“Morgan Stanley points out that historically, catastrophe losses during El Nino events are on average 40 per cent lower than in periods when La Nina occurs.”
Resources companies would enjoy a net benefit. Drier weather meant that mining operations suffered from less flooding and damage from heavy rainfall – a benefit. On the other hand, it also meant more output in the market, which would weigh on prices.
…But other Australian companies would benefit, said Macquarie, particularly insurers.
These companies were given an outperform rating: Orara, Village Roadshow, Suncorp, QBE Insurance, APA GRoup, BHP, Rio Tinto, Fortescue Metals Group, and BC Iron.
You can’t keep the dumb down, from the AFR:
Let’s do some quick numbers using RIO. It is planning 340mt of iron ore shipments next year. It has plenty of spare capacity so any loss of shipping days owing to more or less cyclone activity could easily be made up in other periods. Hence El Nino is basically irrelevant unless it changes its strategy mid-stride. Same goes for BHP. For other junior suppliers running flat chat there is perhaps some marginal less volume risk but they’re stuffed anyway so who cares?
And let’s not forget that at this juncture anything that increases volumes is pretty much bad. Same goes for coking coal.
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