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When they diverge, investors generally see opportunity in the cheaper asset, which in this case is bonds.
"With less political uncertainty, the authorities may hope that capital flight eases and that some may return capital in coming months to take advantage of cheaper asset prices," Charles Robertson, chief economist at Renaissance, wrote in a note for investors.
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The bank said: Misys would be on the expensive side of Temenos' recent acquisitions, particularly if we factor in a take-out premium, making an acquisition less likely if cheaper assets remain.
Financing acquisitions in the United States requires more funding than relatively cheaper assets in Europe, and a three-way partnership makes more sense than attempting to tap the currently volatile debt markets.
Clearly, investors have a choice between holding their portfolios in shares, bonds or cash, and can switch to the cheapest asset.
At the same time, the government would want to avoid the use of taxpayer money to subsidize cheap asset purchases by wealthy private investors, he said.
"This is H.P. saying, 'We see a cheap asset.' " Chris Whitmore, an analyst with Deutsche Bank, noted that E.D.S. has grown marginally to around $22 billion in annual revenue from $19.8 billion in 2003.
In the meantime, it systematically rebalances to buy more of cheap asset classes, a proven model for long-term success.
Indeed, momentum for consolidation among gold miners seems to have started in earnest, aided by the relatively cheap asset value due to falling gold prices since the summer that renders an acquisition less expensive, with the latest deal announced this month by Papua New Guinea's Lihir Gold for smaller Australian gold developer Ballarat Goldfields for about A$350 million.
Better to have cheap assets than overpaid role players.
The firms are betting that they can snap up cheap assets for as little as 10 cents on the dollar.
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