Q&A -weekend report – Resources

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Question asked 28/09/2024

Q&A -weekend report – Resources

Hi Market Matters How sustainable is this week's momentum in Resources? I have been painfully overweight resources and have benefitted greatly from this week's rally. I have read differing opinions on the Chinese stimulus ie "More bullets than Bazookas" It seems most resource stocks have gained this week and I know it depends on stock specifics in the resource sector as to further gains and will be guided by your opinions and stocks held within your porfolios. But for instance resource stocks you've held in the past- IGO, ILU, LYC and PLS - Are you bullish these stocks? regards Deb

Answer

Hi Deb,

Like yourself we have been overweight the resources space in our Active Growth Portfolio which has led to a few tough months but as you say the last 5-days have been great with strong moves by a number of holdings including Mineral Resources (MIN), Sandfire (SFR), Paladin (PDN) and BHP Group (BHP).

We remain bullish on most resource stocks but after this weeks dramatic reversion from banks into miners it feels like a rest is around the corner but with the market so heavily skewed overweight banks & underweight resources surprises are likely to remain with this weeks trend.

We have no plans at present to trim our overweight resources exposure – we think the moves by the PBOC clearly signal a ‘whatever it takes’ moment, reminding us of Fed Chair Ben Bernanke’s comments in 2008 as he wrestled with the GFC. In short, yes, we think this is a significant shift in policy from China.

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ASX200 Materials Index

LAST UPDATED 27/09/2024 13:40

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