Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We initiated on the iron ore space recently with a short-term bullish call (see: <a href="https://www.smartkarma.com/insights/iron-ore-primer-understanding-the-drivers-of-the-market-ways-to-play-the-sector" target="_blank" data-smartkarma-citation="insights:136452" rel="noopener">Iron Ore Primer: Understanding The Drivers Of the Market, Ways To Play The Sector</a>). </li>
<li>Check out our initiation on  <a href="https://www.smartkarma.com/insights/mount-gibson-mgx-au-iron-ore-pure-play-77-of-the-mkt-cap-in-cash-0-5x-ev-ebitda-with-catalysts" target="_blank" data-smartkarma-citation="insights:136941" rel="noopener">Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts</a> ).</li>
<li>Iron ore has a more short-term upside as it bounces off the cost curve in its three-year band (95-130 USD/ton), while China has demonstrated an abundant appetite for restocking. </li>
</ul>


We initiated on the iron ore space recently with a short-term bullish call (see: Iron Ore Primer: Understanding The Drivers Of the Market, Ways To Play The Sector). 
Check out our initiation on  Mount Gibson (MGX AU): Iron Ore Pure Play, 77% of the Mkt Cap in Cash, 0.5x EV-EBITDA With Catalysts ).
Iron ore has a more short-term upside as it bounces off the cost curve in its three-year band (95-130 USD/ton), while China has demonstrated an abundant appetite for restocking. 


Iron Ore Comes Roaring Back! BHP-Anglo, VALE, FMG: What's Hot In the Space

Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Event-Driven

<ul>
<li>In this note we assess the JSE Top 40 index effect of an Anglo American restructuring or takeover by BHP, assuming the Amplats and Kumba stakes are spun out.</li>
<li>We also explore the details of BHP's initial offer and what the market could be pricing with respect to a potential revision of BHP's stock offer (minimum).</li>
<li>If Kumba is unbundled from Anglo American, we expect the stock to enter the JSE Top 40. Potential deletes are included in the note.</li>
</ul>


In this note we assess the JSE Top 40 index effect of an Anglo American restructuring or takeover by BHP, assuming the Amplats and Kumba stakes are spun out.
We also explore the details of BHP's initial offer and what the market could be pricing with respect to a potential revision of BHP's stock offer (minimum).
If Kumba is unbundled from Anglo American, we expect the stock to enter the JSE Top 40. Potential deletes are included in the note.


Anglo American (AGL, AAL): JSE Index Effects of Potential Takeover or Restructuring

Northam Platinum Holdings  / Event-Driven

<ul>
<li>The annual WisdomTree rebalance takes place next week Wednesday in the closing auction. Turnover on the JSE at the rebalance last year (20 Oct) was R30.6bn, 1.5 times the 5-day average.</li>
<li>
There are several SA stocks being added to and deleted from the range of WisdomTree EM funds.
</li>
<li>
Our buy flow estimate for SA additions is R1.3bn, our sell flow estimate for SA deletions is R1.8bn. This excludes up and down weightings.
</li>
</ul>


The annual WisdomTree rebalance takes place next week Wednesday in the closing auction. Turnover on the JSE at the rebalance last year (20 Oct) was R30.6bn, 1.5 times the 5-day average.

There are several SA stocks being added to and deleted from the range of WisdomTree EM funds.


Our buy flow estimate for SA additions is R1.3bn, our sell flow estimate for SA deletions is R1.8bn. This excludes up and down weightings.



WisdomTree Oct 2023 Rebalance (Wed, 18 Oct)

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>On 27 April, Reuters reported that BHP is considering making an improved offer for Anglo American after its initial proposal was rejected. Anglo's shares trade at 0.3% discount to proposal.</li>
<li>BHP is not paying any control premium. Despite its robust portfolio and recent share price appreciation, Anglo trades at a 18% discount compared to the sum of its parts (3018p). </li>
<li>Interloper risk is high. Antitrust risk seems low. As a defence, Anglo may conduct some portfolio simplification to unlock value. I would be long at current prices.</li>
</ul>


On 27 April, Reuters reported that BHP is considering making an improved offer for Anglo American after its initial proposal was rejected. Anglo's shares trade at 0.3% discount to proposal.
BHP is not paying any control premium. Despite its robust portfolio and recent share price appreciation, Anglo trades at a 18% discount compared to the sum of its parts (3018p). 
Interloper risk is high. Antitrust risk seems low. As a defence, Anglo may conduct some portfolio simplification to unlock value. I would be long at current prices.


BHP to Consider Sweetened Proposal for Anglo

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP (BHP AU)</a>'s all-scrip <a href="https://announcements.asx.com.au/asxpdf/20240426/pdf/062w455d52h3cv.pdf" target="_blank" rel="noopener">unsolicited Offer</a> for <a href="https://www.smartkarma.com/entities/anglo-american-plc" target="_blank" data-smartkarma-citation="entities:21798:1" rel="noopener">Anglo American (AAL LN)</a>, zeroes in on AAL's copper assets as demand for the metal increases for use in EVs and renewable power.</li>
<li>The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL's Chilian/Peruvian copper mines are obscured by its sprawling business interests.</li>
<li>The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged. </li>
</ul>



BHP (BHP AU)'s all-scrip unsolicited Offer for Anglo American (AAL LN), zeroes in on AAL's copper assets as demand for the metal increases for use in EVs and renewable power.
The proposal has been labelled highly opportunistic by some shareholders and South African politicians. And that the value of AAL's Chilian/Peruvian copper mines are obscured by its sprawling business interests.
The Offer remains conditional and non-binding. A transaction hinges off AAL spinning off its South African iron ore and platinum businesses. Expect AAL to reject terms, but remain engaged. 


BHP/Anglo American: A Decarbonising Solution

South Africa

Kumba Iron Ore Limited mines for and produces iron ore.

Kumba Iron Ore (KIO SJ)

Iron Ore Comes Roaring Back! BHP-Anglo, VALE, FMG: What's Hot In the Space

We summarize newsflow in the iron ore market and our take on the BHP-Anglo deal. We also summarize the production reports of Vale/FMG and Champion...

Sameer Taneja

Anglo American (AGL, AAL): JSE Index Effects of Potential Takeover or Restructuring

We explore the recent takeover bid by BHP and potential JSE index effects of a takeover or restructuring that would see Amplats and Kumba unbundled.

DMA

WisdomTree Oct 2023 Rebalance (Wed, 18 Oct)

The annual WisdomTree rebalance takes place next week Wednesday in the closing auction. Turnover on the JSE at the rebalance last year (20 Oct) was...

DMA

BHP to Consider Sweetened Proposal for Anglo

On 27 April, Reuters reported that BHP is considering making an improved offer for Anglo American after its initial proposal was rejected. Anglo's...

Jesus Rodriguez Aguilar

BHP/Anglo American: A Decarbonising Solution

I would expect AAL to reject terms; but remain engaged. I'd expect BHP to fump. For that, the near term trade is probably to still be short BHP,...

David Blennerhassett