- FTSE 100 closes 159 points higher
- US indices open sharply higher
- Whitbread and AB Foods confirm eligibility for government’s CCFF
5.10pm: FTSE 100 closes 3% higher
The FTSE 100 closed at 5,787 points on Friday, up 159 points for a gain of 2.8% on the day.
Next week will bring new insight into the effect of lockdown on the UK’s economy.
“It’s been an up and down few days for the markets, one that isn’t set to get any easier next week,” wrote Spreadex‘s Conor Campbell on Friday. “Alongside whatever this weekend brings, there’s a host of potentially illuminating data, including the UK jobless claims for March on Tuesday, as well as April’s flash manufacturing and services PMIs on Thursday.”
2.10pm: FTSE 250 overshadows FTSE 100
London index of blue-chips is just about keeping its head above 5,800 as it looks to cap the week with a big flourish.
The FTSE 100 was up 174 points (3.1%) at 5,802.
“European markets are heading towards the weekend in optimistic fashion, with news of a positive coronavirus treatment from Gilead raising hopes that the economic impact of the coronavirus crisis will be less than expected,” said IG’s Joshua Mahony.
“With the news of a potential beneficial treatment coming on the same day that Donald Trump laid out plans to reopen the US economy, there is a clear optimism over the possibility that some semblance of normality could soon return. Stocks associated with global travel have received a welcome boost as traders react to plans from the likes of Germany and the US to ease lockdown restrictions. Rolls-Royce, Carnival, Intercontinental Hotels, and IAG have all seen sharp gains, yet the road ahead is likely to be rocky given that travel volumes will remain muted for some time yet,” he added.
The mid-cap FTSE 250, despite flagging a bit towards the end of the lunchtime trading session, is actually outstripping the FTSE 250 with a 2.4% (526 points) rise at 15,905.
The shares are 15% firmer at 245p despite the company revealing a 14.6% slide in funds under management in the first quarter of 2020.
With markets taking a tonking in March, the market was braced for a large slide and was encouraged by Brewin Dolphin reporting net inflows of £400mln or so of discretionary funds.
— Proactive (@proactive_UK) April 17, 2020
12.30pm: US indices set to get off to a flyer
US markets are set to smash it out of the ground this afternoon with US investors set to drink heavily from the optimism cup.
Spread betting quotes suggest the Dow Jones index, which laboured to a 33 point gain yesterday to close at 23,538 will open at around 24,238, up 700 points.
The broader-based S&P 500 is tipped to start 73 points higher at 2,873.
Like investors in Asia and Europe, US shareholders are expected to draw encouragement from promising early trial results from a treatment for the coronavirus (COVD-19).
On top of that, there is the prospect of some US states reopening for business soon.
“The double whammy of US lockdown exit plans and, more importantly, a potential coronavirus treatment from Gilead has given investors cause for optimism heading into the weekend. It feels a long time since the weekend wasn’t treated with caution and fear but there’s certainly a feeling now that we’re moving in the right direction. The news is improving,” declared Craig Erlam at OANDA.
In London, the Footsie is having a bit of a lunchtime breather; having reached 5,837 at noon it has ebbed a tad to 5,821, up 193 points (3.4%) on the day.
Hotels group Whitbread PLC (LON:WTB), up 9.1% at 2,810p, was one of the better performers, although whether that was because of general optimism about the possibility of the UK lockdown ending in June or because of its confirmation as an eligible issuer under the UK Government’s Covid Corporate Financing Facility (CCFF) is hard to say.
Primark owner AB Foods losing revenue of £650m pm due to store closures. Confirmed AB Foods are eligible to access funding through Covid Corporate Financing Facility, likely confirmation of commercial paper being issued will follow to assist business during closures.
— Scott Bebbington (@BebbingtonScott) April 17, 2020
11.15am: Flow of good news on the coronavirus front
The Footsie has kicked on again in the second half of the morning.
London’s index of heavyweight shares was up 193 points (3.4%) at 5,822, just a dozen or so points below its high point of the day.
Sentiment has been boosted by numerous indications that humanity may be winning the battle against the coronavirus (COVID-19).
“Major European economies, along with the US and Canada, are managing to “flatten the curve” of the coronavirus. The number of daily confirmed cases of COVID-19 has plateaued across the west,” observed Berenberg Economics.
“Yesterday, US president Donald Trump announced a series of guidelines for states to lift restrictions. It is down to individual states to decide when to act. While some states will begin to open up cautiously sooner than others, as a best guess, expect most to wait until early May,” the German finance house continued.
