De-globalization forces remain strong into 2011 4 Jan 2011 Antidumping policies, capital taxes and currency manipulation erected global market barriers in the Great Recession, while globalizing actions have been few. In 2011, deglobalization could gather pace if commodities continue to surge or if there's another financial crisis.
Oil bulls may have to pull in their horns 29 Dec 2010 They say an intensifying struggle to lift output will collide with unstoppable Asian expansion to push the oil price above $100 a barrel. In fact, the cost of crude may be held down by a halving of demand growth as producers from Russia to Africa via Brazil ramp up supply.
Dollar rally has further to run 10 Nov 2010 Far from collapsing on QE2, the greenback has bounced. A sick euro zone favours the dollar over the single currency. A wave of risk aversion is possible. Equally, improving U.S. economic data raises the chances of a broad dollar recovery.
World Bank’s gold standard lite idea not crackpot 8 Nov 2010 The world is unsettled by QE2 and currency wars. Robert Zoellick, the World Bank head, is saying gold could serve as some sort of currency reference point. Such a scheme could be used to push up the value of China's currency. Whether Beijing plays ball is another matter.
Private sector should lead gold standard adoption 8 Nov 2010 A proposal from the World Bank boss to use gold as a reference point could prove destabilizing. Like the Bretton Woods system, such a governmentrun peg would break under stress. A better approach would flip the monetary order and use gold as a private means of global exchange.
Potash shareholders should just say no to BHP bid 2 Nov 2010 Not because Saskatchewan needs protecting, but rather because BHP s offer is too low relative to share rallies of rival fertilizer groups. Agrium s have surged a third since BHP s bid, while Mosaic s and CF s added more than 40 pct. On this basis alone, Potash is a $150 stock.
Potash looks like Cadbury, without the chocolate 29 Oct 2010 The Canadian fertilizer group s battle against BHP resembles the one Cadbury waged before folding to Kraft. The similarities include lack of competing bids, noisy politics and antsy shareholders. Barring a government shocker, it s hard to see a wildly different outcome.
Corn chaos casts cloud over commodities trading 14 Oct 2010 Violent swings in corn prices following recent contradictory statistics have exposed flaws in the way commodity markets work. The latest surge threatens a food crisis for the poor even though the global harvest is the thirdhighest ever. The market is not working for endusers.
Copper trackers don’t glitter like gold 13 Oct 2010 New basemetals exchangetraded funds look riskier than their preciousmetals counterparts because they may hold a higher proportion of global supply. That could cause shortfalls and price spikes for copper, tin and the like and gluts once investors inevitably lose interest.
Reserves and growth make Severstal Gold attractive 29 Sep 2010 Russian miner Severstal looks set to spin off its gold division in a London listing likely to value it at around $4 billion. The rumoured price isn't cheap. But international diversification, large reserves and growth prospects should make the issue a hit.
Louis Dreyfus merger looks odd for Olam 24 Sep 2010 A deal could be worth $15 bln and would create the world's third largest agricultural commodities trader. Big may be better in trading, and the tieup could advance the French group's strategic ambitions. But a combo may dilute the attractions of nimble Singaporeanbased Olam.
China’s rare earths grip shows free trade limits 21 Sep 2010 PRC producers dominate the market, and a sharp cut in export quotas has sent prices soaring. That s a blow to hightech industrial users of the metals elsewhere and a reminder that the assumptions that make globalization beneficial can easily be thrown off.
AngloGold rightly bows to gold bug holders 15 Sep 2010 The gold miner is diluting shareholders to remove the last of its hedges. Hedging protects operations in down markets for the metal. But most investors are betting on the gold price and hedging as well as muddying financial results deprives them of the exposure.
Potash CEO’s big payday won’t decide the deal 25 Aug 2010 A $500 mln check would normally sway the minds of most mortals. But Potash CEO Bill Doyle has sat on larger sums before and held tight. With his golden parachute just 6 pct of the payoff, he has no obvious incentive to shortchange shareholders with a quick flip of the firm.
BHP takeover would upset cozy potash market 25 Aug 2010 Potash Corp's size means its production can affect fertilizer prices. If BHP succeeds with its $39 bln takeover bid, it promises to run Potash mines at full capacity. That probably would help farmers, at least in the short term, and hurt highcost producers like K+S and Intrepid.
Mining deals show M&A funding market is open again 18 Aug 2010 Banks have lent acquisitive miners more than $50 bln in the past week. With bond markets healthy, lenders may be expecting much of this to be quickly refinanced. Nevertheless, the ready supply of funding for big, risky deals shows the appetite for M&A lending is back.
Potash defense may include Chinese wildcard 18 Aug 2010 The Canadian fertilizer group is willing to sell but only at a price well above BHP's $39 bln offer. Getting an auction going is its best bet. Obvious players are hamstrung and short of time, but there are other options and the company s allure could draw out surprise bidders.
BHP’s diversification case is far from compelling 18 Aug 2010 The miner has the financial firepower to raise its $39 billion bid for Potash Corp. It may also make some improvements to the world s largest fertiliser group. But the deal won t substantially alter the shape of BHP s business just make it look more like a commodities index.
BHP puts itself in focus with $39 bln Potash bid 17 Aug 2010 The mining giant's measly allcash offer for the world s largest fertiliser group was firmly rebuffed. Though the commodity is hot, Potash Corp s size makes a bidding war unlikely. Even so, BHP needs to prove a deal is a better use of its cash than returning it to shareholders.
Potash dynamics suggest more upheaval to come 17 Aug 2010 BHP s huge $39 bln offer for Potash Corp highlights a trend. Demand for potash fell off a cliff in 2009. But it will more than recover as growing prosperity leads people to eat more foods that need fertilizer. High barriers to entry favor acquisitions over digging new mines.