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New record low for Anglo American

Shares in Anglo American slumped to a new record low today, as fears of a dividend cut prompted more selling. 

An Anglo American sign
Source: Bloomberg

2015 has seen the shares of this mining giant drop by 65%, and today’s record low has pushed them to a level not seen since 1999. The latest bit of bad news is an observation from HSBC that Anglo may follow Glencore in cutting back its dividend to shareholders. The bank has cut its price target to 410p, but given that is just 2.4% away it seems holders of the stock aren’t really hanging around.

Disposals are the current theme in big mining stocks, with Glencore and others conducting a fire sale of assets. Anglo has already sold $2 billion this year, with a target of $3 billion. However, it may well struggle to raise more money given that most other firms find themselves in a similar situation.

Aside from the broader, long-term downtrend, the price has been stuck in a downward channel since April. It touched the top end of the channel in late October and since then the decline has been rapid. While HSBC might think 410p is a good target, technical traders will be looking to support around the 400p area, at which point the price may bounce. 

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