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BHP - BHP Group

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MRC & Co said:
Block merger/takeover, decreasing monopoly/oligopoly power.

Zero sum game is better than a negative sum game, right.......? Hedging........
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I agree that buying a blocking stake would be the one instance where it isn't a zero sum game for them, but as I said in an earlier post, I really don't think that is their prime motivation.

I still think their main motivation is their view that resources companies are undervalued. So they figure if they get ripped off by paying for commodities, they can recoup this with high profits and share values on their share of resource companies that they hold.

You could label this a form of hedging.

I read somewhere today that in the next few decades 200 million Chinese peasants are expected to relocate to the cities. I personally think the number will be much higher than this.
 
Also I think the fact that Chinese company want to buy Oz biggest resources company show that they can see a long term proposal to the resource boom. It is also a way of protecting themselves to what we have started to see which is price negotiations largely in favour of the producer. This mean that by buying a stake into BHP or RIO part of the money of the resource boom is coming back to China.
 
Fab said:
Also I think the fact that Chinese company want to buy Oz biggest resources company show that they can see a long term proposal to the resource boom. It is also a way of protecting themselves to what we have started to see which is price negotiations largely in favour of the producer. This mean that by buying a stake into BHP or RIO part of the money of the resource boom is coming back to China.
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Yes. Which is another way of saying they think that resource shares are undervalued. Since they see good long term prospects, it means they think share prices will go up a lot in future- another way of saying the current price doesn't represent future prospects/
 
the barry said:
Hows your gumnut collection going? You still waiting for your suggested $23? Did it turn out to be one of those "classical" head and shoulders?
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It didn't get down to $23 and has now shaken off the head and shoulders. I still hold BHP but greed for a cheaper price meant I didn't buy more when it recently hit the low $30's.

I would be surprised if BHP fell again to below $40.

A semi log chart enclosed.

gg
 

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Mr_T said:
Disagree completely.

This would make it into a zero sum game. If they could reduce prices of commodities, then there would be a corresponding decrease in the profitability & market value of the commodity companies.

I still think their main motivation is their view that resources companies are undervalued. So they figure if they get ripped off by paying for commodities, they can recoup this with high profits and share values on their share of resource companies that they hold.

You could label this a form of hedging.
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Huh?

Either way, your opinion for their stake or my opinion for their stake, is the same concept, hedging. Does it really matter why?

You cannot completely disagree with my opinion, saying this would make it a zero sum game (add in a bar and brewery example), then go on to lay the same scenario (a zero sum game), with a different means. Same ends.

I can see some long-term ownership here.
 
Looks like today should be another good day for BHP. Up 2.38% overnight in London. Also Chinalco has not denied being interested in BHP. Mentioned that they were looking at investing in more mining stocks around the world:):)
How far can BHP go. I am guessing possibly $50. How soon is the question but there is still a lot of potential good news in the pipeline
 
MRC & Co said:
Huh?

Either way, your opinion for their stake or my opinion for their stake, is the same concept, hedging. Does it really matter why?

You cannot completely disagree with my opinion, saying this would make it a zero sum game (add in a bar and brewery example), then go on to lay the same scenario (a zero sum game), with a different means. Same ends.

I can see some long-term ownership here.
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Looks like this disgreement is all in vain...the Chinese weren't after it after all.

I do get your point about wanting a hedge not necessarily meaning they view the shares as undervalued.
 
meantime.....
the top five Japanese steel makers have capitulated and accepted a 300% rise in coal prices from BHP. The Nikkei reports that this could "virtually wipe out the combined operating profits at the five companies".

Cheers
..........Kauri
 
Strong March 2008 GDP figures out of China today. Very good news for BHP shareholders.

This should help persuade the market that an American recession has not materially affected Chinese growth, which means that the commodity boom can continue.
 
Mr_T said:
Strong March 2008 GDP figures out of China today. Very good news for BHP shareholders.

This should help persuade the market that an American recession has not materially affected Chinese growth, which means that the commodity boom can continue.
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I think there would be a significant lag to any effect on China as most forward export orders could be commited 6 months ahead.

