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Takeover activity gives markets a lift

by LLB Reporter
4th Apr 23 10:33 am

The prospect of mega deals in the mining space has got investors excited, bringing a new lease of life to the sector which had previously been suffering from fears about weaker economic activity feeding through to reduced commodities demand.

Glencore led the FTSE 100 higher on Tuesday following its $23 million move on Canada’s Teck at the start of the week. While its business combination proposal was rejected, Glencore is likely to be persistent in its pursuit for greater things which means one cannot rule out a higher offer.

Danni Hewson, head of financial analysis at AJ Bell, said: “Teck’s board said it wasn’t contemplating a sale of the business at this time, yet there is a price for everything and so it all boils down to how much Glencore is prepared to pay.

“Also opening its wallet with the intention of splashing the cash was L’Oreal. It has offered to buy Australian skincare brand Aesop for the equivalent of £2 billion. There is a big opportunity to accelerate a rollout plan in China, which is seen as potentially lucrative place for Aesop’s soaps, lotions and creams.

“US employment levels will be in focus later today with the publication of the latest ‘JOLTS’ Job Openings and Labor Turnover Survey. The headline figure will be the number of job vacancies, which is still very high by historic standards, to suggest employers cannot find the staff they need – usually a sign of a strong economy.

“In January, the number of vacancies dipped by 400,000 but still came in at 10.8 million. Bears will say that is below the March 2022 peak of 12 million. Bulls will say is it higher than normal for the 20-year history of this dataset and also miles above the 7.1 million vacancies on offer in 2020 just before Covid struck.”

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