Gold mining equities rally after a strong rise in the gold price over the past few days. Gold actually fell in value on the back of figures yesterday that showed US jobless claims at a near six-year low, pushing up US 10-year bond yields. But the metal price soon regained strength on talk there's a gold short squeeze and that JPMorgan is scrambling to buy gold in the open market to meet delivery requirements linked to exchange traded commodity product holdings. Also contributing to the rise was safe-haven buying amid the sell-off in the US stockmarket and renewed violence in Egypt.
Shares remains cautious towards the gold price as the market is simply playing a guessing game as to when the US Federal Reserve will start to reduce quantitative easing. Such an event would be negative for the gold price, but sustaining the monetary policy is seen to be positive for the metal. As for gold mining equities, they continue to be on a rollercoaster ride, particularly those with high costs or high debts, as assumption that gold could rise in value gives investors hope the businesses can still survive. This applies to Petropavlovsk (POG), up 14% to 111.75p, and African Barrick Gold (ABG) which rises 9.1% to 161.5p.
The market is getting hot under the collar over mobile networks and kit testing workloads, slicing 10% off specialist kit tester Anite (AIE) to 112.5p. Read our explanation as to why the market has reacted in such a way.
Investors are unfazed by the re-emergence of bribery allegations first made in 2009 at FTSE 100 diversified miner BHP Billiton (BLT), the stock rising 0.3% to £19.80. The group could face legal action by the US over possible breach of anti-corruption laws.
Support services group WS Atkins (ATK) slips 0.9% to £11.60 after paying Florida-based group Moss £2.6 million to take on its US construction management business, Peter Brown. This could be a good move as Peter Brown is loss making and removes a weak part of the Atkins group.
Minimally invasive surgery equipment specialist Surgical Innovations (SUN: AIM) shoots up 18.9% to 5.5p after its pre-tax profits for the six months to July more than treble. It made £567,000, compared to £181,000 during the same period of 2012, from a 28% rise in revenues to £3.8 million. Its first-half growth is thanks to its equipment being used in 25 more UK hospitals than they were at the start of the year. Management are confident of hitting full-year pre-tax profit forecasts of £1.8 million, especially as they expect orders to rise in US after appointing a new head of its US operations. More of our coverage on the company can be found here.
Veterinary medicine company Dechra Pharmaceuticals (DPH) is up 1.9% to 682.7p after selling its services business. The deal allows the company to focus on its higher margin own branded veterinary products businesses, a strategy Shares reported last month. The deal’s £87.5 million price tag will reduce its £102 million debt.
Property fund manager Warner Estate (WNER) dives 13.5% to 0.8p as management confirms it’s on the brink of insolvency. The company is looking for a way of raising enough cash to repay its debts. Talks with its lenders continue.
Real estate play Development Securities (DSC) improves 1.3% to 197.6p after terminating its management contract with Aviva (AV.) and British Land (BLND) for the Paddington Central development. Development Securities receives £12.1 million in compensation and the return of its working capital after departing the project.
Oil minnow Range Resources (RRL:AIM) ticks up 3.3% to 2.38p after indicating there is no reason behind the weakness in the stock and confirming it is on track to receive $25 million from the sale of its Texas assets by the end of this month. The group also confirms production from its main base of operations in Trinidad is up by more than 30% since April - we reported on a site visit to these assets back in November.
Little eCommerce platform specialist @UK (ATUK:AIM) is again on the up, jumping nearly 9% to 21.75p. Investors have clearly taken a liking to news 10 days ago of cash generation lifting much of the threat of a dilutive cash call. The shares have more than doubled since that trading update (6 Aug).
Malaysian data centres microcap CSF (CSFG:AIM) rallies 8% to 10p on investor bargain hunting. This is despite quite horrible full-year results last week and an ongoing top-to-bottom strategy rethink. The shares have lost 80% of their value since September, and 88% since 85p peaks in October 2010.