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Liberum downgrades Anglo American to ‘sell’

3rd March 2014

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – Investment banking firm Liberum Capital has downgraded Anglo American to “sell” from its previous “hold” grading, describing the company as offering “plenty of risk but little reward”.

“Anglo American is a higher risk investment proposition than its peers. Over half the company’s profits originate in South Africa and its major growth projects are greenfield.

“Despite this, the shares trade at a premium, offer between 10% and 25% less yield than its peers and its rising debt levels limit future capital returns. While we anticipate some turnaround of underperforming assets, we have downgraded the company after recent outperformance,” the company said in a statement on Monday.

Moreover, Anglo American shares now offered less yield than its peers, without the potential for additional capital returns in the next three years.

This came as the brokerage firm expected a month-long strike by some of Anglo American Platinum’s employees to likely accelerate, either reaching a resolution or inducing a more “militant-type” action.

Edited by Tracy Klückow
Creamer Media Contributing Editor

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