Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

BHP Billiton rally caps stellar week for FTSE

BHP Billiton rally caps stellar week for FTSE

BHP Billiton (BLT) has helped drive the FTSE 100 towards its biggest weekly gain in six months, as the miner announced its intention to spin off manganese and nickel assets.

BHP Billiton rose 2.8% to £20.82, contributing to a 44 point, or 0.7%, rise for the index, which reached 6,729 points. That has set it on course for a 2.6% weekly rise, the biggest since February.

Citywire AAA-rated fund manager Henry Dixon, who holds BHP Billiton in his GLG Undervalued Assets fund, spoke recently of the stock allowing him to target a ‘conglomerate discount’ from companies looking to restructure.

‘Within big conglomerates, some parts of the company are not being valued by the market,’ he said. ‘BHP Billiton is unlocking hidden value through non-core disposals.’

However, analysts at Liberum were more sceptical about the potential for further share price rises from the move. ‘We understand the rationale for the portfolio simplification – it will create a simple, diversified miner with the best margins and return on capital employed in the sector over the long run,’ they said. ‘However, we’re not convinced it is necessarily value accretive.’

Speaking after the stock had rallied in Australia on the news, they said the upside was ‘probably baked in’ to the price.

The Office for National Statistics meanwhile further underlined the contrasting fortunes of the UK and the eurozone, when it published its second estimate of UK gross domestic product (GDP) growth in the second quarter. At 0.8% it stands unchanged from the first reading and compares to no growth in the eurozone over the same period.

‘The UK has enjoyed a period of consistently strong growth since the start of last year, during which the economy has grown some 3.8%,’ said Chris Williamson, economist at Markit.

‘The second quarter upturn was notable in finally pushing GDP 0.2% above its pre-crisis peak, reached in the first quarter of 2008.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter