Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
The deal-making frenzy in the global mining sector during the first half of the year was followed by a dramatic drop in activity in July and August, according to a new report by consultants PricewaterhouseCoopers.
Figures from the report titled Riders on the Storm show that in July and August the value of global mining deals fell by 49% and deal volumes declined by 25%. The sharp reversal came after a record first half when 1,379 deals worth $71bn were announced even though Chinese entities, firmly focused on value, retreated from iconic western takeovers.
Buyers were willing to pay over the odds for large publicly listed targets – for $500 million+ acquisitions, the average premium was 37%. For sub-$500 million deals, premiums averaged a mere 8%. These premiums were also on the heels of a 42% jump in public mining companies’ market values over the last year.
The author of the report, PwC global mining leader Tim Goldsmith said: “While the western world operates on three- month forecasts, the Chinese are operating on longer term plans, making this blip largely irrelevant in the grand scheme of things.”
