A fund manager has claimed, contrary to conventional belief, that real estate investment trusts (REITs) are a practical hedge against inflation.

With the world transitioning to a post-COVID recovery, inflation is expected to pick up.

Traditional wisdom dictates that as inflation rises, interest rates will rise. And higher interest rates dampen enthusiasm for real estate.

However, Resolution Capital chief investment officer Andrew Parsons told an investor briefing that this is a false correlation.

“It’s a simple catch-phrase that the market focuses on without actually looking at the history of returns,” he said.

“There’s plenty of evidence to demonstrate that REITs are not highly correlated to rising interest rates and bond yields.”

Resolution Capital is a specialist manager of international listed real estate assets.

The proof was just last year

Parsons said investors needed to “look deeper” into the dynamics between the economy and real estate “fundamentals” to gauge how rising interest rates could influence REIT values.

One only had to look at last year to see the conventional relationship between property and inflation turned on its head.

“We had falling bonds and falling interest rates and yet REIT prices actually fell,” said Parsons.

“So, to us it’s a common error for people to focus on the simple thought that rising interest rates are bad for REITs. The historic evidence does not show that clearly, whatsoever.”

Where REITs are headed this year

In the current post-pandemic recovery, rising construction costs would act as a “strong tailwind” for real estate funds, according to Parsons.

“What we’re seeing is a very significant increase in building costs. Important ingredients in building properties have been going up at a very dramatic rate in the last 12-18 months,” he said.

“That’s been as a consequence of a number of factors, including the likes of the COVID disruptions, the problems with Vale mines in Brazil, a recovery in new housing starts in the US, plus the extraordinary [Australian] government infrastructure plans that have been announced.”

Real estate is a hedge against inflation

All that points to REITs rising in values along with inflation.

“Ultimately we believe that real estate is a hedge against inflation,” said Parsons.

“Developers are facing the prospect of higher building costs and as a consequence they will need higher rents to justify making that investment in new buildings.”

As higher rents are charged for new buildings, that helps existing landlords.

“You’ve got a cost advantage and therefore it should in fact moderate the supply picture and underpin existing property values.”

Parsons said this is why it’s important investors not get caught up in time-worn cliches.

“Actually look at the real returns that the sector can produce and the drivers that are so important in determining that. 

“For us it’s about pricing power and capital management.”

Australian REITs have done pretty well in the last 12 months. The S&P/ASX 200 A-REIT index (ASX: XPJ) has risen 31.74% over that time.

More reading

• 3 exciting small cap ASX shares to watch in May
• The Australian Ethical (ASX:AEF) share price has surged 80% in 2021
• Can the Openpay (ASX:OPY) share price double in value?
• The RBA just told us what’s going to happen with interest rates
• Alliance (ASX:AQZ) share price edges lower despite positive update

Motley Fool contributor Tony Yoo 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 Bruce Jackson.

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As I’m a fan of small cap shares, I feel quite fortunate to have a large number to choose from on the Australian share market.

Three small cap ASX shares that stand out from the rest and could have bright futures are listed below. Here’s what you need to know about them:

Booktopia Group Ltd (ASX: BKG)

The first small cap ASX share to watch is Booktopia. It is an online book retailer which has been in fine form this year. For example, during the first half of FY 2021, the company reported a 51.1% increase in revenue to $112.6 million and a 502.3% jump in underlying EBITDA to $8 million. This was driven by the shift to online shopping and its new distribution centre. The latter allowed the company to take advantage of the increased demand by shipping more books than ever before. Positively, its strong form has continued since then. Last month it released its third quarter update and revealed a 53% increase in quarterley revenue.

Earlier this week, Morgans retained its add rating and lifted its price target to $3.54.

Nitro Software Ltd (ASX: NTO)

Nitro Software is another small cap ASX share to watch. It is a software company that is aiming to drive digital transformation in businesses around the world. Its main solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution. Nitro counts a number of the largest companies in the world as customers. This is a testament to the quality of its offering.

Morgan Stanley has an overweight rating and $3.70 price target on the company’s shares.

Universal Store Holdings Limited (ASX: UNI)

Universal Store is a fashion retailer which aims to deliver an ever-changing and carefully curated selection of on-trend products. Its strategy has been highly successful, helping Universal Store deliver a stellar half year result in February. For the six months ended 31 December, Universal Store reported a 23.3% increase in sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million. As with Booktopia, this has continued in the third quarter. It recently reported a 39.6% increase in quarterly sales.

This went down well with analysts at Morgans. The broker currently has an add rating and $8.37 price target on its shares.

