Morgan Stanley has trimmed its stake in Central Asia Metals (CAML), the London-listed copper and zinc producer, to 6.99%, according to a filing made public on Tuesday. The US investment bank previously held more than 7% of the company's shares, though the exact size of the previous stake and the number of shares sold were not disclosed in the notification.
The reduction places Morgan Stanley just below the 7% threshold that triggers mandatory disclosure under UK market rules. Central Asia Metals, which operates the Kounrad copper project in Kazakhstan and the Sasa zinc-lead mine in North Macedonia, has seen its share price decline by roughly 15% over the past six months, closing at 184p on Tuesday, down 0.5% on the day. The FTSE 250-listed miner has been under pressure from falling base metal prices and rising operational costs.
Analysts at Peel Hunt noted that while the stake reduction by a major institutional investor could weigh on sentiment, it does not necessarily signal a fundamental bearish view on the company. “Morgan Stanley may simply be rebalancing its portfolio after the recent rally in base metals,” they said in a note. However, they added that the move comes at a time when the wider mining sector is grappling with subdued Chinese demand and geopolitical uncertainty in Central Asia.
For UK investors and pension holders who have exposure to the mining sector through funds or direct holdings, the development serves as a reminder of the volatility inherent in commodity-linked equities. Central Asia Metals has historically been a popular pick among income-focused investors due to its dividend yield of around 6%, but the recent share price weakness has eroded total returns.
The company is due to report its half-year results in September, and market watchers will be looking for updates on production costs and copper price outlook. Any further significant selling by Morgan Stanley could trigger additional pressure, although the bank has not indicated any plans to reduce its holding further.
Source: London Stock Exchange regulatory filing, Peel Hunt research note.