The TSX’s recent fall has reawakened risk appetite in certain sectors.
The benchmark – down over 5 per cent over the past 2 weeks – has reacted to worries about financial system integrity stemming from the collapse of Silvergate, Silicon Valley Bank and Signature Bank.
Viral sentiment about a potential repeat of the 2008 financial crisis also caused milder 3-4 per cent losses in U.S., Developed International and Emerging Markets over the same period, reflecting the TSX’s roughly 33-per-cent allocation to financials.
This ongoing turmoil is a falling tide that has sunk all ships, which, when coupled with Canadian inflation’s steady fall from 8.1 per cent last summer to 5.9 per cent as of January, offers long-term investors a chance at discount buys where fear is obscuring solid fundamentals.
Oil
This potential value dislocation is evident in oil’s 13.5-per-cent drop over the past week and 30-per-cent drop since May 2022, even though China’s emergence from COVID lockdowns, increasing demand from India, and the western shunning of Russian crude all support a bounce-back over the next 12 months.
Financials
Due to investors’ heightened pessimism about financials at the moment – RBC, Canada’s largest bank, is down over 8 per cent since February 17 – a window has opened up for thorough due diligence to carry exposure to the sector through near-term pain toward outsized long-term returns.
Lingering worries about banks’ excessive loan-loss provisions, the reassurance of the U.S. Fed making depositors whole regardless of FDIC caps, and investors’ generalized tendency to extrapolate high-inflation indefinitely into the future should bode well for high-conviction allocations once economic growth reverts to historical averages.
Battery technology
In addition, TMH readers spent the past week evaluating the battery technology space, whose exponential growth on the back of electric vehicle adoption is a hard sell for the average investor, who is too susceptible to the short-termism of daily financial news to accept the space’s venture-like volatility, regardless of its lucrative prospects.
Based on our brief assessment of where market value currently lies, here are three stories that made the rounds across our reader base over the last five trading days:
Trillion Energy (CSE:TCF) discovers 55 m of potential gas pay at the SASB field
Trillion Energy announced preliminary gas indications from the West Akcakoca 1 well in the Black Sea.
As much as 55 m of potential natural gas pay was discovered during drilling.
Completion and flow testing will occur upon well perforation, with revenue generation slated before the end of the month.
CEO Arthur Halleran sat down with Sabrina Phillips to discuss the updates.
Trillion Energy is an oil and gas company with natural gas assets in Turkey and Bulgaria.
Trillion Energy (TCF) is up by almost 14 per cent over the past month and over 78 per cent YoY.
RevoluGROUP Canada (TSXV:REVO) unveils new fintech integrations
RevoluGROUP has added a suite of fintech features to its platform.
These include access to Automated Clearing House, Faster Payments Service, SEPA Instant single euro payments and Visa Direct.
CEO Steve Marshall sat down with Sabrina Phillips to discuss the updates.
RevoluGROUP Canada is a multinational financial technology company active in banking, remittances, forex payments, esports, travel and blockchain, among others.
RevoluGROUP (REVO) is down by over 24 per cent over the past month and 7.4 per cent YoY.
HydroGraph (CSE:HG) to commercialize promising graphene blend
HydroGraph and LOLC Advanced Technologies will partner to commercialize a novel graphene blend.
The new product incorporates HydroGraph’s fractal graphene and LOLC-owned Ceylon Graphene Technologies’ reduced graphene oxide.
The blend has improved the charge acceptance of lead acid batteries by 47 per cent.
CEO Stuart Jara spoke with Coreena Robertson about the news.
HydroGraph Clean Power funds and commercializes green processes to manufacture graphene and other strategic materials in bulk.
HydroGraph (HG) is flat over the past month and down by 22.22 per cent YoY.
