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Good ol’ days

I was recalling to some colleagues a time long ago one of my first broking jobs as an operator/lackey for a hedge fund sales team. One of my jobs of the day was to collate all the new merger and acquisition activity, calculate any arbitrage, and update files on counter offers or increased bids. Just basically track the M&A market.

I was never short of work.

That 2005-2007 period and post the GFC was a wonderland of small and mega deals. I remember it was an absolute banger of a deal in which one energy company made a counter-takeover of another energy company that had made a takeover for them and Mac Bank had to ask ASIC if it was ok for them to have a separate Mac Bank deal teams on either side of the transaction. Just wild days.

Then it all dried up and it was only once in a while that something would come up.

Then, BHP comes out with a monstrous, and quite complex, $60b takeover of Anglo American.

You don’t need to be a market insider to know the motivations because the BHP CEO mentions it about 40 times in any interview he’s given over the last few days.

Copper.

Do you really want me to go over it again?

It went through a new 2-year high of USD10000/tonne into the weekend just gone and I’m still a buyer of dips.

Not only is the recent rally all, or mostly, about China, which accounts for 50% of global use. But the focus on the underlying reasons is the rise of EV cars in that country coinciding with the turnaround in China itself.  

Then to have the head of the largest diversified miner in the world broadly announce that the reasons they want to become the biggest copper miner in the world is purely because there’s an inevitable shortage of the stuff and you get as clear a picture on the future as you need.

I thought I’d post a monthly copper futures chart (in pounds) dated back to when I started in broking.