Newspaper article The Evening Standard (London, England)

Brokers' Upgrade for the Booming Miners; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Brokers' Upgrade for the Booming Miners; MARKET REPORT

Article excerpt


WHILE the rest of the stock market was struggling to make headway yesterday, mining shares were again striking it rich as metal prices boomed.

This time it was the turn of copper to trade at record highs, touching a price of $6930 a tonne. Gold, silver and zinc have also traded at record levels in the past few weeks and, according to the experts, still have some way to run as producers struggle to keep up with demand on world markets. The booming Chinese economy, in particular, continues to suck in vast amounts of raw materials.

Brokers are now happy to allow the raw materials' price to dictate the ratings of the big mining companies, so hardly a day goes by without one City firm or another moving to upgrade. Yesterday, it was the turn of Numis Securities to raise the bar.

Lonmin, whose target price was upgraded by broker Credit Suisse by about 900p last week, has been lifted from 2260p to 2606p by Numis, which has also raised Chilean copper miner Antofagasta from 2438p to an eye-popping 3484p while repeating its buy rating. The world's biggest miner, BHP Billiton, continues to be rated a buy and has had its target price lifted 1195p to 1437p, as does Anglo-Swiss outfit Xstrata where Numis has raised its sights from 2221p to 2873p.

Peter Hambro Mining drilled up through the 1500p-a-share level as the gold price continued to scale new heights. Investors in the Russian gold miner shrugged off a 23% fall in 2005 profits to $17.5 million ([pounds sterling]9.8 million) that was blamed on the costs of extracting the metal rising at a faster rate than production, up nearly a fifth in the year.

Brewer Greene King frothed up on talk a bidder may be stalking the shares.

They traded close to record highs, with private-equity companies being tipped as the most likely suitors. But there are doubts about such a move. Greene King has a southern bias, which would deter a buyer seeking national coverage.

The shares have enjoyed a strong run in the past two years and that may make it difficult to extract further value from a bid.

Biofuels, which transforms rapeseed into diesel fuel, continued to make up lost ground. …

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