MARKET REPORT: Omega Diagnostics soars as Government moves to lower UK’s dependence on foreign firms for Covid tests
A government drive to lower the UK’s dependence on foreign Covid testing firms sent shares in Omega Diagnostics rocketing.
The AIM-listed biotechnology group is one of three British firms that has been picked to scale up production of rapid lateral flow tests – which are used to screen for coronavirus in people who are not showing any symptoms.
The tests have proved controversial as some studies have shown that up to 60 per cent of positive cases could be missed.
AIM-listed biotechnology group Omega Diagnostics is one of three British firms that has been picked to rapidly scale up production of lateral flow Covid tests
But the Government has doubled down on its commitment to them and they are seen by some as a key tool in getting Britons back into offices, as workers could be regularly screened.
The lateral flow tests are particularly helpful because they do not need to be sent off to a laboratory and can provide a result in 30 minutes.
Ministers hope Omega and two other groups, Global Access Diagnostics and SureScreen, can together produce up to 2m of these tests per day for the UK, according to reports in the Financial Times. The move would reduce the UK’s reliance on devices shipped in predominantly from the US and China.
Stock Watch – Bahamas Petroleum
Investors rushed to exit oil minnow Bahamas Petroleum after it was forced to abandon a long-awaited project.
The company struck oil at the Perseverance-1 well, which has been in development since 2008, but its drilling did not find enough to make it worth operating.
AIM-listed Bahamas Petroleum had spent years trying to drill the well but major partners kept pulling out.
Shares crashed 67.5 per cent, or 1.39p, to 0.67p on the disappointing result from the site.
Omega confirmed in an announcement to the stock market yesterday that it is modifying its Scottish plant to ‘upscale significantly’ its lateral flow test production. It said it will release a further update once any contracts have been signed.
Omega Diagnostics was among a clutch of rapid responders to the Covid pandemic and saw its shares surge in value by more than 350 per cent last year.
Its value soared by another 32.4 per cent, or 22.5p, to 92p yesterday as shareholders crossed their fingers that the rumoured deal will get over the line.
The mid-cap FTSE 250 had a modest start to the week, climbing 0.1 per cent, or 19.68 points, to 21086.55. The top risers on the index – Just Group and Weir Group – were boosted by upbeat broker notes.
Insurer Just Group rose 5.7 per cent, or 4.5p, to 84.15p after analysts at Peel Hunt initiated coverage by slapping a ‘buy’ rating on the group’s stock and giving it a target price of 120p.
And engineering group Weir was upgraded to ‘overweight’ – with a price target of 2200p – by Morgan Stanley.
Broker Robert Davies said the company would benefit from a rebound in the mining sector, where metals prices and industry spending are rising. Weir’s shares rose 5.1 per cent, or 98.5p, to 2026p.
Speaking of miners, a strong performance from the likes of Evraz (up 4.1 per cent, or 20.4p, to 523.6p), Anglo American (up 3.9 per cent, or 97p, to 2581p) and Antofagasta (up 3.4 per cent, or 50.5p, to 1532p) helped boost the FTSE 100.
The blue-chip index rose 0.5 per cent, or 34.2 points, to 6523.53. Footsie-listed jet engine maker Rolls-Royce lost ground, falling 1 per cent, or 0.9p, to 93p, after confirming it is in talks to shut down production at its main division for two weeks this summer.
It would be the first such closure of factories since Rolls became a listed company in the 1980s.
The plunge in air travel has hammered Rolls’ civil aerospace arm, which makes and maintains plane engines.
It was a difficult start to the week for so-called ‘Covid winners’ after reports that the Government is considering a tax raid on companies whose profits soared during the pandemic.
Online retailers in particular proved to be some of the most resilient firms last year while their bricks-and-mortars peers stalled and other industries, such as travel and leisure, also saw their turnover plummet.
Ocado (down 2.2 per cent, or 62p, to 2746p) and AO World (down 5.8 per cent, or 19.5p, to 313.5p) were among the big fallers after the reports.