Jamie Hopkins, chief executive of Mapeley, is accustomed to being quizzed on all manner of arcane facts when his property company reports quarterly figures – everything from the size of onerous lease provisions to the terms of loan-to-value debt covenants.

So, the fact that not a single analyst or shareholder asked a question at yesterday’s second-quarter results presentation is perplexing. What might be deemed a sign of investor contentment in other circumstances is less explicable in the case of a company whose shares have more than halved over the past 12 months and which yesterday announced a halving of its dividend.

The more troubling explanation is that of straightforward apathy – that at a time when commercial property values continue to fall, as evidenced by last week’s figures from Hammerson and Liberty International, professional investors have come to treat Mapeley and its ilk with indifference.

Not that yesterday’s numbers were without merit. Funds from operations (FFO), a gauge of free cashflow that is Mapeley’s most closely monitored measure of profitability, rose 16 per cent to 109p on an underlying basis.

That performance is testament to the resilience of its niche. About 92 per cent of Mapeley’s income is derived from government agencies or blue chips – its tenants include Revenue & Customs, BT and Microsoft – with an average lease length of ten years. Its geographical spread – Mapeley claims a presence in every big British town and city – also provides a degree of insulation.

Further, given the importance of its outsourcing division, which accounts for more than half its assets by value, the RPI basis on which its contracts are struck means that Mapeley’s revenue should rise faster than its costs, which should underpin margins.

The broader concern is that Mapeley’s business model is badly out of step with a bear market. Its strategy of regularly tapping the equity markets to fund property purchases – in return for paying out all of its FFO in dividends – is no longer tenable in straitened times. That much is evident in Mapeley’s revised payout policy – albeit that the shares still provide a yield of 9 per cent. High gearing (£1.5 billion of debt) and the opacity of its debt covenants are also unsettling in the face of a weakening net asset value – down by 13 per cent to £16.17 in the first six months of the year.

At £10.70, revived bid interest from Fortress, Mapeley’s majority shareholder, is the best short-term hope, but is not sufficient reason alone to buy. Avoid.

Kazakhmys

The City was once again scratching its head yesterday over the antics of the Kazakh miners on the FTSE 100. The cause was the purchase by Kazakhmys, the copper producer, of a further 3 per cent stake of Eurasian Natural Resources (ENRC), its larger ferrochrome peer, taking its stake to 25 per cent.

At first glance, it is unclear what Kazakhmys gains by the move. The stake is neither large enough to force a merger nor to prevent ENRC from making a bid for Kazakhmys – something it did in March, only to abandon hostilities two months later.

Kazakhmys’s explanation is that recent falls in commodity prices had made ENRC’s shares cheap: they had fallen by more than 40 per cent in a month. But if demand for metals remains strong, Kazakhmys might do better spending its cash on improving its present operations. Alternatively, if it wants exposure to other metals, it might target a rival that is based somewhere other than Kazakhstan.

That means the more likely rationale is to give Kazakhmys a blocking stake. Having passed the 25 per cent threshold, it now has the power to stymie special resolutions proposed by ENRC that require 75 per cent shareholder approval. It should also modestly enhance Kazakmys’s earnings.

However, the longer-term assumption – that Kazakhmys and ENRC will be forced together at some point by a Kazakh government that wants a national natural resources champion – remains intact.

In the meantime, falling copper prices, which hit a six-month low yesterday, means that, even at £12.34, or six times this year’s earnings, the shares are best avoided.

Ideal Shopping Direct

Another day and yet more gloom from the high street, with the British Retail Consortium reporting that sales in July fell 0.9 per cent. Such numbers lend weight to the view that the retail downturn could last for at least another year, and that share prices across the sector have further to fall.

That has not deflected renewed attention from Ideal Shopping Direct (ISD), which sells everything from pressure washers to wigs over television and the internet. Shares in the AIM-listed company have rallied nearly 12 per cent since hitting a four-year low last month, sparking suggestions that the bidder who made an ultimately unsatisfactory “very preliminary” approach in February is poised to return.

ISD sits in one of its sector’s sweeter spots. The TV home shopping market is expected to grow by a further £75 million between now and the switchover to digital in 2012, and ISD is well placed to benefit, given that its Freeview contract runs until at least 2018. The internet also offers significant potential: ISD generates only 21 per cent of its total sales via the web, but this should rise after June’s relaunch of its three core sites.

Next month’s interim results will provide further clarity after what proved volatile quarterly trading patterns last year. Yet with cash on the balance sheet, a modest freehold property portfolio and no stores on which to pay rent, ISD, at 165p, or less than 10 times 2008 earnings, and yielding 4 per cent, is worth tucking away for the long term.

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