[BRIGHT INFO] Our Focus Metal Sector

A rebound in China's official purchasing managers' index (PMI) in March shows that the Chinese economy may have bottomed out. China's official PMI, a measure of activity in the manufacturing sector, rose to 52.4 in March from 49.0 in February, marking the first time the index has been in expansionary territory since September. A reading above 50 indicates expansion. The March PMI also showed that China's economic stimulus measures had created demand and boosted growth, he said.

On the other hand, The Global Total Output Index, produced by JP Morgan on Friday with research and supply management organizations, rose to a 5-month high of 40.1 in March from 37.4 in February, but remained below the 50.0 mark that divides growth from contraction.



The 16-nation euro zone's dominant service sector contracted sharply again in March, but not as rapidly as in February, while the UK service sector PMI reached a 6-month high. The index combines data from countries including the United States, Japan, Germany, France, Britain, China and Russia.




US manufacturing contracted in March as the PMI registered 36.3 percent, which is 0.5 percentage point higher than the 35.8 percent reported in February.



This is the 14th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.



ISM: It seems as if the industries are bouncing along the bottom, the good news is that it does appear to be stabilizing over the last three months. Things aren't improving but it doesn't look as if the situation is deteriorating.


The March ISM manufacturing report was mildly encouraging because new orders look relatively strong.


It's a fairly striking move up in the orders index. Some of that has to be for real. Now only 9 points away from a reading of 50 and a reading of 50 reflects stability. Optimists would see hints of a beginning of the end of the inventory correction.

We agree that demand for metal like Nickel and Tin still low in the short-term. But with this situation we believe that demand from manufacturing will start improve. We believe demand for Nickel, Tin and another base metal will picking up on 2H09 and getting better on 2010. The price for Nickel and Tin looks stable and we think the price had reach the bottom.

Our recommendation is start accumulating metal sector like INCO, ANTM and TINS for mid to long-term investment.

[Personal Opinion ]
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