Category: Stock Market

ASX dividend shares can be found across the market capitalisation spectrum. Lesser-known names can still be great options for passive income.

Investors have probably heard of names like BHP Group Ltd (ASX: BHP), Telstra Group Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA). They are popular dividend picks for some investors.

But, both a large business and a small one can pay a good dividend yield. So, let’s look at these two names with high projected payouts.

Cromwell Property Group (ASX: CMW)

Cromwell describes itself as a real estate investor and fund manager with operations across three continents and a global investor base.

According to estimate data on Commsec, the business is projected to pay a distribution per security of 5.8 cents in both FY23 and FY24. This translates into a forward distribution yield of 8.2%.

While the ASX dividend share has been disrupted by rising interest rates, it has been working on simplifying the business by disposing of non-core assets and focusing on being a global capital-light real estate fund manager as a way to enhance long-term value for security holders.

For example, it recently sold a property in Wollongong for $53 million, a 3.9% premium to the book value after settlement adjustments.

It’s going to reduce gearing and continue to “de-risk the business until volatility in the global equity and debt markets begins to ease and attractive opportunities for reinvestment present themselves.”

Fletcher Building Limited (ASX: FBU)

This business has multiple segments. It manufactures building products, including insulation and cement. The ASX dividend share also builds homes, buildings and infrastructure.

The Fletcher Building share price has plunged around 30% over the past year. This has pushed up the prospective dividend yield for the business.

According to the estimates on Commsec, it could pay a dividend yield of 8.4% in FY23.

The company recently gave an update which said that in its products and distribution divisions, sales volumes are “broadly in line with expectations”, slightly softer in the civil sector and robust in the residential finishing trades and the commercial sector.

Management believes that cost inflation is being managed effectively, and gross margins were slightly ahead of expectations.

Fletcher Building said that the Australian business is continuing to improve despite the first half of weather and transport challenges. It’s expecting the earnings before interest and tax (EBIT) margin in Australia to be 5%.

In the ASX dividend share’s residential and development division, house prices and margins are in line with expectations at around 10% below the peak in late 2021. House sales remain lower than planned.

Its FY23 EBIT target, excluding significant items, is at least $855 million. It said that the balance sheet continues to be in a strong position.

The post 2 ASX dividend shares you’ve probably never heard of forecasting yields over 8% appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d invest $5,000 in ASX 200 shares to earn a second income
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It seems like a long time since technology stocks were all the rage.

But it was only 13 months ago when the market was thirsty for anything related to automation. The world was in the midst of the COVID-19 pandemic and it seemed people were more reliant on tech than ever to work, shop, and play.

2022 put an end to all that though.

Even before central banks started raising interest rates to combat inflation, fear had already struck. Tech shares started their plunge in late 2021 and it only got worse as the months passed.

Indeed they are still in the doldrums. The S&P/ASX All Technology Index (ASX: XTX) is now almost 35% lower since November 2021.

But that’s not the end of the story.

More than one expert reckons tech has now been beaten up so much that it might make an excellent contrarian play for 2023.

The idea is that interest rates will stop rising eventually and businesses that are growing will reward investors in the long run.

“Selective exposure to technology stocks is likely to deliver value due to their ability to grow earnings faster than GDP, regardless of interest rate movements,” Morgans investment advisor Jabin Hallihan told The Bull.

Here is a couple of ASX shares that he would stash away right now:

‘High quality’ with pricing power

The share price for Xero Limited (ASX: XRO) has halved since November 2021, with some investors worried about its expansion prospects and a change of chief executive.

But Hallihan would pick it up in a heartbeat.

“This cloud-based financial software company services about 3.3 million businesses across the globe,” he said.

“We prefer high-quality technology companies with net cash balance sheets and pricing power.”

The Morgans team is expecting solid expansion in earnings over the next year or two, and thus feels like the stock is undervalued.

“We’re forecasting earnings per share to grow from 10.6 cents in fiscal year 2023 up to 30.2 cents per share in fiscal year 2024,” he said.

“Our current valuation is $77 a share.”

Xero shares closed Monday at $74.31.

Popular in turbulent times

Telstra Group Ltd (ASX: TLS) has been frustrating to own for many years, but Hallihan’s team is convinced the stock is currently “undervalued”.

“Demand for secure digital infrastructure remains robust,” he said.

