The FTSE 100 saw a small increase of 0.1% in Monday trade as Russia and Ukraine prepared to negotiate terms for a ceasefire, and a COVID outbreak rocked Asian markets.

European shares posted much stronger gains than the FTSE 100 with the German DAX up 1.8% at 13,879 and French CAC gaining 1.1%.

The FTSE 100’s underperformance can be attributed to weakness in the commodity shares caused by concerns around the health of the Chinese economy, following news Shenzen had started a week long lockdown.

“Worries about a China slowdown have also helped drive mining stocks lower on the FTSE 100 today, with Rio Tinto, Anglo American and Glencore among the biggest fallers on the index in early trade,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

Rio Tinto shares fell 3.6% after the miners decided to acquire the rest of Turquoise Hill for $2.7bn. This move was to help along Rio’s mining project in Mongolia, Oyu Tolgoi.

“Like the project itself, this transaction is not expected to go smoothly. Rio may have to dig a lot deeper to win over Turquoise Hill’s shareholders,” said Russ Mould, investment director at AJ Bell.

Oil majors were heavily hit by as falling oil prices slipping with BP and Shell giving up 1.3% and 1.2% respectively.

The price of Brent Crude further declined to $109 per barrel as traders assess the impact of discussions between OPEC and the IEA.

“The stage is still set for a fluctuation in price, given concerns that OPEC+ counties may not easily be able to increase supply, while a breakthrough in the stalled Iran nuclear talks remains elusive,” said Susannah Streeter.

UK Banks

Heavy weights like Lloyds and Barclays have supported the gains in the FTSE 100 on Mondays investors look forward to Thursday’s Bank of England rate decision. There are expectations the Bank of England will again increase rates which will further support banking profitability.

Lloyds’ share were up 3.6% to 47.1p and Barclay’s shares were up 4.2% to 168p.

Talks of diplomacy have also given airline and travel related shares a boost, as IAG and Melrose saw an increase in share prices on Monday.

“British Airways owner International Consolidated Airlines Group, and engineer Melrose, with its large commercial aerospace business, lifted more than 4% on the open,” said Streeter.

BATS

British American Tobacco fell 1.3% to 3,026p after the cigarette manufacturers exit Russia whilst still paying their 2500 employees.

The tobacco makers have recently revised their financial guidance for 2022 to constant currency group revenue growth of 2% to 4%. Ukraine and Russia accounted for 3% of the group revenue in 2021.

Aston Martin revenues raced 79% higher to £1.1bn in 2021 from £0.6bn in 2020 due to increased volume growth.

Wholesale volumes grew to 6178 units worldwide in 2021 from 3394 units in 2020.

The largest contributor to those figures was the North and South America with a 32.1% contribution followed by Asia Pacific at 29.5% in 2021.

“We have already delivered on many of our promises. Our core business has performed to plan in its first full year of new leadership, with our largest number of retail sales made by our dealers since 2007, despite the challenging global backdrop of COVID-19,” said Lawrence Stroll, Executive Chairman, Aston Martin.

“The evidence is there that our strategy is working, and it is a very long time since the core business was in such good health as it is today.”

Adjusted EBITDA swung from a £70m loss in 2020 to £137.9m profit in 2021.

The luxury car company’s operating loss has reduced from £322m to £76.5m in 2021, despite higher investments in the marketing and branding of the firm.

Goodwood Festival of Speed and Pebble Beach Concours d’Elegance resumed post the pandemic, along with F1 events and the new Bond film, No Time to Die, which represented branding occasions for the company.

The groups net debt saw an increase of of £165m to £891.6m in 2021 due to fluctuations in foreign exchange.

In terms of ESG, Aston Martin, like many, also committed to the science based targets of the Net-Zero initiative.

Tobias Moers, Chief Executive Officer, Aston Martin, said, “2021 was a pivotal year for Aston Martin, with our team rising to the collective challenge of setting ambitious new standards, elevating our business, our products and our brand.”

“While there remains hard work ahead of us, the last year has provided proof that Aston Martin can truly unleash potential.”

Aston Martin shares were up 2.5% to 880p on Monday’s opening trade with ongoing but reduced operating losses.

Rio Tino has submitted an all-cash bid of $2.7 billion to acquire complete ownership of the Turquoise Hill project.

The company has reportedly offered minority shareholders $34 per share, which would represent a premium of 32% to Turquoise Hill’s last closing share price on the Toronto Stock Exchange.

Rio Tinto noted that the transaction would bring the Oyu Tolgoi project forward, simplify the mine’s ownership structure, reinforce the company’s commitment to Mongolia and reinforce its copper portfolio.

The mining group also hoped that the exchange would reset relations between the partners and help approve commencement of underground projects.

The move followed news last week that Rio Tinto would no longer be using Russian fuel supplies for its Oyu Tolgoi mine, after global companies withdrew from the country in protest of its assault on Ukraine.

Rio Tinto will file its proposal to the Turquoise Hill Board with the Securities and Exchange Commission (SEC).

The proposed bid will be subject to approval by a majority vote collection by the Turquoise Hill minority shareholders.

The transaction will reportedly not be submitted to any financing condition or due diligence.

“Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term,” said Rio Tinto CEO Jakob Stausholm.

“That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio.”

“We believe the terms of proposal are compelling for Turquoise Hill shareholders.”

