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PHG

Stifel has downgraded its positive rating on Scottish Mortgage (SMT.L) amid concerns that the recent rally in its share price may not be sustainable heading into 2025.

Iain Scouller, head of investment companies research at Stifel, said that shares in Baillie Gifford’s £13.5bnn global flagship have risen by 10% since Donald Trump was re-elected as US president last month. This surge has narrowed the discount on the fund to 8%, prompting Scouller to take a more cautious view on its growth prospects for next year.

“We are taking a contrarian view and following this strong re-rating we are more cautious on the prospects for the investment style as we head into 2025, and wonder if many of these growth company stories are now starting to be priced for a perfect environment,” Scouller said.

Nvidia (NVDA) has struck a deal to set up an artificial intelligence (AI) research and development centre in Ho Chi Minh City, Vietnam's economic hub.

Jensen Huang, CEO of AI darling company, met with Vietnamese prime minister Pham Minh Chinh during a visit to Hanoi, where the two agreed to launch Nvidia Vietnam, a centre focused on AI innovation.

“The data of Vietnam is a national and its natural resource. The AI of Vietnam should be processed here, built here, operated here, for the people and industry of Vietnam,” Huang said.

He added that Nvidia is aiding Vietnam in the development of its “first AI cloud,” while also advancing projects in robotics and AI-powered smart cities across the country.

Nvidia has already invested over £196m in Vietnam, Huang revealed. The company is collaborating with Vietnamese tech firms to integrate AI across industries such as cloud computing, automotive, and healthcare.

Southeast Asian countries are competing for big tech investments to be data centres and AI hubs.

US stocks floated higher on Thursday as investors waited for Friday's crucial jobs report and bitcoin (BTC-USD) posted new all-time highs above the key $100,000 milestone.

After all three major averages closed at records on Wednesday, the Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) traded on both sides of the flat line. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) was up more than 0.1%.

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AJ Bell (AJB.L) unveiled a £30m share buyback, following a year of growth in profits, users, and assets under administration (AUM).

The Salford-based company reported that 66,000 new customers joined its platform over the past year, driving a 14% increase in its customer base to 542,000. AUM also reached a new high, rising 22% to £86.5 billion, bolstered by inflows of £6.1 billion, up from £4.2bn a year ago.

In addition to the buyback, AJ Bell, which is listed on the FTSE 250 (^FTMC), also announced a 16% increase in its annual dividend, raising it to 12.5p per share.

AJ Bell chief executive officer, Michael Summersgill, said: “Backed by our strong profitability and highly cash-generative business model, we have accumulated significant surplus capital above our regulatory requirements.

“We have today announced a record level of shareholder returns, reflecting the board’s confidence in the long term outlook for AJ Bell.”

Simon Peters, crypto analyst at eToro, on the crypto rally:

Oil prices rose on Thursday, as investors awaited a decision later in the day on what producer group OPEC+ will do on supply cuts.

Brent crude futures (BZ=F) climbed 0.2%, trading at $72.44 per barrel, while US West Texas Intermediate (WTI) (CL=F) climbed 0.2% to $68.70 per barrel at the time of writing

The Organisation of Petroleum Exporting Countries (OPEC) and its allies — collectively known as OPEC+ — is set to meet on Thursday to discuss its production policy for the first quarter of 2025. Many analysts expect OPEC+ to extend its current supply cuts through at least the end of March, which would aim to support oil prices amid weaker-than-expected global demand.

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New car registrations in the UK dropped by 1.9% in November, marking the second consecutive year-on-year decline and the third in the past four months, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT).

The SMMT attributes the slowdown to manufacturers prioritising the production of electric vehicles (EVs) in order to meet regulatory targets. This year, 22% of all new cars sold must be electric, a target that is set to rise to 28% in 2025.

Despite the overall decline in deliveries, sales of electric cars saw a sharp increase of 58.4%, with 38,531 EVs registered in November out of a total of 153,610 new cars. This accounts for 25.1% of all new car sales for the month.

