BHP shares traded at a four-year high on the last day of July, reaching a day’s high of $34.98 before closing at $34.86 – the highest the shares have been since August 2014, just as global oil prices were starting their big slide.
The latest rally – the shares were up nearly 2% on the day and more than 5.6% for the past five trading days.
In fact it has been the solid rise in that time that have helped the shares close July with a gain of around 5.5%.
For 2018 to day BHP shares are up more than 17.8%, double the 3.5% rise in the ASX 200 in the same time.
BHP’s run up came a day before rival Rio Tinto releases what are expected to be solid interim results on Wednesday, and a good dividend for shareholders – perhaps a capital return.
Rio shares have underperformed BHP in recent weeks. The shares rose just 0.5% in July and are up 7.1% for the year to date – well behind the wider ASX.
The rally is oil related – as much to do with the recent small recovery in world oil prices in the past week as the news by BHP confirming it will share the $US10.8 million proceeds from selling its US shale assets with shareholders.
BHP is expected to get the money in October and with broking analysts now forecasting some sort of capital return, investors are hopping into the stock in advance of the annual results to be announced in just over two weeks.
BHP is thought likely to make its capital management options a little clearer with that release and then confirm it at the annual meetings in November.
US oil futures touched $US70 a barrel overnight Monday and traded just under that level in Asia yesterday.
BHP’s rally helped the ASX 200 remain fairly positive yesterday in the face of a third daily sell off in tech stocks on Wall Street.
The ASX200 jumped 20 points on opening to 6,298, eased, rose and then fell away at the end of the session to close up a mere 1.8% at 6,280. The Index was up a mere 1.13% for the month of July.
