Bank of America Merrill Lynch’s nine-person squad under the direction of Jason Fairclough and Eduard Faritov rises one rung to top this lineup for the first time. “I consider them to be intellectually astute,” applauds one fan of the team. China’s macroeconomics underpin the performance of the region’s metals and mining shares, according to the analysts, who work out of Cape Town, Johannesburg, London and Moscow. “Lately, Chinese property prices have rolled over and housing sales have slowed. This is a key driver for the sector globally, with China consuming around 50 percent of most metals,” explains Fairclough, 43. “As such, any Chinese government policy response will be key.” Regarding specific commodities, they expect supply for iron ore to outstrip demand in the near term, while the fundamentals for nickel and copper “look more compelling,” he adds. The BofA Merrill team’s sector favorite is Russia’s MMC Norilsk Nickel, a base and precious metals mining company that is the world leader in the nickel and palladium production. In May the researchers raised their target price for its American depositary receipts from $20 to $25, on the belief that the stock will benefit from a continuing Indonesian nickel export ban — a ban that has resulted in strong performance for nickel, which accounts for 40 percent of the company’s revenue. Another catalyst for the stock is management’s commitment to paying a combined 40 percent dividend yield for three years, adds Faritov, 39. Fairclough joined Merrill Lynch & Co. a dozen years ago, after working as a mining engineer in Canada, Russia and South Africa for Kvaerner Metals and Davy International. He earned a bachelor’s degree at Queen’s University at Kingston in Canada and an MBA at the University of Chicago. Faritov graduated from INSEAD with an MBA and holds a master’s degree in economics and Oriental studies from Russia’s Far Eastern State University. He covered autos and transportation stocks at Renaissance Capital before landing at BofA Merrill in 2008. Previously, he was CFO and COO of drinks maker Russian Standard. |
The 2014 Emerging EMEA Research Team: Metals & Mining, No. 1: Jason Fairclough, Eduard Faritov & team
