Traders lick their lips when a bit of turmoil hits the markets. The collapse of Lehman Brothers and the 'rescue' of Merrill Lynch has been just the catalyst for a decent sell off and I reckon this is creating some very nice opportunities.
One trade that I have been eyeing for a while has been going long Platinum producer Impala Platinum.
The thinking around this is three fold.
1. The currency - The Rand / Dollar is slipping. SA resources run hard when the Rand slips. I believe that breaking the R8 mark was critical and I'm thinking we are about to see some sell off of the Rand. (Although I cant say where the money is going to).
We have seen emerging market currency sell offs before and when they happen, they happen FAST.
2. Plat stocks have taken a bit of a hit in the last few weeks and the junior miners are taking some pain. I think there is time for a bit of consolidation
3. Impala has some very nice assets that the market has completely discounted in Zim. IF this power sharing detail provides even a semblance of political stability and its game on for these assets.
Bit of a cheap and nasty punt but lets see how it goes. Entered a call warrant with IMP trading at R189....
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Bloomberg:
Impala Sees `Strong Buying' From Jewelry Industry, China
By Carli Lourens
Sept. 15 (Bloomberg) -- Impala Platinum Holdings Ltd., the world's second-biggest platinum producer, is seeing ``strong buying'' from the jewelry industry, particularly in China.
``The markets are not necessarily in as bad a shape as they're made out to be,'' Chief Executive Officer David Brown said in an interview today. The jewelry industry should have ``quite a successful year,'' he said, adding it's too soon to say whether overall demand for platinum will increase or decrease.
Read the complete article here:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ayaGJKFf61X0
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