The Santos Ltd (ASX: STO) share price is on track to exit September nursing big losses, but this hasn't dissuaded some experts from recommending the energy giant as a buy.

Shares in Santos may be up 0.28% to $7.04 in early afternoon trade today, but the company is still likely to post a loss of around 10.5% for the month.

That's worse than Woodside Energy Group Ltd (ASX: WDS) shares and S&P/ASX 200 Index (ASX: XJO). Both shed around 7% over the month.

Buy the dip in Santos share price

But the Santos share price weakness could be a buying opportunity, according to some experts.

Fund managers Simon Shields from Monash Investors and Todd Warren from Tribeca are big Santos backers, reported LiveWire.

The fundies believe that the energy sector has benefited from the multiple headwinds buffeting the market this year.

Todd Warren said:

A lot of cheap money has been washing around in the market for a little while now. We're dealing with the consequence of that. We think that the longer-term consequence though, with regards to resources, is that there's been no money going in the ground for new supply.

Obviously specific to energy, we think that's going to continue to be a thematic that plays out. But obviously, with energy, you've got geopolitics that can cause some short-term headlines that can be a risk factor for markets.

Price target upgrade

Both Warran and Shields rate the Santos share price a buy. And they aren't the only ones that are bullish on the shares.

Citigroup reiterated its buy rating on Santos yesterday as it lifted its price target by $1 to $10 a share. This implies a more than 43% upside if you include Santos' expected dividend payout.

The price target upgrade follows news of the 5% sell-down in Santos' PNG LNG stake for US$1.4 billion.

Better than expected valuation

The broker added:

The implied value of the offer is 8.3% above our base case PNG LNG NPV of US$25.8bn. With project partner sign-off and regulatory/financing approvals still to come, we have a high degree of confidence the deal will go ahead….

We see this as value accretive with higher exposure to the LNG spot market at elevated prices amid global gas price volatility.

High LNG prices and an expected increase in production are other factors behind Citi's favourable view on the Santos share price.

Santos share price snapshot

Santos has lost 1.7% in value over the past 12 months, while the ASX 200 index is down more than 11% in the same period.

In comparison, the Beach Energy Ltd (ASX: BPT) share price dipped 1.5%, although the Woodside share price is up by an enviable 33% following its purchase of BHP Group Ltd's (ASX: BHP) oil and gas assets.

The post Why these experts say the Santos share price is 'definitely a buy' appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Santos Limited and Woodside Petroleum Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P 500 Index (SP: .INX) tumbled 2.1% last night to its lowest level since November 2020 and it's lost nearly 9% this month. The Nasdaq Composite Index (NASDAQ: .IXIC) fared worse last night with a 2.8% retreat to a fresh low this year.

Why the US stock market is falling

It's a case of good news being bad news. Resilient jobs data in the US is reinforcing the view that the US Federal Reserve will need to keep lifting interest rates aggressively to fight inflation.

The negative sentiment is spilling over to our market. The futures market is predicting a 0.3% drop in the S&P/ASX 200 Index (ASX: XJO) this morning.

Signs of hope for a turnaround

But there might be a little relief around the corner for embattled investors. US stock futures are trending up following Thursday's sharp sell-off on Wall Street.

The S&P 500 futures are up 0.3% and the Dow Jones Industrial Average Index (DJX: .DJI) futures are pointing to a 0.2% gain, reported CNBC. The NASDAQ-100 Index (NASDAQ: NDX) futures are also indicating a 0.1% gain for the tech heavy index.

Could the worst be over for the US stock market?

It might be too early to pop the champaign, but investors have another reason to celebrate. This month is just about over and September has a notorious reputation of being the worst month for the US stock market.

In fact, history has shown that US equities have fallen almost every September over the past several years.

Given the ASX 200's correlation to the US share market, September isn't a great month for us either. Our top 200 share index is nursing a loss of around 6% for the month.

When bad news could be good

But there are two other reasons to be hopeful. The flood of doom and gloom headlines about shares and the economy may signal that the bottom could be closer than you'd think.

The overwhelming sense of pessimism tends to overtake everything just before the bear market turns. I am not suggesting we are there yet, but this is how bad news can turn good.

Will Xmas save US and Australian shares?

The other thing worth remembering is the end of year Santa Rally. This is another seasonal trend that occurs as dependably as the September sell-down.

If next month's US inflation data shows signs that price pressures are easing, this might just be enough to convince bargain hunters to jump back into the US stock market.

There is no doubt that ASX investors will also be basking in the afterglow should US sentiment turn positive.

It's a big "if", but most share investors are by their nature a "glass half full" kind of crowd, aren't we?

The post The US stock market just hit new 2-year lows. But it's not all bad news appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian dollar may be wallowing around at more than a two-year low but that spells good news for several S&P/ASX 200 Index (ASX: XJO) shares.

While the Aussie battler bounced more than a cent from its 2020 lows to around US65 cents in the last 24 hours, the trend for our dollar is still down.

Some experts are forecasting the Aussie to fall to around US60 cents before the year end. This is due largely to the faltering global economy driving investors into the relative safety of the US dollar.

How ASX 200 companies can benefit from a weak Australian dollar

It's bad news for those of us looking to holiday overseas, but the opposite is true for many ASX 200 shares.

This is because several of our larger companies are net exporters. This means they sell their services and wares in US dollars.

The weak exchange rate will boost their revenue, earnings and dividends when these are converted to the Aussie.

Why not all ASX 200 companies are smiling

Make no mistake, a weak Aussie is generally good for the overall Australian economy. This assumes it doesn't trigger too much inflationary pressure from imported goods and ignores the impact of hedging contracts that a company may have.

Naturally, not all of our largest ASX shares benefit from this thematic. For instance, Woolworths Group Ltd (ASX: WOW), Telstra Corporation Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA) won't get a free lift. In fact, the downtrodden Aussie could even be a headwind to profitability for some of them.

Why some miners benefit more than others

On the flip side, the ASX 200 companies that are best placed to benefit from the currency trend are those that not only sell most of their products in US dollar, but also have a large Australian dollar cost base.

If a company sells and buys in the same currency, then the exchange rate makes little difference.

From this perspective, miners like Fortescue Metals Group Limited (ASX: FMG) could be in the winner's circle. It sells iron ore in US dollars but its mines (and most of its workforce) are in Australia.

