Report Cover Page

Contents

Where are we in the Cycle?
A surge in metal prices has come with speculation of higher infrastructure spending in the USA but the foreseeable outlook for global growth diminishes the chances of the gains being sustainable with a strong US dollar being an added constraint.    More...

Market Directions
Market moves were dominated by the effects of the US elections which turned out to be far more equity market friendly than had been anticipated. Equities, bonds, metals and foreign exchange all felt the impact as reflation became the latest market theme.   More...

Portfolio Performance and Positioning
Some of the biggest gains came among the Phase III companies which were the most immediate beneficiaries of the macro themes revolving around infrastructure and reflation. There was some retracement in the gain from the prior week among the Phase I section of the portfolio. There were no changes made to the model portfolios pending clearer evidence of a sustainable cyclical change in background market conditions. More...

Stock Reviews and Rating Analysis
Tiger Resources (TGS:AU) and Atlas Iron (AGO:AU) displayed some of the strongest returns in the sector in the past week as investors were prepared to bid up the prices of companies with copper and iron ore links. Since late October, copper prices have increased by as much as 21%. Since the end of October, the price of iron ore for delivery in China has risen 26% to significantly exceed the budgeted price outcomes on which Atlas Iron had planned its debt reduction program. Shipments of 4.1Mt of ore in the September quarter enabled sufficient cash flow for Atlas Iron to reduce company net debt to $89M from A$257M at the end of the March quarter. Over the first three quarters of 2016, Tiger Resources produced copper at an annualised rate of 24,259 tonnes at an all-in sustainable cost of $1.64/lb compared with the recent price in excess of $2.50/lb.
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Although the statements of fact in this communication have been added from and are based upon sources E.I.M. Capital Managers Pty Ltd, the publisher, believes to be reliable, their accuracy is not guaranteed and any such information may be incomplete or condensed.

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