The Telegraph 11/06/19 - Vox Markets | Vox Markets

The Telegraph 11/06/19

AstraZeneca still on the hunt for ‘transformational’ cancer drug deals. AstraZeneca (AZN) will continue to look for ‘transformational’ drugs to add to its oncology portfolio, as it sharpens its focus under new cancer R&D chief José Baselga. Earlier this year the drug maker paid $1.36bn (£1.07bn) to work with Japanese pharmaceutical company Daiichi Sankyo on a promising breast cancer treatment, with a further $5.54bn to be paid to Daiichi if the drug achieves certain milestones. The size of the deal raised eyebrows among some analysts who worry about AstraZeneca’s growing debt pile and ability to make generous dividend payments to shareholders. However, it is a critical part of the company’s bid to beef up its ageing pipeline and a cornerstone of its new tactic to focus resources on cancer treatments that deliver major benefits rather than incremental improvements, according to head of oncology David Fredrickson.

Saga sets sights on members’ savings in Goldman Sachs deal. Saga (SAGA) is hoping to revive its fortunes in an unlikely alliance with Wall Street banking giant Goldman Sachs. A deal between the retirement specialist and the US bank, dubbed the “great vampire squid” for its influence over the banking industry, is expected to be announced on Tuesday morning. Saga chief Lance Batchelor said the group has signed a partnership with Goldman’s savings arm Marcus, the online bank that launched in the UK late last year, as many of the group’s customers “hold a large proportion of their wealth in savings”. The move has emerged months after Saga unveiled an annual loss and promised a “fundamental” change in strategy that would cut profits in an announcement that sent shares tumbling almost 40% to a record low.

Commercial property developer Helical (HLCL) leapt to a one-year high after confirming that it has rebuffed “more than one” takeover approach in the “recent past”. The company said that it has batted away the proposals as they were “at a significant discount” to the value of its assets. Matthew Saperia, at Peel Hunt, believes “the market has been undervaluing Helical for some time now”, arguing that a bid above 470p would fairly value the company.

RSA Insurance Group (RSA) inched up to a fresh eight-month high after Citigroup raised hopes of a special dividend as the bank added the insurer to its “buy” list. Analyst James Shuck warned that RSA has “some issues in the UK business that may take time to fix” but expects the stock to be boosted by lower earnings volatility. “We expect improving newsflow in the UK and increased potential for a full-year special dividend to be established,” he told clients in an upgrade as RSA rose 0.4p to 570.6p.

Prudential (PRU) was lifted to “buy” by Citi on hopes that the insurance giant could surprise investors by executing its demerger as soon as September. It pointed out that the major hurdles to the split are either on track or complete as Prudential edged 11.5p higher to £16.36.

Playtech (PTEC) climbed to a one-month high after Jefferies put the gambling software provider on its “buy” list, arguing it is poised to tap online growth in global gambling. Analyst James Wheatcroft told clients that Playtech is “well positioned” as the “leading tech provider” for the sector and is valued at a “material discount to gambling peers”. He initiated coverage with a 570p target price, boosting Playtech 7.9p to 427.9p.

Scapa Group (SCPA) clawed back 19.4p to 183p after boss Heejae Chae reversed his decision to quit the maker of specialist tapes as the company eyes legal action against Convatec Group (CTEC) over a cancelled contract. Its shares tumbled 47% last week after ConvaTec terminated the contract that provides $30m (£24m) in revenue every year.

Questor: a strong competitive position in a hot market – GB Group (GBG) is worth holding. Questor share tip: the identity verification firm is still growing strongly, although we must keep an eye on valuations


Mentioned in this post

Convatec Group
GB Group
RSA Insurance Group
Scapa Group