56 1GM RK Saturday September 5 2020 | the times
BusinessMarkets
5
Tom Howard Market report
Once again, European stock
markets lost early gains after
another morning rout in New York.
The FTSE 100, comfortably
ahead for most of the day, finished
51.78 points, or 0.9 per cent, down at
session lows of 5,799.08. London’s
blue-chip index fell 164.49 points or
2.8 per cent on the week, its third
weekly loss on the spin.
Similarly, a late-afternoon reverse
saw the FTSE 250 close 105.41
points, or 0.6 per cent, lower at
17,354.28, making its losses for the
week 434.05 points or 2.4 per cent.
Technology stocks, which have
been chased to record highs over
the spring and summer, bore the
brunt of the sell-off on Wall Street.
That hit the big tech investors on
this side of the Atlantic.
Polar Capital Technology Trust,
which owns stakes in most of the
Silicon Valley giants, tumbled 155p,
or 7.2 per cent, to £20.10; Scottish
Mortgage Investment Trust, whose
biggest holding is Tesla, the electric
car maker, fell 58½p, or 6.4 per cent,
to 849p; and Allianz Technology
Trust, with Apple and Microsoft as
its top two investments, dipped
150p, or 6.2 per cent, to £22.80.
Four big housebuilders also
struggled after the Competition and
Markets Authority launched an
investigation after it uncovered
“troubling evidence” over the way
leaseholds were sold. Barratt
Developments fell 7.0 per cent to
501¾p; Persimmon lost 5.2 per cent
to close at £25.03; Taylor Wimpey
retreated 5.0 per cent to 114¾p; andH
ikma shares hit their
highest price for two
and a half months as
analysts rushed to
update their forecasts
after a US court ruling over the
drugmaker’s generic version of a
prescription grade fish oil capsule.
Amarin, the US company that
makes Vascepa, a treatment for
heart disease, failed to overturn an
earlier ruling which found Hikma’s
copycat didn’t infringe its patents.
Few in the City had thought that
Hikma would win the initial patent
battle so it wasn’t a given that the
final decision, which wasn’t
expected until later in the year,
would fall in its favour.
Barclays admitted that it had
“stayed on the sidelines” while itwaited to see what happened but it
moved quickly to slap an
“overweight” rating on the stock
once the verdict was issued and its
analysts started to throw in
contributions from the Hikma fish
oil capsule into their estimates.
“We expect this product to be
significantly accretive to both 2020
and 2021 and see the potential for
the product to have a longer tail,”
said Emily Field, a pharmaceuticals
and healthcare analyst at the bank.
Barclays thinks Hikma will
launch its generic pill next month
adding £290 million or so to the
top-line over the next five years,
boosting underlying profits by
around £225 million. Hikma shares
rose 45p, or 1.9 per cent, to close at
£24.57, their highest since June.Hikma lands whopper as it nets
victory in fish oil pill patent case
Truworths to invest in
revival of Office shoes
The South African owner of shoe
chain Office is planning to close
half of its loss-making stores over
the next four years. Michael
Mark, outgoing chief executive of
Truworths, said it will shut
around 58 of its 129 UK stores.
Office is not following the trend
of using a company voluntary
arrangement to close its shops.
Instead it plans to stagger the
closures as leases expire with 28
stores shutting next year and a
further 30 between 2022 and- Truworths, which has
owned Office since 2015, had
tried to sell the business but
instead has put in another
£6.5 million to revive it. Truworths
plans to increase the number of
Office’s own-brand shoes sold to
boost profit margins.