This assumes the commodity price doesn't work against the miner in the same time period.

Another ASX 200 company winning from the Aussie

Another currency beneficiary is hearing implant maker Cochlear Limited (ASX: COH). Most of its devices are manufactured in Australia and Sweden while sales in North America make up a substantial percentage of its total sales.

Can ASX tech shares benefit?

ASX tech companies could also be another group that will welcome the falling Aussie – all things being equal. I am referring more to software than hardware innovators. Hardware is mostly made in China and paid for in US dollars, while the main costs for software companies are developers (many of whom may be based here).

Again, I am ignoring the ongoing staff shortages and wage inflation. But if companies can manage their cost base well and sell their solutions in US dollars, then they should be in a sweet spot.

One ASX tech company that I suspect fits this niche is logistics software group WiseTech Global Ltd (ASX: WTC).

Foolish takeaway

Just to be clear, I am not suggesting investors buy an ASX 200 company just based on the exchange rate. There are many other more important variables that need to be looked at when picking ASX shares to buy.

But next time you feel like complaining about the weak Aussie, just remember there are always winners and losers for any event.

The post 3 ASX 200 companies that could benefit from a falling Aussie dollar appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Commonwealth Bank of Australia and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear Ltd. and WiseTech Global. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited and WiseTech Global. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The AGL Energy Limited (ASX: AGL) share price is outperforming the market even as one of Australia's most influential super funds is putting pressure on the company.

The $68 billion healthcare superfund, HESTA, is warning AGL's board that its soon-to-be-released decarbonisation plan better be good, as reported by the Australian Financial Review.

The market seems to have cast an early verdict. The AGL share price is up 3.12% to $6.61 while the S&P/ASX 200 Index (ASX: XJO) is 0.88% lower during afternoon trade.

AGL share price coping with the pressure

However, HESTA itself is under pressure from members to explain why it doesn't sell its entire holdings in AGL. HESTA's chief executive Debby Blakey is trying to convince them that engagement is better than divestment. She said:

We are seeking to learn more about how they will mitigate climate risk, how they will reduce emissions and how they will manage the situation, support the transition and align with that 1.5 degree transition pathway.

More board changes could be afoot

There have been significant management changes since AGL's failed plan to split itself into two companies. HESTA voted against the demerger and there could be more changes to the board. This is because HESTA has not decided who to back when directors seek re-election.

But given the turmoil that has already rocked the AGL share price since the Mike Cannon-Brookes-led campaign against AGL's spilt, investors do not seem too perturbed.

More ASX shares in the climate firing line

If it's any consolation to AGL's board, it won't be the only ASX company that HESTA is pressuring. The fund will write to all S&P/ASX 300 (ASX: XKO) companies in its portfolio asking them to outline plans to tackle climate change, social inequality, and biodiversity.

The letter will warn companies that those who don't have a fit-for-purpose plan will face a revolt from HESTA. This could include uncomfortable shareholder resolutions, votes against directors, and HESTA dumping their shares.

The fund, which has 950,000 members, has a 2050 net-zero target for its investment portfolio. It also has a 50% carbon reduction interim target set for 2030 (the baseline year is 2020).

HESTA's move comes at a time when several large cap ASX companies have been accused of greenwashing. That means they are only paying lip service to their climate commitments for PR and marketing purposes.

AGL share price snapshot

The AGL share price is under more scrutiny than most on the climate front due to its ownership of coal-fired power plants.

But the market sees value in the shares given they've rallied 16% over the past year. In contrast, the ASX 200 has fallen over 11% in the same period.

On the other hand, longer-term investors are probably underwater on their investment. The AGL share price was trading at more than $20 in early 2020.

The post AGL share price rallies despite sustained pressure from $68 billion super fund appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Threats of a global recession and heightened market volatility may not be enough to stop the CSL Limited (ASX: CSL) share price from topping $300 again.

Shares in the biotech tried repeatedly and failed to break above this elusive target since July.

But several experts believe this will happen within the next 12 months, if not sooner. This is despite the S&P/ASX 200 Index (ASX: XJO) and global markets being roiled by aggressive rate hikes, geopolitical tensions and a sputtering economy.

Can the CSL share price break its record high?

Citigroup is one that's tipping the CSL share price to not only race above $300, but to break its record high of $336.40 that was hit in February 2020.

The broker is recommending investors buy CSL and has a 12-month price target of $340 a share. This reflects around a 20% upside to CSL's closing price yesterday.

Citi isn't the only one that's bullish on the company. The analysts at Macquarie Group Ltd (ASX: MQG) have set a target of $329.50 on the CSL share price.

Upside from potential new drug

Macquarie reiterated its outperform call on the shares following the successful Phase 3 trial of garadacimab. This is a factor XIIa-inhibiting monoclonal antibody for the prevention of hereditary angioedema (HAE).

Macquarie believes the drug can take market shares (if approved). This is because of its higher efficacy and favourable dosing when compared to current treatments.

The broker said in its note, which was released two weeks ago:

We also assume pricing in line with Haegarda on an annual cost per patient basis, but with a slightly higher gross margin.

In aggregate, these assumptions imply increased HAE product revenue for CSL to FY27 (ahead of our current assumptions i.e. Haegarda and Berinert only), with solid gross profit and earnings upside (incremental EPS of ~9% by FY27).

Product portfolio and favourable court ruling

Another broker that's upbeat on CSL's growth outlook is Morgans. The broker noted that CSL's world-leading businesses are well placed for growth due to its superior drug portfolios, significant investment in research and development, and strong demand.

Morgans' 12-month price target on the CSL share price is $321.30 a share.

Meanwhile, a court ruling in the US is adding an extra tailwind for the company. A US District Court issued a preliminary injunction stopping US border officials from preventing Mexicans from entering the US on USB1/B2non-immigrant visas to receive cash for blood donations.

What is the CSL share price worth?

Morgan Stanley noted this is a clear positive for CSL. The company has 304 centres in the US with around 16 near the US-Mexican border.

Morgan Stanley has an overweight rating on the CSL share price with a 12-month price target of $323 a share.

The post When might the CSL share price top $300 again? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in CSL Ltd. and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX dividend share investors might be in for a rude shock as the federal government is looking to claw back some of the past franking credits from investors through their ASX dividend shareholdings.

