Category: Stock Market

The Piedmont Lithium Inc (ASX: PLL) share price is falling on Wednesday morning.

At the time of writing, the lithium developer’s shares are down 2% to 77.5 cents.

Why is the Piedmont Lithium share price falling?

The Piedmont Lithium share price has come under pressure today following the release of its bankable feasibility study (BFS) for the Carolina Lithium Project in North Carolina, United States.

According to the release, the study confirms that Carolina Lithium could be one of the world’s largest and lowest-cost producers of lithium hydroxide in a highly favourable location to supply the rapidly growing electric vehicle supply chain in the United States. It also highlights that the project has a sustainability footprint that is superior to incumbent producers.

The BFS indicates that the after tax net present value of the project is US$2 billion and expected to generate steady-state EBITDA of US$459 million over the first 10 years of operations. The latter is expected to be achieved with steady-state lithium hydroxide cash costs of US$3,657 per tonne and an all-in sustaining cost (AISC) of US$4,377 per tonne for the first 10 years.

Judging by the Piedmont Lithium share price performance, it appears as though investors were hoping for even stronger numbers.

Though, it is worth noting that management sees opportunities for further economic upside at higher lithium prices. For example, based on current spot prices, the project has a net present value of US$4.55 billion.

What’s next?

Piedmont Lithium is now looking ahead to making a final investment decision on the project in 2022.

President and Chief Executive Officer, Keith D. Phillips, commented: “We will soon commence detailed engineering for the Project with a view to a final investment decision in 2022. We are actively engaged in project financing discussions, including possible debt finance via the U.S. Department of Energy’s Advanced Technology Vehicle Manufacturing loan program, and potential strategic equity investments via the partnering process being coordinated by our financial advisors.”

“An important priority for 2022 will be the evaluation of expansion opportunities incorporating the spodumene concentrate assets we control in Quebec and in Ghana. Our ambition is to build America’s largest lithium hydroxide business, and the spodumene resource base we’ve assembled during 2021 should underpin substantial growth,” he concluded.

The post Piedmont Lithium (ASX:PLL) share price drops following Carolina Lithium Project BFS results appeared first on The Motley Fool Australia.

More reading

• Why is the Piedmont Lithium (ASX:PLL) share price struggling of late?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Evolution Mining Ltd (ASX: EVN) share price is falling on Wednesday.

In morning trade, the gold miner’s shares are down 4% to $3.86.

Why is the Evolution share price falling?

Investors have been selling down the Evolution share price today after a pullback in the gold price offset the release of a positive announcement this morning.

The price of the precious metal fell overnight amid concerns that the US Federal Reserve could increase interest rates sooner than expected.

It isn’t just the Evolution share price falling. At the time of writing, the S&P/ASX All Ords Gold index is down 2.2%.

What did Evolution announce?

Failing to boost the Evolution share price today was news that it has successfully completed the sale of the Mt Carlton gold mine to Navarre Minerals Limited (ASX: NML).

As per the agreement, Evolution has received the upfront consideration of A$40 million, comprising A$26.8 million in cash and 176,565,396 Navarre shares. The latter equates to a 12.9% shareholding in Navarre.

In addition, the agreement includes up to A$25 million contingent consideration payable on cumulative gold production milestones from Crush Creek. This comprises A$5 million payable upon achievement of 50,000 ounces, A$5 million payable upon achievement of 100,000 ounces, and A$15 million payable upon achievement of 175,000 ounces.

Finally, Evolution will receive up to an additional A$25 million in the form of a 5% gold price linked royalty when the average spot gold price is greater than A$2,250/oz in a given quarter. The royalty is payable on production from both Mt Carlton and Crush Creek from 1 July 2023 for up to 15 years.

Why is Evolution selling Mt Carlton?

Evolution’s Executive Chairman, Jake Klein, has previously explained the rationale for the asset sale.

He said: “Mt Carlton was Evolution’s first development project and has generated excellent returns for shareholders since it was commissioned in 2013. With the Company focussed on delivery of growth projects at the cornerstone assets in the portfolio, we believe now is the time to hand Mt Carlton over to an emerging gold producer who can focus on extending the operation’s mine life.”

“The exposure we have retained will enable Evolution shareholders to benefit from the future success of the operation. Evolution would like to thank our employees, contractors, suppliers, the traditional custodians of the land the Birriah People, and the local community for their contribution to Mt Carlton’s success. We are confident that Navarre will be a great partner for those stakeholders in the future,” he added.

The Evolution share price is down 27% in 2021.

