Resources stocks account for almost 80 per cent of the ASX’s top 20 shorts, with traders targeting everything from uranium and lithium producers to iron ore and copper.
Already a subscriber?Hedge funds in Asia are increasingly targeting Australian mining companies betting that the rout in the sector will deepen from weak commodity prices and the threat to earnings from elevated costs this reporting season.
“There’s real nervousness across the entire commodity suite, and a lot of these miners are under pressure given the China situation is a moving feast which investors are still trying to get their heads around,” RBC Capital Markets’ head of Australian equities, Karen Jorritsma, told“The sheer number of these shorts is telling us two things: hedge funds in Asia are back in the region in a big way after being gone for a while; and secondly, just the lack of conviction with investors questioning...
But prices of the heavy metal have dropped from a 16-year high around $US106 a pound in February to about $US82 a pound amid concerns of oversupply, which were heightened by the world’s top producer, Kazatomprom, raising production guidance earlier this month. “The biggest concern will be that they report negative jaws where cost growth is higher than revenue growth,” Ms Jorritsma said. “The issue this time around is that revenue growth is really fading, but cost growth has maintained its pace, so that’s something we’re watching.”
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