AFIC says resources sector is becoming 'very interesting'

Terry Campbell chairman of AFIC has outlined plans to raise $150 to $200 million sighting opportunity in the Australian market. "Last Tuesday the market was particularly good value and certainly I was glad that we were doing something that day. The outlook is sufficiently uncertain that it might not be the bottom of the market but my feeling is, particularly in the big stocks, it could be reasonably close..." Campbell is cautious on the outlook for Banks but says developments in the resources sector are interesting. "I think the signals we are seeing pointing toward a bottoming of the sector are sounding very loudly right now, whether it is how low the rates of return are on invested capital that companies are now achieving, whether it is how deep we are now into the cost curve in nickel and other commodities, whether it is the emergence of private equity groups coming onto the registers of companies… Production cuts are also now coming through, so there are a lot of signals saying that this sector is very interesting." (Source:AFR)