Investment Column: Boardroom woes create uncertainty for ENRC

Our view: Sell

Share price: 761.5p (+15p)

Few companies can boast a name as grand as the Eurasian Natural Resources Corporation. Better known as ENRC, the unabbreviated version brings to mind some giant of the corporate world – and indeed, the company fits the bill, commanding a market value of nearly £10bn, with more than 70,000 employees.

Those figures reflect the miner's vast operations. It is the world's largest producer of ferrochrome on a chrome content basis and the world's ninth largest producer of traded alumina by volume, not to mention a significant player in the iron ore market.

And yet, ENRC has not looked quite so grand in recent weeks. The annual general meeting saw no fewer than four non-executive directors leave the board. Two – the former GlaxoSmithKline boss Sir Richard Sykes, who was the senior independent director, and Ken Olisa – were voted out.

News of the departures was accompanied by the announcement of a "comprehensive review of its corporate governance". ENRC said the review will be conducted over a three-month period, "with the intention of establishing a board structure that can best support the group while complying with UK corporate governance best practice".

That might have been that. But then there were reports that another independent director, the Cyprus-born investment banker Mehmet Dalman, was considering his position on the board. Though the reports were never confirmed, yesterday it emerged that the ENRC company secretary Randal Barker had resigned.

There is clearly something wrong here. We hope that the review will lead to an improvement at the helm of this giant miner. But until then, we suspect the market is likely to remain cautious.

Add in the fact that this month will see the expiry of the US quantitative easing programme, and we could be in for a period of underperformance as traders reassess the commodity outlook. If the market ends up taking a negative view of metals and minerals, that is likely to hit the mining sector as whole. But recent issues at ENRC could, we fear, make matters worse for this particular stock.

Arden Partners

Our view: Speculative buy

Share price: 69.5p (no change)

It sometimes seems like Lord Flight will be found involved somewhere or other with whatever small broker or fund manager you'd care to mention. Is Arden Partners destined to be one of his winners? The ubiquitous peer was confirmed chairman of the operation, which has a decent enough franchise on Aim but a rather more interesting Indian arm, yesterday.

The latter has brought a couple of rather large companies as clients, and Arden is becoming the first port of call for Indian businesses looking to raise cash in London that aren't quite big enough for bulge-bracket firms.

Aim brokers are having a tough time at the moment – commissions are being squeezed, and activity is limited but brokers' salaries aren't falling much. Arden, however, has wind in its sales, and earlier this year came up with a trading update which had analysts scurrying to up forecasts.

It should be borne in mind, that as recently as last year they did the opposite after a profits warning. So earnings, and the shares, will be volatile.

What's more, a valuation of 23 times forecast looks fancy enough. However, it should also be borne in mind that these shares are some way off recent highs and there are grounds for thinking that Arden can deliver.

These shares are only for those with a strong appetite for risk. But we'd make Arden a speculative buy.

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooksA special investigation by Andy McSmith
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn