Markets gain from Chinese potential

Commodity shares should be a value investor's dream. Technical supply constraints benefit the oil sector, while over the longer term, metals stand to gain from the huge potential of the rapidly growing Chinese market. Meanwhile, valuations are cheap because of a de-rating that occurred throughout the 1990s. That de-rating can be attributed to a drop in inflation fears, overcapacity in many resource-based industries and low earnings growth. The end of the decade saw crude oil fall to less than $9 a barrel and commodity shares being dumped in favour of technology, media and telecoms an...