More reading

• 2 exciting small cap ASX shares to watch
• Brokers name 3 ASX shares to buy now
• Booktopia (ASX:BKG) share price lifts on strong quarterly update
• Why Coles, Nickel Mines, Nitro, & Regis Resources are storming higher
• Why the Nitro (ASX:NTO) share price is surging 6% higher today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Booktopia Group Limited. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Australian Ethical Investment Limited (ASX: AEF) are currently trading at all-time highs, having surged more than 80% in 2021.

Investors have been scrambling to buy shares in the company since the start of the year. Read on to find out why the Australian Ethical share price is surging in 2021.

What is moving the Australian Ethical share price?

The initial catalyst that sparked investor interest in Australian Ethical can be traced back to the company’s quarterly update in early January.

The update notified investors that Australian Ethical increased its funds under management (FUM) to $5.05 billion for the quarter ending 31 December 2020. In addition to hitting a milestone of $5 billion, FUM surged 16.9% from $4.32 billion at the end of September.

Australian Ethical’s management noted that the increase in FUM was driven by the company’s exceptional investment performance and strong net inflows. This was reflected in a 22.4% quarter on quarter increase in Managed Funds FUM of $1.75 billion. In addition, Australian Ethical reported a 14.6% increase in Superannuation FUM to $3.3 billion over the period.

Investors have also been attracted to Australian Ethical given the global focus and shift to green energy. The Biden administration in the US has pledged $US trillion to climate-related policies over the next 8 years. As a result, companies like Australian Ethical which focus on environmental, social and governance issues are expected to benefit.

More on Australian Ethical

Australian Ethical is a funds management company that specializes in environmentally and socially responsible investing. The company’s business is divided into managed funds and superannuation funds.

The company’s managed funds segment provides investors with 8 different investment options. In addition, Australian Ethical’s superannuation business allows investors to build a retirement plan by investing in ethically sustainable businesses.

Earlier this year, Australian Ethical released its half year results for the 6 months ending 31 December. The company reported a 10% increase in operating revenue for the period of $25.6 million. The company attributed the growth to strong growth in new customers and positive investment performance.

However, Australian Ethical did report an 11% increase in operating expenses of $18.9 million. Management attributed the rising costs to continued investment in its brand, distribution capabilities and customer experience. As a result, Australian Ethical reported an underlying profit after tax of $4.9 million for the half.

More reading

• Here’s a secret hedge against rising inflation
• 3 exciting small cap ASX shares to watch in May
• Can the Openpay (ASX:OPY) share price double in value?
• The RBA just told us what’s going to happen with interest rates
• Alliance (ASX:AQZ) share price edges lower despite positive update

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Like many tech shares, it hasn’t been a great week for the Openpay Group Ltd (ASX: OPY) share price.

As things stand, the buy now pay later (BNPL) provider’s shares are on course to record a weekly decline of 6%.

This will mean the Openpay share price has lost 18% of its value since this time last month.

Is the weakness in the Openpay share price a buying opportunity for investors?

One broker that appears to believe this weakness is a buying opportunity is Shaw and Partners.

According to a recent note, the broker has a retained its buy (high risk) rating but cut its price target on the company’s shares to $4.00.

Based on the latest Openpay share price of $1.93, this price target implies potential upside of over 100%.

What did Shaw & Partners say?

Shaw and Partners was pleased with Openpay’s performance in the third quarter.

It commented: “OPY’s very positive – and accelerating – momentum has continued (very strong 1Q21, 2Q21 and 3Q21 results) with all growth metrics trending in the right direction (number of plans, number of customers, number of merchants, net bad debt, TTV) – all of which translate into solid revenue. Buy retained.”

And while it acknowledges that its bad debts as a percentage of transaction value increased beyond its target rate of 2.5%, it notes that management expects this metric to return to target levels in the short term.

Why is the broker bullish?

There are a number of reasons that Shaw and Partners is bullish on the Openpay share price. One of those is its massive market opportunity.

It explained: “Total Addressable Market (TAM) for BNPL globally is >US$6.5t (comprising US$5.5t, UK $0.63t, Australia US$0.32t and NZ US$0.1t) and OPY’s share of this US wallet is estimated at c. 15%, equating to a mammoth US$829b target market in the US alone.”

“A “back-of-the-envelope” sensitivity by Shaw and Partners with respect to the potential revenue impact of US penetration (market share vs. gross revenue yield) highlights that this significant scale, opportunity and revenue runway, based on relatively conservative assumptions, could potentially yield a quantum leap in revenue generation,” it added.

In addition to this, the broker believes its shares offer significant value for money in comparison to rivals Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

It notes that the Openpay share price is currently trading at a 35% discount to its BNPL peers on an FY 2021 EV/Sales multiple of 9.3x vs. combined 14.2x.

