“We are not convinced that at this stage we are at the beginning of a new supercycle for commodities,” Cullens told Bloomberg. “We don’t believe that anything fundamental has changed which is going to make the sector particularly attractive over the next 12 to 18 months. This is a rally still in a bear market.”
Troye Brady, analyst at Noah Capital Markets Ltd., also mirrored the cautious outlook, arguing that mining stocks only rebounded from oversold levels rather than strengthened from long-term fundamentals.
“The resources index was very, very oversold,” Brady told Bloomberg. “I don’t think the bad news is out of the system yet. It does seem like a bit of a relief rally.”
South Africa’s mining industry remains vulnerable to slowing global growth, notably as Europe and China show tepid expansions.
iShares MSCI South Africa ETF
Max Chen contributed to this article.