Why Abax is turning up its nose at precious metal stocks
Abax Investments, a South African hedge-fund firm part-owned by Affiliated Managers Group, is giving precious-metal stocks the short end of the stick. The Cape Town-based investor, which has the equivalent of $6bn under management, is betting that South African gold and platinum producers are going to fall after a rally that drove stocks to multiyear highs. Mining companies had already cut costs substantially, supplies remained robust and safe-haven demand had eased since the US election of Donald Trump, Abax co-founder Anthony Sedgwick said in an interview. "I don’t buy the platinum supply cliff story at all," he said in reference to some forecasts that the metal could soon be hard to find because low prices have discouraged miners from investing in shafts. "I’ve been hearing that for 20 years and they always keep producing." Investors fled to gold for safety following the UK vote to the leave the EU and immediately after Trump won. Since then, gold has dropped more than 7%, while ...
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