“This telecommunications giant is expected to retain its attractive dividend yield, which appeals to income investors in volatile times. Telstra remains the dominant player in Australia’s telecommunications sector.”

Over the past year, the telco’s shares have fallen more than 5.5%. The current dividend yield stands at 3.36%.

The stock closed flat on Monday at $4.02.

“The company has forecasted total income of between $23 billion and $25 billion in fiscal year 2023,” said Hallihan.

“We have a price target of $4.60.”

The post Tech turnaround: Expert picks 2 ASX shares to buy for a 2023 revival appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally
• 5 things to watch on the ASX 200 on Monday
• Analysts say these ASX growth shares can generate huge returns for investors
• How I’d invest my very first $500 in ASX shares in 2023

Motley Fool contributor Tony Yoo has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Telstra Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The fund manager Wilson Asset Management (WAM) has recently identified some S&P/ASX 200 Index (ASX: XJO) shares that it owns (or owned) in one of its main portfolios.

WAM operates several listed investment companies (LICs), including WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) that looks at the larger businesses on the ASX, often referred to as ASX blue-chip shares.

WAM says WAM Leaders actively invests in the highest quality Australian companies. But does WAM have a good reputation for picking stocks?

The WAM Leaders portfolio has delivered gross returns (before fees, expenses, and taxes) of 14.4% per annum since its inception in May 2016. This compares to the S&P/ASX 200 Accumulation Index average return of 8.4% over the same time.

WAM outlined these ASX 200 shares in its recent monthly update.

Lendlease Group (ASX: LLC)

The fund manager described Lendlease as a globally diversified real estate business that operates through three main segments, property development, construction and investment.

WAM noted that the Lendlease share price fell to a 10-year low in mid-December because of concerns about the company’s ability to “meet financial targets in a more challenging economic environment”.

The investment team believe that the market is being too pessimistic, so used the decline to increase its position in the portfolio.

WAM also noted that the ASX 200 share has a new CEO, adding that the company had been “simplified and overall better positioned than the market implies to weather headwinds”.

Concluding its thoughts about the business, the WAM investment team said:

We expect further returns over the medium-term and are impressed by the new strategic direction of the business, which is focusing on using the development pipeline to grow investment earnings, while reducing the exposure to construction will improve earnings predictability.

DEXUS Property Group (ASX: DXS)

This business was described as an Australian office, industrial and funds management real estate company.

The fund manager noted that Dexus traded at around a 40% discount to its asset backing at the start of December, which was the lowest level since the Global Financial Crisis of 2007-08.

WAM noted that back then, the market was impacted by “high debt margins, capital constraints and forced sellers”.

But the conditions now were not the same. Demand for high-quality assets remained strong, according to WAM.

Explaining the positive outlook for the ASX 200 share, the investment team wrote:

As such, we remain confident on the further returns expected over the medium-term. We believe management are exceptional asset allocators, and are continuing to move up the quality spectrum by recycling lower-quality office assets into high-quality development projects.

Additionally, growth in Dexus’ industrial and funds management businesses is impressive and diversifies the business from its pure office exposure. We continue to see value in Dexus with its strong balance sheet, with gearing well below its target range and long-dated average debt maturities.

The post 2 ‘exceptional’ ASX 200 shares to buy now: fund manager appeared first on The Motley Fool Australia.

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• My $15 a day plan to build passive income this year
• Here are the top 10 ASX 200 shares today
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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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For a number of years, Pilbara Minerals Ltd (ASX: PLS) shares have been the domain of growth investors.

However, with the lithium miner announcing the establishment of a capital management framework late last year, the company is now catching the eye of income investors.

And that’s for good reason based on what analysts are expecting from Pilbara Minerals shares in 2023.

Pilbara Minerals shares tipped to provide an attractive dividend yield

With Pilbara Minerals still commanding very high prices for its lithium, at least for now, the market is expecting the company to deliver bumping earnings and free cash flow in FY 2023.

This has many analysts expecting the lithium giant to reward its shareholders with a very big maiden dividend later this year.

For example, according to current consensus estimates, the market is forecasting a 17 cents per share dividend for FY 2023.

Based on the current Pilbara Minerals share price of $4.04, this will mean an attractive 4.2% yield for investors.

Even bigger dividend yield expected by Macquarie

According to a recent note out of Macquarie, its analysts believe that the lithium miner’s earnings will be strong enough to pay a dividend almost double consensus estimates.

