FTSE 100 Risers and Fallers: Fresnillo soars, while SLA helps drive index lower
The FTSE 100 had a tough week, down 2%, with Mexican-based miner Fresnillo bouncing back but unable to stop Standard Life Aberdeen from leading the Footsie’s decline.
SLA helped drag the FTSE 100 lower this week, with the UK’s largest asset manager seeing its profit fall by more than £30 million in its first six months of trading.
In the wake of its disappointing half-year results on Wednesday, its share price fell more than 11% to 250p a share.
Despite a significant decline in profit, SLA recorded a 5% increase in the value of its asset under management. However, the asset manager continues to see capital flight, with £15 billion outflow of funds as investors choose to de-risk and place their funds elsewhere.
Two years after Standard Life Investments and Aberdeen Asset Management merged to create the UK’s largest asset manager and investors are still waiting to see the deal bear fruit, with its share price tumbling more than 30% since being formed.
The £11 billion deal was meant to create a major active fund manager capable of becoming a European powerhouse and have the size to compete against the rise in passive fund management, but the merger has failed to create value for shareholders.
Last week, Centrica slashed its dividend, helping to send its share price 19% lower. Analysts expected to see the energy company reduce its pay-out to shareholders, just not quite so severely, with management reducing its dividend from 12p to 5p a share.
‘Centrica has spent the last few years looking to reposition itself away from the volatile world of finding and producing oil & gas, which places the onus squarely on the retail business,’ Hargreaves Lansdown equity analyst George Salmon said. ‘And progress here wasn’t particularly strong.’
FTSE 100 Risers
Doing its best to stop the Footsie’s decline was Fresnillo, with the Mexican-based miner’s share price climbing more than 11% to £6.78 this week.
Its share price was given a boost by UBS analysts, who reiterated their ‘neutral’ recommendation for the stock, despite the mining company seeing its profit for the six months to June 30 fall by 69% to $70.9 million. UBS set a £7 target price for the stock, implying a 2.9% potential upside.
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