The proposed law will prevent ASX companies from paying franking credits if the dividends are funded by capital raisings.

Franking credit curse taints some ASX dividend shares

What's more alarming is that the new rule will be applied retrospectively. This means investors and superfunds may have to repay the franking from 2016 onwards.

The new rule, which is open for consultation, could effectively kill off the payment of special dividends.

Which ASX dividend-paying companies are affected

A company is deemed to be funding dividends from a capital raising if the distribution is not consistent with its established practice of making such payouts on a regular basis.

The entity will also have to have undertaken a capital raising before (that means almost every ASX share) and that it's clear that the raise would fund all or part of the distribution or if the company raised capital for the purpose of funding all or part of the distribution.

The government claims the move is to close a loophole that allows companies to release excess franking credits that exceed the profits they make in a given period.

Closing a franking credit loophole but opening a tax hole

Companies like Harvey Norman Holdings Limited (ASX: HVN) have used the so-called loophole in the past to release excess franking credits to shareholders. The retailer paid a fully-franked special dividend and launched a capital raise to fund the payment.

The move is bound to create angst among shareholders. It could leave them on the hook to repay thousands in franking credits that they have received over the past five years.

What's surprising is that the federal Labor government won't be saving much through this controversial change. It's estimated that the franking clawback will save treasury around $10 million a year.

It seems like a risky gamble for the Albanese government for not much return. Who can forget the last time federal Labor tried to mess with franking credits? That, along with other proposed radical changes, cost Bill Shorten his shot at the Lodge.

What kind of capital returns are affected?

Regular dividends are unaffected and ASX dividend shares can still pay special dividends but without franking.

This will significantly reduce the incentive to use special dividends as a means of returning surplus cash to shareholders.

It is unclear at this point if off-market share buybacks will also be affected. These sorts of capital management programs have a "capital component" and a "dividend component" to the offer price. Franking credits are usually attached to the dividend component.

It reads to me that off-market buybacks could be impacted as the dividend part of the offer meets the conditions of the new rule.

You can voice your concerns to the government during the consultation period (until 5th Oct). Instructions can be found on this link.

The post Why changes could be afoot for ASX dividend shares and franking credits appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Our market is in for a rough ride but the weakness could present longer-term investors with a buying opportunity for CSL Limited (ASX: CSL) shares.

Shares in the global biotech slipped 0.1% in early trade before bouncing 0.2% higher at $278.72.

That's a good outcome given that the S&P/ASX 200 Index (ASX: XJO) crashed 1.5% on recession fears.

Why the CSL share price is a long-term buy

The volatility is likely to stay for a while, but that won't change the positive view on the shares from Medallion Financial Group's Jean-Claude Perrottet.

New technology and demand for flu vaccinations are some of the reasons for his "buy" recommendation on the CSL share price, according to The Bull. He said:

Full year results for this blood products company were positive in response to strong demand for flu vaccines, in our view.

CSL is rolling out new technology in the US, which reduces plasma donation procedure times by about 30 per cent. These innovations should improve the collection process and, as a result, we retain a positive long-term view on CSL.

Court ruling gives a secondary boost

He isn't the only one that is bullish on the CSL share price either. This is particularly so after a US District Court for the District of Columbia issued a favourable ruling on blood donations.

The preliminary injection prevents US border officials from enforcing a ban on paid plasma donations from Mexicans that enter the US on USB1/B2non-immigrant visas, noted Morgan Stanley.

US border officials had previously said that such donations were a violation of the terms of the visa.

What is the CSL share price worth?

Morgan Stanley commented:

CSL has 304 centers in the US with ~16 near the US/Mexican Border – which we estimate may have accounted for ~10% of plasma collections. If the US border issue is resolved this would be a clear positive for CSL.

Morgan Stanley has an overweight recommendation on the CSL share price with a price target of $323 a share.

This positive view was echoed by Citigroup, although the broker doesn't think this development has a major impact on CSL.

Citi said:

This is a positive for the industry which has just recently seen plasma collections reach pre-pandemic levels. For CSL the impact will positive, but relatively small.

Nonetheless, Citi is recommending investors buy the CSL share price. Its 12-moth price target is $340 a share.

The post Why this expert has a 'positive long-term view' on the CSL share price appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The BHP Group Ltd (ASX: BHP) share price is at risk of ending the year nursing losses with few signs of a letup in the headwinds pressuring the miner.

Falling iron ore prices, the sputtering Chinese economy and rising cost pressures are some of the factors hanging over its shares.

Now that BHP has shed its massive record dividend, I don't blame you if you were thinking of cashing out.

What's the shorter-term outlook for BHP shares

After all, we might be waiting for a while before the next positive share price catalyst. And given the BHP share price has fallen around 10% since January, shareholders might be sitting on losses for 2022.

While this ignores the in-specie distribution of Woodside Energy Group Ltd (ASX: WDS) shares, the outlook for BHP is still looking uncertain.

But I think it would be a mistake to throw in the towel. While I do take profit as I actively manage my portfolio (cash is my single largest position currently), I intend to keep my remaining BHP shares.

Flat means up for ASX iron ore shares

This is despite the iron ore price crashing from its March 2022 peak of around US$160 a tonne to approximately US$100/t.

The fact is the BHP share price is still sitting pretty at the current iron ore spot price. It roughly costs BHP US$20 to dig up and ship a tonne of ore from its Pilbara mines.

At current market prices for its key commodities, Macquarie Group Ltd (ASX: MQG) estimates a 12% and 20% earnings upside for the miner in FY24 and FY25, respectively.

Iron ore can hold its ground

BHP can continue to generate substantial cash flows even if the world goes into a recession – if iron ore holds its ground.

There are reasons to think it could. The problems with China and the global economy from rapidly escalating rate hikes are well understood. The risks are largely priced in.

Secondly, the supply of iron ore is tight even when demand is on the back foot due to production issues at Vale SA (NYSE: VALE) and Rio Tinto Limited (ASX: RIO).

Has iron ore hit a bottom?

The scope of the supply imbalance is reflected in comments by Vale that things can only get better, reported Bloomberg.

The comments came from the Brazilian miner's head of strategy and business transformation, Luciano Siani. He said that the iron ore market has stabilised following the sell-off and commented:

"The good news is that from now on it can only get better…. There is no ore available in the near term.

