Anglo American FY figures due Friday

As chief executive officer Mark Cutifani has stated, 2013 was a year of change for the multinational mining company Anglo American.

When Mr Cutifani took over from Cynthia Carroll as CEO of Anglo American, the company faced some sizable headwinds. A top-to-bottom review of the firm was immediately carried out, followed by a change in management thinking. As always tends to be the case in these instances, cost-cutting measures have subsequently been introduced: from selling off the company’s corporate Gulfstream jet to restructuring mining labor forces.

The year 2013 saw demand from China cool as the general state of the economy stepped off the pace, with the Asian power house being one of the leading drivers for global demand weighing down returns.

With a number of Anglo American’s mining operations in emerging markets such as India and South Africa, there has also been an increased currency risk. Both countries’ central banks have seen their currency suffer to such an extent that they have felt forced into raising interest rates.

The bearish hanging-man from yesterday’s price action coincided with the 1560p resistance level, and with today’s decline we have managed to fill the gap from yesterday’s open. A break through this major resistance point would target 1662p, a price last seen in September, and could culminate in the completion of the double-bottom pattern (based of 1200p) with the neckline at 1662p. A convincing close above this could see a return to the 2000p mark over the medium/long term. Any further declines through 1500p will target the 1460/65 area, but the 200-daily moving average should lend additional support on a breach.

The share price has had a decline of 64% over the past three years.

Anglo American chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.