Yesterday's Australia Biotech Invest 2014 conference in Melbourne rather optimistically considered whether the flight from resources stocks may benefit the...

John Robertson

PortfolioDirect

Yesterday's Australia Biotech Invest 2014 conference in Melbourne rather optimistically considered whether the flight from resources stocks may benefit the biotech sector. Pity a sector than must rely on resources for its momentum. Australian biotech companies are suffering some of the same investment woes afflicting Australia's resources companies. There are just not enough success stories to keep investors engaged. Both sectors have some outstanding technical skills - perhaps the best in the world - but that is not enough. The biotechs were mistaken for thinking there is a pool of funds for their taking. There are few profits to be reinvested. Resources prices are within a whisker of 1990s levels but, with more than three times the number of listed companies and hugely inflated capital needs, the sector is sucking up more than it ever did. The biotech sector is in a similar position being able to generate only 1.7% from $9.1 billion invested.


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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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