BP is the “ugly duckling” of UK oil majors, according to Thomas Moore, fund manager of Aberdeen Equity Income Trust. But this is exactly the reason why Moore and his team have built a sizeable position in the firm despite the oil giant’s recent operational challenges.

The Aberdeen fund manager discussed his contrarian approach to BP shares in a recent podcast with UK Investor Magazine, highlighting the stark difference in market perception between BP and its larger rival Shell.

“In big oil, the go-to stock for anyone with quality as a key factor in their process would be Shell in the UK,” Moore explains.

Shell’s appeal is evident – it boasts strong cash flows and consistent quarterly delivery that investors prize. The company has established itself as the sector’s quality benchmark.

However, Moore sees opportunity where others see risk. BP, he argues, represents the “ugly duckling” of UK oil majors. Whilst both companies trade on similar price-earnings ratios, this metric masks BP’s true potential for transformation.

Hidden value in operational inefficiency

“BP is so inefficient, and it’s got so much cost it can take out, it can do so much better than it’s been doing over the last three years,” Moore observes.

This inefficiency is seen by Moore as an opportunity to look beyond current performance to the company’s future potential.

The fund manager’s investment thesis centres on where companies will be tomorrow, not where they are today. “You always pay up for that quality,” he notes, referring to premium-rated stocks like Shell. By contrast, BP’s quality characteristics haven’t yet been recognised by the market, creating what Moore sees as a compelling value proposition.

Management under pressure

Moore acknowledges BP’s recent struggles under current management whilst maintaining faith in the company’s underlying assets. “This is a company that’s lost its way,” he admits. “The latest iteration of the management team will do its very best, and we all wish them good luck.”

However, he suggests external pressure may force change if current leadership cannot deliver operational improvements. Takeover speculation has periodically surfaced, including rumours linking Shell as a potential acquirer. “If you’re going to mess up on the operations and fail to deliver, there will be others waiting in the wings,” Moore says.

The possibility of merger and acquisition activity adds another dimension to the investment case, though Moore emphasises this isn’t his primary rationale for holding the stock.

Brazil discovery offers massive potential upside

Moore’s conviction was reinforced in August when BP announced one of its largest discoveries in company history – a significant hydrocarbon find off Brazil’s coast.

The discovery is BP’s largest for 25 years, with analysts suggesting it could be worth tens of billions of pounds.

Early estimates indicate the discovery could be worth as much as a quarter of BP’s entire market capitalisation, though full evaluation of the discovery for commercial potential remains ongoing.

Although Moore didn’t say this directly, his comments suggest that the recent discovery could act as a catalyst for a BP share price rerating in the coming years.

Contrarian value amid market pessimism

Moore’s approach exemplifies contrarian investing principles – finding value in temporarily unfashionable assets. “You just think, does that mean it’s going to go not so well forever? I rather doubt it,” he reflects on BP’s recent performance.

His strategy involves paying “next to nothing in terms of the valuation for one of the UK’s stalwart companies” that has simply hit a rough patch. This long-term perspective contrasts with investors caught up in what he describes as a “frenzy” of constantly upgrading portfolio quality without regard to price.

The Brazil discovery validates Moore’s patient approach, demonstrating how sometimes “good things can happen” when investors look beyond short-term operational difficulties to underlying asset value and long-term potential.

BP shares account for around 4% of the Aberdeen Equity Income Trust portfolio, while 2% is allocated to Shell. The trust has a 6% yield and is one of the few UK equity income trusts that trade at or near a premium to NAV.

Defence Holdings has launched Project Ixian, its first sovereign artificial intelligence product designed to counter information operations.

Following a recent announcement regarding a tie-up with AI hyperscalers and the MoD that sent shares into the stratosphere, the firm has revealed its first AI product targeting information warfare.

Information operations involve controlling, distorting or denying information to destabilise societies and undermine institutions. These encompass disinformation campaigns, cyber attacks, narrative manipulation and digital sabotage—threats the UK Strategic Defence Review 2025 identified as requiring urgent sovereign capability.

Project Ixian was developed alongside one of the world’s leading technology giants and Defence Holdings’ engineers worked directly with the partner’s team to integrate AI-native cloud infrastructure, embedding hyperscale capability from launch. Development involved workshops with frontline UK military personnel.

