Report Cover Page

Contents

Where are we in the Cycle?
Cyclical positioning is moving closer to average near the bottom of a cycle as the absence of improved growth momentum imposes a near impossible burden on the policies of central banks to improve the attractiveness of the resources sector.   More...

Market Directions
Generally greater risk tolerance in financial markets has underpinned an improvement in resource sector conditions but what can move resource sector prices to the next level is currently hard to discern.   More...

Portfolio Performance and Positioning
Larger stocks have been among the best and most uniform performers to date in August with the prices of all eight Phase III stocks in the portfolio rising in the past week to produce a 7:2 advance/decline ratio in the month. Cash positions remain high within the macro model in the absence of any improvement in the cyclical guideposts.    More...

Stock Reviews and Rating Analysis
BHP Billiton (BHP:AU) will find itself in an increasingly tough fight to hold its position as the most widely held stock in the portfolios of Australian investors. BHP continues its lengthy transition from being a proxy for the Australian market to being an undistinguished mining house in a perennial search for a viable strategy. On a steady-state basis, BHP is asking investors to pay US$128 million over 10 years in return for approximately $112 million. Better commodity prices will improve this paltry return but that leaves BHP Billiton as just one unimpressive alternative among hundreds in the sector with at least as much leverage to higher prices.
For company reports & ratings...

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.

All opinions and estimates in this communication constitute judgments by E.I.M. Capital Managers as of the date of this communication and are subject to change without notice. The publisher is under no obligation to make public any change in view about any matter referred to in this or any linked documents.

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.