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Nasdaq 100 and S&P 500 drop back as Hang Seng continues to rally US indices are struggling in the wake of Meta’s earnings last night, but the Hang Seng is showing fresh strength. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 25 April 2024 13:53 Nasdaq 100 rally torpedoed by Meta earnings The index reversed course yesterday, giving back most of the gains made on Tuesday, as earnings from Meta soured sentiment. The price remains well above last week’s low for the time being, but with more earnings from Big Tech due in the coming week, further upward progress may be difficult. So long as the price holds above last week’s low at 16,970 then a bounce may yet materialise. A close back above 17,700 would help to bolster the bullish view. Alternately, a close back below 16,970 will bring the late 2021 high at 16,630 into play, and then on down to the 200-day simple moving average (SMA). Source: ProRealTime S&P 500 stumbles on tech earnings This index also took a knock on Wednesday, though it continues to look like it has created a higher low. A push back above the highs of the week so far at 5093 would mark a bullish development, and would open the way to the 50-day SMA, and then on to the highs from late March at 5274. Sellers will want to see a reversal back below the 100-day SMA and below last week’s low at 4925 to provide a more bearish view. Source: ProRealTime Hang Seng surges through key level This index has seen an impressive bounce from the lows of mid-April, which has caried it above 17,000 and the 200-day SMA. It has also succeeded in closing above the latter, for the first time since July. If the price can manage a close above 17,200, then this will be a significant development. 17,200 was the high from early January, and also the peak of March and April, as well as being support from early November. Further gains target the November 2023 high around 18,300. A reversal back below the 200-day SMA would be needed to put more of a dent in the bullish view. Source: ProRealTime -
Sourece: Getty Images Mergers and acquisitions Valuation Iron ore Leverage Balance sheet Written by: Shaun Murison | Senior Market Analyst, Johannesburg Publication date: Thursday 25 April 2024 14:56 Key takeaways BHP has proposed a strategic all-share merger with Anglo American Anglo American's shareholders would receive 0.7097 BHP shares for each Anglo American share, plus shares in Anglo American Platinum and Kumba Iron Ore distributed proportionally This proposal values Anglo American at approximately £31.1 billion, a premium over current valuations The merger aims to combine BHP's high-margin, cash-generative assets and strong balance sheet with Anglo American’s diverse commodities portfolio The proposal remains non-binding, subject to due diligence, with no firm commitment yet made BHP has reserved the rights to alter the terms or structure of the proposal, while also setting a deadline of May 22, 2024, to formalize their intention Further strategic reviews of Anglo American’s operations, particularly its diamond business, are planned post-merger Strategic Merger Proposal BHP has proposed a strategic all-share merger with Anglo American, offering 0.7097 of its shares for each Anglo American share, with additional distributions of shares in Anglo American Platinum and Kumba Iron Ore to Anglo American shareholders. This proposal aims to consolidate the strengths and portfolios of both companies for enhanced market competitiveness and growth. Valuation Premiums and Financial Benefits The proposal values Anglo American's share capital at approximately £31.1 billion, offering a substantial premium over current market valuations. Anglo American shareholders would see an immediate increase in value, with a significant premium on the weighted average share price over the past 90 days, alongside direct holdings in Anglo Platinum and Kumba. Operational Synergies and Growth Potential The merger is designed to leverage operational, procurement, and marketing synergies between BHP and Anglo American, which could enhance profitability and yield significant cash flows. Key synergy areas include combining high-quality assets from both companies, particularly in iron ore, metallurgical coal, and other future-facing commodities like potash and copper. Strategic Review and Talent Integration Post-merger completion, Anglo American’s high-quality operations, including its diamond business, will undergo a strategic review. Furthermore, the merger aims to utilize the deep talent pool from both organizations to drive successful integration and operational excellence, potentially benefiting broader community stakeholders. Conditional and Non-binding Nature of the Proposal The proposal, while detailed, remains non-binding and subject to conditions such as satisfactory due diligence and regulatory approvals. BHP has set a deadline of May 22, 2024, to either declare a firm intention to proceed with the offer or withdraw, emphasizing the cautious approach and compliance with regulatory norms governing such transactions. Anglo American Plc (FTSE) analyst ratings Source: IG TipRanks Based on 12 Wall Street analysts offering 12 month price targets for Anglo American in the last 3 months. The average price target is 2510.77p with a high forecast of 3264.41p and a low forecast of 1741.02p. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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