# Roundup of the week: 4 July 2025 _Markets shrugged off political drama, but AstraZeneca’s possible US move reignited debate about the UK’s undervalued equity market._ Neil Woodford · 4 July 2025 · 6 min read ![Attitudes of UK newspapers towards Rachel Reeves's tear during Prime Minister's Questions.](https://cdn.sanity.io/images/v3acfbvo/production/5d0d46e9fbaba8991d4ad0e1f2384788fb59d29b-4032x3024.jpg?w=1600&fit=max&auto=format) --- ## Politics It has once again been a very eventful week, especially for UK-based investors. The government’s travails with its welfare reform bill were anticipated, but Starmer’s climbdown in the lead-up to Wednesday’s vote did have some unforeseen consequences in the House of Commons, which once again led to yet another very emotional, arguably histrionic reaction in financial markets and the media. For some reason that is as yet unclear, Rachael Reeves was very upset during PMQs (I cannot ever remember seeing another senior cabinet minister in tears in the Commons) and as a result of her visible discomfort and Keir Starmer’s failure to endorse her, financial markets had a brief but quite extreme hissy fit on Wednesday afternoon. The equity market fell, and domestic stocks took a battering (NatWest, for example, was down over 5%). Bond yields rose dramatically, as they had done a few years ago during the brief engineered “crisis” that accompanied Liz Truss’s mini-budget in September 2022. This time, the crisis was over in an afternoon following a belated PM endorsement of Rachael Reeves, and a restatement of his commitment to her “fiscal rules”. UK financial markets now see her as a steady hand, or at least a constraint, on the more spendthrift tendencies of the incumbent UK government. Bond yields have returned broadly from whence they came, and the ten-year gilt is now yielding just over 4.5%, below the average yield of the last three months. In the US, the Big Beautiful Bill has navigated its way through the Senate, and apparently, the House of Representatives will pass the bill before the Trump-imposed deadline of the 4th of July. This huge bill includes significant tax and spending cuts, a phase-out of Biden-era clean energy subsidies, and a host of other Trump policies. The bill is very divisive, and its implications for the economy will emerge over time. Some believe, including the Congressional Budget Office, that it will add trillions to the deficit; its supporters, on the other hand, believe it will unleash higher growth in the economy. We will have to see, but the US bond market appears to be a little more relaxed about it than it might have been. (Ten-year yields in the US are now below 4.3%) ## Economics In a quiet week for major announcements, the only significant data was the US labour market figures (June payroll data). The report turned out to be stronger than consensus expected yesterday afternoon. Payrolls increased by a bigger-than-expected 147,000, and the unemployment rate ticked down a little. Frankly, this is neither here nor there in the context of what is actually going to happen to US interest rates, which I continue to believe are headed down, but will have to wait for evidence that Trump’s tariffs are not pushing US inflation up by more than is already priced in. US bonds have ticked down a bit on the back of this report, but US equities are up again, with NASDAQ leading the way up over 1%. ## Financial markets Despite the geopolitical issues global financial markets have had to contend with in 2025, it is quite surprising that equity markets are as buoyant as they are. The S&P is at an all-time high, and UK and EU markets are both registering decent gains for the first six months of the year. Nevertheless, as usual, there are many things to worry about. This week, the many challenges confronting the profoundly undervalued UK equity market were highlighted in a story which I have written about on several occasions over the last year. This time, the context was [a story in The Times](https://www.thetimes.com/business-money/companies/article/astrazeneca-ceo-wants-to-move-britains-most-valuable-company-to-us-0j57vbwcf) that AstraZeneca, until very recently the UK’s largest company, was considering moving its listing to the US. Once again, this story highlights the profound valuation discount that affects the whole UK equity market, but it also shines a light on the profound harm inflicted on the UK’s equity market ecosystem by ill-thought-through accounting reform, government neglect and regulatory overreach. I have written about these subjects at length in [previous Woodford Views blogs](https://www.noisecancelling.co/read/a-quarter-century-of-damaging-reforms), and so I won’t repeat the analysis here, but I do want to draw your attention