There was rare good news for BAE Systems yesterday. The British defence giant scooped a 315m pound contract from the Government to start work on the next generation of nuclear-powered submarines. The contract is also due to yield 500m pounds by year end, which could fund a share buy back. Longer term, defence spending could recover, which presumably was one of the attractions for EADS to do the deal with BAE. But overrall, the picture still looks grim. BAE faces stiff competition to secure a big chunk of rapidly growing defence spending in emerging markets. Its core markets are shrinking. The company has tried, and failed, to pull off a transformational deal. It may try again, but there are no obvious suitors right now. Shares are trading at a 20 per cent discount to American defence rivals. But they are cheap for a reason, The Times´s Tempus column says reports.

F&C lost another £3.7bn of mandates in the three months to September, most of it through the well-signalled withdrawal of insurers such as Friends Life. This is very low-margin business. More promisingly, the company won a net £401m of new mandates from third-party institutional investors such as pension funds. Another net £1.4bn from this category is in the pipeline, F&C says. The cost-cutting programme is all but complete, with almost all the £48.8m in promised savings now achieved. The jury is out on whether these cuts — mostly in back-office functions — have been achieved without damaging muscle. But if so, F&C should deliver 9.6p of earnings per share next year, putting it on a multiple of 10. The present yield is 3.1% and there is a strong chance of a dividend hike next year, Tempus explains.

Anglo American shares rose 4% on Friday after it revealed that Cynthia Carroll, its chief executive, had fallen on her sword. This follows years of sniping by shareholders over performance at the mining group. So far, Ms Carroll is the only departure - but the board must share some responsibility. Anglo was too late to the investment cycle when it came to the Chinese commodity boom - and the company then spent far too much on projects such as Minas-Rio. These spending decisions were approved at board level under the chairmanship of Sir John Parker. Questor last said the shares were a hold when they were at £20.34 in September. They remain a hold, The Telegraph´s Questor team says.

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