The FTSE 100 was in consolidation mode on Wednesday morning after a China-induced rally on Tuesday. However, the bulls took control after lunch and sent the index over 0.3% higher.

The impact of China’s stimulus measures fizzled out on Wednesday morning, although the key beneficiary mining sector was still higher for the week. 

London’s leading index even managed to carve out gains despite weakness in oil heavyweights BP and Shell who slipped back with oil prices.

“Brent Crude remains close to $75 a barrel as supply concerns continue to swirl. Although crude prices remain well below the peak in 2022, when they were nudging $120 a barrel, the intensity of the Israel’s attacks on targets in Lebanon has increased concerns that that the conflict will spread further across the Middle East,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

The stocks leading the rally at midday included Rentokil, Fresnillo, and Croda. Rentokil was the top riser, up 4%, after an activist investor took a board seat following a period of poor performance.

“Pest control outfit Rentokil was not in a strong position to refuse any requests from activist investor Nelson Peltz, so news that a representative from his Trian Fund Management vehicle is joining the board shouldn’t come as a big surprise,” said AJ Bell’s Russ Mould.

“After serving up a doozy of a profit warning earlier this month, Rentokil’s board is hardly in a position to suggest it doesn’t need help or fresh ideas, and it will be interesting to see where Peltz looks to exert pressure. 

“Weaker than expected revenue at Rentokil has been compounded by internal problems around the integration of acquired branches and poor cost control as the company strained to hit sales targets. This state of affairs does not reflect well on the company’s discipline.”

With little economic news on Wednesday, the big story in London is the Rightmove takeover interest from Rupert Murdoch’s REA Group and the third revised bid announced on Wednesday. Like the two prior bids, the third was rejected by Rightmove.

“While there was a shift in the tone of Rightmove’s announcement earlier this week in that it was ‘carefully considering’ REA’s latest proposal, it didn’t take long for the property portal to go back to its dismissive ways,” Russ Mould said.

“REA looks to be running out of patience with Rightmove after it rejected a third takeover proposal, banging the drum even louder that it’s bad form not to properly engage in a conversation. This sets the tone for REA taking a hostile approach, bypassing the board and negotiating directly with shareholders.

“Rightmove’s biggest investors are asset management firms and they will all have a price at which they’d be happy to let their shares go. Names like Kayne Anderson Rudnick, BlackRock and Lindsell Train won’t be emotionally attached to a business like Rightmove in the way a founder or company employee might be. They’re holding Rightmove stock to make money and it’s clear that REA continues to want the business.”

Tekcapital shares were higher in early trading on Wednesday after the technology group announced a 46% jump in NAV and hinted at the IPO of portfolio company Guident.

“We are excited to report significant progress across our portfolio companies. This has resulted in the growth of our Net Assets during the period by ~ 46% reaching US$69.8m with an NAV per share of US$0.35,” said Dr. Clifford M. Gross, Tekcapital Chairman.

“Our first half performance reflects strong commercial progress of the portfolio companies during the period. I’m delighted that each portfolio company has grown its respective revenues this year, validating our investment case for each company and the Tekcapital investment process.”

Microsalt, the low-sodium technology company, accounted for a large proportion of the NAV gains after it listed in London in February this year. The company has agreements with one of the world’s largest snack foods businesses to supply low-sodium salt, as well as extensive retail distribution channels.

Following MicroSalt’s successful listing earlier this year, Tekcapital is moving forward with its strategy of creating shareholder value through achieving portfolio company liquidity events by launching AI analytics company GenIP.

“As part of our strategy to create value from innovative technologies, we launched GenIP this summer. We feel its forthcoming IPO will provide UK-focused investors with a unique opportunity to secure exposure to the fast-growing Generative AI analytics market,” Gross said.

The surprise proposed GenIP IPO will add around £5m of liquid NAV to the portfolio.

Guident IPO

Investors who see Guident as the jewel in Tekcapital’s crown will be delighted to see the Tekcapital group Chairman hint at a listing after noting revenue-generating progress for the autonomous vehicle safety company.

“Guident has made material progress in commercialising its autonomous vehicle safety solutions, and revenue generation has increased accordingly,” Gross said.

