Weekly review

Equity view

GSK has announced positive results from a phase III trial of its ovarian cancer treatment, which met its primary endpoint of progression free survival. Headline results from the FIRST-ENGOT-OV44 phase III trial evaluating a combination of Zejula (niraparib) and Jemperli (dostarlimab) showed statistically significant differences compared with standard-of-care chemotherapy.

The UK government has cleared the £3.6bn sale of Royal Mail parent company International Distribution Services to Czech billionaire Daniel Kretinsky's EP Group. In a statement issued on Friday, EP Group said it had met requirements under Britain’s National Security and Investment Act to “provide services that are in support of UK national security”.

Judges Scientific said on Friday that chairman Alexander Hambro has decided to retire at the end of 2024. He will remain as a non-executive director until he steps down from the board at the conclusion of the next annual general meeting in May 2025. Non-executive director Ralph Elman will assume the role of non-executive chair on 1 January 2025.

Science investor IP Group announced on Friday that two of its quoted life sciences portfolio companies have received cash offers, with anticipated proceeds of £13.8m. The FTSE 250 company said it planned to allocate about 20% of the proceeds to expand its share buyback programme.

John Wood Group on Thursday said it had won a contract by OMV Petrom for a major project to boost production of sustainable fuel in Southeast Europe. After work on the front-end engineering and design at the PetroBrazi refinery in Romania, Wood will now deliver engineering, procurement and construction management to install a new bio-hydrotreater unit and relevant storage facilities. No financial details were disclosed.

Costain said on Thursday that its 50/50 joint venture with Siemens Mobility had secured a contract to deliver high voltage power supply systems for the HS2 project throughout the 225 km route from Birmingham to London. The contract is expected to be worth around £300m to the JV, with optional contract extensions. Costain said there’s a separate maintenance contract following the design and build phase which will operate for seven years and is valued at £32m.

Europe-focused office and commercial property investor CLS Holdings has leased 9,600 square metres of office space for 20 years in Dortmund, Germany. The City of Dortmund's Office of Public Order has chosen to establish its new headquarters at 'The Yellow' office in central Dortmund, representing one of the largest leases in the Ruhr district in 2024.

Outsourcing giant Serco forecast full-year revenue of £4.8bn in an update on Thursday, in line with its prior guidance but reflecting an organic revenue decline of 3%. The FTSE 250 company said the decline softened over the year, with North America leading an improvement in the second half. Underlying operating profit was expected to rise 9% year-on-year to £270m, with second-half profit up over 25% compared to 2023.

DIY group Kingfisher has announced the sale of its loss-making Brico Dépôt business in Romania to retailer Altex Romania for €70m (£58m) as it looks to focus on key growth markets. The Bucharest-headquartered subsidiary comprises 31 stores across 24 cities, along with distribution operations, which generated annual sales of £269m but made a loss of £18m in the most recent financial year.

National Grid on Wednesday submitted plans to invest up to £35bn in Britain’s electricity network over a five year period from April 2026. The plan includes £11bn to maintain and upgrade existing networks, alongside construction works for the first three of its accelerated strategic transmission investment (ASTI) projects. A further £24bn has been allocated to future projects, including around £15bn to increase network capacity.

Toys and games designer Character Group said on Wednesday that both revenue and profits had grown modestly in the year ended 31 August, in line with market expectations. Character said full-year revenues had grown from £5.3m to £6.5m, while statutory pre-tax profits rose from £4.7m to £5.7m and underlying earnings improved to £10.1m from £8.9m. Basic earnings per share jumped from 18.08p to 25.96p.

Shares in Feedback sparked in early trading on Wednesday, after the clinical infrastructure specialist adopted an optimistic outlook on the back of a recent fundraising. Updating on half-year trading, the AIM-listed business - which provides healthcare software and systems - said reported revenues in the six months to 30 November would likely be flat at £0.4m. Core product Bleepa, a communication and collaboration platform, accounted for around 90% of that.

Carlsberg's purchase of soft drinks maker Britvic has been given the green light after the UK’s competition regulator said it would not refer the $4.23bn deal for an in-depth probe. The deal will see the Danish brewing giant take over Britvic's bottling agreement with PepsiCo. The two companies said all regulatory conditions have been satisfied, including clearances from the European Commission and the UK's Competition and Markets Authority.

The British government has approved Bharti Global’s acquisition of a 24.5% stake in telecoms firm BT Group from France’s Altice. Following a national security assessment and assurances from BT, the government said in a statement on Monday that the acquisition had been approved "on the basis that BT will establish a National Security Committee within BT to oversee strategic work that BT performs which has an impact on or is in respect of the national security of the United Kingdom".

