LONDON (ShareCast) - Old Mutual's latest quarterly results revealed gross sales up by almost a fifth, mostly thanks to its UK-based wealth management unit. Yet the company continues to be dogged by pressures to give up its London domicile and listing. The firm still obtains two-thirds of its operating profits from South Africa and trades at a discount to its peer group in Britain. More important, the shares have woefully underperformed those of Sanlam which has mostly stuck to its operations in that country.
However, outgoing chief Julian Roberts' strategy seems to be broadly the right one. He has pared overseas assets, listed a US asset manager and cut debt. In the UK, he also tacked on Quilter Cheviot to Old Mutual Wealth and expanded into Africa. If the combined units can achieve a £400m operating profit then on a rating such as Rathbone Brothers that would value that division at £5bn, in comparison to a market capitalisation of £11bn for all of Old Mutual at present. That could lead to the re-rating of Old Mutual that investors want, says the Financial Times's Lex column.

Vesuvius saw revenues slip 2.9% in the first four moth of the year, tracking the decline in steel production worldwide. Output in the European Union and Brazil is flat and slowing down in China. In the US, it is down by a startling 6%, as the strong dollar favours substitution of domestic production with imports. There is also a shift underway in China towards the kind of steel used for consumer goods and away from that needed for construction and infrastructure.

The firm can gain by helping producers attain efficiency gains and helping with that transformation in China. However, the positive impact from such initiatives may be offset by customers who are saving money by running down their inventories. Nevertheless, there is no sign of an immediate recovery in its core markets, so avoid for now, writes The Times's Tempus.

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