Fresnillo dips and becomes the FTSE’s biggest casualty in June

Fresnillo plc (LON:FRES) moves toward volatility as share price dips, following a euphoric start to the month.

After silver prices reached a five-month high at over 17.20 USD an ounce in mid June, they have since dipped by over a dollar in the wake of trade tensions and the subsequent sell-off of silver. As such, all of Fresnillo’s gains since the start of the month have been cancelled out, their share price is down 0.7 percent within the first two hours of trading and 3.03 percent since Monday morning. In other words, a dip of 8 USD in the first two hours of trading and 34 USD since Monday morning.

On the whole, the firm’s value has dipped 13 percent since the start of the month, and analysts are predicting a 4 percent fall in profits in 2018.

Despite a drop of 1,146-1,138 GBX in the first 20 minutes of trading, brokers are bullish in their forecasts of long-term success for the mining firm. Their faith is built upon the fairly reliable demand for silver which is illustrated by the incremental rally of precious metal prices in recent years. Further, the company has seen its productivity boom with a yield of 15.4 million ounces of silver in the first quarter, which is a 14 percent increase on the same period the year before.

It is fair to say that Fresnillo’s stock has wobbled and borders on volatility, but the firm has suffered in the same way as most, in the midst of the Sino-US tensions that have had implications for most of the global market. Their drastic fall can perhaps be credited to their esteemed position amongst the elite of the FTSE 100 at the start of the month, which only gave them a greater pedestal to fall from. Going forwards, their share price remains relatively high, but at a level where one could expect to see a return on their investment in future months.

Previous articleBunzl post 11pc revenue rise after significant acquisitions
Next articleFastjet in danger of collapse without new funding
Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.