- UK re-rate long overdue.
- Signs of recovery in biotech.
Two of the big sound bites of recent years were “broken Britain” and “trust the science.” From an investment perspective it may be time to discard the first and keep faith in the second of these phrases. Following a tough decade there are some deep value opportunities especially among smaller UK-listed companies. In the case of life sciences and biotechnology, the industry is showing signs of recovering health after valuations and fundraising were hit by the period of rapid interest rate hikes.
Recent PMI data, especially in manufacturing, suggests that the UK recovery is on track. Greater political certainty is widely perceived as being of benefit in encouraging companies to make capex decisions which will provide a further boost to UK growth. Of course, the flipside of increased demand for resources and labour is that this can have an inflationary effect in the short term, but not necessarily in the components of indicators that are worrying policymakers.
