He honed in on challenges facing resource sector juniors, saying that while companies with good projects and good management are attracting capital, they aren’t seeing a lot of attention from retail investors.
Will retail investors return in 2024? Carleton said lower interest rates would help, as would higher commodities prices.
‘I think the catalyst, or one of the significant catalysts, will be … signals from the central banks — Canada, the US — that interest rate policy is going to soften,’ he commented. ‘And I think you saw that even just in the last couple of weeks with the larger-cap parts of the markets where the Fed basically said, ‘Okay, we’ve probably hit the peak.”
The CSE is also home to cannabis and tech companies, and Carleton said sentiment in those sectors is much the same.
When it comes to cannabis, he sees companies making progress without seeing share price appreciation.
‘The movement seems to be driven not by the fundamentals of a particular business, but by the sentiment that’s generated by potential changes to the status of cannabis at the federal level (in the US),’ he explained during the interview. ‘Management is kind of frustrated by that because they are justifiably proud of the progress that they’ve made developing their businesses, and they’re just not seeing that reaction from the marketplace.’
Even so, Carleton has a positive outlook for the year ahead, and pointed to critical minerals as an area of strength.
‘I would say that the one thing we know for sure is that critical minerals are continuing to be funded by investors in the pre-public round,’ he said, noting that stable jurisdictions like Canada, the US and Australia get the most attention.
‘There’s potential for 2024 to be in fact a very strong year for the public equity markets in particular, and for the CSE specifically,’ he said. Watch the interview above for of his thoughts on the Canadian markets.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.