OEQ, N1H, QUE: ASX financial penny stocks with over 25% YTD gains

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Highlights

  • The World Bank has warned about the risks of stagflation, which refers to a period of high inflation accompanied by stagnant economic growth
  • The Reserve Bank of Australia has increased the interest rate on Exchange Settlement balances by 50 basis points to 75 basis points
  • The S&P/ASX 200 Financials, the benchmark of the ASX financial sector, is performing low on a year-to-date (YTD) basis being red at 8.82%

The recent warning by the World Bank about stagflation is weighing on the global economic growth. Stagflation, a period of high inflation and stagnated economic growth, has led to interest rate hikes by many banks across the world.

Talking about Australia, earlier this month, the Reserve Bank of Australia increased the interest rate on Exchange Settlement balances by 50 basis points to 75 basis points. Domestic factors like floods earlier this month, capacity limits in some sectors and a tight labour market are further contributing to rising prices.

The S&P/ASX 200 Financials, the benchmark of the financial sector of the Australian Securities Exchange (ASX), is performing low on a year to date (YTD) basis being red at 8.82%. This can be attributed to the global inflation rise and financial crises fuelled by the Russia-Ukraine war and supply chain disruptions led by COVID-19.

However, some stocks from the financial sector are performing quite well, giving a decent return on a YTD basis. This article will discuss three penny stocks from the ASX financial sector with a YTD return of over 25%.

Do read: ASX 200 falls 0.67% at open; financials bleed, energy stocks buck trend

Source: Refinitiv as of 14 June

Orion Equities Limited (ASX: OEQ)

Orion Equities is an investment company based in Australia which has invested major funds in a portfolio of listed Australian and international companies and Australian property. The company has managed strategic as well as non-strategic investments.

Orion has provided a price return of nearly 75% to its investors on a YTD basis despite gloomy results in the half-year ended 31 Dec 2021. During that reporting period, the company witnessed AU$3.827 million of net loss, which was majorly attributed to:

  1. AU$2.092 million as a share of an Associate entity’s net loss, i.e., Bentley Capital Limited (ASX: BEL), which generated a net loss of AU$7.765 million for
  2. AU$1.55 million unrealised loss from its investment in Strike Resources Limited (ASX: SRK), whose share value declined from 26.5 to 11 cents per share during the half-year.

N1 Holdings Limited (ASX: N1H)

N1H provides strategic advice to businesses, project developers and property investors seeking new capital/debt or refinancing existing debt. Majorly, it provides services like business lending, project funding, cross border corporate financing, vendor finance solutions and fund trustee services.

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Queste Communications Limited (ASX: QUE)

Queste Communications is an Australian company focused on investments. Its subsidiary Orion Equities Limited (OEQ) provides services, including investments in listed securities, unlisted securities, and real estate held for development and resale.

In the quarter ended 31 Mar 2022, the company’s consolidated net cash used in operating activities amounted to AU$46,000. At the end of the period, its cash and cash equivalents stood at AU$13000.

The company’s shares in Orion Equities Limited have a market value of AU$2,060,884, while its shares in Bentley Capital Limited have a market value of AU$94,383.

Also read: ASX 200 to fall; Wall Street slips ahead of inflation data; oil rises


 


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