It’s call care and no responsibility in broker land. From Fairfax:
Despite being the first trading session since the iron ore price fell to $US91.80, shares in several Australian iron ore miners rose on Monday.
Fortescue shares rose 8¢ to $4.49, Atlas shares rose 1¢ to 69.5¢ while BC Iron shares rose 19¢ to $3.71.
Those rises came after UBS analyst Glyn Lawcock published a note suggesting that share prices for those miners, plus BHP Billiton and Rio Tinto, were factoring in significant further falls in the iron ore price, and were duly oversold.
Speaking on Monday, Mr Lawcock pointed to better than expected manufacturing numbers out of China on Sunday as another possible explanation for the share price rises enjoyed by Atlas, Fortescue and BC Iron.
”The market has been exceptionally short on iron ore,” he said.
With respect, most iron ore equities have been radically out-performing the iron ore price versus previous bouts of weakness (the exception being juniors), principally on these repeated buy calls by brokers:
I haven’t seen Mr Lawcock’s note but I recommend anyone looking to catch this falling knife wear very strong gloves. Citi made the same call recently with iron ore at$103. JPM likewise.
As I said then, and will repeat now, unless China radically steps up stimulus then this market is in for a very torrid time ahead, broker denial or not.
Both Dalian and rebar futures have opened down again today, -0.6% and -0.9% respectively. Equities are again up today and out-performing on stimulus hopes which, for some reason, don’t seem to be exciting the Chinese.
