RIO - Rio Tinto

[noirua]

Perhaps the opening is here for a Chinese company or companies, to pick the right point to substantially raise or take a stake in Rio.

China may want to block the likes of BHP Billiton from ever making another pitch for Rio Tinto.
With the Aussie economy looking weak and China looking as if it may take the opportunity of taking a chunk of Australia, Kevin Rudd & Co are likely to become willing partners in this, the easier way out.

China may well then become keener in taking all their iron ore supplies from Australia and thereby safeguarding the industry and jobs in WA.

 

[Aussiejeff]

Perhaps the opening is here for a Chinese company or companies, to pick the right point to substantially raise or take a stake in Rio.

China may want to block the likes of BHP Billiton from ever making another pitch for Rio Tinto.
With the Aussie economy looking weak and China looking as if it may take the opportunity of taking a chunk of Australia, Kevin Rudd & Co are likely to become willing partners in this, the easier way out.

China may well then become keener in taking all their iron ore supplies from Australia and thereby safeguarding the industry and jobs in WA.

Accordingly, I think it is time Ms Gohard re-jigged the school curriculi to include new compulsory Chinese Language Studies for EVERY student.

Xie xie.

 

[jono_oz]

I totally agree with the compulsory Mandarin for kids - we might as well adjust to the Chinese takeover of our companies quickly!

I am also perplexed as to why RIO is only up 7% on the ASX Vs 20% on the FTSE and the DOW??

But then again I am also confused about why the XAO is now 800 points behind the FTSE, and 15% behind the DOW? I stupidly thought that we had the better economy and the stronger banks, and the lower unemployment and a government, at least partially in surplus for the moment. Go figure!!

 

[TheAbyss]

I do not understand why RIO is up at all. Surely the news will only get worse for RIO before it gets better? Only positive i can see is a take over offer otherwise the reality of a discounted SPP.

Sure they have announced savings via job cuts etc but they have that same amount of debt committment via Alcan next year alone ($US10b).

Either Rio cuts costs via reduced capital and operational expenditure and sell some assets or a share issue is on the cards. I cant understand why the price has jumped so quickly but i am no analyst either.

What if Rio cant sell the assets at a reasonable price due to the downturn? Then they need money to pay debt. Where does that come from? SPP, to institutional or private or a mix but either way it will be at a discount to the prevailng SP.

That or they will need to do something else with the $US38 billion debt load that Rio took on when it bought Alcan.

Why the rally? Wish i got some yesterday to sell today. Either way Rio will be around long after i am gone but short term i think they have to get cheaper yet.

 

[banska bystrica]

I took a RIO $40 call option with a 29/1 expiry at a tick over $2 on Friday for a pork chop. BHP and RIO should have a Christmas/New Year rally.

That was money for jam. Haven't closed it out either. Panic creates opportunities and I was only too pleased to buy that $40 call.

 

[white_crane]

Put in my sell order last night and it filled at the open (20% raw return). I'm thinking that it's going to go down further than the last low. If it bounces off $30 again with good volume, it might be worth another punt.

 

[cutz]

For all you techies out there is $30 a fair level of long term support on RIO? looking at volume at that level it seemed to be unusually high also a couple of indicators I use are turning up (MACD Daily).

MACD weekly is still in decline but I guess that may take a while to catch up.

Any thoughts.

(Apologies for sounding simplistic but I’m fairing green when it comes to charting.)

 

[Sean K]

For all you techies out there is $30 a fair level of long term support on RIO?

Yes, see post on the last page here:

https://www.aussiestockforums.com/forums/showpost.php?p=370545&postcount=269

 

[noirua]

Rio Tinto may find the only assets reasonably priced are the ones they don't want to sell.
It looks as if they're lining up the coal companies to sell, as suggested in the press, but these may be worth only 20% of the price last May.
Between the rock and a coalface may not be much pay dirt.

Big saver is to shutdown every one of the difficult iron ore and coalmines and sack most of the workers. Watch Rio back out of near every development going.

 

[Sean K]

Could RIO fail?

The first MAJOR miner to fall into the abyss?

Is their debt too great, and fall in demand and prices too swift?

 

[amory]

purely on T/A ... looking at a number of charts ... they've suffered a severe selloff for many weeks & now showing the odd buy-signal ... Macd, stochastic, countback-lines ... but the Coppock which would show safe entry into a new trend, no happiness there & the various oscillators not as yet showing signs of life.

unlikely to move against the market ... BHP & the XAO in particular ... for the time being. put it this way: they look comfortable where they are now, unless overall bearish sentiment sets in again.

 

[noirua]

Could RIO fail?

The first MAJOR miner to fall into the abyss?

