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Coronavirus Update

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Weekly review

Friday 07 Aug 2020

(Sharecast News) - The FTSE 100 ended the week up 134.42 points at 6,032.18.
Equity view

Online real estate agency Rightmove posted a fall in half-year profits and agency branches, reflecting the impact of the coronavirus lockdown as it reported a cautiously optimistic outlook after strong trading in July.

Standard Life Aberdeen proposed an unchanged dividend as the investment manager reported a 30% drop in first-half profit and a decline in revenue.

TP ICAP reported an improvement in underlying revenue in its first half on Friday, to 990m, from 922m a year earlier, though it warned that activity was showing signs of slowing in July.

Healthcare investment company Syncona announced on Friday that its portfolio company Freeline Therapeutics has priced its initial public offering in the United States.

Glencore scrapped its deferred $2.6bn dividend to bolster its balance sheet as half-year profits fell on weak commodity prices and the Covid-19 pandemic but oil trading posted record profits.

UK outsourcer Serco said interim profits rose 53% on the back of demand from governments for its services during the coronavirus pandemic and purchase of a US naval systems unit last year.

Mondi restarted paying dividends as the paper and packaging company reported a 26% decline in first-half profit after the Covid-19 crisis reduced demand for its products.

ITV's first-half profit was almost wiped out as the Covid-19 crisis caused revenue to plunge and exceptional costs to increase.

FTSE 250 recruiter PageGroup said on Wednesday that it swung to a loss in the first half as it took a hit from the coronavirus pandemic.

Bottling group Coca-Cola HBC reported a decline in first-half profit and revenue on Wednesday as trading was dented by coronavirus lockdowns.

British American Tobacco said Ricardo Oberlander would step down as the boss of its Reynolds US business and would be replaced by fellow BAT veteran Guy Meldrum.

Hastings on Wednesday said it had agreed terms on a 1.6bn takeover by a consortium led by Finnish insurer Sampo and its biggest shareholder, Rand Merchant Investment Holdings.

AA reported it had received three approaches from potential private equity bidders as the company said it needed a large injection of capital to reduce its debt.

Rotork reported a 4% decline in first-half profit on Tuesday as revenues were dented by the Covid-19 pandemic, but the industrial flow control equipment maker reinstated its previously-deferred final dividend for 2019.

Car insurer Direct Line lifted its interim dividend and declared a special "catchup" payout to make up for cancelling its 2019 disbursement, as it reported a fall in profits.

Spectris said on Tuesday that it performed better than expected in the first half, with sales down less than forecast and orders faring better, as it reinstated its dividend.

Hiscox swung to a loss in the first half as the Lloyd's of London insurer set aside $232m (177m) for Covid-19 related claims.

Hammerson confirmed on Monday that, following recent press speculation, it is in advanced discussions on the terms of a possible disposal of its 50% interest in VIA Outlets to its joint venture partner APG.

TUI Group confirmed the signing of a sale and leaseback agreement with BOC Aviation for five new Boeing 737 MAX-8 aircraft on Monday, for a total of $226m (173.06m).

Gene and cell therapy company Oxford Biomedica has signed a new development, manufacture and license agreement with Beam Therapeutics, it announced on Monday, which it described as a Massachusetts-based biotechnology company developing precision genetic medicines through the use of base editing.

Economic news

House prices across the UK hit their highest mark in the history of the Halifax house price index in July, adding to the emerging view that the market is experiencing a surprising spike post lockdown.

Bank of England Governor Andrew Bailey warned there was a long, uncertain road to get the economy back on track after the central bank published more upbeat forecasts for 2020.

Output in the UK construction sector expanded in July at its steepest pace since October 2015 but more jobs were lost, according to data released on Thursday.

The Bank of England stood pat on interest rates on Thursday as it said the UK's economic recovery will take longer than previously thought.

British consumers will see lower energy bills this winter after the industry regulator cut its price cap to record lows as wholesale energy market prices plunged during the coronavirus pandemic.

UK new car registrations rose for the first time this year in July, by 11.3%, according to figures published on Wednesday by the Society of Motor Manufacturers and Traders (SMMT).

