News Column

UK WINNERS & LOSERS: Metminco Shares Up 14% But It Doesn't Know Why

July 7, 2014

James Kemp



LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Monday.

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FTSE 100 - WINNERS

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Weir Group, up 2.2%. The engineering company is the biggest riser in the FTSE 100 after Citigroup upgraded its recommendation on the stock to Buy from Neutral, increasing its price target 19% to 3,100 pence from 2,600p.

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FTSE 100 - LOSERS

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Tullow Oil, down 1%. The oil and gas exploration company's shares are among the biggest fallers in the blue-chip index after AIM All-Share index-listed Faroe Petroleum said the Butch South West exploration well 8/10-6S in the Norwegian North Sea has drilled to its target depth, finding a good quality reservoir but without any hydrocarbons. Faroe said that Butch South West exploration well will now be plugged and abandoned, meaning that both the eastern and south western flanks of the Butch Main oil discovery have failed to add further resources. The Butch licence is owned and operated byCentrica, which has a 40% stake, while Faroe has a 15% stake, Tullow Oil Norge AS, a subsidiary of Tullow Oil , also has a 15% stake, and Suncor Norge AS holds the other 30%. Centrica and Faroe Petroleum are both trading close to flat.



SABMiller, down 1%. The brewing giant said it could sell all its 39.6% stake in gaming, hotel and entertainment group Tsogo Sun Holdings Ltd, disposing of a business it no longer considers part of its main portfolio and using the funds to invest in its remaining businesses. SABMIller said it will sell up to the whole holding, valued at about ZAR11.7 billion, or about USD1.09 billion, by selling 305 million shares in a secondary placing into the market, and through a deal whereby Tsogo Sun will buy back about 130 million shares for ZAR2.8 billion or about USD260 million.

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FTSE 250 - WINNERS

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Balfour Beatty, up 0.9%. Berenberg has lowered its price target on Balfour Beatty to 280 pence, from 290p, after the construction and infrastructure company said last week that trading has worsened in the mechanical and electrical engineering part of its UK construction business. However, the bank has reiterated its Buy recommendation on the stock, based on its cheap valuation and its potential for a significant recovery. Encourgingly, "there is a good chance the company is nearing the end of the problems," says Chris Moore, an analyst at Berenberg.

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FTSE 250 - LOSERS

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Taylor Wimpey, down 1.8%. The housebuilder is one of the heaviest fallers in the mid-cap index, even though it has echoed its peers by citing recovery in the UK housing market for a strong first half of 2014, with sales and pricing at the upper end of its expectations. All of the UK's major housebuilders have reported an accelerating recovery in the UK housing market through 2013 and into this year, particularly in the southeast of England, where Taylor Wimpey has high exposure. However, the market is becoming increasingly used to this type of update from the housebuilders, with much of the UK housing recovery already priced in. "We really need expansion and margin-led upgrades rather than inflation to make any material change to ratings," said Shore Capital analyst Robin Hardy. In the run up to this release, Taylor Wimpey's shares had risen over 10%.

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AIM ALL-SHARE - WINNERS

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Metminco, up 14%. The copper and gold miner's shares have jumped in London following a sharp rise on the Australian Securities Exchange on Monday. Ahead of the UK equity market open, and in response to a request from the ASX, the company had said it was unaware why its shares rallied sharply or why trading volumes were high in Australia.



Trakm8 Holdings, up 13%. The GPRS hardware and software maker said pretax profit rose in its last financial year, as revenue almost doubled thanks to acquisitions, new contract wins, and like-for-like order growth. It reported a pretax profit of GBP396,523 in the year to end-March, up from just GBP37,533 a year earlier, as revenue jumped to GBP9.2 million, from GBP4.7 million. The sharp revenue growth also pushed up its cost of sales threefold while administrative expenses grew by just over GBP1 million.



Legendary Investments, up 10%. The company said that Bosques Energeticos EBE SA de CV, one of its portfolio companies, has secured more land on which to grow its recently cultivated non-toxic, high-yielding G4J jatropha. The harvested seeds from jatropha can be turned into a biodiesel and the residue into a cake for use as animal feed. Mexico-based Bosques has been breeding the plant to improve yields. Bosques now has 18 hectares under cultivation in total, including 16,000 pongamia trees, 28,000 jatropha plants, of which 14,000 are G4J jatropha, and 3,000 castor plants.



Octagonal, up 7.9%. The company has seen its shares rise after it said its principle investment, custody and clearing company Investment Strategy UK Ltd, had a record month in June, with over GBP1.1 billion of transactions completed on behalf of its clients. Octagonal has a 9.97% stake in Global Investment Strategy.



Fastjet, up 7%. The African low-cost airline said it flew 53,386 passengers in June, up 24% from a month earlier due to new routes it is flying. Capacity was up 12% from May as it flew 67,425 seats, driven by increases on its Dar-es-Salaam to Mbeya and Dar-es-Salaam to Mwanza routes. Its load factor, a measure of how full its seats are, was 79%. Passenger number were almost double the 27,385 passengers flown in June 2013, but load factor decreased from 82%.

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AIM ALL-SHARE - LOSERS

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Landore Resources, off 17%. The company said it has raised GBP2.6 million through an oversubscribed placing and subscription, money it will use to fund a 6,000 metre drilling programme to test prospective targets it identified in a previous 3D survey at its Junior Lake property in Ontario, Canada. It said it issued 36.6 million shares in the placing and 67.4 million shares in the subscription, both at 2.5 pence each, which is a 20% discount to the closing middle market price of 3.125 pence on July 4. The new shares make up about 20.1% of the company's enlarged share capital. Landore's shares are currently quoted at 2.6 pence.



Noricum Gold, off 15%. The gold exploration and development company said it has received approval for a 2,500 metre surface drilling programme at the Altenberg target area of its Rotgulden gold project in Austria. It said the approval was granted by Austria's mining authority and is valid through November 2018, for mineral exploration at the area, which is on a continued mineralised strike from a previously operating Rotgulden mine nearby. The Altenberg region has seen very little modern day exploration, but recent sampling and mapping from the site have shown values of up to 86.4 grams per tonne of gold, 1,011 grams per tonne of silver and 4.49% copper. The company said that eight samples from the 92 sample batch test returned grades higher than 10 grams per tonne of gold, and an aerial survey undertaken during 2012 showed multiple targets for further study in the Altenberg area.

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Source: Alliance News


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