LarCO
11-11-2008, 09:31 AM
JP Morgan’s star resources manager, Ian Henderson, believes the current global economic slowdown can in fact speed up infrastructure spending. He also says the resource super-cycle isn’t over because emerging world growth remains on course, if somewhat tamed.
‘The fact of the matter is that markets have been downgrading resources stocks,' he says. ‘It takes stocks back to the couple of years ago and to a degree it provides an opportunity for the future. The long-term story remains in tact in terms of expansion of the emerging world and the expansion of commodities.’
‘The resources sector is cheap as it’s ever been. Relative valuations of the oil and gas stocks, metals and mining stocks relative to the MSCI World does illustrate what downward re-rating has occurred in the sector. Overall, the sector is cheap as ever to the market.’
Henderson highlights gold as one area that has suffered by recent sell offs and currency fluctuations. However, he notes that gold is unlikely to lose its tag as the safe haven and is an attractive proposition at current valuations.
‘If you compare the value of the gold sector to the gold price, they’ve never been so cheap as they are today and that I find to be a foundation of the forced selling rather than the fundamentals of the companies and that to me is paradoxical. Given the fall in price, I’m pretty optimistic that gold isn’t a bad place to be. The demand for gold ETF funds has been strong.’
http://tinyurl.com/5g2hfs
‘The fact of the matter is that markets have been downgrading resources stocks,' he says. ‘It takes stocks back to the couple of years ago and to a degree it provides an opportunity for the future. The long-term story remains in tact in terms of expansion of the emerging world and the expansion of commodities.’
‘The resources sector is cheap as it’s ever been. Relative valuations of the oil and gas stocks, metals and mining stocks relative to the MSCI World does illustrate what downward re-rating has occurred in the sector. Overall, the sector is cheap as ever to the market.’
Henderson highlights gold as one area that has suffered by recent sell offs and currency fluctuations. However, he notes that gold is unlikely to lose its tag as the safe haven and is an attractive proposition at current valuations.
‘If you compare the value of the gold sector to the gold price, they’ve never been so cheap as they are today and that I find to be a foundation of the forced selling rather than the fundamentals of the companies and that to me is paradoxical. Given the fall in price, I’m pretty optimistic that gold isn’t a bad place to be. The demand for gold ETF funds has been strong.’
http://tinyurl.com/5g2hfs