By Powerscourt on 08/06/2020
Just as we see signs everywhere that the acute period of the coronavirus crisis has now passed in the developed world, the UK has introduced its new quarantine rules – to the fury of the travel industry.
From today, anyone arriving in the UK by plane, train or ferry will have to go into quarantine for 14 days, excepting passengers from Ireland, the Channel Islands and the Isle of Man.
All this at a time when health and economic data appear to have turned the corner in many developed nations.
The surprisingly upbeat US jobs data Friday which showed America actually added jobs for May, are the latest indicator that the world economy may have dodged the doomsday economic scenario presented a month ago. As if to buttress that feeling, investors have been selling off US government bonds, considered the safest haven in a crisis, with yield curves rising sharply.
The Federal Reserve’s rate-setting committee will meet early this week, its first meeting since Chair Jerome Powell predicted a years-long recovery from the crisis, to survey significantly more upbeat data.
Mood music is significantly more upbeat around the world. New Zealand said on Monday it has eliminated virus transmission domestically and will lift all controls except border containment checks.
Many New Yorkers will return to work on Monday, 100 days after the first case of coronavirus was confirmed, with many construction, manufacturing and retail sites set to open. The reopening of New York is striking for a city which weeks ago was declaring hundreds of deaths a day.
Media reports suggested the UK is planning to bring forward the deadline to allow pubs and restaurants to reopen to June 22 from July 4, part of a campaign led by the Chancellor Rishi Sunak, to “save summer” for Britain’s battered hospitality industry.
The UK recorded its lowest number of daily coronavirus deaths on Sunday since lockdown began, with none recorded in either Scotland or Northern Ireland.
Pascal Soriot, the Chief Executive of AstraZeneca, said over the weekend that the Oxford project to develop a vaccine for coronavirus would have data by August to establish whether the vaccine was successful.
Finally, anti-China sentiment continues to grow. The Times reports that Boris Johnson is planning curbs on Chinese investment in the UK post-Brexit. In an editorial, the same newspaper berates British universities for their dependence on the fees paid by Chinese students of whom there are estimated to be 120,000 paying up to £40,000 a year in fees.
WHAT ARE COMPANIES SAYING?
Consumer & Retail
The Restaurant Group
The Restaurant Group plc responded to recent press comment this morning. In order to meet both the immediate challenges and to build a post-lockdown business with a sustainable future, The Restaurant Group said it is in discussions with their landlords regarding potential restructuring options for their Leisure estate. The Group added that Wagamama, Airport Concessions and Pub operations are not affected by these discussions. A further announcement will be made as and when appropriate. The Group added that the casual dining sector was already facing significant challenges prior to the onset of Covid-19, with overcapacity and significant cost pressures.
Industrials & Transport
The gas producer focused on the Mediterranean, announced that work recommenced on the Energean Power FPSO in the Admiralty Yard, Singapore, on 2 June 2020 and the subsea installation campaign offshore Israel is progressing as planned. An application has been submitted to the Singapore Economic Development Board for the return of up to 529 workers for the Energean Power project. The ramp-up of the workforce, currently expected over the course of June, will be dictated by the Singaporean authorities’ ongoing evaluation of the situation. Energean does not expect the revised timetable to have a material financial impact on the Company due to the contracting structures that it has in place with its main contractor and its gas buyers.
The energy storage and clean fuel company provided a trading update where it mentioned legacy projects, Covid-19 delays and Brexit transition effects on EU grant funding increase expected EBITDA loss for the year ended 30 April 2020 to £17.5m, which was in line with expectations. Additionally, there has been minor Covid-19 impact on Bessemer Park fitout programme which is now expected to open in Q4 2020.
Speaking on BBC Radio 4’s Today programme, Michael O’Leary, Ryanair’s chief executive, said the airline will not cancel flights and plans to fly half-empty planes in July and August in the face of the Government’s “stupid” quarantine plan, which came into force this morning. He said that bookings for July and August are running at about 50pc of where they would normally be this time of year.
Heathrow Airport’s chief executive, John Holland-Kaye, warned that 25,000 jobs, largely from airline redundancies, may be lost at the airport if the government’s quarantine rules are not relaxed, or air bridges not established, within the next two weeks. He also revealed a decision on cutting a third of Heathrow’s directly employed workforce (of roughly 7,000) was imminent unless steps are taken to lift the blanket regulations when speaking to City A.M.’s City View podcast published over the weekend.
Financials & Real Estate
In a unscheduled trading update, the leading online service provider for trading Contracts for Difference internationally, said that the Company has continued to see record levels of customer trading activity despite despite heightened levels of market volatility. Performance across the Company’s financial and operational KPIs remained strong; it has added 100,574 New Customers since the start of Q2, which is already ahead of their expectations for the entire quarter, and in excess of the 82,951 New Customers added in Q1.
According to The Times, Astrazeneca has abandoned a tentative interest in combining with an American rival behind remdesivir, the coronavirus treatment. The London-listed, Cambridge-based pharmaceuticals company made a preliminary approach to Gilead Sciences last month, according to Bloomberg. However, sources talked down the prospect of any Astrazeneca interest yesterday.
The digital advertising and marketing services company, provided the statement Sir Martin Sorrell, Executive Chairman of the Company, will make at the AGM today. Sorrell said despite the impact of Covid-19, trading for the first four months of 2020 “continues to be strong, but understandably below a pre-pandemic budget, with reportable revenues up 68% and like-for-like revenues up over 11%.” Furthermore, early indications of May figuresshow that the month will be stronger than April across both its practices and that in June, the pipeline of their content mandatory practice, has already started at a higher level than May did.
The global provider of media and entertainment technology solutions, announced a trading update where it said that “transformation to a software-led business has provided the Group with improved resilience during this COVID-19 period.” Despite challenges in the supply chain and delayed orders, it has also seen increased viewing on its streaming platforms. The Company said it has good visibility of orders and sales pipeline to meet revenue expectations for the financial year, but it is still too early to quantify the potential negative impact of the current economic situation and therefore the outcome remains uncertain.
IN THE NEWS
Pubs set for June 22 reopening in attempt to ‘save the summer’ – The Times
UK quarantine regime begins despite airlines’ opposition – The Financial Times
Big drop in vacancies stokes fears of mass unemployment – The Financial Times
Sunak and Johnson point towards recovery – The Times