Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration 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 Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Play Boutique tapes: are top managers better off at small firms?

Boutique tapes: are top managers better off at small firms?

In episode three of our series, boutique bosses discuss whether the best fund managers are more likely to thrive at smaller firms.

Play Boutique tapes: if you want a Ferrari, you have to pay for it

Boutique tapes: if you want a Ferrari, you have to pay for it

In the second part of our four-part series, boutique bosses are asked how they can justify the fees charged by active managers.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter