BHP, Rio Tinto and Woodside boosted by higher commodity prices, CBA sells 10% to Chinese bank for $1.8b

ASX 200 BHP RIO WPL CBA WOW CIM March 2022
While the conflict in Ukraine captured headlines this week, Australia's largest companies were also making news.

Earlier in the week, Australia’s two biggest mining firms BHP (ASX: BHP) and Rio Tinto (ASX: RIO) saw their stock prices buoyed by a global rise in the price of iron ore as a result of the conflict in Ukraine, but they went into a slight reverse on Friday.

Despite iron ore prices ending the week at a six-month high on Friday with futures on the Singapore Exchange hitting US$161.20 per tonne (A$219.19/t), the fire at the Zaporizhzhia nuclear power plant in Ukraine hit BHP and Rio Tinto’s stock prices.

BHP closed at $49.78, a 0.28% decline on the day and a sharp contrast to the 3.8% rise it posted on Wednesday. Likewise, Rio Tinto was down 1.44% on Friday at $126.41.

Woodside Petroleum

Global oil prices may have shifted to their highest level since 2014 on rising geopolitical tensions but Australia’s biggest oil and gas firm Woodside Petroleum’s (ASX: WPL) shares hit a two-year high on Thursday for local reasons.

The Supreme Court in Western Australia tossed out a challenge from the Environmental Protection Authority (EPA) over two of the energy firm’s gas plant projects: Pluto LNG and Karratha.

Despite the EPA’s assertion that the expansion of Pluto LNG II would result in an increase in greenhouse gas emissions equal to 15 new coal-power stations, the court gave the development the green light.

Woodside’s share price slipped back slightly in Friday trading to $31.42 but the firm’s share price is still nearly 3% up on the same time last week.

Woodside is also in the process of merging BHP’s Australian assets into its business, a move which is expected to be accretive to earnings in the longer term.

Commonwealth Bank of Australia

Commonwealth Bank’s (ASX: CBA) stock price ended the week on a high at $94.60, following news that Australia’s biggest lender is offloading its 10% stake in China’s Bank of Hangzhou for US$1.31 billion (A$1.8 billion).

The Sydney-headquartered bank is selling its holdings in the regional banks as part of a broader move by Australian lenders to focus their capital on core services.

CBA has been a shareholder in the Bank of Hangzhou for two decades and the move comes amid broader pressure on the Chinese retail banking sector on fears of a property market crash in the country.

Woolworths

Iconic Australian retailer Woolworths (ASX: WOW) ended the week in positive territory, with its stock price closing up 2.05% at $34.81.

The rise came after the firm’s stock price increased 3% in February despite a decline in profitability as the latest COVID-19 wave hit the firm’s business hard, with costs rising.

But sales growth has also been positive, providing tailwinds for the firm’s stock price that have continued into March.

CIMIC

The hostile takeover of Australia’s biggest construction group is starting to look a done deal, with its major shareholder, the German group Hochtief, now holding 83% of CIMIC’s (ASX: CIM) stock.

Hochtief itself is owned by the supersized Spanish infrastructure firm Grupo ACS which first announced plans to takeover CIMIC on 23 February as part of a move by the Iberian company to simplify its global operations.

In an analyst call last month the Spanish firm’s general manager Angel Garcia Altozano said the company wanted to simplify a group which is active in every continent, bar Africa. Currently its holdings in CIMIC account for nearly 20% of GRUPO ACS’s global turnover.

CIMIC’s shares closed on Friday at $22.01, a slight increase of 0.01% on the day.

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