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 Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Play Europe bulls, a retail boost and why a little inequality can be a good thing

Europe bulls, a retail boost and why a little inequality can be a good thing

This week’s Investment Pulse looks at whether investors should be bullish on Europe, the surprise rise in UK retail sales and if a little inequality is a good thing.

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter