SMALL CAP MOVERS: Blockchain firm GSTechnologies soars on Canadian acquisition

There is still life in the cryptocurrency sector, it may seem.

At least for GSTechnologies, the London-listed financial technology small cap has traditionally focused on the esoteric blockchain and stablecoin industries.

GSTechnologies has been trying to get its stablecoin project through the relevant UK regulators this year, with the group noting “significant” progress in June regarding its application for admission to the UK Financial Conduct Authority (FCA) Regulatory Sandbox.

For the uninitiated, a stablecoin refers to a digital currency tied to something else; more often than not the US dollar, but there are also sterling, Mexican peso and euro backed stablecoins.

GSTechnologies aims to become the first stablecoin issuer and service provider to be listed on the London Stock Exchange.

As that journey continues, the group recently expanded its tentacles into the Canadian financial sector by signing a legally binding agreement to acquire PAYPT Finance, a Canadian company with a Canadian Money Services Business (MSB) license.

GSTechnologies plans to rename PAYPT to Angra Global. Investors seemed to like this development, with GST shares rising more than 46 percent to 0.77 p on the standard segment.

Small caps generally performed well this week, with the AIM All-Share Index adding 1.9 percent to 765.79p since Monday’s open.

A bullish mix of happily softer inflation data on Wednesday and solid retail sales on Friday provided some tailwind.

Make no mistake. Year-on-year inflation is still exceptionally high at 7.9 percent, but was better than the market forecast of 8.2 percent.

A number of small-cap mining companies have performed well.

Empire metals rose another 40 percent, bringing its total increase for the month to 133 percent year-to-date. The group has had an operational bumper in July, with promising updates on its titanium mining projects in Western Australia.

CleanTech lithiumThe upgrade of the resource estimate of the Chilean Lagunda Verde project laid the foundation for a strong trading week. The AIM-listed group then added 40 percent.

Powerhouse Energy Group Up 45 percent following Tuesday’s announcement that the energy technology group’s European patent for its non-recyclable waste conversion technology is progressing.

Outside of heavy industry, alternative investment fund manager Gresham house attracted attention with what appears to be a generous takeover offer from private equity firm Searchlight Capital.

Gresham agreed to Searchlight’s £470 million offer at 1,105 pence per share, placing a 63 per cent premium on Friday’s closing price of 680 pence.

Gresham House chairman Anthony Townsend said the offer is four times what shareholders would have invested in 2014 when management bought back.

Gresham shares reached an all-time high of 1,065 pence on Monday before finishing the week slightly lower at 1,058 (that’s still a 55 percent return since last Friday’s close).

Shield therapies led the life sciences industry. The commercial-stage pharmaceutical group said its Accrufer iron-deficiency treatment saw a 173 percent growth in prescriptions in the second quarter, or a 50 percent improvement over the first.

Shield’s shares were thrown 41 percent higher as a result.

As for the fallers, native advertising company dianomi posted a particularly stark trading update that warned of a significant drop in traffic volume among its customer base of financial services websites.

Traffic levels at the major publishers Dianomi works with dropped by up to 30 percent in the six months to June 30 compared to the same period in 2022.

Dianomi told shareholders to expect an 18 percent drop in revenue when audited results were released. The shares plummeted by 40 percent as a result.

Viewers fell 14 percent after the London-listed car dealer announced shareholder Cinch intended to block the proposed sale.

After withdrawing a letter of intent to support Global Auto Holdings Limited’s acquisition of Lookers, Cinch’s 19.2 percent stakeholder will now vote against the acquisition.

Lookers is again in talks with other shareholders to understand whether [resolutions] to execute the acquisition can be assumed,” Lookers said in a statement.

Bowling ended a rollercoaster week with more big swings on Friday.

The company released a statement saying there was no reason to know why the shares had risen from 1.05 pence to 1.75 pence the day before.

That was enough to cut the opening price by a third, but in the style of the true bulletin board favourite, no amount of denials will ever convince bettors and by mid-morning much of the losses had been recouped.

Chalk that up as this week’s AIM-listed mystery.

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