Tuesday 8 October 2024
Rio Tinto is in talks to spend up to $9 billion on a major lithium miner.
And more, including:
The share market closes at a near record high
The auction clearance rate falls to its lowest level in almost two years
And an unused Sydney mansion sells for around $130 million
Plus don’t miss the new episode of The Property Pendulum, brought to you by Domain and Fear & Greed. This week’s episode: how much should you spend on renovations? Get it from APPLE, SPOTIFY, or anywhere you listen to podcasts.
Rio Tinto is in talks to spend up to nine billion dollars on a major lithium minor. The sheer market closes at a near record high, and the auction clearance rate falls to its lowest level in almost two years. Welcome to Fear and Greed, Daily business news for people who make their own decisions. It is Tuesday, the eighth of October twenty twenty four. I'm Michael Thompson, and good morning, Sean Aylmer.
Good morning, Michael. I tell you what, half the country had the day off yesterday, but it didn't seem that weighs so much going on in the world of business.
There is so much to cover this morning, and the main story this morning is a big one, isn't it. This is and it's kind of exciting stuff. Rio Tinto confirming that it's in talks to acquire arcadium lithium for between four and six billion US dollars.
Is it about time we had a decent takeover to talk about that? You reckon?
You know you are right, because it feels like there hasn't actually been what we're talking about yesterday. The fact there hasn't been much kind of much in the way of IPOs and big deals and stuff to chat about for quite a while.
And even the ones that we had BHP making a bid for Anglo American got knocked back. You know, not much to see. They're a bit disappointing anyway. Rio's bid is worth between six and nine billion Aussie dollars for the dual listed minor, which trades on Wall Street and locally. Undoubtedly it is opportunistic. Lithium prices have tumbled and Arcadium's share prices down more than sixty percent twenty twenty four. Already shareholders are calling for a higher offer. Rio started talks in London to acquire Arcadium, with an offer expected and I quote Rio, in the near future, we might be able to talk about put up and shut up rules as well, Michael. They'd be exciting because you.
Know that is like I mean, I learned a lot in this podcast, but that is one of the things that has really really stayed with me. And that was all because we were talking about BHP and Anglo American and all that, and they put up and shut Up laws. They're on the wall of the studio now, because that's right. It is just the best name for a set of laws.
Basically, you've only got about a month if you're making your bid, Otherwise it lapses anyway, Rio's comment about a bid in the near future. So arcadiums share place up forty six percent yesterday, which it puts it back to where it was in June. Mind you, it is still way below where it started. The Rio likes lithium, and Arcadian's Argentinian assets are near Rio's lithium mine in that country. Arcadian was created last year through the merger of Alcombe and live Ent and has assets across Argentina, the US, China, Japan, Canada and Australia. It is a big lithium player. It's expected to supply about five percent of the globe's supply next year.
Sean, you mentioned that it's an opportunistic bid, and that's kind of the key here, isn't it. Because lithium prices, as you say, have tumbled. Will it actually get over the line?
I don't know. But when you're a big miner like Rio needing future growth, particularly outside iron ore and preferably in the critical mineral sector, then downtrodden withim miners are pretty attractive. While analysts don't expect lithium prices to surge anytime soon. It could be years before you too much supplied not enough demand issue is sorted out. There is confidence that ultimately it will be sorted possibly later this decade, so buying it these prices makes sense. Most big miners want copper. That was a big play in BHP's unsuccessful bid for Anglo American, but that's very expensive. With shareholders already coming out saying they want more money for Arcadium, it seems that that company is definitely in play and for Rio to be successful, it probably will need to pay more. But certainly this is a bid with real legs.
Indeed, it's a great story to talk about. It is something just exciting, isn't Absolutely It's got a lot of components to it. Local markets, Sean, Let's take a look what happened yesterday.
It was a strong day in the markets notwithstanding this up. While the ACT, South Australia and Queensland were closed, the SMPA six two hundred finished up zero point seven percent to eighty two hundred and five points, just seven points from the record closed set last month. Training was thin and the banks were the big winners. National Australia Bank in Westpac both rows two percent. Comonwealth Bank was up one and a half percent. Big day for that Lithium minors, no surprises there. The announcement dragged other stocks higher, including Liontown Resources, which jumped eighteen percent, whilst they owned a mining and Call Lithium both did well. Forest fu Metals Group was another strong performer. Worst on the day was West African Resources, down eighteen percent, despite affirming guidance and reiterating that the Bikina Faso government was supportive of its gold mining operations and that it was not aware of any plans to withdraw permits. Just the fact that a company comes out and says, I'm very confident that the government we're working with, Bikina Faso is supportive of our operations isn't a good look.
