It was provided by the best in the sector

Since the time that the increase in the cost of raw materials suggested us the idea of a circle specially dedicated to the question! The meeting eventually stand... in the aftermath of a severe correction on all the markets: energy, gold, non-ferrous metals! Evidence that lighting experts was needed more than ever. It was provided by the best in the sector. Ms. Nathalie Alazard-cough, Director of studies at the French Institute of petroleum, has delivered its macroeconomic analysis. While the other three participants brought their visions of managers and investors. In this case, it was Edouard Carmignac, one of the first managers French launched a fund dedicated to raw materials. Similarly, Jean-Bernard Guyon was able to enjoy his experience meeting, since the President of the Executive Board of Global Management is probably one of the oldest Parisian market on the raw materials and natural resources sector. As Frédérique Dubrion, she arrived from Geneva, where, in Bearbull, it also invests in natural resources through two specialized funds, for the moment "long only." But with a vision of future alternative Manager. Thus, it had as many suggestions of securities, or sectors, the sale and purchase. However, as a first step, it fell to Nathalie Alazard-cough the picture of the supply and the demand for oil and gas. For her, it is clear that "all overcapacity have now disappeared."

NATHALIE ALAZARD-COUGH. Currently, the entire chain suffers from tensions that appear to be sustainable, unless a strong slowdown in demand... In addition, it seems unlikely that the investment needed to bring the global capacity of refining at the desirable level are made in the next five years.

EDOUARD CARMIGNAC. Do you have measured an evolution of the storage over the previous year

NATHALIE ALAZARD-COUGH. In the countries of the OECD, industrial storage in number of days of consumption tend to decline over the past ten years, increasing tensions. This phenomenon is often overshadowed by our habit of thinking from one year to the other rather than over a long period.

FRDRIQUE DUBRION. What investment would be needed, upstream and downstream, to find a less tense situation

NATHALIE ALAZARD-COUGH. It is quite difficult to judge. We are currently an increase in investments but, at the same time, therefore current tensions on the only human as well technical means, costs increase strongly.

FRDRIQUE DUBRION. This is not unique to the oil sector. The chain of production of raw materials is a deficit of human capabilities, with repercussions in terms of costs. This deficit also slows the implementation of new projects. All the companies we reported, either in the field of precious metals, the metal base or sands, for example in the petroleum sector. Sectors of mining engineers and geologists have not preferred by students, where they offered few opportunities in times of depressed classes where mining and oil companies have vagrant more than hired staff.

NATHALIE ALAZARD-COUGH. On the other hand, the cyclical nature of the activity in the oil sector gives rise, among companies, a reluctance to widely expand their workforce.

EDOUARD CARMIGNAC. Yes, the human problem must not be neglected and translates into increases in costs. However, I do not think that profitable projects are blocked or human resources. The ability to entice away top executives of the underperforming oil groups remains. The Brazilian State company Petrobras manages thus to find competent personnel without difficulty. Similarly, Schlumberger has to a real advantage over smaller internal University and its global network service companies.

One of the major problems facing the offer is the inertia of the projects. It is more easier than before to find a very large deposit with high potential. In addition, environmental standards are today very restrictive, even in full Papua, to quote the example of Freeport.

The last problem is the legitimate appetites of the host countries. While rising prices should encourage an increase in production, we may be found to the contrary in many countries a decline of the latter. This is the case in the Venezuela and Ecuador, and this will be the case of the Bolivia. Similar phenomena will occur in the mining field.

Jean-Bernard GUYON. companies we know in some subsectors of industry complain bitterly of the skilled labour shortage. I know a company that specialize to drilling for the mining industry, thereby avoiding the mining risk. Its leaders showed me that its development was greatly hampered by this problem. No school form of well drillers. This is a bottleneck of the industry which may loosen before many years.

Similarly, the analysis of samples by the laboratory requires much more time that five or ten years ago. Recovery occurs in a context where the specialists, to meet their needs, have had to convert.

That said, the increase in the price of raw materials is perhaps not justified throughout. Between speculation and overvalued, is there not the markets on which you would be rather seller and buyer

FRDRIQUE DUBRION. effectively. I am particularly concerned about the level of the courts of the copper.

However, the gold sector and the oil sector, including the international deep offshore, seem remain very interesting, especially after the correction made these days. In the field of base metals, I think that zinc needs justify also high prices.

The lack of projects in the field of raw materials will lead to the concentration. It should be search projects in development or production already which may be of interest the important players experiencing difficulties of growth due to lack of upstream investments or by difficulties of access to interesting areas.

JEAN-BERNARD GUYON. In my view, the IMF will have to revise its forecast downward. On the one hand, an economic slowdown will occur in the United States. On the other hand, according to my information, the Chinese Government is extremely concerned about the excitement of its economy and would reduce its rate of growth of 10 to 8.