The UK services sector grew in July at its fastest pace in five years as the coronavirus lockdown eased, although employment was a weak spot, according to data released on Wednesday.

The Scottish government has reimposed partial lockdown conditions in Aberdeen to deal with a Covid-19 cluster in the city.

UK factory output and orders rose strongly in July and sentiment improved as Covid-19 lockdown restrictions were relaxed, a survey showed.

The Covid-19 pandemic which led to a precipitous fall in spending has also seen UK millennials invest their savings into the stock market.

International events

Chinese exports printed well ahead of economists' forecasts again in July but import growth dipped, stoking some concern about the pace of the domestic recovery in China.

Hiring in the US slowed last month, but by less than expected by many observers on Wall Street.

German factory orders surged in June although volumes were still much lower than before the coronavirus pandemic, according to provisional figures released by Destatis on Thursday.

Jobless claims in America unexpectedly broke significantly lower over the preceding week.

Growth in China's services sector slowed to a three-month low in July as new exports declined and job cuts continued, an industry survey showed.

Eurozone retail sales increased 5.7% in June, short of market expectations, as trading rose strongly in Spain and Italy but declined in Germany.

An enormous blast rocked all of Beirut shortly before 1700 BST on Tuesday, with initial reports citing official sources saying that it was the result of an accidental fire at a fireworks depot.

China's manufacturing activity continued its recovery from the coronavirus crisis, the private Caixin/Markit survey revealed on Monday.

The World Health Organization warned on Monday that there is a possibility that a "silver bullet" to combat Covid-19 may never come despite the existing strong hopes for a vaccine.

The most closely-followed gauge of manufacturing sector conditions in the US edged past forecasts last month, but as in Europe, companies were still loath to hire.


FTSE 100: 5 Day Chart

UK Markets

Index Value 1 Week % Change
FTSE 100 6,032.18 +2.28%
FTSE 250 17,622.93 +4.08%
FTSE AIM All-Share 932.92 +5.41%
FTSE techMARK Focus 5,729.24 +4.92%

Biggest Risers

Name Price 1 Week % Change
AA 32.85p +37.4%
Kin and Carta 63.00p +21.2%
Regional REIT Limited 79.50p +19.9%
Riverstone Energy Limited 282.50p +18.0%
Restaurant Group 51.45p +16.4%

Biggest Fallers

Name Price 1 Week % Change
KKV Secured Loan Fund Limited NPV 18.88p -27.4%
Indivior 119.50p -13.0%
Amigo Holdings 8.17p -11.4%
Mears Group 123.00p -10.2%
Dialight 290.00p -9.4%

Sector Risers

Name Value 1 Week % Change
Travel & Leisure 6,338.50 +9.3%
Forestry & Paper 16,728.64 +9.0%
Technology Hardware & Equipment 2,397.71 +8.6%
Oil Equipment, Services & Distribution 4,094.14 +8.5%
Life Insurance 6,408.17 +8.5%

Sector Fallers

Name Value 1 Week % Change
Beverages 20,365.69 -7.1%
Tobacco 25,898.53 -1.4%
Banks 2,010.28 -0.9%
Household Goods & Home Construction 17,421.72 -0.6%
Personal Goods 37,006.61 -0.2%

This newsletter is intended for general circulation only and does not constitute a personal recommendation. The information is provided to help you make your own investment decisions. Investors who are in any doubt as to the suitability of an investment or service contained in this newsletter should consult their financial adviser.

HSBC UK Bank plc is a member of the HSBC Group, any member of which may trade for its own account as a principal, may have underwritten an issue within the last 12 months or, together with the directors, officers and employees, may have either a long or short position in a future, option or security mentioned in this document. The information in this document was obtained from sources believed to be reliable but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein may include those of an associate and are given in good faith, but are subject to change without notice. No liability is accepted whatsoever for any direct or consequential loss arising from this document. Where appropriate, the information in this newsletter is based on our understanding of current and proposed legislation and H M Revenue and Customs practice. The legislation and practice may be subject to change.

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