Overall, this could make it worth considering if you’re looking for exposure to the BNPL sector.

More reading

• The Afterpay (ASX:APT) share price breaks below $100
• Why the Afterpay (ASX:APT) share price is sliding 5%
• The Sezzle (ASX:SZL) share price is rising on new partnership
• Openpay (ASX:OPY) share price slides despite positive quarterly update
• How does Afterpay’s (ASX:APT) growth rates compare to peers?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was a bit of a non event really. On Tuesday, the Reserve Bank of Australia (RBA) held its monthly meeting, and… decided to leave interest rates unchanged at 0.1%.

It was a move that surprised absolutely no one. And nor should it have. The RBA has previously flagged that it did not intend to raise interest rates again until unemployment falls to a near full level and wages and inflation start rising. And it doesn’t reckon that will happen until 2024 at the earliest.

This bold and far-reaching prediction has certainly helped the Australian share market and the S&P/ASX 200 Index (ASX: XJO) over the past few months reach the precipice of its all-time high where it stands today. A growing economy with near-zero interest rates is about the best recipe you can get for higher stock prices.

But today the RBA also released its statement on monetary policy that it tends to do after its meetings. And it had some interesting tidbits.

First, the good news. The RBA noted that “the strong recovery in the Australian economy and the labour market has continued”. That last aspect was especially encouraging, with the bank going on to say “Employment has also bounced back, to be above its pre-pandemic level, and the unemployment rate has declined significantly from its peak in July 2020”.

RBA expects high growth, low inflation

But the bank’s outlook on inflation and spending was a bit more nuanced. The RBA noted that wage growth and inflation remained low.

On wage growth, the RBA stated that “pressures have been subdued across both the private and public sectors”, and noted that inflation is running at 1.1% annualised, far below its old target band of 2-3%.

However, the RBA also pointed out that Australian households still have an “unusually large amount of additional savings”. It said if this excess of savings results in stronger spending patterns than normal going forward, it could set off an economic chain reaction that would result in wages and inflation rising sooner than the bank expects, perhaps as early as mid-2023. That in turn may result in the RBA being forced to tighten rates earlier than it anticipates.

But just to be clear, that is not what the RBA is expecting. The bank made it very clear once again that it doesn’t see the monetary policy status quo changing until 2024. Here’s what the RBA closed its statement with:

The board is committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 percent target range.

For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest.

How’s that for certainty!

More reading

• Telstra (ASX:TLS) and 2 other dividend shares with yields over 6% today
• ASX tech shares are in a world of pain. There might be more to come…
• ASX 200 up 0.45%: Macquarie full year results & REA Group Q3 update
• 5 things to watch on the ASX 200 on Friday
• ASX 200 drops, Nearmap plunges, Appen declines

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

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The Alliance Aviation Services Ltd (ASX: AQZ) share price is slightly in negative territory during mid-afternoon trade. This comes despite the company announcing an update to its wet lease agreement with Qantas Airways Limited (ASX: QAN).

At the time of writing, the aviation services company’s shares are selling for $4.17, down 0.4%.

What did Alliance announce?

Investors appear unfazed by the company’s latest announcement, sending Alliance shares lower.

According to its release, Alliance advised that Qantas has exercised its option to call up 5 additional Embraer E190 aircraft. This follows a wet-lease agreement signed in early February, enabling Qantas to lend 11 aircraft based on market conditions.

Previously, Qantas asked Alliance for 3 E190 aircraft to service its route network, which is expected to commence 25 May.

However, with today’s update, Qantas will now take delivery of 8 aircraft. The E190 planes will be based in Adelaide and commence operating from 21 June 2021 onwards. Qantas recently created a new Adelaide-Gold Coast route which will service 4 times per week, beginning 25 June.

The planes are expected to compete for market share against Regional Express Holdings Ltd (ASX: REX) and ASX-delisted company Virgin Australia.

Alliance managing director, Scott McMillan welcomed the extended agreement, saying:

This is an exciting development for Alliance and further extends on previous wet leasing arrangements that Alliance has had with Qantas.

The extension of the arrangements with Qantas is also further confirmation that the E190 is the perfect aircraft to take advantage of the new route network that is developing in the post- COVID aviation recovery.

Each option has an initial 3-year period, with the remaining aircraft available at Qantas’ disposal.

About the Alliance share price

In the last 12 months, Alliance shares have climbed to register a 100% gain, with year-to-date performance just below 10%. The company has been on an upwards trajectory citing a recovery in the aviation sector from COVID-19.

