The gold sector in Australia is set for a shake-up, after Genesis Minerals yesterday pitched a $12.6 billion merger proposal to Vault Minerals. It comes after another gold company, Regis Resources, proposed a $10.7 billion tie up with Vault.

Genesis wants to create Australia’s third largest gold company and become the dominant player in Western Australia’s Leonora goldfields, north of Kalgoorlie.

A combined Genesis-Vault would produce between 600,000 and 700,000 ounces of gold annually, have 9.4 million ounces of gold in reserves, and would be a top 50 ASX company.

The third player in all this, Regis, now has five days to improve its offer. It would be the biggest deal in the local gold mining sector since late 2023, when Canadian based Newmont acquired Newcrest.

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Greed-o-meter

The number of Australians with net assets worth more than $US 1 million rose to 1.6 million people last year, an increase of around 25,000. We now rank seventh in the world for the number of millionaires, with housing and super largely to thank for our relative wealth.

Source: UBS, ABC

Fear & Greed Q+A today

It's 25 years since the first exchange traded fund (ETF) was launched in Australia. Jonathan helped launch it - and discusses how ETFs went from humble beginnings to transforming the investing landscape in this country:

 

 “It was a completely different world. Taylor Swift was ten or eleven years old. People didn't Google things - they used Yahoo and AltaVista.

 

Managed funds back then just weren't suitable for the exchange. It wasn't like a fresh paint job on an existing product. It was more like a full-scale gut-the-building renovation.

 

We had to rewrite the constitution completely. The tax side of it was completely different back in the day. We had to rethink the whole process. The ASX listing rules were completely different, and there was regulatory work as well. So it really was a rebuild from the ground up.”

News in brief

The country’s biggest home lender, the Commonwealth Bank, has warned that the housing market is set to replace the Middle East war as the biggest drag on the economy.

Australia and Fiji have signed a mutual defence treaty, elevating to the two countries’ relationship, and pushing back the chance of China doing a deal with the Pacific nation. The two countries also signed a separate Vuvale Union covering the economy, climate, health and migration.

Just hours after the agreements were signed, a Chinese submarine launched a nuclear-capable long-range missile with a dummy warhead in the Pacific Ocean. Chinese officials had briefed various regional governments, including Australia and New Zealand, about an intercontinental ballistic missile test in the Pacific.

Meta, the owner of Facebook, has defended policy changes that permitted offensive anti-immigrant and LGBTQI speech on its platforms, including statements such as “immigrants are scum”, “trans people don’t exist”, and “gay people are sinners”.

Two of the biggest local winners from the football World Cup are SBS and the Commonwealth Bank with the broadcaster and advertiser attracting huge attention for their involvement with the Socceroos.

Fear-o-meter

Deals are back. Yesterday, Genesis Minerals pitched a $12.6 billion merger proposal to Vault Minerals. Last week South32 said it wants to sell its aluminium and alumina assets to Alcoa.

IFM Investors made a hostile bid for Atlas Arteria and now holds 60 per cent of stock. Macquarie Asset Management has bought logistics group Qube Holdings and in the insurance sector, a North American group has made a $4.7 billion bid for broker Steadfast Group.

Then there’s been some smaller deals like Barrenjoey picking up Magellan Financial Group and Swiss based PE group EQT bidding for Perpetual.

The surge of activity is slightly surprising given all the geopolitical tension, but corporate confidence appears high. There is also private markets money looking for assets to buy. Atlas Arteria, Qube and Steadfast are all going to the private sector.

The Australian dollar is relatively weak making local assets more attractive. As important as any of these reasons - there’s also a push by CEOs and boards to gain not just scale, but technology and know-how in an AI world.

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