Performance

Grand Gulf Energy Limited (ASX:GGE) saw an insane run up to a 360% peak at 47 days post placement, following the Utah Helium Acquisition. The price settled down to an impressive 130% return at 90 days post placement, easily outstripping the other best performers for this week.

Check out our Past Capital Raises page for more information on past transactions. If you want more information on Fresh Equities and how we work, feel free to contact our team at clients@freshequities