Market Report: Investors count cost of Lonmin strike

As Lonmin's miners returned to work, investors were counting the costs of the six weeks of bloodshed. A total of 46 lives were lost during the unrest in South Africa's mining belt as poorly paid miners fought for more in their pay packets each month. But shareholders will be more concerned about the cost of the strike to Lonmin's balance sheet and when the company expects to raise fresh cash through a rights issue. Lonmin tumbled 41.0p to 610.5p as the price of platinum began to fall.

A return to work will mean a rise in production, and therefore supply. During the strikes the price of platinum jumped by 20 per cent, but has fallen 5 per cent this week.

Traders following the platinum price fall also sold out of fellow mid-cap miner Aquarius Platinum, which was down 1.75p to 45.0p.

Although workers have returned at Lonmin's Marikana mine, safety checks could mean that it will be two weeks before a return to full-scale production.

The Lonmin pay deal has brought peace, but conflict in the area could return. Anglo American's Amplats is yet to reach agreement with workers at its Rustenberg mines.

Weak manufacturing data from China put the kibosh on the entire mining sector yesterday. They loitered around the bottom of the FTSE 100 and FTSE 250, with copper digger Evraz, down 16.7p to 260.8p, and mid-cap Ukrainian-focused iron ore producer Ferrexpo, down 8.5p to 209.8p.

Data from China showed that private-sector manufacturing fell again in September, confirming fears that demand will continue to fall, as the FTSE 100 index lost 33.84 points to close at 5,854.64.

Liberum Capital's Richard Knights thinks BHP Billiton, down 45.5p to 1954.5p, looks attractive due to its low gearing and the likelihood of excess capital from 2014.

But the red pen was out for the Australian mining giant Rio Tinto and Anglo American. Mr Knights thinks Rio Tinto's cashflow is "impacted by heavy iron ore investment" and it lost 84.5p to close at 3077p. For Anglo, Mr Knights says "swapping copper for diamonds and coal leaves a cashflow void", and it dug up a 90p loss to 1944p.

On a downbeat day for the benchmark index, analysts watching the UK's property stocks have grown tired of a lack of merger activity compared to their European rivals.

Analysts at Société Générale have decided to play matchmaker with Hammerson and Capital Shopping Centres. The latter, which owns the Lakeside and Metro Centre malls, is tapping the bond market to refinance its short-term borrowings, and is said to be a good match for Birmingham's Bullring owner Hammerson as the most obvious combination of the UK real-estate investment trusts. Scribes at Société Générale reckon that the combined pair "would create a clear leader in the UK with 19 of the top 35 shopping centres".

Hammerson built up a 5.7p loss to 453.8p, and Capital Shopping Centres lost 14.2p to 332.4p.

Petards, the Aim-listed security, surveillance and engineering group, has received a bid from Water Hall "that may or may not lead to an offer being made". Water Hall, the waste management group, built up a 29.9 per cent stake in the company in 2010. Shares in Petards blasted up 3.5p, or 12.7 per cent, to 31.0p.

Ghanim al-Saad, Qatar's man behind its investments in London developments The Shard and Chelsea Barracks, has taken on his first board-level position on a listed company. The Qatar Investment Corporation director joins the board of Creon Resources, the Aim-listed oil infrastructure investor. He has a 73 per cent stake in Creon, whose shares edged down 0.05p to 0.7p.

Following the previous day's news from fellow Irish oil explorer Europa Oil & Gas, Aim-listed Petrel Resources has updated the market on its finds from a study. This caused its shares to gush up by 0.75p, or 12.0 per cent, to close at 6.625p.

Finally, as the boards of Xstrata and Glencore met to discuss the potential for a tie-up, Liberum Capital became the latest broker to assume the deal will happen. Xstrata's independent board members have until Monday morning to recommend the improved terms offered by Glencore, but analysts are assuming the deal is all but done.