Market Report: Shine comes off Egyptian gold miner Centamin
Wednesday 26 February 2014
The shine came off Egyptian miner Centamin yesterday after just one day as a gilded stock.
The gold miner jumped more than 7 per cent on Monday on news that Egypt has drafted legislation to bar third parties from challenging contracts such as Centamin's licence at its Sukari mine in the country.
The news sent the shares to the highest they have been since March last year. But just as things looked brighter, punters took profits as Peel Hunt's experts downgraded the miner to hold.
It fell back nearly 7 per cent yesterday and Peel said: "Whilst we remain of the view that the ultimate outcome of the [Sukari licence challenge] court case will be positive for Centamin, we have not seen any material changes in the risk profile." Peel Hunt gave it an 87p price target and Centamin fell 4p to 53.8p, bottom of the FTSE 250.
The wider market was in the red and the Footsie couldn't hold on to yesterday's 14-year high. The FTSE 100 slipped 35.36 points to 6,830 after worries about debt in China. Miners bore the brunt of the tumbling market. The Mexican digger Fresnillo lost 30p to 967.5p and Rio Tinto fell 97.5p to 3,439p.
The Irish construction-supplies expert CRH reported earnings ahead of City forecasts at €1.48bn (£1.22bn) and said 2014 will be a year of profit growth as a pick-up in the US helped. The shares accordingly soared to the top of the table, up 104p to 1,788p.
On the other hand, GKN which supplies car parts, reported a 17 per cent rise in annual profits, but was shot down to the bottom of the blue-chip index as shareholders were spooked by analysts' concerns about the engineer's outlook.
GKN shares are up 60 per cent in the past 12 months but Jefferies said: "The full-year 2014 outlook may not be enough to add momentum to the equity story." GKN shares swerved and dropped 4.2p to 410.7p.
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