The ultra-bullish broker is forecasting a fully franked 34 cents per share dividend in FY 2023.

Based on where Pilbara Minerals shares are trading, this will mean a whopping 8.4% dividend yield for investors.

Another positive is that Macquarie believes that the company’s shares can rise materially from current levels.

Its analysts have an outperform rating and $7.50 price target on them. This implies potential upside of over 85% for investors over the next 12 months.

Combined with its forecast dividend yield, this lithium miner has the potential to provide investors with a total return of 94%.

The post Can Pilbara Minerals shares really deliver an 8% dividend yield in 2023? appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Monday
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Motley Fool readers will be well familiar with the advice that it’s a dangerous game trying to pick the bottom.

That’s why the best alternative might be to try to hop on ASX shares that have just started rising.

If the underlying business is thriving, the upwards stock price momentum could continue, and it may end up a fruitful investment for those who got in early.

Taking this philosophy, one expert this week earmarked two ASX shares that he would buy right now:

Throwing down the gauntlet

Protective glove maker Ansell Limited (ASX: ANN) has been a painful stock to own for long-term investors, but it has shown signs of life in recent times.

Over the past six months, the share price has spiked up more than 20%.

“The share price has been trending higher since June 2022 and breached resistance at $28 in late October,” Fairmont Equities managing director Michael Gable told The Bull.

“The technical chart remains bullish, which is another positive for the stock. The stock is in a strong uptrend, with no signs of weakness.”

While Gable is keen on Ansell as a buy, that view is not unanimous among his peers.

According to CMC Markets, four out of eight analysts currently covering the $3.6 billion company rate the stock as a hold. Three do consider it a strong buy, while one says Ansell is a moderate sell.

Gold is back, baby

Last year was remarkable in that both stocks and bonds suffered, even though traditionally, they are seen as counterweights to each other.

To top off the disaster, the ultimate ‘safe haven’ of gold also struggled for most of the year.

But with a global recession looming, the last couple of months has seen a revival for the precious metal.

This is why Gable rates miner Evolution Mining Ltd (ASX: EVN) as a buy.

“We’re bullish about the outlook for gold in volatile and uncertain times across the globe,” he said.

“Evolution is one of the biggest gold miners on the ASX.”

Similar to Ansell, the Evolution share price is on an upward swing. 

“The share price has risen from $1.81 on October 21, 2022, to trade at $3.33 on January 12, 2023,” said Gable.

“We expect the upward trend to continue. In our view, any short-term weakness presents a buying opportunity.”

The post ‘No signs of weakness’: Expert names 2 ASX shares to buy just starting their rise appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Thursday
• Will 2023 be a golden year for ASX 200 mining shares?
• What’s the outlook for ASX 200 gold shares in 2023?
• Could ASX 200 gold shares provide a safe haven for investors in 2023?

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you were asked what your biggest investment mistake was, you’d likely think of a stock that almost shrunk to $0.

But one expert reckons that would not be your biggest error.

US financial expert Brian Feroldi, in his Long-Term Mindset newsletter, revealed some of the startling mistakes he and his fellow commentators have made over the years.

“In 2009, Brian Stoffel sold Alphabet Inc (NASDAQ: GOOGL) for a split-adjusted US$10 per share. He’s missed out on 820% returns — a mistake costing tens of thousands of dollars,” said Feroldi.

“In 2007, Brian Feroldi sold DexCom Inc (NASDAQ: DXCM) for a split-adjusted US$2 per share. He’s missed out on 5,800% returns — a mistake costing hundreds of thousands of dollars.”

Those are painful enough, but the third error was a whopper.

Brian Withers sold Netflix Inc (NASDAQ: NFLX) shares in 2010 for a split-adjusted US$20.

“He missed out on 1,500% returns. Because it was his largest position, this mistake cost him millions of dollars.”

Loss aversion

What do these massive mistakes have in common?

They were all bad selling decisions rather than buying errors.

And the same motivator was behind the sale of all three shares — loss aversion.

Loss aversion is the psychological phenomenon that sees humans trying a lot harder to protect what they have than to gain the same amount.

“Stoffel sold Google because he couldn’t believe that he’d made a quick thousand dollars. Feroldi wanted to lock in a small profit while he could,” said Feroldi.

“Withers — sitting on 20-bagger returns — was worried about losing all he’d gained.”

