Secondary Recommendation

MDM Engineering - Mining consultantâ€™s order book rockets on back of surging exploration

June 2008

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Anyone claiming that the new issues market is dead will have to eat their words given the extraordinary debut by MDM Engineering (MDME), whose shares quickly soared from their 145p float price to a high of 185p. The fact that MDME provides engineering and project management services to African-based mining exploration and production companies, which have seen their profitability explode on the back of soaring commodity prices, has clearly started a private investor clamour for its tightly traded stock. It was therefore relatively easy for its broker, Numis, to place 3.45m new shares (9% of its enlarged share capital) among institutional investors in order to raise net proceeds of just over Â£4m. This will be used for working capital in o ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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