Spreadex Market Update
FTSE up in early trading
Policies to stabilize foreign trade, expand infrastructure investment, fine-tune monetary policies and structurally reduce taxes may be introduced.
Xstrata has been volatile this morning following the decision by the sovereign wealth fund of Qatar, the second largest shareholder in the miner, opposed the terms of the $65bn merger between the company and its rival Glencore.
As Qatar holding has a near 11 percent stake, about a quarter of shareholders are against the deal’s terms, which is more than enough to block the merger.
The deal is not dead in the water however as Qatar Holding can see benefits in a combination of the two companies, but would be seeking improved terms with an exchange ratio of 3.25 per share as opposed to 2.8.
Glencore also unsurprisingly finds itself the subject of some heavy trading this morning following the news given the fact Ivan Glasenberg will now have to go back to the drawing board in order to get the deal done with just over 2 weeks before Xstrata shareholders are set to vote.
In terms of Economic indicators Durable goods Orders and BBA Mortgage Approvals in the UK are the main events today. The number of mortgage approvals is expected to rise to 33,000 from 32,438 in April.
In the case of durable goods orders we are likely to see a fall as orders are likely to have failed to make up for the worst four months since the recession, indicating US manufacturing will cool.
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