Is it time to turn bullish on resources

Is it time to turn bullish on resources? Some analysts think the worst is behind us and the dust has now settled. Investec analyst Marc Elliot believes that the downside risks in the sector have now materially diminished, overall we feel that the big shocks that we've seen over the last two or three years are done and dusted and an environment of greater stability is certainly conducive to better commodity prices. Mining companies are talking about operational efficiencies, reducing the capital budgets and overall returning value to shareholders. Adding some weight to the argument are calls that the commodity price cycle has bottomed and the seeds for the next mining boom are being sown. In particular analysts have cited lack of new production, slower supply growth and high construction costs as key factors in limiting further downside shocks. (VIEW LINK)


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