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Strategies & Market Trends : Australian Shares and ADRs
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To: EPS who wrote (28)4/6/1998 9:23:00 PM
From: Moominoid  Read Replies (1) of 96
 
You're probably right but why overlook the obvious? Natural resources are many of a time in
countries that are politically unstable, with poor or non liquid stock markets, etc, etc. The advantage to
own a good Australian Gold issue say seems evident to me, specially if one can get them at good
prices.

Everywhere I look the Australian resource sector is in trouble. Coal mining in NSW is almost unprofitable certainly compared to the US for example. Most goldmines are marginally or not profitable compared to South Africa etc. (even if the Gold price has risen a few dollars). Oil and gas and particularly gas is probably good but there are long distances to substantial markets unless pipelines are built to SE Asia from the Timor Sea area (and is Indonesia a stable customer?!). Traditional demand has come from Japan, Korea etc. who are in or going into recession. The biggest conglomerate BHP paid far too much for various US assets. Poor management and heavy millitant unionisation in all these industries. The agricultural sector is sufferring from either drought or floods in different parts of the country. Conditions are pretty desperate in the region around Canberra - small dams are almost all dry and the Burrinjuck Dam on the Murrumbidgee - a major irrigation dam is down to 9%! Farmers are selling off their breeding stock. I could go on.....

David
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