Market Report: Bumi battered by fears over shareholders' debts

 

With yesterday a horror show for stocks across the Square Mile, Bumi was one of the worst hit amid renewed fears over the debts of the Bakrie family. The Indonesia miner, which was co-founded by financier Nat Rothschild, slumped 46.1p to 497.4p following reports claiming the family needs to resolve a covenant breach on a loan worth $437m (£271.1m) by the end of the week.

With Bakrie's stake in the digger backing the loan, the possible breach is reportedly the result of the recent weakness of Bumi's share price. With fears it will mean the family (whose dispute with Mr Rothschild led to the latter stepping down as co-chairman last month) may have to raise money through a disposal of some of its assets, Bumi was one of a number of companies with links to Bakrie to decline.

The family has faced such issues before – last year they sold part of their shares in Bumi for $1bn to escape a default – and some claimed the fall was an overreaction.

"I don't think the move is entirely rational. The last time this happened Bakrie sold shares at a big premium," said Liberum Capital's Richard Knights.

"I think the worst-case scenario is that they [Bakrie] would sell their stock with a call option attached so they could buy it back," he added. "They no doubt have many options and I think the chance of them losing their stake altogether is low".

The FTSE 100 – along with markets across Europe – started the week with a sharp sell-off, sliding 106.58 points to 5,665.57. With political events in the Netherlands and France, plus poor private sector data from the eurozone and Spain returning to recession, reviving fears over the region's debt crisis, Barclays and Royal Bank of Scotland dropped 9p to 204.55p and 0.89p to 23.13p respectively.

Figures from China's manufacturing sector did not help the heavyweight miners. Vedanta Resources was left with the Footsie's wooden spoon after sinking 70p to 1,167p, as Rio Tinto was pegged back 171p to 3,376p and Kazakhmys retreated 40.5p to 849p.

There ended up being just two blue-chip risers, including BSkyB. The satellite broadcaster edged up 4.5p to 679p despite Ofcom announcing it was investigating its Sky News channel regarding email hacking, with the group instead boosted by reports over the weekend talking down the prospect of Al Jazeera bidding for the rights to show Premier League football.

IAG nosedived 9.2p to 162.6p following last week's completion of its deal to buy bmi. In a last-minute change to the acquisition, the British Airways owner ended up with two of the regional airline's loss-making units, and IAG boss Willie Walsh yesterday admitted that he was "not confident" over being able to sell them.

Down on the FTSE 250, SuperGroup was still falling out of fashion following last week's profit warning. Despite its share price having shed nearly 40 per cent on Friday, yesterday it was off another 16.8p at 335p as analysts continued to make dramatic adjustments to their predictions.

Singer Capital's scribes slashed their target price by a huge 470p to 320p, saying that while they do not think "the brand is dead, we accept that until confidence in forecasts materially improves the stock has become uninvestable for many".

Cable & Wireless Worldwide shot up 12.19 per cent to 35.9p after its bid saga finally came to an end, with the telecoms firm agreeing to a 38p a share takeover offer from mobile phone giant Vodafone (0.1p worse off at 171.4p).

The subject of recent speculation, Kenmare Resources declined 4p to 50.9p after the Irish digger's boss Michael Carvill said over the weekend that he hopes the group is not taken over.

Having seen its share price come close to doubling last week on rumours that it was about to reveal a storming update from its drilling off the Falkland Islands, Borders & Southern did announce a find but it was not what the market was expecting. Instead of striking black gold, the explorer revealed it had discovered gas condensate, which – although often sold at a higher price – is more complicated to develop than oil.

In response, Borders slumped by 31.68 per cent to 89.5p on Aim, although there were plenty of supporters, with broker FoxDavies calling the news "a terrific technical success, and one that the company should be proud of".

At the same time, fellow driller Gulf Keystone Petroleum climbed 24p to 235p after announcing that the testing programme on its Shaikan-4 well in the Kurdistan region of Iraq had been completed, with the firm saying it was the "best well drilled to date".

Meanwhile, machine gun manufacturer Manroy was driven back 11.5p to 83.5p after admitting that a £8m contract had not yet been confirmed.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

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

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power