7 June 2021

Remuneration Report Analysis and Commentary: PortfolioDirect scores annual remuneration reports from ASX listed companies against a consistent analytical framework designed to help assess which reports are most worthy of shareholder support. 
Contents

Where are we in the Cycle?
Of the five PortfolioDirect cyclical guideposts, one is ‘green’ and four are flashing ‘amber’.  Cyclical conditions have been disproportionately affected by the unprecedented surge in liquidity from central banks and accompanying fiscal expansions.  Looking ahead, commodity markets are at risk from an inevitably slowing monetary momentum.  An apparent acceleration in global growth, reflected in forecasts for 2021, is concealing a tendency for weakening growth through the course of the year and into 2022. The cyclical positioning has been characterised as being near a peak and at risk of moving into a ‘downswing’ phase.   More...

Market Directions
A weakening US dollar and unprecedentedly loose monetary conditions have underpinned price strength among a broad array of assets, including those of industrial and precious metals. Speculative capital flows connected to retail investors are supporting sector prices and offsetting the negative effect on mining equities of physical market balances tilting into surplus due to a slowdown in demand.  Heavily hyped energy storage innovations are stoking interest but remain too far in the future to affect current metal demand.  1990s style investment performance - when modest sector equity price gains occurred in the midst of sometimes highly disruptive macro conditions - remains the underlying theme.   More...

Portfolio Performance and Positioning
Stocks in the Phase III development category led minor gains in the sector with overall returns even divided between positive and negative outcomes.  Despite last week’s relative strength among the leaders, a general willingness among retail investors to take speculative risks continues to favour the earliest stage companies with Phase I stocks also offering uncorrelated returns from discovery opportunities.  Phase II companies, among the riskiest investment options due to their indebtedness, heavy reliance on execution success and need for strong global economic conditions to sustain sales, are struggling to match risk adjusted returns in either of the other two development categories.  Portfolio models remain biased to the Phase I stock category with cash positions reflecting the cyclical risks associated with slowing  rates of monetary expansion and output growth.    More...

Stock Reviews and Rating Analysis 
PortfolioDirect rating reports analyse the quality and risk attributes of proposed mineral developments.  Rating criteria apply to mining and oil and gas stocks at any stage of development.  PortfolioDirect uses a five point rating scale to measure the risk adjusted quality of proposed mineral developments or companies.    
More...

The 'Steak or Sizzle' blog provides summary judgements on the top performing ASX-listed resources stocks. More...

Although the statements of fact in this report have been added from and are based upon sources the authors of the report believe to be reliable, their accuracy is not guaranteed and any such information may be incomplete or condensed.  To the extent permitted by law, the authors of the report are not liable for any loss or damage arising as a result of reliance placed on the contents of this report.  

All opinions and estimates in this communication constitute judgments by the authors at the report date and are subject to change without notice.  The report publisher is under no obligation to make public any change in view about any matter referred to in this document.    

No references to past investment performance should be taken to indicate anything about future performance.

This communication is directed only to Australian wholesale investors and licensed financial advisers for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of a security.

Copyright 2021 PortfolioDirect All Rights Reserved.