Market Report: Kazakhmys quiet on fate of ENRC stake
Thursday 28 February 2013
A 23-page trading update from Kazakhmys contained a mine of information, but the burning question that every City trader wanted to know was left unanswered. What will happen with Kazakhmys's stake in rival miner Eurasian Natural Resources Corporation?
The copper miner Kazakhmys, the single largest investor in ENRC with 26 per cent, said it would write down the value of the holding to close to the market value, implying an impairment of at least $1.5bn. It said that the value dropped to $1.55bn at the end of 2012 from $3.29bn at the end of 2011.
Its chief executive Oleg Novachuk's only comment on the subject was: "We are open to all possible options. As soon as we see an opportunity, we will use it, but currently it is difficult to see what will be the next step."
The Kazakhstan-focused miners have been surrounded by bid rumours for months. Despite a lack of news on the stake sale front, there was plenty of other detail for investors to study.
Kazakhmys's full-year profits dropped by more than 30 per cent to $1.36bn (£899m) because of weak prices and rising costs. Revenues fell 5.9 per cent to $3.35bn as the price of copper declined by 10 per cent over the year.
As expected, billionaire Vladimir Kim – Kazakhstan's richest man – stood down as chairman, and the former London Metal Exchange boss Simon Heale has come on board. But he was welcomed with a tumbling share price. As the biggest fallers in the benchmark index, the shares lost 58p to 619p.
Kazakhmys's decision on the future of its stake is a key issue for the miner, which is seeking to increase its free float to comply with London regulations. ENRC's shares dipped 8.6p to 338.4p.
At the other end of the spectrum, Kazakh's AIM tiddler Sunkar Resources updated the market with a detailed feasibility study on its Chilisai phosphate project in the country and the shares rocketed 9.62p to 13.75p.
Back on the FTSE 100 index, and joining Kazakhmys at the bottom of the table was Royal Bank of Scotland, down 22.9p to 323.9p as its £5.1bn full-year loss was more than analysts expected.
The index managed to hang on to the gains, and added another 34.9 points to 6,360.81.
City scribblers thought National Express was travelling in the right direction after its 2012 results, and the shares journeyed to the top of the mid-cap index, up 24.7p to 220p.
Howden Joinery results were also solid and it raised its dividend to 3p, which accompanied a share-price rise of 23.6p to 214p. Final results at the hedge fund Man Group were ahead of market expectations, but the performance on asset growth is a big worry for investors, and the shares declined 2.7p to 100.3p.
Nigel Wray, chairman of Saracens Rugby Union Club, decided to sell another slice of his shareholding in the pizza maker Domino's. He offloaded 5.6 million shares at 518p, reducing his stake to just under 3 per cent. He sold around £22m of shares last year. Stephen Hemsley, non-executive chairman, disposed of 1.1 million shares. Domino's share price topped up with another 18p to 537p.
Investors continued their demolition job on the small-cap steel contractor Severfield-Rowen's share price as it launched a £48m rights issue. Britain's biggest structural steel group has gone cap-in-hand to shareholders to raise £50m to put it on a firmer footing after a series of contract cost overruns damaged profits.
The contractor has been hit by £20m of cost overruns – British Land's Cheesegrater in Leadenhall Street was one of eight problem contracts that emerged last month when the chief executive Tom Haughey was ousted. But analysts think its £209m order book "remains robust". Jefferies' Andy Douglas rates the group a "hold" with a 107p price target.
Details of the rights issue and its full-year results today sent the share price south, down 3.5p to 68p.
Over on AIM, the cake maker Finsbury Food sold its Free From business to Edinburgh-based Genius Foods, founded in 2009 to specialise in gluten-free baked goods. Finsbury shares packed in a 7.5p rise to 51p.
The AIM tiddler Central Rand Gold completed a positive scoping study on its Crown West mining project, and the South African gold miner's shares glinted up 0.06p to 0.58p.
- 1 Scotland independence vote: Everything you ever wanted to know about life after the result
- 2 Lego breaks out of the toy box and heads for the gallery
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
- 5 Tyler, The Creator says having the new U2 album automatically downloaded on his iPhone was 'like waking up with herpes'
David Haines remembered: Death of British hostage executed by Isis lamented from the Balkans to Sudan
Jennifer Lawrence and Kate Upton nude pictures exhibition cancelled after artist concedes photos were 'stolen property'
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
Jennifer Lawrence to make public appearance after nude photo hacking scandal as Met Gala Ball 2015 co-host
Daniele Watts: Django Unchained actress detained in Los Angeles after being mistaken for a prostitute
George Galloway on Scottish independence: The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Scottish independence: Britain faces 'constitutional crisis' at next election
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...