News

June 30, 2008

Sunkar Resources Rides The Phosphate Wave To List On Aim, But Dips On Day One Of Trading

By Charles Wyatt

The flow of new companies to Aim may have flowed to a trickle, but it is at least a trickle, not a drought. But Canada has led the charge into phosphates on the back of an ever-rising price, just as it has with coal and Australia has with both coal and iron ore. The thing about fashions is that they change, and in mining it is just the same as in clothing where skirts tend to vary in height. When prices are rising for any particular commodity, investors develop an appetite and entrepreneurs are there to satisfy it. So it is with Sunkar Resources, which listed on Aim today having raised £33 million at a price of 120p per share. That gave the company an initial valuation of £191.8 million.

Unfortunately investors are fickle, as is fashion, and some of the institutions who contributed seed money clearly decided to take a profit without telling the company, so the shares kicked off at a slight discount. It is a sad reflection on the compliance officers, and others, who insist that minimal information can be given on a company before it lists despite, the fact that the shares cannot be traded until then. So no one was able to market the company and stimulate an appetite for buying...