Holding on to BHP shares

This doesn't mean that the BHP share price will be protected if the S&P/ASX 200 Index (ASX: XJO) tanks.

But I believe the Big Australian can recover more quickly than those in other sectors thanks to the positive fundamentals.

Naturally, all bets are off if commodity prices crash. But that would take something rather unexpected to trigger such a meltdown.

The post 2022 hasn't been kind to BHP shares. Here's why I'm holding tight appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in BHP Billiton Limited, Macquarie Group Limited, Rio Tinto Ltd., and Woodside Petroleum Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The US stock market will reach a key inflection point tonight that could set the tone for ASX shares for the rest of the year.

The US Federal Reserve will be handing down its interest rate decision on Thursday with the market fully pricing in a 75-basis point (bp) hike.

If that comes to pass, it will be the Fed's third three-quarter point hike and would lift the Fed Funds Rate from 3% to 3.25%. That would be the highest since the start of the GFC in 2008!

What is spooking the US stock market?

But the Fed could be even more aggressive. The futures market is pricing in a 16% chance that the Fed could hike by a full percentage point, reported Reuters.

The US stock market is on tenterhooks. Investors are split over whether the Fed will hike rates to a point that will trigger a recession.

Adding to the angst is the prediction by "Dr. Doom", Nouriel Roubini, that the US and the world is facing a "long and ugly" recession, reported Bloomberg.

Dr. Doom's warning of a 40% crash in the US stock market

In fact, the economist believes the S&P 500 Index (SP: .INX) will crash by 40% if the US economy comes in for a hard landing. Make no mistake, the S&P/ASX 200 Index (ASX: XJO) won't be spared even if our economy holds up better.

Roubini correctly forecasted the GFC to earn his nickname. He said:

Even in a plain vanilla recession, the S&P 500 can fall by 30 per cent…It's not going to be a short and shallow recession, it's going to be severe, long and ugly.

How high can the Fed go?

His pessimism is premised on the Fed hiking rates to a peak of 5% in this cycle. That's well above expectations that the central bank will top out at a little over 4% before cutting rates next year to stave off a bad recession.

But Fed Chair Jerome Powell may not have that luxury as Dr. Doom reckons achieving a 2% inflation rate without a hard landing will be "mission impossible".

While there are early signs that inflation is easing, economists are divided on how quickly price pressures will ease.

ASX shares to feel the heat

If the Fed were to lift borrowing costs by more than expected, it will put pressure on our RBA to be more hawkish. Our reserve bank may be independent, but as a player in the global economy, relative rates matter more than the RBA cares to admit.

The US stock market is yet to price in 5% interest rates, let alone a long hard recession. This is why investors will be hanging on to Powell's every word tonight.

ASX investors will have a fretful 48 hours though as we have been "blessed" with a public holiday tomorrow.

The earliest we can react to the Fed's decision will be Friday, although Victoria will be on another holiday.

Go Cats!

The post Thursday is an important day for the US stock market. Here's why appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

You probably have a preferred bank to serve your banking needs, but when it comes to investing in S&P/ASX 200 Index (ASX: XJO) bank shares, it often doesn't pay to discriminate.

This is why I have all four of the ASX big banks in my portfolio despite the fact that some have brighter prospects than others.

But experience has taught me that trying to pick the winner from the group can be a counterproductive exercise. This is particularly so for longer-term investors.

Spreading your eggs across ASX 200 bank shares

There are two key reasons behind my thinking. The first is to do with risk – something I look at as much as returns when it comes to investing.

There are two kinds of risk an ASX investor faces. One is systemic risk and the other is non-systemic risk. The former refers to broader market risks (such as economic cycles), while the other refers to the risks facing individual companies (like loss of market share).

It is the latter that prompts me not to keep all my eggs in one ASX 200 bank share. In any case, different banks tend to outperform over a specific period. This complicates the task of picking winners for more passive longer-term investors.

Portfolio positioning

For instance, the National Australia Bank Ltd. (ASX: NAB) is the top performing ASX 200 bank share over the past year. But it's Commonwealth Bank of Australia (ASX: CBA) that is leading the pack over a five-year period.

However, I invest more in some of the ASX banks to gain leverage to certain shorter-term thematics. In other words, you don't need to have an equal weighting for all in the sector.

To be sure, I didn't start off this way when I only had a modest amount to invest. It just doesn't make sense to be spread too thin. But as my portfolio (and capital base) grew, the strategy had to evolve.

How I pick the big 4 ASX 200 bank shares

The second reason I own all four big banks is because of the way I pick shares. I am usually a top-down investor when it comes to large caps and a bottom-up investor for small caps.

The former means I look at broader economic factors first when deciding to invest at the top end of town. The latter refers to picking shares primarily for company-specific reasons.

Top-down works better for me when it comes to the banks because choosing one large cap over another can often be akin to splitting hairs. I typically use the same approach when it comes to the iron ore majors too.

If I have a positive view on a sector due to the economic cycle, I am better off buying most or all the leaders in the field.

Can't ignore the laggards

This includes the laggards (unless there is a significant non-systemic issue). In the case of ASX 200 bank shares, the laggards are Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC). I am ignoring the regional banks as that's for another article.

There's no doubt that holding these two ASX 200 bank shares have dragged on my returns in the last year. But it's a price I am happy to pay to sleep better at night and they could very well come back into fashion next year.

The post Here's why I decided to buy each of the big 4 ASX 200 bank shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Wall of Worry is a higher barrier for investors to scale this year but there are still plenty of S&P/ASX 100 shares to keep your eye on, according to a top broker.

The figurative wall refers to the market pushing higher despite the growing list of problems. And there are problems aplenty.

Aggressive global interest rate hikes, the sharp slowdown in China's economy and a looming energy crisis in Europe are only some of the obstacles ASX investors have to climb.

Volatility ahead

The experts at Macquarie are also warning investors to brace for more volatility over the next six months. The broker said:

"We think it is hard to make a bull case for stocks when Industrial (non-resource) PEs are already high, we are in the middle of an earnings downgrade cycle and central banks continue to tighten to slow inflation. Our indicators also suggest the US will be in recession by early 2023."

But with volatility comes opportunity. Macquarie polled its analysts for their best ASX 100 shares to buy now.

Defensive ASX 100 shares to buy

One standout is the CSL Limited (ASX: CSL) share price. Macquarie likes the global biotech for its multiple growth drivers.

