Broker Numis Closes Natural-Resources Team as Deals Dry Up

(Bloomberg) -- Broking and advisory firm Numis Corp. has closed its natural-resources team after deals and share sales dried up in the mining and oil and gas sectors, according to people familiar with the situation.

Numis, which focuses on U.K. small- and mid-cap equities, is closing both equities and investment-banking businesses in natural resources, said the people, who asked not to be identified because the information has not been made public. Some of the employees affected may be offered other roles, said one of the people.

Listings of smaller companies have dried up in London in recent years and regulations such as Europe’s MiFID II market rules have resulted in fewer analysts producing research on them. The natural-resource sector has been hit especially hard, with few recent deals or fund raises.

Brokers in the sector have come under pressure due to a a shift toward more environmentally friendly fuels and a growth in ESG investing, said Neil Shah, director of research at independent research firm Edison Group.

“Natural resources companies are finding it hard work to attract capital and most of the money that is going into energy is going toward renewable sources,” he said. Contraction and retrenchment in the sector is natural, said Shah. “These are big themes and I don’t think they’ll change any time soon.”

Numis said July 3 it expected stronger revenue and profit in the second half compared with the first six months of its financial year. The company said it completed capital raisings for clients including insurer Beazley Plc and retailer ASOS Plc.

Savannah Energy Plc said Wednesday that Numis will no longer be the company’s joint broker after exiting the natural-resources sector.

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