The Australian resources sector lost its momentum through the September quarter with prices adding 22% after dropping 6% in September. With prices now at the same level as in the depth of the 2008 financial crisis and having made no net gain for five months, the sector remains poised precariously - consistent with both the beginnings of a cyclical recovery and a continuation of a downtrend which is now nearly three years old. The most recent flow of macroeconomic data point to the necessary market adjustments moving in the right direction but investor fatigue is now one of the greatest threats after so few examples in the past three years of companies offering competitive returns. But the reason to keep interested remains: the bulk of the sector has always had extraordinary leverage to an improvement in global growth.
John, I am attending a resources focused investor forum for the next two days. One of the key things to take away for me will not be the company presentations but the sentiment of the investors and how full the room is at the conference. Speaking to the executives last night there is no doubt they are feeling fatigued from the past three years. I'll be posting updates.