Morning Report Wednesday 20 August 2014
BHP gets hammered as expected, should investors sell?
The market very suddenly agreed with my logic around BHP, (see Monday’s Market Matters video update) with investors and traders unceremoniously dumping the stock, closing -5% overnight in overseas trade, after pushing it up towards $40 is Australia, prior to its annual report. As anticipated, BHP announced plans of a demerger, but a lack of capital return to shareholders.
Very simply, BHP will be left focusing on businesses that have made the big profits over recent years i.e. iron ore, coal, copper, petroleum and potash.
A selection of BHP’s better-quality non-core assets are to form part of new independent metals and mining company with assets spanning aluminum, coal, manganese, nickel and silver.
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