"Corporate governance issues have caused ENRC to underperform the sector over the past year. Uncertainty remains, notably the outcome of the corporate governance review due in September 2011. We initiate with a Hold and target price of 650p," says a note from RBS.
Eurasian Natural Resources Corp has underperformed the FTSE 350 by over 25% in the past 12 months, and has also underperformed most of its key mining peers.
"In our view, this has been a result of negative investor sentiment following corporate governance/ethical issues and a boardroom battle that has led to the departure of a number of board members. ENRC is currently performing a corporate governance review due in mid September. The outcome is binary – a positive and actioned review should result in a share price rebound; a poor or unactioned review should result in further share price weakness," says RBS.
UK 100 heads higher
Meanwhile, the FTSE 100 is up today after a degree of normality seems to be creeping back into the FTSE 100 as Greece’s stock market posted its biggest one day gain yesterday since the 1980s.
Commenting on the state of the markets this morning is Simon Denham at spread betting company Capital Spreads:
"Even though the market likes what they see in the merger of two of Greece’s troubled banks no one seems to have learnt anything from the UK when Lloyds was forced to takeover HBOS.
"In a classic example of shifting a problem from one side of the table to the other it looks like this deal is going to do exactly the same whereby a bigger bank will be created with the same problems.
"We will have to wait and see but for now London is catching up with other European bourses as it was closed for its August Bank Holiday yesterday so a triple digit gain is greeting investors as they return from the extended weekend."