1、EQUITY RESEARCHJanuary 15,2025European Diversified miners:Policy Chain ReactionDowngrading Anglo American and Antofagasta to UnderperformOur view:We maintain our neutral sector view on the diversified miners,but see plenty of opportunitiesin the months ahead as markets get to grips with a second Tru

2、mp term.The world awaits to see howthis new government fares against the practical realities of trying to implement Trumps seeminglyimplausible agenda and what will be the reaction from other governments and central banks.Our basecase is for more of the same that we saw in the first term.Markets hav

3、e arguably become desensitised tothe rhetoric and checks and balances hold.We prefer cheaper,more defensive bulk plays over the raciercopper equities(we rate GLEN&VALE Outperform while we downgrade AAL&ANTO to Underperform).The bear case is that with the governing trifecta and greater control of the

4、 courts,Trump will pushthrough with the planned tariffs,sparking a trade war that puts a sharp break on global growth(ANTOmost vulnerable,BHP/RIO the least).The bull case is that we are at peak enthusiasm for US equities andthe dollar,and a significant unwind is to come.Funds should then flow to mor

5、e commodity intensivedeveloping countries,with higher beta stocks likely to outperform in this scenario.Anglo American(Underperform vs Sector Perform,PT 2,200p vs 2,400p)-AAL was the standoutoutperformer in 2024,delivering on its restructuring plans,and it retains a residual bid premium sinceBHPs ta

6、keover approach.However,we do not believe it is a bid target at the current share price(tradingat 1%above BHPs final offer)and certainly not before it spins out Anglo Platinum(expected by mid2025).Management face trickier restructuring steps from here in our view.De Beers demerger will likelyhave to