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Coronavirus a market threat, and opportunity, says Canaccord

Canaccord Genuity has an optimistic outlook for the ASX resources sector this year, notwithstanding the obvious caveat that is the coronavirus outbreak.
Coronavirus a market threat, and opportunity, says Canaccord Coronavirus a market threat, and opportunity, says Canaccord Coronavirus a market threat, and opportunity, says Canaccord Coronavirus a market threat, and opportunity, says Canaccord Coronavirus a market threat, and opportunity, says Canaccord

Image: iStock/gguy44

Michael Quinn in Fremantle

While Canaccord's head of mining research Reg Spencer believes the full impact of coronavirus is yet to be felt, any assumption around it being brought under control means the current period could in fact represent a ‘buying' opportunity on the basis of future stimulus spending in China.   

As such, Spencer is positive on the pricing trajectories of copper and nickel.

Speaking at the very popular RIU Explorers Conference, he also expects the 10-year bull market in ASX gold stocks to continue given multiple supportive macro factors for bullion.

He further anticipates M&A to continue in the gold space, with more of a focus on the smaller end of the sector.

Elsewhere, Spencer flagged a potential turnaround year in the making for lithium producers in 2020 given the classic "bottom-of-the-market-signals" being seen such as prices being below the cost of production for about two-thirds of global output, as well as projects being slowed, deferred or closed.