Whilst XAM may like to hide its light under a bushel, it's definitely 'on the radar' with people who know. Below are some excerpts from Travis Hamilton, founder of the Singapore-based specialist investment fund, Khan Mongolian Equity Fund. The comments are about Mongolia but ... note the second para.
"We believe that Mongolian resource and mining stocks have been grossly oversold – largely in line with global equities and the resource sector in particular – without consideration to individual company analysis or even the most conservative estimations of valuation.
Xanadu remains a core position within the portfolio and one of our top stock picks, which we continue to acquire on price weakness.
In June, Mongolia successfully completed its 7th free and fair national parliamentary elections. The business friendly Democratic Party (DP) will lead a new coalition government 75%/25% in partnership with the nationalist "Justice Coalition" (JC). Mr N. Altankhuyag, head of the DP, will become Mongolia’s new Prime Minister. We expect the DP, with 75% control of the coalition, to enforce their pro-business agenda upon the junior members of the coalition, welcoming foreign investment, driving positive policy and encouraging growth over the next 4 year term.
The new DP led government will sit for the first time this week and we are confident that they will be quick to hasten growth and development, including the slated privatization of promising state-owned enterprises, encouraging growth in non-mining industries, and maintaining double digit economic growth targets.
We reiterate that China is not broken, that absolute growth still remains strong, and that even in the advent of a Chinese “slow down”, Chinese consumption of Mongolian resources will continue to increase at considerable multiples as access to the country’s comparatively cheap commodities improves via new infrastructure developments.
Within the next couple of years the country will have the potential capacity to effect global coal prices and will be one of the largest copper exporters in the world. With a massive resource endowment literally on the doorstep of the world’s largest and growing commodity consumer, poor infrastructure, a small population, and masses of required development needed in order to extract the country’s mineral riches there are ample investment opportunities." _____________________
Nice to hear that our little Xanadu is one of the fund's top stock picks. Hopefully the Fund sees 22c as a price weakness and will pick up a few more.
XAM Price at posting:
22.0¢ Sentiment: LT Buy Disclosure: Held