Indivior chairman
steps down suddenly
Howard Pien, 62, the chairman of
Indivior, who has been on
medical leave since June 15, has
notified the board of his
resignation with immediate
effect. Daniel Tassé, interim
chairman of the newly promoted
FTSE 250 drugs company, will
continue in the position until the
board appoints a permanent
successor, Indivior said after the
stock market close. Mr Tassé
joined the board in 2014 and was
appointed senior independent
director in 2016. He is a member
of the audit and remuneration
committees. Indivior was spun off
from Reckitt Benckiser in 2014. It
is based in Virginia in the US, but
retains an office in Slough. The
shares closed down 2½p, or 2.1 per
cent, at 114¼p.Takeover of Arm would
hurt UK, says union
A leading union has warned that
the mooted takeover of Arm, the
chip designer, by its US rival
Nvidia would harm Britain’s
technology industry. Prospect,
which represents workers in
science and technology, has
written to Alok Sharma, the
business secretary, to express
concern over a possible takeover.
Nvidia was reported to be in
talks with Softbank to acquire
Arm. Cambridge-based Arm was
bought by the Japanese
company just after the 2016
Brexit vote. Mike Clancy,
Prospect’s general secretary,
said: “It would be irresponsible
for the government to take a
hands-off approach to a
company that accounts for 2 per
cent of UK R&D spending.Company Change
Rank Group Recovers after hitting three-month low on Thursday 4.5%
Marshalls Climbs amid heaviest trading volumes since June 4.4%
Vesuvius Growing steel demand bodes well for business 4.4%
Ferrexpo Tracks rise in iron ore prices 3.8%
Anglo American Metals prices rise on strong Chinese demand 3.6%
Allianz Tech Trust Apple, its biggest holding, falls sharply at New York opening -6.2%
Scottish Mort Inv Trust Burnt by US tech rout -6.5%
Barratt Developments Under investigation about leasehold sales practices -7.0%
Polar Capital Tech Trust Suffers after big tech sell-off in the US -7.2%
Hammerson Pulled back after surge earlier in week -7.7%The day’s biggest movers
Name Pre-tax figure
Profit (+) loss (-)Dividend
Capital & Regional (property HY) -£115.5m (-£55.4m) nil
Eurocell (construction HY) -£16.5m (£10.4m) nil
Zegona Comms (telecoms HY) €7.1m (€33.7m) nil
6 Results in brief are given for all companies valued at more than £30 million. f = final p = payableResults in brief
Countryside Properties was
marked down 4.5 per cent at 311p.
Bucking the trend for a change
were travel stocks, which have been
battered this year. Not yesterday
though, as pressure rose on the
government to bring in coronavirus
testing at airports. Tui, the holiday
group, rose 7¼p, or 2.1 per cent, to
347¼p; Carnival, owner of P&O
Cruises, gained 38p, or 3.5 per cent,
to close at £11.32; and IAG, theBritish Airways owner, flew 3½p, or
1.7 per cent, higher to 219½p.
Miners also found themselves in
an exclusive group of winners, as
metal prices gained on continued
demand from China, the world’s
biggest consumer of raw materials.
Ferrexpo, the Ukrainian iron ore
producer, rose 6½p, or 3.8 per cent,
to 180p; Anglo American, which
mines everything from coal to
diamonds, improved 63¾p, or
3.6 per cent, to £18.33; and
Glencore, the giant commodities
trader, put on 4¾p, or 2.8 per cent,
to end the week at 171½p.The National Leasehold Campaign took their dispute with builders to Parliament
ALAMYWall Street report
Investors ignored a big fall in US
unemployment to focus on selling
tech shares. But early steep losses
were reversed and the Dow Jones
industrial average finished 159.42
points lower at 28,133.31, for a
weekly drop of 1.8 per cent.Capital & Regional hit
by virus restrictions
Shopping centre owner Capital &
Regional reported sharply lower
profits because of the coronavirus
restrictions. Revenues fell to
£16.2 million in the first half,
compared with £25.2 million a
year ago. Adjusted earnings
dropped from £14.8 million to
£4.6 million. Lawrence Hutchings,
chief executive, said: “While all
our centres remained open
throughout the pandemic, the
restrictions have naturally
impacted on operations.” He
added that a capital raising in
December and “measures agreed
with our lenders” would create a
“sound base for navigating the
short to medium term”.
Occupancy levels fell from 97.2 per
cent at the turn of the year to
95 per cent at the end of June.