Weekly review

The FTSE 100 ended the first week of 2022 in positive territory, gaining 100.74 points to close at 7,485.28 on Friday.

Equity view

Drugmaker AstraZeneca's Alexion rare diseases unit has inked an exclusive collaboration and licence agreement with Neurimmune that will see the pair develop and commercialise NI006, an investigational human monoclonal antibody for the treatment of transthyretin amyloid cardiomyopathy. AstraZeneca said on Friday that under the agreement, Alexion will be granted an exclusive worldwide licence to develop, manufacture and commercialise NI006, with Neurimmune receiving an upfront payment of $30.0m and the potential for additional contingent milestone payments of up to $730.0m, as well as low-to-mid teen royalties on net sales of any approved medicine resulting from the collaboration.

Premium drinks company C&C Group said on Friday that its second-half trading performance had been "significantly impacted" by renewed government restrictions across the UK and Ireland, leading the firm to reassess its full-year operating profit guidance. C&C Group stated that in December, the key festive trading period, it had traded directly with 81% of on-trade outlets, delivering 64% of the volume against an expectation of 90% and 90%, respectively.

Aston Martin on Friday said sales to dealers surged 82% in 2021 on the back of sales of its DBX sports utility model. It added that adjusted core earnings would be £15m lower than forecast as it shipped fewer-than-expected Valkyrie cars, but said the impact was due to “timing only” as all production of the model had been sold and remained allocated to customers with “significant deposits”.

Royal Dutch Shell said its $7bn share buyback programme would continue "at pace" despite weaker oil product sales due to the Omicron Covid variant and forex headwinds in Turkey. Shell has already returned $1.5bn to investors and a decision was taken on December 31, 2021 to carry on with the redistribution of the remaining $5.5bn.

Real estate investment trust Segro has tapped Andy Harrison to succeed Gerald Corbett as chairman, effective from 30 June. Segro said on Friday that Harrison, currently the chairman of Dunelm Group and previously the chief executive of Whitbread, EasyJet and RAC, will join the board as a non-executive director on 1 April before taking over as chair when Corbett departs the firm later in the year.

Bakery chain Greggs said on Thursday that it had made "considerable progress" under "tough trading conditions" in the fourth quarter, putting the group in a "strong financial position" going into 2022. Greggs said full-year sales were up 5.3% on the equivalent period in 2019 at £1.23bn, while in the fourth quarter two-year like-for-like sales in company-managed shops grew by 0.8%, with a strong performance in October being followed by more "challenging conditions" as consumers responded to precautionary messages relating to the Covid-19 omicron variant.

Mining giant Glencore said on Thursday that it has closed the sale and purchase of its 100% interest in Ernest Henry Mining to Evolution Mining. Glencore has received AUD $800.0m (£424.0m) for the sale of Ernest Henry, the owner of the Ernest Henry Mining copper-gold mine in Queensland, Australia, and will receive a further AUD $200.0m (£106.0m) in 12 months time.

Discount retailer B&M European Value Retail said on Thursday that full-year profits were set to be above analyst expectations following a "strong" performance over the Christmas period. In a third-quarter trading update, the company said it now expects FY22 group adjusted EBITDA on a pre-IFRS 16 basis of between £605m and £625m, which is ahead of consensus expectations of £578m.

Capricorn Energy said it had withdrawn all litigation in a tax case with the Indian government, clearing the way for a $1bn refund. The company, formerly Cairn Energy, said it had “entered into the final stage in its undertakings with the Government of India by withdrawing all global enforcement proceedings”.

Dr Martens tumbled on Thursday after private equity firm Permira sold 65m shares in the iconic bootmaker in a placing, which made up around 15% of its holdings. The shares were placed at 395p each, raising gross proceeds of around £257m. Following the placing, Permira will hold just over 364m shares in Dr Martens, which represent around 36.4% of the issued share capital.

Waste management group Renewi said on Wednesday that Toby Woolrych will step down as chief financial officer on 1 April after nearly 10 years in the role. Woolrych joined the board of Shanks Group in September 2012 and was part of the team that created Renewi through the 2017 merger with Van Gansewinkel.

Gene and cell therapy group Oxford Biomedica on Wednesday said it had signed a new licence and supply agreement on its LentiVector platform with US-based Cabaletta Bio. The deal gives Cabaletta a non-exclusive licence for LentiVector to be used on Chimeric auto-antibody receptor T programme, DSG3-CAART, for autoimmune disease.

