The Australian reported that US hedge fund Harbinger Capital is continuing its selldown of Australian iron ore miners with Murchison Metals its latest target.
Mr Philip Falcone's Harbinger is rumoured to be behind the dumping of about 45 million Murchison Metals shares, days after he offloaded a block of shares in Mr Andrew Forrest's Fortescue Metals Group.
Shares in Murchison slumped 9.59% to USD 2.45, making it one of the hardest hit among the iron ore stocks, which were all down as commodity prices retreated.
Harbinger was said to also be behind 30 million share sale in Pilbara miner Fortescue last week, as it continued to reduce its stake in the third force in iron ore, which has dramatically dropped from 16.2% to 4.2% over the past year. Speculation last week suggested Mr Falcone is unsure about the continued strength of China and believes this could be a potential problem, given his heavy exposure to the economic powerhouse.
Mr Nick Burmester MF Global Australia's head of equity sales said that Harbinger was the ultimate insider in terms of insight into markets. If they thought there was an enormous amount of upside from here, they would not be selling those amounts of stock.
The selldown in the Mid West miner came as Murchison released its quarterly report, which highlighted the increasing price of iron ore and continuing demand from China. Market speculation suggested that Mr Falcone sold the Murchison stock at USD 2.50 per share using UBS as the broker. UBS was also said to be behind the Fortescue sale. The 2 special crossings included one for 25 million shares and another for 19.8 million.
It is unclear whether one seller offloaded 44.8 million shares representing 10.3% of the company or if the smaller trade was on selling, meaning only 25 million shares representing 5.7% were offloaded. It is understood institutions purchased the shares.
Mr Burmester said that Harbinger would be having daily discussions with the companies over what they were experiencing. Being a large global hedge fund they would have very good insight into what is going on in terms of the demand environment for iron ore. I suspect they think things are getting pretty choppy, particularly when you look at where the spot price has gone.
(Sourced from www.theaustralian.com.au)
