Market Report: Talk of SFO inquiry hits Kazakh miner

Kazakh mining giant Eurasian Natural Resources Corporation is no stranger to controversy following a series of corporate governance issues, but news that the Serious Fraud Office could be considering a formal criminal inquiry left the miner buried at the bottom of the benchmark index.

Earlier this month the group parted company with law firm Dechert which it had hired to run its internal inquiry into potential corruption in its Kazakh and controversial Congo businesses.

But it emerged that the SFO has sent a section 2a notice to the legal firm concerning the investigation. The notice means the SFO can demand information at a "pre-investigation stage" when it suspects overseas bribery and corruption.

There is no indication yet that the SFO will pursue a formal inquiry but punters took fright at the suggestion.

ENRC has had a rotten April – the shares are down 30 per cent since the start of the month. Opportunistic investors lifted the shares a tad last week but these bottom fishers were left adrift when the shares declined 10.4p to 229.8p.

In February the group was the subject of takeover rumours with traders speculating that a bid was being lined up by a private European billionaire.

The rumours followed speculation that a bid from one of ENRC's joint founders – Alijan Ibragimov – had recently been rejected. Mr Ibragimov owns close to 15 per cent of the group. Its major investor, with a 26 per cent stake, is fellow miner Kazakhmys, which had also been indicated as a potential buyer.

The Kazakh government owns more than 26 per cent of Kazakhmys and would have to agree any deal. For now the takeover rumours have subsided.

After four days in the red the FTSE 100 began the day in positive territory with no new bad news to rattle investors. But during the afternoon, once the US had opened in the red, London looked less confident. The FTSE 100 couldn't hang on to its earlier gains and slipped into negative territory for a fifth day, dropping 0.54 points to 6243.67.

Michael Hewson, a senior market analyst at CMC Markets, said: "Equity markets started to roll over on vague chatter that a French bank might be in trouble and this sent banking stocks sharply lower."

Royal Bank of Scotland suffered at the hands of the rumour and closed 9.3p down at 273.95p, while Lloyds lost 1.14p to 47.085p.

Pharmaceuticals giant GlaxoSmithKline got the thumbs up for its lung-disease drug when advisers to the US Food and Drug Administration gave their backing for its experimental treatment Breo Ellipta. The FDA will decide whether to give full approval by 12 May.

As a result, Glaxo's shares were looking healthy at an 11-year high, but analysts still think it is a good time to buy into the pharmaceutical group.

Analysts at Deutsche Bank raised their target price to 1,620p, while Kepler, rating the stock a buy, gave it a 1,770p price target. The shares were 51p better at 1,658p.

Oil group Tullow Oil recovered some of its falls. A dry well in French Guiana was the cause of its drop on Wednesday, but analysts at Société Générale said the 21 per cent fall in the share price this month creates a buying opportunity and gave it a 1,200p price target. The shares jetted 41.5p to 1,024p – to top the blue chips.

Car and aerospace engineer GKN, which makes parts for several vehicles including Ford Cougars, pictured, reported a 4 per cent fall in revenues, but analysts at Investec said that the group's margins were up and it "remains an attractively rated stock." The shares drove up 6.3p to 252p.

Mid-cap oil and gas explorer Soco International released some good news from its TGT field and the shares spurted 3.4p to 371.9p. The wooden spoon went to coal miner New World Resources. It has scrapped its full-year guidance as coal prices continue to hit the struggling central European group. The shares slumped 22.1p to 164.9p.

On Aim, shares in Europa Oil & Gas gushed up 1.5p to 9.62p after it announced plans for a farm out with Kosmos Energy for its prospect offshore of Ireland.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before