What on paper might look like a great business opportunity – iron ore just waiting to be dug out of the ground or millions of barrels of untapped oil – can often prove to be trickier in practice.
Politics, war and pestilence have all been getting in the way of business recently and the latest company to feel the meddling hand of circumstance on the tiller is African Minerals, the Aim-listed miner digging up iron in Sierra Leone.
The company’s share price has been falling steadily over the last week, as the clamour around the Ebola outbreak in West Africa has grown louder. Yesterday African Minerals suffered its biggest sell-off yet, tumbling 11p to 47p, as fears about its Tonkolili mine came to a head. The Sierra Leone mine is at the epicentre of the current outbreak. To make matters worse, African Minerals has already been struggling with falling iron prices.
The Footsie wasn’t up to much, down 4.96 points at 6,682.48, with the summer malaise setting in and geopolitical factors leaving investors feeling skittish. Meggitt tumbled 23.8p to 479.7p after a slump in profits, while Royal Mail suffered a 23.8p slide to 479.7p. Credit Suisse slashed its target price for the postie, amid fears that continued pressure on parcel volumes could lead to profit warnings.
Weir Group climbed 51p to 2,576p as RBC Capital Markets added the engineer to its top picks list.
The microchip designer Imagination Technologies ticked up 8.9p to 191.25p on the back of an upgrade from Liberum, which reasoned that shares are cheap and new product launches from Imagination’s biggest customer, Apple, could be a catalyst for a rise.
Afren shareholders are still rushing for the exit, with the oil and gas explorer falling 8.9p to 98.1p. Afren, which has interests in Nigeria and the Middle East, has now fallen 34 per cent since announcing last Thursday that its chief executive and chief operating officer had been suspended over unauthorised payments from a third party that may have been for their benefit. The company is also not immune to fears about the march of Isis into Kurdistan, where Afren has assets.Reuse content