Rio Dumped After Massive Dividend
Comment of the Day

August 12 2021

Commentary by Eoin Treacy

Rio Dumped After Massive Dividend

This note from the Sydney Morning Herald may be of interest to subscribers. 

Rio Tinto stock dropped as much as 7 per cent yesterday after the mining giant's shares traded ex-dividend.

The $190 billion company fell to a near seven-week low of $120.15 a week after it reported a record first-half profit and a massive $5.61 dividend per share.

The stock closed 6.9 per cent lower at $120.26.

The mining giant has now shed 10.8 per cent of its value since hitting a record high $134.665 late last month as the outlook for iron ore demand continues to weaken amid Chinese government restrictions on steel output and a slowing housing market. Iron ore prices recovered slightly overnight, rising 1.9 per cent to $US165.48 a tonne.

Eoin Treacy's view

Iron-ore prices surged during the pandemic and not least because China remained a bastion of uninterrupted economic activity while most other countries experienced a more difficult time with the first round of COVID. That helped boost demand while supply growth was contained.

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