Market Overview

Dear Investor,

Silver continued to steal the spotlight this week as prices surged above $60 per ounce for the first time, extending a rally that has now seen the metal more than double since January. Tight supply conditions, strong investor demand and growing industrial use have combined to create a powerful upward trend. A 4% jump to $60.4 per ounce underlined just how stretched the market has become, with precious metals once again attracting attention as monetary policy edges looser.

At the other end of the commodity spectrum, Brent crude has moved sharply lower. Oil prices fell below $60 a barrel for the first time since early 2021, driven by hopes of progress towards a Russia Ukraine peace deal and growing confidence that global supply will remain ample. Any easing of sanctions or normalisation of trade routes could release oil currently tied up in long shipping chains, effectively increasing available supply. While analysts caution that optimism may be premature, sentiment has clearly shifted.

The supply backdrop reinforces that pressure. Global oil production has risen by close to 3 million barrels a day this year, with output growth coming from both Opec and non Opec producers. Even with recent geopolitical disruptions, the International Energy Agency expects a sizeable surplus to persist into 2026. Brent has now fallen for five consecutive months, its longest losing streak in more than a decade, as concerns about oversupply outweigh demand growth.

For UK investors, the week was rounded off by a long anticipated move from the Bank of England. The MPC voted five to four to cut rates by 0.25 percentage points to 3.75%, marking the sixth cut since the summer of 2024. Governor Andrew Bailey struck a cautious tone, signalling that further easing is possible but far from guaranteed as inflation approaches target. With precious metals surging, energy markets resetting and interest rates edging lower, divergence across asset classes is becoming more pronounced. These shifts tend to create clear winners and losers at the stock level, making selectivity increasingly important as we head into the new year.

With best wishes for Christmas and the New Year,

Tom

Market Movers

On the rise: Whitbread (LSE:WTB) +9.3% on the week

Whitbread moved higher this week after activist investor Corvex Management disclosed a 6% stake in the Premier Inn owner and called for a review of the company’s capital allocation strategy. The US based hedge fund urged Whitbread to reassess its £3.5bn five year investment plan, arguing that recent policy changes have widened the gap between the group’s share price and underlying value. Corvex also confirmed it intends to seek board representation.

Whitbread has not yet formally responded to the activist’s proposals. The company continues to operate a predominantly UK focused hotel estate with a growing presence in Germany, where investment remains a core part of its long term strategy. The stock had been under pressure over recent months, leaving valuation metrics more subdued relative to history, with a forward price to earnings ratio of 12.1 and a forecast dividend yield of 4.25%.

Regency View: We have previously highlighted Whitbread as a high quality operator facing a temporary policy headwind rather than a broken business. Constructive activist pressure could act as a catalyst to sharpen capital discipline and unlock value that we believe already exists within the group.

On the slide: Time Out Group (AIM:TMO) -25.5% on the week

Time Out Group came under pressure after publishing its preliminary results alongside the announcement of an £8m equity placing. The company reported full year revenue of £73.2m and adjusted EBITDA of £7.1m, showing continued operational progress as it expands its global food and cultural media footprint. However, the funding announcement quickly became the dominant focus for investors.

Time Out said the proceeds will be used to support future growth, though the announcement arrives at a time when investor sentiment towards dilution has been fragile, particularly among small and mid cap growth stocks. The combination of a discounted placing and the reminder that additional capital is still required to fund expansion weighed on the shares despite the improvement in underlying financial performance.

Regency View: Capital raises are rarely welcomed, especially when delivered at a meaningful discount. While Time Out’s growth ambitions are clear, dilution risk remains front and centre, which is why we continue to watch from the sidelines rather than get involved at this stage.

Sector Snapshot

Financials took the top spot this week, supported by strong earnings momentum and improving sentiment around global rate expectations. Consumer Discretionary and Industrials followed closely behind, while Materials and Utilities also performed well, giving the rally a healthy mix of cyclical and defensive participation.

Real Estate and Telecom added to the gains, while Tech and Consumer Staples were largely flat. Energy was the clear laggard, reversing sharply after recent strength, as investors took profits and rotated back into sectors with more consistent earnings visibility.

UK Price Action

As we head into Friday, the FTSE is finishing the week on a positive note, breaking higher from the consolidation range that has been forming above the 50 day moving average. Buyers have continued to absorb weakness around 9,600 and the index has pushed steadily into the upper end of this week’s structure.

This week’s price action has strengthened the short term outlook, with momentum improving while the broader trend remains firmly bullish. A weekly close above 9,742 would put the market in a strong position for a run towards the 9,929 highs.