Iron ore feedback
Our call with Atlas Iron CEO yesterday painted a picture of stability in iron ore market “a lot less tonnes slopping around in the system tan there was 6 weeks ago” “unprecedented level of new supply...
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Look East (cont): to the Chinese “bull market”
Few were expecting to marry China with the words “Bull Market” at any point this year, but that is how the media now describes it (see TOP on Bloomberg news yesterday). While the H-shares have risen...
View ArticleBHP / SIR – Nickel West catalyst
We recently highlighted there is a 30% probability the Sirius share price could double in the next 2 months given the high likelihood the large conductor sitting below the existing Nova / Bollinger...
View ArticleBHP – Big catalysts 10 days away
In 10 days time (August 19th) BHP report their FY earnings. As previously mentioned we see multiple catalysts to own BHP into this event Expect strong result – Recent production of 4 key pillars was...
View ArticleBHP: big catalyst is 10 days away
Here is another quality company still perceived as deep-cyclical with little control of its destiny. Many forget BHP was one of revered group of companies not to cut their dividend during the crisis –...
View ArticleAustralia: Banks vs Miners
BANKS: Dividends have been the #1 reason to own the Oz banks, but with payout ratios and capital management under the focus of the regulator the market needs to get more comfortable with earnings...
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New BHP vs Old BHP
RIO result on Thursday last week highlighted the increasing focus of miners on FCF generation and capital returns for shareholders. The 2 charts below paint a great picture of how much things have...
View ArticleIs BHP next to impress?
Rio Tinto’s result on Thursday highlighted the increasing focus of miners on FCF generation and capital returns for shareholders. BHP has followed a similar path under Andrew McKenzie and we expect a...
View ArticleWhat is good for Chinese property is good for the miners
The Southeastern Province of Fujian (population 37.2mn) asks Banks to speed up approvals for mortgage lending and increase loans to property developers. First-tier city Shenzhen plans to make small...
View ArticleChange in China: positives hidden in plain sight
Two of the key risk factors for China have been run-away off balance sheet financing and an addiction to credit. Numbers today should reassure on both counts. While July aggregate loan figures were...
View ArticleBHP catalyst next week
We expect a key feature of the BHP result will be a US$3bn buyback, with the likely structure an off-market buyback given the call to release franking credits and given spread to London is down to a 5%...
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Banks to suffer as BHP/RIO dividend growth + capital management more attractive
As BHP and RIO simplify their portfolio, cut costs, reduce CAPEX and raise production to improve FCF, the predictability of earnings will enable management to lift payout ratios, increase dividends and...
View ArticleBHP – Demerger a certainty = Buyback and DLC collapse?
Whilst a lot of the focus will be on the demerger process, perhaps the big question should be is what implications the demerger announcement has on potential for a buyback and DLC collapse. BUYBACK...
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BHP demerger – Why it makes sense
The BHP demerger we have been talking about for the last 4 months was announced a couple of days earlier than expected with BHP announcing on Friday “a demerger of a selection of assets is out...
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BHP Billiton: demerger in motion
Yesterday, we highlighted how based on the chart below and CEO Mackenzie’s focus on ROIC going forward rather than size would lead to a demerger of the Billiton acquisition. This morning BHP announced...
View ArticleBHP Billiton – Disappointing
Best word to describe the FY result was disappointing with i) NPAT $13.45bn vs $13.58bn consensus ii) Net debt $25.8bn – appears not allocating any debt into new demerged company iii) No capital...
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10 reasons why we are bearish the AUD?
1. Australian investment boom has peaked 2. Terms of trade are falling 3. Lower relative and lower absolute interest rates (200bps cuts in last 2.5 years + 2 more rate cuts expected this year) 4....
View ArticleAluminium, don’t forget Rio and BHP
While we have discussed the benefits to Norsk Hydro – a pure play, and Rio (Alcan) we haven’t really discussed it with respect to BHP, and so were surprised to see how big they were in terms of the...
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