Defence group is pursuing with 'vigour' a merger with a US group; current trading good

Shares in BAE Systems, the UK defence giant, topped the FTSE 100 index risers board in active morning trade as heavyweight broker Deutsche Bank waxed lyrical on its attractions. At 9.49am, its share were up 10.5p to 143.5p with a hefty 18.8m shares traded.

The broker said it appears that first half trading for BAe does not appear to have generated any negative surprises thus far and the group is pursuing with renewed vigour the potential for a prime contractor merger with the US.

In the wake of a meeting with BAE Systems CEO Mike Turner, Deutsche Bank repeated its 'buy' advice and 150 pence price target -- saying he gave further insight into BAE's strategic intents and provided a reassuring update on current trading.