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Strengthening emerging market equity prices may be needed to help precipitate a turn in resources sector stock prices

John Robertson

PortfolioDirect

Strengthening emerging market equity prices may be needed to help precipitate a turn in resources sector stock prices. The chart at (VIEW LINK) shows a clear break in relative performance dating from January 2012 between the share prices of Australia's smaller resources companies and emerging market equity prices. The break occurred after many years during which the two were closely correlated. The loss of momentum in emerging market equities has translated into large losses of absolute performance for the bulk of the listed resources companies. The resources sector has turned from being highly correlated with emerging markets into a highly leveraged proxy for developing economies and emerging markets.


John Robertson
John Robertson
PortfolioDirect

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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