The FTSE 100 rallied on Monday amid a broad European rally driven by defence stocks sparked by positioning for greater defence spending.

Donald Trump’s approach to Ukraine peace negotiations has strengthened the argument that Europe must bolster its armed forces with investors quickly buying up defence shares, including London’s BAE Systems and Rolls Royce.

“European markets pushed ahead on Monday amid talk of greater defence spending, M&A activity and a series of important political meetings,” said Russ Mould, investment director at AJ Bell.

“Ukraine peace talks topped the agenda, while Chinese president Xi Jinping undertook a rare meeting with some of China’s biggest tech firms to boost business sentiment.”

BAE Systems was the top FTSE 100 riser as investors tweaked their portfolios to reflect a possible increase in defence spending.

“Comments by secretary general Mark Rutte that NATO members will have to boost their defence spending by ‘considerably more than 3%’ of GDP put a rocket underneath defence stocks. BAE Systems jumped to the top of the FTSE 100 risers list as investors hoped its earnings prospects would be greatly improved. Mid-cap defence player Chemring also enjoyed a boost.

BAE Systems shares surged by 7% while Rolls-Royce gained 3%, reaching an all-time record high.

Away from the defence sector, Barclays and NatWest enjoyed buying pressure following a bout of profit-taking last week. Both banks dipped after releasing their results, but the weakness proved short-lived, with investors piling back in and sending the pair higher by more than 3%.

Barratt Redrow added 1%, and Persimmon was flat after Rightmove said house prices showed signs of slowing, although sales remained robust.

“UK asking prices rose modestly from January to February, slightly below the typical seasonal gain, with the year-on-year increase also slowing according to data from Rightmove,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Despite this, sales activity remains solid, with strong buyer demand and an uptick in new sellers. After a tough 2024, housebuilders have generally been upbeat about the outlook for 2025, and the steady market activity supports some cautious optimism.”

Tekcapital shares gained on Monday after the UK-based intellectual property investment group issued a year-end portfolio update and affirmed its plans to return capital to shareholders through special dividends.

Tekcapital reported a 38% increase in its investment portfolio value to $64.2 million in 2024, significantly outperforming market benchmarks and peer companies during the year.

The company’s strong performance is reflected in its share price growth of 27% during 2024, substantially outpacing both the AIM All-Share Index, which declined 5.5%, and the FTSE 250, which gained 5.69%.

This growth was driven by achieving key milestones for portfolio companies, including the successful public listing of two portfolio companies, MicroSalt plc and GenIP, on the AIM market.

MicroSalt had a rip-roaring start to life as a listed company, with shares tripling before falling back. The low-sodium salt technology company announced a ten-fold increase in projected volumes at the beginning of 2025, setting MicroSalt up for another promising year of growth.

The company supplies one of the world’s largest snack food companies with its low-sodium products. It has signalled that the relationship is expanding by announcing increased volumes towards the end of last year, which were followed by encouraging projections. The snack food company remains unnamed, presumably due to the commercial sensitivities of adopting MicroSalt’s technology.

GenIP was listed during a challenging period for the wider market in late 2024 and has set about ramping up its AI-enhanced analytics services aimed at the technology transfer industry. GenIP announced a record order and fresh commercial relationships since listing.

With the listing of GenIP and MicroSalt, four out of Tekcapital’s five portfolio companies are now publicly traded, with the fifth company, Guident, the autonomous vehicle safety company, preparing for a NASDAQ listing in 2025.

Guident may prove to be the jewel in Tekcapital’s crown. Tekcapital is preparing to list Guident at a crucial juncture for autonomous vehicles created by the wider adoption of the technology. Peers listing in the US are attracting bumper valuations, and everything points to a very favourable IPO for Guident.

“We are excited to provide this 2024 summary report which describes a few of our portfolio company achievements and their contribution to our profitability and growth. In 2024 our unaudited net assets reached US$65.1m, an increase of ~36%, over the previous year, with an NAV per share of US $0.31 or £0.25,” said Dr. Clifford M. Gross, Chairman.

“Our performance reflects strong commercial progress through the completion of two AIM listings (MicroSalt plc & GenIP plc) which we are keen to hold. As a result of this progress, four of our five portfolio companies are now listed. Additionally, we observed significant commercial traction for Innovative Eyewear Inc. as they achieved several new product and go-to-market milestones. We were also pleased to note Microsalt has received new and follow-on B2B orders from a major snack food manufacturer. Further, we believe that Guident Corp’s commercial advancements coupled with improving market conditions in the autonomous vehicle industry, have created the ideal opportunity for Tekcapital to further crystalise its balance sheet in 2025.

The Tekcapital Chairman continued to explain the group’s strategy and objective to return capital to investors through special dividends:

“Tekcapital’s core business objective is to grow its net assets and return material levels of capital generated from its portfolio companies’ successes to shareholders via special dividends. As ever, we remain committed to this objective, and our portfolio companies’ progress in 2024 means we have taken strides forward in delivering on our long-term strategy,” Gross explained.

Despite Tekcapital’s strong performance, the stock currently trades at a 64% discount to its Net Asset Value (NAV), a larger gap than its industry peers. For comparison, Molten Ventures plc trades at a 52% discount, IP Group plc at 45%, Frontier IP Group plc at 35%, and Mercia Asset Management plc at 25%. The industry average discount for UK closed-end funds in 2024 was 16.6%, according to Morningstar.

This discount may prove to be an opportunity for investors as general market sentiment improves and Tekcapital completes the Guident IPO, which could significantly increase Tek’s net asset value.

In addition, the company maintains a notably efficient operation, with administrative expenses of just US $2.2 million in 2024, the lowest among its peer group. This lean structure, combined with its strategic focus on a select number of portfolio companies, has contributed to its strong financial performance.

Mining giant Anglo American has outlined its June timeline for the separation of Anglo American Platinum, following the platinum company’s release of its 2024 annual results.

Anglo American has scrambled to fight off takeover interest from BHP, and this demerger is one measure undertaken in an attempt to keep the Anglo listing going.

The unit will be listed on both the Johannesburg Stock Exchange and the London Stock Exchange, meaning the London-listed AAL entity will retain some exposure to its platinum business.

Anglo American Platinum has declared dividends amounting to R16.5 billion (approximately £0.7 billion), which comprises both a final dividend for 2024 and an additional cash dividend.

These payments will be distributed to all shareholders before the demerger takes place. As Anglo American currently holds approximately 67 per cent of Anglo American Platinum’s shares, it anticipates receiving roughly £0.5 billion from these dividend payments.

Anglo American Platinum reported adjusted EBITDA for 2024 of R19.8 billion, approximately $1.1 billion.

“We are on a clear timeline towards demerging Anglo American Platinum – the world’s leading PGMs producer – in June, with its primary listing on the Johannesburg Stock Exchange and an additional listing on the London Stock Exchange,” said Duncan Wanblad, Chief Executive of Anglo American.

“Consistent with our commitment to deliver a responsible demerger, Anglo American intends to retain a 19.9% shareholding in Anglo American Platinum in order to further help manage flowback by reducing the absolute size of the shareholding that will be demerged. Anglo American will no longer have any representation on the Anglo American Platinum board post demerger and we intend to exit our residual shareholding responsibly over time, and subject to customary lock-up arrangements.”