A previously close link between the Australian small resources benchmark indicator (green line) and emerging market share prices (white line) broke down during...

John Robertson

PortfolioDirect

A previously close link between the Australian small resources benchmark indicator (green line) and emerging market share prices (white line) broke down during 2012 and 2013 as emerging market prices lost momentum and resources sector equities were re-priced. Over recent months, as risk appetites have appeared to re-emerge, both measures have made gains although the emerging markets price indicator remains within (and at the upper end of) the range it has occupied since the beginning of 2012. Similarly, the resources share price indicator remains within the range it has occupied since the cyclical low point in the market in mid 2013. The two market segments remain closely connected economically with both depending on improved developing country growth rates. Both are nearing important tests of their capacity to push higher.


John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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