Look at the business, not the stock

According to Feroldi, each expert was so anxious about losing capital that “we lost sight of what actually mattered”.

That’s the long-term potential of the businesses.

So the three Brians are urging all long-term investors to learn from their mistakes and do exactly that.

“If we had looked at the businesses instead of the stocks, we’d likely have stayed put,” said Feroldi.

“Holding great companies for long periods of time isn’t easy. But, selling a future mega-winner early is one of the most costly investing mistakes that you can make.”

The post How to avoid the biggest mistake in investing: expert appeared first on The Motley Fool Australia.

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More reading

• Earn passive income with these ASX 200 dividend shares – experts
• 5 things to watch on the ASX 200 on Tuesday
• Buy QBE and this ASX 200 blue chip share: broker
• Morgans names 2 of the best ASX 100 shares to buy now
• Why did iron ore shares lag the ASX 200 on Monday?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended DexCom. The Motley Fool Australia has recommended Alphabet, DexCom, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The ASX 200 index is home to a large number of shares offering income investors attractive dividend yields.

But which ones should you buy over others?

Listed below are two that brokers rate as buys right now. Here’s what you need to know:

Elders Ltd (ASX: ELD)

This agribusiness company could be an ASX 200 dividend share to buy according to analysts at Goldman Sachs.

Its analysts believe the company’s shares were oversold in 2022, creating a buying opportunity for investors. This is because its analysts feel “the fundamentals of this company remain unchanged, and strong in our view.” Goldman also believes “ELD is very well positioned to grow through the cycle.”

The broker has a conviction buy rating and $18.40 price target on the company’s shares at present.

As for dividends, Goldman is forecasting fully franked dividends per share of 53 cents in FY 2023 and 57 cents in FY 2024. Based on the current Elders share price of $10.05, this will mean yields of 5.3% and 5.7%, respectively.

Macquarie Group Ltd (ASX: MQG)

This investment bank could be another ASX 200 dividend share to buy. That’s the view of Morgans, which believes Macquarie is well-placed for the long term.

It highlights the company’s “exposure to long-term structural growth areas such as infrastructure and renewables” and its potential to “benefit from recent market volatility through its trading businesses.”

Morgans has an add rating and $214.30 price target on Macquarie’s shares.

In respect to dividends, the broker is expecting Macquarie to pay partially franked dividends of $7.05 per share in FY 2023 and $7.36 per share in FY 2024. Based on the current Macquarie share price of $180.00, this implies yields of 3.9% and 4.3%, respectively.

The post Earn passive income with these ASX 200 dividend shares – experts appeared first on The Motley Fool Australia.

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More reading

• Morgans names 2 of the best ASX 100 shares to buy now
• Up 20% in 6 months, is the Westpac share price now fully valued?
• How I’d invest my very first $500 in ASX shares in 2023
• Which ASX 200 bank shares are the ones to buy in 2023?
• Here are some top ASX dividend share ideas according to experts

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a strong gain. The benchmark index rose 0.8% to 7,388.2 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to end its winning streak on Tuesday despite a positive night of trade in Europe. According to the latest SPI futures, the ASX 200 is poised to open the day 18 points or 0.25% lower. In Europe, the DAX rose 0.3% and the FTSE pushed 0.2% higher. Wall Street was closed for a public holiday.

Oil prices run out of steam

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices pulled back overnight. According to Bloomberg, the WTI crude oil price is down 1.3% to US$78.87 a barrel and the Brent crude oil price is down 1.3% to US$84.20 a barrel. Traders appear to have been taking profit after some strong gains.

Qantas rated as a buy

Goldman Sachs has reiterated its conviction buy rating and $8.20 price target on Qantas Airways Limited (ASX: QAN) shares. This follows the release of industry data that indicates “2H23 domestic capacity at 102% of pre-COVID & Int’l at 80%; both ahead of market.” Goldman added: “We believe the stock is not appropriately pricing QAN’s improved earnings capacity.”

Gold price edges lower

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a soft day after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$1,917.3 an ounce. The gold price is trading near a nine-month high despite this softness.

Super Retail can keep climbing

The Super Retail Group Ltd (ASX: SUL) share price rocketed higher on Monday after the release of a strong update. This went down well with Goldman Sachs, which has reiterated its buy rating and with an improved price target of $14.20 on its shares. Goldman said: “SUL is our preferred pick in discretionary apparel/footwear space given outdoor/functional category resilience as well as the company’s focus on driving consumer experience via loyalty (~70% of sales) and unique omni-channel experience.”

