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Most Australians might have at least heard of the Future Fund – Australia’s official sovereign wealth fund. But odds are it plays a very minimal role in the lives of most Australians. Let alone mental space in their investment or retirement planning.

Yet this is something we could well see in the future.

If you’re not familiar with the Future Fund, it was established in 2006 as an independently managed sovereign wealth fund. It was initially intended to help the federal government fund existing public service superannuation liabilities.

Interestingly, it was first funded with one of the government’s tranches from the sale of Telstra Corporation Ltd (ASX: TLS) shares.

What is the Future Fund?

Over the past 15 years or so, the capital in the fund has been prudently invested in growth investments by the Future Fund’s board. Just last week, we found out the Future Fund’s assets now total a whopping $196.8 billion. That was after the fund managed to bring home a 22% annual return in the 2021 financial year.

These stellar returns, the best in the Future Fund’s history, have sparked calls for a shakeup in the national superannuation retirement scheme.

This shakeup would result in the Future Fund providing superannuation services for Australians. This would be in addition to its more traditional role of strengthening the government’s long-term financial health.

These calls have come from some high places too. According to a recent report in the Australian Financial Review (AFR), Senators Andrew Bragg (Liberal) and Andrew Leigh (Labor) are both on board.

Both senators have been urging the Productivity Commission to release research that it has conducted into the performance of the Future fund against the performance of the superannuation sector.

A super Future?

Senator Bragg has reportedly already released a discussion paper on this matter. In this paper, he argued that the Future Fund should become the “default super fund for the nation’s workers”. It’s a view that’s also supported by current Future Fund chair and former treasurer Peter Costello.

“There would be huge economies of scale,” Costello told the AFR a few years ago. “The government has decided [savers’ money] should go into the super system. It could show some interest in managing it in a cost-efficient way.”

This view is backed by Senator Bragg, who also told the AFR:

I think having a simple product on the table in a compulsory system could actually be quite engaging… The Future Fund has done a good job. It hasn’t any new money for a long time and it still performs strongly. There are a lot of funds that perform very, very poorly, despite having truckloads of money coming in the door every single year.

With the government’s new Your Super, Your Future reforms recently implemented, it looks as though the government has decided on some alternative reforms for the superannuation industry at present.

But what if the Future Fund continues to deliver returns that make other super funds blush? If that happens, we can be sure this won’t be the last time we hear calls for a Future Fund super scheme.

The post Your super fund could be run by the Future Fund one day appeared first on The Motley Fool Australia.

More reading

• The Macquarie Group (ASX:MQG) share price smashed its record high on Thursday
• Which ASX 300 shares are the biggest winners and losers on Thursday?
• ‘Price makers’: 2 ASX shares to protect against inflation
• The Regis Resources (ASX:RRL) share price is falling on Thursday
• Tyro (ASX:TYR) share price edges higher as CEO calls for open borders

Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation 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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The Macquarie Group Ltd (ASX: MQG) share price has spent today’s session in the green.

In early trade Macquarie shares reached their all time high, touching an intraday high of $168.50 before tracing back down, where they are currently exchanging hands at $167.50 apiece.

In addition, whereas the S&P/ASX 200 index (ASX: XJO) has posted a return of 0.9% over the past month, the Macquarie Group share price is 7% in the green.

What tailwinds are behind the Macquarie Group share price?

Macquarie shares had a strong August, having climbed from a low of $155.61. That signifies an 8% gain from the record high described earlier in this article.

A positive broker note out of investment firm Morgans highlighted Macquarie’s exposure to infrastructure and alternatives as a plus for the investment case on Macquarie’s shares.

It reiterated its add rating, implying a buying opportunity, and backed this up by assigning a price target of $172.30.

In addition, the bank also issued a capital note offering that is set to inject a further $500 million in liquidity to enhance the company’s expansion opportunities. The financing is only costing Macquarie 2.9% per annum, however, the effect on its balance sheet is meaningful.

There is also positive sentiment in the ASX-listed banking basket, which may be lifting the Macquarie share price.

