Oxiana Still Favoured
- May 02 2006
Opinion at Tolhurst Noall may be that investors should look
elsewhere for exposure to surging copper and gold prices, but
the general market view seems to be that it is stillokay to
hold a few shares of Oxiana Resources (OXR) in one's
investment portfolio.
Oxiana's shares fell dramatically on Friday, when the market
experienced a good old fright following the surprise Chinese
interest rate hike, but they bounced back swiftly on Monday.
Moreover, if UBS's latest assessments are anything to go by,
Oxiana shareholders should be in for ongoing rock'n'roll in
the medium term.
UBS raised its commodities prices forecasts substantially on
Monday and among the results of that exercise is a target
increase for Oxiana to $4.20 from $3.00. As the shares were
only rated Neutral, they obviously went up to Buy.
As the average target price ha snow climbed to $3.29
(including UBS's contribution) the obvious question that comes
to mind is: is the rest of the market going to catch up?
Oxiana shares have been trading persistently above the
experts' target price for many weeks, closing at $3.64
yesterday.
The UBS upgrade lifts the stock's reading on FN Arena's Market
Sentiment Indicator to 0.4. Apart from UBS, GSJB Were,
Macquarie, Credit Suisse, ABN Amro and Deutsche Bank all rate
it a Buy.
Citigroup, Merrill Lynch and JP Morgan don't want to go
further than a Neutral. Aspect Huntley has a negative rating
for many resources stocks at the moment, and Oxiana is no
exception.