Miners close in on banks following Easter spike
Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "The number of buy and sell trades almost levelled out this week, with buys marginally ahead by just 4%. The mining sector continued to gain ground, accounting for 40% of the top ten amid a general rise of 4.6% in the FTSE All-Share mining index last week. Spurred on by positive US jobs and manufacturing data over the Easter break, mining stocks have tripled since their lows of December 2008. Meanwhile, the increased interest in miners has caused the banks to slip to 50% of the overall top ten trades, down from 56% last week.
"Desire Petroleum was the week's most heavily traded mining stock - accounting for 10% of the overall top ten - as our customers reacted to news that it was forced to abandon its first offshore well in the Falklands Islands. Shares in the AIM listed firm dropped 6.4% (47¼p), causing buy trades to gain 25% on sells, after an initial analysis of its Liz 14/19-1 well found that two separate gas discoveries are likely to be poor in quality. Desire has three months to analyse its findings before deciding where to turn its attentions. However, shares in Rockhopper Exploration, which has a 7.5% stake in the Liz well, jumped 19.9% (54¼p) as it prepares to start drilling on a neighbouring licence once Desire leaves the rig.
"Xstrata advanced one position in the sells table this week to knock Barclays down to fourth place as sells in the miner were 89% higher than buys. Over the past seven days, shares in the Anglo-Swiss miner climbed by 4.89% (61.00p) after it revealed plans to invest $130 million to extend work on its Black Star Open Cut zinc mine in North-west Queensland. The expansion means the mine will remain in operation for an additional four years as the firm expects to extract approximately 4.6 million tonnes of ore from the site.
"Fund manager Gartmore Group made its debut appearance in this week's top ten, climbing to fourth and tenth position in the buys and sells respectively. Shares in the UK-based firm fell by almost a third towards the end of last week after its manager Guillaume Rambourg was suspended following an investigation into directive trading. However, shares began recovering earlier this week after the firm announced its plans to merge its private equity fund of funds activities in a joint venture with Hermes. Going under the title Hermes GPE, the venture will manage £4.1 billion of assets on behalf of 20 clients from Hermes London base."