The tide had started to turn in February this year for resources stocks. Cannings Purple’s Investor Insight team explain.
We recently noted that the tide had started to turn in February this year for resources stocks, with a flurry of activity and reporting since then supporting that.
With the last of the June quarterly reports dribbling out today, most investors are grinning from ear-to-ear. So much so that they may have been more than happy to tip new money into companies that have been on struggle street for the past few years.
Of the clients in the Cannings Purple IR stable, there were 11 capital raisings in the June quarter, totalling $181.8 million. Compare this to the full year where there were 24 raises for $256.2 million and you can see the sentiment clearly shifting.
On the M&A front, we continue to see companies looking at new opportunities, however in the current market, due diligence is at the fore and timeframes are being extended. Over the past year, our clients undertook 19 M&A transactions totalling $2.9 billion, underpinned by a few large mergers.
With prices recovering across a number of commodities, investors are looking for the next phase of the resources cycle to begin.
