Latest news for Aurubis (OTC:AIAGY) Stock

Aurubis AG produces copper, using raw materials which include copper concentrates and recycling materials. The company also produces precious metals such as gold and silver and a range of other products, including sulfuric acid and iron silicate, as byproducts of copper production. Revenue is predominantly generated through the sale of continuous cast wire rods, copper cathodes, precious metals and continuous cast shapes, used in the manufacture of cables and wires which are used in electrical applications. It has two segments Multimetal Recycling and Custom Smelting & Products which is the key revenue generating segment. The company is based in Germany and has production sites across Europe and the United States.

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Total short-selling activity in Hong Kong Monday stood at HK$14.3 billion ($1.8 billion), or 22.9% of all shares traded.

Short-selling can cause a rout in stocks but it can also make for sharp upswings when speculators are forced to cover their short positions by buying the stock back in the event of a sudden (a “short-squeeze”).

Monday&#39;s Top 3 Short Trades In Hong Kong - And What Traders Say About The Squeeze

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Total short-selling activity in Hong Kong Monday stood at HK$14.3 billion ($1.8 billion), or 22.9% of all shares traded.

Short-selling can cause a rout in stocks but it can also make for sharp upswings when speculators are forced to cover their short positions by buying the stock back in the event of a sudden (a &ldquo;short-squeeze&rdquo;).

Here&rsquo;s a look at the top 3 stocks (excluding tracker funds, i.e. companies only) that were being shorted in Hong Kong Monday by total volume of shares traded and a break-down of what traders are saying:

#1 &ndash; China Construction Bank Corporation (OTC:<a class="ticker" href="https://www.benzinga.com/stock/CICHY#OTC">CICHY</a>)

Summary: CCB was in top spot among Hong Kong companies being targeted by short-sellers with HK$666.4 million, or 37.4% of its volume representing short positions being taken. The company&rsquo;s stock price was 0.22% lower on the day.

Reason: Traders were bearish on the stock after reports in the Chinese-language press that non-performing loans are sharply on the rise. Data from the Yingdeng Center <a href="https://finance.caixin.com/2023-10-15/102117070.html" style="color:#0563c1">showed</a> that for the third quarter of 2023, delinquent loans hit 39.12 billion RMB ($5.4 billion), its highest on record for a single quarter.

Squeeze View: Banks did well last week <a href="https://www.benzinga.com/markets/penny-stocks/23/10/35224132/hong-kong-stocks-rally-as-sovereign-bank-buy-up-overshadows-climb-in-negative-mortgages" style="color:#0563c1">as China&rsquo;s sovereign fund snapped up shares in the country&rsquo;s four leading banks</a>, including CCB. The fund said that it would continue with share purchases in these banks over the next six months. China&rsquo;s government is also showing willingness to incentivize lenders to increase auto-loans to consumers, which could be a plus for banks.

#2 &ndash; AIA Group Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/AIAGY#OTC">AIAGY</a>)

Summary: Insurer AIA was second on the list of the top three short-seller targets, with HK$437.05 million or 33.5% of the company&rsquo;s shares sold short. AIA shares ended the day&rsquo;s trading flat.

Reason: Insurance firms are on a sector watchlist as investors fear these firms may have exposure to real estate debts that are as yet still unknown after a Bloomberg report Monday morning concerning Ping An Insurance Co of China Limited&rsquo;s (OTC:<a class="ticker" href="https://www.benzinga.com/stock/PNAGY#OTC">PNAGY</a>) hidden balance sheet debt. AIA and Ping An both <a href="https://www.scmp.com/business/china-business/article/3217836/aia-ping-pour-billions-chinese-commercial-property-insurers-seek-long-term-stable-yields" style="color:#0563c1">poured</a> billions into commercial property in China earlier this year too.

Squeeze View: AIA has been one of the largest buyers of its own stock this month, believing the shares to be priced too cheaply.

#3 &ndash; BYD Company Limited (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BYDDF#OTC">BYDDF</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BYDDY#OTC">BYDDY</a>)

Summary: EV maker BYD was in third place among the top Hong Kong-listed short-sold equities as sellers targeted HK$322.6 million, or 24.4% of the company&rsquo;s daily turnover for short positions. BYD shares ended down 1.2% on the day.

