The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Rio Tinto (Q4 update 16 January)
Iron ore's recent surge will likely help burnish Rio Tinto's statement. Although, we’ll have to wait for the full numbers for a real assessment of just how well the firm has done after the rally in prices. Meanwhile, a solid balance sheet and manageable levels of debt help to make the shares attractive. A 5.1% yield remains competitive in the broader FTSE 100, and at 11 times forward earnings there seems to be plenty of upside in the valuation case.
The recent surge has seen Rio Tinto hit its highest level since 2011. Pullbacks have been firmly bought, so we would look for similar dips as more attractive entry points, rather than chasing the current rally. Support is possible at £38.32 and then £37.17, while on the upside, the highs of 2011 at £46.23, and then £47.18, come into view.