A Weekly Digest of The World's Financial Press: Financial Times

The South African Mining group Anglo reorganises its operations

THE POINTS for investors to focus on are mercifully simple. In the short term there may be a scramble for stock as the new Anglo looks bound to join the FTSE 100 Index in late June. The share are tightly held for a FTSE stock;over 50 per cent is owned by De Beers and Oppenheimer interests. Yet the company will carry its full weighting in the index and no new shares are being issued.

More fundamentally the argument for mining shares is that the metal prices must be somewhere near the bottom of the cycle. And South Africans are are rated well below their North American counterparts. But there are good reasons for a discount, at least in Anglo's case.Although its platinum strength is a plus, the diamond market is rigged and opaque. And even if South Africa surmounts its political and economic problems, recovery in the rand would squeeze Anglo's margins. Buying of the old Anglo shares in Johannesburg has been voracious recently: the shares are 75 per cent above their year-end level.

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