EM CEEMEA CREDIT: GFISJ: Forcing of closure at Damang Mining, neutral for credit
Apr-14 13:10
Gold Fields (GFISJ; Baa3/BBB-/-)
Forcing of closure at Damang Mining, neutral for credit
- Neutral for credit, Damang Mining is small vs overall. For context, overall gold production for Co. amounts to 2.07Moz in FY24. Co.’s guidance for FY25 had Damang Mining at gold production of 85koz, AISC at USD2,340oz and nil capex (source: Co.’s FY24 reports).
- In perspective, gold production at Damang was already on a downward trajectory (134.6koz in FY24, 152.6koz in FY23) on lower yields. Co. reports of no in-pit mining activity in ’24. Damang Mining accounted for USD138mn adj FCF out of USD1,148mn overall in FY24.
- Today, the Co. released an update on the Damang Mining lease extension, citing that “The Government has instructed Gold Fields to cease operations and vacate the lease area by the 18th April on expiry of the lease”. The Co. has been liaising with the authorities since applying for a lease extension back in Dec ’24. The decision by the authorities forces the Co. to take necessary steps to adhere to the request.
- In secondary market, our feeds show seasoned GFISJ 6.125 May29 bonds charting at z+188bp. The Co. had mandated banks in primary for a potential new deal week before last.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
Mar-14 21:28
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Mar-14 21:25
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
Mar-14 21:17
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
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