Bullish Signs: Copper and Silver Shine Anew

The two metals’ prices have climbed nicely, a good counterpoint to the jobs situation.

The steadiness of the economic recovery may be iffy, what with mounting layoffs and stubbornly high claims for jobless compensation. But two indicators are flashing green: the price increases in the bellwether industrial metals copper and silver.

Known as Dr. Copper, because it often renders a telling diagnosis of the economy, the metal has widespread applications, ranging from factory production to electrical transmission. This year, it is up 10.2%, besting the stock market’s key index, the S&P 500 (ahead 7.6%). And that’s after copper lost a quarter of its value in the March panic over the coronavirus’ onset.

The rebound stems from a pickup in US manufacturing, such as in automobiles, which had a two-month shutdown in the spring. China is another factor, as the economy there has sprung back, requiring a fresh influx of industrial materials.

Aiding the copper price bounce is low inventory, resulting from an earlier mining slowdown related to the pandemic, said Ed Egilinsky, Direxion’s head of alternatives. Also benefiting the metal are government stimulus actions around the globe, he added.

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Silver has a dual use, both as a precious metal and as an industrial staple. Perhaps owing to that duality, it has performed even better then gold—which is up 26.3% this year, versus silver’s 40.6% climb. Gold is a classic haven investment. Right now, Egilinsky said, “there is a $20 floor for silver,” meaning the price seems determined to stay north of that mark. On Friday, the metal closed at $25.30 per ounce.

Like almost everything else, silver suffered in the March freak-out, losing a third of its value. Its comeback is a testament to its resilience and its appeal as a store of value, a la gold.

Regardless of which party wins the November election, a large infrastructure buildout seems very likely. That will be manna for industrial metals.

CPPIB Sells 50% Stake in London’s Nova Victoria to Singapore-Based REIT

The transaction is expected to yield $549 million when the deal closes later this year, the fund said.

By Sarah Min

A planned sale of the Canada Pension Plan Investment Board (CPPIB)’s half-stake in the Nova Victoria development in central London, a deal that was reportedly delayed because of the coronavirus earlier this year, has been finalized.

The Canadian pension plan said last week that it will sell its 50% stake in phase one of the $1 billion mixed-use real estate project to Singapore-based Suntec REIT [Real Estate Investment Trust], which is managed under ARA Asset Management. The transaction is expected to yield $549 million when the deal closes later this year, the fund said.

“The sale of Nova phase one is the culmination of a long-term and highly successful joint venture development project,” said Tom Jackson, managing director and head of UK real estate at CPPIB. The CPPIB made the joint venture with UK-based REIT Landsec.

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“The project has been a huge success, as a large and high-quality mixed-use development scheme that has significantly revitalized the area around Victoria station. It represents one of the most successful developments in London in recent times,” Jackson added.

Construction for phase one of the Nova Victoria development finished in 2017. The two office buildings and the block of apartments, near the Victoria subway stations, are essentially fully rented and sold. About five buildings in total are involved in the Nova Victoria project.

The global investor said it will continue to invest in real estate assets across the UK, such as offices, shopping centers, and student housing. About 11% of the $331 billion portfolio is invested in real estate investments. About $20.7 billion, or 5%, of its total portfolio is invested in the United Kingdom.