CBA reports upswing in agribusiness sector

The agribusiness sector has bounced back in the last month, outperforming the broader S&P/ASX200 with gains of over 10 per cent.

According to the Commonwealth Bank’s April Agri Indicators Report, the agribusiness sector delivered returns of 12.8 per cent to investors compared to 12.4 per cent for the S&P/ASX200 index.

“Whilst the sustainability of the recovery is critical, the last few weeks certainly have provided a more positive outlook for investors with exposure to stocks within the agribusiness sector,” said Brendan White, executive general manager, Commonwealth Bank Agribusiness.

The bank’s report said that while the consensus outlook for the sector had improved in the last month, it “remains modest at best”, but is expected to hold its ground and outperform more volatile sectors such as energy and materials.

“The April Agri Indicators Report confirms that while the market will remain volatile, a number of agri stocks continue to trade at a discount to their underlying fundamentals,” White said.

“Although this may present strong buying opportunities, investors will no doubt remain cautious in the short term.”

The Commonwealth Bank Agribusiness Indicator Report features 16 stocks, 11 of which returned more than 10 per cent in the past month, with seven stocks delivering returns greater than 20 per cent.