13 September 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’, three are flashing ‘amber’ and one has turned ‘red’ as the momentum of central bank liquidity support subsides.  An unprecedented surge in liquidity from central banks and accompanying fiscal expansions are less supportive. Upgraded growth forecasts for 2021 had been concealing a tendency for weakening growth through the course of the year and into 2022.  Supply side constraints remain a positive influence. The cyclical positioning has been characterised as near a peak and at risk of moving into a ‘downswing’ phase.       More...

Market Directions
Unprecedentedly loose monetary conditions are underpinning 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, their impact on funding aside, they are yet to have a meaningfully demand effect.  Persistence of a 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
Gains among Phase I stocks again led returns in the past week although the most significant investment theme revolved around the negative impact of deteriorating iron ore market conditions on the investment returns of sector leaders.   Backed by favourable monetary conditions, a general willingness among retail investors to take speculative risks continues to favour the earliest stage companies which also offer uncorrelated returns from discovery opportunities.   Although further along the development path, Phase II companies are among the riskiest investment options due to their indebtedness, heavy reliance on execution success and need for strong global economic conditions to sustain sales.  Several Phase II companies performed relatively well in the past week after previously underperforming.  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.    
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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.

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