“We believe improving market conditions and Guident’s commercial advancements are creating the ideal opportunity for Tekcapital to crystalise the balance sheet value held in the company while providing a greater pool of investors the chance to join us in the next phase of Guident’s scale-up. As previously announced, Guident is seeking a private investment round and, once consummated, should have the investor support for a range of possible future funding opportunities, including an initial public offering.”

Guident has plenty of space for a higher valuation on listing given the size of the addressable market and Guident’s SaaS model, which provides recurring revenues.

Portfolio management

In this update, Tekcapital alluded to taking a measured approach to managing its portfolio. Although nearly all of Tekcapital’s technology companies are now listed, the company clearly still has a desire to capture new opportunities.

Interestingly for investors, the Tekcapital board has also displayed flexibility in their approach to creating value for shareholders, which is likely to expedite returns. The company has previously opted to found companies and provide seed capital directly into them. The approach to GenIP is different because the first major funding round is the upcoming IPO.

This does two things. First, it allows investors to gain exposure to the company in the early stages when the company grows rapidly. Second, it reduces reliance on Tekcapital for growth capital.

Dr Clifford Gross said that the company is at ‘an inflection point’ and shares have reacted accordingly on Wednesday.

Chinese stimulus helped propel the FTSE 100 higher on Tuesday as the world’s second-largest economy stepped up its efforts to support the economy.

China has taken a different approach to the slowing economy over the past year by holding back from major stimulus and choosing to let events play out – much to the displeasure of investors who had become accustomed to China acting at the first sign of weakness.

However, China’s stuttering growth has proved too much for Beijing, which again moved to stimulate the economy overnight, sending Asian stocks soaring.

“China has been searching for solutions to its economic growth challenge for some time, and stimulus measures haven’t really worked. It’s gone from being a trailblazer with supersonic economic expansion to a country whose batteries were close to running out of energy. It’s now gone all-in with its bet on getting the economy back into top gear and that’s driven the mother of all rallies on the Chinese stock market,” said Russ Mould, investment director at AJ Bell.

China chose to focus on the much-loved housing market for the latest major stimulus to help the struggling industry after years of slow growth and debt troubles.

“The People’s Bank of China has delved into its bag of tricks to try to get growth back to the 5% target, including cuts to interest rates, mortgage rates, and downpayments for house buyers,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

The focus on housing plays straight into the Chinese wealth effect and the historical investment case for the country as a consumer of natural resources.

“The Shanghai SSE index jumped 4.15% while the Hang Seng soared by 4%, indicating that investors are pleased with plans to lower borrowing costs and allow banks to increase their lending. That had a direct read-across to the FTSE 100 and its army of commodity producers who should benefit from greater economic activity in China and for London-listed companies which do business with consumers in the country including Burberry and Prudential,” Russ Mould said.

The miners are almost always the biggest beneficiaries of Chinese stimulus, and on Tuesday, Antofagasta, Rio Tinto, and Anglo American were all among the top gainers. 

Smiths Group was the top faller, down 7%, after releasing lacklustre full year results.

Plans are currently being delayed by ‘procedural matters’ in this group’s application for a listing on the Australian Securities Exchange. 

On Tuesday 13^th August the hopes were that CleanTech Lithium (LON:CTL) had submitted its Prospectus for a dual-listing on the ASX. 

It also inferred that it was hoping to raise up to A$20m in the process. 

Management Comment 

At that time Chairman and Interim CEO Steve Kesler stated that: 

“CleanTech Lithium is positioning itself to become a leading supplier of battery-grade lithium to the growing EV and energy storage market to support the global energy transition. 

We’re excited of the prospect to join the ASX which is home to many of the world’s leading lithium companies. 

In addition to our existing AIM listing, the dual-listing in Australia will provide us with access to a broader collection of security holders and stakeholders who have a deep understanding of the lithium industry and its importance in supporting the world’s ambitions for net-zero.  

We are looking forward to introducing CTL to the Australian market, providing Australian investors the opportunity to invest in an emerging producer of battery grade lithium from a country with an established lithium industry, an FTA with the USA and a preferential trade agreement with the EU. 

Our two core projects host, in aggregate, total resources of more than 2.7 million tonnes of LCE and we are advancing the use of DLE technology, which features much higher recovery rates and less environmental impact compared to conventional forms of lithium extraction.  

