Gilts

Gilt prices rose after the Bank of England paid above-market prices at its weekly operation to buy £3.5 billion of long-dated gilts. September gilt futures rose 66p to £118.80. The yield on ten-year gilts fell eight basis points to 3.61 per cent, narrowing the spread against German bunds. Month-end buying also helped the market.

Rumour of the day

Mercator Gold, which was worth 90p before its Australian mine went into administration, fell ¼p to 2.625p as it placed 850,000 new shares at 2p each. The company has emerged from six months’ suspension with new cash-generating assets. A buyer, believed to be Al Rahji Group, the Saudi investor, has been found for a 10 per cent stake.

Deal of the day

Lapp Plats, an iron ore explorer, is moving into oil and gas in Lebanon and Cyprus. John Craven, the chief executive and founder of Petroceltic, is forming a venture with Quantic Group, a private firm whose director is Rui de Sousa, chairman of Soco International, to help to win licences. Lapp fell 2p to 29p as it placed new shares at 12p to raise £4 million.

Bet of the day

HMV rose 4p to 118¾p before full-year results today, helped by Seymour Pierce upgrading from “sell” to “hold”. The group has benefited from the collapses of Woolworths and Zavvi, but Waterstones, its book chain, is under pressure from Amazon.com.Cantor Index is offering a September contract-related spread of 119.6p-120.4p

Tiddler to watch

Cluff Gold, up 2¾p at 55p, is expected to reach gold production of almost 100,000 oz a year from its two mines soon. It is also assessing the commercial viability of its Baomahun gold project in Sierra Leone. Seymour Pierce believes that this will be a multimillion-ounce deposit and has a “buy” rating, with a 132p price target.

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