Last week, we suggested that the index was more likely to recover towards 5,200 than continue the recent slide, so the minor recovery in the past few days has been largely in line with expectations.

There were some minor concerns last week on bad GDP data, and of course we had sizable moves lower from heavyweights such as Nvidia and Meta.

However the wider market held last week’s lows and buyers moved back in with enough scale to lift the markets once more. With strong trends of this nature the buying and selling rarely turns off like a tap, instead if it turns it turns with the pace and grace of an oil tanker. We have seen heavy buying interest for the past few months and the recent minor sell-off is likely to appear as just too attractive an opportunity to miss for many of these buyers.

The longer term bearish arguments do continue to mount up: Inflation resurfacing, higher personal debt, slower GDP growth, inverted yield curve, sluggish personal spending, but so far these significant red flags have not been enough to dent the wider bullish sentiment.

As a result we maintain last week’s view that 5,200 remains on track. In order to turn negative, last week’s lows will need to be broken, and even then more evidence that the underlying economy was struggling would be needed to suggest that the longer term buying interest was finally running out of steam, else this could just be seen as yet another buying opportunity. Leaving a positive outlook for the index overall next week, with moves under 4950 needed to turn more negative.

Poolbeg Pharma has revealed a substantial year of progress in which the well-capitalised biopharmaceuticals company made strides forward in the development of key medicines.

Poolbeg is increasing its focus on rare and orphan diseases by leveraging POLB 001’s potential to treat cancer immunotherapy-induced Cytokine Release Syndrome (CRS). The rare and orphan drug market is expected to grow rapidly, reaching $368 billion by 2030, and Poolbeg is well-positioned to benefit from opportunities in this space given its leadership team’s expertise.

POLB 001 showed positive results in an influenza human challenge trial and potential as an oral preventative therapy for CRS in cancer immunotherapy, with a market potential over $10 billion. Poolbeg has also achieved promising in vivo animal data post year-end.

The company is effectively utilising AI through collaborations with CytoReason and OneThree Biotech, which have yielded valuable insights into influenza and RSV through the analysis of human challenge trial data.

Poolbeg also noted progression in the Oral GLP-1R agonist program by engaging key opinion leaders and working towards a clinical trial to demonstrate oral delivery, tapping into the projected $150 billion obesity and diabetes market by 2031.

Poolbeg has an enviable cash position with £12.2m on hand as of 31st December 2023.

“We made excellent progress and hit multiple key milestones in 2023, the most important of all perhaps was filing patent applications which will give us international protection over the use of POLB 001 as a preventative therapy for cancer immunotherapy-induced CRS, in addition to the existing severe influenza indication,” said Jeremy Skillington, PhD, Chief Executive Officer of Poolbeg Pharma.

“With a market opportunity exceeding US$10 billion in cancer immunotherapy-induced CRS, positive data generated, and a robust patent portfolio – POLB 001 has great potential to generate significant value for shareholders.”

On Tuesday, Poolbeg also announced an option to acquire a novel topical muco-adherent formulation of Pentoxifylline, a treatment for patient’s suffering from Behçet’s Disease from Silk Road Therapeutics Inc.

Investors were evidently encouraged by today’s updates and shares were trading 6% higher at the time of writing.

The underlying momentum at Whitbread is intact. Revenue was up 13 % in the 52 weeks to 29th February 2024 and underlying profit before tax jumped 36% to £561m.

The hotel business was Whitbread’s driver of record performance. UK accommodation sales grew 12%, helping margins increase to 21.2% and rapid expansion in Germany saw sales surge 62%.

“Whitbread’s served up a set of record beating results for the 12 months ending 29 February 2024. Premier Inn UK has continued to outperform the rest of the market and management are seizing the opportunity to convert 112 restaurants into 3,500 new room extensions. This appears to be a shrewd way to optimise the current real estate footprint and a capital efficient method to help reach the 2029 target of an estate of at least 97,000 rooms,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

Spelling out where Whitbread sees its business going, the company is culling restaurant space in favour of rooms. Whitbread has a portfolio of tired restaurant brands that do not resonate with consumers as well as they used to. To avoid expensive rebranding and marketing activities, Whitbread has decided the best course of action is to convert the restaurants into rooms on a massive scale. 

Investors will be pleased to see another buyback and a 26% jump in the final dividend. While this is not reflected in today’s 0.5% gains in shares, Whitbread is entering a period where the food business may be a drag on earnings and require large amounts of capex to rectify. 

As highlighted by Nathan, there may also be nagging concerns about the valuation of the stock after such a good run which has acted as a counterweight to shareholder returns announced today. 

“Whitbread’s ongoing expansion and commitment to returning cash to shareholders has seen debt levels creep up but not to levels that are overly concerning,” Derren Nathan said.

“The Board’s indicated its confidence in its ability to further drive growth and expand margins with a generous dividend increase and renewed share buyback programme. The valuation has come under pressure of late largely due to wider concerns about the health of demand for hospitality. But Whitbread is a first-class operator that should be able to execute its medium-term goals and ride out any short-term turbulence.”

Innovative Eyewear has announced plans for a new stock and warrant offering the current market price. The company has entered into an agreement to issue and sell 4,200,822 new shares of its common stock at a price of $0.244 per share through a registered direct offering priced at the current market rate under Nasdaq rules.

