SATURDAY'S WEEKLY NEWS ROUND-UP

The news roundups, which are broken down by the sector, provide investors with an opportunity to read a summary of the most interesting news of the past five days of trading in just one story as they prepare for another busy week.

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FTSE 100 news summary, including Rio Tinto, Anglo American, Glencore, Xstrata, AB Foods, ARM Holdings

January 19 2013, 8:00am
FTSE 100 news summary, including Rio Tinto, Anglo American, Glencore, Xstrata, AB Foods, ARM Holdings

Mining giant Rio Tinto (LON:RIO) has joined a long list of miners to have waved goodbye to their chief executives over the past year.

Tom Albanese was sacked in the wake of Rio’s mammoth write-downs totalling $14bn, including a $3bn loss on its Mozambique coal projects.

His surprise departure makes Albanese the 15th chief executive to have either “stepped down” or fired from major producing miners.

The list includes Anglo American (LON:AAL), whose CEO Cynthia Carroll stepped aside after a wave of pressure from shareholders to do so. It was revealed last week that Mark Cutifani, AngloGold CEO, will take the reins in April.

Notably, Anglo was cut to ‘underperform’ by French broker Exane BNP Paribas this week. It said that while the miner may have a new CEO, it still faces the same challenges as before, especially in the troubled platinum business.

City pointy-heads analysed the prospects of the mining sector this week, with many favouring Rio Tinto after the departure of Albanese.

Citigroup went as far as upgrading the stock to ‘buy’ in the wake of the shock exit, slamming the former management’s poor capital allocation and lack of shareholder focus.

Investors waiting to invest in the merged Glencore (LON:GLEN) and Xstrata (LON:XTA) will have to hold on a bit longer.

The deadline to create the world’s biggest mining group has been pushed back to the middle of March as South African and Chinese regulators quibble over the fine print of the deal. Both parties must give it the green light if it is to go through.

Retailers also made headlines this week, with Thursday a particularly busy day for High Street reports.

Miners got a boost at the end of the week when encouraging data from China was cheered by investors.

The emerging superpower’s growth picked up to 7.9% in the latest quarter from 7.4%, giving the FTSE 100 a leg-up as it continued its barnstorming start to the New Year.

The index climbed a further 0.7% to 6,163 this week as it knocks on the door of the 6,200 mark.

AB Foods (LON:ABF) meanwhile hailed an “outstanding” performance from its clothing arm Primark, which saw sales grow 25% from 2011.

The news saw AB Foods shoot to the top of the FTSE 100 as City number crunchers gave the stock the thumbs-up after its sales came in above expectations.

Panmure Gordon hailed “stunning growth” as the reason behind its higher target price of 1,670p, a 220p jump from its previous goal.

As investors fret that Apple might be losing its touch, brokers have cut their ratings for chip designer ARM (LON:ARM), a major beneficiary of Apple’s rise to prominence.

Morgan Stanley has cut its rating to ‘equal weight’ while bumping up its price target from 725p to 911p to take account of the share’s 45% rise over the last year.

It is not particularly worried about rumours that Apple is scaling back on orders for components of its iPhone 5, but it does believe that everything that could go right for ARM over the last 12 months pretty much has, and this is reflected in the share price.


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