Newton sees mining sector headed for a fall

The mining sector has reached its peak and is likely to fall in value, according to Newton fund manager Tineke Frikkee.

Frikkee, manager of the £2.6bn Newton higher-income fund, says: “We have seen some results from the mining companies, Antofagasta, for example, which have come in below expectations. What will happen next is downgrades in share valuation.”

She adds that the rapid appreciation of mining resources such as copper puts mining companies at risk of rapid price falls.

LV=Asset Management head of UK equities Graham Ashby, who runs the £143.1m UK equ-ity income fund, cut his 5 per cent weighting in BP and upped his weighting in Antofagasta and BHP Billiton at the start of 2011. His weighting in Antofagasta is up by 2.3 per cent to 4.7 per cent and BHP Billiton is up from 2.8 per cent to 4.7 per cent.

Ashby says: “Mining companies are a little more in charge of their own destiny. They have a lot more control on the amount of supply coming on stream than the oil companies, where the reserves are owned by the governments in the Middle East.”