FTSE 100 movers: Miners dig way out of a hole, builders subside
The FTSE 100's preponderance of mining giants boosted performance of the UK benchmark on Thursday.
Anglo American was top of the pile as it Amplats subsidiary accepted around a $135m offer for its 33% interest in a joint venture, allowing the Jo'burg listed business to focus its capital on own-managed mines. The consideration will comprise an upfront cash payment of around 200m rand, with the balance paid in three equal tranches ta 1.5 years, 2.5 years and 3.5 years from the completion date, with Amplats continuing to process 50% of concentrate from the JV.
Russian long-steel maker Evraz was second in the list. Earlier in the week, Moscow called for the WTO to broker consultations with the US over steel and aluminum tariffs. On Thursday, broker SP Angel highlighted that Beijing's three-year plan to tackle hazardous air pollution threatens to tighten constraints on Chinese steel and aluminium production.
Glencore bounced off a what was almost a year's low as it announced the start of a share buyback programme of up to $1bn. Shares have been hit this week after the US Department of Justice sent a subpoena over the commodities colossus's business in Africa.
Broker Canaccord said the buyback is equivalent to an increase in 2018 estimated shareholder returns of around 1.6%, from 6.0% to 7.6%, which compares favourably to BHP & RIO’s dividend yield of around 6.6%.
Anglo, Glencore and other big miners, including BHP Billiton and Rio Tinto were also higher on Thursday thanks to a bullish note from Goldman Sachs claiming the sector had been ‘oversold’ over the fears of a trade war.
Going the other way, AB Foods was at the bottom of the heap as it reported better profit margins from its Primark clothes retail arm but that lower EU prices were dragging on its sugar business. In the AB Sugar unit, revenues declined 17% in the quarter and expectations were reduced for the full year and next year, entirely driven by much weaker EU prices, which have been hit by low world prices and high production last year.
Some analysts, such as those at Credit Suisse, noted that sales growth for Primark of 7% and like-for-like sales down just 0.5% was well ahead of a flat market and meant it was taking share from peers such as New Look, Arcadia and Matalan.
Shares in Persimmon were little moved as it announced solid trading for the first half of its financial year but with the housebuilder revealing that business is slowing. Revenue rose 5% to £1.84bn in the six months to the end of June and completed sales increased 3.6% to 8,072 homes. The average selling price rose 1.2% to £215,000.
Rival builders Berkeley, Taylor Wimpey and Barratt all fell.
Market Movers
FTSE 100 (UKX) 7,594.06 0.28%
FTSE 250 (MCX) 20,579.16 -0.36%
techMARK (TASX) 3,504.84 -0.20%
FTSE 100 - Risers
Anglo American (AAL) 1,724.60p 3.00%
Evraz (EVR) 503.60p 2.73%
Glencore (GLEN) 326.50p 2.21%
BHP Billiton (BLT) 1,659.20p 1.74%
Ashtead Group (AHT) 2,223.00p 1.74%
Rio Tinto (RIO) 4,032.00p 1.66%
Melrose Industries (MRO) 208.80p 1.51%
Croda International (CRDA) 4,797.00p 1.29%
Johnson Matthey (JMAT) 3,543.00p 1.23%
Coca-Cola HBC AG (CDI) (CCH) 2,530.00p 1.20%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,600.50p -4.29%
Berkeley Group Holdings (The) (BKG) 3,601.00p -2.46%
Land Securities Group (LAND) 941.70p -1.91%
Next (NXT) 5,836.00p -1.85%
Ocado Group (OCDO) 1,021.00p -1.83%
Taylor Wimpey (TW.) 171.70p -1.29%
British American Tobacco (BATS) 3,886.00p -1.16%
Sky (SKY) 1,443.50p -1.13%
easyJet (EZJ) 1,618.00p -1.10%
Barratt Developments (BDEV) 487.60p -1.08%