27. rise of green vesting

The Rise of ‘Green-Vesting’ and Investor Outlook for 2023

By Grady Wulff, Bell Direct
29 March 2023

Over the last few years, the number of investors focused on investing in the global green movement and decarbonised future, has increased. The movement known as ESG (which stands for Environmental, Social and Governance) or Eco-investing is a form of socially responsible investing where investors focus their trade decisions on companies that prioritise environmentally and socially friendly practices and products.

Back in 2021 when the idea of green investing was first gaining momentum, critics said it wasn’t going to work based on the way machines and businesses are developed to make a profit, according to former BlackRock Chief Investment Officer, Tariq Fancy. Fast-forward to 2023 and it’s a different story with some companies, especially in the mining industry, setting targets such as Strike Energy (ASX:STX) which is striving to become Australia’s lowest-cost onshore energy producer, and a globally competitive urea manufacturer with net-zero carbon emissions by 2030.

Gold Hydrogen (ASX:GHY) debuted onto the ASX early in January 2023 slotting right into the green ‘hydrogen’ movement at the right time. Understanding the strategic movement into hydrogen-powered energy in Australia and around the world, Gold Hydrogen is well positioned to benefit from increasing consumer preferences for cleaner energy, and the company hopes to be the first in Australia to discover naturally produced hydrogen in the earth’s crust.

In February 2022 Australia sent the world’s first shipment of liquified hydrogen to Japan in a major milestone as part of the $500 million Hydrogen Energy Supply Chain (HESC) pilot project.

Gold Hydrogen debuted on the ASX on 13 January 2023, with an issue price of $0.50 after raising $20 million. The company proposes to explore, appraise and develop natural hydrogen within Petroleum Exploration Licence 687 following historical exploration in South Australia that uncovered natural hydrogen gas while exploring for oil. Since debut, shares are up 1.96% at $0.52 as at the time of writing.

IPO Outlook 2023

After a year of high uncertainty and turbulence in the global macro environment, investor appetite for IPOs declined in 2022 following a record year in 2021. With increasing market and macro certainty expected in 2023, we may see increased interest in ASX debutants over the year ahead.

Tiger Tasman Minerals (ASX:T1G) is preparing to list on the ASX later in February 2023 with a listing price of $0.20 and hopes of raising $8 million in IPO. The company is an Australian- based minerals exploration and development company with strong diversification across its multi-commodity portfolio, with projects in the proven mining jurisdictions of WA and QLD focused on copper, lithium, nickel, manganese, silver, gold, base metals and industrial minerals. T1G is committed to sustainable approaches to mineral exploration and development with ESG at the core of its strategy and operating style.

As the world moves toward a greener future, lithium producers remain a key investment priority for many investors in 2023. Evergreen Lithium (ASX:EG1) is preparing to list on the ASX in March 2023 with an issue price of $0.25 and hopes to raise $7m. The company boasts an extensive landholding at its Bynoe Lithium Project and an additional compelling tenure prospective for lithium in the Northern Territory and Western Australia which is adjacent to Core Lithium’s (ASX:CXO) Finniss Project. Initial soil sampling and preliminary geochemical activities at the Bynoe Project have confirmed the company’s view of strong anomalous lithium in the soil. With intentions to advance three hard rock lithium projects in Australia, the company is well positioned to capitalise on the growing EV trend for years to come once its projects come online.

Growth-Stock Outlook

2020 – 2021 were the years of the tech dream, as investors saw high share price growth in this sector while interest rates were at record lows and funding for non-profitmaking technology companies was easily attained.

Fast forward to 2022 and there’s no denying it was a tough year for the technology sector as investors fled growth stocks in favour of defensive, value stocks to weather the high inflation, rising interest rate environment. Stepping into 2023 has already seen a pivot in investor confidence back into the technology sector amid slowing outlook for interest rate hikes both at home and overseas.

Since January 1, the technology sector is up almost 10%, led by rallies for the likes of Wisetech Global (ASX:WTC) up 26% YTD, Altium (ASX:ALU) up 15.60% YTD, and NextDC (ASX:NXT) up 14.89% YTD.

The buy now, pay later sector is one area of technology that investors have reopened their minds to in 2023 as leading players like Sezzle (ASX:SZL) underwent high cost-cutting strategies in 2022 in a bid to turn a profit, which worked. Shares in Sezzle are up 63% YTD, regaining some momentum from the sharp sell-off last year.

Investors aren’t as risk-hungry though, like they were in 2020, with the majority taking time to assess profit outlooks and subscription model revenue growth before diving into high- growth technology shares in 2023.

To keep up with market trends and movements, access Bell Direct’s daily market commentary by opening a trading account with Bell Direct via www.belldir/ect.com.au

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