We can see this in two ways. Firstly, the S&P/ASX 200 Banks index (ASX: XBK) is up almost 4% over the month and around 26% over the year. That’s well ahead of the broad index.

Then when we look at the Betashares Australian Financials Sector ETF (ASX: QFN) we can see it is up 5% on the month, and also up 23% year to date.

Judging from these two indicators that serve as relevant proxy’s to gauge investor sentiment, it appears that the basket of Australian Financials sector shares, including banks like Macquarie, are exhibiting strengths across the board.

There is no market sensitive information for the company of late. Therefore, it stands to reason that investors are pushing the Macquarie Group share price higher on the back of these tailwinds.

Macquarie Group share price snapshot

The Macquarie Group share price has posted a year to date return of 21%, extending the previous 12 month’s gain of 31%.

These results have outpaced the broad index’s climb of around 25% over the past year.

The post The Macquarie Group (ASX:MQG) share price smashed its record high on Thursday appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any 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 owns shares of and has recommended Macquarie Group 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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The S&P/ASX 300 Index (ASX: XKO) is continuing its run into negative territory today following the wrap-up of earnings season.

At the time of writing, the ASX 300 is down 0.71% to 7,475 points. This means the index has almost erased its August gains, sitting relatively flat for the last month.

Let’s take a look at which ASX companies are leading the charge today.

Paladin Energy Ltd (ASX: PDN)

The Paladin share price is again topping the charts, surging another 10.17% to a multi-year high of 65 cents.

The uranium producer has not released any market-sensitive news since its full-year results last Friday. However, in the annual report, the company did highlight progress on the Langer Heinrich Mine.

It appears investors are valuing Paladin shares at a bargain considering they have lifted by more than 30% in the past week.

Coronado Global Resources Inc (ASX: CRN)

Another big mover on the ASX 300 is the Coronado share price, up 6.59% to $1.172.

The coal miner also hasn’t reported anything new since its half-year results in mid-August. However, the spot price of coal has picked up steam since August 20, reaching a new record high of US$174.60 per tonne.

No doubt, this will translate into bumper profits for the company’s second half of FY21.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price is pushing 4.7% higher to $14.03 following director purchases over the last few days.

This comes after investors were initially spooked by the IT distributor’s chair and CEO David Dicker selling his shares. However, the share price weakness has presented a buying opportunity for some board members.

Dicker Data shares reached a record high of $16.60 last Thursday after reporting its FY21 interim results.

And the biggest fallers?

BHP Group Ltd (ASX: BHP)

The worst performer on the ASX 300 today is the BHP share price, down 6.84% to $41.95.

While no market-sensitive news has been released by the company, the share price fall can be attributed to BHP going ex-dividend today.

The board declared a fully franked final dividend of US$2.00 per share, which will land in shareholder accounts on 21 September.

United Malt Group Ltd (ASX: UMG)

Lastly, United Malt shares also crashed on Thursday, declining 6.48% to $4.115.

The commercial maltster released its full-year scorecard to the market late yesterday afternoon, recording significant one-off expenses. This weighed down the overall result along with recent COVID-19 restrictions affecting consumption in Asia and Australia.

The post Which ASX 300 shares are the biggest winners and losers on Thursday? appeared first on The Motley Fool Australia.

More reading

• Why BHP, NIB, Northern Star, & Redbubble shares are tumbling lower
• ASX 200 midday update: BHP sinks, Flight Centre expansion
• Why the BHP (ASX:BHP) share price is down 7% today
• Here’s why the BHP (ASX:BHP) share price is down 7% today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data 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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Even though the market was obsessed with post-COVID inflation for the first few months of this year, that talk seems to have completely quietened down now.

With the Delta variant of COVID-19 plunging half of Australia into lockdown, the focus is now understandably on yet another recovery out of the pandemic.

But AMP Capital portfolio manager Dermot Ryan reckons rising inflation is still as relevant as ever for investors.

