In a note to clients on Friday, an Australian resources analyst was forthright: Forget the bear market; that has been washed out of the system. The rally over the past two weeks has escalated to become a boom in the resource stocks.

How else can you view the movements of stocks that were absolute dogs a month ago, when they have performed like they have since then? A month ago an advisor told me the private client market was dead. Well, they were famous last words. The private client market is back as a force and the hunger for trading profits is ravenous.

The 100 hottest mining stocks have bounced from stock price lows, mostly seen during November 2008, by a monumental 345%, on average, measured on a weighted basis. At the same time, it should be pointed out that this selection of stocks is, on average, 65% below highs, seen earlier during 2008.

These numbers appear to indicate both that mining stocks were taken into completely overheated territory during 2008, and, equally, were brutally sold down to way below any kind of fair value, however individual investors choose to define that. The world's biggest 100 mining companies, measured by value, have bounced by just over 100%, on average, and lead the world's attempted stock market recovery.

The MSCI Barra dollar world equities index, a very broad benchmark, has advanced by a modest 28% from its recent multi-year lows; the dollar index for emerging market equities has recovered by 45%, so far. Among country stock markets, the Micex Russia shows the sharpest recovery, from an insanely oversold level, followed by the CSI 300, which measures the weighted performance of hundreds of stocks listed in China.

The surge of investment flows into Chinese and Russian listed stocks has also benefited mining stocks; VorkutauGol, a coal miner, has bounced by more than 600% from its lows; JSC Polymetal, a silver-gold miner, by 548%, while Zhaojin, a Chinese gold miner, has advanced by more than 400%. Among the world's 100 biggest mining stocks, there have been strong recent contributions from stocks such as Sichuan Hongda, Shanxi Lu'an, Shanxi Xishan, SDIC Xinji, Jiangxi Copper, Yunnan Copper, and Tongling.

SELECTED INDICES, SPOTS AND GROUPS

From

From

Points

high*

low*

MSCI world equities USD

875.59

-44.1%

28.0%

MSCI emerging markets USD

648.39

-48.2%

45.4%

Dow Jones Industrial

8125.43

-38.1%

25.6%

S+P 500

865.30

-39.9%

29.8%

DJ Stoxx 600

194.68

-41.5%

25.3%

CSI 300

2650.69

-35.0%

65.0%

Shanghai Composite

2503.94

-33.9%

50.4%

Micex Russia

929.80

-52.7%

88.4%

Reuters/Jefferies CRB

225.08

-52.5%

12.5%

Dow Jones AIG Commodity

113.27

-52.5%

11.6%

Baltic Dry Shipping

1604.00

-86.4%

141.9%

Baltic Capesize Shipping

2140.00

-89.1%

157.8%

Dollar Index Spot

85.75

-4.3%

20.5%

Gold spot USD/oz

871.28

-13.4%

27.7%

KBW banks

35.96

-59.4%

102.6%

* 12-month

While there is no question that the shine has moved away from listed gold and silver stocks generally, given the recent strong resurgence of base metal prices, gold and silver names continue to heavily populate the hottest performing mining names list. Stock prices have bounced by at least 600% for Century Mining, La Mancha Resources, Azteca Gold, Australian Solomons, San Anton Resources, and Marum Resources, all within the gold classification.

For months, listed gold (and silver) stocks held up best, supported by the world's best performing commodity, relatively speaking. But the past few weeks has seen distinct profit taking, as investors switched out of gold stocks and into selected miners of base metals. Listed zinc stocks, led by the likes of CBH Resources, with a bounce of 425% from lows, currently show the best bounce from lows among mining subsectors. Copper (led by the likes of Chariot), nickel (Minara Resources and Jien Nickel) and tin stocks (Yunnan Tin) are also outperforming their gold peers at this stage.

STOCK GROUPS

Value

From

From

 

USD bn

high*

low*

Dow Jones Industrial

2610.62

-40.1%

33.3%

Top 100 global miners

1041.73

-58.2%

103.6%

Oil stocks

2001.95

-48.0%

40.1%

S + P 500 Energy

976.43

-49.1%

31.0%

Zinc stocks

31.15

-55.7%

171.7%

Copper stocks

75.87

-56.6%

162.3%

Gold stocks

228.27

-45.3%

120.0%

100 hottest miners

40.75

-65.2%

345.3%

Gold ETFs

41.66

-18.0%

29.6%

Uranium stocks

19.16

-48.8%

105.7%

Paper stocks (60)

44.39

-55.6%

66.6%

Shipping stocks (32)

29.83

-70.4%

75.5%

World banks (80)

2139.73

-54.9%

77.6%

* 12-month

Source: market data; analysis by Barry Sergeant

Listed oil stocks remain adrift, and while the uranium price remains weak, there has been significant ongoing buying of listed uranium names, as seen in the cases of First Uranium, Niger Uranium, Mega Uranium, and a good number of others. There has also been strong recent interest in selected diamond stocks, from among one of the most damaged mining subsectors of all, as seen in the cases of Kopane Diamonds (with a magnificent 800% bounce from lows), Tsodilo Resources, Pangea Diamondfields, and others.