The post Evolution (ASX:EVN) share price falls despite completing Mt Carlton sale appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Wesfarmers Ltd (ASX: WES) share price is on watch on Wednesday after the company reiterated its intent to win Australian Pharmaceutical Industries Ltd (ASX: API), despite facing major competition.

Woolworths Group Ltd (ASX: WOW) recently entered the battle to take over the Priceline owner, outbidding Wesfarmers by more than $100 million.

Today, Wesfarmers reminded the market of its 19.3% holding in API and vowed to vote its stake against the supermarket giant’s takeover.

As of yesterday’s close, the Wesfarmers share price is $58.41.

Let’s take a closer look at today’s announcement from the company.

All eyes on the Wesfarmers share price

The Wesfarmers share price is in the spotlight this morning after the company announced it won’t back down from its attempt to acquire API despite Woolworths’ $872 million bid.

Wesfarmers states it believes its own $763 million bid is a superior proposal and confirmed it will be voting its shareholding, and “any other API shares that it may acquire” against the competitor.

The company also said its takeover will “significantly benefit community pharmacists and Priceline franchisees.”

That might be a jab at Woolworths after the Pharmacy Guild of Australia questioned the company’s intentions. In a statement, a Guild spokesperson asked:

Why is a company with interests in the alcohol, tobacco, gambling, and nightclub industries wanting to move into healthcare?

In today’s release, Wesfarmers managing director Rob Scott said:

[W]e’re confident our proposal supports community pharmacists and their businesses, for the long-term. Pharmacists face various competitive pressures and Wesfarmers is uniquely placed to support the growth of community pharmacies including Priceline franchisees.

Additionally, the company addressed potential data privacy issues.

Key stakeholders apparently voiced concerns that data from Priceline’s Sister Club might be shared with Wesfarmers’ 50%-owned Flybuys loyalty program. Flybuys is co-owned by Coles Group Ltd (ASX: COL), which was demerged from Wesfarmers in 2018.

The worries were due to an overlap of non-prescription products sold in both supermarkets and pharmacies.

However, Wesfarmers assures it will keep API data entirely separate from all supermarket-based loyalty programs. It noted:

This assurance provides API and its community pharmacists, including current and future Priceline franchisees, with comfort that their customer data will be protected from supermarket competitors.

Right now, the Wesfarmers share price is 13.4% higher than it was at the start of 2021. Though, it’s only gained 0.7% since it posed its takeover offer to API in July.

The post Goliath vs Goliath: All eyes on Wesfarmers (ASX:WES) share price as conglomerate vows to vote against Woolies appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Afterpay takeover vote, Woolworths crashes
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The metaverse is gaining popularity among consumers and investors after the company formerly known as Facebook announced it was making a significant investment in resources to become a metaverse leader. Now known as Meta Platforms (NASDAQ: FB), the company that started all the commotion is one of my favorite metaverse stocks to buy in 2022.  

My other favorite is one of the pioneers of the metaverse, Roblox (NYSE: RBLX). The company is a favorite with kids 16 and younger although it’s increasingly being adopted by an older demographic as well. What follows is a more detailed look into what makes these two my metaverse stock picks for 2022. 

Meta Platforms 

Already the titan of the social-media world, Meta Platforms has made a bold move into the metaverse industry. The company announced it will have spent at least $10 billion on the expansion in fiscal 2021 and is likely to spend more in the years to follow. The move could be in response to decelerating revenue growth in the company’s core social-media business.

CEO Mark Zuckerberg has said the metaverse is something he’s long been interested in, and the timing could be perfect right now. Zuckerberg also said that he aims to help over 1 billion people be active on the metaverse before the decade is over.  While this is a bold ambition, it’s not an unreasonable one from someone leading a company with over 3.5 billion monthly active users across its family of apps, including Facebook, Instagram, and WhatsApp.

What’s more, Meta Platforms has the resources to invest in growing its new line of business. Between 2016 and 2020, the company has generated over $100 billion in operating income. And as of Sept. 30, Meta Platforms had over $58 billion in cash and equivalents on its balance sheet.

Roblox

While Meta Platforms is just now building its metaverse, Roblox has had a several-year head start. Roblox’s metaverse platform has been primarily focused on kids and teenagers — 48.9% of its daily active users are 13 years old or younger. It is growing users at a healthy rate, from 18.4 million in the third quarter of 2019 to 47.3 million in its most recent quarter ended Sept. 30.

