Reeves embraces finance
Jeremy Hunt is doing his best to reinvigorate the City and revive pension fund investment in London-listed shares and growth assets. There should be some progress in the months ahead with several flotations in the pipeline, including a retail and institutional offer for the 38.6 pc stake in NatWest held by the Government.
Ground-breaking reforms, such as the London Stock exchange Group (LSeG) proposal for an intermittent trading venue, where privately held and growth companies can raise new capital, remain in abeyance.
City regulators move at a snail’s pace, to the frustration of the LSeG and the fintechs or neo-banks in the waiting room.
There is real concern that while UK enforcers take their time, New york exchanges – out in full force in Davos last month – will beat them to the finish line.
Labour is seeking to outpace the Tories in the same territory. Shadow Chancellor rachel reeves’ declaration that a Labour government would not reintroduce the cap on bankers’ pay may pop a few champagne corks on Lombard Street but will be less palatable on the doorsteps.
Britain passionately believes in free markets but there is little tolerance for fat cat pay. reeves is adopting the City script. It is hard for Labour to be critical of a sector which accounts for 12 pc of GDP and in 2023 delivered a trade surplus of £92 bn.
Her description of the Square mile as one of Britain’s ‘greatest assets’ will have one predecessor, John McDonnell, choking on his cornflakes. reeves and her team have reached for the copy and paste button.
The embrace of ‘sustainable finance’ is straight out of the lobby group City UK’s ‘Key Facts’, which points out that £160.4 bn of these bonds were issued in 2022.
If she becomes Chancellor, reeves’ first task should be to make sure the ‘edinburgh reforms’, designed to unleash London equity and capital markets, are extracted from a regulatory quagmire.
Shot in the arm
SHAREHOLDERS have waited a long time to see all metrics at GSK pointing in the right direction.
The divorce from the Haleon consumer healthcare side gives the pharma group plenty of visibility, with the shares up 2 pc.
over the full year 2023 sales, profits and earnings per share are all comfortably up.
as pleasing to long-term investors (including this writer) is that chief executive emma Walmsley is promising an even brighter future, with the outlook for 2024 and the next decade upgraded.
What is good for GSK is good for Britain. Chancellor Jeremy Hunt recognises that life sciences are critical to rebooting growth prospects. The immediate progress at GSK is being driven by vaccines.
Shingles sufferers and vulnerable groups will be forever grateful for shingrix, a blockbuster three times over in 2023, with sales of £3.4 bn and 17 pc growth.
as exciting is the emergence of arexvy, a respiratory vaccine for the over-60s. It has joined the elite, with £1.2 bn of sales in a couple of quarters.
as approvals from regulators move down the age scale, there is much more to come. Satisfyingly, it is outperforming US competitor Pfizer on the same playing field.
Walmsley is upbeat about the pipeline for blockbusters, projecting 12 further launches from 2025, with HIV and oncology among areas earmarked for progress.
Future prospects will be augmented with bolt-on acquisitions using what remains of the Haleon treasure chest and buoyant cash flows. The cloud on the horizon is in the Delaware courts, where claimants are seeking compensation for alleged ill-effects from the use of an ulcer compound zantac.
These matters are often settled, and lesser zantac suits in California have not proved hugely painful.
Wrong number
VODAFONE boss margherita Della Valle is finding that reshaping Britain’s mobile pioneer is tricky.
efforts to merge Italian operations with French rival Iliad have fallen on stony ground. In Britain, a proposed merger with Hutchison’s Three is in the hands of the Competition and markets authority.
Similarly, abu Dhabi’s goal of becoming a cornerstone investor has fallen under the spell of the under-used National Security and Investment act.
Spain has been sold to UK start-up Zegona Communications.
That has not been enough to halt a 27 pc plunge in the share price over the last year.
yikes!