Report Cover Page

Contents

Where are we in the Cycle?
Exchange rate and related monetary policy moves continue to underpin the improvement in metal prices. The term structure of forward metal prices is also suggestive of tightening market conditions.      More...

Market Directions
The oil price/equity price link broke down last week but relative sector price movements are now favouring resource sector investments. Gold equities appear overbought. Uranium equities are struggling to break from a downtrend despite more buoyant conditions elsewhere.    More...

Portfolio Performance and Positioning
Phase III companies, usually the highest profile and largest companies in the sector, have been the beneficiaries of higher commodity prices and a perceived change in the balance of risks between resource sector investments and other market segments. There have been no significant portfolio recommendation changes. High cash holdings have been retained.         More...

Stock Reviews and Rating Analysis
OZ Minerals (OZL:AU) has been classified as a Phase IV company with a ‘2+’ PortfolioDirect rating on the five point rating scale because it is faced with declining production and a deteriorating value profile. Investor expectations about its value are stretching beyond the reach of the company’s own efforts. Validation of the existing market value now requires a cyclical improvement in copper prices. The company’s recent operating consistency has contributed to market confidence about its outlook. Ironically, being near peak production, having hit record output in 2015, has encouraged optimism rather than anxiety.
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DAILY BRIEFING: The PortfolioDirect market diary offers brief thoughts on current issues affecting sector investment strategies.

Although the statements of fact in this communication have been added from and are based upon sources E.I.M. Capital Managers Pty Ltd, the publisher, believes to be reliable, their accuracy is not guaranteed and any such information may be incomplete or condensed.

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