It's been pretty bad for quite some while for anyone invested in UK mining shares. Given that the main markets have been fairly bullish for some time, the sell off in mining stocks has been severe. Here are the worst performers.
1 year
African Barrick Gold -72.45%
Hochschild Mining -63.27%
Kazakhmys -62.35% Recently relegated from FTSE100.
Evraz -61.04% Recently relegated from FTSE100.
Centamin -57.18%
6 Months
African Barrick Gold -75.89%
Kazakhmys -66.68%
Hochschild Mining -65.84%
Evraz -60.74%
Polymetal International -58.88%
Even in the last 30 day's with the market correction, mining shares have been hit hardest, only Man Group tops them.
Man Group - 32.03%
Hochschild Mining -31.82%
Evraz -31.37%
Polymetal International -26.18%
Centamin -23.39%
Looking at the weekly UK mining sector chart suggests that there is still no let up or bottom in site as of yet. Not a good chart for mining investors.
Chart:
Wednesday, 26 June 2013
Video market round up for the week ending Friday, 21st June 2013
A week ending round up of the markets from Steve Briggs YouTube channel.
Included in this video is a look at the fall in the UK mining sector, including Fresnillo and Randgold Resources.
Links:
Included in this video is a look at the fall in the UK mining sector, including Fresnillo and Randgold Resources.
Links:
Steve's YouTube site http://www.youtube.com/user/sjb5555.
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Useful charts and analysis can also be found at http://www.flickr.com/photos/stevebriggspics/
Tuesday, 25 June 2013
The Onion's take on the financial world, almost like reading the FT
Financial Sector Thinks It’s About Ready To Ruin World Again.
“It’s been about five or six years since we last crippled every major market on the planet, so it seems like the time is right for us to get back out there and start ruining the lives of billions of people again,” said Goldman Sachs CEO Lloyd Blankfein. “We gave it some time and let everyone get a little comfortable, and now we’re looking to get back on the old horse, shatter some consumer confidence, and flat-out kill any optimism for a stable global economy for years to come.”
“People are beginning to feel at ease spending money and investing in their futures again,” Blankfein continued. “That’s the perfect time to step in and do what we do best: rip the heart right out of the world’s economy.”Surely bankers don't really think and behave like this....I mean, they are really nice guys at heart.
“The other day I actually overheard someone on the sidewalk utter the words ‘I’m saving up for retirement,’ and right away I thought to myself, ‘Well, time to get down to work,’” said Morgan Stanley chairman James P. Gorman, adding that the increasing number of individuals entertaining ideas of starting their own businesses or buying houses was the financial sector’s cue to set off another devastating global recession. “We’re definitely thinking on a huge scale again, because we all really enjoy toying with the livelihoods of millions of people overseas and forcing them to wonder why reckless, split-second decisions made thousands of miles away dictate their whole country’s socioeconomic future.”http://www.theonion.com/articles/financial-sector-thinks-its-about-ready-to-ruin-wo,32865/
“Plus, it’ll be nice to finally wipe out the Euro once and for all this time,” Gorman added.
FTSE100, worst performers.
Fear appears to be back in the market whether it is QE tapering, China growth, China banking system, there's always something to give the markets the excuse to fall once sentiment has changed. It would seem sentiment has changed in the last month or two which is hardly a surprise given the bull run before. Whether this is just a correction that will see markets revert later in the year to their usual seasonal bullishness cycle remains to be seen.
For now, it is worth having a look at the FTSE100 worst performers because despite all the bullishness about some companies and sectors have seen crash level falls.
6 months
Fresnillo -53%
Antofagasta -39%
Randgold Resources -33%
Anglo American -31%
Rio Tinto -26%
3 months
Fresnillo -35%
Randgold Resources -26%
Anglo American -24%
Glencore -24%
G4S -20%
30 Days
Aberdeen Asset Management -27%
Arm Holdings -23%
Severn Trent -21%
Old Mutual -20%
Vedanta Resources -20%
For now, it is worth having a look at the FTSE100 worst performers because despite all the bullishness about some companies and sectors have seen crash level falls.
