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Johnson Matthey (JMAT) £17.94

The shares of Johnson Matthey are are closely correlated with movements in the price of platinum, thanks to its precious metal refinery operations. Around 80% of the global supply of platinum comes from South Africa, and last week’s power cuts could spark a quick upsurge in the price of the precious mineral.

Joe Lunn, an analyst at broker JM Finn, points out that the price of platinum could remain at high levels for some time as South Africa lacks new power generation, a long-term problem, which has been highlighted by the current power emergency.

The shares of Johnson Matthey are likely to react well to the surge in platinum prices, and the company is also facing high demand for catalytic converters for motor vehicles, especially from China and India. We see this as an opportunity to buy in the short term.

ACTION: BUY Johnson Matthey • Target £19.50 • Stop loss £16.90

TIME TARGET: 5 WEEKS