Gilts

Gilt futures rallied after producer prices fell at their fastest pace for seven and a half years in June, undoing some of the damage from the Bank of England’s decision to slow gilt purchases. The September long gilt future settled up 42p at £117.77. Ten-year yields fell four basis points at 3.74 per cent after initially rising 18 basis points.

Rumour of the day

Industry chatter has it that China Minmetals, the state-owned miner that bought Oz Minerals’ Australian mines for $1.3 billion (£802 million) last month, is eyeing a bid for Griffin Mining, steady at 33¼p, which, aside from a Chinese zinc mine, has a 39 per cent holding in Spitfire Oil, up 3p to 19p. Spitfire owns technology that can convert coal deposits to oil.

Deal of the day

Kevin Hayes, the finance director of Man Group, bought 445,780 shares in the hedge fund manager at 241¾p. This followed Thursday’s trading statement showing that private client redemptions accelerated in June while its flagship AHL fund has lost 11 per cent so far this year. Private clients are more profitable for Man than institutions. It rose ¼p to 241¾p.

Bet of the day

After topping $70 a barrel last month, oil prices fell to below $60 yesterday as expectations of a swift economic recovery faded. Even the International Energy Agency’s prediction of world oil use growing by 2010 failed to lift the markets. So do crude prices have further to fall? Spreadex has an August contract with a spread of $59.53 to $59.61.

Tiddler to watch

Allied Gold rose 1¼p to 20½p after it found gold in drill holes near its mine at Simberi, Papua New Guinea, which Ambrian, the broker, said should extend the mine life by one or two years. Allied is also eyeing acquisition opportunities. Ambrian maintained its “buy” advice but lowered its price target from 28p to 27p on the falling dollar.

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