MARKET REPORT: Vedanta Resources shines like a beacon amidst gloom that has dragged the other major miners down
Vedanta Resources shone like a beacon amidst the gloom that has dragged the other major miners down the pit.
Shares of the India focused group touched 1042p before closing 17p higher at 1009p on hearing that the Supreme Court of India has allowed an appeal and reversed the Madras High Court’s order to shut down the copper smelter of its Indian subsidiary, Sterlite Industries, following complaints of a gas leak.
Buyers also dug in ahead of next Wednesday’s annual results as rumours continued to circulate that a significant deal could accompany the figures.
Speculation has been rife for weeks that Vedanta’s Bombay-listed Cairn India is lining up a mega cash bid for Cairn Energy, 4.8p better at 275.7p.
The acquisition would give Cairn India access to 50 prospective exploration blocks in Asia, Africa, Europe and Greenland.
The two companies know each other well as Vedanta bought 58.5 per cent of Cairn India for £5.7bn from Cairn Energy in 2010.
Energy then retained a 22 per cent shareholding, but sold a further 8 per cent
stake in September 2012, raising a hefty £602m in the process.
a recent upbeat note, Cantor’s analyst Sam Wahab said: ‘Cairn Energy
could sell everything it owns and return an amount to shareholders
greater than the current share price. 2013 will be the year when its
starts to develop its interesting portfolio with an exploration
programme targeting 3.5bn barrels of oil equivalent.
‘The current share price is less than net cash – plus the shares in Cairn India. In other words the exploration portfolio is in for free’.
Meanwhile, Rio Tinto
slumped 60.5p to 3024.5p after reports it is looking to sell more
stakes in some of its Australian coalmines in order to cut costs with
demand for coal from Europe and the US falling.
Suisse put the boot in too by slashing target prices and earnings
estimates across the mining sector saying it sees downside risk to metal
prices in the second-half of this year. Kazakhmys lost 18.8p to 350.7p, Fresnillo 60p to 1306p and Randgold Resources 215p to 5375p.
Already easier on profit-taking, the Footsie drifted further down late to close 70.38 points off at 6,420.28, while the FTSE 250
shed 96.76 points to 13,960.2 after disappointing data from across the
Pond reminded everyone that the US recovery is still fragile.
Wall Street closed
69.35 points down at 14,592.66 after a jobs report from payrolls
processor ADP showed private employers added only 158,000 jobs in March,
well down on the expected figure of 200,000. This did not augur well
ahead of tomorrow’s US non-farm payroll numbers. Dealers in New York
also heard that growth in the service sector in March was the slowest
for seven months.
Marks & Spencer cheapened
1.5p to 392p on industry gossip that next Thursday’s fourth-quarter
sales figures will be poor having been supported by a 52-week peak of
407.75p recently on takeover hopes.
Gulliver, analyst at Espirito Santo, advised clients to sell and
reckons fair value to be 310p. She does not believe recent bid
speculation and is confident weak fourth-quarter trading will lead to a
correction in the share price.
has had to cope with continuing weak consumer confidence, snow in
January and the coldest March in 50 years, which has led to both
declining clothing sales and gross margin investment. She has therefore
cut her 2013 full year pre-tax profit estimate by 3 per cent to £640m.
sales for general merchandise is expected to have fallen 4 per cent in
the fourth-quarter despite a 1 per cent easier comparison than in the
third-quarter. On the other side of the street, Superdry fashion company
Supergroup jumped 385p to 644p in response to an Investec recommendation and target price of 843p.
an initiation note, the broker said it expects international and online
revenue growth to drive the company forward adding that the revitalised
senior management team of Shaun Wills and Susanne Given now has the
capacity to support sustainable and profitable growth.
Fund manager Schroders
rose 30p to 2165p after Credit Suisse said it expects it to gain from
positive net inflows into European equities. Analysts also gave the
thumbs up to its acquisition of STW Fixed Income Management, a
speciality fixed income manager which increases group assets under
management by 50 per cent to £23bn.
Ubiquitous Credit Suisse lifted Ashtead’s target price to 850p from 545p and shares of the equipment hire company advanced 26p to 635p.
Shareholders of Bond International Software,
the supplier of staffing, HR and payroll software and services,
celebrated a final dividend of 1.8p, a 50 per cent increase on the
previous year, and a strong return to profitability.
Pre-tax profits came in at £558,000 compared with a loss of £1.4m last time. It has entered 2013 in good shape with a strong balance sheet and buoyed by recent contract wins. Shares jumped 7.5p to 53p.
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