Why do you need to reassure people this is the case suddenly? It just puts that doubt into people's minds, doesn't it. Sean coming up after the show, and this is really not relevant to gold mining operations or international permits or anything. You have an interview coming up today with Simon Kustin Maha from the Demographics Group.
Yes, it is fascinating. Anytime you talk to Simon, you get great insights about what's going on in the world, particularly among the population where we focus today is this growing carehort of people, mostly male, between about fifteen, sixteen, seventeen and mid twenties. I'm trying to think of the term he called them neats. I think no education, no employment, no training. So it's kind of people who aren't in a job, who aren't learning a skill, and aren't at university. What that means for the economy is quite remarkable, right from economic growth through to marriage proposals and prospects of these people getting married and stuff like that. It is really fascinating.
Yeah, it is a great conversation, so it as well worth sticking around for that. It's coming up after the show. What's happening in international market?
Sean Oh and Alas back in favor, couldn't keep it down. The mineral is trading back above one hundred and ten US dollars a ton on speculation Beijing will make further announcements to stimulate the Chinese economy. Now there is a briefing scheduled for today. Beijing announced a bunch of measures, including interest rate cuts, and targeted support for the property sector. Over a week ago, late last month, it was now China, Michael, if you were unaware, they've had a week long public holiday that started last Yuesday finished yesterday. That means there was no official announcements. I know you're getting very excited about their whole prospect of a week long public holiday.
Goodness made. What does that do for just for general output, for productivity, for everything. Goodness may get a lot of sleep. That's a great bit of downtime. I guarantee you even if we had a week long public holiday, you would still make me turn up to the studio every single day during that time.
Now do you know what the holiday is though.
No Golden Week.
It's called Golden Week.
Oh I think we talked about this last year.
Yeah, yeah, yeah, yeah. It kind of begins this It's the mid autumn festival. It's kind of up to eight days long, and about half of those you get paid leave. I mean, this is pretty good stuff. It was started by the Chinese government in nineteen ninety nine, and the idea was to help expand domestic tourisms. They get people moving around the country and hopefully give the country itself a boost, which I thought, Yeah, we did talk about last year's fascinating.
That's why we were talking about it. We're talking about it because there was a lot of people moving around the country at the time. It might have even been the previous year as well, because it was in to do with all of the COVID lockdowns and the fact that it was the first big test as China started to lift a lot of their restrictions with people moving around the country. It was a big, big, big test for how much the country was going to be able to get back to normal.
Anyway, I'll keep an eye out. I'll keep an eye ex I don't know how many people moved around, but we're talking hundreds of millions of people taking holidays in China. It's pretty amazing.
Yeah, anyway, it's an entirely different scale to talk about here.
Totally, totally. Just before we leave international markets, golds steady around twenty six to fifty US dollars announce and the Aussie dollars buying around sixty eight US cents.
Excellent. Sean will be back in a moment with the rest of the day's business news. Sean house sales are falling fast with successful auctions now at a near two year low.
The combined preliminary auction clearance rate last week came in at sixty three point nine percent across capital cities, the lowest level since December twenty twenty two. There were nineteen hundred auctions held. The lower numbers last week can in part be attributed to the Labour Day long weekend in New South past ac teams Australia. Queens of Law sade yesterday off that was actually the King's Birthday long weekend, not the Lavery Day weekend for Queenslanders. A low preliminary clearance rate in Sydney was the main drag sixty two point seven percent, down from sixty six point one percent in the previous week. Sixty four point four percent in Melbourne. That was better than the previous week, of course, the previous week was Grand Final week in Melbourne. Across the smaller capitals, Bridzman came in at sixty one percent, Adelaide was seventy percent, Cambridge just under fifty two percent. Things get back to normal this week post long weekend and football finals. About twenty six hundred houses going up for auction, so we'll get a pretty good idea this time next week about just how much of a slow down there's been in the housing market now, Shawn.
The Australian government has evacuated nine hundred and four Australian and immediate family members from Lebanon over the past week, and Quantas says it flew a jet to Cyprus yesterday to transport people home.
Yes So, Australian government assisted flights have been evacuating citizens, permanent residence and immediate family members to Cyprus from Lebanon as the war intensifies. Yesterday's Quantus flight is expected to return back to Sydney Airport and Quantas has pledged to fly those passengers to their nearest home domestic airport at no cost good on Quantas. In addition to the flight in cabin crew, there will be a dedicated team on board to support the special assistance flight. Meanwhile, Hesbler has praised pro Palestinian and pro Hesbla protests in Australia over the weekend, posting pictures from the rallies on its Telegram channel with a caption from Australia to the world, stop the Israeli aggression on Lebanon. There are also peaceful vigils yesterday in Sydney and Melbourne from both Lebanese supporters and Israeli supporters.