Reason: Strong sales for Huawei Technology&rsquo;s AITO M7 have led Li Auto Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LI#NASDAQ">LI</a>) to cut prices <a href="http://www.aastocks.com/en/stocks/news/aafn-con/now.1300070/latest-news" style="color:#0563c1">according</a> to Chinese language newswire Cailian. That report sparked fears of lower margins for BYD in the ongoing EV price war. Recent selling pressure from shareholder Berkshire Hathway Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/brk-a#NYSE">BRK-A</a>), which has been disposing of a chunk of its stake in BYD has incentivized short-sellers too. Added to this, there are concerns about the strength of the Chinese consumer sector which would affect the company&rsquo;s sales outlook and about the upcoming earnings for rival Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>)

Squeeze View: BYD is aggressively improving both sales and margins despite a price war for EVs. The company is valued at a fraction of the earnings of Hong Kong-listed rivals XPeng Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XPEV#NYSE">XPEV</a>), Nio Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NIO#NYSE">NIO</a>) and Li Auto, and is in a stronger selling position globally among both luxury and cheap vehicle sales than any of these brands, especially Huawei. BYD is beating Tesla on total sales volume worldwide this year.

Monday's Top 3 Short Trades In Hong Kong - And What Traders Say About The Squeeze

Goldman Sachs analyst Eugene King penned a report this week that focused on the firm&rsquo;s updated outlook for copper and copper-exposed stocks. Goldman sees both supply and demand pressures continuing to weigh on copper prices throughout 2016, and the firm reduced its price forecast for the metal.
	<h3>Supply</h3>

	While consensus estimates show a reduction of supply coming next year, Goldman is calling for the base copper supply to continue to grow. In fact, the firm sees about 3 Mt of supply coming online in an environment of forex weakness and cost deflation.
	<h3>Demand</h3>
	Goldman sees the copper demand environment as equally bearish. China currently consumes about 45 percent of the global copper supply, and Goldman believes that demand is sustainable. &ldquo;Private consumers in a country with 20 percent/13 percent of global population/GDP cannot consume half the world&rsquo;s copper,&rdquo; King argued.
Goldman sees little demand relief coming from developed markets either.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/earnings/15/07/5698599/mid-day-market-update-sandisk-jumps-on-upbeat-results-qualcomm-shares-sl">Mid-Day Market Update</a></bzrelatedlink>
	<h3>Outlook</h3>

	Until something meaningful changes in the copper market, Goldman predicts that the world will continue to be oversupplied with copper. The firm reduced its price forecast for 2015 from $5724/t to $5670/t and its 2016 forecast from $5825/t to $4725/t.
	<h3>How To Play It</h3>
In addition to its reduced price forecasts, Goldman is also bearish on several copper-exposed stocks. The firm has Sell ratings on London-listed <a href="https://www.google.com/finance?q=LON%3AANTO&sq=Antofagasta&sp=1&ei=EDSxVYHiCcWamAHSnoiwDQ">Antofagasta plc</a> and <a href="https://www.google.com/finance?q=LON%3AKAZ&ei=JTSxVfHFIoHpmAGevavICw>KAZ Minerals Plc</a>, while downgrading the stocks of <a href="https://www.google.com/finance?q=LON%3AGLEN&ei=PzSxVfGfBcOnmAGX57yoDQ">Glencore PLC</a> and <a href="https://www.google.com/finance?q=LON%3AFQM&ei=cDSxVcGfNMazmAH0_ZuwDA">First Quantum Minerals Limited</a> from Buy to Neutral.

	The firm sees smelter exposure as the best way to profit off the copper oversupply. Goldman has Buy ratings on AURUBIS AG ADR (OTC: <a class="ticker" href="/stock/aiagy#OTC">AIAGY</a>) and BOLIDEN AB (OTC: <a class="ticker" href="/stock/bdnnf#OTC">BDNNF</a>).
Image Credit: <a href="https://pixabay.com/en/copper-wire-cable-scrap-metal-72062/">Public Domain</a>

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