Newspaper article The Evening Standard (London, England)

Punters Dig into Anglo amid Talk of [Pounds Sterling]58bn Bid

Newspaper article The Evening Standard (London, England)

Punters Dig into Anglo amid Talk of [Pounds Sterling]58bn Bid

Article excerpt


CITY speculators are looking for another round of consolidation amongthe miners, despite claims from a leading City player that the sector may havereached the top of the cycle.

Weekend reports claimed Brazilian mining giant Vale was poised to make an offerof at least 4000p a share for Anglo American, valuing the business at [pounds sterling]58billion. Anglo shares responded with a surge of 109p to 3298p.

But HSBC casts doubt on whether this might be money well spent. It says that,following a "perfect storm" to start off the year, the commodities rally isfacing its biggest challenge yet.

Global demand is easing at a time of accelerating inflation, it adds, and theUS dollar has started to rally strongly.

HSBC warns this could derail fund flows from the "short dollar/longcommodities" trade that has underpinned the commodities rally for some timenow. The broker also says recent supply/demand tightness has eased as supplyresponds to elevated prices and demand recedes.

That all seemed to be lost on stockmarket investors with the rest of the minersmaking the early running.

Eurasian Natural Resources jumped 39p to 1360p, Kazakhmys 20p to 1570p andVedanta Resources 27p to 2280p.

That helped underpin the market, enabling the FTSE 100 index to get its nose infront as it rose 23.1 to 5825.9.

Banks were also marked higher on the back of Barclays' fundraising plans.

HBOS continued to rally, adding 9 1 / 4 p to 331p, while Alliance & Leicesterput on 9 1 / 4 p to 348p and Royal Bank of Scotland added 6 1 / 4 p to 242 1 /4 p.

Arian Silver firmed 1p to 13 1 / 2 p on the back of "outstanding" assay resultsfrom a diamond-drill programme at its Tepal project in Mexico. It said 30 outof 42 the drill holes had significant gold-copper mineralisation. The AIMlistedcompany added that the drilling also confirmed the existence of two significantmineralised porphyry zones and discovered a new porphyry zone to the east. …

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