UK income managers U-turn on mining exposure

BHP Billiton latest firm to cut dividend

UK equity income managers are scrapping their mining holdings, after topping up only last year, following a round of dividend cuts in the sector and a dismal outlook for future payouts.

Miners have been hit significantly in the commodity prices downturn, with the basic resources sector down 45% over the past year to 25 February - the biggest negative contributor to the UK market during 2015. This has led to five miners cutting their dividends for 2015/16, leaving Randgold Resources as the only large-cap miner that has not reduced its payout so far. The most recent news came from BHP Billiton last week, which announced a 74% cut in its dividend from 62 cents to 16 cents. Prior to this, BHP was forecast by analysts to be the highest-yielding stock in the FTSE 100, w...