Why the ASX is King of the Hill for Mining Investments
The Australian Stock Exchange (ASX) is home to the most actively-traded indices in the Asia Pacific region. Among the many sectors in the ASX, the Metals & Mining sector ranks highly. At last count, there were some 700+ ASX listed companies involved in mineral exploration, production, and development across 100 countries. Top-tier ASX companies include Rio Tinto and BHP Billiton. There are also junior mining companies and mid-tier production companies
in the mix.
The ASX is home to some of the world’s biggest metals, mining and commodity listed companies, and investors from all parts of the world are engaged in ASX trading. Since 2009, domestic investors and foreign investors have been instrumental in securing 270+ additional junior resource flotations on the ASX. Examples of top-listed mining companies on the ASX include Wolf Minerals Limited, Cudeco Limited, Teranga Gold Corporation, Iluka Resources Ltd., Anglogold Ashanti Ltd, and Sims Metal Management Limited.
The top 5 mining company stocks on the ASX include the following (subject to fluctuation):
- BHP Billiton Limited with a market capitalization of $98,643.9 million
- Rio Tinto Limited with a market capitalization of $77,823.4 million
- Alcoa Inc. with a market capitalization of $17,227.9 million
- Fortescue Metals Group Limited with a market capitalization of $12,642.0 million
- Newcrest Mining Limited with a market capitalization of $18,495.9 million
These companies are the leaders in diversified metals and mining, aluminum, steel, and gold. Investors looking to profit off the price movements in the metals and mining sector of the ASX can do so easily. Further, these stocks are the perfect alternative to exchange traded funds (ETFs). For example, there are 14 Australian stock exchange companies available to be traded with the metal lithium. These include the following tickers: CAG, CNY, PLP, AJM, MZN, LIT, ENL, LTX, GXY, BGS, ORE, NMT, PSM, CXB, TKL, PLS, RNU. Much the same is true for gold mining companies, platinum companies, iron ore, silver and others. Overseas investors looking to cash in on the lucrative ASX and its array of mining companies will do well to transfer money to Australia, to invest in these mining stocks. The way this is done is laid out under the services as described in sendmoneyaustralia.com. Small businesses in Australia, Australians living abroad, and others can easily transfer money to Australia, typically within 2 – 3 working days. The benefits of using money transfer services for investment in the ASX are tremendous cost savings on FX rates.
What Sort of Returns are Possible on Mining Stocks?
The early part of 2016 was characterized by lackluster performance in mining stocks. However, as China’s economic performance began to strengthen so demand for silver, gold, iron ore and other mineral resources increased. The future of metals like lithium is bright indeed. That’s why investors around the world are touting lithium as the must-have asset in a financial portfolio. The most important reason for lithium’s bullish prospects are electric vehicles. Lithium is a key component in electric vehicles, and for this reason demand for this element is going to increase sharply.
Australia is a first world country with a huge mining sector. The massive scale of mining operations down under accounts for AU$28,476 million of Australian GDP as at Q3 2016. The total value of Australian GDP is US$1,339.54 billion. Therefore mining accounts for approximately 1% - 2% of Australian GDP. Just a couple years ago, that figure was closer to 8.5% when the price of precious metals was much higher. Nonetheless, a strong uptick is expected what with a resurgent US economy and China on the mend. This will boost the prices of precious metals and industrial metals in Australia. Traders will do well to cash in on these opportunities while the market is in correction mode. Few, if any, markets provide traders with as much earning potential as the ASX in the mining sector. It is a largely untapped pool of profit waiting to be generated.