The company said the collaboration provides sovereign-grade resilience, but Defence Holdings will have to prove its scalability and revenue generation capabilities to justify the recent rally in the share price. The firm hasn’t made any indication of how much revenue the new project could generate for the firm.

The tool will enter its first commercial phase in December.

Live threat

The company highlighted recent operations that demonstrate information warfare’s immediate danger and the need for Project Ixian.

Russia’s Operation Doppelgänger has impersonated European media outlets to spread disinformation across UK and EU audiences. Meanwhile, Telegram networks have recruited individuals for sabotage operations, including arson attacks on British and European infrastructure.

These hybrid tactics—combining digital disinformation with physical disruption—highlight the urgent need for sovereign information operation capabilities. The government has recognised this priority through the National Security Act 2023, the forthcoming Cyber & Electromagnetic Command, and the Cyber Resilience Bill.

Project Ixian aligns with these initiatives, potentially benefiting from increased government spending on sovereign digital resilience.

“Information is infrastructure, and it is under attack right now,” said Andy McCartney, Chief Technology Officer, Defence Holdings.

“Project Ixian shows how Defence Technologies is moving from strategy to live delivery, embedding sovereign capability in one of the most contested domains of modern defence. Working alongside a Magnificent 7 hyperscale partner, we are ensuring that the UK can detect and disrupt hostile campaigns with sovereign tools that are resilient, scalable, and trusted at allied level. We’re proud that Project Ixian will be the first of our products to move into the field, proving our ability to deliver capability where it matters most.”

Defence Holdings shares were up 2% at the time of writing.

Tekcapital has announced that its portfolio company Innovative Eyewear has rolled out a new translation feature for its Lucyd ChatGPT app.

The update enables real-time translation across 17 languages, including Chinese, Japanese and Arabic, by using its app, which has been downloaded over 18,000 times.

The voice-based translation system allows users to communicate through Lucyd smart eyewear without typing. One person can speak in their preferred language through the eyewear whilst the other uses their phone, with automatic translation between both parties.

Key capabilities include rapid language switching and offline functionality once languages are downloaded – making it particularly suitable for travel in areas with poor connectivity. The feature uses native device language models for smooth voice recognition, eliminating the typing requirements common in other translation apps.

Currently in open beta for all users, a full release with expanded device compatibility is expected within a month.

The company believes translation represents a key use case for wearable technology, adding significant utility for Lucyd users, particularly when travelling.

 “The Lucyd app is a vital tool for introducing new features to complement our smart eyewear releases, as well as providing valuable services to other Bluetooth device users who have not yet switched to Lucyd,” said Harrison Gross, CEO of Innovative Eyewear.

“In addition to bridging our users to the powerful ChatGPT AI via Siri and Bixby, the app has introduced other critical features such as Walkie. Now, with Lucyd Translate, our glasses become an incredible ally for travels abroad, and for speaking with colleagues across language barriers-even when missing an internet connection. Translation is an often-cited “killer app” for wearable products, and we are pleased to offer a refined, smart eyewear approach to this important feature. I highly encourage everyone to download the Lucyd app and use it to facilitate your next cross-language conversation.”

Lucyd’s latest technological advancement adds to a series of innovations that are deployed through their range of Lucyd, Lucyd Armor, Reebok, Eddie Bauer and Nautica branded smart eyewear,

The FTSE 100 was trading largely flat on Wednesday after giving up early gains driven by a rally in defence stocks amid rising political tensions.

London’s leading index was bouncing around the 9,245 level at the time of writing after US stocks recorded another fresh high overnight.

“European shares pushed ahead on a busy day for corporate news,” says Russ Mould, investment director at AJ Bell.

“A record-breaking day for Wall Street yesterday helped to calm investor nerves over Poland shooting down Russian drones that violated its airspace. Geopolitical concerns have been front and centre for multiple years, and investors had been hoping for tensions to ease.

“Oracle shares soared amid optimism about AI-related revenue, sending a strong message to the broader market that the tech revolution is still red hot. That had a positive read-across to Nvidia which advanced 2% in pre-market trading.”

The overarching hope of an interest rate cut by the Federal Reserve next week continued to propel US stocks higher as markets price in a reduction in borrowing costs.