Rebel Senator Fatima Payman should hand back her seat to Labor and contest the next selection along with the other candidates from her new party. According to Prime Minister Anthony Albernezi, the.
Western Australian senator plans to announce her new party this week, and the PM said she should use it as an opportunity to test her own popularity as well and contest the next election under her new banner. Now. Senator Payment was elected as a Labour senator in twenty twenty two for a six year term. She'd defected to the cross bench in July this year, citing her disappointment with Labour's stance towards the Arab Israeli conflict. Because she's in the middle of her term, Senator Payment personally won't face the voters at the next election due bi May next year. Now, Yesterday, Senator Payment is said by creating a new party, she's allowing the population to pass judgment on her. Also, Senator Payment yesterday released a statement to mark the first anniversary of the terror attacks against Israel, in which twelve hundred people were killed. She was overtly critical of Israel. She said, and I quote, nothing justifies the killing of civilians. Nothing justifies this laughter of twenty thousand children. Nothing justifies apartheid, nothing justifies occupation.
Now, Sean, a little bit of economics here for you. Australia's trade balance, which has been in surplus almost continually since twenty seventeen, is heading lower, with both exports and imports down. Over the month of August, the.
Goods trade surplus was five point six billion dollars for the month. It's been that sort of five billion dollar range for the past few months, but it's about half what it was at the start of the year. The sliding surplus reflects lower commodity prices, particularly iron ore prices. Still accounts for about twenty percent of all exports, and eighty percent of those go to China. A trade surplus means we're selling more stuff overseas and buying it from offshore, so it's a positive for economic growth. However, recent signs of a slow down in global manufacturing firms, particularly in China, and falling international student visa approvals doesn't augur that well for coming quarters.
Sure. I know we're twenty four hours out from the Fear and Greed Weekly newsletter now, which comes out on Wednesday morning, tomorrow morning. Any kind of hints as to what you are going to give us your unadulterated thoughts on, Well, I.
Am going to talk about the housing market. Yes, what's happening there in terms of price rises and stuff like that.
Okay, You're not going to get stuck into Australia's trade balance.
Probably not. I mean it's exciting, there's no doubt.
Yeah. To what extent do we want to entice people to subscribe to the newsletter? Look, you know what, maybe we'll make that an Ironcloud commitment. There will be no discussion on trade balance.
Okay, all right, my promise.
Head along to Fearangreed dot com dot Au and sign up for the free weekly newsletter. There's been a surge in people joining up in the last week Seawan ever since you we both posted a couple of videos on social media on LinkedIn and everything featuring each of us walking along talking about the newsletter.
It's almost falling over downstairs all that kind of thing.
Goodness may be putting our bodies on the line for fear and greed, So sign up for the newsletter and make all of that worth it, Shawn. Financial advice not only provides investors with guidance on money matters, it also helps improve the quality of life for many people and increases their financial confidence and satisfaction.
That's according to a Financial Advice Association Australia survey, which also says that an adviser helps people feel more confident when managing health issues. Now we're big fans of financial advisors on this show, absolutely though. The survey is very, very positive about financial advisers, including where did it come from? Againshawan, Yeah, the Financial Advice Association Australia. Across the board, all age groups with advisors experienced an increased value in quality of life, confidence and financial satisfaction over the last year. For those without an advisor, quality of life decreased slightly. The survey says that ninety one percent of clients earning one hundred and twenty thousand dollars or less who had financial advisors felt financially secure, higher than those who didn't have an advisor. For advised clients, trust and satisfaction in their advisor had increased with two thirds of clients reporting their perceptions of the value received from their advisor had improved. Over All, the surveys suggests that financial advice protects finances, delivers peace of mind, and support decision making. I would love one of these surveys from a peak body to say, Yep, NAP doesn't work.
We've done a bit of research, and you know what, it's not really necessary, irrelevant. You don't need financial advice. Goodness me, and a lot of that really is common sense.
It is. I mean, I'm sure if you have a financial advisor, it does give you peace of mind because you know, at least someone is looking after my money.
Yeah, yeah, yeah, it gives you a little bit of control back and a little bit of kind of just a sense that kind of time is not getting away from you and the opportunity is not getting away from you. Can you tell that I've talked to a financial advisor in the last couple of weeks, clearly, and suddenly the optimism and the enthusiasm is back. So I one hundred percent agree with this survey. Now Regal Partner's bid for Platinum Asset Management as well and truly alive, even though it's been knocked back with Platinum allowing Regal Partners access to its books.