We are also aiming to be powered by renewable energy once in production, utilising Chile’s excellent renewable energy resources including in the region of our projects. 

Harnessing DLE and renewable energy positions CTL to be a leader in a more efficient method of producing lithium in Chile, and we believe this will give us an advantage in supplying a premium lithium product to the market.” 

The company declared that the proceeds of the proposed Fundraising could be applied towards the development of the company’s suite of projects in Chile, primarily the completion of the Pre-Feasibility Study at the Laguna Verde Project and ongoing operations at the DLE pilot plant, which is producing battery-grade lithium carbonate.  

CTL’s projects are centred in an area of northern Chile dubbed the ‘lithium triangle’ which is shared with Argentina and Bolivia.  

CTL aims to become a leading producer and supplier of ‘green’ battery-grade lithium to the Electric Vehicle and Energy Storage market by utilising advanced environmentally-sensitive processing technology powered by renewable energy. 

Submission Of Replacement Prospectus 

On Tuesday 27^th August the group announced that it had needed to issue a Replacement Prospectus to the ASX clarifying the scalability and global usage of Direct Lithium Extraction and the company’s reliance on renewable energy and potential exposure to fossil fuels.  

The amended copy now also contains additional information on the Chilean national electricity grid’s existing high renewable energy mix.  

It noted that it plans, where possible, to include renewable energy sources to power operations in line with its objective of promoting sustainable lithium production. 

At that time the company stated that it did not anticipate that the lodgement of the Replacement Prospectus would impact the timing of its admission to ASX and declared that admission is expected to occur on or around 24^th September. 

Offer Period Extended 

On Monday 9^th September the company noted the delay and reactively decided to extend the Offer Period for its fundraising from 9^th September to 23^rd September. 

It stated that it will provide a further update once it has received confirmation of the proposed ASX Admission and commencement of trading dates.  

Update On Its ASX Listing 

Last Friday 20^th September the company announced that it had been informed by representatives of the Australian Securities Exchange that due to procedural matters the approval process of the company’s listing on ASX will be extended. 

CleanTech Lithium informed investors that it is working with its lawyers in Australia, its other advisers and ASX to address the matters expeditiously and will provide the market with a further update when greater clarity has been obtained on the revised expected timetable. 

In My View 

This £23m capitalised group’s shares, which hit 94p in February last year and were down to just 10.50p in April this year, before rapidly picking up to 25.30p in late July, then drifted back to 14p just over a month ago. 

Despite the ‘procedural delays’ they are now trading at around the 15p level. 

I hope that the company can get its ASX listing speeded up, thereby enabling the required funding to complete. 

Getting that out of the way will allow mining sector punters to react rapidly to any items of good corporate news that are sure to follow. 

Should I buy an S&P 500 ETF at current levels? There’s no two ways about it, for many investors, buying the S&P 500 index is probably the best thing they could do if they’d like to get exposure to the stock market.

The numbers are compelling. The S&P 500 has outperformed most active managers by some margin over the past decade. 

However, while this fact is often touted by ETF proponents, it doesn’t take into consideration that private investors can be a lot more nimble than your average fund manager, apply a degree of trading to their portfolios, boosting returns.

That is, of course, if they have the experience to do so. Those who don’t have a reasonable level of experience in the stock market are probably better suited to sticking to the broader equities indices.

Investors in the S&P 500 index will gain exposure to the world’s largest companies. Household names such as Apple, Microsoft, Nvidia, and Amazon make up a large proportion of the index and, therefore, your investment when you buy an S&P 500 index ETF.

These companies and the S&P 500 have been a safe bet and will likely remain so for the foreseeable future. 

There is one technique that savers and investors should be aware of to help smooth out the inevitable bumps in the road when investing in stocks. 

That’s dollar cost averaging. Or pound cost averaging, depending on which side of the Atlantic you’re on.

The answer to our question of whether you should buy an S&P 500 ETF at current levels is probably yes. But it will also be yes at the same time next month, and the month after that, and, yes, the month after that.

By drip-feeding your cash into the S&P 500 on a regular basis, you even out your investment and soften any bouts of volatility. They even become an opportunity and can boost your long-term returns.

