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Market report: Acacia misses out on gold rush after jitters hit FTSE

Gold miner Acacia Mining missed the rally: REUTERS
Gold miner Acacia Mining missed the rally: REUTERS

A bout of the jitters sent investors rushing for safe-haven gold stocks, but there was one that was left off the wish list: Acacia Mining.

Shares in the Tanzanian gold miner dived 26.5p or 5.6% to 450.7p after it terminated merger talks with Canada’s Endeavour Mining.

Though the FTSE 250 firm did not say why the £3 billion deal had fallen through, analysts speculated that the Tanzanian government’s decision this month to ban exports of gold and copper concentrates was the reason.

Shore Capital’s Yuen Low wondered whether the export ban, which hit Acacia’s share price, prompted Endeavour to ask for better terms. “Perhaps they pressed just a bit too hard?”

Panmure Gordon analyst Kieron Hodgson said the deal would have created “a credible London-listed Pan-African producer capable of challenging Randgold”, referring to the FTSE 100 gold giant.

In fact, it was Randgold, up 65p at 7260p, which stole the show on the blue-chip index amid concerns that the global market rally might have finally run out of steam, with the FTSE 100 down 66.01 or 0.9% to 7312.33.

That pushed investors towards gold, known for its safe-haven appeal. However, the gains were limited to just 2.11 cents today, to $1246.61 an ounce, after last night’s rally as the dollar fell.

The City’s punters had a flutter on William Hill, one of the few to avoid the sea of red. Its shares edged up 0.2p to 280.3p as Investec upgraded from Sell to Hold in anticipation of a share surge in the run-up to its first-quarter results in May.

Another broker downgrade knocked industrial laundry firm Berendsen 31p or 3.8% lower to 781.5p as Credit Suisse swapped its Outperform rating for Underperform, following yesterday’s move from Barclays.

Clarksons sank 132.5p or 4.5% to 2818.5p after shareholders of RS Platou, which it bought for $440 million, sold £34 million of the shipbroker’s shares, while strong results lifted software firm Softcat 14.6p to 362.10p.

Elsewhere, recent AIM float Van Elle warned that contract delays would mean annual revenues around 5% lower than the £93 million it had pencilled in. Shares in the construction firm tumbled 24p or 21% to 90p, below the 100p IPO price.