BHP, World's Top Miner, Nears Biggest Acquisition in a Decade
Topic of the day
BHP Group Ltd. raised its offer for OZ Minerals Ltd. to value the Australian miner at $6.34 billion, as it seeks to produce more copper and nickel needed for electric vehicles, wind turbines and solar farms. OZ Minerals said it intends to recommend shareholders vote in favor of BHP's revised offer of 28.25 Australian dollars, the equivalent of about $18.90, a share. A completed deal would represent BHP's largest acquisition since 2011 when it bought Petrohawk Energy Corp. for more than $12 billion. BHP, based in Melbourne, Australia, approached Adelaide-based OZ Minerals about a potential takeover in August, but its offer was quickly rejected by directors as too low. On Friday, OZ Minerals said it had received a new proposal from BHP to buy the company. The latest offer represents an improvement on BHP's initial proposal of 25 Australian dollars a share. OZ Minerals's shares closed at 26.30 Australian dollars on Tuesday, the last session before trading in the stock was halted pending news of the transaction. BHP predicts that demand for copper, which is an excellent conductor of electricity and has wide-ranging uses including in construction and electronics, will double in the next three decades.
The Switzerland stock market open on a firm note on Friday and held its course right till the end of the session to sign off on a strong note thanks to sustained buying at several counters. Data showing a faster pace of industrial expansion lifted sentiment. The benchmark SMI ended with a gain of 127.61 points or 1.17% at 11,045.49, slightly off the session's high of 11,063.88. Novartis climbed more than 3%. Geberit, Swiss Re, Sonova, Richemont and UBS Group gained 1.3 to 1.7%. Swiss Life Holding, Sika and Swisscom advanced 1 to 1.2%, while Swisscom, Nestle, Zurich Insurance Group, Holcim and ABB gained 0.8 to 0.91%. Credit Suisse drifted down 1.55%, while Logitech and Lonza Group ended marginally lower. In the Swiss Mid Price Index, SGS, Adecco and Clariant gained 1.8 to 2.1%. AMS, Flughafen Zurich, Georg Fischer, Zur Rose, VAT Group, Velvetia and SIG Combibloc also ended notably higher. Bachem Holding tumbled 3.7%. Tecan Group declined 1.27%. Data from the Federal Statistical Office showed Switzerland's industrial production expanded at a slightly faster pace in the third quarter, advancing 5.2%, following a revised 5% rise in the June quarter.
European markets closed higher on Friday, rebounding from recent losses, as investors picked up stocks despite lingering concerns about interest rate hikes, and a surge in Covid-19 cases in China. The markets also digested European Central Bank President Christine Lagarde's speech at a conference, where she said the bank will keep raising rates as withdrawing accommodation may not be enough to curb inflation. The pan European Stoxx 600 climbed 1.16%. The U.K.'s FTSE 100 gained 0.53%, Germany's DAX climbed 1.16% and France's CAC 40 surged 1.04%, while Switzerland's SMI advanced 1.17%. Among other markets in Europea, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Portugal, Spain, Sweden and Turkiye closed higher. Norway and Russia ended weak, while Poland settled flat. Bank stocks moved mostly higher as the European Central Bank begins the biggest withdrawal of cash from the euro zone's banking system in its history. In the UK market, Frasers Group rallied nearly 6%. Convatec Group, JD Sports Fashion, Harbour Energy, Next, Kingfisher, Phoenix Group Holdings, United Utilities, ICP, Flutter Entertainment, Ashtead Group and B&M European Value Retail gained 3 to 4.5%. Legal & General shares gained more than 3% after the company backed its FY22 operating profit view. Prudential, Smiths Group, Rolls-Royce Holdings and Glencore shed 1 to 2%. In Paris, Teleperformance climbed nearly 4% after the company said it will exit what it calls the 'highly egregious' part of its social media content-moderation business.
Stocks rose Friday, capping a tumultuous week with investors assessing the outlook for interest rates. The S&P 500 gained 18.78 points, or 0.5%, to 3965.34, while the Nasdaq Composite edged up 1.10 points, or less than 0.1%, or 11146.06. The Dow Jones Industrial Average ticked up 199.37 points, or 0.6%, to 33745.69. All three indexes are down two of the past three weeks. Of the 11 sectors within the S&P 500, nine rose on Friday. Stocks in energy and communication services were the only laggards. A slowdown in inflation sent stocks ripping higher last week, and the dollar and bond yields into retreat. The S&P last week wrapped up its best stretch since the summer. But in recent days, hopes that the Federal Reserve will back off its campaign of aggressive interest-rate increases have faded somewhat. On the economic front, U.S. existing home sales fell for a ninth straight month in October as high mortgage rates pushed buyers out of the market. In stocks, Ross Stores rose $9.66, or 9.9%, to $107.59. The off-price retail and home-accessories store operator raised its guidance for the fourth quarter and topped sales and earnings forecast. Shares of Grindr surged more than $24.87, or 214%, to $36.50 after the LGBTQ-focused social network and dating app completed its merger with special-purpose acquisition company Tiga Acquisition Corp.
The stock markets in East Asia and Australia are showing some significant reductions at the beginning of the week. Sentiment is being weighed down by further Corona infections in China, combined with strict containment measures. This is fueling investors' concerns about a further economic slowdown in China. On the Hong Kong stock exchange, the Hang Seng Index drops sharply by 2.2 per cent. In the Chinese heartland, the Shanghai Composite loses 0.8 per cent. Meanwhile, the People's Bank of China (PBoC) left its benchmark bank lending rate (LPR) unchanged this month amid continued downward pressure on the yuan and slowing economic growth. The one-year loan prime rate (LPR) remains at 3.65 per cent and the five-year LPR at 4.3 per cent.
Treasury yields are inverted, with short-term U.S. government borrowing costs above longer-term yields. That dynamic has, in the past, often been predictive of a recession. The yield on the 10-year Treasury note rose to 3.817% from 3.774% Thursday.
UBS lowers Kuehne & Nagel target to CHF 255 (263) – Buy
JP Morgan raises Thyssenkrupp target to EUR 5.10 (4.80) – Underweight
Bank of America raises Siemens target to EUR 179 (172) – Buy
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.