Market and product

ALUMINA chairman Don Morley believes that on a replacement basis, the group's 40 per cent share of the Alcoa-managed global alumina joint venture known as AWAC could be valued at more than $11 billion. The only problem for shareholders is that Alumina's market value is less than $4 billion.

But managing director John Bevan believes the valuation gap - one that exposes Alumina to a cheap takeover bid from Alcoa - could narrow as the group's earnings and dividend flow rebound in line with the greatly improved price for aluminium.

Speaking after the annual meeting in Melbourne yesterday, Mr Bevan said that, in the short-term, the market was waiting to see earnings re-emerge before rerating the group's share price. ''Those earnings will start to emerge in the back half of this year,'' he said.

(Source: www.smh.com.au, by BARRY FITZGERALD )