These include recovery in plasma collections, benefits from the Rika platform, earnings from Vifor and contributions from pipeline products.

Another on the buy list is diversified property giant GPT Group (ASX: GPT). Macquarie believes its defensive earnings and gearing puts it in a good position to outperform in this environment.

Speaking of defensive shares, Lottery Corporation Ltd (ASX: TLC) is also on the broker's most favoured list. Macquarie calls it one of the most defensive discretionary shares due to its long and exclusive lotteries and Keno licenses in Australia.

Best placed industrial shares

Meanwhile, Idp Education Ltd (ASX: IEL) is another top ASX 100 share pick due to its structural growth story. The long-term growth rate of international students stands at 7% to 10% a year and the group enjoys good operating leverage.

The James Hardie Industries plc (ASX: JHX) share price is also a top buy, in Macquarie's book. While the building materials supplier is under pressure from a slowing property market, the company is more exposed to renovations and remodelling – an area that has greater resilience to economic cycles.

Energy shock puts these ASX 100 shares on the buy list

Finally, there are two ASX 100 shares in the energy sector that made the cut. These are the Origin Energy Ltd (ASX: ORG) share price and Santos Ltd (ASX: STO) share price.

The energy shortage caused by the Russian-Ukraine war will drive up global gas prices and the two are well placed to benefit.

The post These are the top ASX 100 buy ideas from Macquarie appeared first on The Motley Fool Australia.

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• What's Bell Potter's updated view on CSL shares?
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Motley Fool contributor Brendon Lau has positions in CSL Ltd. and Santos Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two opposing views by Wall Street gurus will only add to investors' angst as the market ends the week deep in the red.

The S&P/ASX 200 Index (ASX: XJO) lost 1.4% to 6,747 on Friday and is down around 3% for the past week.

The weakness won't surprise many as history has shown September and October to be among the worst times of the year for global share markets.

What is the market's next move?

But those debating whether to buy the dip for the much anticipated Christmas rally will be torn by conflicting forecasts from Cathie Wood and Ray Dalio.

Wood is the founder of Ark Investment Management and was named top stock picker of 2020 by Bloomberg. Dalio is a billionaire investor and founder of the world's largest hedge fund, Bridgewater Associates.

Wood is using the market weakness to snap up shares while Dalio is warning of another sharp drop for equities.

Inflation outlook will decide market direction

Their opposite views can be essentially boiled down to inflation expectations. Ark Investment bought 27 shares on Tuesday amid the sharpest sell-off on the NASDAQ-100 (NASDAQ: NDX) since March 2020, reported Bloomberg.

Wood is playing chicken with the US Federal Reserve. The Fed unleashed the market volatility by aggressively hiking interest rates to control runaway inflation.

The buying spree is likely related to Wood's prediction that high inflation will soon turn into deflation.

As inflation is bad for share valuations, deflation will arguably have the opposite effect. This is particularly so for tech shares, which have borne the brunt of the market sell-off.

Warnings of a new bear market

But not many would share her view on deflation. If anything, Ray Dalio reckons the market is underestimating the inflation problem.

In a tweet to his 234k followers, Dalio said:

Right now, the markets are discounting inflation over the next 10 years of 2.6 percent in the US. My guesstimate is that it will be around 4.5 percent to 5 percent long term, barring shocks (e.g., worsening economic wars in Europe and Asia, or more droughts and floods) and significantly higher with shocks.

He is also predicting that rates will have to rise to around 4.5% too and that will trigger a 20% drop in share prices. A peak-to-through fall of 20% or more would officially put shares in a bear market.

Foolish takeaway

However, Dalio stressed that these are only "guesstimates". Who can blame him when central banks have gotten their inflation forecasts so wrong?

Perhaps the more important lesson from history is not to try to pick market bottoms. Over the longer-term, persistent investors have made good returns from buying quality shares – regardless of the market cycle.

The post Chalk and cheese: 2 iconic share investors couldn't be further apart on the market's next move appeared first on The Motley Fool Australia.

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• 3 top ASX ETFs to buy with $30,000 this month
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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Woodside Energy Group Ltd (ASX: WDS) share price is set to end the week on a sour note as weakening oil prices and controversy over its $30 billion Browse gas project is weighing on sentiment.

Our largest ASX energy share is among those leading losses in the sector with a 4.48% drop to $32.22 in afternoon trade.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is giving up 1.51%. Although it's the energy sector that is the worst-performing group.

Why are ASX energy shares lagging the market

Woodside's peers aren't faring much better. The Beach Energy Ltd (ASX: BPT) share price is down 4.55% to $1.63. Meanwhile, the Santos Ltd (ASX: STO) share price has surrendered 3.39% to $7.69.

You can blame the close to 4% overnight decline in the Brent oil price to US$90.65 for the sector's woes.

Fear of a global recession sparked by too-aggressive rate hikes from central banks in the United States across to Australia triggered the sell-off.

Browse project hangs heavy on Woodside's share price

It doesn't help that Woodside is copping fierce criticism from environmental groups for its Browse LNG project in Western Australia after it submitted its final environmental impact statement (EIS) to the government.

Greenpeace estimates that Browse's lifetime Scope 1 and Score 3 emissions will total 1.6 billion tonnes of carbon, reported the Sydney Morning Herald.

Scope 1 emissions measure the amount of carbon released from the project, while Scope 3 measures carbon from customers using gas from Browse.

The article also noted that Woodside avoided any commitment to "bury" 107 million tonnes of carbon.

Fuzzy maths plague carbon calculations

The final EIS said burying the carbon via carbon capture and storage is a "high-risk, high-cost" option. Therefore, it isn't part of the base plan.

The 107 million tonnes of CO2 represent 33 times Woodside's direct emissions in 2021. One would think that by not dealing with this issue, the ASX energy giant would not be able to meet its own climate goals.

Interestingly, management is insisting that pushing ahead with the stalled project can contribute to hitting the goals of the Paris climate accord.

Its reasoning is that Browse could cut 342 million tonnes of carbon from the atmosphere. This is the difference between using gas from the project to generate power and using fossil fuels.

Woodside share price snapshot

While the Woodside share price may be struggling today, it is up over 53% in the past 12 months. This makes it the best performer among the major ASX energy shares.

