The S&P/ASX 200 Index (ASX: XJO) was on form during the first quarter of 2021. Over the three months, the benchmark index climbed 3.1%.
While there were a good number of shares climbing higher with the market, some stood out with particularly strong gains. Here's why these were the best performers on the ASX 200 during the first quarter:
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Lynas Rare Earths Ltd (ASX: LYC)
The Lynas share price was the best performer on the ASX 200 during the quarter with a 55% gain. This rare earths producer's shares were in demand with investors thanks to a very strong half year result and news out of China. In respect to the latter, reports that China is looking to curb the exports of rare earth minerals that are crucial to defence industry gave the Lynas share price a big boost. These materials are used to manufacture sophisticated weaponry such as fighter jets. As Lynas is the largest rare earths producer outside China, this could bode well for its future growth.
Virgin Money UK CDI (ASX: VUK)
The Virgin Money share price wasn't too far behind with a gain of 45% during the first quarter. The key driver of this strong gain was the release of a stronger than expected first quarter update in February. That update revealed that the UK based bank "had a profitable and positive first quarter." In addition to this, with its COVID bad debts comfortably within the level assumed in its provision, the worst appears to be over for Virgin Money.
Zip Co Ltd (ASX: Z1P)
The Zip share price may have crashed lower in March but that couldn't stop it recording a 39.5% gain over the first three months of the year. Investors were fighting to get hold of the buy now pay later (BNPL) provider's shares for a number of reasons during the first quarter. This includes a strong second quarter update and an overall re-rating of BNPL shares following the highly successful Affirm IPO in the United States. In addition to this, speculation that Zip is considering a secondary listing in the United States went down well with investors. This would give Zip greater access to US capital markets.
Codan Limited (ASX: CDA)
The Codan share price was on fire and stormed 38.1% higher during the first quarter. This gain was driven by a very strong half year result from the technology company and the announcement of a major acquisition. In respect to its results, thanks largely to strong demand for metal detectors, Codan reported a 14% increase in half year sales to $194 million and a 36% lift in profit after tax to $41.3 million. Since the end of the half, Codan has announced the acquisition of US-based Domo Tactical Communications for $114 million. And just yesterday, Codan added to this with purchase of Zetron, Inc. for US$45 million.
