While news outlets have likened this week’s global stock market hammering to a potential precursor to another ‘Black Monday’ event, amid the noise millions of buy orders were actually placed on the Australian Securities Exchange (ASX).
Ben Williamson, co-founder and CEO of InvestorHub, says 4,029,722 buy orders were executed on the ASX on Monday (7 April).
“It was 4 million individual trades. That’s 4 million, essentially, decisions to invest in a stock,” Williamson tells Mining.com.au.
“Every sell had a buy. It’s a good reminder that people are choosing this time to enter.”
Over 130 companies across Australia and the UK use InvestorHub’s direct-to-investor software to better understand and engage with 500,000 shareholders.
ASX-listed resources companies using InvestorHub include Impact Minerals (ASX:IPT), Dreadnought Resources (ASX:DRE), RareX (ASX:REE), Warriedar Resources (ASX:WA8) and Tempest Minerals (ASX:TEM).
Williamson says InvestorHub sees a lot of trading, and about 63% of those buying into a stock are existing shareholders.
“So that’s existing shareholders doubling down, upgrading their position,” he says.
On top of that, 16% are former shareholders buying back into a stock they are already familiar with.
“People who sold out previously and are now coming back,” Williamson notes.
“So you add that together, 79% are people who have already bought shares in the stock before. If the stock is unaffected, it’s a great opportunistic time to buy into a story you know, a story you trust, an opportunity that you see that others might not.”
Williamson pointed to RareX as an example of one of the stocks witnessing buying activity in the slump.
The company released news on 25 March of a new “high-grade” gallium discovery at its Cummins Range Project.
Historical drillholes contained values of up to 6,826 grams per tonne gallium, with RareX saying research suggests these are the highest grade gallium assays reported in Australia.
Prior to that news RareX was trading at $0.008 and following the announcement, shares spiked over 200% to $0.025. On that day 191.5 million shares were traded.
While the junior explorer ended this past Monday down like pretty much every other stock on the market, the stock was sitting at about $0.017 by the closing bell and still more than double what it was prior to the news.
With the market up on Tuesday (8 April), RareX regained ground to be roughly on par with where it closed the day it released the news of the gallium discovery.
“Given the massive sell off at the top end, you would think it would impact them more so than that,” Williamson tells this news service.
“They’ve had some really good buying.”
Diversified explorer Tempest Minerals was also an outlier on Monday, closing relatively unchanged on the trade of just over 7 million shares following the stock market rout, and gaining 20% on Tuesday to trade at $0.006 before ending the day level.
The company announced last week that it will boost the coffers by $1 million via a private placement to international resources investor Cambrian.
Cambrian is associated with well-known corporate figure Neil Herbert, who is currently the executive Chairman of Atlantic Lithium (ASX:ALL), which is listed on the ASX, London’s secondary AIM exchange and the Ghana Stock Exchange.
Herbert has spent over 30 years in finance, including in senior roles with natural resources investment firms Polo Resources and Galahad Gold.
He said following news of Cambrian’s planned injection of funds into Tempest that the company’s Remorse Project exhibits all the characteristics of a potentially groundbreaking iron ore deposit, as demonstrated by the “high-grade” magnetite iron ore discovery with promising drill intercepts.
“Such a discovery could pave the way for the swift development of a mine, potentially enabling Tempest shareholders to realise significant value from their investment,” he says.
InvestorHub’s Williamson says that over time, the recovery time from big selloffs gets shorter and shorter.
“So you would expect this to be shorter than the COVID recovery. You would expect it to be shorter than the GFC recovery, as that trend looks to hold true,” he explains.
Write to Angela East at Mining.com.au
Images: iStock
