Impatient Investors Sell BHP Billiton Shares

BHP Billiton Ltd [ASX:BHP] fell almost 1% today, to $23.69 per share.

BHP presented at the Melbourne Mining Club lunch today. The giant miner indicated it could grow its base value by more than 50%.

As reported by The Australian:

There was no time limit placed on the growth but it was nonetheless the sort of statement that normally comes from much smaller listed corporations.

No doubt the pressure from hedge fund giant Elliott played a role in BHP’s optimism.

Nevertheless the way it believes it will achieve that growth has enormous implications for both BHP shareholders and the nation. And in terms of the stock market it comes at a time when the four largest corporations on the ASX — the banks — are under pressure from the government and doubts about the housing market. The market is pensive.

Among the drivers for growth for BHP was US shale oil and copper.

Why Did The BHP Share Price Fall?

Why would BHP fall as a result of this? Simple: Institutional investors don’t like to wait. A lot of them are judged on a quarterly basis. BHP referred to growth drivers that would unfold over a number of years instead of months.

So they took their capital and looked for short-term growth elsewhere in the market.


Härje Ronngard,

Junior Analyst, Money Morning

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