Gilts
Gilt prices fell as investors booked profits from last week’s rally and awaited a Bank of England decision on interest rates on Thursday. The March long gilt future was 27 ticks lower at 110.31, broadly in line with the equivalent bund. Traders were also holding off ahead of a government auction of £2.5 billion of ten-year gilts due this morning.
Rumour of the day
Dermot Smurfit, the entrepreneur, will list Powerflute, owner of a paper mill in Finland, on the Nordic small-cap exchange today in the hope that Scandinavian investors will better understand it. The AIM-listed shares closed at 49½p yesterday compared with their 110p May float price. It needs a strong share price to finance acquisitions.
Deal of the day
William Grant, director of Oilexco Incorporated, a North Sea oil and gas explorer, spent C$600,000 (£305,000) on 50,000 shares in the company. Oilexco is dual-listed in London and Toronto and graduated from AIM to the main list in London in June. The price peaked at 894p in October, then drifted down but rose 16p to 673p yesterday.
Bet of the day
Today BP reports full-year earnings after Shell announced Britain’s biggest corporate profit last week. BP, steady at 542p, is expected to report profit of £15 billion, below initial forecasts but smashing Shell’s record and confirming its status as the biggest company in Europe. Capital Spreads is quoting a rolling price of 541.2p-542.8p
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Tiddler to watch
Xcite Energy rose 17p to a new high of 125½p after it said that test drilling at its Bentley field in the North Sea had produced a commercially viable flow of heavy oil. It also said that seismic tests of the field showed that there was likely to be more oil in the reserve than first thought. Mirabaud, the broker, gives it a 190p price target.