Market Report: ENRC back in favour after terrible year

 

Admirers of miners with corporate governance issues have been thin on the ground, but today analysts and investors started to appreciate Eurasian Natural Resources Corporation's attributes. ENRC was certainly out of favour last year. Its shares declined more than 50 per cent during 2012, and even last month Goldman Sachs scribblers cut their buy rating to hold.

But today Credit Suisse's mining specialists outed themselves as fans of the Kazakhstan and African-focused digger. They claim its "downside risks" are limited. Why? They think it will move on from development to the actual production of its assets, and may even start to sell some of its smaller projects.

They now rate the shares outperform, up from neutral. The share price followed suit, and was the biggest riser on the benchmark index, up 11.4p to 334p. Credit Suisse gives the shares a price target of 400p, up from 350p, and added that the "growth delivery" could even see the shares rise to around 500p.

A blue-chip mover is always accompanied by gossip, and today some traders speculated that ENRC's shareholders could be thinking of splitting or buying out the company. Last year there were rumours that the miner could split its African holdings from its Kazakh assets. This time around vague chat suggested that the founding shareholders could be assessing their holdings, while the fellow FTSE 100-listed miner and 26 per cent owner Kazakhmys is also said to be weighing up its options. But most traders dismissed the vague bid babble as way off the mark, for now.

Kazakhmys, in which the government of Kazakhstan has a 26 per cent stake, was itself out of favour. Analysts at Barclays rated it underweight and the shares fell to the bottom of the blue-chip index, down 23p to 785.5p.

Traders with an eye for fashion speculated that the British luxury brand Burberry could produce a better than expected third-quarter update today. The shares, which suffered at the hands of profit warnings last autumn, strutted up 20p to 1,325p.

Banks were still in favour with investors, even after last week's steady gains prompted by the relaxation of the Basel III liquidity rules. Lloyds Banking Group was already 2012's best performer, and it jumped more than 8 per cent last week. An earnings forecast upgrade from analysts at Redburn accompanied another 0.88p rise to 54.92p today.

The top-flight index continued last week's rise during morning trade, but worse than expected news from company updates in the US toppled investor sentiment by the afternoon. In the US Apple shares were one of the big fallers when it emerged that there was reduced demand for its iPhone 5. With sentiment weakened the FTSE 100 ended off 13.72 points to 6,107.86.

The software group Sage was one of the losers on the blue-chip index after analysts at Barclays cut their rating to sell, from hold. The shares lost 3.6p to 310p.

The telecom group Cable & Wireless edged down 1.68p to 40p on the mid-cap index after it confirmed it had sold 51 per cent of its Macau operation to Chinese state-owned Citic Telecom.

Competition regulators postponed their decision on the proposed merger of the fizzy drink firms AG Barr and Britvic. The groups said they expected the Office of Fair Trading to make a decision next month. AG Barr trickled down 5.3p to 490p and Britvic gurgled down 1.1p to 413.1p.

News of a strong Christmas helped shares in Moss Bros to a five-year high. The men's suit and formalwear retailer said it expected annual profits to "exceed" market expectations, and analysts upgraded their profit forecasts to £2m for the current year. The shares lifted 4.5p to 71p.

The serial entrepreneur and resources specialist Algy Cluff's fifth company, Cluff Natural Resources, soared 0.75p to 4.38p on AIM after winning two licences for Underground Coal Gasification in the Loughor estuary in Wales and the Dee estuary in Merseyside. He thinks the UK could avoid the controversial use of fracking – hydraulic fracturing to produce energy for the UK. The licences have been awarded by the UK Department of Energy & Climate Change, and Mr Cluff will now apply to develop the sites, which he said have the "potential to do much to address the UK's future energy needs".

Also on AIM, Afferro Mining said an exclusivity period with International Mining and Infrastructure Corporation has ended. It said talks will continue, but it will also entertain discussions with other potential bidders. Its shares lost 6.25p to 93.5p.

Buy: JD Sports

Snap up shares in JD Sports, Seymour Pierce urges. The broker says that the sportswear retailer's shares "are currently the lowest rated in our universe" and that "the potential for restructuring has been overlooked". It even thinks an "opportunistic bid from majority owner, Pentland" could be on the cards and any drag caused by its Blacks business "is fully discounted". It gives a target price of 1,000p for shares presently at 720p.

Sell: TUI TRAVEL

Panmure Gordon has Tui Travel in its sights and advises dumping its shares. It says that the travel agent's "current trading is strong" but adds that it is still able to detect "headwinds in continental Europe. The company's shares at present are 282.3p but Panmure gives a target of 245p.

Hold: RENTOKIL

Hang on to shares in Rentokil, says Investec. The broker feels that, "after a prolific share run" last year the pest controller is now "poised for investor scrutiny". It says the company's parcel business, City Link, "continues to disappoint", but the core business "has recovered its organic poise". Shares are 91.3p; Investec gives a target of 94p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
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: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

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
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before