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Johannesburg - There is value in platinum shares despite the current wave of strikes facing South Africa’s major producers of the metal, according to RE:CM, an independent asset manager.
The asset manager is among the first of the few South African asset managers to boldly hold this positive view on the shares.
Linda Eedes, a senior analyst at RE:CM, on Wednesday said the “unpopular” shares of Amplats, Lonmin [JSE:LON] and Implats were at levels “we consider attractive”.
“These stocks have all seen significant price declines in recent markets, making them decidedly “unpopular,” Eedes said.
“But the investment case is thus: poor recent history and a weak short-term outlook for the European automotive market have served to drive platinum and platinum mining share prices to levels that we consider attractive from a longer-term perspective.”
With smaller mines shutting down and production volumes dropping, platinum supply would fall, she said.
“But this, along with an eventual pick-up in demand once the European automotive industry recovers, should see the industry becoming economically viable once more.”
The fact that these three South African platinum miners control such a large share of global platinum production and reserves puts them in a strong position.
On Wednesday, the Mineral Resources Minister Susan Shabangu, Cosatu and the National Union of Mineworkers blamed Implats management for the wave of strikes in the platinum mining sector.
During Tuesday intraday trading, the Implats share price lost 0.47% or 66 cents to R138.84.
The judicial commission of inquiry into the shooting of striking workers at Lonmin’s Marikana platinum mine entered its third day on Wednesday.
The commission is scheduled to hear oral evidence in the Rustenburg Civic Centre.
But during intraday trading ojn Wednesday, Lonmin shares sagged 0.08% or 6c to R74.48.
Operations at Amplats’ Rustenburg min were set to resume on Wednesday after having had to be suspended on Tuesday.
Amplats said the security situation in the Rustenburg area had worsened during Monday evening, reflected in a 1.89% loss during intraday trading on Wednesday.
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The asset manager is among the first of the few South African asset managers to boldly hold this positive view on the shares.
Linda Eedes, a senior analyst at RE:CM, on Wednesday said the “unpopular” shares of Amplats, Lonmin [JSE:LON] and Implats were at levels “we consider attractive”.
“These stocks have all seen significant price declines in recent markets, making them decidedly “unpopular,” Eedes said.
“But the investment case is thus: poor recent history and a weak short-term outlook for the European automotive market have served to drive platinum and platinum mining share prices to levels that we consider attractive from a longer-term perspective.”
With smaller mines shutting down and production volumes dropping, platinum supply would fall, she said.
“But this, along with an eventual pick-up in demand once the European automotive industry recovers, should see the industry becoming economically viable once more.”
The fact that these three South African platinum miners control such a large share of global platinum production and reserves puts them in a strong position.
On Wednesday, the Mineral Resources Minister Susan Shabangu, Cosatu and the National Union of Mineworkers blamed Implats management for the wave of strikes in the platinum mining sector.
During Tuesday intraday trading, the Implats share price lost 0.47% or 66 cents to R138.84.
The judicial commission of inquiry into the shooting of striking workers at Lonmin’s Marikana platinum mine entered its third day on Wednesday.
The commission is scheduled to hear oral evidence in the Rustenburg Civic Centre.
But during intraday trading ojn Wednesday, Lonmin shares sagged 0.08% or 6c to R74.48.
Operations at Amplats’ Rustenburg min were set to resume on Wednesday after having had to be suspended on Tuesday.
Amplats said the security situation in the Rustenburg area had worsened during Monday evening, reflected in a 1.89% loss during intraday trading on Wednesday.
*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.
