BHP slides as boss warns over US-China trade war
AS THE boss of the world’s biggest mining company, when Andrew Mackenzie talks, people listen.
The chief executive of BHP warned that nationalism and state interference in markets are major threats to the global economy, while the US-China trade spat will dampen world growth.
These will also reduce demand for the raw materials which BHP is expert at extracting.
Mackenzie’s moonlighting as a macro-economic pundit came as the Anglo-Australian mining giant revealed it made £7.5bn in profit in the year to June, up 2pc on the previous year, but short of expectations of around £7.8bn.
The disappointment sent shares down 2.6pc, or 46.6p, to 1734.8p.
But investors will presumably be soothed by its record final dividend. BHP will hand out £3.2bn, meaning shareholders will have received £5.5bn between July 2018 and June 2019.
The impact of trade tariffs has also not escaped the attention of cruise and commercial port operator Global Ports Holding.
It blamed taxes and general uncertainty around global trade for a slowdown at its ports, which handle cargo that is being shipped around the world, with problems keenly felt at Akdeniz in Turkey.
Revenue in the commercial division dropped 10pc to around £25m in the first six months of the year, dragging down overall revenue at the group, which fell by 3.4pc to £45m. But shares rose 0.8pc, or 2.5p, to 300p.
London’s FTSE 100 index is also no stranger to the effect of the global economic slowdown and fretting over trade tariffs. Last week markets were pummelled by concerns about a global recession. And fresh jitters have now been sparked by Italy’s Prime Minister, Giuseppe Conte, saying he will resign amid a clash with his deputy, Matteo Salvini.
The index closed down 0.9pc, or 64.65 points, at 7125.
Meanwhile, the pound rose on comments from German chancellor Angela Merkel that the EU must consider ‘practical solutions’ to end the deadlock over the Irish backstop in Brexit negotiations.
Sterling climbed 0.7pc against the dollar to $1.2180, while it rose 0.3pc against the euro, to €1.098.
A stronger pound tends to drag the Footsie lower, as most of its stocks rely on money made in other countries, which then becomes less valuable when brought back into the UK.
The FTSE 250 also ended in the red, closing down 0.5pc, or 89.88 points, at 19,008.09.
Traders will be watching shares in Rolls-Royce closely today following after-market reports that it will sell the bulk of its civil nuclear division – though not its UK-focused work – to French consortium Framatome. Rolls rose 0.8pc, or 6.2p, at 769p.
Jack Wills’ chief executive Suzanne Harlow has been shown the door just weeks after the retailer was snapped up by Mike Ashley’s Sports Direct. She joined last September and it is understood she did not want to leave.
Sports Direct bought preppy fashion chain Jack Wills for £12.8m this month when it fell into administration. Sports Direct shares fell 0.3pc, or 0.6p, at 239.4p.
Mid- capper Wood Group fell 4.5pc, or 20.4p, to 430.4p, after it said it would sell its nuclear division, which includes contracts with Sellafield in Cumbria, to private US group Jacobs for £250m.
The deal needs the approval of the Competition and Markets Authority, but is expected to complete next year. Wood will use the cash to pay down debt it incurred from its £2.2bn takeover of Amec Foster Wheeler in 2017.
It comes in the wake of new UK nuclear projects stalling over funding concerns.