SHARES of Nevsun Resources (TSE:NSU) climbed to a five-month high beginning of this month and are expected to continue to rise.
One of the biggest contributing factors is how major economies such as China, USA and Russia impact commodity prices around the world.
For instance, the People’s Bank of China (PBoC) slashed interest rates for the third time in six months determined to fight deflation and support growth in the world’s second-largest economy.
This is good news for commodities such as iron ore and especially copper, and impacts the share price of companies like Nevsun positively.
The outlook is that copper’s fundamentals are expected to improve sooner-than-anticipated, thanks to some supply disruptions and production cuts, according to analysts.
Shareholders like to trade on investment and speculative basis and since it became apparent that Bisha’s smaller satellite deposit Harena could become a high-grade underground copper-zinc-gold-silver mine the share price might benefit from this.
Other factors fueling the share price are the repeating mantra of Nevsun’s share price being undervalued, speculations about an imminent merger and acquisition deal and the fact that Nevsun owns a huge cash flow stock.
Hence why dozens of brokerage firms have assigned favorable ratings to Nevsun’s share price in recent weeks.
Shares of Nevsun Resources (TSE:NSU) traded up 0.99% hitting US$ 4.7 with a trading volume of 199,660 shares on Wednesday.