Market Report: Short squeeze at miner Kazakhmys pushes stock up
Friday 28 February 2014
Restructuring plans and a short squeeze at miner Kazakhmys pushed the stock up nearly 39 per cent yesterday.
The FTSE 250-listed copper miner plans to spin off some of its mines to focus on the most profitable. But hedge funds shorting the stock – borrowing shares and hoping the share price will fall – have been squeezed and the rocketing share price was forced higher by those investors trying to cover their positions. The biggest shareholder, former chairman Vladimir Kim, yesterday said he would personally buy its mature, high-cost deep mines that have been a drag on profitability and Kazakhmys will be left owning only the efficient open cast mines.
Kazakhmys finished the day up 86.6p – or 38.7 per cent – to 310p.
The wider market spent most of the day in the red as traders were concerned with Ukraine. But the FTSE 100 picked up towards the close and finished ahead 11.12 points to 6810.27.
Retail analyst Kate Calvert at Investec maintained her gloomy stance on department store group Debenhams and rated it a sell as this year is forecast to be the fourth "of profit decline". She expects management to come up with a new strategy at its half-year results next month but a focus on "product quality and… fewer promotions" will hit mid-term profit and it eased 0.8p to 73.7p.
Jupiter Fund Management revealed record assets under management of £31.7bn and Numis predicted the move by retail investors into equities – a "structural growth opportunity in the retail savings market" – is an opportunity for Jupiter. It reported a strong 2013 with pre-tax profit up 55 per cent to £114.1m and it jumped more than 7 per cent – up 32p to 434p.
Online electrical retailer AO World surged 33 per cent on its first day of trading but fell back slightly, down 11p to 367p.
Aim-listed pawnbroker H&T Group said pre-tax profit fell 60.6 per cent to £6.7m but the outlook has improved and shares ticked up 4p to 181.5p.
Surveillance specialist Digital Barriers issued a profit warning because of product delays and it tumbled 26.5p to 115p.
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