Specialist international distribution and service provider Bunzl said in an update on Tuesday that it expected full-year revenue for 2024 to rise about 3% at constant exchange rates, driven by acquisitions, although underlying revenue would see a small decline. The FTSE 100 company said that at actual exchange rates, revenue was forecast to be between flat and 1% lower compared to 2023, reflecting currency headwinds.

Commercial property business Land Securities has acquired a 92% stake in Liverpool ONE from the Abu Dhabi Investment Authority and Grosvenor for a total consideration of £490.0m. Land Securities said on Tuesday that its acquisition of the shopping centre was in line with its objective to grow its investment in major retail destinations, recycling the proceeds from its £464.0m of non-core sales earlier in the year.

Australia's financial crime regulator has started civil penalty proceedings against Entain Group related to alleged contraventions of an anti-money laundering and counter-terrorism financing act. The Australian Transaction Reports and Analysis Centre (AUSTRAC) said on Monday that it found "systemic failures" in the company's approach to its AML/CTF obligations, such as not having adequate controls to confirm customers' identities and not conducting appropriate checks on higher-risk customers.

Shares in media group Videndum tanked on Monday after the company warned of a slower-than-expected recovery in end-markets. The company, which provides hardware and software to the content creation market, said in a pre-close trading update on Monday that it expects to break-even for 2024, when excluding a £25m exceptional write-off and £10m in restructuring costs.

Clinical-stage biotech group Puretech Health has announced promising results from the trial of its lung disease treatment deupirfenidone, which the lead investigator hailed as "extremely exciting". The ELEVATE idiopathic pulmonary fibrosis (IPF) study was a Phase 2b trial evaluating Puretech's deupirfenidone over 26 weeks, compared with a placebo and one of the two existing standard-of-care treatments for IPF, pirfenidone.

Computer products manufacturer Concurrent Technologies said on Monday that it had received a $3.33m purchase order for one of its standard product computer boards. Concurrent Technologies said the order, which came from a US defence prime contractor, was for a product that conforms to the VME standard, an older standard, used widely in defence, and will be delivered in H125.

Economic news

UK retailers were struggling to find any cheer in the run up to Christmas as sales fell amid worries over rising costs next year, according to the Confederation of British Industry. The business lobby group's monthly retail sales headline balance improved to -15 in December from -18 in November. Sales volumes were judged to be "poor" for the time of year, to a similar extent as in the previous month (-23% from -22% in November). Retailers expect sales to remain below seasonal norms in January, but to a lesser degree (-18%).

UK car manufacturing fell 30.1% last month to the worst November performance since 1980, according to the Society of Motor Manufacturers and Traders. British factories produced 64,216 cars last month, a 30% year-on-year drop and a ninth consecutive monthly decline. Output for both domestic and markets fell 56.7% and 21.3% respectively, while output year-to-date was down 12.9% to 734,562 units. 19,165 battery electric, plug-in hybrid and hybrid electric cars were made in the month, representing 29.8% of total output.

UK retail sales missed expectations in November, but borrowing figures came in better than expected, according to data released on Friday by the Office for National Statistics. Retail sales ticked up 0.2%. This was an improvement on the 0.7% decline seen in October, but was below analysts’ expectations of a 0.5% jump. The ONS said growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers.

The Bank of England left interest rates on hold at 4.75% on Thursday, in a move widely expected following a recent uptick in inflation. In its last meeting of the year, the Monetary Policy Committee voted by a majority of six to three to leave the cost of borrowing unchanged. The MPC has trimmed rates twice this year, each time by a quarter point, after record inflation eased significantly.

The Financial Conduct Authority (FCA) extended the deadline for firms to respond to complaints, it announced on Thursday, related to motor finance agreements without discretionary commission arrangements (DCAs), until 4 December 2025. It said the extension aligned with an earlier decision to delay responses for complaints involving DCAs, ensuring consistent handling of consumer issues.

Output volumes in the manufacturing sector fell in the quarter to December at the fastest pace since mid-2020, according to the latest Industrial Trends survey from the Confederation of British Industry. The survey showed that output volumes declined, with a weighted balance of -25 in December from -12 in the quarter to November. This marked the steepest drop since August 2020.

UK house prices are set to grow "modestly" in 2025, Halifax said on Wednesday, following a better-than-expected performance over the last 12 months. According to the mortgage lender's UK housing market review and outlook, published on Wednesday, the average UK house price now stands at £298,083, an increase of £13,641. Halifax said it was a "record" high, with the past peak prior to 2024 being June 2022, when the average house price reached £293,507.

