Halister News

(Bloomberg) -- Anglo American, the FTSE 100’s second-most shorted stock, has climbed 60% in the past two weeks, the biggest 10-day rally on record, boosted by a rebound in metals prices, M&A speculation and an update from the CEO.

• The rally in commodities was fueled by a 2.6% drop in the dollar index on lower expectations of further Fed tightening
• Following gains in mining shares, Investec said on Feb. 5 that while largely reflecting short covering, advance is also partly investors trying to determine an equity value for heavily-indebted companies

SHORT INTEREST:

• Anglo American has the highest short interest in the Stoxx 600 Basic Resources index, at 18.9% of shares out, according to Markit data; followed by ArcelorMittal at 12.3%, Glencore at 8.4%
  • The percentage of shares out has risen to 18.9% from 13% on Jan. 25: Markit
• Odey Asset Management increased its short by 2.5m shares on Feb. 4 after covering it last week by 2.32m shares
  • Key Group decreased its short position by 1.42m shares to 0.87%

PRICE MOVES:

• Anglo American was the biggest Stoxx 600 Basic Resources gainer in the 10 days to Feb. 5 close, followed by Glencore up 30%, Antofagasta up ~20%
• Commodities strength resulted in a gain of 11% for the Stoxx Basic Resources index for last 10 sessions
• 10-day move in metals: Platinum up 9.5%, Gold up 6.9%, Iron Ore up 8.9%

RIGHTS ISSUE:

• Second-largest holder Coronation Fund Partners said co.’s cost-cutting plans are “not aggressive enough,” ruled out investor bailout, Sunday Times reported on Feb. 7
• Jan. 7: Public Investment Corp., Anglo’s biggest shareholder, said company should only ask investors for more money after first exploring all expense-reducing alternatives available
• Jan. 6: Schroders, one of Anglo American’s biggest investors, urged the board to resist mounting pressure to tap shareholders for cash

M&A TALK:

• The FT market report on Feb. 5 noted speculation that Anglo may consider a more formal tie-up with South32, which has been reported to be among the bidders for Anglo’s $1b-valued Brazilian phosphates and niobium business
  • Jan. 13: BHP Spinoff South32 said interested in $1b Anglo sale
• Daily Mail market report noted takeover talk surrounding Anglo American last week
• Jan. 27: Anglo American mulls sale of Brazil nickel assets: Globe & Mail
• Co. mentioned as a possible takeover target in the Bloomberg M&A survey on Jan. 26

RELATED:

• Anglo American Sees 2016 Being Tougher Than 2015, CEO Cutifani Says
• South African Mines Minister Says Anglo Sales to Happen Soon
• Anglo Platinum Sees More Price Pain as It Halts New Projects
• ArcelorMittal to Raise $3b Capital, Sees $4b Debt Reduction