Punters mine First Quantum
ALTHOUGH also listed in London, the highly speculative Toronto exchange in Canada is where the real action takes place as far as First Quantum Minerals is concerned.
Shares of the second largest copper and nickel group in Canada jumped 5pc to C$18.15 amid growing speculation that it is on the shopping lists of several acquisitive mining groups, including Rio Tinto, China’s Sinopec and Glencore International.
The market ignored its 11.5p loss to 1178.5p in London, noting that punters had dealt heavily in Canada on talk that First Quantum’s board could soon be called upon to defend a bid approach north of C$30 a share.
First Quantum last month reported its eighth consecutive earnings miss due to a 3pc decline in copper sales.
Back in January ENRC agreed to pay $1.25bn to First Quantum in order to settle an acrimonious dispute over rights to copper mining in the Democratic Republic of Congo.
Dealers said that should the proposed £57bn merger between Glencore (12p easier at 389.4p) and Xstrata (26p off at 1074p) eventually go through, the enlarged group would be particularly keen on swallowing First Quantum as it would bulk up its presence in Central African copper.
Silver miner Fresnillo led the mining retreat elsewhere with a fall of 138p to 1533p. Rio Tinto shed 124p to 3406.5p, while Vedanta Resources cheapened 18p to 1210p.
The day began badly for blue chips and got steadily worse. The Fed’s March meeting revealed that the chances of a much hoped for third phase of quantitative easing had waned considerably and so with the end of the tax year upon them, fund managers exited stage right.
The Footsie fell 134.57 points more to 5,703.77, while the FTSE 250 was 286.32 points lower at 11,352.45. Wall Street slumped 124.80 points to 13,074.75, disappointed that the Fed had pushed QE3 to the back of its agenda. News that private US employers added 209,000 jobs in March was ignored.
High yielding hedge fund Man Group lost 7.3p to 122.8p.
India-focused integrated energy company Essar Energy declined 8.7p to 152p after announcing its subsidiary Essar Oil has been informed that the Supreme Court of India has disallowed the company’s review petition in relation to deferred sales tax. Essar said it has no new impact on its business.
Chief executive Lord Wolfson’s sale of a 7.3pc stake in Next at 3060p a pop didn’t go down at all well and shares of the fashion retailer closed a ragged 123p down at 2937p.
Rival Marks & Spencer was dragged 13.8p lower to 370p in sympathy. Barcap also lowered its target price to 345p. M&S shareholders will be hoping that the start last night of a new advertising campaign featuring Take That’s Gary Barlow singing Here Comes The Sun will strike the right note with consumers and lead to an increase in sales.
Continuing fears that trading at its troubled Argos catalogue chain is deteriorating left Home Retail 8.5p down at 109.4p. Kesa Electricals, in which activist shareholder Knight Vinke holds 20.3pc of the equity, lost 4.65p to 63.55p.
Oil equipment services group Kentz collapsed 35.2p to 437.8p after announcing the placing of 12m shares, or 10.31pc of its equity.
Broker Investec was given the task to place the stock by Kerbet Ltd, which is represented by Tan Sri Mohd Razali Abdul Rahman and Hassan Abas who are both nonexecutive directors of Kentz. The sale will leave Kerbet still holding 16.22pc.
Malcolm Graham-wood at broker VSA Capital is a fan of Kentz. He says apart from the remaining overhang he believes the outlook for Kentz to be exceptional and maybe the placing can kick- start the share price which has been uninspiring in the last year.
Logica lost 7.4p to 91.4p after announcing the departure of Seamus Keating as head of the Benelux region and also as group chief operating officer. Keating was chief financial officer of the group from
2002 to 2010 and was parachuted in to sort out the Benelux business at the end of 2010. Benelux reported its worst performance ever in 2011. Say no more.
Merchant Securities is a seller and says market concerns may now grow that Keating’s departure suggests problems in the Benelux are intractable.
Buying on the back of a promising pre-close trading update helped BTG add 8.8p at 347.1p. Full year revenues are expected to be substantially ahead of analysts’ forecasts at between £190-195m. Nomura Code expects year- end cash should be in the region of £100m and its fair valuation is 390p. ÷ PLACED on AIM today by broker Daniel Stewart at 124p, Naibu should make a brisk start. It is the 10th largest sportswear brand in China. Founded in 2002 by Huoyan Lin, the firm designs, manufactures and supplies Naibu branded sports shoes, clothing and accessories. Its orange coloured product label is apparently well known around the world. Last week’s Chinese flotation Rare Earths Global closed at 642.5p (down 20p) after a placing at 247p.