Gem hit the jackpot


Friday, 7th April: Gem Diamonds started the day 4.5% higher at 93p after the market was filled in about their 114 carat diamond recovery. Given their recent struggle and scarcity of larger finds in recent months, analysts believe that this new exceptional find could be the start of Gems road to recovery. Gems Letseng mine, which is the mine that made the discovery, has an eminent reputation for its quality and size findings of diamonds which sell at a massive average of $2,000 a carat, compared to a global average of $120 a carat. The discovery came just in time, as the group were trading at an all-time low just the day before the extraordinary diamond was revealed at 89.25p. They finished the day trading close to 97p.

The same clan of mining companies which pushed the FTSE higher mid-week are the same ones dragging it down today. Four of the miners mentioned mid-week made up the top 10 fallers of the FTSE today, which opened 0.21% lower as investors adapted a cautious approach after the US responded to the chemical attack which took place in Syria. Anglo American was down 2.22%, Rio Tinto 2.04%, BHP Billiton 2%, and Antofagasta 1.53%. Glencore also contributed this time, down 1.04%. Brent Crude was also up 1.59% to $55.56/bbl by the afternoon due to the conflicts in Syria.

Gold, the typical investors’ safe haven, was up to £1,017.90 per ounce after starting the week at £995.67 per ounce.

Next also remained near the bottom end of the FTSE. The clothing retailers’ share price has declined around -25.9% ytd, and continued to decline as they confessed their operating performance is likely to remain weak for the rest of the year and potentially even into 2018. S&P Global Ratings decided to downgrade the group from stable to negative. One of Next’s weakest points is their e-commerce presence. Although they have successfully adjusted to consumers’ shift in buying behaviour which is more preferred to online shopping, it is their physical stores which compromise the vast majority of their retail revenues, demonstrating the groups’ difficulty in reaching the full potential of what they could achieve from an online presence.

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