Buy Now Pay Later (BNPL): the hot sector went from strength to strength today with the smaller players getting the bulk of the attention as investors looked past Afterpay (APT). The biggest stock of the lot fell marginally but the smallest stock of the sector, Openpay (OPY), stormed ahead to close at an all-time high, up 38.7% on the day. Today’s moves come with Afterpay issuing almost 10m new shares on the back of the institutional placement – the rally from the smaller names likely a result of the participants in the APT raise using the strength in the share price to take some cash and spread the exposure across the sector. Sezzle (SZL) used attention the raise some capital of their own, managing to bring in $79m from institutions with CDI shareholders able to bid for another $7m worth shares at $5.30 through an SPP – the stock closed a huge 22.3% higher, now more than 60% higher than the placement price. The funds will be used to build out their product offering, add more staff to the sales and marketing teams and move into new geographies. Zip Co (Z1P) jumped on the coattails of the rally to add 5.39% as well to round out the group.
For now, the rally continues to defy the calls of many in the market, which could mean it has more to run! In saying that though, some analysts have boosted their price targets on Afterpay by more than 100% highlighting the exuberance of the market (and the lag effect of analyst valuation changes). For now, though, it’s difficult to stand in the way of momentum here.
Iron Ore +5.34%: Commodities are a place we want to be right now and today was another example why, Iron Ore traded higher again and is once again surprising to the upside and taking the likes of Fortescue Metals (FMG) to all time highs. We’ve got RIO across the growth and Income Portfolios, FMG has clearly done better however RIO looks primed to catch up. From current levels, we are bullish Alumina (AWC), bullish Rio Tinto (RIO), bullish Oz Minerals (OZL) & Bullish Western Areas (WSA).
