Gilts

Gilt futures fell, the minutes of the latest Bank of England Monetary Policy Committee meeting did little to shift the view that this month’s expansion to quantitative easing was probably the last. Short sterling futures set contract highs after the Bank said that it had discussed cutting the rate it pays on commercial deposits.

Rumour of the day

WSP Group rose 1¼p to 318¼p after Royal Bank of Scotland said that growing confidence in a global economic recovery may herald a new M&A cycle. With sterling apparently undervalued, foreign suitors may take advantage of inexpensive British engineering consultant valuations, particularly UK-listed groups with significant international exposure.

Deal of the day

Altona Energy rose 0.8p to 5.2p after the Australian-based energy group signed a joint venture with the Chinese state-owned CNOOC New Energy Investment to advance its Arckaringa project, a 7.8 billion-tonne coal resource. Julian Emery, an Ambrian analyst, said that the deal marked a big step towards the development of the project.

Bet of the day

Shares in Ted Baker rose 15½p to 449p before an update from the retailer today. Early noises from the company indicate that business has been good as shoppers react positively to its most recent collections, but everybody knows that the UK consumer is far from out of the woods. IG Index offer a June price of 448.9p to 454.3p.

Tiddler to watch

Shares in Modern Water rose 1p to 69½p after the desalination group said that its Cymtox unit had received its first revenue from sales of its water toxicity monitoring units in China. The group’s plant in Oman has produced its first fresh water. KBC Peel Hunt has a “buy” recommendation on the stock and a target price of 77p.

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