to the implications of these institutional failures because they don’t just affect big companies’ listing decisions. Critically, these failures, spread over two decades, have left listed UK companies trading on very low valuations in comparison with the UK equity market’s history and with its peers. In normal circumstances, mean reversion might be prompted by an equity owning community of pension fund investors who would recognise this obvious disconnect with history and other markets and seek to correct it. Unfortunately, because UK defined benefit pension schemes, historically the largest natural owners of UK equity risk, decided years ago to pretty much eradicate any exposure in their funds to UK equities (see table below), this natural mean-reverting mechanism no longer exists in the UK. ![Roundup of the week: 4 July 2025](https://cdn.sanity.io/images/v3acfbvo/production/422e0163692f23225de45da732accabc2f666b47-666x309.png?w=1600&fit=max&auto=format) But all is not lost, and in my opinion, this shocking national failure presents UK investors with a unique opportunity in their domestic equity market to take advantage of structurally mispriced high-quality corporate assets. Of course, it also presents a very interesting opportunity to international investors and acquisitive corporates who now appear to be taking advantage of it at an unprecedented scale. For example, in the first half of 2025, there were 31 bids for UK-listed companies with a market cap over £100mn, and with a total value of £24bn. In 2025, there were 45 bids with a total value of £52bn. Over this entire period, there were only three IPOs. In just eighteen months, 13% of the FTSE 250 has disappeared. Need I say more?! ## Company updates Before the half-year results season gets into full swing, there were a couple of important corporate announcements this week affecting businesses I follow. Here I want to mention just three briefly. ### Burford Capital Burford is a unique business specialising in litigation finance. This week, there were three important developments: two relating to cases where the business has a significant economic interest and the third to a favourable development in relation to the Big Beautiful Bill currently going through Congress. The first relates to Burford’s single biggest exposure, which is in a case against the Republic of Argentina. Without going into detail, a judge in New York ordered Argentina to hand over shares in the national oil and gas giant YPF to the plaintiffs to the value of $6.5bn, of which Burford’s exposure is $2.5bn. Although the state can appeal, and in common with everything in these cases, resolution takes time, this is a decisive development that is likely to hasten moves towards an eventual settlement that would be potentially transformational for the business. The second favourable development was in a large antitrust case in the US, which should also speed up the process to an eventual settlement. Finally, an amendment to the One Big Beautiful Bill Act, which would have increased Burford’s US tax rate, was dropped, adding to this week’s positive news flow on the business. ### Apellis This biotech business announced a capped royalty agreement in which it will receive $300mn in exchange for 90% of Apellis’ future ex-US royalties for one of its approved drugs, Aspaveli (used to treat a rare genetic disease, PNH), from a company called Sobi, a Swedish pharma business. The cash Apellis will receive is non-dilutive and will strengthen its balance sheet as the business builds to sustained profitability and cash generation. ### Windar Photonics Windar announced its calendar 2024 results this week. Although the results were in line with recently changed guidance, the share price fell on the day of the release. This, I think, reflected some disappointment that the statement referenced customer caution in the face of tariff uncertainty. Overall, the business is clearly poised to accelerate as it continues to win significant new business from across the world, which will be transformational in scale. ## What to look out for next week Next week is not particularly busy on the economic calendar. We will see more US labour market data in the form of continuing and initial jobless claims towards the end of the week. In the UK, we get Halifax house price data on Monday and May’s GDP data on Friday. EU CPI data is out on Friday. In the UK, we have a few announcements from businesses I follow, which I will cover in next week’s roundup, if they are significant. I suspect that the AstraZeneca story may also gather a bit more traction, given its scale and importance to the UK equity market. Of course, whether it will prompt any sort of action is another matter, and I am not holding my breath on this.