Where are we in the Cycle?
 If anything, cyclical conditions have worsened slightly.  US capacity utilisation measures are now at recession-like levels.  The actions of private equity funds in providing finance are not matching their rhetoric about their potential as catalysts for a change in industry funding conditions.            More...

Market Directions
The connection between oil and equity prices has become more volatile but the directional link remains.  US equity market conditions appear more benign with just enough growth to keep expansion underway but not so much as to worry the US Federal Reserve about the onset of inflation.           More...

Portfolio Performance and Positioning
The largest stocks in the sector have dominated returns recently after having been led by the smaller companies in the early months of 2016.  Portfolio results have reflected the performance difference.  High cash positions have been retained with an unconvincing macro backdrop to the near term strengthening in market returns.        More...

Stock Reviews and Rating Analysis 
Danakali Limited (DNK:AU), developing a large-scale potash project in Eritrea, has been classified as a late stage Phase I company and was rated 3+ on the five point PortfolioDirect rating scale in January.  The company’s rating takes account of Eritrea’s highly unfavorable regulatory setting due to the government having abandoned the country’s newly adopted constitution after coming to power in 1993.   The nature of the government has not detracted materially from Danakali moving its project forward.  A definitive feasibility study has been submitted and the company has recently announced memoranda of understanding covering Colluli’s entire output.  Companies producing inputs into the agricultural sector offer significant portfolio diversifying characteristics, including a lesser dependence on industrial production outcomes in China.      
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