“In Germany, most small shops will reopen on Monday while some other restrictions on schools will be lifted gradually from 4 May. While Spain and Italy have eased restrictions a little, most measures will remain until early/mid-May – as in the UK and France. Thereafter, expect those countries to lift some key restrictions gradually – probably along the lines that Germany has set out,” it added.
In the US, shares of Gilead Sciences were up by about a sixth in after-market trading after early data from its coronavirus medicine Remdesivir was described as “very encouraging”.
“It’s not actually a vaccine, but anything that can help end lockdowns and get economies moving quickly is a huge positive,” said Neil Wilson at markets.com. at 0.645%.
10.00am: Optimism abounds
It’s definitely a “risk-on” day with equities flying high and gold in the doldrums.
The FTSE 100 was up 126 points (2.2%) at 5,755 while gold for May delivery is US$17.20 cheaper on the futures markets at US$1,705.50 an ounce.
Sentiment has been boosted by rising hopes that an end to lockdowns is over the horizon.
If that is true – and it is a big “if” – then demand for delivery services is likely to come off the boil, which explains why groceries delivery outfit Ocado Group PLC (LON:OCDO) and fast-food courier Just Eat Takeaway.com (LON:JET) are occupying the cellar slots on the Footsie; Ocado is down 2.4% at 1,560.6p and Just Eat is 1.8$ lighter at 7,886p.
The shares rose 0.9% – underperforming the Footsie – at 429.1p after the company said it would continue to offer free advertising to its customers while the lockdown remains in place.
8.40am: Friday advance
The FTSE 100 got off a strong start on Friday amid hopes the worst of the coronavirus (COVID-19) pandemic could be over.
The index of UK blue-chip stocks opened 144 points higher at 5,772.73.
The incremental easing of lockdowns in Germany, Spain, Austria, and Italy provided some cause for cautious optimism, as did the revelation that one of the world’s leading biotech companies has found an effective COVID-19 treatment.
Reports overnight suggest Gilead Life Sciences’ drug led to the rapid recovery of 125 patients.
It meant data showing China’s woeful economic performance during the height of the Wuhan outbreak was largely shrugged off. Even so, the figures were pretty poor, with the world’s second-largest economy contracting a worse-than-expected 6.8% in the first three months of the year.
After a rally in the airline stocks early Thursday, there was follow-on optimism around the outlook for the companies that supply parts and maintain fleets for the likes of British Airways, easyJet and Ryanair.
Mounting hopes that the lockdown may be eased here in the UK in three weeks gave a further lease of life to Cineworld (LON:CINE), which jumped 18% early on.
Flutter Entertainment (LON:FLTR) rose 7.5% after what on the face of it was a dreadful performance, with sports revenues off 46%.
“Since the lockdown, the online gaming strands of the business have held up relatively well as consumers have shifted their habits, at least on a temporary basis,” said stock picker Richard Hunter of Interactive Investor of Flutter’s figures.
“In a sign of some prudence as well as confidence, the company’s decision to proceed with the dividend in the form of shares rather than cash is quite an elegant solution to the problem facing so many other companies, who have largely chosen to back away from making any distributions at all for the time being.”
Proactive news headlines:
Gfinity PLC (LON:GFIN) has been selected by cricket broadcaster Willow TV to host The eCricket Challenge, a series that will see cricket players compete in the Cricket 19 video game. The series, designed and developed by Gfinity, will see some of the biggest names in world cricket compete remotely in five-over matches.
ANGLE PLC (LON:AGL OTCQX:ANPCY) said a study by the University of Athens showed its liquid biopsy was superior to a leading antibody approach when it came to harvesting circulating tumour cells (CTC) in people with head and neck cancer. Researchers drew blood from 50 patients and 18 healthy volunteers. The published data revealed use of the ANGLE technology resulted in much higher CTC harvesting positivity rates, purer samples, and “excellent” RNA quality for molecular analysis.
KRM22 PLC (LON:KRM) has agreed to acquire the remaining 40% stake in market surveillance firm Irisium Ltd that it does not already own from Cinnober Financial Technology for a £550,000 convertible loan note. The risk management specialist, which acquired its initial 60% stake in Irisium for £1.7mln in June 2018, said the consolidation of the remaining stake will allow complete integration of the firm into its own platforms and immediately remove £700,000 of debt and liabilities from its consolidated balance sheet.
