Davy Research

Davy Morning Equity Briefing

Market Comment

EU27 set to reject calls to discuss UK transitional arrangement

At their meeting this week, EU leaders look set to dismiss UK calls to discuss a transitional arrangement on trade. With just 529 days to go until Brexit, the pressure on the UK government will grow as firms start to consider contingency plans to move activities away from the UK. Overnight, Rightmove asking prices were up 1.4% in the year to October, indicating that Brexit is weighing on the housing market.

FBD Holdings

New reinsurance arrangements should provide better storm protection

A series of windstorms culminating in Storm Darwin cost FBD €15.2m net of reinsurance back in 2014 as its single event cover of €5m was required for multiple events. However, the group’s new reinsurance arrangements – it retains more attritional property risk but has increased its catastrophe cover – should afford increased protection, particularly as Storm Ophelia is expected to be a single event.

Malin Corporation

A unique life sciences opportunity

Since its IPO in 2015, Malin has made significant progress in executing its strategy. It has allocated €372.5m across 18 portfolio companies, offering investors diversification of development and commercial risk and a spread of product/device/service plays through the healthcare life cycle. An uplift in observable fair value since 2015 indicates business model progression and shareholder value creation. Further development and commercial milestones are expected in the coming 12-18 months, which should lead to an increase in the observable fair value. We reiterate our ‘Outperform’ call with a price target of €16.90.