Copper fight highlights merger of equals flaw 28 Feb 2011 Lundin and Inmet wanted a quiet, nopremium marriage. Now a third copper miner, Equinox Minerals, has thrown in a $5 bln hostile bid for Lundin at a 26 pct premium. One message is that mergers of equals are usually copouts that can be easily trumped.
Prolonged oil shock threatens global growth 24 Feb 2011 Prices nearing $120 a barrel raise the spectre of previous spikes. In the emerging world, inflation is the main concern. Recession risks are highest in postbubble western economies. But oil would have to remain high for a sustained period to inflict serious damage.
Glencore partners eye Goldman-style bonanza 22 Feb 2011 When the Wall St bank went public in 1999, 221 partners shared $16 bln. The Swiss commodity group's 500 partners could share $60 bln an average of $120 mln when it floats. As with Goldman back then, the current Glencore generation will scoop up the entire franchise value.
Could US states devalue their way out of trouble? 18 Feb 2011 Some economists think weak EU economies could regain health by abandoning the euro. A few U.S. states are even contemplating their own currencies. A chapter from an imagined future history textbook casts light on the consequences of states adopting alternatives to the dollar.
G20 can’t control commodities – but rates would 18 Feb 2011 Nicolas Sarkozy's dream of guillotining commodity speculators won't find support in the G20. Brazil doesn't want any trading curbs and blames loose Western money. Brazil is right, tighter money may be the best way to fight speculation and may already be beginning to help.
Gold bears may be overlooking Asia’s gold bugs 17 Feb 2011 The yellow metal occupies a special place in the hearts of Asia's savers. With concerns about inflation mounting, gold's popularity is rising in India and China with official encouragement. That may confound growing suspicions that gold's rally has run its course.
LSE on better side of underwhelming TMX deal 9 Feb 2011 The London exchange bags the CEO seat and pays the smallest of premiums. Though the synergies are slim, the strategic logic is OK: it's not a bad move. But if the deal completes, the new group still won't be too big to be taken over assuming TMX does not get a counterbid first.
Buoyant copper is riding for a fall 9 Feb 2011 The red metal has busted through $10,000 a tonne, partly because of its links to Chinese growth. Demand outstrips supply, so the market is tight. But financial participants have clouded the picture. When they lose interest, or if China proves fickle, copper prices could tumble.
As interest rates climb, gold could tank 1 Feb 2011 The yellow metal's price has tripled in the last five years as investors, wary of money printing, craved something solid. Now cash is coming out of one of the world's biggest gold funds. As global growth and inflation picks up and interest rates rise, gold could fall hard.
TNK-BP owners’ Rosneft ire seems like a ploy 31 Jan 2011 A court case launched by the oil firm's oligarch coowners is ostensibly aimed at scuppering BP's Rosneft deal or forcing TNKBP's inclusion, but neither outcome is likely. The real aim is to pressure BP to make the concessions that would fuel TNKBP's international expansion.
Exxon’s Rosneft deal mimics BP without strings 27 Jan 2011 The U.S. oil major's Black Sea development pact is a smaller version of BP's deal, with a crucial difference: there's no share swap. The reason? Exxon isn't desperate.
U.S. oil independence no longer a joke 26 Jan 2011 America imports 10 mln barrels of crude daily. Presidents have paid lip service to reducing this dependence since the 1970s. But as drivers shun gas guzzlers and U.S. production rises, imports could be cut in half this decade. Oil selfsufficiency could even be within reach.
Egypt’s handouts look unsustainable 25 Jan 2011 Subsidies have been stepped up by governments across the Middle East to stem social unrest following the landmark uprising in Tunisia. Oilrich Gulf states can afford this bribery; but not oilpoor highly populated countries such as Egypt.
Sarkozy’s G20 plans fail to impress 24 Jan 2011 Though it is France's turn in the G20 chair, it's hard to see that President Sarkozy's calls for more commodity markets regulation, a reformed world monetary system and a financial transactions tax will gain much traction. His focus on food prices may not be unhelpful, however.
Cargill valuation validates Wall St rules of thumb 19 Jan 2011 With its Mosaic sale, the world s largest private firm has lifted the kimono a bit. Newly available figures put Cargill s value at about $55 bln. That s roughly the same as had been estimated using multiples of publicly traded rival ADM. High finance isn t often rocket science.
Cargill gives BHP a second shot at potash 18 Jan 2011 The biggest private U.S. firm is spinning off its majority stake in $37 bln phosphate and potash producer Mosaic. The complex deal will create three share classes and take a while but should still invite suitors in time. And Minnesota may be more welcoming than Saskatchewan.
Why it’s time to sell the family silver 7 Jan 2011 Prices have risen so sharply that London antique dealers are buying Edwardian cutlery for scrap. Bulls point to the perils of paper money and the white metal's cheapness relative to its yellow rival. But oversupply means silver may be fool's gold, not the poor man's alternative.
Commodities cast wary eye on dollar and liquidity 6 Jan 2011 Despite good economic news, commodities have wobbled this week. Oil, food and metals prices all thrived on a weak dollar and low interest rates. But growth, inflation and higher interest rates point to a firmer dollar and tighter liquidity. Commodities may be volatile in 2011.
Alcoa may finally be ripe for picking 6 Jan 2011 The $17 bln aluminum producer is a mainstay on the takeover talk circuit. But a successful deal for a cyclical company hinges on timing. With the economy ramping up and a trio of eager and frustrated buyers BHP, Rio and Vale in the wings, Alcoa s time may have come.
Investors still over-gloomy on BP 6 Jan 2011 The UK oil major's shares have shrugged off a damning White House report into the Gulf of Mexico spill. It's still hard to be confident about the final tab for the disaster. But based on the latest estimates, a Breakingviews calculator suggests investors are on the bearish side.