Is their debt too great, and fall in demand and prices too swift?

Perhaps the words of Dr Marc Mobius of Templeton Asset Management, a few days ago holds the answer, "...are we heading for a deeper collapse or a turnaround?"
He was referring to Asian countries who he says will be hit the hardest.

 

[AS414]

Rio got some coverage in the Economist this week, lumped in with other 5 very large materials and mining multinationals who look pretty overextended from expansion commitments. I have discussed this further here:

http://internationalbs.wordpress.co...ionalbs.wordpress.com/2008/...-in-a-downturn/

 

[AS414]

The link appears to be playing up. It should be:
http://internationalbs.wordpress.com/2008/12/14/chasing-synergies-in-a-downturn/

 

[Tukker]

Rio jumps 8% on no news and not a single post about it. Ill be the first then. Although I am not a holder, i am curious to see how rio handles its current situation. Lots of debt, M&A commitments, weak commodity prices, global slowdown, not a lot going well for Rio atm.

Chart is at a point where in my opinion share price can go either way. Not impressive volumes to substantiate a trend, but the gradual growth of the sp over the last 6 days with the 8% jump yesterday speaks contrary. I'm skeptical tho, with news coming out this week on US job and retail sales i think the whole market is going to get jittery again, so im forced to side with a short on Rio later on this week if not today.

 

[Tukker]

lol do yourselves a favor, and don't listen to what i say. No matter what kind of conditions i trade under, i always get it wrong, thank god for TA and stops.

 

[michael_selway]

Rio jumps 8% on no news and not a single post about it. Ill be the first then. Although I am not a holder, i am curious to see how rio handles its current situation. Lots of debt, M&A commitments, weak commodity prices, global slowdown, not a lot going well for Rio atm.

Chart is at a point where in my opinion share price can go either way. Not impressive volumes to substantiate a trend, but the gradual growth of the sp over the last 6 days with the 8% jump yesterday speaks contrary. I'm skeptical tho, with news coming out this week on US job and retail sales i think the whole market is going to get jittery again, so im forced to side with a short on Rio later on this week if not today.

yeah interesting two days for RIO!

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 653.9 1,195.4 787.0 870.3
DPS 154.3 198.9 198.9 201.9

thx

MS

 

[Miner]

I noticed that the thread on RIO has been rather quiet for last 8 days compared to many low profile stocks are heavily discussed. Even if Paul Skinner removal put little effect.

Irony of the situation is that although many senior managers and junior managers have been asked to get out of the door for poor performance recently,stop projects etc the real culprits are given time to enjoy the bonus and four months to look for a job. End of the day Mr Skinner will get out of the door with some $30 M or more. No one has said any thing against Tom (CEO) though these are the people should get out of the door for their billion dollars mistake affecting not only Rio employees but depending businesses and the country

Market has reacted positively with the new incumbent coming to replace Mr Skinner . Now should the market react positively. He is a Tata Steel man. Well tecnically that is true because Corus (British Steel) was taken over by Tata Steel. He became Chairman as a part of the deal and was desperate to get out as Tata in the process of consolidating Corus Steel as a part of Tata Steel. So cost efficiency to see Mr Glen to go. Further under the stewardship of Mr Glen British Steel has been performing not so well giving Tatas to acquire them. Traditionally Tata Steel and Rio never liked each other in real term and Tatas did everything to see Rio does not enter into India in a big way and aligned with Posco. It will be therefore interesting to see how Rio will do any better just changing the Chairman. What synergy does the new Chairman brings just being stationed in London nearer to Rio office with no raw materials experience !

Time will tell of course and if Rio turns over great - that will help economy as well as share holder confidence. If it turns over in two years time as Tom asked then it is no credit for these two top guys but normal economics where depression is always followed by an inflation : Mr Keynes please come back from 1930 or Mr Paul Samuelson (famous economist) return to the field to help us .

 

[vincent191]

Maybe RIO wants to take up a position in India. It is the next mega emerging market (I think). That's why they choose someone from Tata who is familiar with the Indian steel making market.

 

[Miner]

Maybe RIO wants to take up a position in India. It is the next mega emerging market (I think). That's why they choose someone from Tata who is familiar with the Indian steel making market.

I am pretty sure the gentleman from British Steel . Corus now Tata Steel has as little knowledge on Indian market. He has never worked in India and became Dy Chairman because of massive take over by tata steel in Jaguar, Corus (also see RIV they are a major share holders).

Please also keep in mind Tata Steel shares have gone down to INR 200 about from INR 850 (rough figures order of magnitude) like any other companies.

We should be wary of Indian companies now : Satyam IT has become an enron and National Bank and others IT are badly affected due to this company's collapse.