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Peru good for copper, bad for Xstrata
News that opposition leader Ollanta Humala had won Peru’s presidential election
saw its equity market fall over 12% on Monday.
The big concern for investors is the impact of his policies on the growth of the
economy, as mining companies are sure to curtail their capex plans in response
to a proposed doubling of royalties and a 40% windfall tax on mining profits.
As we said yesterday, Michael Bogusz ran the numbers last week, and of the
major mining companies Xstrata (XTA LN) and Nyrstar (NYR BB) face the
most downside risk as a result of Humala’s victory. For Xstrata, he says that
Peru is critical for its copper business, which is looking to grow production 50%
in the medium term largely due to its Peruvian projects. Las Bambas alone is
set to raise production by 400,000 tonnes a year, giving Xstrata the largest
relative and absolute copper growth of the Big 4. >> Read Report
The big winner from the Peru election is copper. Michael expects new projects
will be delayed, and that marginal projects are likely to be cancelled. With Peru
accounting for 5% of current copper production, and expected to be one-third of
new supply growth in the long term, the market will be tighter than it would have
been. For exposure to the red metal, two of our top picks in the space right now
are Jiangxi Copper (358 HK) and OZ Minerals (OZL AU).
Yesterday we highlighted the rapid growth in demand for luxury and premium
brands due to the aspirational consumption in Asian markets. Following on from
that theme we have fleshed out some more ideas. You can take your pick
among the prestige German auto makers Porsche (PAH3 GR), BMW (BMW
GR) and Daimler (DAI GR), which all have forecast 12 month TSRs over 30%.
In France, Christian Dior (CDI FP) and LVMH (MC FP) will also benefit from
Asia’s rising demand for luxury goods. Last but not least, Compagnie Fin
Richemont (CFR) is another one to highlight given premium Swiss watch
brands are likely to retain their position as a status symbol.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Peru good for copper, bad for Xstrata
News that opposition leader Ollanta Humala had won Peru’s presidential election
saw its equity market fall over 12% on Monday.
The big concern for investors is the impact of his policies on the growth of the
economy, as mining companies are sure to curtail their capex plans in response
to a proposed doubling of royalties and a 40% windfall tax on mining profits.
As we said yesterday, Michael Bogusz ran the numbers last week, and of the
major mining companies Xstrata (XTA LN) and Nyrstar (NYR BB) face the
most downside risk as a result of Humala’s victory. For Xstrata, he says that
Peru is critical for its copper business, which is looking to grow production 50%
in the medium term largely due to its Peruvian projects. Las Bambas alone is
set to raise production by 400,000 tonnes a year, giving Xstrata the largest
relative and absolute copper growth of the Big 4. >> Read Report
The big winner from the Peru election is copper. Michael expects new projects
will be delayed, and that marginal projects are likely to be cancelled. With Peru
accounting for 5% of current copper production, and expected to be one-third of
new supply growth in the long term, the market will be tighter than it would have
been. For exposure to the red metal, two of our top picks in the space right now
are Jiangxi Copper (358 HK) and OZ Minerals (OZL AU).
Yesterday we highlighted the rapid growth in demand for luxury and premium
brands due to the aspirational consumption in Asian markets. Following on from
that theme we have fleshed out some more ideas. You can take your pick
among the prestige German auto makers Porsche (PAH3 GR), BMW (BMW
GR) and Daimler (DAI GR), which all have forecast 12 month TSRs over 30%.
In France, Christian Dior (CDI FP) and LVMH (MC FP) will also benefit from
Asia’s rising demand for luxury goods. Last but not least, Compagnie Fin
Richemont (CFR) is another one to highlight given premium Swiss watch
brands are likely to retain their position as a status symbol.
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