6 months
Fresnillo -53%
Antofagasta -39%
Randgold Resources -33%
Anglo American -31%
Rio Tinto -26%
3 months
Fresnillo -35%
Randgold Resources -26%
Anglo American -24%
Glencore -24%
G4S -20%
30 Days
Aberdeen Asset Management -27%
Arm Holdings -23%
Severn Trent -21%
Old Mutual -20%
Vedanta Resources -20%
Thursday, 20 June 2013
Bernanke speaks, market overreacts, what's new?
Fed Chairman Ben Bernanke just about said everything that he could say to sooth market fears yesterday, but as usual the market reacted in its knee-jerk way with a little sell off, the excuse being that he probably wasn't as certain with his response as they would like him to be and there is still this remarkable fear that tapering will come sooner than the market wants.
However, given the great unknown experiment that is going on with QE and the monthly bond buying, how could he be certain than to say that it is data dependent?
However, given the great unknown experiment that is going on with QE and the monthly bond buying, how could he be certain than to say that it is data dependent?
The Fed has said it would keep rates close to zero so long as the jobless rate, now at 7.6%, was above its 6.5% threshold.
And the Fed chairman stressed the bank won't start to hike rates even once its economic targets are met. He said the bank has to be convinced the economic recovery is on a solid upward path before it starts to pull back.
“Our policy is in no way predetermined,” Bernanke said. “Our policies are tied to what’s going on in the economy.”
Indeed, 14 of the 15 Fed members don’t expect the first rate hike until 2015, according to the bank statement.
“The Fed is in no hurry to remove monetary accommodation, but as the downside risk to the U.S. economy and labor market diminish, the rationale for maintaining emergency quantitative-easing measures becomes harder to justify,” said Scott Anderson, chief economist of Bank of the West.http://www.marketwatch.com/story/fed-much-more-upbeat-about-outlook-2013-06-19
So, basically this gives the market what they wanted. If the economy does improve then QE cannot go on as the risks for real inflation become deeper. Surely the market wants an improved economy? Or does it just want an endless supply of newly printed money every month because that is easier? Fair enough the market had gone up in the 2 previous sessions, so the sell off was probably an excuse for quick profit taking. Sometimes any excuse will do, but sooner or later the market will have to learn to live without the Central Banks intervening in this way and if the economy is supposedly improving then what is the problem for the market?
In the meantime, with the markets going down it doesn't alter the fact that many companies are still producing good results.
Monday, 17 June 2013
FTSE100, oversold bounce due?
The big news this week will probably come when the Fed meets and concludes on Wednesday. Much of the current uncertainty came about when Ben Bernanke talked about the tapering of QE and that it could possibly end sooner as against later. The market seemed to take this as a signal that it would end quickly, all in one go and that it was as good an excuse as any to sell off. If anything the sell off in equities has been stronger outside the US, the UK getting to around 6900 before the latest fall to 6300. It's believed that Bernanke will basically say the same as before, but for the benefit of the trader panic types, it will be made a little clearer on what is likely to happen.
“We suspect that this week Bernanke will continue to say tapering will happen at some point, could happen this year but will be data-dependent, and that we are still a long way off from removing the very easy policy stance the Fed has in place,” said Jim Reid, strategist at Deutsche Bank.
“We still think that the Fed will struggle to taper very much and very early, but the debate is now going to be around for a while,” said Reid.http://www.marketwatch.com/story/stock-futures-up-sharply-on-fed-clarity-hopes-2013-06-17?link=MW_popular
In other words, same as before, data dependent and nothing likely to happen until the "recovery" is fully in place. Even then it likely will be a slow winding down, gradual, over time. What they will not do is turn it off totally on a specific date.
