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FTSE 100 slides to cap treble-digit fall on the week

Last updated: 03:51 14 Dec 2013 AEDT, First published: 04:51 14 Dec 2013 AEDT

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Footsie ended Friday little changed, despite the millstone of RSA Insurance (LON:RSA), which took a clobbering after the boss announced his resignation.

Chief executive officer Simon Lee resigned with immediate effect from his role after a review showed its Irish unit needs to be strengthened by an extra £130mln, on top of the £70mln announced in November relating to claims and finance issues in the country.

This, along with last week’s storms across Europe, will affect earnings further for 2013, the company said, in the third warning of this year. It now expects mid-single digit return on equity this year.

RSA also hinted it could cut its dividend in February.

Shares slumped 7.2% to 92.5p, helping drag the FTSE 100 down five points to 6,440. Over the week as a whole, the Footsie was down 1.7% after shedding 112 points.

Temporary power solution provider Aggreko was another grey spot, sliding 2.2% to 1,516p, ahead of a trading update on Monday. Numis Securities reiterated its ‘sell’ rating ahead of Monday’s statement.

RSA’s dire performance and Aggreko’s weakness were offset by strong gains in ARM Holdings (LON:ARM) shares after it bought ANGLE plc’s (LON:AGL) computer games graphics business Geomerics from the group for £6.2mln.

This marks ARM's first foray into computer games, having been focused on designing chips to power computers, tablets and smartphones, including Apple's iPads and iPhones.

It is hoping to benefit from the recent shift in gaming, which is moving from traditional consoles to tablets and smartphones.
Investors certainly welcomed the move, with shares adding 3% to 1,001p.

ANGLE, meanwhile, moved up 1.9% to 81p.

Among small caps, Regency Mines (LON:RGM) rose 9.4% to 0.503p - following upbeat broker comments.

Beaufort says Regency offers exposure to a unique nickel processing story, which could transform the shares.

Direct Nickel Limited (DNi), in which Regency has a 7.5% stake, and which it is joint ventured with on the Mambare nickel-cobalt project in Papua New Guinea, is close to completing a validation report on the nickel laterite treatment process at its test plant in Australia.

The broker notes a positive outcome could spark interest from major industry players - seeking both to participate in the immediate opportunity and Regency's rights to additional licensing and ultimately lead to a revaluation of world class prospects.

Iofina (LON:IOF) has been asked to provide more information about its water needs after having its water rights application turned down by the authorities in Montana. The news sent shares down 12.2% to 124p.

Victoria Oil & Gas (LON:VOG) returned from suspension in the wake of the court decision on its long-running dispute with RSM over the Logbaba oilfield in Cameroon as the court in charge of the arbitration handed down its judgement.

The Secretariat of the International Chamber of Commerce decided that RSM Production Corporation did not automatically forfeit its interest in the licence as Victoria had argued.

Shares in Victoria rose, however, as it emerged that RSM must now pay the second cash call, which it failed to make, of US$4.1mln “promptly” or risk a further default. It will also need to stump up more in a third cash call for its 40% share of expenditure incurred since the second cash call in June 2011 to the tune of US$20mln.

If RSM fails to meet the demands within ten days, it will definitely be in default.

Shares rose 7.4% to 1.11p on their return from suspension.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

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