At today’s prices, Alliance has a market capitalisation of roughly $670 million, with approximately 160.4 million shares on issue.

More reading

• Qantas (ASX:QAN) share price lower on ACCC update
• Could the grounded Qantas (ASX:QAN) share price take off in May?
• This ASX airline you never heard of could see 40% earnings boost
• Are ASX travel shares about to go through a big recovery?
• Brokers favourite ASX share for the COVID-19 reopening trade

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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The Mighty Kingdom Ltd (ASX: MKL) share price is flopping today as the company released its newest game, Peter Rabbit Run!

At the time of writing, Mighty Kingdom shares are down 4%, trading at 24 cents apiece.

Mighty Kingdom is a game developer that works with companies including Disney, LEGO, Australian Red Cross, Funcom, Rogue, and Snapchat. Some of its games include Sugar Slam, Ava’s Manor, Wild Life, Heart Lake Rush, Danger Days, and Shopkins.

Its latest is a venture with Sony Pictures, based on the upcoming film Peter Rabbit 2: The Runaway. The first film was a bust among the critics, but a boom at the box office. The second movie, although currently in delayed release due to COVID-19, is potentially set for similar results. 

Peter Rabbit Run! can be played on iOS and Android smartphones and tablets.

Peter Rabbit running for cover

It appears the mobile game will be a simple endless running format, somewhat in the spirit of the traditional Mario franchises. The developer is hyping the cuteness, calling it “cheeky”, “fun” and “adorable”. 

It’s unclear whether the game will be a freemium model or ad-supported. But it appears likely that Sony Pictures will have provided much of the funding as a way of building additional excitement around a potential third film and additional merchandising opportunities.

Mighty Kingdom managing director Phillip Mayes said the game release was another feather in Mighty’s bow:

We are extremely excited to have worked with Sony in seeing their vision for Peter Rabbit come to life at the cinema and via Peter Rabbit Run! It’s a strong validation of the Mighty Kingdom teams’ skills in developing this game for a global franchise.

Mighty Kingdom share price snapshot

Mighty Kingdom is a new face on the ASX after listing roughly three months ago. It debuted at 28 cents but fell immediately and, excluding a small recovery at the beginning of this month, has steadily lost value since.

More reading

• Mighty Kingdom (ASX:MKL) share price falls on ASX entrance

Motley Fool contributor Lucas Radbourne-Pugh 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a high. In afternoon trade, the benchmark index is up 0.3% to 7,083.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

CSR Limited (ASX: CSR)

The CSR share price is down 3.5% to $5.88. This decline appears to have been driven by a broker note out of Ord Minnett this morning. According to the note, the broker has downgraded the building materials company’s shares to a hold rating with a $5.50 price target. It made the move on valuation grounds following some strong gains.

Fonterra Shareholders’ Fund (ASX: FSF)

The Fonterra share price is down 4.5% to $4.05. This morning the dairy company’s shares returned from a trading halt after announcing the start of a consultation process. This process is seeking farmer feedback on potential options to change its capital structure. These changes could give farmers greater financial flexibility.

Nearmap Ltd (ASX: NEA)

The Nearmap share price has continued its slide and is down a further 5% to $1.72. Investors have been selling the aerial imagery technology and location data company’s shares this week after it was hit with legal proceedings. The company advised that rival Eagle View alleges patent infringement in relation to its roof estimation technology. Nearmap has denied any infringement and will defend the complaint.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price has dropped 6.5% to $42.89. This is despite there being no news out of the healthcare technology company. However, with a number of shares on high PE ratios coming under pressure, it isn’t overly surprising to see Pro Medicus trading lower. After all, its shares are currently changing hands for ~130x estimated FY 2021 earnings.

More reading

• ASX tech shares are in a world of pain. There might be more to come…
• ASX 200 up 0.45%: Macquarie full year results & REA Group Q3 update
• ASX 200 drops, Nearmap plunges, Appen declines
• Why Adore Beauty, Appen, Flight Centre, & Nearmap shares are sinking
• ASX 200 down 0.35%; NAB half year results, Nearmap crashes on legal threat

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. and Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Neometals Ltd (ASX: NMT) share price is slumping lower today. The falls come after the company released capital and operating cost estimates for its lithium battery recycling plant in Germany.

At the time of writing, shares in the lithium and vanadium specialist are trading at 52 cents each – down 7.14%. By comparison, the All Ordinaries Index (ASX: XAO) is 0.3% higher.

Let’s take a closer look at today’s update.

What’s up with the Neometals share price?

The Neometals share price is in the red after the company provided an estimate of the capital and operating costs for its 50%-owned Primobius commercial recycling plant in Germany.

