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Breaking the 8,500 barrier for the first time, FTSE 100 The stock hit an all-time high on Friday (Jan. 17).
In some ways this seems a bit strange. UK growth figures continue to disappoint, with the economy stagnating since April 2024. Additionally, inflation remains above the Bank of England's 2% target. And earlier this month, 30-year government bond yields hit a 26-year high.
Things appear to have gotten so bad that there is even speculation that the Chancellor may have to call for an emergency budget to address another “black hole” in the nation's finances.
It really looks very gloomy out there!
And yet the UK's largest listed companies now attract a higher valuation than ever.
What is happening?
In my view, this optimism reflects the global nature of the FTSE 100.
It is true that the UK economy is not experiencing great success at the moment. But it is estimated that 75% of the revenue of the companies in the index is earned abroad.
This means that they do not depend on a particular territory and are less affected by a set of economic indicators.
On the other hand, countries more focused on the national level FTSE 250 It remains 15% below its historical maximum, reached in September 2021.
And the better performance of the FTSE 100 over the last month illustrates this point.
doing well
From December 17, 2024, the shares of Airtel Africa (LSE:AAF) are up 17%. And the secret to its recent success could be that the group makes no money outside of Africa. The threat of 'Trump tariffs' will not affect the group.
As of September 30, 2024 (H125), it had 156.6 million customers in 14 countries, an increase of 6.1% over the previous year.
During the first half of 2025, revenue increased by 19.9%. However, this was calculated using a fixed exchange rate (constant currency). Real income was 9.7% lower, especially due to the weak performance of the Nigerian naira.
Volatile exchange rates illustrate one of the difficulties of doing business in this part of the world. It is also a highly competitive sector and the necessary infrastructure can be expensive.
But despite these risks, the company is attracting the interest of a major investor. On December 27, 2024, an entity closely related to one of the company's non-executive directors, Shravin Bharti Mittal, bought £15.75 million worth of shares. This now takes Indian Continental Investment's stake to just under 16%.
And in the telecommunications industry, Africa seems to be the place to be right now. During the first half of 2025, Vodafone – which derives 20% of its revenue from the continent – reported a 9.9% increase in its services revenue in the region.
In the long term, Africa's economic growth is likely to outpace the rest of the world. And as incomes rise, consumers are likely to have more to spend on things like cell phones.
Good news
As a major owner of FTSE 100 shares, I welcome the new high. But I don't get too carried away. I think the stocks in the index most likely to do well over the next 12 months are those that are least dependent on the UK economy, such as Airtel Africa.
But while I believe the group is well positioned to benefit from expected growth on the continent, I already own Vodafone shares and do not want any further exposure to the sector.
