Newspaper article The Evening Standard (London, England)

Miners Set to Tunnel into Footsie Top Level; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Miners Set to Tunnel into Footsie Top Level; MARKET REPORT

Article excerpt


MINING companies are likely to feature predominantly in tomorrow's regular quarterly reshuffle of the lead Footsie 100 index.

At present it looks as if two miners, Vedanta Resources and Lonmin, will find their way into the top flight after seeing the value of their shares powered higher by record prices for raw materials such as copper, zinc, aluminium and gold.

Despite the recent sell-off in mining shares, most are still showing healthy gains on the year. Vedanta started 2006 at 875p and was today changing hands 7p cheaper at 1414p, capitalising it at more than [pounds sterling]4 billion and placing it in 70th place.

Lonmin, up 12p at 2561p and in 82nd place, has also come up from around 1600p since the start of the year and boasts a price tag of [pounds sterling]3.6 billion.

Another company jostling for position for promotion is market newcomer Drax, Europe's biggest coalfired electricity generator. It joined the stock market just before Christmas last year, trading at about 500p.

Today the price was 2p off at 827p, putting it in 88th place.

Those companies facing the drop include betting chain Ladbrokes (108th), which sank below 400p with a fall of 23/4p to 3971/4p, having demerged its Hilton hotels chain earlier this year. The shares have traded within a narrow range for much of the year, after peaking at 4403/4p in March.

Communications specialist Cable & Wireless, down 1/2p at 1041/2p in 109th place, also faces the chop. Its chances were scuppered by a profits warning that forced analysts to downgrade their profit forecasts.

Most of them are now looking for a 40% drop in pre-tax profits on the previous year, at [pounds sterling]226 million. The group is shedding UK jobs following the acquisition of rival Energis. A [pounds sterling]250 million share buyback has also gone on hold. The shares are now trading just 7p above their year's low.

Royal ratcatcher Rentokil Initial (102nd), up 3/4p at 1453/4p, is still looking for the road to recovery and may also find itself demoted.

DMGT A shares were struggling to stay in the top flight. …

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