Lead continues to lead the recovery in metals prices, followed by copper, platinum, and others. Gold prices remain out with a speeding ticket, while aluminium prices remain under pressure from a persistent stubbornness by big producers to fully amend supply to fit new demand dynamics.

METAL PRICES

Industrial, USD/lb

Low*

High*

Current

From low

Copper

1.28

4.06

2.15

67.9%

Aluminium

0.58

1.53

0.67

15.9%

Lead

0.39

1.32

0.68

76.7%

Tin

4.40

11.57

5.24

19.1%

Nickel

4.01

13.70

5.65

40.7%

Zinc

0.47

1.08

0.68

44.2%

Precious, USD/oz

 

Gold

682.41

1006.29

871.28

27.7%

Platinum

744.25

2225.50

1211.50

62.8%

Palladium

160.75

478.50

234.25

45.7%

Silver

8.46

19.48

12.08

42.8%

* 12-month

The Australian analyst sums it up, for now: It is amazing how quickly sentiment can turn around. We are now in a market that appears balanced, though maybe somewhat overdone in the short term - but that might just be a corollary to the ridiculous doomsday prices of a couple of months ago. Money is flowing again and the resource stocks will bounce (have bounced) better than industrials. We should be watching for further rises on good economic news, but equally there may be pullbacks on disappointments.

SELECTED TOP 100 HOTTEST MINING STOCKS

Ranked on 12-month composite price performance

Stock

From

From

Value

price

high*

low*

USD bn

Century Mining

CAD 0.25

-10.7%

2400.0%

0.035

La Mancha Resources

CAD 0.41

-28.1%

925.0%

0.048

Ivanhoe Australia

AUD 1.50

-26.1%

900.0%

0.338

Azteca Gold

CAD 0.19

-19.6%

825.0%

0.027

Kopane Diamonds

GBP 0.11

-27.4%

800.0%

0.028

Australian Solomons

CAD 0.23

-63.7%

800.0%

0.019

San Anton Resources

CAD 0.26

-60.6%

766.7%

0.023

Marum Resources

CAD 0.19

-11.6%

660.0%

0.016

VorkutauGol

USD 3.01

-61.9%

652.5%

0.030

Tanami Gold

AUD 0.03

-43.3%

580.0%

0.087

Greystar

CAD 3.51

-36.2%

562.3%

0.152

JSC Polymetal

USD 6.48

-29.6%

548.0%

2.041

Aricom

GBP 0.35

-67.2%

578.7%

0.609

Yukon-Nevada Gold

CAD 0.14

-91.3%

600.0%

0.035

Regis Resources

AUD 0.39

-11.4%

519.0%

0.068

NWT Uranium

CAD 0.13

-59.4%

550.0%

0.014

First Uranium

CAD 6.20

-18.5%

507.8%

0.774

Tsodilo Resources

CAD 0.40

-22.5%

507.7%

0.005

Golden Goose

CAD 0.43

-55.3%

507.1%

0.017

African Minerals

GBP 0.56

-71.2%

522.2%

0.155

Novagold

CAD 2.95

-70.5%

521.1%

0.442

Brazauro

CAD 0.58

-35.6%

480.0%

0.041

Shoreham Resources

CAD 0.22

-17.0%

450.0%

0.009

Niger Uranium

GBP 0.21

-19.6%

446.7%

0.017

Mano River

CAD 0.06

-85.5%

500.0%

0.016

Mega Uranium

CAD 2.07

-21.9%

430.8%

0.319

US Gold Corp.

