One to Watch

SINCE we first mentioned Great Basin Gold (GBG) in The Scotsman, the stock has risen from C$0.95 to C$1.90. Since March, gold has rallied, even as the dollar strengthened, as investors look to hold both assets during the eurozone sovereign debt crisis. We expect gold to continue to perform well.

We still recommend GBG as it offers production growth and wide margins. The production is fully funded and we expect strong earnings by mid-2011. The Nevada operations offer risk diversification that protects against the current strength of the Rand whilst maintaining its highly geared nature by virtue of its South African mining exposure that comes on line in early 2011.

Any weakness in the Rand will lead to margin expansion from the South African asset base and, given the economic conditions in South Africa, we believe this remains a longer-term possibility.

A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for GBG in the past year. Investment markets and conditions can change rapidly and as such the views expressed should not be taken as statements of fact nor should reliance be placed on these views when making investment decisions. Past performance is not a guide to the future.

Babcock

598.5p -2.5p

Broker says BUY

CANACCORD Adams thinks the new Conservative-Liberal Democrat coalition government is "positive for Babcock's markets". The broker, which kept its 755p target price, said: "The Lib Dems dropping their demand to scrap Trident should continue to boost sentiment on Babcock."

Marks & Spencer

354.5p +3.2p

Broker says HOLD

MARKS & Spencer's funding plan for its pension scheme sparked Citi to reiterate its "hold" rating. Citi said: "While the 1.3 billion deficit is circa 300 million worse than our expectation, the 35m per annum cash contribution for the first three years, rising to 60m per annum until 2018, is in line with company's 50-70m previous guidance."