Airtel Africa announced the first closing in the sale of its telecommunications tower assets in Tanzania on Wednesday to a joint venture company owned by a wholly-owned subsidiary of SBA Communications as majority owner, and Paradigm Infrastructure. The FTSE 250 company said the gross consideration for the transaction would be $176.1m.

Brazil-focussed mining and development company Serabi Gold published assay results from recent surface and underground exploration holes into the Chico da Santa sector, as well as the first results into the newly-discovered Pele sector at the Palito Gold Mine in the northern Para state on Wednesday. The AIM-traded firm said the programme was targeting strike and resource extension of the established Ipe and Mongo veins, with results confirming extension along strike and at depth.

Embedded computer products specialist Concurrent Technologies updated the market on its trading for the year just ended on Wednesday, reporting that based on its unaudited accounts, it was expecting to report revenues and profitability “slightly ahead” of market expectations. The AIM-traded firm said that performance came despite ongoing challenges being experienced by the component supply chain globally.

Hungary-based budget airline Wizz Air said December capacity soared by almost 200% year on year, reflecting eased Covid-19 restrictions. The company on Tuesday said it sold 3.5m seats. Passenger numbers were up 293% to 2.6m, while the load factor was up 19.3 percentage points to 75.4%.

Genel Energy has suspended drilling operations at the QD-2 well of the Qara Dagh oil project in Iraqi Kurdistan, due to “insurmountable technical problems”, the company said on Tuesday. Three sidetracks had been drilled after the miner hit more complex geology above the target reservoir than expected.

AIM-listed Quadrise Fuels said on Tuesday that it has appointed Philip Hill as chief operating officer. Hill is a chartered chemical engineer with more than 20 years of experience in fuels and chemicals manufacturing, sales and distribution for BP and INEOS. Quadrise said he has "significant" technical and commercial experience in production operations, technology licensing, asset optimisation, project development and strategic planning.

Macfarlane said on Tuesday that it has sold its specialist labels business to Reflex for £6.4m. Reflex is a privately-owned company focused on the manufacture of labels and flexible packaging, with revenues of £135m and more than 800 employees, primarily in the United Kingdom.

Online estate agent Purplebricks has refuted a Telegraph article suggesting that it’s looking to offload its lettings business. The Sunday Telegraph reported that chief executive Vic Darvey and other senior employees had recently discussed plans to sell the embattled division and had approached auditors to assess the business prior to sale. It also said that internal audits had been planned, with checks being conducted to ensure there were no undiscovered problems.

Economic news

The Competition and Markets Authority has cleared Admiral Taverns' takeover of the Hawthorn pub business. The competition watchdog launched an investigation into the deal last year but on Friday it said it had accepted undertakings given by Admiral and as a result would not be referring the acquisition for an in-depth probe.

Growth in the UK construction sector hit a three-month low in December amid disruption from the Omicron variant, according to a survey released on Friday. The IHS/Markit CIPS construction purchasing managers' index fell to 54.3 from 55.5 in November, but remained above the 50.0 mark that separates contraction from expansion. Some survey respondents said tighter pandemic restrictions and rising Covid cases had acted as a brake on recovery, especially in the commercial sector.

UK house prices rose in December at the fastest annual pace since July 2007 amid strong demand and low supply, but are expected to cool in 2022, according to a survey released on Friday by Halifax. Prices rose 9.8% on the year following an 8.2% increase in November. On the month, prices were up 1.1% in December, in line with the previous month, with the average property price now standing at a new record high of £276,091.

Consumer caution around the Omicron variant of Covid-19 saw retail footfall slip back in December, with industry data on Friday showing an 18.6% decline in the month when compared to the pre-pandemic period two years prior - below the three-month average decline of 16.4%. The British Retail Consortium’s Footfall Monitor also recorded a 2.9 percentage point decrease from October.

The Competition and Markets Authority confirmed on Thursday that chief executive Andrea Coscelli will step down from the role at the end of his term in July. Coscelli joined the competition watchdog as an executive director when it was created in 2013 and has been CEO since July 2016. In March 2020, he was re-appointed for a further term of two years.

