UBS bearish on ASX-listed diversified miners but bullish on gold, lithium

Gold Road Resources

04/10/2022 03:37

** UBS says commodity demand will slow over the next six
months, with China stimulus "unlikely" to drive an acceleration
in demand
    ** Brokerage says downside risks to iron ore, copper,
metallurgical coal and nickel prices in the next 12+ months will
weigh on equities
    ** Rates BHP Group  BHP.AX  and Rio Tinto  RIO.AX  "neutral"
and Fortescue Metals Group  FMG.AX  "sell"
    ** Markets have not yet priced in a recession as commodity
prices remain above cost support levels - UBS
    ** Says thermal coal and gas will remain highly priced for
the next 2-3 years due to supply disruptions 
    ** However, brokerage is positive on ASX-listed gold miners
due to recent underperformance "heading into a worsening macro
and geopolitical backdrop" 
    ** Rates gold miners Northern Star Resources  NST.AX ,
Evolution Mining  EVN.AX  and Gold Road Resources  GOR.AX  "buy"
    ** Remains constructive on lithium miners IGO Ltd  IGO.AX ,
Mineral Resources  MIN.AX  and Allkem  AKE.AX  with "buy"
rating, as record spot prices drive "exceptional" cash flows
    ** Australian miners  .AXMM  trading ~3.6% higher on
Tuesday, gold miners  .AXGD  up ~5.5%, benchmark stock index
 .AXJO  rallies ~2.4% 
 (Reporting by Harshita Swaminathan)
 ((Harshita.Swaminathan@thomsonreuters.com))