Platinum wants a higher price and has granted Regal access to do due diligence in the hopes of achieving a better offer. The two asset managers confirmed they had entered an initial period of non exclusive mutual due diligence, with Platinum, saying the process could allow Regal to improve the value in terms of its proposal and allow Platinum to assess the absolute and relative value of Regal share consideration and the costs and benefits of any combination. Lots of words there. What I'm trying to say is they're talking to each other being there. Platinum founder and major shareholder Clon Nelson has yet to comment on Regal's offer. A bit of a king maker in this one. There's no pun there, because of course the person who is in charge of Regal Partners is Philip King. Anyway, I digress the board. Basically, the Platinum board has set its open to offers, including from third parties.
That's such a niche pun your making.
That's very good.
Such a specific audience that is going to understand that one. Speaking of billionaires, how about this one at Lassian co founder Scott Farquah and his wife Kim Jackson have sold their unnu used Point Piper waterfront mansion A Lane for about one hundred and thirty million dollars.
Yeah, so it's the top deal of twenty twenty four and at that price is either equal to or slightly above the current national house price record, according to the Finn Review. The exact price is undisclosed, but the Finn's reporting sources saying the property exchange for about the same amount that the couple paid for another property close by. That's where they're living. The far By Jackson's paid seventy one million dollars for the eighteen sixty three built a lane in April twenty seventeen. They haven't lived in it. It's now a dilapidated residence. So you pay seventy one million bucks, you don't live in. Australia's overall residential record sits at one hundred and forty million dollars paid for a combined penthouse and sub penthouse atop then leases one Sydney Harbor at Bringaroo, purchased off the plan in twenty nineteen. That one. No one's living there. It's still yet to settle.
So they made about sixty million dollars out of this over that time.
Yeah, seven years, sixty million dollars.
It's not a bad little investment, was it? Selling The Weekender hasn't even lived in run down old shack turn into international news now Sean Donald Trump's economic plan so forecast to raise the federal debt by roughly double the increase expected if Karmala Harris is elected.
That's according to new analysis from the Committee for a Responsible Federal Budget, a non partisan group in Washington and reported in The Financial Times. Through twenty thirty five, the federal debt is projected to swell by seven point five trillion dollars if the former president wins the White House and follows through with his pledge to lower taxes for individuals and businesses, apply heavy tariffs on imported goods, and deport millions of immigrants, amongst other proposals. Vice President KRMLA Harris's platform features expanded tax credits for small businesses, improved access to affordable childcare and housing, but higher corporate taxes. It's estimated to increase the debt by about three and a half trillion dollars over the same period indicate a tight race between the two. What we're four weeks away, four weeks today till the election day. They've both made the economy a focal point of their campaigns.
And finally showing. The death toll in the US from Hurricane Helene has risen to more than two hundred and twenty five, with many more unaccounted for. As communities across six states reel from its effects, including several hundred thousand homes left without power and short of clean water.
Washington has deployed soldiers and military helicopters to help emergency workers reach people stranded in remote towns. Flooding destroyed highways, and trenchill rain unleashed mudslides on homes all over the place. The toll was highest in North Carolina, where almost one hundred fatalities were estimated, followed by South Carolina. The southern states of Georgia, Florida, Tennessee, and Virginia were also badly affected. The scientists have found that warming sea temperatures are linked to more intense hurricanes. According to the FT, A preliminary study from the Lawrence Berkeley National Laboratory in California found that climate change may have boosted the amount of rainfall over parts of Georgia and North Carolina by as much as fifty percent as a hurricane dumped moisture collected over the Gulf of Mexico, where record temperatures have been reached.
Okay, Up next Sean is the Fear and Greed Daily interview with demographer Simon kusten Maher from the Demographics Group.
All about what's happening in society, but particularly this cohort of young men in particular from for fifteen sixteen seventy to about their mid twenties and how their lifestyles have changed and how that's impacting everything from the marriage market to the economy.
Yeah, it is a great chat. It is coming up next to the Fear and Greed playlist on your podcast platform or at Fearangreed dot com dot a you and keep an eye on your playlist at around about midday today when the new episode of Ask Fear and Greed is released. That's where we answer listener questions. I can be on the economy, they can be on business, they can be on look, that could be on relationships, really, that could be on pretty much anything, and we'll have a crack at answering it, and today's question is a good one, but she'll have to come back at midday to hear all about it. Thank you very much, Sean, Thank you, Michael. It is Tuesday, the eighth of October twenty twenty four. Make sure you're following the podcast and please join us online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael Thompson and that was fear and greed. Have a great day.