Gilts

Gilt futures prices fell amid fears about a flood of new gilt issues to finance Gordon Brown’s bailout. That drove yields on ten and 30-year government bonds up by 10 and 13 basis points respectively to 4.47 per cent and 4.50. Prices of gilts two years from redemption rose as investors rushed to safe-haven government debt.

Rumour of the day

Punch Taverns rose ¼p to 161¾p while all around it stocks were plunging. The pub group has huge debts and faces declining consumer demand and falling property values. Word is that the collapse of Kaupthing, Iceland’s biggest bank, has forced short-sellers who traded through Kaupthing to close their short positions.

Deal of the day

Jim Murray, the interim executive chairman of Meldex, the drug distributor, bought 65,000 shares on Thursday and yesterday at prices between 17½p and 18p. The shares ended the week flat at 18p. They have been falling after a failed buyout attempt by earlier management, leading to their departure. Meldex is in talks about raising new capital.

Bet of the day

Is BP, down 33¼p at 376¼p, a bargain? BetsForTraders is offering odds of 2-1 that BP’s shares will fall below 355p in five market days and said that yesterday its clients had begun to bet heavily on a fall in the oil price. Many analysts believe that the oil price will recover eventually, but no one can predict what it will do in the next few days.

Tiddler to watch

African Diamonds rose 8p to 52½p after Botswana gave the go-ahead for its diamond mine. The Government is not demanding an equity stake and only a 10 per cent royalty, which is good news for shareholders. Mining must start by April 2011. Earliet the Government forced De Beers, its partner, to give up attempts to delay the project.

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