Hiya Gringo Whilst I still think the BRM will get up, I have no doubt that the cost of capital will increase substantially and that the NPV will be negatively affected by this "super-tax". Hence, even if the project is successful the amount of success will ultimately be limited by the short-sightedness and stupidity of this government.
$8.3 billion dollars has already been wiped off the value of resource stocks in the wake of this alone.
To actually say that any return in excess of the bond rate is "super" beggars belief. Particularly as the "super" nature of such a return is apparently limited the resource industry. The banking industry is not dependent on billions of infrastructure costs to get it started, yet apparently its "super profits" are fine.
I agree that the hysteria needs to die down and that potentially there are accounting techniques to manage the issues, but the fact is at best it is an unnecessary distraction that will result in a significant amount of financial remodeling and limit the potential return to investors.
Who knows, maybe Abbot will show some guts and take this opportunity to make a stand . Although the fact the Liberal part is very skeptical of it to me is far from saying they are against it.
Rudd is dangling all the benefits in front of the starry eyed faithful that Abbot needs to win the election.. hence he will need an alternative means of getting $9 billion to keep them happy. He may well assume that companies like BRM and its shareholders are the collateral damage needed to win the election .
BRM Price at posting:
$3.25 Sentiment: Buy Disclosure: Held
