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First Up

UPDATED 28/05/2025 09:34

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The ASX200 advanced +0.6%, closing at a three-month high, on Tuesday. The index was trading lower into lunchtime before the S&P 500 futures got the proverbial “bit between its teeth,” pushing higher after Japan indicated it’s considering a reduction in bond issuance. If Japan sells fewer bonds, investors’ appetite will need to be satisfied elsewhere, which in this case pushed up US 30-year bonds (yields lower) – remember, it was rising long-dated bond yields that weighed on global equities and risk assets last week.

The Bank of Japan (BOJ) helped illustrate that equity markets have evolved into a global mosaic influenced by more than just President Trump and tariffs.

Elsewhere, the ASX copper names led the gains after the AFR ran a story that an offshore suitor was looking to take over $1.3bn Mac Copper (MAC), which had already gone into suspense. First, it was OZ Minerals (OZL), and now it’s Mac Cap (MAC) as the pure copper plays on the ASX dwindle away. We read in the evening that the AFR were on the button:

South Africa’s Harmony Gold has confirmed it has made a $1.6bn bid for MAC, which is at a 21% premium to the last price.
The bid has the approval of the MAC board and shareholders representing ~20% of MAC stock, with the deal looking set to be the first test of the Albanese government’s revamped FIRB.

MM remains bullish on copper over the coming years, but buyers will find it increasingly difficult to identify those who will dance the M&A jig. Last year, for example, BHP was forced to walk away from its failed $49 bn bid to buy Anglo American (AAL LN) when the “Big Australian” was targeting the UK company’s attractive copper assets. The question we ponder as owners of Sandfire (SFR) and AIC Mines (A1M) is how far it will push up the valuations of other ASX copper companies? It appears much easier to buy than build these days, particularly with the AUD still mid 60’s.

Overseas markets surged overnight, with US equities halting a four-day slide as consumer confidence rebounded sharply, as the US and the European Union accelerated trade talks. The Dow closed up over 700-points as overnight news combined with economic and trade optimism to push most US indices up more than 2%. In Europe, gains were more muted with the EURO STOXX 50 advancing 0.4% while the UK FTSE put on 0.7%.