FTSE in-depth: Randgold shines for anniversary

By Geoff Foster for MailOnline
Updated: 03:18 EDT, 3 November 2009

December heralds the first anniversary of Randgold Resources' admission to the Footsie.

Geoff Foster: The FTSE 100 got November off to a solid start, rising 59.95 points.

It was the first time in 19 years that a pure gold miner had traded with the big boys since Consolidated Goldfields said cheerio in 1989 after being swallowed by Hanson.

Its performance since has been sparkling. The shares soared from £24 to touch a year's high of £47-plus before boiling over.

But buyers were back chasing the stock 236p higher to 4135.6p in a strong mining sector yesterday.

They piled in on hearing that Randgold and its joint venture partner AngloGold Ashanti has agreed to buy an additional 20% in the Moto Gold project in the Congo.

Following the transaction, they will each hold 45% of the project, with the Democratic Republic of Congo state-owned OKIMO retaining 10%.

Some analysts were sceptical. Evolution's Charles Kernot said he likes Moto's assets, which are in the north east of the Congo, but believes that development of the project will not be without its challenges in terms of politics and infrastructure. His target price is 2370p.

Other miners led the Footsie higher, buoyed by dollar weakness and higher metal prices after HSBC's China Purchasing Managers Index rose to an 18 month high in October.

As copper rose above $6,500 per tonne, Eurasian Natural Resources added 45½p at 871.79p, Vedanta Resources 104p at 2189.1p, Lonmin 72p at 1535p and Xstrata 39p to 920.7p.

Rio Tinto, 120p up at 2809.8p, was additionally excited by vague talk that BHP Billiton (46½p better at 1690p) is considering reviving plans for a £120bn merger. A year ago BHP Billiton dropped its marriage plans, citing economic turmoil. Slumping demand for commodities and Rio's £42.1bn debt mountain.

At the time the proposed deal also raised competition concerns and unease among steel makers, as the merged entity would have 35% of the global iron ore market.

Citigroup waxed lyrical about Rio following an investment seminar with the mining giant on Friday. The broker sees Rio as the best entry point into the sector and has a target price of 3850p.

Petropavlovsk, the former Peter Hambro Mining, advanced 42p to 1082.3p to enhance its chances of promotion to the Footsie next month.

The FTSE 100 got November off to a solid start, rising 59.95 points to 5,104.50. Wall Street gave London a late lift by climbing 114 points in response to bullish economic data. This included news that pending US home sales in September jumped far more than expected, while construction spending in October also unexpectedly surge and a measure on manufacturing came in at its highest point since April 2006.

Following confirmation it is close to agreement with the Treasury with respect to its proposed participation the Asset Protection Scheme, Royal Bank of Scotland, which is 73%-owned by the government, fell 3.27p to 38.65p.

Lloyds Banking Group cheapened 2.03p to 84.68p ahead of an imminent £12bn rights issue as part of a refinancing plan that will boost its cash cushions by £25bn.

Continuing speculation that the housebuilding giant has found a buyer for its North American business helped Taylor Wimpey put on 1.62p to 37.796p. Analysts say sale proceeds could all but wipe out group debts of £900m.

Skyepharma soared 18¾p to 101½p on news that its developing and marketing partner Mundipharma International has successfully completed the final Phase III clinical study for the European development programme for Flutiform (TM), with the higher dose strength study meeting its primary endpoints.

Buyers chased Toumaz 0.375p higher to 8.625p on hearing it has begun clinical trials of its Sensium 'digital plaster' wireless body monitoring system at St Mary's Hospital, London. Sensium monitors multiple vital signs, including skin temperature, heart rate and respiration.

Assetco, which provides vehicles and equipment to emergency services, rose 8p to 71p after signing a 10-year contract with the Abu Dhabi government to develop and manage a 100-acre multi-agency emergency services training centre.

Responding to a 12-month tolling contract with energy supply company GDF Suez Energy UK, Alkane Energy added ½p at 18p. Jubilee Platinum firmed ¼p to 32p after entering into a strategic alliance with Sylvania Resources, 1¾p easier at 50½p.