Analysts take shine off FTSE diamond miners
THE diamond market has lost its sparkle. At least that’s the conclusion of the London analysts of German bank Berenberg who visited the industry’s focal point of Antwerp, where stones are cut and polished.
‘Sentiment is mixed, with rough diamond prices starting the year on a relatively lacklustre note, but at least remaining stable, rather than weakening,’ Berenberg said.
Returning from the Belgian city, analyst Richard Hatch and the team have taken out the red pen.
Gem Diamonds, up 0.1pc, or 0.1p, to 93.1p, was downgraded to a ‘Hold’ from a ‘Buy’. There were tweaks down to share price targets for Petra Diamonds and Firestone Diamonds. The latter is rated a ‘Sell’ by Berenberg. ‘Current cash flow generation leaves little upside for shareholders, with debt holders taking the bulk of the value,’ it said of Firestone.
In other broker action, there was some support for Pets At Home, formerly one of the most shorted stocks on the market, as Citi switched its recommendation on the retailer to ‘Buy’ from ‘Neutral’ saying it had a viable plan to turn around the business. The shares rose 3.2pc, or 4.9p, to 160.5p; however, the American investment bank reckons Pets is worth 180p.
The FTSE 100 briefly nudged into positive territory, but with no great conviction as it reversed 2.10 points down at 7194.19, with Brexit uncertainty keeping a lid on any irrational exuberance. Among the blue chips, Imperial
Brands’ revelation that annual earnings were likely to be at the upper end of City forecasts failed to register, as stock in the cigarette maker fell 0.5pc, or 13.5p, to 2560p. M&C Saatchi shares – up 32pc in the year to date – fell 3.6pc, or 14p, to 378p in the wake of a solid set of prelims which revealed profits had advanced 16pc to £32.2m.
Another mid-cap faller was antivirus software group Avast, which sank 4.5pc, or 13.3p, to 283.5p after shareholder Sybil Holdings sold 95.4m shares, or around 10pc of the company, for £271m. Among the small caps, Mirriad
Advertising fell 34.2pc, or 3.25p, to 6.25p after it unveiled restructuring plans, concluding its previous strategy was flawed. Software firm
Cloudcall was not far behind in the losers’ stakes with a wider annual loss due to increased investment despite a double-digit rise in revenue. The shares tumbled 16.8pc, or 17.5p, to 86.5p. Social media content creator
Brave Bison looked more like a wounded buffalo as it failed to register a profit last year. Shares dropped 17.7pc, or 0.6p, to 2.8p. A poor performance also cut into crypto-currency project developer
Online Blockchain, which saw its shares sink 13.6pc, or 3p, to 19p after its half-year losses grew to £276,000 from £188,000 a year ago.
UK Oil & Gas fell 5.8pc, or 0.07p, to 1.13p after it issued stock to raise £3.5m. The fresh cash will be splashed on new projects. It will be interesting to see what the management comes up with.
Quadrise Fuels jumped 4.2pc, or 0.14p, to 3.38p after it agreed to partner with bitumen products maker Bitumina Group to look for opportunities to use its MSAR synthetic fuel.
Five acquisitions helped shares in gas and electricity consultant
Inspired Energy surge 5pc, or 0.88p, to 18.25p as the additions helped its 2018 revenues rise by nearly a quarter.
Finally, toilet roll maker Accrol recovered from an initial plunge on the back of an investigation into its accounts by the Financial Conduct Authority, ending 4.8pc, or 1p, higher at 22p.