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UK defence firms rise as Healey says investment plan fully funded

By Reuters News

** Shares of several British defence firms rose on Wednesday after Finance Minister John Healey said the UK’s defence investment plan would be fully funded

** The plan would be funded through capital reprioritization across Whitehall, bridging a £4.7 billion ($6.24 billion) shortfall and reinforcing Britain’s commitment to NATO.

** Babcock International BAB.L up 2.9%, Chemring CHG.L up 1.3% and QinetiQ QQ.L up marginally, while BAE Systems was down marginally

** Matt Dorset, defence equity analyst at Quilter Cheviot, called the plan “clearly an incremental positive” for defence firms with UK exposure, including BAE, Babcock and QinetiQ. He said he would expect a high proportion of the increased spending to go on defence equipment to improve UK readiness

** Rolls-Royce RR.L also edged up after Healey confirmed the firm will develop its next generation of turbine engine technology in the UK in a £2.5 billion ($3.32 billion) investment

** YTD: BAE up about 19%, Babcock down about 18%, QinetiQ up about 20%, Chemring up about 21%, Rolls Royce up about 8%

($1 = 0.7527 pounds)

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