The Beach Energy share price is a touch behind with its 48% advance while Santos is sitting on a 20% gain.

In contrast, the ASX 200 lost over 9% of its value in the past year.

The post Why is the Woodside share price having such a woeful end to the week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Santos Limited and Woodside Petroleum Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Santos Ltd (ASX: STO) share price is on the nose today as speculation of a potential share buyback wasn't enough to offset the fall in the oil price.

The Brent crude price tumbled 3.7% to US$90.65 a barrel on renewed worries of a recession hurting demand.

If there was a silver lining for Santos shareholders, it's the prediction by Macquarie Group Ltd (ASX: MQG) that it will launch an extra US$500 million ($747 million) share buyback.

Santos share price slips on oil slide

But buyers are scarce on Friday following falls on Wall Street and the drop in oil prices. The Santos share price lost 2% to $7.80 when the S&P/ASX 200 Index (ASX: XJO) fell 0.8% in early trade.

Other ASX energy shares are also under pressure. The Woodside Energy Group Ltd (ASX: WDS) share price and Beach Energy Ltd (ASX: BPT) share price have lost around 2% as well, at the time of writing.

At least Santos is flush with cash from the sale of its 5% stake in the PNG LNG project. The broker estimates that the company could reap US$1.3 billion from the transaction.

Santos' current share buyback running out of puff

The cash will come in handy as Santos' current on-market share buyback could be close to running out of steam.

Macquarie noted:

STO has now bought back ~US$80m of its shares on market since 30-Aug (post its result 17-Aug), representing 45% of the remaining buyback program that was outlined at the results (and 72% of the overall enlarged US$350m buyback).

On certain days post-result, STO has purchased as many as 2.5m shares (~A$20m) — even assuming a slower pace, the program could be exhausted within weeks.

Santos share buyback a balancing act

If Santos doesn't undertake a new buyback or some other capital return, pro-forma gearing could fall to under 10% by year end, according to the broker. Gearing was 22.5% at the August result.

But Santos will need to keep some of its powder dry. It will need to cough up some serious cash for its growth projects. These include Alaska, Barossa/Darwin and Moomba CCS, which could add up to around US$3 billion, said Macquarie.

Of course, volatile energy prices also pose another risk to the Santos share price. It should be noted though that Santos is more exposed to gas than oil and the outlook for gas is brighter due to the Russia-Ukraine war.

Share price snapshot

The Santos share price has rallied around 22% over the past 12 months when the ASX 200 fell 9%.

Despite the outperformance of Santos, Macquarie rates the shares as outperform (meaning a buy). The broker's 12-month price target on Santos is $10.60 a share.

The sale of a 5% interest in PNG LNG will lower Santos' stake in the project to around 45%. Exxon Mobil Corp operates PNG LNG on behalf of five co-venture partners and supplies gas to Asian customers.

The post ASX 200 oil giant Santos tipped to unleash US$500m share buyback appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Macquarie Group Limited, Santos Limited, and Woodside Petroleum Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Zip Co Ltd (ASX: ZIP) share price has been largely unmoved by news the company has handed over 2.5 million new shares to the vendors of Quadpay.

The embattled ASX buy now, pay later (BNPL) share issued the new shares as part of its acquisition of the US BNPL.

The handover was approved by Zip's shareholders at an extraordinary general meeting back on 31 August 2020.

New share issue doesn't faze shareholders

The Zip share price is currently down 1.71% in afteroon trade to 86 cents. This puts the value of the new share consideration at $2.15 million.

But the takeover could be the last one Zip does for a while with its expansion plans largely derailed. The BNPL world has dramatically changed with surging inflation forcing central banks to aggressively hike rates.

When money was cheap, interest-free type offerings could generate good profits. But with rates rising quickly and government regulators tightening oversight of the sector, the next few years could be challenging.

Zip shares on the retreat as interest rates advance

In this new environment, Zip has retreated from the UK and Singapore markets and is focusing on the US and Australia-New Zealand (ANZ).

The company is putting on a brave face, even with the Zip share price shedding 87% of its value over the past year.

Last month, Zip reported a 51% increase in FY22 total transaction volumes to $5.7 billion as customer numbers lifted 64% to 7.3 million.

Still aiming for growth

Management also added that customer arrears are improving as it stepped up its screening and risk management.

Further, Zip is reassuring investors that its takeover of Quadpay is paying off. It reported strong growth in that market.

Zip allows users to split the cost of purchases over four interest-free payments, much like its competitors.

The company has a medium-term target to grow revenue by 7% to 7.5% and increase cash earnings before tax, depreciation and amortisation by 1-2%.

Zip share price snapshot

The Zip share price isn't the only one on the nose. Fellow BNPL company Block Inc CDI (ASX: SQ2) is also nursing losses of more than 40% in the past year.

In contrast, the All Ordinaries (ASX: XAO) has surrendered around 8% of its value over the period.

The post Look who just landed more than $2 million worth of Zip shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Altech Chemicals Ltd (ASX: ATC) share price is rocketing today despite the big plunge in the market.

The ASX small cap battery tech company announced it has formed a joint venture (JV) with Germany battery institute Fraunhofer IKTS (IKTS).

The JV will commercialise IKTS' Cerenergy Sodium Alumina Solid State (SAS) battery. The technology uses table salt instead of lithium.

How the Altech share price compares to ASX lithium shares

The news sent the Altech share price surging 31.3% to 11 cents in afternoon trade. In contrast, the All Ordinaries (ASX: XAO) tumbled 2.35% as inflation fears trigger a sell-off in global share markets.

Even popular ASX lithium shares could not withstand the negative sentiment. The Allkem Ltd (ASX: AKE) share price has lost 2.1% to $15.66, IGO Ltd (ASX: IGO) has fallen 1.84% to $14.68 and Pilbara Minerals Ltd (ASX: PLS) dropped 2.2% to $4.64 at the time of writing.

Large market opportunity

But the Altech share price is powering ahead as the company tabled the JV agreement. The ASX minnow will own 75% of the entity, which will commercialise a 100MWh project on Altech's land in Germany.

The company thinks the SAS battery is perfect for grid storage as it is fire- and explosion-proof. The battery can also operate in extreme cold and desert conditions and has a lifespan of more than 15 years.

Altech claims that the global grid energy storage market is expected to grow to US$15.1 billion by 2027, from US$4.4 billion in 2022.

