MINERS were given a boost yesterday, after JP Morgan upgraded its recommendation on the sector to overweight.
The likes of Rio Tinto, BHP Billiton and Anglo American topped the FTSE 100, after the bank said that there are “signs of a rebound in activity” in China, the world’s largest consumer of commodities, while the sector is “delivering on cost cutting”.
A slowdown in demand, followed by a subsequent fall in commodity prices, has hit miners hard over the past 18 months, with firms cutting costs and divesting non-core assets in an attempt to turn around their balance sheets.
“The sector has performed poorly in the last few years, down 50 per cent relative, to be currently at the same levels as at December 2008,” said the research. “At the same time, commodity prices are double the December 2008 levels.”
JP Morgan’s analysts named Rio and BHP as the most attractive stocks in the sector, which closed 4.8 per cent higher and 2.7 per cent higher respectively.
YEARS OF DISCONTENT
Workers strike at a Lonmin mine, amid discontent about wages and working conditions, leading to 44 deaths.
The Association of Mineworkers and Construction Union orders another strike, raising fears of more violence.
Amcu members strike again calling for higher pay, drastically cutting output at South Africa’s three largest platinum miners. Talks remain unresolved.