Newspaper article The Evening Standard (London, England)

BHP Billiton's China Cheer Gives Mining Stocks a Boost

Newspaper article The Evening Standard (London, England)

BHP Billiton's China Cheer Gives Mining Stocks a Boost

Article excerpt


STOCKS from the old economy and the new received a lift today as miners celebrated rising demand and a cyclical pickup in the global economy, while a second bullish report on chip sales provided a tonic for technology issues.

In Australia, BHP Billiton executives at the group's annual general meeting painted a picture of a secure portfolio of products, combined with excitement about rising Asian giant, China.

"This diversity means that throughout the economic cycle, when some commodities inevitably will be weaker than others, BHP Billiton is able to generate a stable and consistent cash flow and so avoid the traditional boom and bust cycles of the resources industry," chairman Don Argus said.

BHP picked up 22 cents, or 2%, to A$11.43. It hit A$8.22 in late May.

Since then gains - fuelled by expectations that a solid recovery is on track - have totalled some 40%.

"We have no doubt that the Chinese demand for commodities will broaden beyond iron ore and alumina," Argus added.

"In fact, it would not be surprising if the Chinese demand for nickel and other stainless steel components increases beyond general expectations."

China, the fastest growing-economy in Asia, already shows up strongly in BHP's numbers. It accounts for a shade under 10% of group revenues, a figure that is expected to grow by about half in the current year.

Other resource plays also rose, bucked up in part by Wall Street's bullish performance overnight. Rio Tinto firmed by 55 cents to A$35.55, a gain of 1.6%.

Australia's banks, knocked in recent sessions by an interest rate rise and the prospect of more to come, gained on hopes that they stood to benefit from brighter overall economic conditions. …

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