New battery technology powers the Altech share price

As the battery only uses sodium and nickel, the surging price of lithium won't impact on costs of the battery. It also doesn't use cobalt, graphite or copper.

IKTS spent eight years and 35 million euros on the SAS technology, which is undergoing final testing.  

The JV entity, Altech Batteries GmbH (ABG), will own the exclusive global rights to the SAS technology and the Cerenergy trademark. IKTS will not receive a royalty but will be awarded 25% ownership of the JV as a "free carry".

Details of the JV

IKTS will also give Altech access to its pilot plant and expertise associated with the technology. The German partner has the right, but not the obligation, to maintain its 25% interest if the JV expands the project.

IKTS also has the right to convert its 25% interest in the expanded project to a 1.5% royalty of all future battery module sales.

Altech said in its ASX statement:

IKTS has been looking for an entrepreneurial partner that has German land available, has access to funding, is a builder of projects, has battery background, and has technology in alumina used in ceramics. Altech fitted the criteria.

The Altech share price snapshot

The Altech share price was trading flat over the past year before today's surge. In contrast, the All Ordinaries dropped 8.5% over the period.

ASX tech shares have also not been performing well since interest rates and bond yields came off their historic lows.

Higher rates hit ASX growth shares harder and tech is seen as the quintessential growth sector.

Luckily for Altech, its link to batteries is shielding it from the sell-off as the world moves towards a decarbonised future.

The post Altech share price explodes 31% on battery news appeared first on The Motley Fool Australia.

More reading

• 3 top ASX ETFs to buy with $30,000 this month
• Down 43% this year, this ASX tech stock is now back at January 2025 levels
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Motley Fool contributor Brendon Lau has positions in Allkem Limited, Independence Group NL, and Pilbara Minerals Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in the mining giant are currently down 2.64% to $94.20 apiece. That's roughly in line with the 2.81% loss in the S&P/ASX 200 Materials Index (ASX: XMJ) and the 2.82% fall in the S&P/ASX 200 Index (ASX: XJO).

It comes as Rio and China Baowu Steel Group Co. Ltd (Baowu) announce they will invest US$2 billion ($3 billion) to develop the Western Range iron ore project in the Pilbara.

The companies have formed a joint venture (JV) where Rio Tinto will own 54% of the entity.

Rio Tinto share price getting swept up in the sell-off

However, the news couldn't save the Rio Tinto share price from diving in early trade.

The fall also comes despite a more than 1% gain in the iron ore price to around US$104 a tonne.

But Rio Tinto isn't the only ASX miner slipping this morning. The BHP Group Ltd (ASX: BHP) share price has lost 2.04% to $38.50 and Fortescue Metals Group Limited (ASX: FMG) is trading 3.89% lower at $17.52 a share.

New 25 million tonne JV

The Western Ranges annual production capacity is estimated at 25 million tonnes of iron ore. The investment from Rio Tinto and Baowu will be used to build a primary crusher and an 18-kilometre conveyor system linking it to the existing Paraburdoo processing plant.

The miner said that construction is scheduled to start in early 2023 with first production in 2025. Rio Tinto's share of the costs ($1.3 billion) is already included in its capex guidance for 2023 and 2024. Rio Tinto is forecasting a capex of around $9 billion to $10 billion in each of those years.

Sales agreement with Baowu

While there is no upfront payment consideration, the JV partners have entered into an iron ore sales agreement. Baowu will buy up to 126.5 million tonnes of iron ore over approximately 13 years at market prices.

The volume reflects the Chinese steel mill's 46% interest in the project, which is tipped to produce 275 million tonnes of ore over the period.

Rio Tinto's iron ore chief executive Simon Trott said:

We have enjoyed a strong working relationship with Baowu for more than four decades, shipping more than 200 million tonnes of iron ore under our original joint venture, and we are looking forward to extending our partnership at Western Range.

Long-standing partnership

Rio Tinto and Baowu have been working in partnership in the Pilbara since 2002. It formed another JV, Bao-HI, to develop the Eastern Range deposits in the Hamersley Ranges and Western Range.

Baowu Resources' chairman Shi Bing commented:

The Bao-HI joint venture has been successfully operating for more than 20 years, leading us to a win-win result, and reaping friendship and trust. We hope that the two parties will deepen the mutually beneficial and win-win partnership, continue to carry forward the spirit of sincere cooperation.

Rio Tinto share price snapshot

The Rio Tinto share price has fallen 12% over the past year while the ASX 200 has declined 8%.

In contrast, the BHP share price has gained 4% while the Fortescue share price has dropped 3% over the period.

The post Rio Tinto share price slides despite new $3bn iron ore project appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in BHP Billiton Limited and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Neometals Ltd (ASX: NMT) share price has jumped today after it took a step closer to building a battery recycling plant in Germany.

Management released the Engineering Cost Study (ECS) for the first stage shredding plant (Spoke). The first stage Spoke has the potential to process 50 tonnes per day of lithium-ion battery scrap.

The company said that the plant will be Europe's first integrated discharging and disassembly operation. As such, the facility can process larger modules from electric vehicles (EVs) and cell production scrap.

Neometals share price powers up on ECS details

The Neometals share price rallied 3.5% in early trade to $1.64 but has slipped 0.3% to 1.58 at the time of writing. In contrast, the S&P/ASX All Ordinaries Index (ASX: XAO) has added 0.7%.

The operating cost is estimated at US$1,400 per tonne of feed. This assumes a mix of 70% modules from EVs and 30% cells.

The capital cost of the project is forecast at US$103.9 million, which includes buildings, plant and equipment, installation, infrastructure, pre-production and owner's costs – such as engineering, procurement, and construction (EPC).

The capital cost estimate also has a 20% contingency, in case things don't go to plan as often the case.

Second ECS expected by year end

The plant is owned by Primobius GmbH, which is a 50-50 joint venture between Neometals and MS group GmbH.

Investors' love for all things lithium has benefited the Neometals share price. The surging popularity of EVs will mean demand for battery recycling plants is set to grow strongly.

The ECS comprises two parts. The first is the Spoke and the second is the hydrometallurgical refinery Hub. The Hub will be co-located with the Spoke on a greenfields industrial park. The second part of the ECS is scheduled to be completed in December this year.

