Antofagasta announced their Q3 results today, showing a 28% increase in profits. Not heard of them? well anyone with a UK index tracker will have holdings in this Chilean mining company, specialising in copper. In fact the company have been part of the UK’s 100 top companies for some time – since 2004. This is a reminder that whilst investing in the UK would on the surface appear to be investing in Britain, in reality the world is rather smaller and indeed something like 70% of revenues of the FTSE100 are generated on a global basis on a UK basis. There’s nothing particularly bad or wrong with this, but it needs to be understood that the the UK market is heavily linked with the global market, whilst we are a geographical island, our financial and commercial systems reveal very different realities.

In the case of Antofagasta, roughly 95% of their revenue is derived from mining, the vast bulk (65%) of which over the last 9 months was from Los Pelambres, in Chile. Suddenly the connection to the Chilean miners rescued last year becomes a little closer. In fact all of the mining revenue comes from Chile, with mines in – El Tesoro, Esperanza and Michilla making up the remaining 35% of revenue from mining. Yet this is a UK listed company and part of the FTSE100 index – a small world indeed.

Turning to some of today’s news, the Germans are contemplating the implications of a poor showing in the Bond auction. The Americans are taking the day off as it is their Thanksgiving. The UK economic data for Q3 revealed growth of 0.50% which was probably better than many expected and British supermarket giants are expected to begin a Christmas price-cutting war and the Portuguese have gone on strike in relation to austerity measures and Portuguese Bonds have been downgraded to junk status. Meanwhile Iceland (the country) have been given a revised (upward) outlook as “stable” by credit rating agency Standard & Poors. Nervousness continues and caution is advised – noises are being made about global contagion, not simply European contagion.

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