BHP-where to next?

[topcropper]

BHP up 22% in London, and RIO up 18%. Amazing stuff.

I used to think that BHP management were very good, until the offer for Rio Tinto.
If Rio Tinto had accepted, BHP would be (if not) close to bankruptcy now.
That pretty tells me they cant see past their nose, nor the next bonus check.

I must admitt, RIO's huge debt level is looking a worry, and as a BHP share holder, I'd probably be happy if the deal didn't go ahead now. I think RIO's extra debt from the alumina deal is about 40 billion.

Why would BHP be close to bankruptcy though? RIO is not now, so BHP wouldn't be either if they were combined.

Smaller miners are going bust and new developments are being mothballed. BHP and RIO will be well placed to benefit in the years ahead when all this carnage is over.

I hold BHP and RIO.

See ya's.

 

[topcropper]

Yes TC , I agree , everything seems to be getting silly . Who knows ....

What do you think will happen with soft commodities in the short to medium term ?

....

I think soft commodities will go down with every other commodity until the carnage is over. Then they will rise with them as well.

Grain has dropped nearly exactly the same as oil. Grain generally follows oil, so that's nothing new.

I'm thinking the current unprofitability in grain could be good for 12 months ahead if a lot of land don't get planted, and inputs are slashed, but it's only a hunch.

See ya's.

 

[BoatBoy]

Heads Up

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5oVQqb5dxvg&refer=home

BHP Withdraws $66 Billion Stock Offer for Rio Tinto (Update1)
By Rebecca Keenan

Nov. 25 (Bloomberg) -- BHP Billiton Ltd., the world’s largest mining company, scrapped its $66 billion offer for Rio Tinto Group citing the turmoil in global markets.

“The BHP Billiton board today decided it no longer believes that completion of the offer for Rio Tinto would be in the best interests of BHP Billiton shareholders,” Don Argus, chairman of Melbourne-based BHP said in a statement to the Australian stock exchange. “We have concerns about the continued deterioration of the near term global economic conditions, the lack of any certainty as to the time it will take for conditions to improve and the risks that these issues imply for shareholder value.”

BHP rose 12 percent to A$26.22 at the 4:10 p.m. Sydney time close on the exchange.

Dave

 

[topcropper]

I used to think that BHP management were very good, until the offer for Rio Tinto.
If Rio Tinto had accepted, BHP would be (if not) close to bankruptcy now.
That pretty tells me they cant see past their nose, nor the next bonus check.

Looks like you might be right Pistonbroke.

I take back what I said earlier.

RIO is down 36% in London. BHP up 7%.
Looks like the market is worried about the debt, and the BHP bid was all that was holding up the price.

Nice call.

Lucky I hold much more BHP than RIO.

See ya's.

 

[Pushka]

Ah, I think that is a good thing. Hold BHP not RIO. Wow, did you say down 36%! Carnage. Maybe that is why BHP has been down more than most recently; now the risk is gone (well, the RIO risk anyway!)

 

[LynnH]

Lucky I hold much more BHP than RIO.

We are also in the same situation.

There was a mention in the morning newspapers of the possibility of RIO undertaking a rights issue in order to pay back some of its debt - no details at this stage.

Also mention of BHP taking another crack at RIO in 12 or 18 months time. Mmmm ..... methinks they would be more likely to try to pick up some of RIO's assets in a 'firesale' situation over the coming months.

Interesting times ahead for both companies!

Cheers
LynnH

 

[Pete_d]

On early trade....

RIO down $21.70 (-34%) to $42.20
BHP up $2.23 (+8.5%) to $28.46

 

[Muli]

Hi all,

Is it a good time to buy RIO?

Muli

 

[peteb]

BHP will be able to buy all the bits of RIO a lot cheaper now .....

RIO has 40Bill debt and the Director says that he is confident that it is managable ......

might be RIO firesale time soon ...

 

[AUSPROP...]

RIO shareholders should feel duped. their board has let them down

 

[josko]

I have just seen the small profit I made trading in the past few months with RIO, completely disappear in the past three days. Especially today. I like BHP's Media release-

“The BHP Billiton board today decided it no longer believes that completion of the offer for Rio Tinto would be in the best interests of BHP Billiton shareholders,” Don Argus, chairman of Melbourne-based BHP said in a statement to the Australian stock exchange. “We have concerns about the continued deterioration of the near term global economic conditions, the lack of any certainty as to the time it will take for conditions to improve and the risks that these issues imply for shareholder value.”

Well, it's only gone if I sell........

Damn, those ANZ shares are looking good.....

Regards JO

 

[THEHEATH]

Sell and buy back to offset your capital gains?

 

[austini]

Sell and buy back to offset your capital gains?

From memory "wash sale" of stocks is no longer permitted. Expect the ATO to query this.

Cheers - Gordon

 

[Sunfish]

From memory "wash sale" of stocks is no longer permitted. Expect the ATO to query this.

Cheers - Gordon

Is selling NAB and buying CBA a "wash sale"? Would achieve the same results.

 

[THEHEATH]

Hmmm, anyone know for sure? I would have thought there was a law against it (or at least a timeframe within which you couldn't purchase the same shares again), but as Sunfish points out, would be pretty silly when you can just go out and buy another stock anyway.

 

[Sunfish]

I'm no tax accountant but I have been a taxpayer for fifty years.

If you have a broker account with a CFD provider then it would be near impossible to fully inform the ATO of your long/short trades and their gains/losses, because it is near impossible for you to know more than your current status yourself. Working on the theory that there is no CGT concession available then I simply state the opening and closing positions. If you have made a profit this way it may be worth getting professional advice on whether these are "gambling returns" and therefore tax exempt anyway.

If you have a pedantic tax accountant such minor facts may need to be presented. In such circumstances, I wouldn't tell him.

 

[kum yin lau]

Bugger, I blame my finance broker for taking so long with my funding. Now it's approved but BHP is no longer $23

C'est la vie.

KY

 

[willair]

Is selling NAB and buying CBA a "wash sale"? Would achieve the same results.

Not as good as buying as buying BHP,late last week and selling early today i still don't understand why anyone would try to outsmart the Australian ATO,from my experience they always have the last say..imho..willair..

 

[Sunfish]

You've got big cajones if you are playing this market on "broker funding".

 

[kum yin lau]

Hi Sunfish, I wasn't going to 'play the market'. I thought I was accumulating some shares. At the moment, I don't have a single share to my name.

'Broker funding' is my allusion to having a mortgage broker write the loan against one of my unencumbered properties. He's taken 3 weeks whereas a private lender would have taken 3 days.

And basically, I'm doing a switcheroo like money out of 1 pocket into the other. I'd already placed the cash in FD when the banks offered 8.5%

Anyway, time will tell whether I can in fact buy any shares at the prices I want to pay.

Of course like everyone else, I'd prefer that I have a stack of cash to pay for shares but that again is another wishlist.

Have fun,
KY