Majors set for another good year

AFTER a glowing 2017 for the mining sector, many might be afraid fortunes could change in 2018, but Macquarie reckons diversified miners are set for a third year of outperformance.

Majors set for another good year Majors set for another good year Majors set for another good year Majors set for another good year Majors set for another good year

"The combination of two years of strong performance for the mining sector and a slowing Chinese economy would seem to indicate that it is time to take profits in the sector. Could 2018 be a repeat of 2011, when the mining sector underperformed the broader market by 24%?" analysts at the bank asked in a note.

"We think there are a number of key differences as to why the miners could see a third year of outperformance, thus avoiding a repeat of the previous 2008-11 cycle."

The reasons for this view were more muted sector capital expenditure levels, limited calls for additional tax payments, less focus on China, a continued upgrade cycle and the sector still looking cheap compared to the broader market...