Copper stocks attract interest

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Since the year started, the copper future contract (ISIN: XC0009656965) on the Comex exchange has gained 9.5% to USD 4,182. The event brings shares in copper mine operators into focus. For investors are betting that any recession in the developed world this year will not be as severe as feared. As a result, industrial metals like copper could benefit from the positive sentiment.

It should be said, however, that it is not easy to invest solely in copper mines as they are usually a unit of larger, multinational extraction companies. Moreover, the world’s biggest copper mine operator, Chile’s Codelco, is not listed but state-owned.

In Africa, the largest copper mine is the Palabora Mine in Limpopo, South Africa. It is owned by China’s HBIS (ISIN: CNE000000H20), which is traded on the Shenzhen Stock Exchange. HBIS’ stock has disappointed investors, shedding 11% in the last twelve months. The second-largest copper mine on the African continent is Mogalakwena, which is also in Limpopo and owned by mining giant Anglo American (ISIN: GB00B1XZS820, quoted in London and Johannesburg). Here the performance has been better, with Anglo American gaining 7.6% in the last twelve months. Regarding other miners, shares in Royal Bafokeng Platinum (ISIN: ZAE000149936), owner of the Bafokeng-Rasimore platinum mine in South Africa’s North West province, gained 4.6% in the past twelve months. Meanwhile, Sibanye Stillwater (ISIN: ZAE000259701), owner of the Rustenberg Complex in the North West province, is down 7.7% for the same period.

Elsewhere in Africa, Canadian mining group Ivanhoe Mines (ISIN: CA46579R1047) does business in the DR Congo. Ivanhoe’s share was very volatile in 2022, losing at first much of its value before posting a strong recovery (+70.2% in the past six months). For the past twelve months, Ivanhoe is up 1.9%.


Turbulent times at Gold Fields

Staying with mining companies, strange things are happening at South Africa’s Gold Fields (ISIN: ZAE000018123). Recently, the company was hit by an exodus of employees, including, most notably, CEO Chris Griffith. Griffith’s departure prompted South Africa’s Business Live to comment: “Chris Griffith’s mysterious and hasty departure from Gold Fields bodes ill for the mining company after a clutch of resignations — and a raft of projects to crack on with.”  Martin Preece, who joined Gold Fields as Executive Vice President in 2017, will serve the company as the interim CEO.

Strangely, the exodus has not weighed on Gold Fields’ share. Instead, the share has gained 37.4% to ZAR 209.55 (EUR 11.51) in the past three months. Although Griffith did not comment on his departure, it is likely due to Gold Fields’ failed USD 6 billion takeover of Yamana Gold last November. But again, that failure did not depress the share but instead lifted it by 21%.

What will happen next is difficult to predict given Gold Fields’ diverse shareholder structure. One the one hand, South African pension fund scheme Public Investment Corporation (PIC) is a big shareholder with an 8.96% holding. On the other hand, several asset managers own stakes in the company. They include Blackrock, Vanguard, Coronation Asset Management, Schroder, Vanguard, Allan Gray and Norges Bank Investment Management, the asset manager for Norway’s gigantic oil fund (USD 1.2 trillion in assets).

What we can say is that Gold Fields Chairman Yunus Suleman sought to reassure investors following Griffith’s abrupt departure. In a statement, Suleman said: “The company is performing well, delivering strong shareholder returns and we continue to deliver on the strategy, including growing the value and quality of our portfolio of assets.”


Sudden interest in Mr Price’s shares

Most of 2022 was not good for shareholders of South African retailer Mr Price (ISIN: ZAE000200457). From January to mid-December, Mr Price’s share price fell 22.6% to ZAR 155.77 (EUR 8.55). The share has recovered a bit since, gaining 7.7% to ZAR 167.81 (EUR 9.21).

Mr Price specialises in clothing, furniture and other household goods. In December – or before the share began its recovery – Mr Price teamed up with Absa Bank to provide a money transfer service. The service is available at Mr Price and Sheet Street stores in South Africa, and the retailer said fees for the transfers were very competitive. Our take: Mr Price’s investors are hoping that the Absa deal is the start of a larger expansion into financial services, which is an interesting business in Africa.


Strong gains for Cleopatra Hospitals

Private hospitals are a lucrative business in emerging countries. As prosperity increases, many Africans become afflicted by diseases that have long plagued the developed world. These include diabetes, cardiovascular diseases, cancer and obesity. Standing to benefit from this unfortunate fact is Cleopatra Hospitals Group (ISIN: EGS729J1C018) of Egypt. This is because Cleopatra specialises in oncology, cardiovascular, neurology and robotic surgery.

However, medical expertise is just one factor to consider before investing in a private hospital group like Cleopatra. A more important economic factor are the agreements that the private hospital signs with companies who pay their employees’ medical bills.

Indeed, Cleopatra could announce in December 2022 that Egypt’s Petroleum Housing and Social Services Fund has signed a contract with it to pay the medical bills of the fund’s employees. Also because of this, investors are bullish on Cleopatra, with its share having gained 35.9% in the past three months. Analysts are equally upbeat, believing that Cleopatra’s share could gain another 17% in value.