Roblox is free to join and generates revenue by selling an in-game currency called Robux. The company is perhaps demonstrating the lucrative, cash-generating ability of the metaverse. It earned $181 million in cash flow from operations on revenue of $509 million in the third quarter. That’s even before Roblox has developed a mechanism for generating income from players that never deposit money on the platform.

Nevertheless, Roblox increased revenue by over 100% in the third quarter. If the company can find a way to earn revenue from non-paying players — for instance, showing them advertisements — this could be a catalyst for boosting revenue growth even higher.

The metaverse industry is in its infancy and could spend decades expanding. Investing in metaverse stocks could be risky, but the potential reward could be worth the risk. For those of who want to dive into it in 2022, Meta Platforms and Roblox are my two favorite stocks to buy. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 Metaverse stocks to watch in 2022 appeared first on The Motley Fool Australia.

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• Wall Street’s bullish take on the metaverse fuels big moves in these 3 cryptocurrencies today
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Parkev Tatevosian has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. and Roblox Corporation. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Insurance Australia Group Ltd (ASX: IAG) share price has been suffering lately amid lawsuits, weather events, and business interruption claims.

In fact, the company’s stock is only 3% higher than its 52-week low of $4.21.

As of Tuesday’s close, the IAG share price is $4.34. And at that price, one expert believes the company is in a prime position to be acquired.

Here’s why Joseph Koh, portfolio manager of Schroders’ Australian equities team, has reportedly picked the company has “an appealing takeover target”.

Could the IAG share price herald takeover offers?

According to Koh, the IAG share price has been damaged by numerous happenings, but it’s not beyond repair.

That means it might be a tempting takeover target for other businesses.  

Koh told the Australian Financial Review (AFR) court decisions from business interruption cases that have plagued the company were “at worst mixed”. He continued:

[E]ven in cases where IAG may be liable, damages may well be quite limited given the large government handouts that supported businesses during COVID-19 lockdowns. On top of all that, IAG has already set aside a sizeable provision for potential business interruption claims.

The New South Wales Court of Appeal ruled that insurance companies have to pay businesses claims for pandemic related disruptions last year.

Additionally, a class action is being brought against the company for its handling of the business interruption case. Its subsidiary is also facing court action brought about by the Australian Securities and Investments Commission (ASIC).

Finally, the IAG share price was dragged 7% lower in early November when the company announced that severe weather events had put a bigger than anticipated dint in its bottom line. The AFR quoted Koh as saying:

On weather-related claims costs, it’s clear that some years will be worse than others, and over time this should either even out, or premiums in the industry will rise to reflect more disruptive weather patterns.

Right now, the IAG share price is 7.6% lower than it was at the start of 2021. It has also fallen 1.3% over the last 30 days.

The post It’s trading at around 9-year lows, could the IAG (ASX:IAG) share price be a takeover target? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The team at Bell Potter has been busy this week looking at its top ASX share picks for 2022.

On this occasion, I’m going to look at what the broker is saying about the banking sector. Here are its top picks in the sector:

Which ASX bank shares are buys?

Bell Potter notes that its top picks in the sector possess proven risk management capabilities, defensive qualities, strong growth prospects, and health balance sheets. The latter includes surplus capital that could eventually be returned to shareholders.

Those top picks are Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB). The broker has a buy rating and $30.00 price target on ANZ’s shares and a buy rating and $31.00 price target on NAB’s shares.

Based on the current ANZ share price, this implies potential upside of 9.2%. Whereas based on the latest NAB share price, Bell Potter’s price target suggests upside of 9%.

Don’t forget the dividends

The broker is expecting the banks to provide attractive fully franked dividend yields next year. Its analysts are forecasting a fully franked 4.7% yield for ANZ’s shares and a fully franked 5.1% yield for NAB’s shares.

This brings the total return on offer for both bank shares to approximately 14% over the next 12 months.

Bell Potter Analyst TS Lim, commented: “Our 2022 top picks once again possess proven risk management capabilities, defensive qualities including healthy balance sheets and surplus capital that could be returned to shareholders in due course, and strong growth prospects.”

“These companies have undergone massive transformation since the GFC to improve earnings quality and consistency. Our selection comprises two major banks. The longer term operating environment post COVID-19 remains positive for ANZ and NAB. Both are well-provisioned and well-placed to capitalise on post-pandemic opportunities in retail and SME banking,” Lim added.

The post Leading broker names the ASX bank shares to buy in 2022 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Since the beginning of 2021, the Telstra Corporation Ltd (ASX: TLS) share price has risen from its past state of hibernation. Fuelled by the telco’s first net profit increase in five years, investors are hopeful of a return to growth.

