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Weekly review

By Josh White

Date: Friday 27 Mar 2020

(Sharecast News) - The FTSE 100 ended the week 354 points higher at 5,510.33.
Equity view

Fashion retailer Next shut its online, warehousing and distribution operations overnight after staff expressed concerns about working during the coronavirus lockdown.

Online real estate agent Rightmove cancelled its dividend and pulled full year guidance as due to uncertainties caused by the impact of Covid-19.

Defence engineering firm Meggitt pulled its final dividend to save cash as the coronavirus pandemic hit its aerospace market.

Redrow said on Friday that it was closing all of its sites and offices due to the coronavirus and is in talks with banks about securing more credit.

British Land has postponed dividends, waived ?3m of rents from smaller tenants and halted work at big developments in a series of measures responding to the Covid-19 crisis.

Capital & Counties announced on Thursday that it was temporarily suspending its share buyback programme and will defer some rental payments due to the Covid-19 outbreak, as it said it is still too early to assess the full impact on rental income and property valuations.

Marine engineering services firm James Fisher & Sons suspended its dividend until further notice, cut boardroom pay by 20% a fifth to save cash and mitigate the impact of the Covid-19 pandemic.

Self-storage company Big Yellow said on Thursday that it was considering a number of initiatives to conserve cash in the short term due to the coronavirus, that it will agree rent holidays or deferrals for some customers, and that a decision about its final dividend will be made "in due course".

House builder Bellway postponed its interim dividend and warned of a slowdown in demand due to the coronavirus and subsequent government-ordered lockdown.

Rentokil Initial has cancelled its dividend and cut the pay of its top people in an effort to conserve more than ?500m in cash after the Covid-19 crisis hit its business.

Waste management company Biffa cancelled its dividend on Wednesday and said it will not be providing any guidance for FY21 as it expects the Covid-19 outbreak to cause "significant" disruption to its operations.

United Utilities updated the market on its trading ahead of its full-year results on Wednesday, saying it was currently in line with its expectations for the year ending 31 March.

JD Sports Fashion said it was pulling guidance and delaying publication of full year results after the UK government ordered nonessential shops to close down in response to the Covid-19 pandemic.

Anglo American said it was reviewing the impact of the South African government's national lockdown to curb the spread of Covid-19.

Rio Tinto will curtail operations in South Africa and Canada to comply with measures imposed by the countries' governments in response to the Covid-19 crisis.

Miniature wargames manufacturer Games Workshop said on Tuesday that its performance has been hit by the Covid-19 outbreak and that it will be closing its stores, headquarters, factory and warehouses in the UK and the US with immediate effect.

Primark's decision to close its stores will cost ?650m a month in lost sales, parent company Associated British Foods said.

Workspace provider IWG said on Monday that it was suspending its dividend and temporarily halting its share buyback programme due to the coronavirus outbreak.

Transport operator Stagecoach issued a profit warning on Monday adding that it was unlikely to pay any further dividends as the coronavirus pandemic hit passenger numbers.

Temporary power provider Aggreko withdrew its 2020 guidance on Monday and suspended its dividend due to the coronavirus.

Economic news

Officials in Westminster have put the brakes on the UK's housing market, in a bid to slow the spread of Covid-19 coronavirus.

Gatwick Airport said it would close one of its two terminals from April 1 and operate flights for eight hours daily as the Covid-19 impact hammered demand for air travel.

Britain's financial regulator gave listed companies an extra two months to file results to properly gauge the impact of the Covid-19 pandemic.

The UK high street was already flagging in February, official data showed on Thursday, as heavy rain and widespread flooding kept people out of shops.

Inflation edged down to 1.7% in February in a harbinger of extreme downward pressure on prices caused by the Covid-19 crisis.

House prices fell in January amid political uncertainty but the Covid-19 crisis has now replaced Brexit as the main driver of activity in the property market.

The coronavirus caused a record slump in UK business activity even before the government imposed extraordinary measures to curb the spread of the disease, a closely watched survey showed.

The already-tardy Elizabeth line project in London suffered a further delay on Tuesday, as Transport for London confirmed that all work on the Crossrail project would be stopped for the foreseeable future as a result of the Covid-19 coronavirus pandemic.

The UK government effectively renationalised the railways on a temporary basis as it suspended all franchise agreements to help train companies avoid collapse due to the coronavirus pandemic.

Growing concerns over job security in the wake of the coronavirus outbreak are weighing heavily on household finances, a key survey published on Monday showed.

International events

German consumer confidence looked set to slide in April amid the coronavirus outbreak, to its lowest level since 2009, according to a survey released on Thursday by market research group GfK.

Federal Reserve President, Jerome Powell, told US broadcaster NBC that the central bank is not going to "run out of ammunition".

The number of Americans filing for unemployment benefits surged to a record 3.28 million last week as businesses shut down and people were let go due to the coronavirus.

The European Central Bank has reportedly ruled out using the emergency Outright Monetary Transactions scheme to tackle the economic fallout from the coronavirus outbreak.

US lawmakers have agreed a $2tn package of fiscal measures to support American households and businesses hit by the coronavirus crisis.

German business sentiment saw its worst deterioration in March since the country's reunification in 1990, according to a widely-followed survey released on Wednesday.

Eurozone business activity collapsed in March amid the escalating coronavirus crisis, according to data released on Tuesday.

Governments around the world need to save crisis-hit airlines, a leading industry body has warned, as it forecast revenues would nearly halve in 2020 because of the coronavirus pandemic.

Markets underestimate Covid-19's destructive potential to cause a credit crisis that damages even the strongest companies, a prominent US investor has warned.

The US Federal Reserve has pledged unlimited purchases of government bonds to support businesses and consumers as the coronavirus crisis threatens economic collapse.

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