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’G’day, Gillard — not
London’s miners were in a fug on the FTSE 100 on Thursday:
And it’s because Australia’s proposed mining super-tax — unlike the prime minister who launched it — appears to be sticking round.
Kevin Rudd resigned on Thursday — but his successor,
Political risk, Aussie rules
Those are the London shares of Rio Tinto, BHP Billiton and Xstrata.
They all shot up despite a negative FTSE 100 at about 1300 UK BST on Wednesday — probably as this flash broke via Reuters:
RTRS-AUSTRALIA PM FACES LEADERSHIP VOTE ON THURSDAY MORNING – SKY TV
The link being:
Super-confusion on Australia’s mining super-tax
A possibly tiresome — but still important — update on the Australian government’s much-villified plan to impose a 40 per cent “resources super-profits tax” on mining companies:
Confusion reigns on Friday.
Mining super-tax rage (Part II): The dark and the light side
Continued from Part I: Xstrata on warpath.
Amid the howls of pain from miners over Australia’s proposed 40 per cent resources ‘super profits’ tax — the latest manifestation being Thursday’s outburst from Xstrata’s combative CEO Mick Davis — come some more sobering figures.
Mining super-tax rage (Part I): Xstrata on warpath
Xstrata’s chief executive Mick Davis is on the warpath.
On Thursday he captured headlines with his threat to scrap $5.4bn in coal and copper projects in Australia, blaming Canberra’s plan to slap a 40 per cent “super profits tax” on mining companies.
CDS report: Grinding tighter
Markit’s Gavan Nolan wrote this CDS report
News vacuum helping spreads to tighten
Euro rallying, supporting risky assets
Peripheral sovereigns lagging broader market – Greece 680bp, Italy 215bp (+1),
CDS report: Shorts back off
Risk appetite returning, little in the way of news
Commodity credits rebounding
Sovereigns tightening, Italy underperforming – Greece 675bp, Portugal 320bp (-10), Spain 235bp (-7), Ireland 245bp (-9),
The not so horrid Henry Tax
Mining stocks led Wednesday’s dead cat bounce in London:
And one reason was a report that claimed the Rudd government in Australia was set to perform something of a u-turn on its proposed mining supertax.
Miners spend big Down Under, but where’s the outrage?
Amid all the mining industry outrage Down Under about Canberra’s plan to slap a 40 per cent “super profits tax” on resources companies, one is almost tempted to side with the Australian Treasurer, Wayne Swan.
CDS report: In retreat
European credit markets in retreat after solid opening
Positive sentiment from EUR750 billion bailout a distant memory
Sovereigns under pressure – Greece 700bp (+23), Portugal 335bp (+57), Spain 205bp (+22),
Oh no, now it’s mining tax contagion…
The list of dead and dying deals and loudly protesting companies in Australia’s resources sector is beginning to look very long, as FT Alphaville noted last week.
The companies, both foreign and domestic,
Australia’s super-controversial mining super-tax
The Australian government has not given up insisting that pigs fly that a planned 40 per cent tax on “super” profits generated by all resources operating on its soil is a Really Great Thing.
Even senior bureaucrats are now weighing in,
Peabody, Macarthur and Australia’s resources super-tax
A setback for the biggest M&A deal in Antipodean mining on Monday has intensified the furore over the Australian government’s plan to introduce a 40 per cent tax on mining profits.
As Bloomberg reports on Monday,
Snap news
Breaking pre-market news on Wednesday,
- Prudential delays AIA rights issue as talks with FSA over solvency continue – statement.
- Xstrata Q1 copper output up 3 per cent to 222,971 tonnes – statement.
The horrid Henry Tax
Messy, complicated, confusing and ultimately damaging for investment in mining down under.
That’s reaction in the City of London to the Australian government’s plan for a 40 per cent tax on profits generated by resource companies (the so-called Henry Tax),
Xstrata Glencore, maybe, someday, possibly
This graph is less than 18 months old.
