Tekcapital creates exciting technology businesses with the potential to help the lives of a great number of people from scratch with the core aim of Tekcapital shareholder value creation.

As CEO Dr Clifford Gross explains, each one of their portfolio companies was founded by Tekcapital and taken from a concept on a piece of paper to businesses with substantial market opportunities.

Belluscura – a company founded by Tekcapital and later listed on AIM – has recently announced a potential $85m worth of orders and royalties.

Tekcapital is now set to list its next success story in London this month. MicroSalt is targeting a £10m-£15m AIM listing to secure growth capital to fund the expansion of their low sodium salt technology business.

MicroSalt has already secured distribution agreements with US supermarket giant Kroger and has said they are in talks with major players in the snack food industry.

Sodium overconsumption plays a part in millions of premature deaths per year and MicroSalt is tackling this head-on with a technology that reduces sodium in their table salt by 50%.

Tekcapital shareholder value

Tekcapital valued MicroSalt at $17m as a privately held company on its balance sheet as of the end of June 2023.

The transition from a privately held company to a listed entity represents a major milestone for both MicroSalt and Tekcapital and provides the opportunity for Tekcapital to crystallise shareholder value.

In addition, the market should give more weight to Tekcapital’s net asset value going forward as a large proportion will now be valued by the public market as opposed to private market methods. Tekcapital’s holding will be readily realisable and the risk premium associated with privately held companies should diminish.

We are yet to learn of the specific valuation attached to MicroSalt on IPO and investors will eagerly await the value of Tekcapital’s holding post-IPO.

With a market cap of just £20m, Tekcapital could quickly start to look very good value as soon as the particulars of the MicroSalt IPO are made public.

The FTSE 100 surged on Tuesday as the gloom around US interest rates reversed, and China was reportedly considering unleashing a wave of stimulus.

The FTSE 100 rallied 1.6% to trade at 7,611 at the time of writing. The rally was broad, with 98 of the FTSE 100’s constituents trading positively.

“Investors regained their appetite for risk after a troublesome start to the trading week linked to concerns about conflict in the Middle East and how the associated hike in commodity prices could feed through to inflation and interest rates staying higher for longer,” said Russ Mould, investment director at AJ Bell.

“Triggering the U-turn in the market mood were comments on Monday from Fed Vice Chair Philip Jefferson who implied the US central bank needed to ‘proceed carefully’ with any further rate hikes. This raised hopes in the market that the Fed might not need to lift rates any higher, particularly if higher bond yields were already threatening to act as an anchor on economic activity.”

Already improving sentiment on the back of US rates hopes received an additional boost from reports China was mulling actions to help stimulate the economy.

Bloomberg reported China was exploring the issuance of 1 trillion yuan ($137 billion) in government debt to be spent on major infrastructure projects.

The prospect of significant construction projects in China fired up the FTSE 100’s natural resources, with miners Anglo American, Antofagasta and Rio Tinto enjoying solid gains. Prudential jumped 3.9% on hopes of better trading conditions in China.

The risk-on sentiment in equities was reflected in a 6% rally for Ocado, the FTSE 100’s top riser.

Spirax-Sarco was the top faller after JP Morgan analysts cut their price target to 11,100p from 11,500p.

On Tuesday, Chinese property giant Country Garden Holdings disclosed in its filings to the Hong Kong Stock Exchange that the company has failed to make a due-to-Monday offshore debt payment of 470 million Hong Kong dollars (48,98 million GBP), further highlighting that they might not be able to pay off all of Country Garden’s current debt.

Country Garden’s shares fell by 10% in Hong Kong overnight.

Country Garden avoided default in September by getting an extension on offshore private bond debt payments. Nonetheless, a sector-wide crisis in China has been hurting Country Garden’s liquidity position and heightening the risk of default.

In its filings with the Hong Kong Stock Exchange, the company further stated that, amid the crisis, they are uncertain they would be able to meet other payments due in the coming periods.

Many Chinese property giants have been defaulting as the result of an inability to pay off debt.

Evergrande, another major Chinese property company, currently has an outstanding debt of $31.7 billion in bonds, repurchases, and collateral obligations. Their shares also fell overnight.

Convenience food producer Greencore said profit was set to exceed prior expectations for the 2023 full year as revenue jumped 13%.

Greencore shares were 15% higher on Tuesday after the group said they saw adjusted operating profit in a range of approximately £74m-£76m.

The strong performance has provided Greencore with the opportunity to expand recent share buybacks with an additional £15m. Net debt is estimated to fall £25m to £155m by the end of the year.

“The Greencore team has delivered a strong second half performance in what was a difficult seasonal comparative period and against the backdrop of inflation and a challenging consumer environment,” said Dalton Philips, Chief Executive Officer, Greencore.

“We continue to drive operational improvements across the business underpinned by our commitment to quality and customer service. While macro-economic uncertainty remains, we are pleased with the expected FY23 outcome and are committed to driving an improved financial performance in the period ahead.”

Capital Metals shares jumped on Tuesday after the company confirmed Sri Lanka had expelled a minister at the heart of the decision to cancel Capital Metals mining licenses.

Capital Metals shares were 58% higher at the time of writing on Tuesday.

The Supreme Court in Sri Lanka has determined the expulsion of Naseer Ahamad from the Sri Lanka Muslim Congress to be legally valid and he will lose his parliamentary seat and position as Minister of Environment overseeing the Geological Survey and Mines Bureau.

Ahamad was the minister involved in cancelling Capital Metals’ Industrial Mining Licences. Both Mr. Ahamad and the Geological Survey and Mines Bureau Chairman he appointed are now under investigation for alleged misappropriation.

Capital Metals is disputing the cancelled licences and the expulsion signals a potential shift in approach by Sri Lankan authorities to mining activities.

Greg Martyr, Executive Chairman of Capital Metals, commented:

“This is a positive development resulting in the removal from office of the minister we believe to be primarily responsible for the illegal interference with our licences. This, together with the recently approved change in mineral licensing procedures, which transfers certain responsibilities to the Board of Investment, should bode well for our situation but also more generally for the country as it takes steps to improve governance.

“We continue to await the outcome of our statutory appeal against the attempted cancellation of our licences which was heard by the Secretary of the Ministry of Environment two weeks ago and are confident of a positive outcome.”

The FTSE 100 closed flat on Monday after a weekend of despicable violence in Israel spilt over into financial markets.

The human tragedy unfolding in Israel and Gaza Strop has heightened geo-political concerns and provided support for oil prices.

Brent oil was trading up around 3% at $86.98 per barrel. Brent has been trading closer to $100 in recent weeks. Elevated oil prices feed through to higher share price for BP and Shell who were central to the FTSE 100’s rise on Monday.

“The FTSE 100 was steady on Monday after the shocking events in the Middle East over the weekend, with the index supported by its oil heavyweights BP and Shell,” said AJ Bell investment director Russ Mould.

“As it nearly always does, an escalation of tensions in the region has helped push up oil prices. This is inevitable given how much of the world’s crude reserves and production are centred there.”

London’s listed airline companies were among the top fallers on Monday with FTSE 100 IAG sinking 5%. Fears are that prolonged war in Israel will dampen tourist demand across Europe as higher fuel prices erode profits.

Elsewhere, Aviva shares continued to benefit from takeover speculation after reports last week the insurer was being eyed by multiple parties.