Daily market update: Trump pains markets, defence stocks, Anglo American, Indivior

“Donald Trump has upset markets once again,” says Russ Mould, investment director at AJ Bell.

“Doubling import taxes on steel and aluminium, and aggravating China once again, mean we face a situation where uncertainty prevails. Trump’s continuous moving of the goal posts is frustrating for businesses, governments, consumers and investors.

“Equity markets were down across Europe and Asia, with futures prices implying a similar pattern when Wall Street opens for trading on Monday. Unsurprisingly, gold got a boost as investors returned to safe-haven assets.

“The defence sector was in demand ahead of the UK government setting out its plans to protect the country and support allies. Babcock, BAE Systems and Rolls-Royce were among the stocks in positive territory as investors targeted an industry with a clear earnings tailwind.

“The revolving doors of the London Stock Exchange span fast as investors were treated to a plethora of demerger and delisting news. Anglo American spun off its platinum interests while Indivior said it would wave goodbye to the London market.”

Anglo American / Valterra

“Anglo American has spun out its interests in South African miner Valterra as part of a bigger plan to streamline its focus on a more select portfolio of commodities.

“The move is partially in response to fighting off takeover interest from BHP and trying to show that Anglo American has a future as an independent business, and one which is now led by a sharper focus on what it does best.

“Valterra is already listed in South Africa and will now have its own listing in London as well. Anglo retains a 19.9% stake for now, yet it’s already pledged to sell down the remaining position in time.

“Anglo shareholders have inherited Valterra shares and normally in these situations we see a chunk of investors immediately sell the stock. Some shareholders might not want a single commodity company, others might view the Valterra shares as a freebie and liquidate them to raise cash, essentially treating it as a special dividend.”

Indivior

“The London Stock Exchange will be upset it is losing another big name. It’s another headwind for the exchange operator in trying to reinvigorate the UK stock market, and means the pressure is on to attract new names to the market and keep existing ones.

“Indivior is the latest company to close the door on a London listing. This isn’t a shock as Indivior had already given enough hints that its future was entirely Stateside. It had already switched its main stock listing to the US and effectively said it would monitor the relevance of the secondary listing in the UK. The latter remark was essentially Indivior only propping open the door for an ongoing London presence with its foot. It was just a matter of time before it walked away entirely.

“Its business is focused on the US and that’s where most of its shareholders are based and where its stock predominantly trades. The London listing only existed because Indivior was spun out of Reckitt, which itself is a London-listed entity. At the time, it made sense to offer a seamless transition and support a London listing for the spun-out entity. Plenty of time has now passed. The demerger happened 11 years ago, and Indivior’s shareholder base is likely to have gone through natural evolution in that time.”

These articles are for information purposes only and are not a personal recommendation or advice.