China’s niche metals export ban lifts prospects for Canadian firms
Canadian companies dabbling in these minerals include Teck Resources, Neo Performance Materials and Northern Graphite.
A new report by Canada’s National Bank Financial, which has $96 billion under management, calculates that the Toronto stock market has been one of the worst spots to invest this year.
The top 60 companies listed on the TSX in terms of market valuation (S&P/TSX-60) supplied worse returns than 20 other developed markets – only the stock indices of Spain’s top companies (Ibex 35) and that of Portugal (PSI-20) fared worse.
The Montreal Gazette says the report by NBF “blames weakness in resources” and “despite improving valuations, that weakness could linger on.”
In the group of resource-heavy exporting countries Canada’s stock market came in stone last. The report has some advice for mining and metals investors going forward:
– Metals stocks: Are at risk if the current slowdown in global growth results in weaker demand for industrial metals.
– Gold stocks: Despite a 50 per cent pop in bullion prices since 2010, gold stocks have performed poorly. But with the ratio between gold stocks and prices at a multi-year low — the same level reached in the market bottom of 2008 — investors are now wondering if the equity issues are soon to play catch up.
Compared to the lacklustre performance of metals and miners on Canada’s stock market, investment in real world projects in the sector is undergoing an historic boom.
According to Stats Canada’s latest investment survey capital spending in the mining sector – this excludes money being pumped into energy and the oil sands – has risen to nearly $16 billion (a doubling in less than three years) from a lowly $2 billion in 2000.
This places investment in the mining segment within firing distance of the funds flowing into Canada’s overall manufacturing sector which is pegged at $20 billion.
