Blue-chip firms deliver their final verdict on 2020
A YEAR most investors would rather forget was laid bare today when a flood of blue-chip companies delivered their final verdict on 2020 in all its painful detail.
Aside from the inevitable earnings and dividend hits from the pandemic, the message from blue-chip companies was largely positive as they plot their recoveries in 2021.
Nowhere is this more in evidence than in the mining sector, where hopes are building for the start of a new commodities supercycle triggered by a robust economic rebound.
With copper and iron ore prices at multi-year highs, Anglo American was today the latest in the sector to announce a big jump in its dividend.
Its shares jumped 5% after revenues of more than 30 billion US dollar beat City estimates, despite the impact of the pandemic on its production operations in South Africa. Sales volumes for its diamond business De Beers initially slumped by as much as 45% before a significant turnaround as confidence returned towards the end of 2020.
Anglo shares today reached their highest level since 2011 at 2,964p, having been just above 1,000p less than a year ago. Other commodity stocks were also sharply higher, helping the FTSE 100 to rise 41.85 points to 6,700.58.
Packaging group DS Smith was the biggest riser, lifting 7% or 26p to 410p, amid speculation that it is in the takeover sights of rival Mondi. Valuations in the sector have soared in recent months amid the e-commerce boom.
Other top flight risers included RollsRoyce, which rose 3.85p to 115.75p as confidence revives on hopes that engine flying hours will dramatically improve from the summer.
Among other companies reporting annual results today, BAE Systems added 6.8p to 502.8p after it forecast sales growth of between 3% and 5% this year. It also paid the dividend it deferred from last year due to the pandemic.