The renewed optimism in one of Australia’s most recognisable blue chips has landed the company a 34.8% increase in value in 2021. This places the telecommunications giant as the fifth best-performing ASX-listed company in the S&P/ASX 20 Index (ASX: XJO).

While one good year is good, long-term shareholders would be wondering if this outperformance has the potential to continue. To determine what next year could look like for the Telstra share price, we review what analysts are expecting.

But first, let’s look into the company’s own roadmap for 2022.

What does Telstra have planned for the year ahead?

The plan for Telstra’s future was laid out for all to see at its T25 investor day on 16 November. While the event focused on a longer-term strategy around the company achieving a compound annual growth rate in the high-teens for its earnings per share during FY 2021 and FY 2025, it also touched on next year’s goals.

In short, Telstra plans to come good on six key priorities by the end of FY22, these include:

• Complete digitisation
• Group restructure
• 5G leadership
• Return Enterprise to growth
• Grow services business
• Deliver on cost reduction

These aims are on top of already drastic overhauls of the business since the introduction of the T22 plan. Since 2018, Telstra has been reshaped with a consolidation of its products from 1,800 to 20, removal of a third of its workforce, and $2.3 billion stripped from the company’s costs.

In speaking with The AFR, Telstra CEO Andy Penn has described his plans for the company loud and clear.

Penn said:

I’d say three things – one is that it’s absolutely front and centre about continuing to transform customer experience and just taking that to the next level. Secondly, it’s about growth, both within the core but also some of our new business investments are really starting to help to get some traction.

Making a call on the Telstra share price in 2022

One fund manager that is bullish on Telstra for the upcoming year is Pengana Capital’s Rhett Kessler. The experienced fundie recently labelled the telco a buy for the fund, naming Telstra one of its biggest holdings in the portfolio.

In describing his case for why Telstra is still appealing at its current share price, Kessler said:

We like the fact that the two main assets are the mobile phone network, and let’s face it, mobile data is the new oxygen. I have four kids. Try and take it away from them. So that’s a very good business, and they’re obviously good engineers, because they’ve got the best network, and they’re very good marketers because they managed to get a 15-20% premium for the same data that their competitors sell.

Dividend investors might also be gravitating towards the Telstra share price in 2022. According to analysts at Goldman Sachs, the company looks well-placed to grow its dividend in the coming years.

The post Is the Telstra (ASX:TLS) share price set to dial in another big year in 2022? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With the S&P/ASX 200 Index (ASX: XJO) down more than 1% in the past month, there are some bargains out there as Santa once again prepares for his epic international package delivery gig.

Two experts this week named 3 ASX shares that they think are ready to rally.

Some sectors have been hit harder than others in recent weeks, so it’s no wonder one of the picks is projected to rocket up 41%.

Insurance ASX share with ‘pricing tailwinds’

Shares for QBE Insurance Group Ltd (ASX: QBE) have fallen about 7% since its mid-August peak.

Morgans investment advisor Jabin Hallihan still likes the look of the insurance giant though.

“QBE has increased insurance rates over the past year, which is likely to increase margins and underlying profit into 2022,” he told TheBull.

“Pricing tailwinds are evident.”

QBE shares closed Tuesday at $11.67, up 0.86%.

The dip in price over the past few months has now made QBE shares historically cheap.

“The stock is relatively inexpensive as it was recently trading on a forecast price/earnings multiple of 12.8 times for fiscal year 2022.”

Morgans has a price target of $13.70 for QBE, along with a juicy dividend yield of 4.2%.

Retailer with ‘brighter’ outlook

After an up-and-down year, Harvey Norman Holdings Limited (ASX: HVN) shares are currently up 6.6% for the year.

Burman Invest chief investment officer Julia Lee reckons the retail giant will leave its COVID-19 troubles behind as it heads into 2022.

“The retail giant sells big ticket items that shoppers want to see before buying,” she said.

“The outlook is brighter now that News South Wales and Victoria have emerged from lockdowns.”

Australian households have plenty of money saved up from staying home the past 18 months, which bodes well for Harvey Norman.

“Increased household savings is positive for Harvey Norman during the crucial Christmas shopping period. Internationally, all regions except Malaysia are generating growth.”

The Harvey Norman share price ended Tuesday at $5.06, down 1.56%.

‘Compelling valuation’: ASX share set to rise 41%

Major bank shares have had a terrible time the past few weeks.

Westpac Banking Corp (ASX: WBC) is no different, seeing its stock price fall more than 20% since late October.

