Resource shares slump in tandem with weak energy, iron ore and metals prices

London

RESOURCE companies have experienced an horrific bear market in tandem with the slide in energy, iron ore and metals prices.

Fashionable during a euphoric boom, the resource share slump is a warning to investors who are rushing into the next speculative play, notably pricey social networking stocks and new initial public offerings.

Several analysts now believe that the resources sector is oversold and relative good value compared with the rest of the equity market. But for any sustainable rally to occur, commodity prices need to reverse, move sharply upwards and remain at higher levels.

Losses have been awful for pension companies, other institutions and individuals who purchased resources shares on the grounds that the large companies pay juicy dividends and demand for commodities would remain strong. Instead …