Fertiliser stocks surge as Russia suspends exports, Rio Tinto cuts ties, Zip continues to disappoint

Fertiliser stocks ASX Incitec Pivot Nufarm Ukraine conflict Zip Z1P
Vladimir Putin warned of higher global food prices as Russia suspended fertiliser exports this week.

Fertiliser company Incitec Pivot (ASX: IPL) has recovered from a series of problems at its production facilities in recent weeks as skyrocketing global wheat prices saw investors pivot to the stock.

Incitec saw its price peak at $3.77 in early trading on Friday only to ease back slightly to close at $3.72, a significant outperformance in recent weeks when its stocks traded as low as $3.06 on 17 February.

Fellow fertiliser firm Nufarm (ASX: NUF) was also up on increased demand for Australian wheat given global supply chain issues stemming from major producers of the soft commodity, Russia and Ukraine.

Rio Tinto

While the conflict in Europe may have given a lift to Australian fertiliser firms, mining majors took a hit to their share price. Rio Tinto (ASX: RIO) ended the week trading at $112.02, a significant discount to its opening price on Monday of $125.35.

The global miner is ending its ties to Russia which include a joint venture with Rusal, founded by the well-known oligarch Oleg Deripaska.

In a statement released to the market, Rio Tinto said it was “in the process of terminating all commercial relationships it has with any Russian business”.

This also includes Rio reviewing its joint venture with Rusal in Queensland Alumina, which runs an alumina refinery in the state.

Westpac

One of the Big Four Australian banks, Westpac (ASX: WBC), saw its stock price rise over the last week, at one point reaching $22.86 in midday trading on Friday, before slipping back slightly ahead of the market close.

The major domestic lender started the week trading at $22.10 but the continued dovish stance of the Reserve Bank of Australia means a rate rise, which could pose issues for its mortgage-lending business, is off the table for the moment at least.

The company’s chief executive officer Peter King was bullish about any potential rates, telling a banking conference in Sydney on Friday that Westpac had built in buffers when offering home loans.

“What’s lost in the debate sometimes is that we weren’t assessing at the rate the customer was paying, we were assuming a much higher rate,” he said, according to Bloomberg.

Zip

Digital payment provider Zip Co (ASX: Z1P) had a torrid week, losing over 7% in Friday’s trading alone to close at $1.58, down from $1.76 in early trading on Monday.

The fall comes after the Buy Now Pay Later firm requested a halt in trading at the end of last week following the release of its half year results which, although they showed a major rise in transaction volumes, the firm’s profits were down some 23%.

Zip raised nearly $150 million from institutional investors last month but since then its shares have cratered 20%.

GrainCorp

Australian wheat supplier GrainCorp (ASX: GNC) was another big winner from global food supply chain issues. Its share rose 24% in a month, despite slipping back slightly to $8.44 at market close on Friday.

The firm’s shares were headed north even before conflict erupted in Europe, off the back of a bumper domestic harvest, and have received a further boost as global wheat prices rise following Russia’s invasion of Ukraine.

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