Market Report: Investors in gold rush out of African Barrick

News of a high court claim against African Barrick Gold over the deaths of Tanzanians tarnished its shares on a day when it revealed $185m of cost cuts.

The struggling mid-cap gold miner has been accused of being complicit in the killing by police of at least six villagers in Tanzania during violence at one of its mines in May 2011.

African Barrick, which said it believes these "proceedings are without merit" and that it "intends to vigorously defend its interests", has a lot on its plate and investors headed for the exit even though it set out plans to address its financial problems. The shares were marked down 5.4p to 111.4p as it revealed $727m (£475m) of write-downs.

The company has been hit by the falling gold price, and although gold has picked up again in the past month, African Barrick's shares are still down more than 75 per cent since the start of the year.

The write-downs relate to a reduction in the value of its mines after it completed an operating review this year. It has now confirmed cost-cutting plans that will include closing its Buzwagi mine in Tanzania in less than four years.

Its second-quarter results were positive, with production and costs beating market expectations. But until there are signs of improvement in profits, the City will remain unconvinced. Investec's Hunter Hillcoat rated African Barrick a hold with a 135p price target.

The FTSE 100 failed to get past the 6,600 "sticking point" that City analysts have noted as a hurdle at the moment, but it still rose 10.7 points to 6,570.95.

A clutch of strong corporate results helped push the market on and the car and plane engineer GKN drove up 21.4p to 348.5p after it reported first-half pre-tax profits 5 per cent higher at £278m.

Broadcaster ITV rallied 9.9p to 167p when chief executive Adam Crozier raised the dividend and said advertisers will continue to spend.

Engineer Weir reported a 14 per cent drop in pre-tax profit but reiterated its full-year guidance and the shares were up 87p to 2,164p.

News that Centrica is poised to become the biggest gas supplier to America's East Coast powered it up 8p to 385.8p. The deal to buy Hess's energy marketing business for around £500m comes ahead of its first-half numbers today.

The American business will become part of Centrica's US operation, Direct Energy, making that "the largest business gas supplier on the US East Coast and second-largest business power supplier in the retail market," Liberum Capital said. The broker added that the deal means Centrica is on track to double its North American profit in the medium term. Liberum's Peter Atherton rated the group a buy but said he needed "more financial information" before deciding on the value of the deal.

The outgoing BT boss and incoming trade minister Lord Livingston has sold more than a million shares that vested under a bonus plan and the telecoms giant ticked up 5.5p to 342.1p.

Barclays confirmed a £5.8bn rights issue and was the worst performer among the blue chips for a second day. The bank was down 17.75p to 291.3p.

Telecoms giant Vodafone confirmed its planned takeover offer for Kabel Deutschland and analysts at Citi said they "still see a 65 per cent chance" of a deal with its US partner Verizon in the next year. Vodafone rose 0.7p to 195.1p.

On the mid-cap index, the bank International Personal Finance reported a record first-half profit and a share buyback and it gained 82p to 647p.

The set-top box maker Pace said profit in the first half more than tripled and it produced a 33.2p gain to 310.9p.

First-half results at the coal-fired power producer Drax were in line with expectations and it rose 8p to 639.5p.

The small-cap luxury car dealership HR Owen confirmed it has rejected a bid from the Philippines investment group Berjaya. The shares reversed 1.5p to 137.5p.

AIM-listed Conroy Gold and Natural Resources was 0.175p better at 2.07p on positive test results.

The oil and gas wellhead specialist Plexus Holdings said its full-year results will be ahead of expectations and it jetted 21.5p to 245p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
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

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent