Merifund Capital Management on FTSE 100 Gains

FTSE 100 edges higher as defence stocks respond to a Norway and UK frigate partnership valued at about USD 13.5 billion; gold miners firm on four-month highs; private equity outlook highlights mid-cap catalysts, share buybacks, PMI readings, tariff risk and monetary policy signals

UK equities open higher on 01 Sep 2025 with defence contractors and precious-metals miners leading gains, while trading volumes are thinner because of a US market closure and investors weigh August manufacturing data. Merifund Capital Management provides analysis of these moves, setting a clear time frame for portfolio positioning through the current quarter while emphasising selectivity rather than broad market exposure.

Defence shares extend gains after Norway selects Britain as strategic partner for a multi-ship frigate procurement valued at about USD 13.5 billion. In today’s session BAE Systems and Babcock International rise 2.6%, with Rolls-Royce up 2.2%. Year to date to 01 Sep 2025, performance remains strong, with BAE Systems up 48%, Babcock International up 87% and Rolls-Royce up 82%. Contract visibility underpins cash flows as allied procurement cycles lengthen and programmes scale. “Contracted revenues tied to multi-year modernisation provide ballast when growth indicators swing from month to month,” Anthony Saunders, Director of Private Equity, explains, framing defence as a stabiliser within diversified allocations for the current quarter.

Precious-metals producers add support. The sector advances 2.9% in today’s session as bullion holds four-month highs and builds on a near 5% rise over August 2025. High-quality operators emphasise capital discipline and shareholder distributions, which strengthens re-rating potential if spot prices consolidate through September. “Low-cost producers with strong free cash flow can compound value, and if pricing remains firm through the present quarter, corporate activity can quicken,” Saunders notes, pointing to dividends, buybacks and selective consolidation as potential drivers.

Selected mid-caps register outsized moves that hinge on company-specific catalysts. Kainos Group surges by more than 20% in today’s session after steering full-year revenue towards the top of expectations for the year ending March 2026. Consensus implies about USD 520 million of revenue and about USD 89.6 million of pre-tax profit. Domino’s Pizza Group gains 8% as the board authorises a USD 27 million share repurchase and maintains full-year profit guidance of USD 175.5 million to USD 189.0 million, while flagging year-end net debt of USD 378 million to USD 405 million. The lens for mid-caps, Saunders adds, “favours recurring revenue, pricing power and cash conversion over the current fiscal period, with idiosyncratic catalysts preferred to broad beta.”

Macro signals remain mixed. The S&P Global and CIPS UK Manufacturing PMI prints 47.0 for August 2025, which keeps the sector in contraction for an eleventh consecutive month. UK banks ease 1.9% in today’s session as investors weigh tariff uncertainty in the United States and the possibility of additional sector taxation ahead of the autumn budget. “Risk budgeting stays tight, liquidity screens remain central and uncorrelated hedges are maintained so capital can be deployed into weakness rather than forced out of positions,” Saunders comments, setting out a process designed to reflect year-to-date volatility.

The conclusions drawn from Merifund Capital Management’s analysis point to three main themes for investors to consider over the remainder of the current quarter. First, defence holdings provide structural support, backed by multi-year order visibility and sovereign programmes. Second, precious-metals exposure offers diversification benefits during a monetary policy phase where outcomes remain data-dependent. Third, carefully selected mid-cap names with clear catalysts and strong cash generation present opportunities for differentiated performance. These pillars capture the firm’s outlook on how portfolios can be positioned most effectively in the prevailing environment.

About Merifund Capital Management

Established in 2010, Merifund Capital Management Pte. Ltd. (UEN: 201024554E) is a Singapore-headquartered investment manager specialising in traditional long-only portfolios, long or short equity, global macro, event-driven approaches and systematic trading. The firm makes selective use of derivatives to refine exposures while keeping capital preservation, liquidity and prudent risk management at the forefront. ESG considerations are integrated in line with recognised global sustainability standards. Client coverage includes accredited investors, family offices, foundations and endowments, and the firm is broadening its range to serve retail investors. Further insights are available at https://merifund.com/insights. Media enquiries: Tao Yang at media@merifund.com. Company information: https://merifund.com.