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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.

The FTSE 100 will end the week 2% down from Monday’s open falling from 7,407 to 7,242 with the blue-chip index driven lower by Standard Life Aberdeen (SLA).

FTSE Fallers

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.

Practise trading the FTSE 100 and other major indices with an IG demo account.

British energy company Centrica and Anglo-Australian miner Rio Tinto also struggled this week, with the pair seeing their respective stocks down 1.6% and 2% respectively.

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.

Other notable risers this week include British advertising and PR firm WPP and online food delivery platform Just Eat, with the pair seeing their stocks rise 5.9% and 6.7% respectively.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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