Mexican mine crackdown digs Fresnillo into a hole

Metals mining giant Fresnillo sent the Ftse 100 into a downward spiral, after analysts at Morgan stanley sparked fear among investors.

a law proposed in Mexico to protect indigenous people from miners could make business much harder, Morgan stanley said.

Companies which operate in Mexico have already come under pressure over the last week, as leftist president-elect andres Manuel lopez Obrador scrapped an airport for the capital.

But Morgan stanley’s analysts said that since the election in July, 11 bills have been proposed which could affect the mining industry.

analyst Dan shaw said that Fresnillo’s earnings per share – how much of the company’s profit is allocated to each share – could fall as much as 11pc.

One particularly troubling bill for Fresnillo would give the state the right to take back land granted to miners, if their activities create a negative social impact. the bill would also require consent from indigenous communities before concessions can even be granted, and require miners to set up a fund for development in the communities they work in.

though Morgan stanley said there was no reason to believe Fresnillo would fall foul of these measures, they add uncertainty to the mining environment.

Fresnillo’s shares tumbled by 12.1pc, or 110.2p, to 802.4p. that added to the drag on the

FTSE 100, which ended the day down by 1.3pc, or 89.92 points, at 6960.32 points.

sterling’s rally, up to $1.288 from $1.278, also pulled the index down – the pound and the Ftse 100 tend to move in opposite directions, as blue-chip companies make much of their money abroad in foreign currencies.

On the Fste 250, industrial valve company Rotork took a dive after admitting its orders in the third quarter were slightly lower than expected.

It makes actuators that sit alongside valves on oil, gas and water pipes to turn them on and off, and said order intake dipped by 4pc compared to the same time last year.

Revenue, however, was still up 8.4pc. Its financial performance is still expected to be on track for the year, but investors were nervous and shares dipped 9.1pc, or 25.8p, to 258.2p.

shopping centre owner Intu was another poor performer, as shareholders grew more impatient over a potential £2.9bn takeover.

a group of bidders hoping to buy the business, including property investors Peel Group, Olayan Group and Brookfield Property Group, requested a second extension to the bid deadline. Intu said the bidders’ checks into the company are largely complete.

But the bidders, who were due to make a decision on November 15 as to whether they would make a firm offer or not, have pushed the deadline to the end of the month. Intu’s shares sank 3.6pc, or 6.95p, to 188.5p.

Hill & Smith, which creates the metalwork used on road signs, hinted a recovery was on the horizon. Bad weather and delays to road projects prompted a profit warning in august, but from July to October revenue picked up by 5pc. It is ‘encouraged’ that the Government is increasing investment in roads to £25.3bn between 2020 and 2025. shares ticked up by 3.3pc, or 37p, to 1157p.

Marketing company Ebiquity sank as it said profit for the year would be materially below expectations. It blamed a slowdown in its advertising intelligence division, which analyses how effective businesses’ adverts are, and delays in pulling in new media clients in Germany. shares dropped 19.7pc, or 13p, to 53p.