World Stocks Have Good Day While US & UK Rest
Despite lower trade volumes on Monday, due to public holidays in both the US and UK, world stock markets had a generally good day with news about the US economy, together with signs the Chinese government may reveal a further mini-stimulus package and what was already looking like a favourable outcome for the election in Ukraine. In Europe, where election results suggest many members of the EU will be seeking reform, there was a rise in the Euro and Italy stood out for a 3.6% rise in the market, the ruling party and its economy reforms having received backing from voters. Japan saw a rise in the Nikkei as the dollar strengthened against the yen making exports cheaper for buyers. Australia gained 0.4%. Read the full story.
Russia’s Plan to Get Fracking
It’s something being considered (or already happening) in many countries as concerns about the future of energy reserves makes shale oil and gas a potential solution. The main opposition is for environmental reasons but where there’s money, policy can be changed. In the US the Bakken field in North Dakota is pumping a million barrels a day and now the Russians look set to change policy direction to allow exploration of Bazhenov, an area the size of France, which could yield 75 billion barrels of shale oil. Read the full story.
Oil Prices Ease After Ukraine Vote
The price of oil futures eased on Monday following the almost certain outcome of the Ukraine election. Prices have been high due to speculation of potential sanctions against Russia by the west but dropped after Petro Poroshenko looked set for victory. As well as being keen for close ties with Europe, the candy king is also looking to sweeten relationships with the Kremlin. Read the full story.
Australia Warned About Mining Future
With supply down along with prices, three mining companies are warning that their Australian operations are in a ‘vice-like grip’ due to high costs, taxation and a strong Australian dollar. This, they say, could lead to further mine closures and therefore job cuts. Australia faces competition from countries such as Indonesia where the costs stack up a bit better in favour of mining companies. Read the full story.
Bitter Pill for Drugs Giant
US pharmaceutical giant Pfizer has withdrawn its offer for AstraZeneca after the UK company’s board rejected their £69 billion takeover bid. The bid was not only unpopular with AstraZeneca shareholders but also raised concern among British politicians, the press and many individuals as it was considered to be based on tax advantages for Pfizer and the worry was it would be asset-stripped. Under UK rules, Pfizer will have to now wait six months to make another offer unless invited to by AstraZeneca but it’s likely the US government will act to close the tax loophole in the coming months. Read the full story.
African Iron Needs Heavy Investors
A deal has finally been agreed to enable mining of a $20 billion iron ore deposit in Africa, now all that’s needed is investors with the cash to finance the infrastructure. To get the mine to market will require a 650 mile railway and deep water port and investors including wealth funds and private equity groups are already being approached for investment. Political wrangles have dragged this deal out for three years and it still has to be formally ratified but that looks to be likely. Read the full story.