“Many economists seem unconcerned about the potential rise in inflation, often citing the current lockdown-induced slowdown. Some are even talking about a recession,” he wrote on the AMP Capital blog last week.

“We don’t believe we are in a recession. We are in a lockdown.”

He concedes growth might be lost this quarter, but the economic environment is still very “stimulatory”.

Look for ‘price-maker’ ASX shares to thrive in inflation

According to Ryan, in inflationary times like these, the best shares to buy are for businesses that can set their own price.

“We believe that quality companies that have price-making abilities, as opposed to price taking, in an inflationary environment, should be able to increase profit margins,” he said.

“If a company can push up the prices of its goods and services as costs rise, it potentially can increase its margins. We believe these types of companies would be attractive businesses to invest in.”

We already saw an example of this globally last month when US technology giant Microsoft Corporation (NASDAQ: MSFT) raised prices for its ubiquitous Office 365 business subscriptions.

According to CNBC, the rise was the first significant price change since the cloud software launched 10 years ago.

Microsoft could do this without fearing major customer churn because of its dominant market position and how valuable its products have become to its business clients.

Ryan told The Motley Fool that 2 local examples of such ‘price-maker’ businesses are Brickworks Limited (ASX: BKW) and APA Group (ASX: APA).

“Price-makers are generally companies with strong moats,” he said.

“In infrastructure, regulated returns are sometimes based on a weighted-average cost of capital and they have inbuilt inflation hedges as well. We expect both real estate and infrastructure assets should continue to perform well, as long as inflation expectations don’t get too high as these sectors generally rely [on] a high level of debt.”

Energy infrastructure provider APA Group has seen its shares lose 7.8% this year. Meanwhile, shares for constructions materials maker Brickworks have spiked up more than 22.6% in 2021.

Ryan also liked the pathology area of healthcare as another industry that has price-setting power.

“Pathology players are experiencing increased costs, because there are a lot more collections going on as a result of COVID-19 testing,” he said.

“They are able to pass through higher prices and they operate on very strong margins in our opinion. They are also experiencing operating leverage from increased volumes going through their businesses.”

The post ‘Price makers’: 2 ASX shares to protect against inflation appeared first on The Motley Fool Australia.

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• The Brickworks (ASX:BKW) share price is now trading on a forecast 2.5% fully franked dividend yield
• APA Group (ASX:APA) share price plunges on flat earnings growth in FY21
• Why the Brickworks (ASX:BKW) share price has beaten the ASX 200 in the last year
• 2 ASX dividend shares rated as buys by brokers

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo owns shares of Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft. The Motley Fool Australia owns shares of and has recommended APA Group and Brickworks. 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 Regis Resources Limited (ASX: RRL) share price is in the red today despite no news having been released by the company.

However, the price of gold is also falling today and might be dragging the gold miner’s shares down with it.

Right now, the Regis Resources share price is $2.40, 3.23% lower than its previous close.

Let’s take a closer look at Regis’ bad day on the ASX.

Regis struggles on Thursday

The Regis Resources share price is sliding today despite silence from the company.

However, while there’s not much talk from Regis today, it’s among many gold companies struggling alongside the price of gold.

The price of gold has spent most of today trending lower. Right now, it’s US$1,814.60 an ounce, US$1.40 lower than it ended yesterday.   

According to reporting by Reuters, while most of Australia slept, the price of gold was falling alongside the US dollar. The trend now seems to have continued beyond the US’s bedtime.

The publication states the US dollar was being weighed down by a US national employment report that found the nation’s private employers’ employment figures were below expectations.  

The ASX 200 gold sector is also a sea of red. Other gold-producing giants struggling include Newcrest Mining Ltd (ASX: NCM), Northern Star Resources Ltd (ASX: NST), and Evolution Mining Ltd (ASX: EVN). Their share prices are down 1.53%, 2.37%, and 2.63% respectively.

Regis Resources share price snapshot

Today’s flop has added to the Regis share price’s recent woes.

At the time of writing, it is 35% lower than it was at the start of 2021. It has also fallen a whopping 53% since this time last year.

