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Earlier, every man and his dog had been keeping a close eye on FKI as shares of the international diversified engineering group raced 8p ahead to a high of 138p.

More than 33m shares were traded as rumours that a management buy-out would be announced with annual results on 7th June intensified.

Acquisitive FKI reported in March that trading was in line with expectations, but because 56% of group turnover emanates from North America, full-year results would be significantly affected by a weaker dollar.

FKI has four main divisions including Logistex, whose automated material handling systems service airport baggage handling.

Former chairman Jeff Whalley tried unsuccessfully with an MBO attempt in 1999 but current chief executive Paul Heiden and his team are believed to have all their bricks in place following a strategic review of the business.

There was no stopping shares of the London Stock Exchange as they followed Wednesday’s leap of 55p with an early surge of 49p before closing 36p higher at a record 1429p.

Rumours were again rife that the governmentowned Dubai International Financial Centre, owner of the Dubai Stock Exchange, is about to trump Nasdaq’s 1.8bn offer for Scandinavian stock exchange group OMX.

But should it fail to wrestle OMX from Nasdaq’s firm grip, it could decide to have a crack at the London Stock Exchange. Nasdaq still sits on a threatening 30% of the LSE. Boss Clara Furse must be thanking her lucky stars. She has done absolutely nothing about future strategy since Nasdaq walked away in February, yet the shares have soared.

Drawing strength from Wall Street’s overnight record and the S&P 500’s best close in more than seven years, the Footsie opened with a gain of 48 points. Follow-through support was limited though and the close was only 19.3 points higher at 6,621.4.

The Dow Jones opened yesterday with a 40-point gain after Wachovia, the fourth largest US bank, announced the 3.4bn purchase of brokerage AG Edwards.

Thomas H Lee Partners and Fidelity National Financial also agreed to buy Ceridian, a provider of payroll and human resources services, for 2.6bn. Mining stocks sewed a richer seam with Xstrata 122p up at 2902p and Anglo American 124p better at 3039p.

Catalytic converter group Johnson Matthey climbed 58p to 1626p after Citigroup upgraded to buy from and hold and lifted its target price to 18 from 14 ahead of results later this month.

Reports of a pending bullish circular helped Michael Spencer’s giant money broker ICAP 17p to 534p.

Properties were in demand following news of global merger and acquisition activity. Morgan Stanley’s real estate unit has agreed to buy Australia’s Investa Properties for 2.04bn and American real estate Archstone Smith is to be bought for 6.7bn.

Land Securities added 58p at 1946p, Hammerson 31p at 1592p and British Land 22p at 1447p.

Continuing hopes of a bid from Singapore state-owned investment group and 12% shareholder Temasek lifted international bank Standard Chartered 27p more to 1710p.

Down 10% in three weeks, investment bank Evolution cheapened 1p more to 140p after saying trading is in line with expectations. Speculative buying amid vague takeover gossip helped Colt Telecom buzz 8p higher to 155p.

Reflecting record annual results, a bullish accompanying statement and a number of new contract wins, oil services group Expro International jumped 42p to 919p.

Having returned to the market at 25p on Tuesday after last week’s successful share swap saved it from liquidation, shares in channel tunnel operator Eurotunnel have rocketed.

Amid rumours that French construction company Vinci is stakebuilding they climbed to 109p at one stage yesterday before reversing sharply on profit-taking to close 13p easier at 64p.

Currently in receipt of a 14p a share bid from Corporate Travel Holdings, shares of CNG Travel jumped 3p to 16p on news it has received ‘very preliminary’ proposals from two other parties regarding possible offers. Each of the proposals is at an indicative price which would trigger the undertaking by CTH shareholders to accept a competing offer of at least 16p per CNG share.

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Computer maker Dell () on Thursday trounced Wall Street’s expectations for its fiscal first quarter, delivering higher sales and profit thanks to selling more higher-end hardware and services.

The Round Rock, Texas-based company also detailed more of its turnaround plans, which include cutting 10% of its 88,100 jobs over the next 12 months.

Dell posted earnings per share of 36 cents, excluding 2 cents a share in costs related to ongoing federal investigations of its accounting and financial reporting, for the quarter ended May 4. That’s a 9% increase from the year-earlier quarter and far above the 26 cents expected by analysts.

Sales rose nearly 3% to $14.6 billion. Analysts polled by Thomson Financial expected Dell’s sales to fall 2% to $13.95 billion.

Dell shares jumped more than 6% following the release of its financial results after hours. During regular trading Thursday, Dell shares closed up nearly 3% to 26.91, a more than four-month high.

The company said it benefited from a focus on more richly configured computers and a better mix of products and services that yielded higher average-selling prices.

Dell said its first-quarter performance shows early progress the company is making in its efforts to re-ignite growth.

“It’s a start,” said Steve Biggs, an analyst at Zacks Investment Research. “They beat the numbers in pretty much all categories. On the other hand, they’re still not seeing strong growth in the areas that they need to, like enhanced services, to turn around the company.”