The top-line figures, operating costs, were estimated at 1,470 euros per tonne of batteries processed. Meanwhile, the capital cost estimate is 150 million euros, including a 10% contingency.

Both the capital and operating cost estimates have increased from the company’s 2019 scoping study. Neometals claims the capital increase can be “largely attributed” to constructing its own building instead of engaging a commercial lease, more equipment to increase production, and relocating the site to Germany. Operating cost estimates are only up by around 5% from the scoping study.

According to Neometals managing director Chris Reed, the jump in operating costs is smaller than expected.

“Importantly, the operating costs have increased by less than 5% from our 2019 Scoping Study estimates despite the jump from lab to pilot-scale, and the site relocation from Kwinana to Germany,” he said.

Breaking down the operating cost estimate, Neometals expects to spend around 23% on labour, 33% on consumables and 26% on utilities. The remainder is allocated to administration and maintenance.

In further news possibly impacting the Neometals share price, the company highlighted that the price of several of its feedstock products has increased markedly since its 2019 scoping study.

For example:

• Cobalt sulphate is up 79.7% to US$11,051.
• Lithium chloride is 68.8% higher to US$8,440.
• Nickel sulphate increased 47.5% to US$4,868.

Management commentary

Mr Reed also said the following in today’s announcement:

We are extremely encouraged with the robust potential economics for Primobius’ first proposed commercial plant.

We took the conservative step to include the cost of constructing dedicated industrial buildings until such time as we are able to identify and agree terms to leased premises. Naturally, we expected the capital costs to increase in line with the change in scope and increased estimation accuracy levels.

The safe production of, amongst other things, cathode-grade nickel and cobalt sulphates from a variety of battery feedstocks, using our patent pending process, augurs well for achieving our ambitions to build Europe’s leading sustainable recycling solution.

Neometals share price snapshot

Over the past 12 months, the Neometals share price has increased by around 250%. Since the beginning of 2021, it’s also jumped by around 90%.

Neometals has a current market capitalisation of $305 million.

More reading

• Why is the Neometals (ASX:NMT) share price in a trading halt today?
• Neometals (ASX:NMT) share price slides on dual-listing update
• What’s happening with the Neometals (ASX:NMT) share price?
• Why the Neometals (ASX:NMT) share price has surged to a 52-week high
• Why the Neometals (ASX:NMT) share price is shooting 8% higher

Motley Fool contributor Marc Sidarous 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 Bruce Jackson.

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ASX iron ore producers are in the spotlight today as the commodities price touched another record high overnight.

The iron ore price rose 5% overnight to reach a new record high of US$202.65 a tonne on the S&P Global Platts index today, reported the Australian Financial Review (AFR). It has easily surpassed its previous record of US$193.85 a tonne, set late last month.

As Australia is the largest source of China’s iron ore, the increasing political tensions have meant another boost to the commodities price. Particularly, as China is ramping up its domestic constructions activities and increasing its demand for steel.

New tensions driving iron ore

The surge in the price of iron ore comes as China’s National Development and Reform Commission released a statement yesterday declaring the nation will halt all activities under the China-Australia Strategic Economic Dialogue. 

Australia’s Minister for Trade Dan Tehan said while the commission’s decision was disappointing, Australia remains open to dialogue and engagement with China at the Ministerial level.

It is disappointing to hear that the NDRC has made this decision. The Strategic Economic Dialogue, which was last held in 2017, is an important forum for Australia and China to work through issues relevant to our economic partnership.

— Dan Tehan (@DanTehanWannon) May 6, 2021

https://platform.twitter.com/widgets.js

 

S&P Global Platt’s head of iron ore pricing Niki Wang was quoted by the AFR as saying:

A few traders told us they see it as a potential risk on the Australia cargoes supply and suspect the paper market will be pushed up on the news…

While the impact on iron ore business shall be limited from what our sources can see for now, the market really seems to be waiting for clarity.

ASX companies to keep an eye on

We’re yet to see any large reaction from ASX-leading iron ore producers to the commodities record high price.

Shares investors might be inclined to shine the spotlight on iron ore miners including Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO), and BHP Group Ltd (ASX: BHP).

Today, the Fortescue share price is leading the pack with a 1.2% gain. The Rio share price is the next best, showing a 0.6% gain, while BHP is trailing behind with a share price gain of 0.2% today.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.3%.

More reading

• A2 Milk (ASX:A2M) share price falls as China suspends dialogue
• Why ASX miners are cheering record high shipping costs
• The ASX 200 is within an arms reach of all-time record highs
• These ASX uranium shares are surging this year. Here’s why
• a2 Milk and Zip were among the most traded ASX shares last week

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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