At its current share price, Regis has a market capitalisation of around $1.8 billion.

The post The Regis Resources (ASX:RRL) share price is falling on Thursday appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why Bubs, Harvey Norman, Mesoblast, & Regis shares are dropping
• Regis Resources (ASX:RRL) share price slides as profits fall 27% in FY21
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Tyro Payments Ltd (ASX: TYR) share price is back in the green, up 0.67% to $3.77 at the time of writing, after earlier posting losses of 1.0%.

Last week, on 26 August, the ASX payments company reported record results for the full 2021 financial year.

Today, in a statement unlikely to have an immediate material impact on Tyro’s share price, the company’s CEO, Robbie Cooke, called for Australia’s state borders to reopen once the nation hits a 70% vaccination level.

What did Tyro’s CEO recommend?

Noting that most of Tyro’s customers are involved in the retail and hospitality sectors, Cooke called on the government to offer a clear reopening plan following a new wave of COVID-19 lockdowns.

As reported by The Sydney Morning Herald, Cooke said it wasn’t a “sensible nor sustainable proposition to have the state borders locked down“.

Cooke was quoted as saying:

Once all jurisdictions get to 70%, governments across the country need to act in a coordinated way. It is exceptionally damaging for businesses if Queensland is locked down and the rest opens up, it does not make sense. It’s going to be damaging for Queensland businesses.

Different states have been spruiking different reopening plans. And a lack of clarity remains about the future of vaccine passports and whether vaccines can be made mandatory.

With those issues in mind, Cooke said, “The [federal] government has to give businesses certainty around what they need to do and how they need to open themselves back up.”

Tyro share price snapshot

The Tyro share price is up 12% year-to-date, just edging out the 11.6% gains posted by the S&P/ASX 200 Index (ASX: XJO).

Over the past month, Tyro’s share price has gained 7.4%, while the ASX 200 has slipped 0.4% into the red.

The post Tyro (ASX:TYR) share price edges higher as CEO calls for open borders appeared first on The Motley Fool Australia.

More reading

• Tyro (ASX:TYR) share price lifting off on record FY21 results
• Potential buys: 2 compelling ASX payment shares
• These 2 hot ASX shares take up 20% of our fund: manager

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tyro Payments. 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 Archer Materials Ltd (ASX: AXE) share price has bolted out of the gates in today’s session.  

Despite not releasing any news, shares in the high-tech materials company are flying more than 7% higher.

Let’s take a look at why investors may be bidding the Archer Materials share price higher today.

What’s moving shares in Archer Materials?

Archer Materials hasn’t released any price-sensitive news that could explain today’s bullish price action.

However, the company did release an update yesterday regarding the sale of its mineral exploration business to iTech Minerals Ltd.

Archer has agreed to sell its mineral exploration business to iTech, in return for 50 million iTech shares.

These shares will be distributed to Archer shareholders and are subject to iTech completing its initial public offering (IPO).

According to yesterday’s announcement, iTech has opened its IPO today and is expected to list on the ASX in late October.

As a result, the Archer Materials share price could be on the receiving end of more investor interest today.  

Other than that, the last time Archer Materials released any price-moving updates was late last month.

Patent issues plague Archer share price

Late last month, shares in Archer Materials came under pressure following media speculations regarding its patent application in Australia.

The company rejected the accusations made against its CQ quantum computer chip patent.

Despite the company refuting the claims, shares in Archer tanked more than 15% on the day.

As a result, today’s bullish price action could be investors snapping up shares in the materials company after its fall.

Snapshot of the Archer Materials share price

Archer is a technology company that operates within the semiconductor industry.

The company has a vast pipeline of semiconductor devices that are in various developmental and commercialisation stages.

Shares in Archer Materials recently rocketed to a record high of $3.08 last month, following a patent update.

Since hitting those record highs, shares in Archer have nearly halved.

Despite the sell-off, the Archer share price remains more than 232% higher since the start of 2021.