However, investors will receive a raft of US inflation data during the remainder of this week, starting with PPI data on Wednesday and then CPI tomorrow. A much stronger-than-expected reading on either of these could pour cold water on rate cut hopes, although the readings will have to be significantly higher to unnerve equity bulls.

“Sentiment could turn sour if today’s inflation snapshot comes in higher than expected,” explained Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The headline rate is expected to come in at 2.9% but the real number to watch will be core CPI, which strips out volatile food and fuel prices. Its broadly expected to be stable, coming in at 3.1% on an annual basis, but if it ticks higher month to month, it could put the cat among the pigeons.”

In the UK, DCC soared to the top of the FTSE 100 leaderboard after announcing it would return £800m in proceeds from the sale of its healthcare business. DDC shares were 4% higher at the time of writing.

BAE Systems joined the rally after Poland shot down a Russian drone that entered its airspace, raising geopolitical concerns.

AB Foods was firmly at the bottom of the FTSE 100 leaderboard as investors turned their noses up at slow Primark growth.

“Primark has long been the jewel in ABF’s crown, a retailer that’s thrived on value, volume, and an uncanny knack for reading the consumer mood,” explained Mark Crouch, market analyst for eToro.

“But today’s update raises more questions than it answers. Sales growth is slowing in Europe, flat in the UK, and while the US is picking up pace, it’s still not enough to counterbalance weakness elsewhere. For a business often seen as retail’s early warning signal, the signs don’t look good.”

AB Foods shares were down 10% at the time of writing.

Vistry Group had a tough start to 2025 as completions and profits sank amid a slow housing market that is yet to feel the impact of Labour’s efforts to boost activity.

Housebuilder Vistry Group delivered adjusted operating profit of £124.4 million for the six months to 30 June, down from £161.8 million in the same period last year but in line with expectations.

The company completed 6,889 homes, 12% fewer than the 7,792 units delivered in the first half of 2024, reflecting reduced partner demand.

Despite lower volumes, the average selling price rose 4% to £283,000, helping to offset the decline partially. Group revenues fell 6% to £1.85 billion.

These are pretty dismal figures and paint a picture of a company feeling the pressure of the slow implementation of government homebuilding policy.

“Vistry’s first-half results didn’t bring any nasty surprises as the housebuilder looks to rebuild investors’ confidence. In line with previous announcements, the group saw revenue decline and profits fall at double-digit rates as partner-funded activity came off the boil,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Much more important than first-half numbers though was the outlook for the second half, and it didn’t disappoint. The UK government’s pledge to invest an unprecedented £39 billion in affordable housing over the next decade marks a significant step up in funding, and it’s already having the desired effect.

“The money has started to flow, and partner-funded activity is picking up again, which should drive growth in the order book in the near future. As these houses are built, that will convert into revenue and should help the top line return to growth territory.”

The firm is well-positioned to benefit from the government’s £39 billion Social and Affordable Homes Programme, announced in June. One would think that the expected future demand created by this scheme is playing a significant part in shares trading down only 5% on Wednesday.

Vistry has built a strong pipeline of transactions expected to be completed in the second half, with positive momentum heading into 2026.

The company remains 88% forward sold for the full year and guidance is unchanged, with management expecting year-on-year profit growth for 2025.

The weakness could be a buying opportunity for those confident in the long-term picture.

Associated British Foods has delivered a mixed trading performance in the second half of its financial year, with strong growth in the US offsetting weaker European markets.

Primark numbers used to be highly anticipated and could seriously move the dial for AB Foods shares. However, in recent years, growth has started to splutter, and it’s very difficult to get excited about ABF’s updates.

The first half of 2025 proved to be more of the same slow, uninspiring growth. Investors have started to throw in the towel.

AB Foods shares were down 11% in early trade on Wednesday as investors digested Primark’s numbers, as well as grocery, sugar and agriculture performance that underwhelmed.

Primark shows resilience

The retail giant’s sales are expected to grow around 1% in H2, despite challenging market conditions. UK and Ireland performance improved sequentially from H1, with sales up 1% and market share rising from 6.6% to 6.8%. The retailer benefited from strong womenswear offerings and increased digital engagement, including Click and Collect, now available across all 187 British stores.

European performance proved more subdued. Spain and Portugal are expected to grow around 2%, while France and Italy faced headwinds with sales declining approximately 4%. Central and Eastern Europe provided a bright spot with 9% growth driven by new store openings.