However, hile the share of electric vehicles sold has risen, only 18.7% of all new cars registered in the year to date have been electric. This suggests that a significant number of manufacturers are struggling to meet the targets, and some may be forced to purchase credits from other companies to make up for the shortfall or face financial penalties.

Growth in the UK’s construction sector picked up pace last month, driven by the strongest rise in commercial building work for more than two years, according to a new survey.

The latest S&P Global construction purchasing managers’ index (PMI) scored 55.2 in November, up from 54.3 in October.

Any reading above the 50 threshold indicates that activity in the industry is increasing, while anything below means it is shrinking.

Tim Moore, economics director at S&P Global Market Intelligence, said: “The construction sector bucked the slowdown seen elsewhere across the UK economy in November, according to the latest S&P Global PMI survey.

“However, the recovery in construction activity remains somewhat lopsided.

“Strengthening demand for commercial work and civil engineering projects contrasted with a sustained downturn in house building.

“Commercial construction activity expanded at the fastest pace for two-and-a-half years in November, while residential work declined at the steepest rate since June.”

Vodafone’s (VOD.L) long-awaited merger with Three UK has finally received approval, but analysts warn that while the deal offers a potential fresh start, it comes with a host of challenges that will test the company’s ability to deliver meaningful change.

Dan Coatsworth, analyst at AJ Bell, said the merger might offer a glimmer of hope for “long-suffering shareholders” of Vodafone. They will hope the deal "is the launchpad for the business to finally show some dynamism after years of stasis," he noted. However, Coatsworth pointed out that this optimism is tempered by several strings attached to the merger.

Key conditions imposed by regulators include a significant commitment to invest in the UK’s 5G infrastructure, as well as a cap on tariffs for the next three years. With these terms in place, the regulator will be closely monitoring Vodafone, "like a teacher looming over an errant pupil," Coatsworth remarked, ensuring the company meets its obligations.

Despite these restrictions, the analyst believes the completion of the deal will offer investors some relief. “If nothing else, there will be relief on the part of investors that the deal has been concluded and everyone can move on,” he said.

But Coatsworth also noted that Vodafone’s challenges extend beyond the UK. The company continues to struggle in key international markets, particularly Germany, where regulatory changes have further hampered its performance.

"With the Three deal concluded, patience for any future messages of Vodafone being in transition is likely to run thin. The company must now deliver," he added, emphasising that Vodafone’s future success will depend on its ability to execute effectively and overcome the hurdles ahead.

Here's some market insight from Lindsay James, investment strategist at Quilter Investors:

Stocks in Asia were mixed overnight with the Nikkei (^N225) up 0.3% on the day in Japan, boosted by a weaker yen and record-setting advances in Wall Street's tech-driven rally.

The biggest gainers of the session were Casio Computer Co Ltd (6952.T), which rose 4.6%, Keio Corp (9008.T) added 3.9% and Ebara Corp (6361.T) was up 3.4%.

Meanwhile, the Hang Seng (^HSI) slipped by almost 1% in Hong Kong. The Shanghai Composite (000001.SS) rose by 0.1% by the end of the session.

Korean equities (^KS11) retreated amid growing political uncertainty, as the ruling party moved to prevent the impeachment of resident Yoon Suk Yeol. The country’s lawmakers are expected to vote on a motion to initiate impeachment proceedings on Saturday, heightening tensions in the market.

In response to the political developments, South Korea's won also slipped against major currencies. Policymakers have called for calm in the financial markets after a surprising martial-law decree that has sent shockwaves through the nation. The decree, which was announced earlier this week, has raised concerns about the stability of the country’s political and economic landscape.

From our US team:

A tech rally boosted US stocks on Wednesday with all three major indexes hitting new record closes, as investors digested Federal Reserve chair Jerome Powell's comments that US economy is in "remarkably good shape."

