Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Glaxo fraud probe weighs on flat FTSE

Glaxo fraud probe weighs on flat FTSE

GlaxoSmithKline (GSK) has weighed on the FTSE 100 after the Serious Fraud Office (SFO) announced it had launched an investigation into the pharmaceutical giant.

Glaxo was the biggest faller of the UK blue-chip index, shedding 28p, or 1.7%, to £16.06 on the news. In a short statement, the SFO said it had 'opened a criminal investigation into the commercial practices of GlaxoSmithKline and its subsidiaries'.

The UK's biggest pharmaceutical group said in response that it was 'committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO.'

The SFO action comes after Chinese police earlier this month charged the former boss of Glaxo's China business and other colleagues with corruption, after claiming to have uncovered a scheme to bribe doctors and hospitals.

The drop in Glaxo shares held back the FTSE 100 from any gains. The index traded broadly flat, down three points at 6,842. Jonathan Sudaria, dealer at Capital Spreads, said European investors were taking stock after a day of healthy gains. 'Following the bank holiday markets took heed from a positive global outlook and a "concern-free" day of trading. The bears are lacking the headline breaking alarm bells to trigger a sell-off, and until that time markets will most likely drift higher as volatility (and thereofre risk) decreases.'

Weir Group (WEIR) was another faller, as the valve and pump manufacturer's revised €4.6 billion (£3.7 billion) bid for Finnish rival Metso was rejected. Weir fell 24p, or 0.9%, to £35.80 as it announced it was abandoning the takeover attempt. 'Weir believes it made a compelling proposal but remains financially disciplined and therefore does not intend to pursue this opportunity further at this time,' it said.

Analysts at Liberum said the deal could have led to a 19% earnings jump, but pointed to other potential takeover targets following the Metso disappointment. 'Weir does not intend to sweeten the deal but we believe the landscape for pumps and valves engineers, including names such as IMI (IMI) and Sulzer, remains ripe for consolidation,' it said.

London Stock Exchange Group (LSE) was the biggest riser, adding 45p, or 2.4%, to £19.52, after Credit Suisse analysts added it to their CS Focus list of top stock pics.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Sam Vecht: the best opportunities in frontier markets

Sam Vecht: the best opportunities in frontier markets

Blackrock's Vecht evaluates frontier markets and explains where he sees the opportunities

Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter