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Oreninc Index Take a Normalizing Dive

The Oreninc Index took a normalizing dive for the week ending April 16, 2015. Total dollars announced fell to $29.7m on 16 deals, three- and four-week lows respectively. One brokered and one bought deal were announced for $13.8m, three-week lows for both.

Deal-making was up again this week, with the planned merger between Alamos Gold (TSX:AGI) and AuRico Gold (TSX:AUQ) being the largest confirmed deal. Shareholders of both companies will each own roughly 50% of the merged company in the US$1.5b deal. Commodities had another up and down week, with gold staying mostly flat and iron ore having a nice couple of days to begin the week before coming back down towards the end.

Last week’s Index performance and the increased level of deal-making in recent weeks is great to see considering the lackluster year, however it’s unsurprising that the Index has fallen to it’s trending level.

 

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Oreninc Index Explodes to 25-Week High

The Oreninc Index exploded to a 25-week high in the holiday-shortened week ending April 9, 2015. Total dollars announced jumped to $166.1m on 32 financings, eight- and six-week highs respectively. Five brokered and bought financings were announced for $138m, eight-week highs for both.

Deal-making was robust with one of the biggest deals of the year (so far) being announced—Royal Dutch Shell’s (NYSE: RDS) acquisition of BG Group (LON:BG) for a cash and stock deal worth $70b (USD). Commodities had another up and down week, with gold gaining a bit before falling below $1,200 an ounce. Oil prices, on the other hand, rose for the fourth straight week.

While one week’s performance is never going to move the needle enough to make up for what has been, up to this point, a horrific financing season, it’s great to finally see a bright spot in the Canadian natural resources space.

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Oreninc Index Crawls Back Up

The Oreninc Index crawled back up for the week ending April 2, 2015. Total dollars announced rose to $38.3m on 23 deals, three and five week highs respectively. Two brokered financings were announced for $17.4m, one of which has yet to announce an offer size, a two-week high. One bought deal was announced for $17.4m, a two-week high.

The only major deal from the week was Israel Chemicals Ltd. (NYSE:ICL) agreeing to purchase Allana Potash Corp. (TSX:AAA) for $137m CDN. Commodities had a roller coaster of a week, with iron ore dropping 15% in just one week and gold moving up and down before settling right around $1,200. Oil was down slightly on news that a framework of an Iranian nuclear deal had been achieved, though it did not drop as much as analysts had been expecting.

While not great, seeing an improvement over last week’s horrendous performance is a positive, even if the five-week moving average plunged further than last week’s multi-year low.

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Oreninc Index Falls to Eleven-Week Low

The Oreninc Index fell to an 11-week low for the week ending March 26, 2015. Total dollars announced fell to $20.9m on 15 deals, 11- and two-week lows respectively. No brokered deals were announced for the first time in 11 weeks. No bought deals were announced for the third time in five weeks.

Deals were light, with the major deal of the week being Ivanhoe Mines Ltd.’s (TSX:IVN) agreement to sell China’s Zijn Mining Group a 9.9% stake in the miner. Commodities were fairly positive for the week, with oil and gold enjoying gains related to the political crisis in Yemen. 

In addition to the poor weekly performance, the Index’s five-week moving average hit a multi-year low, highlighting just how bad this first quarter has been. When the only strength of the week is increasing commodity prices due to an uncertain political crisis that is unlikely to spark some sort of long-term pricing trend, you know we are in a bad place. 

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Oreninc Index Jumps 

The Oreninc Index jumped up for the week ending March 19, 2015. Total dollars announced fell to $33.5m on 17 financings, ten- and two-week lows respectively. One brokered bought deal was announced for $25.1m, a five-week high for both. 

Deals were almost non-existent again for the week. The biggest deal-making news of the week were reports that Barrick Gold (TSX:ABX) is looking into selling its Chilean Zaldivar copper mine for around $1.5b to reduce the company’s overall debt. Commodity prices for the week were mixed, with iron ore continuing its fall, but gold had a strong end to the week—rising almost 2%—on news that the US Federal Reserve will likely wait until the second half of 2015 to raise interest rates.

Although an increase in performance over last week, the financing market is still struggling, which can be seen with the ten-week low in dollars announced. As we go into spring, and enter the start of what has historically been lower performing months for the Index, it’s hard to stay positive that things will get much better before summer.

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