Additionally, Innovative Eyewear will issue unregistered warrants to purchase up to 4,200,822 shares of common stock in a concurrent private placement. These warrants will have an exercise price of $0.244 per share.

The funds will be used to support Innovative Eyewear’s operations and growth initiatives in the smart eyewear market. The company has recently announced new distribution agreements and signed football pundit Micah Richards as brand ambassador as part of a global marketing push.

This raise is notable because it was completed at the current market price, demonstrating investor demand for the stock without having to offer a major discount.

The FTSE 100 started the week off on the front foot with more gains for London’s leading index as sentiment remained high after a better session in the US on Friday.

Investors will be delighted to see the FTSE 100 notch up another 0.4% gain, bringing the index within touching distance of 8,200 and another fresh record high.

“The FTSE 100 has clearly had its Ready Brek as the blue-chip index continues to glow and sustain energy that we haven’t seen in the UK market for a long time,” said Russ Mould, investment director at AJ Bell.

After a robust earnings week last week, better-than-feared US inflation data has helped maintain the upbeat mood with more earnings are expected this week. 

“Sentiment is upbeat at the start of the week, fuelled by relief that inflationary pressures in the US aren’t as bad as feared, and hopes return that a ceasefire could be negotiated in the Middle East. The FTSE 100 has scaled fresh heights, with another sprint higher in early trade. April has been a record-breaking month for the blue-chip index, with a glass-half full sentiment dominating,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The Footsie has gained more than 11% over the last six months, with super-patient investors finally rewarded by this spurt of growth.”

Improving geopolitics is playing a part in Monday’s equity rally as tensions subside. 

“Investor optimism has been buoyed by a rally on US markets on Friday, and developments in the Middle East. Negotiators from Israel and Hamas expected to meet in Egypt, while US Secretary of State Antony Blinken ups diplomatic efforts at the World Economic Forum in Riyadh, Saudia Arabia,” Streeter said.

Anything positive from the Middle East is feeding directly into stocks currently because the risk premium built into oil is diminishing, which is easing inflation concerns. 

Monday’s gains were broad, with most industry sectors rising. Frasers Group was the best performer with a 2.5% gain.

Petrofac shares were down heavily on Monday after the energy EPC company said its shares would be suspended due to a delay in the publication of its annual report.

Petrofac shares were down around 24% after the company announced it was engaged with the FCA regarding a short delay in publishing the full-year 2023 results, which will now be published on 31st May 2024. Petrofac shares will be suspended from 1st May 2024.

Alongside the suspension notice, Petrofac announced a trading statement and update on financing, which did little to support Petrofac shares.

Petrofac has secured an additional $300m in financing from secure note holders as it pursues asset sales to improve its financial position.

In a trading statement issued on Monday, Petrofac said EBIT would be around $15m to $20m lower, but its financial performance for the year ending 31st December was otherwise broadly in line with what had already been announced.

“The Board and management are focused on arriving at a comprehensive refinancing solution as quickly as possible. We are encouraged by the engagement with the ad-hoc group of noteholders, which we hope demonstrates momentum in this complex process,” said René Médori, Chairman of Petrofac.

Zenova Group shares jumped in early trade on Monday after announcing a new deal for the supply of their fire-protective paint.

Zenova Group, a fire suppression and interdiction solutions company, has secured a substantial two-year contract with Drips and Sparks Ltd. The contract entails the supply of 200,000 litres of Zenova’s FP coating, which will be applied to steel surfaces at various project sites of Gracewood Construction Ltd in the UK.

The order, valued at £2.4 million, will be paid in equal monthly instalments against deliveries to specified sites. This sizable contract follows a successful 12-month trial period with Drips and Sparks, facilitated by Zensafe Ltd, one of Zenova Group’s major sub-distributors in the UK.

Zenova shares were 26% higher at the time of writing.

“This is a major contract win for our FP paint,” said Thomas Melchior, CEO of Zenova Group.

“In addition to a significant effort from our sales team working alongside Zensafe, winning this is also the result of the Company’s now well-engaged strategy of focusing on validating and aggressively marketing our best-in-class fire suppression products through a streamlined B2B distribution model.

“Securing a contract of this size further demonstrates the value-add of Zenova and its suite of high performance products, as we bring solutions to global needs. I fully expect our team to continue to deliver new business across all of our paint and extinguisher products, and look forward to updating the market on those developments in the near-term and beyond.”

Personalised marketing SaaS company Eagle Eye has landed a major one-year deal with Tesco, Britain’s biggest supermarket chain. The contract, with an option to extend for another year, will see Eagle Eye’s AI-powered Personalised Challenges platform integrated into Tesco’s Clubcard program.

The Personalised Challenges solution is a digital gamification platform that serves customised promotions and “challenges” tailored to each customer’s shopping habits. Leveraging advanced AI and machine learning, it hyper-personalises offers by analysing reams of customer data.

After a successful trial that exceeded expectations on participation rates, Tesco is now rolling out the rebranded “Clubcard Challenges” to its millions of Clubcard members. Each customer will receive bespoke, gamified offers and promotions designed to incentivise incremental purchases.

“It’s a privilege to be working with Tesco, one of the world’s great retailers and an acknowledged leader in customer loyalty, to usher in its next stage of personalised promotions,” said Tim Mason, CEO of Eagle Eye.

‘This win underlines the power of the EagleAI solution, capable of creating and delivering millions of hyper personalised marketing messages, and our position at the forefront of personalised marketing.”