Brokers give resources sector cautious nod

Brokers are betting on a brighter outlook for the resources sector even as commodity prices stay subdued, favouring large cap diversified stocks with the ability to weather a lower-growth backdrop, according to the Australian Financial Review.

The Bureau of Resources and Energy Economics will release its report on major mining projects today, while third quarter capital expenditure intentions are due from the Bureau of Statistics tomorrow.

Little change to capex intentions is expected given the long-dated nature of project commitments, but experts warn that the outlook beyond next year is unclear.

Greens, Oakeshott push to cap royalties

Parliamentary crossbenchers will try to pre-empt any government moves to limit state royalties credited through the mining tax, saying the money can be better used on hospitals and schools, according to the Australian Financial Review.

Independent MP Rob Oakeshott will second a Greens motion to cap royalties paid to companies at July 2011 levels. This means companies will have to pay the difference if states increase royalties. It represents a $2.2 billion budget saving.

“There is a problem, there are inconsistencies that still exist,” Oakeshott said.

Diversity in revenue streams adds lustre to BHP Billiton

China’s slowing growth and an expected move away from big infrastructure projects are highlighting the appeal of BHP Billiton's range of revenue streams – including oil – compared with its iron ore-reliant rival Rio Tinto, according to The Australian.

In a note to clients yesterday, Goldman Sachs said it preferred BHP stock to Rio.