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Yesterday's trading: Dark clouds over solar firm Jetion

By Geoff Foster for MailOnline
Updated: 03:50 EDT, 18 June 2009

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One of the best jackanories of the day came out of Shanghai and featured a stock trading on AIM.

Geoff Foster: Eye on the market.

Shares of Chinese solar cell and module manufacturer Jetion crashed to 37p and closed 17¾p down at 46½p following a shock profits warning and news that chief executive Roger Lijon Gai and three unnamed senior managers of a Chinese trading subsidiary had been sacked.

It is alleged that Gai and three managers had ties to a local competitor that put them in serious breach of their contracts.

Public records also show that Gai's wife is a shareholder in the competing business, Wuxi Sundy, which is also a producer and exporter of solar modules. Close relatives of the other three also apparently own shares in the company.

Jetion chairman Gabriel Kow said: 'The board believes that, by their involvement in this business, these individuals have committed serious breaches of their fiduciary duties to the company and have material conflicts of interest.'

Kow added that he was confident there had been no direct, significant impact on Jetion's business, but disappointingly warned that sliding prices for its products would hit profits this year. While sales volumes were 'substantially' ahead of last year, unit sales prices were 40% below last year's level.

Only six weeks ago Jetion reported strong 2008 results with full-year revenues at £153m, well ahead of analysts' expectations of around £130m. Nomura put a 100p fair valuation on the stock.

On a brighter note, AIM-listed Kiwara soared 4½p to 29p following an extremely bullish inferred resource statement complied by Snowden, the international mining consultancy. It suggests that its Kalumbila copper project in north west Zambia has a 1.38bn tonne resource.

It led Joe Lunn, analyst at FinnCap, to proclaim that Kalumbila contains more copper than the rest of Kiwara's AIM peer group combined. The new resource statement materially reduces project execution risk and the Kalumbila deposit on its own is worth 44p per share. Dealers believe that Kiwara looks a tasty morsel for one of the bigger mining majors to swallow.

It was the same old story for the Footsie, as it was dragged 50 points lower to 4,278.46 by mangled miners. They sustained further hefty falls in sympathy with weaker metal prices amid growing doubts about the speed of the global economic recovery.

Shares of Rio Tinto were adjusted to take in the effect of its £8.8bn rights issue, terms of which were 21-for-40 at 1400p. Rio traded 675p lower at 2154p, while the new nil-paid rights moved between extremes of 930p and 727½p before closing at 754p. Xstrata lost 73p to 643½p and Lonmin 110p to 1191p.

Anglo American shed 105p to 1574p after JP Morgan Cazenove downgraded to underperform from in-line.

Oil and gas producer Venture Production slipped 7½p to 763p after the Takeover Panel informed Centrica (1¾p easier at 222¼p) that it had until July 13 to launch a full-scale bid for the company.

Mobile phones giant Vodafone buzzed 4¼p higher to 118.95p on consideration of its defensive qualities. The group yesterday launched Vodafone Telecoms Management, a new service which combines and simplifies the management of fixed and mobile telecoms.

Legal & General, the insurance group, touched 63½p on speculation it could be on Resolution's (unchanged at 92½p) shopping list, before closing ½p off at 60¾p. Resolution is reported to have a £7bn war chest for acquisitions.

Vague takeover gossip accompanied a 6p rise to 131p in investment manager Brewin Dolphin. Nervous selling ahead of tomorrow's AGM left housebuilder Taylor Wimpey 1¼p cheaper at 32¼p. Rival Barratt Developments shed 8½p to 151¾p after Goldman Sachs downgraded to neutral from buy.

Rumours of a profits warning depressed industrial group Cookson, 31¼p down at 257p.

Reflecting the bullish tenor of chairman John Charles' AGM address, smartFOCUS advanced 1.1p to 7p. The marketing software group with a top client list which includes Manchester United, ASOS, Next and Hilton International, expects first-half results to be ahead of the board's expectations. Arbuthnot upgraded to 'strong buy' from 'buy'.

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