UK new car registrations recorded a slight rise in 2021 but were still well behind pre-Covid-pandemic levels as semiconductor shortages continued to hinder sales, according to figures released on Thursday. Around 1.65 million new cars were registered last year, up 1% from 2020 but 28.7% fewer than in 2019, the Society of Motor Manufacturers and Traders (SMMT) said.

Growth in the UK services sector eased to a 10-month low in December as the Omicron Covid variant took its toll, according to a survey released on Thursday. The IHS Markit/CIPS services purchasing managers’ index fell to 53.6 from 58.5 in November, hitting its lowest level since February. Still, it remained above the 50.0 mark that separates contraction from expansion.

Facebook parent Meta had lodged an appeal against the Competition and Markets Authority (CMA), after the regulator decided to block its 2020 acquisition of animated image sharing platform Giphy. The CMA ruled last year that Facebook - now Meta - needed to sell Giphy after finding that the $400m acquisition would reduce competition in the display advertising market.

UK supermarkets became popular once again as sales reached their highest level since March 2020 over Christmas with Tesco emerging as the main beneficiary. Despite soaring prices on the back of supply-chain constraints and labour shortages, Britons still spent £11.7bn in supermarkets in December, with own-brand sparkling wine and crisps in high demand, according to market research firm Kantar.

The UK manufacturing sector grew more than initially estimated in December amid a slight easing of supply chain delays, according to a survey released on Tuesday. The IHS Markit/CIPS manufacturing purchasing managers’ index printed at 57.9 in December, down from November’s three-month high of 58.1 but up from an initial reading of 57.6. A reading above 50.0 signals expansion, while a reading below indicates contraction.

International events

The US added 199,000 new jobs in December, according to the Bureau of Labor Statistics' non farm payrolls report, well and truly short of the 400,000 expected by analysts. However, November's non farm payrolls figure was revised up to show that 249,000 jobs were created, up from 210,000, while October's print was also lifted to 648,000 from 546,000.

Eurozone inflation rose unexpectedly in December driven by surging energy prices and putting the European Central Bank under more pressure to act. Consumer prices in the single currency region rose by 5% in the year to December, up from 4.9% in November - a new record high and well above forecasts of 4.7%.

German industrial production unexpectedly declined in November, according to figures released on Friday by Destatis. Output fell 0.2% on the month following a revised 2.4% increase in October, missing expectations for a 1% jump. On the year, production was down 2.4% in November following a 0.9% drop the month before.

First-time claims for unemployment benefits came in at 207,000 in the week ended 1 January, according to the Labor Department, up from 200,000 in the previous week and above the 195,000 forecast by economists. Continuing claims, which run a week behind the headline number, also increased, rising by 36,000 to 1.75m, while the four-week moving average, which accounts for weekly volatility in the numbers, grew to 204,500.

Producer prices continued to rise at a fast clip in the single currency bloc during the month of November with dearer energy the main culprit. According to Eurostat, euro area producer prices advanced at a month-on-month pace of 1.8%.

Internet giants Google and Facebook were eyeing up fines totalling €210m, it was reported on Thursday, for breaking European Union privacy rules. According to Politico, France’s privacy regulator - the Commission nationale de l'informatique et des liberté (CNIL) - was preparing to fine Alphabet’s Google operations in Ireland and the United States €90m and €60m, respectively.

Factory orders returned to growth in Germany in November, with fresh data from Destatis on Thursday showing a 3.7% month-to-month increase, above the consensus for a 2.1% rise. The fall in October was also upwardly-revised to 5.8%, while the working day-adjusted year-on-year rate rose to 1.3%, from a revised 0.1% in October.

China’s services sector expanded in December amid improved demand, according to a survey released on Thursday. The Caixin services purchasing managers’ index rose to 53.1 from 52.1 in November, coming in above consensus expectations of 51.7. A reading above 50.0 indicates expansion, while a reading below signals contraction.

Levels of activity in America's services sector continued growing at a steady pace last month, although cost pressures reached a new series high, according to the results of a closely-followed survey. A preliminary reading for IHS Markit’s services sector PMI in December was revised up from 57.5 to 57.6.

Private sector employment in the US grew more than expected in December, according to the latest data from ADP. Employment rose by 807,000 from November, coming in ahead of expectations for a 400,000 jump. Meanwhile, the November total of jobs added was revised from 534,000 to 505,000.