Lol, it’s Melbourne Cup day so take a punt! Big miners are flying down the outside towards the post as the mangy nag that is their only product face plants into the turf after being shot by the starter. BHP and RIO are at full gallop up 1.5% plus, and FMG has pulled the whip up 3.5%:
UBS sums up the party:
Diversifieds: All else equal, our BHP & RIO earnings estimates for CY 16 would be 34% and 18% lower, respectively, under a spot scenario. RIO would also trade on cheaper spot multiples at 18x CY 16E PE vs BHP at 33x CY 16E. At spot, S32’s CY 16 earnings would decline to a loss of US$35m. Iron ore: The spot iron ore price is 7% below our CY 16 forecast and combined with FX implies a 19% downgrade to FMG’s FY 16E earnings.