Might still be a bit early to properly gauge ?

Being the consumer society the USA is it seems impossible that such a major supplier as China would go uneffected.
 
However, inflation is soaring at over 8%.

What are they going to do to reign this in? Will it have an impact on demand and hence commodity prices.........?

On another note, will be interesting to see how the markets react to the news. US inflation figures tonight too I beleive?

BHP doing well lately :) First experience in BHP for me (usually don't like the big guns), but a pleasant one so far. Up 6% since the 8th, excellent consistent position trade so far.
 
It is my understanding that exports account for 10% of China's GDP. Specifically, American exports account for 2% of China's GDP. If I am incorrect on these figures, am happy for someone to point this out, but they are what I have read/heard (I wish I could remember from where).

It is also my understanding is that the USA recession isn't all that severe. I got this perception from talking to the people living there. Apart from their housing market of course.

Bottom line, the USA slowdon appears unlikely to materially affect China's growth rate. But I guess we already knew that, given that most of China's growth thesedays is domestic.

Now for the next issue: what will the Chinese do to tackle high inflation? Not sure but what I WISH they woudl do is revalue their currency. This would lower prices there whilst increasing demand for imports (ie our and other countries' exports).
 
BHP in London is almost back to its altime high. 1820 pence, just 80 away from the all time high.

Probably a good sign that we may hit $46 soon.
 
On a more negative note, rumour has it that BHP might raise its stake for RIO. More skin for them means less for us.

On the other hand, Marius does have a history of taking the other side to the cleaners whilst giving the impression he is offering a good deal - him being on the Billiton side of the BHPB merger and the price BHPB paid for Western Mining being two such instances.
 
well if steel prices keep heading skyward (already up about 15% this year). - just a matter of time you'd think before the iron ore boys head that way themselves - heading up like a homesick angel as they say. Supply of steel plate in Aus starting to look like hen's teeth at the moment. :2twocents
 
I still think that RIO price would be lower if it wasn't for the BHP t/over proposal. Though I guess that's just speculation on my part.
 
Mr_T said:
I still think that RIO price would be lower if it wasn't for the BHP t/over proposal. Though I guess that's just speculation on my part.
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I would tend to agree by a quick valuation.

I much prefer BHP, especially when you take its current technicals into the equation.
 
Basic materials prices are at their all time high :
http://finance.google.com/finance?catid=57629812&hl=en


LON:BLT is near its all time high of 1580:
http://finance.google.com/finance?q=LON:BLT&hl=en&meta=hl=en

NYSE:BHP is near its all time high.
http://finance.google.com/finance?q=BHP&hl=en&meta=hl=en

ASX:BHP is NOT near its all time high:
http://finance.google.com/finance?q=asx:BHP&hl=en&meta=hl=en


We might break a short term resistance of 43.50 tomorrow, after that if we break the resistance at 47.10 then we might establish a new high.

Interesting times for BHP after a long sleep!
 
BEIJING is poised to take greater control of China's push to secure Australian iron ore assets, amid speculation that Chinese entities are considering a $22 billion-plus share raid on BHP.
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http://www.theaustralian.news.com.au/story/0,25197,23551237-643,00.html

Last week, the news of S. Korea and Japan paying a 300% price rise for Australian coal emerged, with the news this week that the China government is now looking to secure rights to Australian resources including iron ore. Also today, the press is that China has negotiated a 227% increase for Potash from a Canadian/US firm for a $400 a ton increase.
Also, the push higher in the AUD has been on the back of a lot of Asian CB buying... wonder why??

Now, back to Skip, we have 94 option barriers to take out..

Cheers
...........Kauri
 
If that speculation does turn to reality, we will see it in the volume anyways, which has not been looking overly eager, so sellers are obviously sparce ATM. Sure to be some profit takers come in soon and another little consolidation on it's run. A few may be waiting for it's breather.

Will be good if it can close above resistance today, though a weak resistance at that.

Quiet a few nice set-ups presenting themselves today, I will open 2-4 more positions at close depending on the outcome of trade today.
 
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