Golden opportunity
Safe haven
Investors flocked towards gold ahead of the UK's referendum on whether to remain in the European Union. The UK's Royal Mint online trading platform reported a 32 per cent increase in transactions compared to last month as uncertainty about the 23 June vote persisted in the days ahead of the vote. Chris Howard, director of bullion at the Royal Mint, said this had led to a 150 per cent rise in revenue this month compared to last. BullionVault, another gold trading platform, said new UK account openings in June were 85 per cent ahead of the past 12 months' daily average.
Free falling
Nigerian naira woes
A 40 per cent drop on its first day of free floating wasn't the best of starts for Nigeria's currency, the naira. What's worse is a marginal recovery on its second day quickly fizzled out to leave it even lower. The country's central bank had previously pegged the naira at around 197 per dollar to support the economy in the wake of plunging oil revenues but the drop to roughly 283 per dollar is expected to boost oil revenues. The fall could be problematic for some UK companies such as PZ Cussons, which derives a quarter of its profits from the country.
New guard
Rio rejig
The soon-to-be-installed chief executive of Rio Tinto Jean-Sébastien Jacques has already implemented a new structure for the group which he views as its best way forward. The group, one of the world's longest-established large mining companies, will be organised around four key product groups - aluminium, copper and diamonds, energy and minerals, and iron ore. Its iron ore chief executive Andrew Harding is set to depart on 1 July and be replaced by Chris Salisbury. Beyond this, a growth and innovation group will focus on future assets and technical support.
Closing time
Stock pays out
After a bitter battle with its largest shareholder which led to former chief executive Chris Heath stepping down and two non-executive directors being appointed to the board, Stock Spirits shareholders will have been looking for some more easily digestible news. And it came in the form of a 10p per share special dividend. This is being paid because there will be no M&A deals this year. Management had said this could happen before Western Gate began agitating but the activist wanted a moratorium on deals so everyone should be happy.
In your face
Strategy working
Facebook's global appeal continues to grow, and not just through its eponymous social network. Instagram, the photo sharing service bought by Facebook for $1bn in April 2012, doubled the number of users on its platform in the past two years with 500m now logging on to the service and around 300m using it every day, of whom four fifths reside outside the US. Analysts reckon this increasingly significant channel could contribute north of $3bn in revenues this year. Add to this the 1.1bn daily users of Facebook itsel, the 900m active monthly users of Facebook's Messenger service and 1bn users of its WhatsApp messaging service and Facebook's suite of social media platforms is accounting for, on average, more than 50 minutes a day of user's time.
No small beer
SAB pay cut
The chief executive of brewing giant SABMiller, Alan Clark, has seen his pay packet drop 17 per cent for the year to end-March due to a drop in profits last year. The company, which is in the midst of being taken over by its even larger rival Anheuser-Busch InBev, was knocked by weak emerging market currencies and the costs associated with the aforementioned deal. Mr Clark's total remuneration for the year dropped to £5.9m from £7.1m a year earlier, according to SAB's annual report.
Air mail
Spanish acquisition
The UK-focused Royal Mail is spreading its wings outside its home turf with the €71m purchase of Spanish parcel delivery company ASM Transporte Urgente. The UK company, which was part-privatised in 2013 with the government selling its remaining stake last year, said its acquisition was Spain's second biggest express parcels network. Royal Mail already has operations in Spain through its General Logistics Systems subsidiary, but this business focuses on the export market unlike ASM, which is domestically focused. The deal should be earnings accretive in 2018-19.
Shares in mining companies trade on a combination of costs, commodity prices and reserves. For diamond extractors, that picture is complicated by the huge variability in pricing, and fashion. Petra Diamonds announced it had recovered a 121.26 carat diamond of “exceptional colour and clarity” from its Cullinan mine and it would be sold later this year. Such a discovery provides huge potential upside, as was the case in February 2014 when Petra found a 29.6 carat blue diamond which sold for a massive $25.6m in its rough form.
Such discoveries inevitably change market sentiment. Canadian-listed Lucara Diamond has produced several major finds from its Karowe mine in Botswana, which have spurred the shares. But Petra’s discovery led to a 2 per cent share price fall. The chart, however, indicates the announcement of a significant discovery tends to be followed by an improvement in the share price.
