One thing to add to this is that over the last couple of weeks there has been a significant sell off of resources focused companies off the back of prices plus low trading volumes. This is going to have the effect of:
-investment managers restricted under mandate from investing directly in resource companies selling the mining services companies; - locking in those profits of fund managers for fear that the market will fall and risk their bonuses; - when resources were getting toppy there was some rotation into mining services companies on the basis that mining companies were getting toppy as well, but the resources/china/india story is still fundamentally sound.
Now you are seeing a rotation back to resource companies, on still low volume. As a result you are seeing a further step down in the mining services companies, with a significant impact on mid cap mining services companies as a result (it is not just Forge experiencing selling pressure, but the broader Mining services companies).
As investment managers are seeing better value elsewhere, or still sitting out the volatility, unti I suspect close ot the end of June or even July (for fear of risking bonuses) you will continue to see volatility in the market.
Good buying, but I suspect better over the next couple of weeks as the share price weakens further.
FGE Price at posting:
$5.32 Sentiment: None Disclosure: Held
