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LYC

Lynas Corp Positive Update. Time To Buy?

Stuart Lucy

Stuart Lucy is an Investment Specialist at the Australian Stock Report, and has gained exposure to funds management and investment banking throughout his career. He draws on this experience to provide macroeconomic commentary and actionable investment insights to clients. Stuart is responsible for writing reports, is involved in delivering Macrovue webinars and provides general advice to our members on portfolio construction. Stuart currently holds RG146 General and Securities qualifications.

Lynas Corp Ltd (ASX: LYC) has rallied over 5% this morning after issuing a positive update on the export of WLP. Malaysia’s Prime Minister made some positive comments regarding the renewal of the companies operating license, allowing them to conduct mining activity in Malaysia.

lynas-corp-LVC-share-price

Lynas will not have to export their WLP residue, a waste product of mining activity, allowing them to boost mining activity and increase profits. Despite this announcement not being formally confirmed by the Malaysian Government, the positive comments from the Prime Minister were enough to cause the company to rally strongly at the open in Australia. This is because the regulatory risk was a major concern for the business, and the recent comments from the Malaysian PM result in investors pricing in lower levels of regulatory risk.

The Malaysian media is split on the issue, with some commentators saying the company should buy an uninhabited island and ship waste there. Lynas will be waiting for another announcement in mid-August, where the Malaysian cabinet is expected to formally confirm the move. While it is hard to tell with a high degree of certainty the chance of approval that the market is pricing in, the stock may still rally on a positive update. Lynas has been a top performer since the start of the year, with shares rising by over 70% as positive business and regulatory markets were well received by investors. The company currently has a market cap of $1.75bn and is in the ASX 200 index.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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