Anglo American’s share price slides as HSBC raises dividend and cash burn concerns
Anglo American's share price has tumbled after HSBC lowered its stock rating on the company to "reduce" from "hold".
In mid-morning trading Anglo American's share price was 8.24 per cent down at 415p, the largest faller on the FTSE today.
HSBC today said the company is likely to have to spend its cash, despite having cut costs, while the bank also raised concerns over the prospect that the miner may scrap its dividend.
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The bank said it expects more near-term pain, with no "clarity on long-term resolution to reverse potential cash burn" at current commodity prices, according to Bloomberg.
"We downgrade to Reduce [from Hold], anticipating more near-term pain and without clarity on a long-term resolution to reverse potential cash burn," HSBC analysts said in a note.
Anglo American's share price has shed 65 per cent of its value this year.