STOCKWATCH
Kumba jumps as much as 12% after trading update
The share price has largely tracked the recovery in the iron ore price, which is now at $83 a tonne with Kumba producing iron ore at below $40 a tonne
Kumba Iron Ore shares surged as much as 12% on Wednesday, extending a year-long rally that has recovered a significant amount of its lost market value. Kumba, which is the biggest local producer of iron ore in SA, bottomed out in January last year when the share price was R25.75, valuing the company at just more than R8bn. The company is worth R63.2bn at current market prices, a development that is likely to go a long way to make its investors smile. The stock valuation peaked at R619 in 2013, according to Iress, when the company was among the blue-chip stocks on the JSE. It is now in the mid-cap category of the market. The share price has largely tracked the recovery in the iron ore price, which clearly boosted its earnings prospects. The iron ore price hit lows of $38 a tonne in late 2015 before bouncing back to its current $83. Kumba produces its iron ore at below $40 a tonne.
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