by Phil Doel
15. July 2011 18:23
I mentioned previously that Cheung Kong Infrastructure was considering a bid for Northumbrian Water and this has duly arrived. The figure of 465p per share, plus the final dividend of 9.5p, represents a fair price and locks in a strong profit for the Fund, where average price paid for our holding was around 300p.
Australian Prime Minister Julia Gillard’s announcement of a new carbon tax on the resources sector, which will land heaviest on the coal producers, while disappointing was not really too much of a surprise. She is following a clear theme of governments looking to raise funds from the resources sector – UK, Chile and Tanzania – and I am sure she won’t be the last.
Rio Tinto is a significant coal producer and my biggest mining position in the Fund, though I also have positions in Xstrata and BHP Billiton. All three will be modestly impacted, though the reality is that the current strong demand globally for resources shows little sign of slowing in any material way, so the impact on profitability should be limited.
