The Trader Nicole Elliott returns on 6 January with the Market Outlook column.
IC TIP UPDATES:
Regional REIT (RGL) has announced six new lettings signed at 3 per cent above estimated rental value, equivalent to £589,856 in annual rental income. Stephen Inglis, chief executive of the trust’s manager, London & Scottish Property Investment Management, says that “demand continues to be strong” and the group has “no shortage of properties to make further acquisitions...subsequently rent out at higher levels or seek an attractive disposal rate." Buy.
IRC Limited, in which Petropavlovsk (POG) owns a 31.1 per cent stake, has announced that its K&S plant is close to operating at close to full capacity after resolving issues at its ball mills. However, ramping up issues at the drying unit – which removes excess moisture from the iron ore concentrate – mean shipment volume is being restrained. The Amur River Bridge over the Russia-China border is due to be completed in 2020 which could reduce K&S transportation costs to Chinese customers by up to $5m (£3.8m) per tonne. Prices in the 65 per cent iron ore market remain stable. With regards to Petropavlovsk, buy.
OTHER COMPANY NEWS:
AstraZeneca (AZN) has secured approval from the US Food and Drugs Administration (FDA) for the use of Lynparza as a maintenance treatment of germline BRCA-mutated metastatic pancreatic cancer. In a phase three trial, the drug nearly doubled the time patients lived without disease progression or death versus a placebo. Lynparza is being jointly developed and commercialised with Merck & Co as part of a global strategic oncology collaboration. The drug has already been approved for the treatment of advanced ovarian cancer and metastatic breast cancer in 65 and 44 countries respectively. Astra sees oncology medicines as a key growth driver with pancreatic cancer having a “high unmet medical need”.
The Competition and Markets Authority (CMA) has referred Amazon’s (US:AMZN) investment in Deliveroo for an in-depth phase two investigation. Amazon was the lead investor in a $557m (£440m) funding round announced in May but an initial look by the regulator concluded the transaction could harm competition in both the online restaurant food and convenience grocery delivery markets. The two parties were given until 18 December to address the CMA’s concerns, but with no such undertakings offered, the CMA has decided to conduct a more thorough inquiry which could take up to six months to complete.
NMC Health (NMC) is continuing to hit back against Muddy Water’s allegations. On Friday, the group published the floor plans for its Royal Women’s Hospital – which were approved by the Health Authority of Abu Dhabi – as well as a letter from engineering consultant STH confirming the total built-up floor area is 18,595 square metres (sqm). Muddy Waters’ recent report suggested there were “numerous red flags” within the development of this hospital but its calculation of the costs involved were based on an area of 14,000 sqm.
