Miners lifted by Australian election which could end super tax

Miners have been given a welcome boost at the start of the week’s trading as the proposed 40 per cent super tax on the sector in Australia has been cast into doubt following an indecisive outcome of the nation’s election.

Kate Neilson
shareprices.com - Monday, August 23, 2010

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BHP Billiton remains in positive territory

The inconclusive election has sparked talks of a change in government down under with a minority conservative rule potentially being drafted in. If this would be the case, then the 40 per cent tax on miners – collectively opposed by a number of the heavyweight firms – will be scrapped.

The super tax has been an ongoing point of concern for investors and has restricted mining stock in recent months.

Kazakhmys (LON:KAZ), Xstrata (LON:XTA), Anglo American (LON:AAL) and Rio Tinto (LON:RIO) are all in the region of 1.5 per cent higher on the news.

Also making strong advances in the mining sector is BHP Billiton (LON:BLT) which hit headlines last week after it made a hostile bid for Canadian fertiliser company Potash.

The miner now faces opposition after it emerged over the weekend that China’s Sinochem Group and Brazil’s Vale have both inquired about the Canadian group. BHP Billiton’s share price is still up despite concerns over a battle for the fertiliser firm – up 1.65 per cent with a gain of 30p per share.

Despite the strong gains for miners, it’s an insurance stock that heads the FTSE 100 gainers.

Old Mutual (LON:OML), which specialises in global savings and wealth management, is gaining 4.5 per cent after confirming it had opened exclusive talks with HSBC Holdings (LON:HSBA) to sell its stake in South African Nedbank. The deal, reportedly worth £4.4bn, would give the bank a gateway into the African continent which is currently experiencing strong boosts.

The report also helped HSBC Holdings post strong share price gains of over 0.7 per cent, and Standard Chartered (LON:STAN) – which has previously inquired about Nedbank - is also up 0.8 per cent.

The rest of the banking sector is gaining on the news too, with Royal Bank of Scotland (LON:RBS) adding 1.25 per cent to its share price and both Barclays (LON:BARC) and Lloyds Banking Group (LON:LLOY) in the green at the rate of 0.5 per cent additions.

At the other end of the scale, energy stock has suffered a slide with negative sentiment kicking in over takeover talks in the sector.

BG Group (LON:BG) and Royal Dutch Shell (LON:RDSA) stock are both struggling at the beginning of the week after the oil giant was named as a potential bidder for the former. BG Group is still making minimal gains on the report, but Shell is over 0.3 per cent down.

Just after 10:30BST, the FTSE 100 is 0.5 per cent higher with a gain of almost 26 points to move to 5,221,16.

 

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