FLSmidth & Co. A/S (FLS), the maker of mining equipment, fell to the lowest price in more than three years in Copenhagen after data showed manufacturing in China, the world’s biggest consumer of metals, is shrinking.
FLSmidth fell as much as 2.5 percent to 253.40 kroner, the lowest since October 2009. The stock also traded at that price at 11:54 a.m. in the Danish capital with volume at 60 percent of the three-month daily average.
China’s June Purchasing Managers’ Index (EC11FLAS) fell to 48.3, according to preliminary numbers released today by HSBC Holdings Plc and Markit Economics. That compares with the 49.1 median estimate in a Bloomberg News survey of 15 economists. May’s final reading of 49.2 was the first below 50 since October, indicating contraction. The contraction will pressure commodity prices and make FLSmidth’s clients more cautious, according to Nordea Private Banking.
“We recommend investors avoid FLSmidth as we fear that mining companies will continue to scale down investments, which will hurt FLSmidth’s order book,” Nordea stock analysts, led by Copenhagen-based Michael Borre, said in a note today.
Last month, FLSmidth reported a first-quarter net income of 37 million kroner ($6.5 million), missing the average analyst estimate of 231 million kroner. “Market uncertainty and customer hesitation have increased in recent months,” the company said then.
Separately, FLSmidth today said that OppenheimerFunds Inc., one of its biggest investors, has reduced its stake to 4.26 percent. Last July, FLSmidth said the New York-based fund owned 5.16 percent after increasing its holding.
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