The Australian market surged higher at the open on Wednesday, taking positive cues from Wall Street. The market also seems to be clawing back all the losses from the previous day when the market closed lower on account of the RBA’s 25-basis-point rate hike. By 12:30 PM AEST, the benchmark ASX 200 index was trading 0.22% or 15.8 points up at 7,332.
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Small caps are not participating in this rally as investors are looking to stick to large cap names. The ASX Small Ordinaries index (ASX:XSO) was 0.49% down at 3,184 by 12: 30 PM AEST on Wednesday. However, some ASX penny stocks are racking up big gains in today’s session. Let us have a look at three such stocks.
- Altamin Limited (ASX:AZI)
Altamin is an ASX-listed small cap miner having a market capitalisation of AU$28.2 million with 391.7 million shares on issue. Today, AZI shares skyrocketed to a high of AU$0.1, gaining around 38.8% by 12:30 APM AEST, on the back of a volume surge of over 5.5 million shares so far.
The catalyst behind the company’s stock price rally is an announcement about VBS Exchange Pty Limited intending to acquire all of the fully paid ordinary shares in Altamin for AU$0.095 per share, that’s a 14% premium to Altamin’s two-month volume weighted average price of AU$0.083 per share.
- Victory Goldfields Limited (ASX:1VG)
Victory Goldfields is a Victoria-based metals exploration company, having a market capitalisation of a mere AU$7.2 million with 47.03 million issued shares. The company’s share price shot up 20% to AU$0.18 in today’s session, clocking a volume of over 92K shares, which is higher than 90-day average of 72.2K shares.
Investors rushed to buy 1VG shares after the company announced exceptional drilling results at its 100%-owned Coodardy project. The company received high-grade gold intersections from the 1 metre fire assay results, which validate the potential for further gold mineralisation in the area.
- East 33 Limited (ASX:E33)
The last stock on our list of high-flying penny stocks is East 33, which is a AU$22 million Oyster producer in Australia, supplying some of the best oysters in the country. E33 was covered in our list on Monday as well and today its shares shot up 18.75% to AU$0.057 by 12:30 PM AEST, without any formal communication by the company.
Today’s volume of 4.09 million shares is also the lowest in the last six trading sessions, but still almost two times higher than the 90-day average of 1.98 million shares. Yesterday, E33 shares were torpedoed 40% after Research Corporation Pty Ltd bought a significant stake of 19.5 million shares in the company.
Penny stocks are generally known for less liquidity, which makes them prone to sudden movements in either direction. This high-volatility nature makes them difficult to be traded or invested in. Therefore, before taking a plunge in these companies, investors must do a proper due diligence.