Sunday 19 November 2017

Kenmare's value plunges after pond spill in Africa

John Mulligan

John Mulligan

It was an uninspiring session in Dublin yesterday as investors continued to fret about the stability of the nation's finances, its prospects for recovery and also digested worse-than-expected jobless figures for September in the United States.

Having ebbed and flowed during the day, the ISEQ Overall Index closed down just over 6 points to finish the session at 2,713.71.

The single biggest faller of the day was Kenmare Resources, the firm that operates an ilmenite mine in Mozambique. The stock plunged almost 13pc in Dublin to just over 19 cent after it announced that a containment pond for non-toxic water and clay had been breached, allowing the contents to spill into a neighbouring village. A four-year-old girl was missing after the incident.

Among the banks, the main mover was Bank of Ireland, which declined nearly 4.3pc, or almost 3 cent, to under 65 cent. Allied Irish Banks followed the trend as state ownership for the institution looms closer and ratings agency Standard & Poor's cut its long-term rating on the bank to BBB+ from A-, citing its weakened prospects. It also said its outlook for the bank was negative. AIB stock was down almost 3pc, or over 1 cent, to 39.5 cent, valuing the institution at just €427m.

S&P also lowered its rating on Tier-2 subordinated debt issued by Irish banks on foot of what it said was the authorities' intent and a legal background that indicated a higher default risk on lower Tier-2 issues relative to senior debt. National benchmark indices rose in all of the 18 western European markets. Germany's DAX Index gained 1.3pc, while the FTSE-100 rose 1.2pc. France's CAC-40 advanced 1.9pc.

Reports showed that UK house prices fell by a record amount in September and German factory orders increased at almost four times the pace economists had forecast in August.

In the US, reports showed that factory orders dropped more than forecast in August and the world's largest economy lost more jobs than estimated in September, while US service industries expanded more than predicted by economists.

Autonomy fell more than any other stock in the Stoxx 600, sinking 18pc as the software company lowered its forecast for full-year revenue by about 3pc and predicted its annual sales would increase by 17pc.

Irish Independent

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