Shell (SHEL.L) and Equinor (EQNR) have said they will combine their offshore oil and gas assets in the North Sea to create a new company.

Based in Aberdeen, the company will be the North Sea’s biggest independent producer is expected to produce more than 140,000 barrels of oil equivalent (BOE) per day next year.

Shell said the deal was intended to sustain domestic oil and gas production and security of energy supply in the UK.

Shell’s integrated gas and upstream director, Zoe Yujnovich, said: “Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system.

“To achieve this in an already mature basin, we are combining forces with Equinor, a partner of many years.

“The new venture will help play a critical role in a balanced energy transition providing the heat for millions of UK homes, the power for industry and the secure supply of fuels people rely on.”

Shell has said there will not be job losses as a result of its tie-up with Equinor to create a new UK oil and gas producer.

Zoe Yujnovich, director of Shell’s integrated gas and upstream business, said the deal could “enhance” the longevity of UK oil and gas jobs.

The British energy major employs about 1,000 people working on assets in the North Sea, such as oil rigs, while Equinor employs about 300.

Bitcoin (BTC-USD) surged to an all-time high of $103,900, reaching the coveted $100,000 mark for the first time in its history. The record-breaking rise follows a series of events triggered by Donald Trump’s recent US election victory, which has injected new optimism into the cryptocurrency market.

The latest surge came after Trump appointed Paul Atkins, a consultant, to lead the Securities and Exchange Commission (SEC). Atkins, who had previously worked for the SEC, has been praised by Trump for his approach to regulation, with the president describing him as “a proven leader for common-sense regulations.”

Trump added that Atkins “recognises the importance of digital assets and other innovations” in the quest to “Make America Greater than Ever Before.”

The market response has been swift. Bitcoin’s price has soared nearly 50% since Trump’s election victory just one month ago, and its value has nearly tripled over the past year alone.

Industry insiders point to these developments as signs of increased institutional confidence in digital currencies, especially as Trump’s SEC appointment suggests a more relaxed regulatory stance towards cryptocurrencies.

“We’re witnessing a paradigm shift. After four years of political purgatory, bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream,” said Mike Novogratz, founder and CEO of the US crypto firm Galaxy Digital.

“This momentum is fuelled by institutional adoption, advancements in tokenisation and payments, and a clearer regulatory path.”

Bitcoin, invented in 2008, has risen from being essentially worthless to the total value of all coins in circulation now being close to $2tn.

High street retail giant Frasers (FRAS.L) said it has witnessed “weaker” confidence among shoppers leading up to and since the autumn budget, as the company reduced its profit forecasts for the year.

It came as the Mike Ashley-owned firm revealed a slump in sales for the past half-year, and lower profits.

The group said it is now on track for adjusted pre-tax profit between £550m and £600m for the current year. It had previously predicted it would be between £575m and £625m.

It reported that “consumer confidence has weakened and trading conditions have been tougher” in recent months as it laid out the slightly weaker outlook.

It came as Frasers revealed that operating profits fell by 10.5% to £266.8m for the half-year to 27 October.

The group said it secured almost £75m in cost savings and efficiencies but these were somewhat offset by planned reductions in low margin sales at Studio Retail and Game.

Revenues for the six-month period dropped by 8.3% to £2.54bn, compared with the same period a year earlier.

A £15bn merger between Vodafone (VOD.L) and Three UK has been given the green light by the Competition and Markets Authority.

The landmark telecommunications deal can go ahead if both companies agree to invest billions to roll out a combined 5G network across the UK, the watchdog said.

The companies have also been told to offer shorter-term customer protections which would require the merged company to cap certain mobile tariffs for three years.

Stuart McIntosh, chairman of the independent inquiry group leading the CMA’s investigation, said the deal is “likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures”.

Vodafone and Three’s merger will create the UK’s largest mobile operator, with some 27 million customers.

The deal is expected to complete formally during the first half of 2025.