Barclays (LSE: BARC.L - news) equity strategists maintain a 'negative' view on the UK miningsector, which was one of the worst-performers on the stock market last year,arguing the industry faces further pressure from slowing demand in top metalsconsumer China which could lead to poor earnings growth.
"We fear 2014 could, initially, be another difficult period for the miningsector," the Barclays strategists write in a note.
"The key issues of negative earnings growth, minimal free cash flow (FCF)generation, slowing Chinese demand and surging supply remain in place," theyadd.
Barclays rates Glencore and BHP Billiton (NYSE: BBL - news) as itsfavoured picks within the sector, and upgrades Glencore to 'overweight' from'equal-weight'. It downgrades Fresnillo (Other OTC: FNLPF - news) to 'equal-weight' from'overweight'.
UK mining stocks dominate the STOXX Europe 600 Basis Resources Index, and weakness in those stocks resulted in that sector falling 13.4percent in 2013 - underperforming a 17 percent gain in the broader pan-EuropeanSTOXX 600 index.
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