BHP’s Shares Mounted on ASX: BHP Billiton Limited’s (ASX: BHP) stock climbed up 1.96 per cent on July 31, 2018 at the back of positive market sentiments related to the sale of its entire interests in the Eagle Ford, Haynesville, Permian and Fayetteville Onshore US oil and gas assets for $US10.8 Bn. The transaction has been flagged for completion by end of October 2018. The group is believed to be benefiting from the deal in terms of lowering its debt and improving returns. The news which has come sooner than expected will help return proceeds to shareholders in a timely manner and this will increase group’s effective yield relative to market capitalisation. At the same time, the group will be announcing a $2.9 billion pre-tax impairment in FY18.

Besides this, the group has agreed to deliver final labour contract offer to its workers’ union amid tensed contract negotiations ahead of a possible strike. Of which, the group offered approximately $18,000 signing bonus, and a 1.5% boost to salaries, with increases for inflation. However, unionized workers at Escondida presumed that BHP's last contract offer did not meet union demands and thus, they expect signing bonus should be around twice on the recent offer announced by the company, and salary should rise up to 5 per cent.

With the positive outlook on copper and oil price, the group is set to deliver significant growth for its shareholders. The group has a sound balance sheet with a debt reduction plan; and high cash flows and healthy operating margin makes it a value stock in the long run. Further, Greenfield minerals exploration has been highlighted to be capturing the advancement on copper targets within Chile, Ecuador, Peru, Canada, SA and South-West US. On the other hand, BHP is preparing itself to defend the claim with regards to the class action proceeding filed in the Federal Court of Australia in Victoria in relation to the Samarco dam failure. Nonetheless, the group has met or exceeded the guidance for its full year production of key commodities (iron ore, copper etc.), with full year unit cost guidance at major assets to be as expected. The group has now five major projects under development in petroleum, copper, iron ore and potash. These have been slated with a combined budget of US$10.6 billion over the life of the projects.

Overall, the strong finish to the year with support from commodity prices and strategic moves in terms of portfolio simplification and asset divestments have helped the group. The group expects to maintain the positive momentum in 2019 at the back of resilient fundamentals and favourable price scenario.

Meanwhile, the stock has surged 12.69% in the past six months while it has been up 32.26% in the last one year (as on July 30, 2018). It traded at the market price of $34.860 as at July 31, 2018. This is the highest price since August 2014 depicting a four-year high level despite volatility prevailing in the market.

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