Zimbabwe troubles see investors dump Aquarius

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The Independent Online

It would be fair to say that the City is not exactly comfortable with Aquarius Platinum's operations in Zimbabwe. Yesterday, for the second time in less than two months, investors were abandoning the mid-tier digger after being spooked by political involvement in the country's mining industry.

Earlier in the year, Aquarius' joint venture, Mimosa Holdings, was involved in a struggle with officials over a controversial law that requires 51 per cent of foreign miners to be owned by local Zimbabweans.

While that issue appears to have been sorted, yesterday came an order from Zimbabwe's mine ministry that more than 450 mining companies must submit new applications for exploration rights.

Although Aquarius responded by saying that "to the best of its knowledge" the company's operations would not be affected by the announcement, this did not stop it crashing as low as 124.6p. The stock did manage to mount a small recovery by the bell, yet it still finished 6.3p weaker at 129.5p – its lowest share price since 2008.

Coincidentally, the latest developments came on the same day that Citigroup warned Aquarius was "far too reliant on the Zimbabwe operations", which provides more than a fifth of its output.

"Any further deterioration in the political situation there... could be a big problem for the company," added analysts from the broker, rather presciently.

While strong retail sales figures from across the pond helped the FTSE 100 rise 14.49 points to 5,666.28, continued fears over the eurozone meant the mood was hardly bullish ahead of Spanish debt auctions today and Thursday.

Both of the state-owned banks closed deep in the red, with Royal Bank of Scotland slumping 0.78p to 24.27p, while Lloyds shifted down 1.05p to 29.71p. The latter dropped amid rising fears Co-op will walk away from negotiations to buy 632 of the bank's branches.

Man Group continued its torrid run after JP Morgan's scribblers slashed their estimates for the world's largest listed hedge fund, blaming the performance of its flagship AHL fund. In response, Man dipped 4.9p to 105.1p, meaning it has shed more than 30 per cent since March.

Following Sir Richard Branson's attack over the weekend on its takeover of bmi, with Virgin Atlantic appealing the European Commission's decision to approve the deal, IAG slipped 3.7p to 171.4p. Also weighing on the British Airways-owner was the warning from its Iberia business that pilots' strikes may put the future of the Spanish airline at risk.

Apple-supplier Arm Holdings climbed 10.5p to 599p in the wake of Chinese reports claiming companies have been tasked with putting together the iPad Mini, the existence of which has yet to be confirmed.

The day's top riser, however, was International Power , which jumped 12.9p to 416.8p after France's GDF Suez bowed to pressure by increasing its offer for the 30 per cent of the power generator it does not already own to 418p a share.

Down on the FTSE 250, meanwhile, Moneysupermarket.com's rise of 5.8p to 134.5p was accompanied by revived rumours that the price-comparison website could become a takeover target. Speculation claimed an unnamed US company may be interested, although traders were not too impressed by the chatter, which suggested a possible price of 175p a share.

The group also had its rating upgraded by Canaccord Genuity's Simon Davies to "buy" ahead of tomorrow's first-quarter update, with the bullish scribe raising hopes that it will announce another special dividend.

Less than a fortnight after agreeing to snap up Agora Oil & Gas, Cairn Energy was already benefiting from the deal thanks to the news that the Norwegian explorer had struck oil off the shore of the country.

There have been suggestions in the City that the Agora acquisition is priced towards the more expensive end of the scale, but these concerns will have been dampened somewhat by the find, which some were estimating could be worth up to 20p a share. Agora also revealed it was plugging and abandoning a well in the North Sea, but that did not stop Cairn racing up 7p to 327p.

ViaLogy was in a boastful mood as the AIM-listed software firm claimed its technology had helped a US client with a successful oil drill. With the tiddler also saying it will soon comment publicly on contract talks with a number of energy "majors", it shot up 0.5p to 3.12p in response.

Oxford BioMedica perked up by 41.12 per cent to 5.8p on the successful completion of a study of its Parkinson's disease drug ProSavin.

Meanwhile, Berkeley Mineral Resources rose 0.1p to 4.32p after claiming the lead and zinc estimated to be in its Kabwe mine would be worth $1.4bn (£881.4m) at current prices, leading to some arguing the company was undervalued.

FTSE 100 Risers

* Croda International 2,190p(up 58p, 2.72 per cent) Chemicals company is recommended to investors by scribblers from Berenberg Bank ahead of the release of its first-quarter results.

* Aberdeen Asset Management 268.8p (up 4.9p, 1.86 per cent)Fund manager climbs after its position as JP Morgan Cazenove analysts' favourite stock in the sector is reiterated.

FTSE 100 Fallers

* Aviva 298.3p (down 7.4p,2.42 per cent) With the insurer falling again as investors shun financial stocks, its share price has now managed to slide more than 20 per cent in roughly four weeks.

* Vedanta Resources 1162p(down 24p, 2.02 per cent) Digger one of a number in the sector to drop despite getting positive broker support from both JP Morgan Cazenove and Citigroup.

FTSE 250 Risers

* Mondi 556.5p (up 6p, 1.09 per cent) Jefferies says the packaging group is "a potential acquisition target", pointing out its "strategically attractive assets, a sector leading ROCE and a strong financial position".

* London Stock Exchange 1,046p (up 11p, 1.06 per cent) Bourse climbs after getting a boost from RBC's scribblers, who raise their target price to 1,300p from 1,150p and keep their "outperform" recommendation.

FTSE 250 Fallers

* Centamin 63.05p (down 3.2p, 4.83 per cent) Egypt-focused gold miner finishes as one of the worst performers on the mid-tier index as Citigroup reduces its target price from 99p to 87p.

* Elementis 197.5p (down 7.3p, 3.56 per cent) Chemicals company is knocked back by analysts from Numis Securities deciding to downgrade their recommendation from "buy" to "hold".

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