USD 2.05

-31.4%

439.5%

0.165

Keegan Resources

USD 2.02

-60.4%

460.6%

0.057

Centerra

CAD 5.00

-60.8%

455.6%

0.891

Colossus Minerals

CAD 2.30

-42.5%

434.9%

0.104

Pangea Diamondfields

GBP 0.02

-95.8%

486.7%

0.057

Coral Gold

CAD 0.54

-56.8%

440.0%

0.011

Zhaojin

HKD 9.60

-33.1%

416.1%

0.542

Pan Palladium

AUD 0.04

-58.3%

437.5%

0.009

African Queen

CAD 0.30

-25.0%

400.0%

0.009

Anooraq

CAD 1.17

-70.5%

431.8%

0.179

Extract Resources

AUD 3.65

-32.7%

386.7%

0.587

Silverstone

CAD 1.71

-42.0%

395.7%

0.173

CBH Resources

AUD 0.11

-73.8%

425.0%

0.067

Queenston Mining

CAD 3.50

-17.3%

360.5%

0.165

Fresnillo

GBP 4.33

-24.7%

365.9%

4.600

Uranium One

CAD 2.91

-43.8%

385.0%

1.126

Dynasty Metals

CAD 4.85

-27.1%

361.9%

0.142

Kalahari Minerals

GBP 1.14

-10.6%

342.7%

0.302

Chariot

CAD 0.30

-72.5%

400.0%

0.081

Archipelago

GBP 0.10

-64.2%

387.5%

0.044

Guyana Goldfields

CAD 2.89

-56.1%

373.8%

0.140

Paramount Gold

USD 1.03

-50.7%

368.2%

0.064

Aurizon

CAD 5.14

-17.6%

324.8%

0.628

Peregrine Diamonds

CAD 0.66

-19.5%

324.4%

0.044

Bannerman

AUD 1.04

-59.8%

362.2%

0.117

North Atlantic Resources

CAD 0.10

-76.3%

375.0%

0.002

Toledo Mining

GBP 0.37

-79.0%

377.4%

0.016

Homeland Energy

CAD 0.20

-90.5%

387.5%

0.042

Dragon Mining

AUD 0.06

-39.0%

335.7%

0.032

Caledon Resource

GBP 0.34

-78.8%

371.8%

0.104

Oceanagold

AUD 0.70

-70.8%

363.3%

0.081

Imperial Metals

CAD 4.19

-60.1%

350.5%

0.111

Claude Resources

USD 0.53

-51.8%

342.0%

0.051

Augusta Resources

USD 1.81

-74.0%

364.1%

0.160

Boliden

CAD 8.47

-34.8%

323.5%

1.908

Andean

AUD 1.69

-10.1%

297.6%

0.564

Adamus Resources

AUD 0.41

-24.1%

310.0%

0.046

Medusa

AUD 1.60

-12.8%

290.2%

0.192

Sichuan Hongda

CNY 16.39

-54.6%

330.2%

2.476

Catalpa Resources

AUD 0.08

-27.6%

300.0%

0.033

Perseus Mining

AUD 0.83

-46.1%

315.0%

0.118

Mantra Resources

AUD 2.30

-42.5%

310.7%

0.261

Moto Goldmines

CAD 2.71

-45.1%

310.6%

0.196

Gryphon Minerals

AUD 0.25

-51.5%

315.3%

0.020

Uranium Energy

USD 0.71

-79.1%

342.6%

0.033

S American Silver

CAD 0.40

-37.5%

300.0%

0.017

Mercator

CAD 1.31

-89.9%

351.7%

0.117

Northern Dynasty

CAD 7.50

-29.2%

290.6%

0.572

Bumi Resources

USD 0.09

-90.3%

350.0%

1.746

Osisko

CAD 5.22

-14.4%

272.9%

1.097

Nevsun

CAD 1.38

-37.3%

294.3%

0.146

Uralkali

USD 13.76

-83.0%

335.4%

5.846

Anatolia

CAD 2.55

-42.0%

292.3%

0.241

Hunan

HKD 1.61

-53.1%

302.5%

0.339

Ridge

GBP 0.82

-42.9%

290.5%

0.112

Monterrico

GBP 0.98

-62.1%

306.3%

0.038

Iamgold

USD 7.90

-12.2%

255.9%

2.884

Emmerson Resources

AUD 0.16

-46.7%

290.2%

0.023

Pan Australian

AUD 0.34

-72.8%

314.6%

0.432

Allied Nevada

CAD 7.25

-11.5%

251.9%

0.342

Jien Nickel

CNY 26.54

-40.7%

279.1%

1.977

Western Goldfields

CAD 1.90

-41.7%

280.0%

0.212

Braemore

GBP 0.04

-62.8%

300.0%

0.047

US Silver Corp

CAD 0.13

-80.5%

316.7%

0.022

Cline Mining

CAD 0.42

-84.6%

320.0%

0.029

Blue Sky Uranium

CAD 0.12

-69.2%

300.0%

0.004

Searchgold Resources

CAD 0.04

-74.2%

300.0%

0.004

Herald Resources

AUD 0.41

-86.3%

310.0%

0.060

Firestone Energy

AUD 0.04

-47.1%

270.0%

0.035

Ferrexpo

GBP 0.87

-82.0%

304.7%

0.758

Camec

GBP 0.078

-87.6%

307.9%

0.322

Hochschild Mining

GBP 2.37

-44.8%

265.0%

1.080

Lingbao

HKD 2.79

-30.9%

248.8%

0.107

Silvercrest

CAD 0.69

-45.7%

263.2%

0.026

Averages/total

-48.6%

427.9%

40.748

Weighted averages

-65.2%

345.3%

* 12-month

 

Source: market data; table compiled by Barry Sergeant