Industry Sector Weekly by Lloyds TSB

BHP Billiton’s $40bn bid for Potash Corp has capital markets thinking beyond fertilizers and about future M&A activity in the basic materials segment. While the Potash acquisition Outlook for mining M&A is paved with gold

BHP Billiton’s $40bn bid for Potash Corp has capital markets thinking beyond fertilizers and about future M&A activity in the basic materials segment. While the Potash acquisition represents the largest announced transaction this year, basic materials has been a hot-bed of activity year to date, accounting for 1,567 of transactions or $193bn in total volume. Leading such activity has been the gold mining segment, which remains highly fragmented, especially in comparison to other metals such as platinum, uranium, nickel, copper and iron ore.

Nordic housing holds up well in global downturn

One sector of the global economy that is noticeably different since the onset of the financial crisis is the housing market. Despite the rapid cuts in interest rates, households’ increased concerns over economic growth and job security drastically reduced the global appetite to take on leverage. This coupled with a financial sector, still affected by the financial crises less willing to lend, caused prices to fall sharply.

The Nordic region, however, has escaped relatively unscathed from this downturn. The correction that did occur was shallow and short-lived – particularly in Sweden, where real house prices rose by 7% in the three months to July alone and have risen continuously for the last 15 months.

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