Buffett and Soros talk lifts potash stocks

Interest - some rumoured, some fact - from the world's two most famous investors helped a rally in potash group stocks, as data also showed some signs of stabilisation in fertilizer markets.

Soros Fund Management gave the sector a fillip by revealing, in a filing, that it had increased its investment in PotashCorp, the sector leader, by nearly one-half to 2.9m shares, worth $266m, although this was less than its holding earlier in the year.

The investment group is chaired by George Soros, who gained his international reputation and part of his $11bn fortune by forcing a devaluation of the pound in 1992, gaining the nickname of the "man who broke the Bank of England".

Buffett feasts 

Germany's K+S gained a further boost from market talk that Warren Buffett, whose fortune is estimated by Forbes at $37bn, was interested in taking a stake.

Soros Fund Management's holding in PotashCorp (value of shares)

Nov 16: 2.95m shares ($266.4m)

Aug 14: 1.98m shares ($184.1m)

May 15: 5.70m shares ($460.3m)

Feb 17: 5.93m shares ($433.9m)

Nov 14, 2008: 3.34m shares ($441.0m)

Source: SEC filings

The rumour follows news that Mr Buffett's Berkshire Hathaway insurance group made a series of investments over the summer, in groups including ExxonMobil, Nestle and Walmart, ahead of his $2.6bn purchase of US railways operator Burlington Northern Santa Fe two weeks ago.

K+S declined to comment on the rumour, which helped K+S shares close up 4.5% at E40.14 in Frankfurt.

The shares were the worst performers on Frankfurt's Dax index on Monday, depressed by expectations that the group will undertake a rights issue to repair a balance sheet dented by the $1.7bn purchase of Morton Salt.

Shares in Russian potash producer Silvinit ended up 3.2%, while stock in Canada's PotashCorp stood 4.4% higher at Can$113.64 at 18:00 GMT, with US-based Mosaic up 3.1% at $51.42.

Potash prices 

The revival also followed data from PotashCorp showing that potash prices had held near $490 a tonne last month.

Potash stocks at 18.20 GMT

K+S: +4.5% (market close)

PotashCorp: +4.4%

Silvinit: +3.2% (market close)

Mosaic: +3.1%

Agrium: +1.9%

Israel Chemicals: +1.4% (market close)

Uralkali: -1.8%

The price of ammonia, a base of nitrogen fertilizers, hit $350 a tonne in the US port of Tampa a recovery of 75% from an early-summer low, data published by fertilizer giant PotashCorp showed.

While the huge potash stocks held by North American producers resumed their upward path, rising by 165,000 tonnes, they converged a little with average levels.

Stocks ended last month 129% above the five-year average, compared with 142% at the end of September.

Many fertilizer groups are forecasting a revival in demand in the spring after a year when tight credit and low crop prices prompted sharp cutbacks in farm spending on nutrients.

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