At the time of writing, shares in Archer are trading more than 4% higher for the day.

Shares in the company were up more than 7% earlier, after hitting an intra-day high of $1.76.  

The post The Archer Materials (ASX:AXE) share price is flying 7% higher today appeared first on The Motley Fool Australia.

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• Why the Archer Materials (ASX:AXE) share price is plunging 15% today
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• Archer Materials (ASX:AXE) share price surges 30% on patent update
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Motley Fool contributor Nikhil Gangaram 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 Bruce Jackson.

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Holders of Mesoblast Limited (ASX: MSB) shares have responded positively to assurances from the company’s CEO that the US Food and Drug Administration (FDA) has not halted the development program of its key drug.

According to reporting by the Australian Financial Review (AFR), the Mesoblast share price has been sliding this week on news the FDA is upping its scrutiny of remestemcel-L.

In Mesoblast’s report for the financial year 2021, it stated the FDA has recently stipulated the company needs to provide potency assays before commencing a newly required additional clinical study. Only then, might the FDA approve remestemcel-L for emergency use to treat acute respiratory distress syndrome (ARDS) in COVID-19 sufferers.

The AFR quoted Mesoblast CEO, Silviu Itescu:

As Mesoblast has told the market, it is planning to meet with FDA in the coming quarter to present data on the potency assay for remestemcel-L in the treatment of children with acute GVHD.

The potency assays for remestemcel-L’s trial to treat pediatric steroid refractory acute graft versus host disease (SR-aGVHD) will likely be cross-referenced in the company’s submission for emergency use authorisation to treat ARDS in COVID-19 sufferers during the pandemic.

The Mesoblast share price fell 5.7% yesterday to finish the session trading at $1.57. It also dropped 15.3% on Tuesday after it released its FY21 earnings.

However, Mesoblast shares are gaining today. Right now, the Mesoblast share price is $1.61, 2.3% higher than yesterday’s close.

Let’s take a closer look at the assurances from the biotech company’s CEO.

Mesoblast shares gain as remestemcel-L still on FDA’s cards

The company announced results from a trial of remestemcel-L’s ability to treat ARDS in April. It found remestemcel-L reduced mortality in patients placed on ventilators after contracting COVID-19.

Following the positive result, the company decided to pursue emergency use authorisation to use the drug to treat ARDS.

However, the FDA thwarted Mesoblast’s plan to fast track the authorisation process by requiring the company to complete an additional clinical study to support remestemcel-L’s emergency use authorisation.

This week, Mesoblast announced the FDA has asked it to provide potency assays before the added clinical study begins.

Mesoblast is hoping to get FDA approval to use remestemcel-L to treat SR-aGVHD in children in the future.

The drug has also been used in a controlled study for its potential to treat inflammatory bowel conditions.

FDA negotiations may not be the only weight the Mesoblast share price is battling against.

As The Motley Fool Australia reported on Tuesday, Mesoblast lost US$98.8 million in FY21 and ended the period with just US$136.9 million left in its coffers.

The post Mesoblast (ASX:MSB) shares rise as CEO reassures market on new FDA questions appeared first on The Motley Fool Australia.

More reading

• ASX 200 rises, Harvey Norman falls, Mesoblast sinks
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• ASX 200 midday update: Harvey Norman’s record profit, PointsBet posts large loss

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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There’s a new kid on the block when it comes to Aussie fintech. The company is known as Refundid, and the Aussie start-up is already turning heads with its backing by the venture arm of buy now, pay later provider, Afterpay Ltd (ASX: APT).

Refundid is garnering the interest of investors as it streamlines the online shopping experience. Much like Afterpay, this startup is making an effort to remove a historical pinch point for shoppers. Today, the Sydney-based startup is in focus after raising $3 million in a funding round led by AP Ventures.

Kind of like Afterpay, but reversed

The first question that probably comes to mind — “what does Refundid do?”. Well, the fintech company gives customers the ability to receive a refund within 30 seconds. On the Refundid website, it is outlined as a simple 1, 2, 3 process. Select the items you want to return, get the money back almost instantly, and then supply a tracking number.

