Investment Banking Issues and Opportunities in Mining

Investec MD (M&A and Equity Capital Markets) Nanda Kumar Menon discusses :

- SPACs - an alternative vehicle for mining assets

- Malaysia was historically a mining country- Independence of banks

- finding a balance between straddling roles of M&A/ECM and investment advisory

- Investment banking fees vs plumber 

- M&A valuations- a subjective assessment of what upside is

- IPO price jump - part of the business’s cost of financing - should always leave something on the table for investors

- Privatisations:   -  shield restructuring process from very short term market demands   

                            -  reward to privatiser for risk-taking during unlisted period 

- M&A trends - natural resources demand still strong especially from China and India

- Fast depleting supply as well - scarcity driven M&As 

- Mining assets long gestation periods - important to plan for supply 

- Recent price crash of gold - just a little correction in the long term bullishness?

- Gold  is harder to correlate to GDP - very much a probability game based comparing current prices to estimated future demand going coming from govts and consumers

- SPACs are interesting because it brings mining co’s to msia which are usually listed overseas

- Mining is alternative to Oil & Gas sector which Malaysia is strong in 

- The risk assessment processes for investors are similar

- The source of a lot of mining investment funding actually comes from Asia