Broker Spotlight

Broker Spotlight brings some of the more intriguing and topical analyst coverage to centre-stage. The daily column aims to illuminate thoughts and opinions behind the big stories.

London is one of the financial capitals of world. The influential and closely followed views of its analysts regularly move markets and split opinion. The Broker Spotlight column arms Proactive readers with the added insight from the often colourful thoughts and headline-grabbing valuations from the City’s analyst community.

14th Oct 2011, 3:55 pm

The mining sector was the focus of attention for UBS today with Rio Tinto (NYSE:RIO), Glencore (LON:GLEN) and European Goldfields (TSE:EGU) as the Swiss bank's top picks in the sector.

In a note, analyst Miles Allsop commented that the outlook for commodities and mining had “turned more constructive”.

“Strategically we have had a consistently bearish top down call on the miners and the commodities from February,” said the analyst.

“We now believe valuation, positioning, China policy stance and dollar fund flow are now more attractive.”

Its 'most preferred' commodities are thermal coal and iron ore, while nickel and aluminium are least preferred.

Rio is chosen for its exposure to the iron-ore market and Glencore for its coal assets and unique financing and marketing abilities. European Goldfields “makes for an attractive M&A target”, says UBS.

Elsewhere, Goldman Sachs highlighted energy services provider Hunting (LON:HTG) as one of its top picks in the oil services sector and rated the stock a ‘conviction buy’ with an 815 pence a share price target (current price: 648 pence).

Initiating coverage this morning, the blue-chip bank said: “Hunting has built a portfolio of premium equipment suited to challenging onshore shale and deep water plays.

“Recent acquisitions have enhanced the group’s presence in the US market. Reflecting its strong position in these high-growth segments, we forecast above consensus growth and expanding returns.”