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Stripe lifts Baillie Gifford funds; Petrofac ban; Omega contract

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Trusts rises on Stripe valuation

Two of Baillie Gifford’s trusts have regained some of their recent tech losses on the back of investments in unquoted US company Stripe which has big plans for expansion.

The e-commerce company, founded in 2010 by Irish brothers Patrick and John Collinson, announced yesterday it had raised $600m from a range of investors including Baillie Gifford, manager of the £16bn listed Scottish Mortgage Investment Trust (SMIT).

The £980m Baillie Gifford US Growth, managed by Gary Robinson and Kirsty Gibson also holds a stake in Stripe, acquired in January 2020.

Stripe is now worth $95bn, three times its $35bn price tag last April. 

This makes the San Francisco based company the most valuable private company Silicon Valley has ever produced, exceeding previous tech stars Facebook and Uber before they went public.

The fund raise underpins the strategy of SMIT fund managers James Anderson (pictured) and Tom Slater who have invested in rapidly growing technology companies, both public and private.

Last year’s annual report showed SMIT’s stake in Stripe was worth £29.6m at the end of March and and had risen to 0.7% or £139.8m of the then £19.36bn fund by the end of January.

Shares in the Trust are up 124% over the year, making it one of the FTSE 100 best performers, though they are down 16.4% over the past month following the tech sell-off in the US. Shares closed today 10p (0.87%) higher at 1157.5p.

Baillie Gifford US Growth ended the session up 5p (1.56%) at 326.5p,

4.30pm: Traders await central bank decisions

The FTSE 100 index ended the session down 11.77 points, or 0.2%, at 6,749.70 as nervous traders looked ahead to key decisions from central banks in the UK, US and Japan.

Among other market movers there was a 6.8% leap for Paddy Power owner Flutter Entertainment which revealed at the weekend that it may float part of FanDuel.

Investors were undeterred by the suspension of the AstraZeneca Covid vaccine by a number of governments and marked the shares 0.4% higher.

Medical diagnostics company Omega said that a contract with the Department of Health and Social Care (DHSC) to provide manufacturing capacity for Covid-19 lateral flow antigen testing could be worth up to £374 million.

The Scottish company cautioned that the value of future purchase orders could be “substantially less” than stated in the disclosure.

The company is awaiting confirmation that a Covid-19 lateral flow antigen test had passed the necessary performance evaluation so that manufacturing can begin.

At that point Omega said it expected to receive purchase orders from the DHSC for the tests and production volumes were expected to result in “substantial” revenue growth for the new financial year.

“It is very encouraging, and is an indication of the substantial impact on Omega’s future performance that such a level of utilisation of our lateral flow test production capacity might have,” said chief executive Colin King.

Shares, which at first rose on the public sector contract disclosure, closed 5.5p (5.6%) lower at 91.5p following the company’s cautionary statement.

2.30pm: Petrofac suspension hits shares

Petrofac shares sank after the Aberdeen-based oilfield services provider said the Abu Dhabi National Oil Company (ADNOC) had suspended it from competing for new awards until further notice.

The suspension follows an announcement by the Serious Fraud Office in January of additional pleas by a former Petrofac employee under the Bribery Act 2010 in relation to historic contract awards in the UAE in 2013 and 2014.

Shares in Petrofac were down 8.2% at 123.25p.

9.30am: Shop closures

More than 1,200 chain stores closed in Scotland in 2020, with just 612 openings, continuing a trend that has developed across high streets in recent years, leading to 14% fewer stores compared to 2016 as shoppers migrate to online shopping.

Full story here

8.30am: FTSE rises

The FTSE 100 rose in line with forecasts and was trading 28 points higher at 6,789.37.

7am: Deliveroo share issue

Deliveroo

Food delivery firm Deliveroo says it will offer about £1 billion of new shares in its forthcoming IPO.

The company confirmed this morning that its listing will include the sale of shares by certain existing shareholders and there will be two classes of shares.

Founder and chief executive Will Shu to be the sole holder of ‘class B’ stock, which will give each of his shares 20 votes, while all other shares will carry one vote. 

The final offer price will be determined following a book-building process.

See also: Can Deliveroo deliver a profit?

China’s economy surges

China’s industrial output and retail sales surged in the first two months of the year, official data showed Monday, underscoring the country’s recovery from the coronavirus pandemic.

Industrial production rose 35% on-year, the biggest bounce in decades, while retail sales also beat expectations with 34% growth.

But the National Bureau of Statistics said the rise was in part due to distortions from last year’s “low base in the same period”.

Both indicators plunged in the early months of 2020 after Covid-19 surfaced in central China and spread rapidly around the country.

However, the world’s second-largest economy became the first to bounce back after imposing strict lockdowns and virus control measures, clocking a full-year economic growth of 2.3%.

Markets

The FTSE 100 was forecast to make a positive start to what is expected to be a quiet start to the trading week, despite volatility in Asia’s main markets.

Stocks in the Asia-Pacific region were mostly lower ahead of this week’s Federal Reserve meeting in the US.

The Hang Seng index in Hong Kong fell 0.39% while the Shanghai Composite in China slipped 1.67%.

In Japan, the Nikkei 225 rose 0.17% but South Korea’s Kospi dipped 0.20%.



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