Daily Brief Energy/Materials: Greatview Aseptic Packaging, Copper, Gold, Iron Ore and more

• Since announcing Shandong Xinjufeng Technology Packaging (301296 CH)’s pre-conditional voluntary offer for Greatview Aseptic Packaging (468 HK) at HK$2.65 per share, the gross spread has increased. 
• The Board’s strategy is to rally shareholders against a hostile offer. However, the recent AGM protest votes suggest that the Board cannot easily thwart the offer. 
• Shandong Xinjufeng’s renewed efforts to secure Board representation suggest that its offer is in trouble. Meanwhile, China Mengniu Dairy Co (2319 HK) seems disinclined to engage in a bidding war. 

• Copper retreated by more than 5% due to China’s weak print on TSF. The plenum’s lack of concrete stimulus measures also did not help matters. 
• Check out our initiation, Copper Primer: What We Like About Copper And What to Play, where we provide our long-term bullish outlook on copper. 
• Also, see our initiation, Southern Copper: In a League of Its Own. The company reported a stellar Q2 FY24, beating the street estimates by 20%.

• Shift to the right in favor of Trump accelerated after assassination attempt
• Republican momentum challenging expectations for a divided Congress
• Gold and oil likely to benefit under GOP control, with potential increase in demand and production respectively

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• Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher cost curve at around 100 USD/ton.
• Last week, quarterly operational updates released were for Vale, BHP, Kumba, and Mount Gibson. Except for BHP, all companies were disappointed due to provisional pricing impacts and mix changes.
• Read our recent production preview Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24, to be declared on the 25th of July.