After a cooling period for gold and rare earths, Australian investors are seeking fresh opportunities for growth on the ASX. This follows a period where gold prices retreated due to a stronger US dollar and easing US-China trade tensions, impacting both bullion and silver markets. Rare earth stocks, including Arafura Minerals, Australian Strategic Material, and Australian Rare Earths, also saw declines as initial excitement over critical minerals deals waned.
Amidst these shifts, investment managers are highlighting promising sectors. Alphinity Investment Management suggests the consumer discretionary sector, particularly JB Hi-Fi, as a strong contender due to potential interest rate cuts boosting consumer spending. They also favour REITs like Charter Hall and GPT, anticipating benefits from lower rates. Wilson Asset Management also supports REITs, with GPT and Goodman Group being named. VanEck is optimistic about consumer-facing stocks such as Eagers and Temple & Webster, alongside JB Hi-Fi and Qantas.
Ophir Asset Management points to Codan, a $6.3 billion company producing metal detectors and drones, as a standout. Codan dominates the metal detector market in Africa. UBS analyst Nathan Reilly highlights ALS, a laboratory services giant, as a key industrial sector buy due to its correlation with gold and copper. ALS provides laboratory services.
In the technology space, Firmus Technologies, backed by Oliver Curtis, is expected to capitalise on the AI revolution. Other picks include Afterpay owner Block. For small caps, Smart Parking and mining technology company Chrysos are also being suggested as alternatives by Regal portfolio manager James Sioud.