Who knows if the S&P 500 will be 5% higher or lower next month? With dollar cost averaging, it doesn’t matter; you buy anyway. It builds your investment and smooths out the entry points.

Fresh after London’s largest technology IPO of 2024, the computing and technology company announced a solid set of first half results on Tuesday. Raspberry Pi raised $179m in June this year.

Despite marginally lower volumes than the comparative period, Raspberry Pi’s overall performance was better than expected during the period. 

EBITDA was 55% higher in H1 2024 than in H1 2023 due to issues with supply in the first half of last year which made this year’s number look that much better.

Investors will also be encouraged to hear that the company sees higher volumes in the second half. 

“The IPO was the watershed moment of the first half, with Admission to trading just two weeks before the period end,” said Eben Upton, CEO of Raspberry Pi.

“In continued pleasing trading in the first half, we saw strong uptake of our latest flagship SBC, Raspberry Pi5, the launch of the Raspberry Pi AI Kit, and the successful ramp to production of RP2350, our second-generation microcontroller platform. The higher than usual customer and channel inventory levels which were evident at the time of the IPO have continued to unwind, and there is a growing sense that this will have concluded by the year end.

“We have an extraordinary team, a world class product set backed up by an exciting future roadmap, and a loyal and engaged customer base that we can continue to grow. In the second half, we have further planned product releases and a number of initiatives to further expand our engagement within our Industrial and Embedded market”.

Antofagasta shares are supported by long-term structural economic expansion and the demand for copper from the clean energy transition.

After touching highs above $10,000 per tonne earlier this year, copper prices have gently eased amid concerns about Chinese growth. However, the Federal Reserve’s decision to start cutting interest rates has sparked a rally in the copper, which touched two-month highs last week. 

Copper’s high correlation with the underlying growth environment has earned the metal the title ‘Dr Copper’, as a rise in the price of metal is usually caused by improving sentiment or economic expansion.

It remains to be seen whether the recent rally in copper is just a result of improving sentiment after the Fed cuts interest rates or is a predictor of future economic buoyancy. Indeed, the shift in copper’s narrative to US interest rates away from Chinese growth will likely be short-lived.

That said, if we see any signs of positivity from China in the coming months, copper prices have plenty of space to rally.

In addition to immediate macroeconomic considerations for the price of copper, the metal is set to benefit from long-term structural demand from the green energy transition. For all the furore around lithium, cobalt, and uranium, copper is the essential metal at the heart of most green energy technologies, including electric vehicles and power generation.

Investors seeking exposure to further recovery in the price of copper or would like to position for the green transition without buying futures or trading another form of derivative should look no further than Antofagasta.

FTSE 100-listed Antofagasta is the ultimate play on copper prices for UK-focused equity investors. The company’s resource base is around 21 billion tonnes, making it one of the world’s leading copper miners in terms of resources.

Focused on Chilean copper assets, Antofagasta’s strength lie in extensive production operations and the supportive environment for copper prices.

Antofagasta invested in mining operations at a time when capital costs were much lower. This provides investors with the attractive advantage of an upside in copper prices without the CAPEX required to bring mines online.

It has become hugely expensive to construct new mines, leading to a dearth of new mines coming on line. It’s one thing for early-stage companies to identify economically viable resources; securing the funds to extract them is something entirely different, especially at the scale at which Antofagasta is operating.

Antofagasta produced 284,000 tonnes of copper in the six months to the end of June 2024. Although this was slightly lower than in the same period last year, group revenues rose 2% due to a higher comparative copper price.

The company expects to spend $2.7bn in capital expenditure for the full year. A large proportion of this will be allocated to improving facilities to increase copper production.

Antofagasta has plentiful resources in place, and its growth strategy is to increase the pace at which it is monetised. Very few miners have the mineral or capital resources to achieve the levels of production Anto is targeting, giving it a huge competitive advantage.

Investors should also note the company’s willingness to return cash to shareholders. Antofagasta pays out 35% of underlying earnings per share. This policy means payouts can be volatile, but it leaves plenty of opportunity for substantial payouts on periods of good performance. 

In conclusion, the stock offers robust chances of both capital growth and income, and with shares below 2,000p, it should be on the watch list of any natural resources fan.