Gold miner loses its shine as another boss bows out
GOLD companies, as a general rule, benefit from turmoil on global stock markets.
In times of trouble, miners of the yellow metal can be found hovering at the top of the FTSE 100 and 250, boosted by rises in the gold price, as investors look for somewhere safe to put their money.
But higher commodity prices are not the only thing a company needs to perform well.
Shares in mid-cap Egyptian gold miner Centamin tumbled 9.9pc, or 12.35p, to 112.75p, after its boss Andrew Pardey handed in his 12 months’ notice after four years in the role, and said production over the first nine months of the year had been lower than expected.
Centamin blamed problems with its operations, such as changes to the team working at its main Sukari mine, for the fall.
With yet another boss deciding now is the time to bow out – following Dave Lewis at Tesco (down 1.5pc, or 3.7p, to 236.3p), Martin Gilbert at Standard Life Aberdeen (down 1.2pc, or 3.3p, to 269.3p), Vernon Hill at Metro Bank and Alison Cooper at Imperial Brands – CMC Markets (up 7.7pc, or 8.2p, at 114.2p) analyst Michael Hewson may be right when he says there’s ‘ something in the water’ this week.
The FTSE 100 shed another 0.63pc, or 44.90 points, to close at 7077.64 and the mid-cap FTSE 250 fell 0.66pc, or 128.75 points, to 19348.16, after IHS Markit data indicated the UK may be heading towards a recession.
The Footsie was also dragged deeper into the red as a clutch of stocks went ex- dividend. This means anybody who bought shares from yesterday would not be entitled to receive its next payout to shareholders. Affected were B&Q- owner Kingfisher (down 3.5pc, or 6.9p, to 189.05p), British
American Tobacco (down 3.7pc, or 108p, to 2789p), Taylor Wimpey (3.2pc lower, or 5p, to 150.65p),
WPP ( down 2.4pc, or 24p, to 959.2p) and British Land (down 1pc, or 5.8p, to 554.4p). Ex- dividend dates are always scheduled to occur on Thursdays.
Johnnie Walker-maker Diageo was a bright spot among the blue-chips.
The world’s largest whisky producer rose 1.9pc, or 60.5p, to 3279p after 25pc US trade tariffs slapped on Scotch were lower than traders had feared. And the London Stock Exchange
Group rose 2.3pc, or 160p, to 7168p, after it was upgraded to ‘reduce’ by analysts at Commerzbank.
Wagamama and Frankie & Benny’s-owner The Restaurant Group took a battering, however, after analysts at Liberum trimmed its target price from 170p to 150p.
Its shares tumbled 7.7pc, or 10.8p, closing at 129p, after brokers said there were still too many casual dining restaurants and the outlook for legacy brands ‘ looks bleak’, with around half of all branches at risk. Stagecoach inched up 1pc, or 1.3p, to 133p, as it confirmed it will take the Government to court early next year following its decision to ban the rail and bus operator from three rail franchises.
In a trading update, it said its bus division in London had a strong summer and it will cut off a share buyback programme when it has bought £30m worth of shares. It previously said it would buy up to £60m.
Metro Bank initially made gains in the wake of an announcement on Wednesday that it was raising fresh funds and that chairman Hill will leave the board by the end of the year.
But the charm had worn off by the close of play, with shares sinking 15.2pc, or 34.6p, to 193.4p, meaning they have fallen 89pc so far in 2019. Imperial Brands was trading 0.6pc higher, up 10p, to 1840p, after Cooper’s surprise departure announcement.