Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

'Huge fan of your work. Very impressive!' - Scott Pape, The Barefoot Investor, Australia's #1 bestseller.

'Must-read, must-follow, one of the finest analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, must-follow for accurate & in-depth analysis' - David Scutt, Business Insider.

'I've been investing 40 years yet still learn new concepts from Pete; one of the finest young commentators' - Michael Yardney, Amazon #1 bestseller.

'The most knowledgeable person on Aussie real estate - loads of good data & charts...most comprehensive analyst I follow in Oz' - Jonathan Tepper, Variant Perception, 2 x NYT bestseller.

Friday, 15 April 2016

F.M. Geeee...

Ore rebound

The iron ore price has rebounded by 36 per per cent in 2016 so far, while the oil price has also gone on a tear.

Good news for the budget, and great news for Australia, although the bull run came to an abrupt end overnight.

Fortescue Metals Group (ASX: FMG) has enjoyed some welcome relief as a result of the resurgence, its share price ripping from a January 21 low of $1.44 to touch $3.34 yesterday.

Source: ASX

Fortescue has a huge pile of net debt - totalling around US$5.9 billion - which it is trying to shave down, so will be hoping that the iron ore price really can be sustained, particularly with new market entrants adding to competition.

FMG is a highly leveraged play in more than one sense, and as such is acutely exposed to the iron ore price. It makes for a volatile ride.

The company has a market cap of just under $10 billion, and probably a bit lower this morning.

Scuttman reported over at Business Insider this week that China had imported - get this - an absolutely jaw-dropping 969 million tonnes of iron ore in the year to March 2016.

A record, obviously.