Mining group boosted by hopes of recovery and talk of possible bidsMarkets are, not surprisingly, trading in a rather hesistant fashion given the continuing uncertainty in Greece, with MPs due to vote on the bailout agreement agreed on Monday and the IMF casting doubt on the economics of the deal.But with better than expected Chinese economic data, a number of mining shares are bucking the downward trend.We upgrade Anglo from neutral to outperform: a wide valuation gap has opened versus peers with the sell-off balance sheet rather than earnings led. We think at current levels investor focus should switch to the underlying asset value; Anglo is trading below its 2008/09 crisis lows and a large discount to peers. At these levels M&A risk can’t be ignored and we see up to 30% upside potential if the company can deliver on its restructuring goals and up to 50% if this is joined by an apparent demand recovery in China in the second half of 2015. Continue reading...
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