Good for Canada?

China is boosting spending on all kinds of natural resources - oil and mining acquisitions by at least half this year to take advantage of lower valuations after prices slumped. The nation’s sovereign wealth fund this week spent $2.75 billion on commodities companies and approximately $60 billion in the past year.

“China sees it as ‘We’re going to use the resources for several decades, so therefore our pricing expectations are different,’” Goodyear said. There “will be resource needs ahead, and they will want access to these resources in the years ahead.”

Chinese companies will step up the pace of overseas mergers and acquisitions in a “new wave” of deals.

This bodes very well for Canadian natural resource companies, and, in turn, for Canada as a whole. It goes along with my much repeated theme that "Canada has the goods that the rest of the growing world needs". Canada should be able to ride this secular wave that should last for at least another decade.

Another point of interest here is the simple little fact that one by one, Canada's mining companies are disappearing - either by way of merger with another or by take-over. With fewer companies to choose from, prices should...

Copper prices have doubled and oil has jumped 54 percent this year as China boosted imports to fuel its stimulus spending needs.

http://www.bloomberg.com/apps/news?pid=20602013&sid=ayAyMtVos3tQ



Saverio Manzo