BHP now worth more than $200bn

RIO TINTO was the first locally listed company with a $100 share price. But arch-competitor BHP Billiton has snared a bigger prize by becoming the first locally listed company with market capitalisation of more than $200 billion. At its record closing price of $37.10, dual-listed BHP was being valued at $US174.67 billion ($A203.38 billion) after counting in its London-listed shares. Rio has been doing very nicely, too, but at $US104.5 billion, it needs some serious mergers and acquisitions if it wants to catch BHP. BHP's charge through $200 billion - it was up 70¢ or 1.9 per cent - is more remarkable when it is remembered that it was valued at $US28 billion before its merger with the out-of-Africa Billiton in 2001. BHP next month will set out to justify its monster capitalisation with the release of its profit for the June year. The report, due on August 22, is tipped to show profit has risen from the 2006 corporate record of $US10.4 billion to about $US13.5 billion. While that has been the expectation for some time, it has been the rebound in base metal prices, the oil price move to more than $US70 a barrel, and sharp increases in price forecasts for iron ore and coal that have carried BHP's share price so high. The increased price forecasts for iron ore and coal have been particularly telling. Credit Suisse revised iron ore and coal forecasts up sharply, prompting it to upgrade its "target" price for BHP to $41 a share on June 18. In more recent days, the kick in the oil price has given the group's share price new impetus. In a nicely timed bit of news, BHP leveraged up interest in its oil business by announcing a $2 billion go-ahead for its Pyrenees oil project off Western Australia. Rio, despite its recent share price charge, is forecast to have entered into something of an earnings flat spot, with profit for (calendar) 2007 tipped at about $US7.7 billion from $US7.4 billion last year.