Hochschild Mining plunged 34% on Monday after reports Peru will no longer approve additional mining or exploration activities in a region with two of the company’s mines on environmental grounds.
Peruvian Prime Minister Mirtha Vasquez said four mines that have been the subject of community protests will be closed as soon as possible.
Analysts at Bank of America say those two mines represent 70% of Hochschild’s
EBITDA. “While the company will likely dispute this decision we don’t see equity outperforming until the dispute is resolved,” the analysts said in downgrading the stock to underperform from buy.
While Telecom Italia
shares were priced significantly below the KKR offer, the move underscored the value of telecom operators. According to Citi, U.K. telecoms traded at just 10 times 2022 earnings, as of Friday, cheaper than the developed market telecoms as 11 times earnings, and much cheaper than the overall developed market multiple of 19.
The telecom gains helped the FTSE 100
edge up 0.3% in midday action.