Zambia debt dispute undermines African credit 17 Apr 2018 The copper producer has denied it has dollar debt beyond its $8.7 bln of foreign borrowing. Its vague clarification comes two years after a $3 bln bond scandal in neighbouring Mozambique. Bilateral lending, particularly from China, is blurring the credit picture across Africa.
Russia’s banks could once more be its airbag 16 Apr 2018 The Kremlin has already authorised short-term liquidity to metals group Rusal. If the U.S. sanctions net gets cast wider, Moscow could use its control of the big Russian banks to prop up stricken companies. After all, that’s what it did when things last got dicey in 2014.
Qatar/Exxon love-in makes two types of sense 12 Apr 2018 Deepening its relationship with the Texas-based oil major would tie the Arab state more closely to the U.S. after recent tensions with Saudi Arabia. It also gets Exxon investing in infrastructure. That could open up the global market, to the benefit of both parties.
DSM has ingredients for long-term health 12 Apr 2018 Shares in the Dutch vitamin and chemicals group hit a record high after it reported strong first-quarter sales. A fire at German rival BASF’s plant cut supply, prompting a spike in vitamin E prices. A healthy underlying business shows the valuation boost needn’t be temporary.
Opacity makes U.S. sanctions on Russia more potent 11 Apr 2018 Rusal aluminium will be barred from London’s Metal Exchange, and the Russian group and parent En+ will be deleted from some stock indices. In theory, non-Americans should be able to deal with both. But fear of how rules will be enforced is compounding the pain of tough sanctions.
Trump trade war risks European carmaker backfire 10 Apr 2018 BMW and Daimler sell a surprising number of American-made vehicles in China. Were the U.S. president’s tariff-war rhetoric to become reality, carmakers could shrink stateside production. If Trump wants to keep rather than lose jobs, he should seize Beijing’s latest olive branch.
Bayer investors get unwelcome antitrust present 10 Apr 2018 The German company has struck a deal with U.S. regulators to clear its $60 billion acquisition of seed group Monsanto, the Wall Street Journal reported. After EU approval in March, a two-year saga is almost over. Bayer’s sagging stock price means shareholders can hold the cheers.
Glencore’s Rusal cloud has a silver lining 9 Apr 2018 The commodity trader is nursing a hit to its 9 percent stake in the Russian miner, whose shares have halved due to U.S. sanctions. But the loss is bearable and disruption to the aluminium market and growing protectionism may end up helping CEO Ivan Glasenberg’s trading business.
Russian stocks deliver sanctions face-palm moment 6 Apr 2018 The U.S. sanctioned Rusal and EN+, as well as related oligarchs like Oleg Deripaska. The danger that groups close to the Kremlin might get burned was pretty clear in EN+’s recent IPO prospectus. Governance and politics are as critical to such companies’ value as their operations.
China brings a gun to its U.S. trade gunfight 4 Apr 2018 Beijing proposed duties on $50 bln of American exports hours after the U.S. said it would tax the same value of Chinese exports. Doing so may hit China’s economy, but that’s the point. The readiness to go toe-to-toe implies Trump’s trade war will be neither good nor easy to win.
Harbour closes in on $10 bln Santos at a price 3 Apr 2018 The private equity-backed outfit is offering 43 pct more for the Australian gas group than it did in August. That’s bold, even if energy prices have risen and the target is in better shape. Harbour must have re-run its spreadsheets, but Santos is wise to engage at this point.
China’s soybean trade card is difficult to play 3 Apr 2018 New tariffs target $3 billion worth of U.S. imports. But they don’t touch a big American pressure point: soybeans. This first round is a warning shot, to be sure. But retaliating against this commodity would hurt Chinese farmers and consumers, so Beijing might save it for last.
Coal clearout puts Rio on path to greener deals 28 Mar 2018 The Anglo-Australian miner has raised $4.2 bln this month getting out of coal. That implies more buybacks and fewer environmental concerns, helping lift Rio Tinto’s modest valuation. It can also focus on future growth, including investments in battery ingredients like lithium.
Market tools can slake Cape Town’s water thirst 19 Mar 2018 The South African city’s taps may not run dry this year, but low rainfall, population growth and invasive flora keep the threat alive. Poor governance adds to the risk. Tradable water rights could bypass many of those problems, and set an example for other arid regions.
China’s lithium trouble in Chile hints at more 15 Mar 2018 A government agency wants to block Tianqi Lithium's bid for a stake in $13 bln rival SQM, arguing the market is too concentrated. China seldom gets pushback in resources M&A. Beijing can expect more potholes as it tightens its grip on ingredients for electric vehicle batteries.
ArcelorMittal’s India homecoming may be scrappy 14 Mar 2018 The world’s largest steelmaker is back on the acquisition trail with a $6 bln bid for bankrupt Essar. It paves the way for the family to go back to its roots. The Mittals would face an inhospitable environment, but it's probably manageable for a company spawned by a hostile deal.
Shell investors could live with a BHP shale punt 9 Mar 2018 The Anglo-Dutch oil major may bid with Blackstone for the miner’s $10 bln U.S. shale assets, Sky says. The business would be less risky for Shell’s balance sheet than drilling for traditional oil. And private equity’s high return targets could reduce the danger of overpaying.
Viewsroom: Trump slaps tariff fear on markets 8 Mar 2018 Imposing levies on steel and aluminum has lost the president his economic adviser, ex-Goldman No. 2 Gary Cohn. That has shocked investors out of complacency. Also: Italy’s elections leave fringe parties in charge. And big deals may be back on the agenda for the mining industry.
Chile can set copper behemoth on market trajectory 8 Mar 2018 Codelco needs cash - and plenty of it. Attempting to privatise the world’s biggest copper producer would be politically toxic. Still, there is plenty Chile's incoming President Sebastian Piñera can do, starting with handing the group more control over its finances.
Oil-obsessed U.S. is drilling itself into a ditch 8 Mar 2018 Shale producers are tilting the market such that international oil drillers will scramble for some time. That’s provoking creative thinking. From Aramco to BP, large international oil firms are planning credibly for a lower-carbon world. Eventually, Americans will come up short.