Bloomsbury Publishing PLC (LON:BMY) has said it is taking a number of actions to protect the business following the coronavirus lockdown, including the sale of shares to bring in a gross £8.4mln. The company has also pushed out the maturity of its bank facility by a year to May 2022, it has made a series of economies, including salary cuts, saving an initial £1.6mln a month, and has cancelled the dividend. The group, which had net cash of £31mln as at the end of February, said it was unable at this stage to give forward guidance.
Bango PLC (LON:BGO) has said the proposed expanded partnership between the mobile commerce company and NHN Corp (NHN), a South Korean big data business, announced on April 3, 2020, completed on April 16, with NHN investing £3.2mln into Bango for a 4.7% shareholding. The AIM-listed company said NHN has also invested a further £6.5mln for a 60% shareholding in Bango Deep – the Bango subsidiary that owns the Audiens Customer Data Platform business – with Bango retaining 40%.
Anglo African Oil & Gas PLC (LON:AAOG) has agreed a further amendment to the terms of the sale of its Congo business, in order to expedite the transfer of cost liabilities to Zenith Energy. In a statement, the company said it has been agreed that Forum will now pay £200,000 in cash, upon approval by AAOG shareholders – this comes after a March revision down to £800,000 from the £1mln agreed in December. The latest revision comes amid heightened uncertainty over certain timelines, which would leave AAOG to additional costs and funding issues.
Amur Minerals Corporation (LON:AMC) said on Thursday that it is to raise £750,000 by placing 75mln shares at 1p a throw. The funds raised will be used to repay the initial advance from the loan note facility from Plena Global Opportunities LLC, details of which were released last month.
ECSC Group PLC (LON:ECSC), the provider of cybersecurity services, has announced plans to raise money by placing shares at 55p a pop. The company said it will place 909,091 new ordinary shares, raising £500,000 before expenses. The funds will be used to ensure the company is sufficiently well capitalised to take advantage of longer-term growth opportunities once the coronavirus (COVID-19) situation stabilises and to strengthen the balance sheet.
Abal Group PLC (LON:SYME) has said its planned name change to [email protected] Capital PLC has been delayed by Companies’ House due to the coronavirus pandemic. The company said it had been notified by Companies’ House that “significant delays are currently being experienced in the processing of name change applications” and that the registrar “may not be able to process documents as quickly as has been done previously”.
Victoria Oil & Gas PLC (LON:VOG) has highlighted a “solid performance” amid coronavirus pandemic disruption, with revenue-generating operations ongoing in Cameroon. In a first-quarter update, the company noted that daily average gas production was 5.1mln cubic feet per day, plus 1,656 barrels per day of condensate, which resulted in US$5.3mln of revenue for the period.
Curzon Energy PLC (LON:CZN) said it will be holding its general meeting (GM) at the company’s business address, which is located at WeWork, 71-91 Aldwych House, London WC2B 4HN on Wednesday, May 6 at 2.00 pm. It added that forms of proxy to vote at the GM must be completed, signed and returned so as to be received by the company’s registrars by no later than 2.00pm on May 4. It noted that full details are set out in the Notice of GM, which has been posted to shareholders and is also available on the company’s website. www.curzonenergy.com
AFC Energy PLC (LON:AFC) said that following enquiries from shareholders and having taken professional advice regarding the government’s current restrictions on social gatherings the company can confirm that the AGM convened for 12.00pm on April 23, 2020, will be held at the Registered Office, Unit 71.4 Dunsfold Park, Stovolds Hill, Cranleigh, Surrey, GU6 8TB. However, in light of the current coronavirus (COVID-19) stay at home measures in the UK, the AGM will be run as a closed meeting and shareholders will not be able to attend in person and are asked to exercise their votes by submitting their proxy as set out in the Notice of Meeting.
6.40am: Hope springs eternal
The FTSE 100 looks set for a jump at open on Friday as hopes that drugs giant Gilead Sciences is on the right track with a treatment for the coronavirus (COVID-19) are set to propel stocks higher.
Spread betting quotes indicate that the UK benchmark, which rose 31 points to close at 5,628 yesterday, will open its account around 180 points higher at 5,808.
According to a report from healthcare media site Stat News, University of Chicago Medicine researchers reported “rapid recoveries” in 125 COVID-19 patients taking part in a trial of Gilead’s drug candidate, remdesivir.
It’s a very small sample size but hope springs eternal.
“The news sent US index futures higher, and it paved the way for a positive session in Asia. European markets are being called higher,” said CMC’s David Madden.