The US delivered standout performance with 23% sales growth expected in H2. Four new stores opened, including the company’s first Tennessee location, as the value proposition resonated strongly with American consumers.

The company relies on new stores for growth and continues to expand its store portfolio with 15 new openings in H2, including preparations for Middle East franchise operations, which are set to start in Kuwait this October.

Food businesses face headwinds

Grocery sales are expected to match prior year levels, with international brands like Twinings and Ovaltine performing well. However, Allied Bakeries recorded an operating loss in challenging UK market conditions. ABF announced an agreement to acquire Hovis Group, subject to regulatory approval, targeting significant cost synergies.

Ingredients delivered solid results with sales broadly matching last year. AB Mauri showed good underlying growth, while speciality ingredients businesses performed well, particularly in enzymes and health nutrition.

Sugar struggles continue

Sugar faces ongoing challenges with an adjusted operating loss of around £40m expected for the full year. The UK government’s decision not to support Vivergo bioethanol led to plant closure, while low European sugar prices and high beet costs pressured UK and Spanish operations. African operations showed mixed performance, with Malawi and Eswatini growing while other markets recovered from drought impacts.

Agriculture sales are expected to rise 1% in H2, though operating profit will be significantly below last year due to exceptional weather affecting joint venture Frontier and one-off costs.

“I’m pleased with how the Group has performed in the second half of our financial year in what continues to be a challenging environment, characterised by consumer caution, geopolitical uncertainty and inflation,” said George Weston, Chief Executive of Associated British Foods.

“Primark delivered improved trading in the UK and strong sales growth in the US, while trading on the continent was softer in a weaker consumer environment. In our food businesses, overall trading in the second half was in line with our expectations.

“This has also been a busy period strategically, including the decision to close the Vivergo bioethanol plant, the restructuring of our Spanish sugar business, and an agreement for Allied Bakeries to acquire Hovis to create a financially sustainable UK bakeries business. Against a backdrop of continued volatility in 2026, we will start to see the benefit from our recent actions and continued investment.”

The FTSE 100 traded higher on Tuesday as global merger and acquisition activity provided investors with another reason to be positive, with the market looking forward to a US interest rate cut next week.

Anglo American led the FTSE 100 0.3% higher as the mining group announced a merger with Teck Resources to create a copper-focused mining giant.

The tie-up followed a string of US deals that underscored the wider optimism in markets created by hopes of lower interest rates.

“A spate of deal-making fired up equities, with many of the main market indices advancing in Europe and Asia. Futures prices also imply a decent start to Wall Street when US markets open later,” says Russ Mould, investment director at AJ Bell.

“Anglo American unveiled a deal to gobble up rival copper miner Teck. On a smaller scale, Novartis said it would buy US clinical biotech firm Tourmaline Bio for $1.4 billion. Yesterday, US lender PNC Financial moved on FirstBank in a $4.1 billion deal, and quantum computing firm Infleqtion announced plans to float in the US via a SPAC, valuing it at $1.8 billion.”

Anglo American shares soared 9% on news of a merger with Teck Resources that would create the world’s 5th largest copper miner.

“It’s interesting to see two companies who have been bid targets find refuge in each others’ arms, snubbing their suitors and going their own way,” said Chris Beauchamp, Chief Market Analyst at IG.

“It looks like the two boards decided they could preserve their own identity by merging rather than letting themselves be absorbed by bigger rivals. As miners grapple with rising costs and uncertain demand, it’s perhaps not surprising that these two have sought to bolster economies of scale. It will also set off a further wave of M&A activity, as the rebuffed suitors look elsewhere for their own expansion.” 

In a boost to London’s market, ‘Anglo Teck’ will keep its London Stock Exchange listing alongside listings in South Africa and the US. Should Anglo American have been taken over as opposed to striking today’s merger deal, it would be yet another loss of a major multinational from London’s flagship index.

The mining sector rallied on the news of the Anglo Teck deal, with Glencore jumping 4% and Antofagasta rising 2% as investors questioned whether the deal would spark a wave of M&A.

Phoenix Group recovered some of the losses sustained yesterday after it announced a rebrand to Standard Life amid mixed results.

Profit taking hit the defence sector with BAE Systems, Babcock and Rolls-Royce among the FTSE 100’s top fallers.