Dell needs a boost from services and enterprise hardware like servers and storage to make up for its lagging PC business, Biggs says. Still, its operating performance definitely is improving, he says.

Dell founder Michael Dell has been led the turnaround since Jan. 31 when he stepped back in as CEO, replacing ousted Kevin Rollins. He has forced out old-guard executives and brought in new blood from companies such as Motorola, () Oracle () and Solectron. ()

Besides restructuring the leadership team, Dell has been investing in technical support resources to better serve customers. It also has increased its focus on emerging markets such as China and Brazil.

The work force cutbacks are the next step to cut costs and simplify the corporate structure.

“While reductions in head count are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future,” Michael Dell said in a statement.

For the third quarter in a row, Dell provided limited information about its quarterly results because of the ongoing federal probes. It also again skipped the customary conference call with Wall Street analysts.

Dell is delinquent with its Securities and Exchange Commission filings. It hasn’t filed its annual report for the fiscal year ended Feb. 2 or for the last four quarters.

Dell’s desktop PC revenue fell 6% from the year-earlier quarter to $4.9 billion, while notebook PC revenue rose 7% to $4 billion.

But Dell’s server revenue rose 19% to $1.6 billion. Its storage revenue was up 13% to $500 million.

Enhanced services contributed $1.3 billion in sales, up 3% from a year ago, and software and peripherals revenue rose 6% to $2.3 billion.

Dell sacrificed PC unit shipment growth to get better profit last quarter, says John Spooner, a Technology Business Research analyst.

“And that’s not something that’s part of Dell’s DNA,” he said.

Dell’s desktop PC segment, its biggest business, continues to be an Achilles heel, Spooner says. Lower sales of desktops translate to lower sales of software, peripherals and services, he says.

Research firm Gartner says Dell’s worldwide PC shipments in the calendar first quarter fell 7.8% from a year earlier while total industry shipments rose 8.9%. Dell, the world’s No. 2 PC vendor, lost the global sales crown to Hewlett-Packard () in third-quarter 2006.

The Chinese Yuan refuses to die as a topic of conversation among forex speculators. In theory, the currency is among the worlds most prosaic; since its famous revaluation by the Chinese government nearly two years ago, the Yuan aka RMB has appreciated at a leisurely pace, roughly equivalent to 3% per year. Last week, the CCP took a step further in liberalizing its currency system by widening the band in which the Yuan is permitted to fluctuate, to .5% daily.

However, this did little to appease foreign diplomats and American politicians, who contend that the Yuan remains vastly undervalued, and that the Chinese government is guilty of currency manipulation. Two American Senators, Lindsey Graham and Charles Schumer, are still threatening to introduce a latent piece of legislation into Congress, which would slap a 27.5% tariff on all Chinese imports, unless the CCP promptly increases the value of the Yuan. (The 27.5% represents an average of the high and low estimates, 40% and 15%, respectively, of the extent of the Yuans undervaluation relative to the USD.) For its part, China maintains that not only is the currency fairly valued, but also that it will not be pressured into hastening the Yuans rate of appreciation. So, two questions need to be answered: Is the Yuan undervalued and if so, should China allow it to appreciate at a more rapid pace?

The first question is probably the trickier of the two to answer. Economists use admittedly crude techniques to value currencies. One method involves a calculation of purchasing power parity (PPP), which dictates that currencies should adjust in value relative to each other in inverse proportion to their respective price levels. In the case of the Yuan, PPP analysis suggests that the Yuan may be undervalued by as much 50%. However, this is to be expected; since income levels in China are vastly lower than in the US, one would expect prices to be lower, irrespective of exchange rates. Other methods used to estimate the fundamental value of the Yuan involve sophisticated statistical analysis, producing estimates of undervaluation ranging from 0% to 50%. In short, it appears as though the Yuan remains marginally undervalued, but the extent of which remains guesswork.

Upon concluding that the Yuan is undervalued, should China be expected to allow the currency to fluctuate more freely (i.e. appreciate)? It depends on who you ask. American officials argue that the revaluation of the Yuan represents a crucial piece of the drive to reduce the burgeoning US trade deficit. However, upon closer examination, this notion is revealed to be false since most of Chinas exports to the US are themselves repackaged products from other parts of Asia. Further, a sudden revaluation of the Yuan would likely result in the relocation of Chinese production to facilities to other low-wage countries, thus doing little to stem the US trade deficit. From Chinas point of view, its economy is helped by an artificially cheap currency in that its export sector receives an indirect subsidy. However, it is constrained in its ability to conduct monetary policy as well as in its need to accumulate massive forex reserves, both of which would be relaxed in the event of a revaluation.

Not withstanding that Chinas stubbornness mean it will not be bullied into appreciating its currency, it is probably in everyones best interest if it capitulates. My prediction, for what its worth, is that China will ultimately allow the RMB to appreciate at a slightly faster pace against the USD, probably somewhere in the neighborhood of 5% a year.