Kazakhmys Plc (KAZ), the biggest copper producer in Kazakhstan, fell for the eighth day in 10 on concern that production costs will continue to rise as slowing economic growth squeezes margins.
The shares dropped as much as 4.6 percent and traded at 528.5 pence at 12:21 p.m., close to a four-year low. Kazakhmys is due to leave the FTSE Index in two days after losing almost 750 million pounds ($1.1 billion) of market value over 10 days.
Mining stocks account for the four worst performers in the index over the past 12 months, hurt by concern about falling commodity prices and rising costs. They also have the potential for the biggest returns in the coming year based on the difference between their current share price and the average 12- month price target of analysts tracking the stocks, according to Bloomberg data.
Seven of the eight stocks in the index with the biggest gap between the two are miners, headed by Evraz Plc (EVR), a Russian iron ore and coal miner. Based on yesterday’s closing price, the potential one-year gain is 34 percent.
Kazakhmys, the biggest faller in the FTSE 100 today, has extended its decline to 21 percent since it said Feb. 28 that costs will rise about 14 percent in 2013 on flat production. Some tracker funds that are only allowed to hold stocks in the benchmark may be selling the shares after FTSE International said March 6 the miner would drop from the benchmark index.
The company, based in London, ranks as the second-worst performer on the index in the past 12 months, down 46 percent, behind Eurasian Natural Resources Corp. (ENRC), which has fallen 50 percent. Randgold Resources Ltd. (RRS), Polymetal International Plc (POLY), Fresnillo Plc (FRES), Eurasian Natural Resources and Rio Tinto Plc (RIO), the world’s second biggest mining company, are all trading at least 18 percent below analysts’ price targets.
Rio Tinto is analysts’ third most-favored company in the FTSE 100 Index (UKX) based on 24 buy, five hold and two sell recommendations, according to Bloomberg data. The price of iron ore could fall to $100 a metric ton by September 2014, Sydney’s Herald Sun newspaper said March 4, citing Vivek Tulpulé, Rio Tinto’s chief economist. It’s currently priced at $143.40.
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