We initiated the bear on the basis of it being a short post the spinoff and the re-concentration of the market on its remaining commodity exposure.

Since initiation we are +9.68% absolute and 5.512% rel  without a significant move lower in oil or iron ore.

While we still think this will transpire over the next quarter, we take the opportunity to take profits on half the position at the important 13 pound level.



Tuesday • 19 May 2015 • 08:01

S32 closed at 108p yesterday and is going to open up again this morning. BLT traded down 70p. So immediate value creation.

BLT now trades on more than 25x spot commod prices, with more than 70% exposure to Oil (rally in the price) and Iron Ore (in continued structural decline).

The yield will continue to be cited as a reason not to sell, until it isnt. The current div requires ongoing cash burn, or continued efficiency exercises that can’t last forever.

After a period of mining outperformance as part of the unwind; dollar weakness, commod strength etc, and the market seemingly finding it’s feet, we think the near term catalyst is out of the way, and it is a good trading short opportunity.