But it’s the favourite among the big four, as far as Morgans is concerned.

“We believe WBC offers the most compelling valuation of the major banks,” said Hallihan.

“Our 12-month price target is $29.50 and we’re forecasting a dividend yield of 6.3 per cent.”

That target is a stunning 41% above the Tuesday afternoon price of $20.94.

Hallihan reckons Westpac has a significant advantage above the other 3 big banks.

“We prefer Westpac to the other major banks because it’s positioned relatively defensively due to its loan book skewed more towards Australian home lending,” he said. 

“The recently announced off market buyback is positive for shareholders, and is earnings accretive.”

The post 3 ASX shares to buy before Xmas (hint: one predicted to rise 41%) appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking for income, then the ASX 200 could be a great place to start. The benchmark index is filled with quality companies that share a good portion of their profits with shareholders.

Two ASX 200 dividend shares that have been tipped as buys are listed below. Here’s what you need to know about them:

South32 Ltd (ASX: S32)

The first ASX 200 dividend share to consider is South32. It is a diversified mining and metals company producing alumina, aluminium, bauxite, energy and metallurgical coal, lead, manganese, nickel, silver, and zinc. It has also just added copper to its portfolio via a key earnings accretive acquisition in Chile.

Thanks partly to its exposure to aluminium, which is believed to be in the early stages of a multi-year bull market, analysts are expecting South32 to generate significant free cash flow over the coming years.

So much so, the team at Goldman Sachs is forecasting double-digit, fully franked dividend yields through to at least FY 2026. In light of this, the broker has a conviction buy rating and a $4.40 price target on its shares. This compares favourably to the latest South32 share price of $3.81.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share to consider is Telstra. Thanks to the successful execution of its T22 strategy and the recently announced T25 strategy, it is expecting to return to growth at long last in the near future.

Telstra’s CEO, Andrew Penn, recently highlighted that T22 was based on transforming the company, whereas T25 will be about driving growth. He is targeting high-teens underlying earnings per share (EPS) compound annual growth rates (CAGR) from FY 2021 to FY 2025.

Morgans is very positive on Telstra. It currently has an add rating and a $4.55 price target on the company’s shares. The broker also expects fully franked dividends per share of 16 cents in FY 2022 and FY 2023.

Based on the latest Telstra share price of $4.11, this will mean 3.9% yields for investors.

The post 2 excellent ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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BHP Group Ltd (ASX: BHP) is getting the band back together! Well, sort of. At present, BHP is a dual-listed company. It’s Australia’s biggest mining company and one of the largest in the world. BHP has extensive iron ore operations, as well as interests in copper, coal and oil.

Ever since its merger with Billiton plc two decades ago, investors have had the option of buying the original ASX-listed BHP shares here in Australia. Or else BHP Group plc (LON: BHP) shares that are listed directly on the London Stock Exchange (LSX) in the United Kingdom. Other investors from South Africa and the United States also have the option of secondary shares. For example, the New York Stock Exchange’s BHP ADR (American Depository Receipt) listings.

The Big Australian comes home

But back in August, the ‘Big Australian’ announced that it would be going back to its roots. It confirmed that it will scrap its London dual listing. Here’s what BHP’s management had to say on why the company is pursuing ‘unification’:

We have regularly sought to streamline and improve our corporate and governance processes. Unification would further simplify the BHP corporate structure and shareholder registers, reduce duplication and streamline our governance and internal processes. 

Unification will enable one market capitalisation and one global pool of liquidity, with the same share trading via the Group’s listings on the Australian, London and Johannesburg stock exchanges and its NYSE listed ADR program.

So what does this mean for investors?

What happens to BHP shares after unification?

Well, for any British investors, the consequences are more apparent. With the delisting, BHP will be removed from London’s share market, and by extension, form the UK’s flagship FTSE 100 Index. But, as BHP clarified above, British investors will still be able to own BHP shares on the LSX via a secondary listing. That’s similar to what already exists for American investors. They will also be given the option of receiving 1 ASX BHP share for every LSX BHP share owned.

For ASX investors, it means a whole lot of not much. There will simply be more shares available on the ASX to compensate for the lack of primary shares on the LSX. But, all other things remaining equal, BHP’s market capitalisation (a.k.a. share price) will not change. Nor will its dividends, earnings or any other fundamental trait of its business. BHP has told investors that “If approved, unification is expected to occur in the first half of the 2022 calendar year”.

So pencil that into your 2022 investing calendar!

The post What will happen to BHP (ASX:BHP) shares after the dual listing is axed? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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