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Anglo American near five-year high on good news from South Africa

Tom Rees
New ANC leader Cyril Ramaphosa will pursue a pro-business agenda - AFP

MINING heavyweight Anglo American climbed back up towards five-year highs after its South African iron ore subsidiary reported a “royal flush” set of results and the country’s ruling ANC made moves to usher in a new pro-business leader.

The rainbow nation’s ANC formally demanded that corruption-hit Jacob Zuma step aside for new party leader Cyril Ramaphosa, but the South African Rand slipped amid fears that the president will not go quietly.

Pro-business Ramaphosa is expected to strike a more cordial relationship with foreign miners and ditch Mosebenzi Zwane, the mining minister at loggerheads with the industry. Norman Mbazima, Anglo American’s deputy chairman in the country, warned last week that the impasse over the country’s mining charter had damaged the industry, arguing that the huge investment needed for mining required a stable regulatory environment.

Kumba, Anglo American’s iron ore subsidiary in the country, exceeded expectations in its full-year figures and its boss, Themba Mkhwanazi, hinted that the firm may use acquisitions to fuel future growth. As the FTSE 100’s small gains deteriorated late on, Anglo American slipped off its best levels to finish 28p higher at £16.70. South Africa-exposed peer Glencore climbed 9.1p to 375.8p.

 

The wider FTSE 100 stumbled 9.05 points to 7,168.01 as the global stocks recovery stuttered ahead of crucial inflation figures from the US today.

Elsewhere, Brent crude started to claw back ground lost in last week’s 8.4pc plunge in overnight trading before the International Energy Agency’s gloomy report predicting that a resurgence in shale will offset OPEC’s production cuts dragged the black gold down.

The UK’s benchmark, Brent crude, gave up a 1pc gain to sink below $62 per barrel for the first time in two months after the IEA questioned whether history would soon repeat itself in a shale boom disrupting the fragile balance of the oil market.

Royal Dutch Shell ‘B’ nudged up 1p to £27.08 as it brushed aside the latest setback in the price of crude after Morgan Stanley argued that the oil major will follow in Total and Statoil’s footsteps and lift its dividend.

Meanwhile, BP, which was handed a downgrade to “equal-weight”, will lag its peers in terms of dividend growth, the broker told clients to weaken its shares 2.9p to 476p.

WPP regained a further 46p to £13.36 amid more tentative signs that the struggling advertising market is beginning to recover after last year’s troubles. Days after ad giant Publicis told shareholders of a brighter outlook for the industry, rival Dentsu missed expectations but raised investor hopes with talk of an improving market.

Lonmin jumped 1.4p to 71.2p as platinum prices showed further signs of arresting their slide in the last two weeks. Satellite company Inmarsat tumbled 25.6p to 426.1p, a six-year low, after analysts at HSBC called into question the FTSE 250 firm’s dividend as it lowered its earnings estimates.