In these conditions, I expect rather a continuation of the consolidation in the field of the metals rising from

know a judgment coup. The dramatic increase in the course belongs now to the past. We will a phase in which the courts remain high but will be volatile, to stabilise at a slightly lower level than we have recently reached. We will have to work in a context may be slightly less favourable. Therefore, the investment strategy will begin to change.

What do you think of the debate on the rebalancing of energy sources, particularly in favour of nuclear power

EDOUARD CARMIGNAC. Given the mediocrity of world political staff, which is growing but that seems difficult to get worse, a country to decide it to adopt a policy of conservation of energy worthy of the name and it will seek to develop alternative energy sources, inter alia by tax incentives I did not noticed such.

JEAN-BERNARD GUYON. Fiscal support quickly shows its limits.

EDOUARD CARMIGNAC. If Mr. Bush decided today the establishment of a surcharge on the large displacements, General Motors and Ford has to be not.

Currently, Mr. Bush wants rather financially help us drivers to mitigate the effects of the increase of oil a measure that will not improve the situation, while the Democrats, whose expected another approach, to reduce taxes on oil! All these measures encourage consumption. This situation makes me optimistic for the price of oil but pessimistic consumers. I see nothing that would contribute to an awareness, even though China has increased by 10 the price of its oil, for which there was a discount of 30 from world prices. I'd see flower development of nuclear energy projects.

FRDRIQUE DUBRION. I was still surprised the reaction of the oil companies that publish on this topic! Number of ads from BP concerning alternative energies. That sounds even more daring that one might consider that they thus derive is "shot in the foot."

EDOUARD CARMIGNAC. Is it not a public relations operation

FRDRIQUE DUBRION. No doubt in part. Nevertheless, given the price of a barrel, the conservation of energy is necessary, and increasingly projects are designed for alternative energies.

With regard to nuclear power, which Tony Blair recently said that it was appropriate to return it to the taste of the day, the France is already remarkably well equipped. China talks to increase its fleet. If the price of the book of uranium has increased considerably, exceed the $ 42, speculative focus, in my view, on the small titles in the field of the exploration of uranium. A myriad of small companies have been introduced on the market, with as only active areas of exploration and the hope of proving a deposit. A number of titles in this sector recently rated in Australia saw their value triple by report in introduction. On the uranium market differ perhaps six major world producers, public part, such as Areva. The only major title of quality which can invest is Cameco. Others, such as Denison or Paladin, have or will start production. For the rest, the sector is marked by a strong speculation.

NATHALIE ALAZARD-COUGH. Do not underestimate the phenomena of inertia. If tomorrow we have a technology that saves 50 of the consumption of a vehicle, the renewal of the French fleet would still take more than fifteen years.

Moreover, the primary energies are specialized: in ascending (a specialization that will go) transport oil and nuclear power in electricity generation.

On the other hand, the massive development around the world with technologies now used nuclear would also encounter a problem of resources.

Edward CARMIGNAC. if a strong political will supports the use of nuclear power, seven years are required for the launch of a plant. Large deposits, including those of the Western Mining by BHP, exist in Australia. They should cope with the demand.

To illustrate your analysis, you have the names of values to suggest

Jean-Bernard GUYON. the following three names come to mind: Geophysics; Viceroy, who works in the areas of gold and silver in Argentina and which is listed in the Canada; Centurion, for natural gas in Egypt.

FRDRIQUE DUBRION. I quote Southwestern Energy, American company listed on the United States, 93 gas.

In the gold sector, I had the same idea as Mr. Guyon. I think that Viceroy is likely to be bought.

Finally, I will refer SNC-Lavalin, a Canadian company that develops activities in several countries, particularly in the Middle East. It assumes a comprehensive approach to commodity sector while being an infrastructure company.

Edward CARMIGNAC. investors in securities markets have behaved in a schizophrenic manner. The development of mineral resources was not in relation to the prices of the correlated securities.

I would tend to place half of the money to invest in energy, a third in the gold sector and the balance in the non-ferrous metals.

It is not simply to consider metals but also countries in which operate the companies; in this regard, the Argentina is not all the guarantees I have. By contrast, Phelps Dodge, very large North American company that is not present in the country at risk, with the exception of very marginally, of the Democratic Republic of the Congo, sees action traded at 83 dollars, including $ 30 in cash. Currently, the title value on the basis of the current less than 4 times the benefits, with a high performance can be maintained. Certainly, the copper is survalorisé, but not the action, unless a fall of the prices of copper from $ 4 to $ 3. For an investor reasoning in the medium term, the title presents no danger.

Gold, for slowing world economy, phenomenon that would speed the decline of the dollar, would be an investment of choice. I would opt for a company working in politically sympathetic countries, and I would choose the securities of the company GoldCorp, featuring a broad market and whose production is growing; its title is negotiated to a multiple of 21 for this year and 15 for next year, what find me really cheap.

In the energy sector, I would prefer companies to oil companies. You can of course choose Schlumberger, but I would opt for Smith International, extremely well managed services company.