Whether this relaxes the markets is anyone's guess, but the FTSE100 is showing that it is ready for a bounce after the recent fall. The Daily chart looks set to retrace some of the lost ground of the last month, but would probably need to go through 6600 and then use that as support if recent highs are to be challenged again. If it fails to get to 6600 and it becomes resistance then we could see a second wave down that confirms a downtrend. The 20dma is just touching the 50dma to a potential downside crossover on daily chart. Weekly chart is also weaker, but the monthly still gives hope to the bull case.
Charts below;
Thursday, 13 June 2013
June, the numbers suggest not a good month for equities
Looking at the falls so far in June, especially deep in emerging markets, Japan, Europe and the UK, you would be forgiven for thinking that "Sell in May" is in full swing, but as usual it might not be as simple as that (sell in May, stock market myth or reality). Sell off for June may be more appropriate.
In the last 22 years the FTSE100 has fallen in June 73% of the time, the average performance being -1.4%.
http://www.cityindex.co.uk/market-analysis/trade-statistics/11787652013/ftse-june-infographic/
But as can be seen by some of the "Sell in May" stats, a bad June doesn't always follow through.
June does have a habit of being a bad month for equities though and this year after such an unrelenting bullish start to the year, the pace of which couldn't be maintained, there had to be a sell off at some point. It's almost as if the market was gearing itself up for a correction and June seems to be a good time for it.
The interesting thing about this sell off is that from a news standpoint we have not been going through a particularly bad period of news. If anything the news is mixed, not overly good or bad, but the market sentiment has changed in the last month, so that any good story is now largely ignored, or it's not good enough. Of course, when the market's going up any bad news story gets the same treatment, ignored. However, the "fear" word does appear to be back, even if the fears seem to be more imaginary than having any basis in fact.
I've long taken the view that the stock market is no more than a sentiment market, which will often use fundamentals, or the lack of, news - good or bad, to justify whatever the prevailing sentiment majority opinion in the market happens to be at that moment in time. I've never seen stock markets as particularly efficient either, they always seem to be too bullish or bearish, rarely is a happy medium ever achieved.
It is almost pointless trying to apply logical or rational thinking to why the market behaves the way it does, yet this is what investors are essentially trying to do when picking companies to invest in. We try to come up with systems, analysis, a way of doing things that will pick us a winner, yet the market itself is largely about sentiment. How to balance these? No easy answer to that one.
In the last 22 years the FTSE100 has fallen in June 73% of the time, the average performance being -1.4%.
http://www.cityindex.co.uk/market-analysis/trade-statistics/11787652013/ftse-june-infographic/
But as can be seen by some of the "Sell in May" stats, a bad June doesn't always follow through.
June does have a habit of being a bad month for equities though and this year after such an unrelenting bullish start to the year, the pace of which couldn't be maintained, there had to be a sell off at some point. It's almost as if the market was gearing itself up for a correction and June seems to be a good time for it.
The interesting thing about this sell off is that from a news standpoint we have not been going through a particularly bad period of news. If anything the news is mixed, not overly good or bad, but the market sentiment has changed in the last month, so that any good story is now largely ignored, or it's not good enough. Of course, when the market's going up any bad news story gets the same treatment, ignored. However, the "fear" word does appear to be back, even if the fears seem to be more imaginary than having any basis in fact.
I've long taken the view that the stock market is no more than a sentiment market, which will often use fundamentals, or the lack of, news - good or bad, to justify whatever the prevailing sentiment majority opinion in the market happens to be at that moment in time. I've never seen stock markets as particularly efficient either, they always seem to be too bullish or bearish, rarely is a happy medium ever achieved.
It is almost pointless trying to apply logical or rational thinking to why the market behaves the way it does, yet this is what investors are essentially trying to do when picking companies to invest in. We try to come up with systems, analysis, a way of doing things that will pick us a winner, yet the market itself is largely about sentiment. How to balance these? No easy answer to that one.
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