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
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• BHP share price hits milestone $50 mark on Monday
• Shareholders rejoice! Qantas share price hits post-market-crash high
• This ASX 200 retail share is booming 10% on an ‘outstanding first-half result’

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The team at Morgans regularly picks out its best ASX share ideas. These are the ASX shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence.

On the list at the moment are the two ASX 100 shares listed below. Here’s why the broker believes these are among the best shares to buy right now:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX 100 share that Morgans is tipping as a best buy is gaming technology company Aristocrat Leisure.

The broker likes the company due to its strong balance sheet, leadership position, and real money gaming opportunity. It explained:

ALL is a global market leader in the rapidly-growing land-based gaming and mobile gaming industries. It has delivered revenue growth of 17% pa over the past five years and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments. Demand for its gaming machines and digital games is resilient to economic cycles, though has slowed in recent months, leading the share price down. ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September. With $3.3bn of currently available liquidity, ALL has significant funding capacity for growth, even after the buyback. It has a stated ambition to build a meaningful presence in the rapidly-growing online real money gaming segment, which we believe may be achieved both through organic investment and inorganic acquisitions.

Morgans has an add rating and $43.00 price target on Aristocrat’s shares.

Westpac Banking Corp (ASX: WBC)

Another ASX 100 share making the list is Australia’s oldest bank, Westpac.

The broker rates this banking giant highly due to its return on equity potential. It also sees Westpac as a top option for income investors due to its fully franked dividend yield. Its analysts said:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

Morgans has an add rating and $25.80 price target on Westpac’s shares. It also expects a fully franked 6%+ dividend yield in FY 2023.

The post Morgans names 2 of the best ASX 100 shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Up 20% in 6 months, is the Westpac share price now fully valued?
• Top brokers name 3 ASX shares to buy next week
• Here are the top 10 ASX 200 shares today
• How I’d invest my very first $500 in ASX shares in 2023
• Which ASX 200 bank shares are the ones to buy in 2023?

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Iron ore shares struggled against the ASX 200 on Monday.

Fortescue Metals Group Ltd (ASX: FMG), Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP) trailed the benchmark index at market close.

Fortescue shares slid 2% today, while Rio Tinto shares slipped 0.1%. The BHP share price was up just 0.1% at the market close after hitting a milestone $50 per share high earlier today. The S&P/ASX 200 (ASX: XJO) jumped 0.82% to finish at 7,388.2 points at today’s close.

Let’s take a look at what may have weighed on iron ore shares on the ASX 200 today.

What happened?

News emerged yesterday that China’s economic planning agency would seek to crack down on surging iron ore prices by heightening its supervision, according to Bloomberg.

All three iron ore-producing giants — Fortescue, Rio and BHP — are impacted by the iron ore price, which can weigh on potential earnings and, therefore, investor sentiment.

China’s National Development and Reform Commission advised on Sunday it was interviewing companies relating to iron ore. In a statement (translated into English), the commission said:

The National Development and Reform Commission will continue to pay close attention to changes in the iron ore market and prices, and work with relevant departments to further study and take measures to severely crack down on illegal activities such as fabricating and disseminating information on price increases, hoarding, and price gouging, so as to effectively ensure the smooth operation of the iron ore market.

Iron ore futures on the Singapore Exchange have fallen 4.50% to US$119.85 at the time of writing.

The ASX 200 iron ore shares also produce other metals and minerals, including copper, nickel, zinc and aluminium. Aluminum is currently up 1.82%, while zinc is 2.74% higher, according to trading economics. Copper is down 1.16%, while nickel is sliding 0.85%.

Share price snapshot

The BHP share price has gained nearly 20% in the last 12 months.

Fortescue shares have climbed 4% in the past year.

The Rio Tinto share price has jumped 10% in the last 52 weeks.

The post Why did iron ore shares lag the ASX 200 on Monday? appeared first on The Motley Fool Australia.

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More reading

• BHP share price hits milestone $50 mark on Monday
• Why is the Fortescue share price being hammered on Monday?
• Is the BHP share price about to crack $50?
• 6 ASX mining shares just upgraded by brokers
• 4 ASX 200 shares celebrating Friday with new, 52-week highs

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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