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Shares to watch: half-year update

FINANCE

BALFOUR Beatty replaced Amec as the UK's biggest contractor in spring and the gap has widened since.

With a market capitalisation of around £1.1 billion, Balfour Beatty is worth a third more than Amec and, unlike its big rival, does not have a single negative rating in the City.

Under Mike Welton's steady hand, Balfour has eschewed Iraq for safer climes such as organic growth in the US and buying Skanska's half-share in Hong Kong outfit Gammon.

Rok's shares have dipped recently after rumours of another bid for larger rival Galliford Try proved false but investors acting on Construction News'advice at the start of this year are still in credit.

Garvis Snook's plan to break up GT in conjunction with a house builder showed flair and Rok's ebullient chief executive will not sit still for long.

The likelihood of more corporate activity should excite investors and see coverage of the shares continue to improve in the Square Mile.

Costain has been a Construction News tip for two successive years and marched to a six-year high of 49p this spring only to fall back.

Ironically, this dip came as shareholders tried to keep the price rise going by ditching shares to make the stock less illiquid.

So does this mean that the City is losing faith? One broker does rate the stock a 'sell'with three others positive.

The next Costain results will be the key to see whether contracting margins of 3 per cent are still achievable.