That is a 67% premium to Turquoise Hill’s Wednesday closing price of $C25.69 per share on 11 March, the day before Rio Tinto's first public non-binding bid to take over the company. The bid represents a 12% discount to most recent fair value for Turquoise Hill of USD$37.21, which was reported on 2 September.
Just earlier this year, Rio tried to purchase all shares of Turquoise Hill for C$34 per share only to be rebuffed as the agreement didn't "fully and fairly reflect the fundamental and long-term strategic value of the Company’s majority ownership of the Oyu Tolgoi project." The buyout provides Rio Tinto with an avenue to gain control of the copper mine held by Mongolian company Oyu Tolgoi, which was majority-owned by Turquoise Hill.
Both Rio Tinto and rival BHP (ASX:BHP) are seeking to boost the value of their copper assets to transform themselves into ESG-friendly miners as global demand for energy transition climbs, with BHP slamming in an $8.3 billion offer for Oz Minerals last month. Rio Tinto shares have slumped 9.5% this year, including a 3.5% drop in trading shortly before Thursday’s close. Shares finished the week down 8.6%, changing hands at $90.19.
BHP wet share market powder dry
The ASX200 divided 1.8% on Thursday after heavyweight BHP’s share price plunged more than 7% in a nasty stock for those investors. The share price fall is also a by-product of BHP’s shares turning ex-dividend. This is where those who bought shares on Thursday and those who buy shares between now and the dividend payment date will not be entitled to the US$1.75 dividend per share. In theory, new shareholders are not being paid the dividend and so share prices should fall by the amount of dividends paid out. BHP occupies the #1 position on the ASX by market capitalisation and makes up almost 10% of the ASX200. The 7.3% decline was sufficient to rattle the overall index.
Migrants – the answer to Australia’s labour shortage?
The Labor Party’s two-day jobs and skills summit opened on Thursday this week to examine the contemporary challenges to boosting the Australian economy and the workforce. The Federal Government revealed on Friday that it will increase the cap on permanent migration from 160,000 to 195,000 for 2022/23. Home Affairs minister Clare O’Neil announced the shake-up at the summit saying Australia had been too focused on temporary workers, which meant countries such as Canada, Germany and the UK were snapping up the “best and brightest”.
“We’ve set up a system where it is really easy to come as a temporary worker probably in a fairly low-skilled job — and virtually impossible for you to come here permanently as a high-skilled worker,” she said.
35,000 rise in migrants could see thousands more engineers and nurses living in Australia permanently, says O’Neil. The negative Covid-19 and border closures effect on Australia’s labour market and migrant pool looking for work were also factors, she added. O’Neil admitted that even if the government will focus on Australian jobs first, migrants are still necessary. Australia’s unemployment rate is at 3.4% now, and economists think it could go lower, even as many firms struggle to fill jobs.
Australian Retail Trade Data Overview
Australian Retail Trade is released by the Australian Bureau of Statistics and measures the total receipts of retail stores.
Treasury - Australians' deeper pockets
National accounts figures released by the Australian Bureau of Statistics (ABS) today show that the Reserve Bank's recent interest rate hikes have not dampened consumer spending, according to the acting Federal Treasurer, Roderick Goss. All sectors other than household goods and retail reported growth in sales in July, with the department stores lifting turnover by 3.8 per cent since June. Clothing, footwear and personal accessory retailing also surged 3.3% over July, while total retailing sales grew by 1.3%. When calculating the total turnover for July this year and July last year, an increase of 16.5% was recorded. The strongest growth was in the states of Victoria and the Australian Capital Territory, where retail sales expanded by 1.8% in each jurisdiction.
US joblessness may spark another major increase
US jobs data will be key for FOMC members as they head into the final September policy meeting but the result here could be an extra incentive for the US Federal Reserve to move.
A little bit on US jobs: Long called August the month the music died and forecast that US unemployment would hold steady at 3.5 per cent when August payrolls figures are released next week. On Friday, the US labour department reported that the number of people claiming unemployment benefits for the first time dropped for the third week running. The data indicates that even as inflation rises and interest rates creep up, Americans are still holding onto their jobs.
