Gilts

Gilts underperformed German bunds after an issue of £2.5 billion 30-year bonds dented demand for other gilts while the prospect of an interest rate cut in the eurozone boosted bunds. However, weaker than expected jobs data from the United States helped gilts to recover in later trade. The September gilt future rose 22p to £117.59.

Rumour of the day

Ruukki, the Finnish group that wants to consolidate South Africa’s stricken platinum industry, is believed to have walked away from a deal with Braemore Resources — down ¼p to 4.6p. In turn, Braemore Resources has gone straight to Jubilee Platinum — down 1½p at 45½p — with an all-shares offer expected to be announced imminently.

Deal of the day

Kiwara, the metals explorer in Zambia, rose 3p to 39½p after the World Bank’s IFC bought $6 million (£3.6 million) of new shares at 19p and took a three-year warrant to inject another $9 million. The cash will help Kiwara to continue drilling targets in northwestern Zambia. Finncap, the broker, has a valuation of 51p even after the share dilution.

Bet of the day

Balfour Beatty fell 3p to 308¼p ahead of its half-yearly trading update today. Although the builder has won government contracts during the recession, its share price performance has been disappointing since April, when it stood at 379p amid worries about public sector cutbacks. Cantor Index offers a September contract related spread of 311.5p-312.6p.

Tiddler to watch

Penna, the outplacement agency, rose 15p to 182½p as Collins Stewart raised its target price to 280p after the company’s £8.7 million purchase of Barkers, a recruitment advertising agency, from the administrator with no debt. The broker said that the deal would give Penna a big lead in the growth market of online recruitment.

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