Proactive Investors - Run By Investors For Investors

Liberum ups blue chip miner Antofagasta to ‘hold’ from ‘sell’, says would not now be short of copper equities

“Copper prices have been weighed down by negative global growth sentiment, driven by the continuing trade war between the US and China and the weakness in global manufacturing purchasing managers indices"
Mining truck
“However the fundamentals in 2019 are more robust than other years with a slow year for mine supply and recycling,” Liberum's analysts said

Analysts at Liberum Capital have upgraded their rating for Chile-based miner Antofagasta PLC (LON:ANTO) to ‘hold’ from ‘sell’ as they say they would not now be short of copper equities.

In a sector note to clients, the Liberum analysts pointed out: “Copper prices have been weighed down by negative global growth sentiment, driven by the continuing trade war between the US and China and the weakness in global manufacturing purchasing managers indices (PMI).

“However the fundamentals in 2019 are more robust than other years with a slow year for mine supply and recycling.”

READ: Antofagasta leaves guidance unchanged after quarterly copper production rises as expected

They added: “There is undoubtedly weakness in the global growth engine as evidenced by weakening yields, slowing trade and contracting manufacturing PMIs.

“The continuing trade war with the U.S. and China is part of the problem, but we are late in the business cycle and we do expect global growth to slow, increasing the likelihood of central bank action in the various regions.”

However, the analysts concluded: “Catalysts including spreading supply disruption in Zambia, further stimulus from China and a Fed rate cut, could result in a decent snap back in copper prices as the currently extended net short futures positioning reverses.”

The analysts also said that the do not believe the recent weakness in copper prices has harmed the chances of the juniors, such as Asiamet Resources PLC (LON:ARS) and SolGold plc (LON:SOLG), being acquired, given the strength of the majors balance sheets.    

View full ANTO profile View Profile

Antofagasta PLC Timeline

Related Articles

1548906539_nevada-2.jpg
January 31 2019
Last year’s pre-feasibility study demonstrated the project’s large scale, long life and low-cost lithium production.
A Western Australian map showing company projects
March 19 2019
Geologist and finance professional Ian Stuart became the company’s chairman last month.
Potash
March 05 2019
The company’s $5.3 million rights issue to fund completion of its DFS closes this week.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use