What Happened to Alumina’s Share Price?
Shares in bauxite miner and aluminium smelter Alumina Ltd [ASX:AWC] rallied hard today, outperforming a buoyant Australian stock market to gain almost 4.5%. Alumina shares are now at a multi-year high after enjoying a strong July.
Why Did This Happen to AWC Shares?
This price action shows how political events can turbocharge the performance of a good stock.
On the fundamental side, the market seems to be pricing in rosy expectations about growth in the alumina price.
On the political side, the resource markets have eagerly awaited the outcome of Indonesia’s presidential election.
In January, Indonesia introduced a mineral export ban. The decision stopped bauxite from leaving Indonesia’s shores. This ban gives a larger market opportunity to companies like Alumina.
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The man confirmed today as Indonesia’s next president, Joko Widodo, has previously stated he intends to keep the ban.
This increases the chance that Chinese importers of bauxite, alumina and aluminium will rely more and more on suppliers like Alumina Ltd. That enthusiasm is underpinning today’s strong price action.
What Now For Alumina Ltd?
Alumina is a solid blue chip play on growth in the global bauxite market. But we’ve found a tiny Aussie stock with supercharged exposure to the same themes. It’s a speculative, risky shot…but an investment could potentially bring you bumper profits.
Cheers, Tim Dohrmann+
Small-Cap Analyst, Australian Small-Cap Investigator
Join Money Morning on Google+
The post Why the Alumina Ltd Share Price Amped Up Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