“The Proposed Transaction would enable Rio Tinto to work directly with the Government of Mongolia to move the Oyu Tolgoi project forward with a simpler and more efficient ownership and governance structure.”

“With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia.”

Rio Tinto’s share price was down 0.5% at 111.2p in early morning trading on Monday.

The Phoenix Group reported a record cash generation of £1.7 billion and its first ever organic dividend increase of 3% in its financial results for 2021.

The company’s share price increased 1.41% to 634.8p in early morning Monday trading on the back of the strong financial report.

The FTSE 100 firm reported a final dividend of 24.8p and a total dividend of 48.9p in 2021.

The insurance provider further announced £6.3 billion revenue, an increase from £4.7bn in 2020.

The company reported that its increased dividend cost of £0.5 billion per annum remained sustainable over the long-term, with £11.8 billion in long-term free cash from the group available to shareholders.

The firm also announced its new dividend policy, which “intends to pay a dividend that is sustainable and grows over time.”

The group mentioned that the organic growth from its open business adequately offset the natural run-off from its heritage business after its record cash generation of £1.18 billion, which proved ‘the wedge’ hypothesis for the company.

The firm also attributed its growth to a record level of Bulk Purchase Annuities (BPA) premiums contracted in 2021 at £5.6 billion, more than double its 2020 rate of £2.5 billion.

The Phoenix Group saw momentum in its workplace business and won 41 smaller schemes on the back of leveraging its Standard Life brand acquisition last year.

The company is reportedly targeting a 2022 cash generation target range of £1.3 to £1.4 billion and a three-year 2022-2024 target of £4 billion.

“It has been an outstanding year for Phoenix, with a record set of financial results and significant strategic progress made as we fully embraced our purpose,” said Phoenix Group CEO Andy Briggs.

“2021 marked a pivotal moment for Phoenix, with £1.2 billion of new business from our Open business more than offsetting the run-off of our Heritage business for the first time.”

“This demonstrates that Phoenix is a growing, sustainable business, and enabled the Board to recommend our first ever organic dividend increase of 3%.”

“Phoenix has also today announced a new dividend policy which sets out our intention to pay a dividend that is sustainable and grows over time.”

Analysts pointed to new business as the key driver in the Phoenix success story, and further highlighted the attractiveness of their dividend yield.

“This is a pivotal moment for Phoenix,” said Steve Clayton, fund manager of the HL Select UK Income Shares fund.

“Ever since the Standard Life acquisition the group has been talking about ‘proving the wedge’.”

“The revelation that new business is now more than offsetting the natural decline of the acquired legacy books upon which the group is built shows that the group is now driving its own destiny organically.”

“The dividend increase announced today leaves the stock trading on a very attractive yield of 7.8%.”

“Phoenix’s challenge is now to prove that they can indeed maintain their new business capabilities and support the growth of their dividend into the future.”

AstraZeneca’s drug to cure early breast cancer, Lynparza was approved in the US.

Lynparza is the first and only approved drug to aid patients with BRCA-mutated HER2-negative high-risk early breast cancer and have already used chemotherapy.

Lynparza was created by AstraZeneca and Merck’s (MSD) olaparib drug. The drug gained approval of the FDA after the results from OlympiA Phase III trial was presented at the 2021 American Society of Clinical Oncology Annual Meeting.

Professor Andrew Tutt, Global Chair of the OlympiA Phase III trial said, “today’s approval of olaparib is great news for patients with a specific inherited form of breast cancer.”

“OlympiA has shown that identifying a BRCA1/2 mutation in women with high risk disease opens the additional option of eligibility for olaparib treatment, which reduces the risk of recurrence and improves survival for these breast cancer patients.”

The trial results showed that Lynparza has statistical improvements in the treatment of early breast cancer with improvements in invasive disease-free survival, reduced risk of invasive breast cancer recurrences, second cancers or death by 42% as opposed to a placebo.

The drug also showed improvements in the stats for overall survival and reduced the risk of death by 32% versus placebo.

“Lynparza reduces the risk of disease recurrence in these high-risk patients and now new data confirm it also significantly extends patients’ lives versus placebo,” said Dave Fredrickson, Executive Vice President, Oncology Business Unit, AstraZeneca.

Breast Cancer Treatment

Breast cancer is a biologically diverse tumour where an array of factors play a role in their unique development.

BRCA1 and BRCA2 are genes which make protein and repair DNA damage. If the BRCA genes changed in any way, the protein production is altered resulting in DNA damage remaining and cells becoming unstable.

Around 2.3m patients were diagnosed with breast cancer in 2020 with 91% diagnosed at an early stage in the US and 5-10% found the BRCA mutations.

More about Lynparza

Lynparza (olaparib) is a PARP inhibitor and a pioneer in the treatment to block DNA damage response in cells or tumours harbouring a deficiency in homologous recombination repair, for patients with mutations in BRCA1 or BRCA2.

FDA approved diagnostic tests will select patients to be treated by Lynparza.

The approval of the drug begins in the US and extends to EU, Japan and many other countries with patients with the BRCA gene provided they’ve been treated with chemotherapy as suggested by OlympiAD Phase III trial.

Following the approval of Lynparza in the US, AstraZeneca will collect a ‘regulatory milestone payment’ of $175 million from MSD, which will be recorded as Collaboration Revenue in Q1 of 2022.