Lining up customer agreements

Primobius is looking to strike supply agreements with Mercedes-Benz and Stelco Holdings. The JV is hoping to have the signed agreements in place in 2023.

Neometals' managing director Chris Reed said:

The addition of a large manual discharging and disassembly operation for modules comes at a cost, that is outweighed by access to a larger market in the medium to long-term. It is also worth noting that we currently get paid to process modules whereas many American recyclers compete to buy purchase individual cells.

Our proprietary refining Hub is the largest value generator for Primobius and its customers. The Hub processes Black Mass into high-purity and higher-value battery materials which can be used in production of new batteries.

Neometals share price snapshot

The Neometals share price has jumped 92% over the past year compared with a 6% decline in the All Ordinaries.

Other ASX lithium-exposed shares have also outperformed on expectations that demand for the commodity will outstrip supply for years to come.

The post Why is the Neometals share price in the spotlight on Tuesday? appeared first on The Motley Fool Australia.

More reading

• 3 top ASX ETFs to buy with $30,000 this month
• Down 43% this year, this ASX tech stock is now back at January 2025 levels
• Buy, hold, sell: CSL, Magellan, and Woodside shares
• ASX 200 energy shares whipsaw amid fragile ceasefire
• 3 fantastic ASX shares that could help build long-term wealth

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX lithium shares are having a mixed day but there are two that are surging higher today.

The two outperformers are ASX minnows are Lithium Energy Ltd (ASX: LEL) and Global Lithium Resources Ltd (ASX: GL1).

The former jumped 9.6% to a high of $1.26 before settling to trade 4.35% higher at $1.20 a share at the time of writing. Meanwhile, the Global Lithium share price recorded an 11.87% jump, hitting $2.45. It's currently trading for $2.40, 9.59% higher.

In contrast, the All Ordinaries (ASX: XAO) is1.05% ahead while fellow lithium producer Allkem Ltd (ASX: AKE) is down 0.91% to $15.805 a share.

Hopes building for Lithium Energy share price

The Lithium Energy share price gathered momentum amid the company announcing the start of its first landmark drilling program.

The miner commenced drilling at its Solaroz Lithium Brine Project in Argentina. The project is within the so-called Lithium Triangle and is close to Allkem's mines.

The first hole is being drilled adjacent to Allkem's Olaroz Lithium Facility. Lithium Energy plans to drill 10 holes going for circa 5,000 metres.

Rising tide lifts all ASX lithium shares

Announcements like this don't normally attract such excitement. After all, it's the results from the drilling that are more important.

But it doesn't seem to take much to trigger a rally in ASX lithium shares. The commodity is in hot demand with several experts predicting a supply shortfall and booming demand for years to come.

Further increases in the price of lithium are adding to the fervour. Macquarie Group Ltd (ASX: MQG) noted on Friday that Chinese spot technical and battery-grade lithium carbonate (LCE) prices are up week on week (WoW).

More price gains for lithium

The prices gained 1% each to RMB482,500 per tonne (US$69,400/t) and RMB495,500/t (US$71,300/t), respectively (non-VAT adjusted).

The broker added:

Lithium carbonate supply remains tight in China due to logistic challenges caused by lockdowns in Sichuan and Qinghai. Realised spodumene prices rose 2% WoW to US$5,110/t.

Macquarie also noted that Global Lithium has recently secured a third drill rig at Manna. This will enable the ASX lithium miner to speed up infill drilling at the deposit.

Should you buy these ASX lithium shares?

The broker has an 'outperform' recommendation on the Global Lithium and Allkem share prices. Its 12-month target on the ASX lithium shares are $2.50 a share and $21 a share, respectively.

Macquarie does not cover the Lithium Energy share price, which has rallied 108% over the past year.

By comparison, the Global Lithium share price is up 513% and the Allkem share price is up 76% over the period.

The post 2 ASX lithium shares leaping more than 9% on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Allkem Limited and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Commonwealth Bank of Australia (ASX: CBA) and its peers could be hit with billions in liabilities that are on top of the threat of the falling housing market.

This new risk to ASX banks is linked to their scope 3 emissions, reported the Australian Financial Review.

Scope 3 quantifies the emissions of bank customers that receive loans from the bank. CBA revealed its scope 3 number for the first time in its climate report and it was several times larger than expected.

CBA's potential $6bn emission headache

As a result, CBA could be facing more than $6 billion in costs by 2030, according to climate data specialist Emmi.

The estimate on the bank's scope 3 liabilities are based on the expected price of carbon allocated to lenders.

Emmi also noted that CBA's scope 3 figure of 24.4 million tonnes of carbon dioxide was 2,300 times higher than its scope 1 direct emissions.

Other ASX banks also on the hook for multi-billion liability

But CBA isn't the only ASX bank that could be on the hook. Using CBA's baseline data, Emmi believes the other three big banks' scope 3 figures won't be far behind.

The Australia and New Zeal Bank Group Ltd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) scope 3 number could come in between 18 million and 24 million tonnes of carbon dioxide.

This leaves the big four ASX banks at risk of coughing up tens of billions by the end of the century. That is if the regulators decide to lay the cost on them.

The banks' scope 3 calculations include emissions from households that have a mortgage with the banks. CBA is the largest home lender in the country.

CBA and friends among worst emitters

If scope 3 emissions are counted, Emmi noted that CBA and the big ASX banks could be in the top 15 worst emitters on the ASX. The banks would be rubbing shoulders with Ampol Ltd (ASX: ALD), BlueScope Steel Limited (ASX: BSL) and Qantas Airways Limited (ASX: QAN).

ASX companies are not required by law to disclose scope 3 figures. But some have started to do so in anticipation of regulatory changes ahead. In this respect, CBA should be applauded for being an early mover by becoming more transparent.

CBA share price snapshot

It isn't clear at this stage if ASX banks will be forced to wear the cost of their scope 3 emissions. But this risk comes at a time when the sector is under threat from a falling residential market and the slowing economy.

The CBA share price has fallen 6.8% since the start of this calendar year when the S&P/ASX 200 Index (ASX: XJO) has declined 7.1%.

In contrast, the ANZ Bank share price has tumbled 17.1%, the Westpac share price has dipped 1.9% and the NAB share price has gained 1.5% over the period.

The post Billions in liabilities could be set to hit CBA and other ASX banks: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.