In a stagnating overall market, the September quarter was quite pleasing for Nestor Australia, with an increase of 3.6%. A number of positions, particularly in commodities, contributed to this. The increasing momentum in electric vehicle (EV) sales continued to attract investors to copper/nickel/lithium stocks. Liontown Resources, which is developing a large lithium project in Western Australia, stood out. The share price rose fromA$0.82 toA$1.48 in the quarter, leading to the sale of the entire position ( the fund had the shares on the books at a cost ofA$0.11! ). Firefox and Ioneer , two other companies in the sector, also gained more than 50%. The position in Ioneer has now also been liquidated due to delays with the mining permit. Our nickel exposure with Panoramic and Centaurus also performed well - here, too, we reduced a little - although mainly for risk management reasons. The gold companies Apollo Consolidated and Marvel Gold also performed well, while BHP and Mineral Resources were under pressure due to falling iron ore prices. Strike Energy failed to meet high expectations with the first reserve estimate of their new gas field. Macquarie Bank shares were partially sold for valuation reasons, despite the positive performance of Australia's largest investment bank.
The fund added positions in 29 Metals (copper producer), Blackmores (vitamin and nutritional supplements), Tesserent (cybersecurity) and Rubicon Water (water management) during the quarter.
Overall, the environment continues to look very positive for commodities benefiting from decarbonisation. The increasingly inflationary environment should also continue to provide good support for the sector.
We are watching the messy cocktail of supply chain problems, regulatory interventions in China, rising inflation and energy problems with concern - but we see ourselves quite well positioned for this.
Wilhelm Schröder, Schröder Equities GmbH