That’s Glencore’s CDS spread, courtesy of Markit, topping out at around 3125 bps back in early December 2008.
None specialists should be aware that a CDS spread more than 3000 bps wide is tantamount to an entity “going bust already.”
Snap news
Breaking pre-market news on Friday,
- Xstrata says Glencore exercised option to buy Prodeco assets for $2.25bn – statement.
- WPP FY like-for-like revenue down 8.1 per cent – statement.
- Kenmare Resource announces £179m cash call – statement.
Snap news
Breaking pre-market news on Wednesday,
- BNP Paribas reports net income of $5.83bn, as defaults drop- statement.
- ING posts underlying 2009 net profit of €748m – statement.
- Legal & General reports over £650m UK net cash generated in Q4 – statement.
Snap news
Breaking pre-market news on Monday,
- Xstrata full-year profit falls 41 per cent to $2.7bn – statement.
- Anglo American supports Anglo Platinum’s $1.6bn rights offer – statement.
- Espirito Santo proposes acquisition of controlling stake in Execution Noble – statement.
Snap news
Breaking pre-market news on Monday,
- Citigroup said to plan sale of $10bn private-equity unit – Bloomberg.
- Ryanair Q3 loss falls to €11m versus €102m year before – statement.
- Gazprom profit falls to 479bn roubles in nine months ended September versus 752bn year before – statement.
What does the Aussie mining tax really mean?
Mining stocks were among the biggest fallers in Thursday’s sell-off. One of the factors driving the sector lower was news of a new mining tax being proposed by Australian Treasury Secretary, Ken Henry.
Resource nationalism down under
The mining sector took another leg down on Thursday afternoon in London:
Now what could have caused that? Surely not Obama’s Glass Stegall II proposal.
Nope. Instead, traders are pinning on it on a story published by the Sydney Morning Herald on Thursday:
Snap news
Breaking pre-market news on Thursday,
- Xstrata approves development of $542m operation for Ernest Henry Mining – statement.
- Phytopharm launches placing and open offer worth ₤25.2m – statement.
Snap news
Breaking pre-market news on Tuesday,
- Dubai World to carry out restructuring in an ‘equitable way’ – statement.
- GSK completes extension of strategic collaboration with Aspen – statement.
- Xstrata copper enters agreement with Zijin mining group – statement.
CDS report: Black & Decker rallies on takeover news
Gavan Nolan of Markit wrote this CDS report
European credit markets widened and stocks declined as investors fretted over the outcome of monetary policy meetings later this week. The Markit iTraxx Europe index was trading around 91bp,
Snap news
Breaking pre-market news on Tuesday,
- Lloyds Banking Group sells Bank of Scotland portfolio management service to Rathbone £35.4m – statement.
- Balfour Beatty wins US contract worth $449m – statement.
Xstrata still keen on Anglo
Xstrata signalled on Thursday its continuing interest in a deal with Anglo American, even as it dropped its ambitious proposal for a “merger of equals” with the rival miner. Swiss-based Xstrata on Thursday backed away from making a formal offer for Anglo after the UK Takeover Panel ordered it to “put up or shut up” before Oct 20.
CDS report: M&A activity has contrasting impact on spreads
Markit’s Gavan Nolan wrote this CDS report
After a promising start, European credit indices gave back early gains following disappointing earnings. This morning the Markit iTraxx Europe index broke though the 80bp barrier for the first time in nearly a month and the Markit iTraxx Crossover index tightened below 500bp for the first time since June 2008.
Snap news
Breaking pre-market news on Thursday,
- Xstrata says it has no intention of making an offer for Anglo American – statement.
- Anheuser-Busch InBev agrees to sell central European operations to CVC for $2.2bn – statement.
CDS report: Alcoa and retail sales boost sentiment
Markit’s Gavan Nolan wrote this CDS report
European credit indices resumed their rally after yesterday’s brief hiatus. But the spread tightening was modest compared to movements earlier this week, and the rally in both credit and equity markets lost momentum in the afternoon.