Yahoo Finance Market report: Centamin loses shine after downgrade
Centamin shares lost their shine after Wall Street analysts warned that stuttering production at the gold miner’s flagship Egyptian site could spill over into next year and delay other projects.
The FTSE 250 miner suffered its sharpest share price fall in five years on Friday after admitting that output from its Sukari gold mine would be up to 14pc lower than initially expected.
Goldman Sachs then piled on the pressure on Tuesday by slashing its earnings forecasts for the next two years. Arguing that Centamin will face “continued challenges” next year, its analysts cut earnings estimates for 2018 and 2019 by 21pc and 16pc respectively.
Not only will problems at Sukari persist into next year but production from Cleopatra, which Goldman had expected to start in 2019, “is likely to be delayed” as the miner attempts to wrest control of issues at its current operations, it argued.
Goldman’s warning of a “muddled” outlook in its downgrade to “neutral” dampened any hope of an immediate rebound from Friday’s 18pc slump, knocking Centamin a further 9.2p to 121.1p, a 17-month low.
Elsewhere, struggling banknote printer De La Rue climbed as much as 4.7pc after The Daily Telegraph revealed that the company is preparing bid defence plans following its recent share price slump.
After losing the British passport contract to Franco-Dutch business Gemalto in March, De La Rue has been left vulnerable to a bid by an 18pc plunge. De La Rue fortifying its defences ahead of a potential takeover attempt boosted the £515m-valued firm 8p to 503p.
ITV tumbled 5.4p to 162.6p after The Daily Telegraph reported that it is mulling a £1bn joint venture with the BBC to buy half of Dave broadcaster UKTV in an attempt to fend off the advances of US tech giants.
Engineering giant Smiths Group jumped 30p to £17.50, an all-time high, after confirming that it has held talks with US companies over a potential £6bn merger. The AA extended its slide, sinking 10.3p to 123p, after top shareholder Neil Woodford dumped a 1pc stake on Friday afternoon, stoking concerns that the star fund manager has lost faith in the roadside rescue firm’s recovery.
Vedanta Resources clawed back ground from a 5.3pc tumble, to close 4.2p lower at 724p, after local authorities ordered the copper miner to shut down its troubled smelter project in India permanently.
Political turmoil in Italy and Spain rocked investor sentiment in Europe and sent banking stocks sliding.
Milan’s blue-chip index, the FTSE MIB, tumbled 2.7pc while Madrid’s IBEX 35 plunged 2.5pc. The FTSE 100’s financial sector dragged the index to a 97.64 point loss at 7,632.64, extending its 3.1pc slide since hitting a record high just one week ago.