UK house prices sparked in October, government data showed on Wednesday, as the market continued to strengthen, while average rents surged by more than 9%. According to the latest rent and house prices data from the Office for National Statistics, average UK house prices rose 3.4% in the 12 months to October, up from September’s 2.8% uplift. As a result, the average UK house price now stands at £292,000.

Amazon has reached a settlement with thousands of UK delivery drivers, it emerged on Wednesday, who claimed the company deprived them of fair compensation by misclassifying them as self-employed. According to an exclusive report from the Guardian, the settlement - which resolved a legal battle that started in 2021 - could cost Amazon and its delivery service partners (DSPs) millions of pounds.

UK inflation reached 2.6% in November, official data showed on Wednesday, the second consecutive monthly rise. According to the Office for National Statistics, consumer price inflation rose in the 12 months to November to 2.6%, up from 2.3% in October. Largely in line with expectations, it was the highest print since March.

International events

Consumer confidence in the US rose modestly, although inflation expectations were mixed, the results of a closely followed survey revealed. A final reading on the University of Michigan's consumer confidence index for the month of December came in at 74.0, which was up from 71.8 one month before. That was in line with a preliminary reading and the consensus forecast.

Americans continued to spend at a steady clip last month, while prices rose by a tad less than anticipated. According to the US Department of Commerce, in seasonally adjusted terms, personal incomes rose at a month-on-month clip of 0.3% during the month of November (consensus: 0.4%). Personal spending meanwhile increased by 0.4% (consensus: 0.5%). On the inflation front, the annual rate of increase in the price deflator for personal consumption expenditures ticked higher from 2.3% to 2.4%.

The annual change in wholesale prices in Germany unexpectedly turned positive in November for the first time in 17 months, according to data from Destatis on Friday. Producer prices were 0.1% higher than November 2023, following a 1.1% year-on-year drop in October, the Federal Statistical Office reported. The consensus forecast was for a decline of 0.3%.

China left benchmark lending rates unchanged at Friday’s monthly fixing, in line with expectations. The one-year loan prime rate (LPR) was held at 3.10% and the five-year at 3.60%. New and outstanding loans in China are based on the one-year LPR, while the five-year is used in the pricing of mortgages.

Activity in the US mid-Atlantic region weakened at the end of 2024, the results of a closely followed survey showed. The Federal Reserve Bank of Philadelphia's manufacturing sector index slipped from a reading of -5.5 in November to -16.4 for December. Economists had forecast a reading of 3.0. A key sub-index linked to companies' new orders swung from 8.9 to -4.3.

Americans lined up for unemployment benefits at a decelerated pace in the week ended 14 December, according to the Labor Department. Initial jobless claims fell by 22,000 to 220,000 last week, beating expectations for a smaller drop to 230,000. On a non-seasonally adjusted basis, initial claims sank by 57,932. Outstanding claims, on the other hand, eased by a smaller reading of 5,000 to 1.87m, while the four-week-moving average, which aims to strip out week-to-week volatility, edged higher by 225,500.

Norway's central bank kept interest rates on hold on Thursday at a 16-year high of 4.50%, as widely expected. Norges Bank said in a statement: "The committee judges that a restrictive monetary policy is still needed to stabilise inflation around target, but that the time to begin easing monetary policy is soon approaching. Based on the committee's current assessment of the outlook, the policy rate will most likely be reduced in March 2025."

Sweden's central bank reduced interest rates to their lowest level in almost two years on Thursday and signalled that another cut could be on the cards early next year.The Riksbank lowered its key policy rate by 25 basis points to 2.5%, in line with economists' projections, which it said would provide further support to the economy and help inflation stabilise at the target. The cut marked the fifth round of monetary easing this year, with the policy rate having now been cut by a total of 1.5 percentage points since May.

The Bank of Japan held interest rates unchanged at 0.25%, in line with expectations, sending the yen to a one-month low. Its nine-member board voted 8-1 to hold the short-term policy rate. Dissenting board member Naoki Tamura, who is a known hawk on policy, wanted it lifted to 0.5% because he felt inflationary risks were building. The yen touched a one-month low of 155.48 to the dollar. Hours earlier, the US Federal Reserve cut interest rates but indicated a more cautious path of easing in 2025, hitting global share markets.

Consumer confidence in Germany increased more than expected as income expectations and willingness to buy both improved. The forward-looking consumer confidence index from GfK and the Nuremberg Institute for Market Decisions (NIM) increased to -21.3 in January, up from a revised -23.1 the month before. While this was above the consensus forecast of -22.5, the consumer climate "remains at a very low level", according to Rolf Bürkl, consumer expert at NIM.