Rare earths stocks rise in Asia
City Index November 23, 2012 10:41 AM
<p>Asian markets were largely quiet on Friday given soft offshore leads in the absence of the US market, closed for Thanksgiving holidays. The clear standout […]</p>
Asian markets were largely quiet on Friday given soft offshore leads in the absence of the US market, closed for Thanksgiving holidays. The clear standout performers in Asia today were rare earths producers. Shares in the producers of this type of commodity were higher on the back of comments from Chinese officials disclosing plans by the government to pump cash into local producers. According to media reports citing Chen Zhanheng – deputy secretary general of China Rate Earths Industry Association – the central government may provide annual subsidies of around $40m to the industry in order to restimulate mining activity.
China produces around 90% of the world’s rare earths supply. Rare earths are mostly used in electronic components, catalytic converters in cars, aircraft engines and many other industrial applications. Australian listed emerging producer of rare earths Lynas Corporation was among the best performing stocks on the market today, despite having gone through a very messy political, legal and social process in 2012, it seems like the company is ready to start processing ore in its Malaysian plan over the next few weeks. Shares in Lynas closed almost 7% higher. Hong Kong listed China Rare Earth jumped almost 5% on the government report, while China Resources Enterprise (also listed in Hong Kong) managed a 2% gain.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.