Bellway, British American Tobacco and Gemfields

“The FTSE100 was virtually flat in early trading as sterling advancing on both the dollar and euro. Investors will be looking to UK average earnings and employment data out mid-morning and, in particular, whether earnings are keeping pace with the consumer-price index, which rose 2.9% in May,” says AJ Bell Investment Director Russ Mould.

“House-builder Bellway topped the FTSE250 board in early trading after a bullish update and a confident outlook with reservation rates up 13%. The general election has created a degree of instability about future Government policy but all political parties recognise the need for increased housing output and demand for new homes remains strong across all regions. Bellway’s shares were up by more than 2.9%.

“British American Tobacco’s shares edged down in early trading on its forecast that profit growth would be weighted to the second half of the year. First half volumes are lapping a strong prior year comparator and will be impacted by the phasing of shipments in a number of key markets, including Pakistan. Overall trading is in line with expectations and the group as seen continued market share growth.

“Gemfields led the AIM board after Fosun Gold confirmed it had made an initial proposal about a possible cash offer to compete with the unsolicited approach by Pallinghurst Resources, which already holds 47% of the company. The Gemfields board set up an independent committee which described the Pallinghurst as derisory and clearly undervalues the company. Fosun Gold’s possible offer of 40.85p per share would represent a 10.1% premium to the offer by Pallinghurst. Gemfields’ shares were up by over 12.6%.”

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