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.
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.
QE2 may not be so harmful for the greenback 11 Aug 2010 The first rule of currency trading is there are no rules. Even so, the dollar s rise after the Fed s return to easing seems counterintuitive. Yet with banks reluctant to lend, few believe Fed actions will boost the money supply while global slowdown fears could favor the dollar.
$7.1 bln gold deal takes double leap of faith 3 Aug 2010 Miner Kinross is buying Red Back Mining, hinting its target's Mauritanian mine contains more gold than thought. To justify the price, both that and the gold bugs' broader narrative need to play out. With Kinross shares off 5 percent, even some enthusiasts see that as a stretch.
BP’s $7 bln Apache deal ticks the right boxes 21 Jul 2010 The UK oil major's disposal programme is off to a good start with the sale of assorted noncore assets to U.S. peer Apache. True, this will have an impact on growth. But BP has proved it can get decent prices despite being a hurried seller, taking some pressure off further sales.
Goldman and BP suffer costly reputational hangover 16 Jul 2010 The Wall Street bank seems to have got off lightly with its $550 mln SEC settlement, while the UK oil major has stopped oil flowing into the Gulf. But both companies' market capitalisations have lost more than the quantifiable cost of each episode. The missing link? Reputation.
Russian-Kazakh gold spat doesn’t look pretty 13 Jul 2010 A plan by Russian oligarchs to turn Polyus Gold into a Londonlisted goliath has hit trouble in Kazakhstan. It's all part of a battle with former owners of KazakhGold, whom the Russians accuse of massive fraud. But no one in this game of subterfuge looks totally unblemished.
Hayward testimony is potential accident for BP 17 Jun 2010 Coming after the chairman's small people slip, the appearance of BP's gaffeprone CEO before Congress means another nailbiting day for investors. Congressman Waxman wants to show BP cut corners in its leaking Gulf well. Hayward will struggle to find a persuasive response.
BP can avert cash crunch 17 Jun 2010 The dividend suspension and staggered $20 bln escrow fund help clarify how the UK oil major will pay for the Macondo oil spill. Even on supergloomy assumptions, with heavy upfront costs and a bill approaching $60 bln, BP looks an unlikely candidate for a liquidity squeeze.
China could be next superpower in Afghanistan 14 Jun 2010 A putative $1 trn in mineral wealth looks tough for U.S. groups to exploit. But neighboring China needs resources and has the muscle to enforce any rights its companies may take up. After Russia and America, a Chinese invasion commercial if not military could be next.
BP M&A fraught with political risk 14 Jun 2010 The UK oil major is 40 pct smaller than it was in April and is now hated in the United States. Predators from all over the world China, Russia, the Middle East and America may be interested in swooping. But almost all combinations have political problems.
BP escrow idea further muddies oily waters 14 Jun 2010 The U.S. wants the UK oil major to put cash in escrow for Gulf of Mexico claims even though BP is already on the hook and there's no doubt it can pay. An early signal on cutting the dividend might have defused the issue. Now, BP's task is to avoid the worst of both worlds.
BP oil spill revision heightens vulnerability 11 Jun 2010 New data show much more oil may have leaked from BP's Gulf of Mexico well than the group and scientists previously thought. The numbers are just one of several measures. But they add to the spill's likely cost and impose another big obstacle to BP's hopes of recovery in the U.S.
BP uncertainty is an opportunity for the brave 10 Jun 2010 The hit to the UK oil major's shares can be explained partly by the mounting costs of the Gulf of Mexico spill and intense U.S. political pressure. But the continuing uncertainty surrounding the situation is also a big chunk and that may tempt bold investors.
BP isn’t the innocent victim 10 Jun 2010 It faces an environmental crisis in the Gulf of Mexico, harsh words from Obama and a share price in free fall. British business leaders have expressed some sympathy for the oil company, but the attacks on BP aren't way out of line, given how the company hasn't handled things.
Glencore will find it hard to avoid an IPO 2 Jun 2010 The commodities trader is keen on a merger with Xstrata, the listed miner in which it has a 35 pct stake, so its partners can cash out and it can continue to fund growth. But as long as Glencore is privately owned, a deal will be a tough sell to Xstrata's other shareholders.
BP’s Gulf bungling puts deepwater in hot water 26 May 2010 With its top hats and golf balls, BP's tragicomic efforts to plug its gusher erode the credibility of deepwater drilling. Each dead pelican increases the risk of a government clampdown. But oilmen and taxpayers must hope Uncle Sam doesn't stamp too hard on offshore exploration.
Euro’s slide may give U.S. more rope to hang itself 20 May 2010 Haven status in a market storm sounds good for the U.S. but could make it less safe. Sure, it bolsters the dollar s standing and delivers the perk of cheap financing. But for a nation that desperately needs to kick its borrowing habit, the weak euro could be a bad influence.
How the gold price could go north of $5,000 13 May 2010 If the 1980 peak price of $875 an ounce is inflated by U.S. CPI, today s equivalent is about $2,400 almost twice the current level. Scaled up by global GDP it would be $5,300, and by money supply $5,700. With paper currencies out of favor, it s far from impossible.
E.ON’s $7 bln U.S. sale comes with tolerable pain 29 Apr 2010 The German power giant is flagging a 900 mln euro writedown on the sale of its Kentucky operations to U.S. rival PPL. E.ON seems to have misjudged the strategic opportunity in the U.S. utility sector. But after overpaying on the way in, at least it has got a fair price on exit.