Overnight, China posted gross domestic product (GDP) data for the first quarter that showed the economy contracted by 6.8% year-on-year, which was a little worse than the 6.5% fall the market had been expecting.
“The last time we saw such a big contraction was back in 1967 when China experienced growth of -5.8% during the Cultural Revolution. The contraction this time is a result of city lockdowns and strict social distancing measures. The comparison of the scale provides us with a sense of how big an impact COVID-19 has had,” said Iris Pang, the chief economist covering Greater China at ING.
Pang has downgraded her GDP forecasts for the rest of this year.
In other economic news from the People’s Republic, annualised retail sales for March fell by 15.8%, which was much worse than the 10% decline traders had been expecting but an improvement on the 20.5% fall seen in February.
And China’s industrial production fell 1.1% year-on-year (YoY) in March, compared to a consensus forecast of a fall of 7.3%. The previous reading was a decline of 13.5%.
“This positive note was mainly a result of the need to fight against COVID-19, e.g. non-woven textiles (masks and protective wear) +6.1% YoY, medicines +4.5% YoY,” Pang observed.
Hong Kong investors were in buoyant mood after the economic releases, with the Hang Seng index up 554 points at 24,561. In Tokyo, the Nikkei 225 added 486 points at 19,776.
Investors hope the update will provide a little more clarity on the impact on the bookmaker of the cancellation of sporting events as a result of the coronavirus pandemic and how much of punters cash has gone onto casino and other gaming instead.
Mining giant Rio Tinto plc (LON:RIO) released a first-quarter production statement overnight on the Aussie exchange, revealing higher-than-expected iron ore production. On the downside, the company did cut its copper production forecast for 2020 to take into account disruptions caused by the coronavirus.
A Chicago hospital treating severe Covid-19 patients with Gilead Sciences’ antiviral medicine remdesivir in a closely watched clinical trial is seeing rapid recoveries in fever & respiratory symptoms, with nearly all patients discharged in less than a week https://t.co/03J76F3bmZ
— Yashar Ali ???? (@yashar) April 16, 2020
Around the markets:
- Sterling: US$1.2495, up 0.37 cents
- 10-year gilt yielding 0.299%, down 0.47 basis points
- Gold: US$1,722.10 an ounce, down US$9.60
- Brent crude: US$28.28 a barrel, up 46 cents
- Bitcoin: US$7,076, up US$31
Significant announcements expected on Friday:
Economic data: China GDP, retail sales, industrial production
- The UK government has prepared rescue packages for some of the largest companies in the UK as well as start-ups that are struggling to survive.
- Morgan Stanley yesterday reported its first-quarter profits slumped by almost a third year-on-year.
- The Facebook-led digital currency project Libra has undergone a severe downgrading of the scope of its initial vision.
- Nearly 22 million people have made new claims for unemployment benefits in the US in the past four weeks as coronavirus brings the economy to its knees.
- A quarter of companies in Britain have been forced to close down temporarily because of the government’s coronavirus containment measures, according to the Office for National Statistics.
- Troubled oil services group Petrofac has lost $1.5 billion of contracts in Abu Dhabi that it had won only two months ago.
- Barratt Developments said that about 85% of its workforce would be laid off temporarily until at least the end of May.
The Daily Telegraph
- Shell has vowed to slash its carbon emissions to net-zero by 2050 by embracing green energy.
- Prices should stay low for shoppers as the coronavirus pushes families online and sparks a surge in home working, Bank of England policymaker Silvana Tenreyro has said.
- KFC, Burger King and Pret a Manger have reopened some fast-food restaurants across Britain as hopes grow the coronavirus cases are reaching their peak.
- Netflix has become a more valuable company than the US oil giant ExxonMobil, as the streaming service benefits from coronavirus lockdowns.
- Vauxhall is planning to restart car production after putting in place new safety measures.
- Millionaires and billionaires are set to reap more than 80% of the benefits from a change to the tax law in the US coronavirus stimulus, a non-partisan congressional committee has said.
- Companies rescued by EU state share-buying programmes during the coronavirus pandemic will be barred from paying executives bonuses, according to a leaked document from the European Commission.
- Hundreds of thousands of jobs in the retail sector are at risk of being lost amid the COVID-19 crisis, the British Retail Consortium has warned.
- Paddy Power is shouldering millions of pounds of staffing costs after opting not to use the Government’s furlough scheme despite sending shop workers home.
- Activist investor Ed Bramson has renewed his attack on Barclays boss Jes Staley – but said he will not vote against his reappointment as chief executive while the coronavirus crisis rages.