Kumba slides on lower iron ore price fears
Falling China demand and stronger rand behind 8% share decline, but company still 15% up in 2017
Kumba Iron Ore was a big casualty of the stronger rand and concern about lower Chinese iron-ore prices on Wednesday, with its share price falling more than 8% in intraday trade on the JSE before recovering later. Analysts said the weakness was due to lower iron-ore prices and not any company-specific news, though the shares were trading ex-dividend. Iron-ore prices were approaching three-week lows, falling 1.37%, to $72 a tonne in intraday trade. The rand was at R13.2016/$, from R13.3216/$. Demand for ore was falling in China as mills held off on purchases, said Investec analysts. "Mills are reportedly well stocked with ore currently and delaying purchases." At its lowest on the day, Kumba was down 8.36%. It closed 5.56% lower at R185.44, the lowest in a month. The shares are trading at a price: earnings ratio of 6. Kumba is still 15% up in 2017, after being one of the JSE’s best performers in 2016, rising 285%. That was after it recovered from the implosion of iron-ore prices in 20...
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