Resource Turmoil Favors Coal, Copper and Precious Metals

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By Tuesday last week, the world's top 20 mining and top 20 oil stocks had lost USD 2.2 trillion in market value (capitalisation), from record highs seen over the past 12 months; ahead of the opening of markets in the Americas on Monday, close to USD 400bn of that lost value had been clawed back.

By Tuesday last week, the world's top 20 mining and top 20 oil stocks had lost USD 2.2 trillion in market value (capitalisation), from record highs seen over the past 12 months; ahead of the opening of markets in the Americas on Monday, close to USD 400bn of that lost value had been clawed back.

An analysis of investment fund flows towards and away from more than 800 globally listed resources stocks over the past four-and-a-half trading sessions indicates positive inflows for all subsectors. Listed Tier I Asian coal producers have been the most heavily favoured, followed by listed miners of tin, coal, gold, silver, copper and platinum.

In the commodity markets, gold ranks as the best price performer among precious metals, while copper leads base metals. Tin, by far the smallest base metal, is appropriately represented by relatively few miners, which, in turn, are dominated by two Asian names, Yunnan Tin, and Timah...

It is clear that the recent reassurances on US credit markets have encouraged investors to seek riskier assets. The general inflow towards resources stocks has followed a wider global trend, inspired by Thursday night's announcement of a plan to start sanitising toxic mortgage bond debt in the US. The fine details are under formulation, but the plan appears to involve hundreds of millions of dollars of US taxpayer money...

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