Polymetals shines on merger rumour

Published on Friday 27 January 2012 00:00

Shares in gold miner Polymetal surged on the London market yesterday on talk that it may merge with Russian rival Polyus.

The FTSE 100 firm’s stock closed nearly 8 per cent higher even after it put out a statement denying it had been involved in talks, as the rumours centred on the Russian billionaires who own large stakes in the companies, rather than the corporations themselves.

Polyus is partly owned by presidential hopeful Mikhail Prokhorov, and its attempts to get a listing in the UK have run into problems with Moscow. However, a merger with Polymetal would allow it access to the stock exchange while creating the ninth largest gold miner in the world. Polymetal’s shares were up 83p at 1,152p.

Investors’ taste for gold was also sharpened after the US central bank signalled that it was preparing to embark on a fresh round of money printing to support the ailing world economy. Gold equities Fresnillo and Randgold Resources were up 4 per cent and 5 per cent respectively at 1,817p and 7,170p.

Other miners also benefited from the Fed’s stance,. Vedanta Resources set the pace, up 9 per cent or 100p at 1,252p. Kazakhmys rose 81p to 1,194p, while Rio Tinto lifted 181.5p to 3,893p.

Banks benefited from renewed optimism over Greek debt talks, with Lloyds up 1.9p to 32.8p, Royal Bank of Scotland ahead 0.9p to 27.7p, and Barclays 5.6p higher at 222.9p.

Investors appeared non-plussed by broker Nomura’s revisions to the UK transportation sector, including Scotland’s two heavyweights.

However, both companies were up by 0.7 per cent. Aberdeen-headquartered First’s shares gained 2.1p to 306.8p while Perth-based Stagecoach added 1.8p to 278.2.

NEW YORK: A month-long rally on Wall Street appears to be sputtering, as stocks slipped last night in what investors called a possible warning of weakness ahead.

The Dow Jones industrial average was down 20.97 points, or 0.16 per cent, to close at 12,735.99 while the broader Standard & Poor’s 500 Index closed down 7.53 points, or 0.57 per cent, at 1,318.52. The Nasdaq Composite Index ended the day down 12.50 points, or 0.44 percent, at 2,805.81.

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