Citigroup sees bullish commodities as spending cuts choke supply

Shanghai

COMMODITIES are poised to strengthen in the second half and through next year, pulling in more investors, as spending cuts curb supply and demand continues to expand at a moderate pace, according to Citigroup Inc.

Markets for raw materials "continue to lurch toward rebalancing" and a strong performance will support new investment inflows, both in physically backed exchange-traded funds and passive long-only vehicles, analysts led by Ed Morse said in an e-mailed note received on Monday.