Centamin loses its lustre amid delay to gold mine in Egypt
GOLD miner Centamin took a dive yesterday after it delayed some open-pit operations at its key Sukari mine in Egypt for safety reasons, sending shares plunging more than a fifth.
The London-listed company has been forced to cut its production forecast after it postponed the mine’s opening, which was originally scheduled for the last quarter of this year.
“While the precise impact has yet to be fully determined, the company’s preliminary estimate is that production for the fourth quarter will be reduced to circa 70,000 ounces,” Centamin said. That compares with the 120,000 ounces the miner produced in the third quarter. The shares closed down 44.6p at 156.6p.
It was a similarly bleak day for shares in RollsRoyce, which hit a 17-year low. The jet engine maker said it would need to issue £2bn in new shares, through a rights issue, a £1bn bond issue and potentially a further £2bn in loans. Rolls sank 3.2p to 113.6p, one of the biggest fallers on the FTSE 100.
Meanwhile, British Airways owner IAG shed 2.3p to 91.5p after it announced the results of its €2.7bn (£2.5bn) capital increase, having said on Thursday that it sold all the new shares in its plan to help strengthen its finances after the coronavirus pandemic has battered passenger numbers amid travel restrictions.
Elsewhere, the announcement that US president Donald Trump and his wife Melania had tested positive for coronavirus – five weeks before the presidential election – rattled markets across Asia and Europe.
“Tonight, [the First Lady] and I tested positive for Covid-19,” he wrote on Twitter. “We will begin our quarantine and recovery process immediately. We will get through this together!”
Trevor Greetham, at Royal London Asset Management, said the news added “an extra layer of uncertainty to an already uncertain situation”.
“Some say a Trump second term would be good for stocks as he is more prone to cut taxes, while others would rather see the back of his erratic policy making and tendency to ramp up trade tensions,” Mr Greetham said.
“Where everyone agrees is that a close and contested outcome with a drawn out period of rancour and instability would be bad news for markets. If anything the president’s illness makes that more likely.”
The diagnosis sent oil prices to a four-month low, rounding off a choppy fortnight for the commodity.
Already stalked by fears of a fresh supply glut and the political standoff in Washington over a potential $2.2 trillion coronavirus relief package, Brent crude fell nearly 5pc to $38.79, before recovering slightly. The US benchmark WTI fell by as much as 5pc to $36.63.
John Kilduff, partner at Again Capital in New York, said the pandemic had “weighed more on the oil market than any other asset class”.
None the less, the FTSE 100 shook off the shock and closed up 0.4pc, having shed as much as 1.2pc during the session, taking weekly gains to 1pc after a fortnight of losses.
Joshua Mahony, senior market analyst at IG, said traders were more levelheaded when they found out Mr Trump may only suffer a mild form of the virus, adding that “the progression of his condition will likely provide another key element for traders to track over the coming week”.