Stockopedia FTSE 100 Round-up: LSE merger plans put the focus on miners

Thursday, Feb 10 2011 by
Stockopedia FTSE 100 Roundup LSE merger plans put the focus on miners

Excitement in London markets this week focused on the FTSE 250 listed London Stock Exchange (LON:LSE) itself, and its plans to “create a merger of equals” with Canada’s TMX. News of the deal, which would give the LSE a 55% stake in the combined entity, got a warmer reception in London than Canada. Quebec officials are scrutinising the detail but there was nevertheless a sense among analysts (and the exchanges themselves) that both sides really need this deal. That sense was fuelled in the aftermath by news that Deutsche Borse and NYSE Euronext were also in talks over a coming together.

What will it mean? Well, the LSE will get its hands on TMX’s derivatives trading technology, which has previously been seen as a chink in CEO Xavier Rolet’s armour. In turn, the Canadian group will go some way to plug the perennial problem of expanding its investor base. More importantly, the proposed merger is a bet on the current super-cycle of commodities, with the combined group promising to be the number 1 global listings venue for natural resources, mining, energy and clean technology. For the time being, the London Stock Exchange share price enjoyed a rise from 884p at the start of the week to 925p by Thursday.

Arguably, it will be the small cap exploration and development companies that feel the effects of the merger the most. TMX’s TSX Venture Exchange is a well regarded and well supported platform for Canada’s burgeoning army of resource stocks. Local investors “get” exploration. However, those companies that plan to go on and develop their project are often encouraged to dual list on the LSE’s Alternative Investment Market. On this side on the Atlantic, the general appetite for exploration is more restrained but the enthusiasm for development opportunities has been a hallmark of AIM’s success in attracting companies and raising cash for them.

Commodities prices boost London miners

Reporting its fourth quarter and full year figures this week, Randgold Resources (LON:RRS) said that despite operational and political setbacks in a generally challenging year, its had boosted its profit for 2010 by 43% to US$120.6 million. Randgold credited the performance to a strong fourth quarter which drove up attributable production by 30% to 132,099 ounces quarter-on-quarter. Lifted by a rise in the gold…

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London Stock Exchange Group plc is a diversified global financial markets infrastructure business that operates with an Open Access model. The Company is organized into operating units based on its service lines and has six segments: Capital Markets, Post Trade Services-CC&G and Monte Titoli, Post Trade Services-LCH, Information Services, Technology Services and Other. Its business activities fall into three interconnected categories: Capital Formation, Risk and Balance Sheet Management, and Intellectual Property. It provides services for corporate and other issuers, investors and trading firms in the value chain for cash equities, fixed income, derivatives and other financial products. The Company offers post trade services, providing risk and balance sheet management solutions. It provides a range of information and data products, including indexes and benchmarks, real time pricing data, product identification, reporting and reconciliation services. more »

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Barrick Gold (Holdings) Ltd, formerly Randgold Resources Limited, is engaged in gold mining, exploration and related activities. The Company's activities are focused on West and Central Africa. The Company operates through the gold mining segment. The Company operates various mines, such as Morila, Loulo, Gounkoto, Tongon and Kibali. The Company is exploring in African countries, such as Mali, Senegal, Cote d'Ivoire and the Democratic Republic of Congo (DRC). The Company also holds an interest in the Massawa project. The Company holds Morila Limited, which holds interests in the Morila mine in Mali. The Company holds a controlling interest in the Loulo mine, located in Mali, through Societe des Mines de Loulo SA (Loulo). The Loulo mine is mining from over two underground mines. It has a controlling interest in the Gounkoto mine through Societe des Mines de Gounkoto SA. more »

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Anglo American PLC is a mining company. The Company has a portfolio of mining operations and undeveloped resources with a focus on diamonds, copper, platinum group metals (PGMs), and bulk commodities. Its segments include De Beers, Platinum Group Metals, Copper, Iron Ore, Nickel and Manganese, Coal, and Corporate and other. De Beers segment is engaged in the diamond business. Within the Platinum Group Metals segment, it has operations principally located in the Bushveld Complex in South Africa. It holds interests in two copper mines: Los Bronces and Collahuasi in Chile and is developing the Quellaveco mine in Peru. Its iron ore operations provide customers with iron content ore through assets in Brazil and South Africa. It has metallurgical coal assets in Australia, and thermal coal assets in Colombia and South Africa. more »

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