In a way, the value proposition to customers is very Afterpay-esque… people want what they want, and they want it now. While Afterpay delivers this by allowing customers to get the product upfront and pay for it later, Refundid reverses it by the customer getting paid and returning the product after. In essence, it’s all about putting the customer first, which is the stereotypical retail adage.

The company was started by the four co-founders, Brad Karney, Judd Katz, Joel Aaron, and Ilan Kessler. Originally, the idea was born out of frustration when one of the founders was forced to wait 6 weeks for a refund after returning an online purchase.

In an interview with The AFR, Refundid co-founder Brad Karney said:

If you mess up the refund experience, the customer is not going to return. One of the biggest uncertainties for customers shopping online in this new era of e-commerce is am I going to be able to get my refund back?

What we’re doing is providing confidence to the customer … if they see [the retailer] offers Refundid, they can see they can get that refund back instantly and that gives them the confidence to purchase more.

In short, the value to merchants would be increased sales as customers can shop and return as needed stress-free.

Refundid gets cash injection

The exciting news today is that Refundid has caught the backing of some big names for $3 million in funding. The capital raise was 3 times oversubscribed, counting AP Ventures as a strategic investor.

While Refundid might be early in its journey, it already has some big retailers onboard. These include Culture Kings, Universal Store, and General Pants Co.

Reportedly, Afterpay’s AP Ventures could play a pivotal role in future synergies and expansion. Unfortunately for retail investors, unlike Afterpay, Refundid is not listed on the ASX.

The post Refundid rides the Afterpay (ASX:APT) wave with $3m funding round appeared first on The Motley Fool Australia.

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• Afterpay (ASX:APT) ‘Touch Ventures’ eyes IPO
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• How do you value the Afterpay (ASX:APT) share price?
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Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended 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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The Fortescue Metals Group Limited (ASX: FMG) share price is wobbling today. After hitting an intraday high of $20.42 shortly after open, it dropped as low as $20.20 around noon but has since bounced back to $20.38. That’s a gain of 0.25% on yesterday’s closing price.

We take a look at what could be affecting shares in the iron ore producer.

Iron ore prices slide to 7-month low this week

The Fortescue share price fell 3.19% on Wednesday, broadly coinciding with the continued weakness in iron ore prices.

Spot prices plunged on Wednesday, falling $10.24/t to US$143.43/t, according to Fastmarkets MB.

Prices continued to fall “amid more expectations for crude steel production curbs for the remainder of 2021”, said Fastmarkets.

‘Cloudy outlook’ for China

China’s demand for iron ore is expected to drop off in the second half of the year as the country aims to flatline its steel output.

In an article featured on Mining.com, UBS analysts said: “We expect China’s steel curtailments to be targeted in 4Q when demand slows seasonally and air pollution is in focus (especially ahead of the Winter Olympics in Feb 22) and as a result we expect prices to stabilise in Sept/Oct before continuing to fall back below $100/tonne in 2022.”

If UBS analysts are correct about iron ore prices falling below US$100/t next year, the Fortescue share price could be in for a bumpy ride.

Additionally, China’s factory activity fell into contraction in August for the first time since April 2020.

COVID-19 containment measures, supply bottlenecks and higher raw material prices were to blame, according to Reuters.

“The slowdown in the manufacturing sector underscores the fragility of the ongoing economic recovery and the impact of strict coronavirus curbs in the country, backing expectations Beijing will roll out more support measures to revitalise growth.”

Fortescue share price in deep red

The Fortescue share price is well into negative territory year-to-date, down about 18%.

Investors might want to watch out for its shares going ex-dividend next Monday, 6 September.

The post Fortescue (ASX:FMG) share price under pressure as iron ore slides to 7-month low appeared first on The Motley Fool Australia.

More reading

• This leading broker tips Fortescue Metals (ASX:FMG) share price to rise by 42%
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• These were the worst performing ASX 200 shares in August
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Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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