Long-overdue restructuring at Vedanta Resources finally came into effect this August, bringing the group's hydrocarbons business and metals mining operations all under one roof, while making the diversified conglomerate better able to cope with movements in the commodity markets. Analysts say significant cost savings are still to come. The collapse in the price of the Indian rupee could also boost Vedanta as a majority of the company's costs are in this currency while it sells oil and metals on the international market in dollars. Should the 22% slump in the rupee hold to the end of March it would generate a 455 million US dollar (£291 million) boost to earnings before interest, tax, depreciation and amortisation. Meanwhile, a bounce-back in China has seen copper and iron ore prices recover from June lows while oil production is benefiting from rising oil prices amid uncertainty over Syria. However, a ban on iron ore mining in India is hurting while the balance sheet was carrying net debt of 8.6 billion US dollars (£5.5 billion) at the end of March, with more than six billion US dollars (£3.8 billion) due for repayment in the next two years. However, shares have gone sideways this year and are starting to look cheap though this is a riskier investment.
Mail on Sunday
Diversified industrial group Melrose Industries has seen £6.6 million in shares snapped up by its own executive chairman Christopher Miller over the past quarter. The group has had a strong run this year and the stock has risen by almost 50% since January. Melrose buys ailing companies before turning them around and selling them at a profit. Much of the management previously worked at Wassall, which made plenty of money for investors before being taken over in 2000. Mr Miller ran Wassall, then set up Melrose in 2003. He bought 2.7 million shares in late June and now owns 17.3 million shares in the business. Interim results published last month showed half-year pre-tax profits doubled to £139 million. Mr Miller was upbeat about prospects while analysts expect shares to increase substantially over the next two years. The business is well run, has consistently delivered on promises, and is a good stock for the more sophisticated investor.