While markets have had plenty of excuses to move higher this morning, it’s again the mining sector which has shackled the FTSE
, pulling the benchmark back into the red despite strong Chinese export data.
But of course for the miners, the concern is imports not exports and while import growth continues to lag the demand outlook for the sector weakens, already prompting a sell-off in a resource biased Australian index overnight. This isn’t the first time the FTSE has faced a headwind from the heavyweight miners in the last week, and with major resource futures in the green it makes the move all the more painful for investors.
The miners aside there was some cause for optimism, with the Chinese exports beat prompting a rally in emerging markets, while at home a recent survey showed UK wage growth at its fastest pace in 6 years. Although the key will be if that translates to consumers opening their wallets over the Christmas run in.
Gulf Keystone ramped up over 7% in the first hour of trading after confirmation that Excalibur Ventures would not be appealing Septembers court ruling, and agreed to pay £17.5m as an interim payment for legal costs. Excalibur had claimed for up to 30% of GKP group assets over an exploration rights dispute in Kurdistan. Following a meteoric rise to fame and fortune back in early 2012 the stock has suffered a string of setbacks both politically and legally. The last 3 months have been no exception, shedding over a quarter of its value from a September peak of 240, so whilst today’s move is a welcome boost there is a long way to go for many long term investors to see any return.
Kentz corp was another big winner in early trade, set to buy Valerus field solutions for around $435m in a bid to increase its US and Latin American presence. Kentz are not planning to integrate the new addition, but will look for bumper earnings within the first full financial year. The deal is scheduled to complete after a shareholder meeting on Jan 2nd.
One oil explorer heading in the opposite direction to GKP was Tullow oil, sliding back after it’s Tultule-1 Ethiopian well came up dry. The well will now be plugged and the drilling equipment will be moved elsewhere in the region for another lucky dip.
Software firm Anite moved higher this morning despite reporting a 64% cut in first half profits. Poor revenues from handset testing were well publicised prior to today’s results, which despite the headline figure have seen some improvement from estimates back in October. The bullish outlook for an H2 revenue boost coupled with a flurry of positive analyst notes at the back end of last week was enough to persuade the market there is value to be had.
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