Finncap stays at buy on Petra Diamonds

Analysts at Finncap greeted the decision by two of Petra Diamond’s lending groups to waive the measurement of two covenant tests relating to its operating profits for the year to 31 December 2015.

The decision came alongside the company’s announcement that its capital expenditure programmes at Cullinan and Finsch were still on track both in terms of budget as well as timing and that it remained well financed to complete its capital programmes.

“This announcement effectively takes a considerable amount of perceived risk out of Petra and should reverse some of the negative sentiment,” analyst Martin Potts said in a research note sent to clients.

Potts retained his 191p price target and ‘Buy’ recommendation on the South Africa-focused diamond mining group.

As of 11:55 shares in Petra Diamond were the second best performer on the FTSE 250, gaining 10.99% to reach 71.20p.