Investors exiting retail stocks to seek other avenues for growth may look to the resources sector as its prospects seem to be on the up. This year, the JSE General Retailers index dropped 20.82% as the consumer environment was marred by slow spending, high food inflation and declining credit sales. In the same period, resources saw a resurgence, lifting the Resources 10 index 33.5%. A similar trend was evident in 2015, when the General Retailers index gained 8.84% while the Resources index was down about 19.5%. Kaeleen Brown, a retail analyst at SBG Securities, said this week that, historically, these stocks tended to move in opposite directions, "so when one has done well, the other hasn't". Also, Brown said, the retail sector was driven by interest rates, consumer confidence and growth, whereas resource stocks were driven by different factors: "It's more about the commodity cycle." In the second half of last year, resources were underperforming after a drastic slowdown in demand b...
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