By Powerscourt on 13/06/2020
The World Health Organisation reports that the Americas are currently bearing the brunt of the global coronavirus pandemic with North and South America currently having four of the ten worst hit countries in the world. Brazil, the second most impacted country behind the US, was of increasing concern as intensive care units were reaching critical levels and under heavy pressure with more than 90% bed occupancy rates.
As the United States moves to ease social distancing restrictions across all 50 states, word from half a dozen was that their hospital beds were filling fast on the back of record numbers of new cases. These worries on rising COVID-19 infections were shared around the globe with a record daily increase in India and warnings against complacency in Europe.
In the UK, the Government continues to face wrenching choices as scientists warn of the likely second rise in cases and associated concerns for the health of the public while cabinet ministers, backbenchers and industry are calling for a lift to the two-metre rule, anxious to get the economy back on its feet.
In the markets, the S&P closed Friday up 1.3%, recovering some of the losses suffered in Thursday’s carnage when stock prices fell almost 7%. In the UK, equities ended a four day losing streak as hard hit cyclical shares rose. However, these limited gains were of slim encouragement as investor sentiment was particularly subdued following the release of dire UK GDP data which showed that the economy shrank by roughly a quarter between February and April.
Airlines including AIG, EasyJet and Ryanair have launched legal action against the UK Government over its two-week “flawed quarantine” policy on travelers entering Britain. The three airlines claim the extreme measures would have a “devastating effect on British tourism and the wider economy” while destroying thousands of jobs. Grant Shapps, the Secretary of State for Transport, speaking at yesterday’s evening press conference, confirmed that the first review of travel corridors policy would be undertaken on June 29 but that the Government’s key principle was to avoid a second wave of infection from hitting its shores.
Finally, in more joyful news, today marks the first day in the UK that single people will be allowed to support those who are particularly lonely as a result of lockdown measures with single adults now being able to spend the night at another house in a ‘support bubble’ aimed at helping combat loneliness.
WHAT ARE COMPANIES SAYING?
Consumer & Retail
The luxury group said in its annual report that bonuses for directors will based on “strategic objectives set around the company’s response to and recovery from Covid-19”. The maximum bonus will be 50%, previously standing at 200%. On its LTIP, the company said: “The committee has determined that a restricted share plan fits better with the characteristics of the luxury industry, of which Burberry is a part, than a traditional long-term incentive plan
The pub group has implemented a number of safety measure ahead of a planned phased reopening from July 4, investing £15m. CEO Nick Mackenzie said: “We can’t wait to welcome customers back to our pubs and we know people are eager to return to their local. The future of our industry is reliant on the continued support from government and reducing social distancing from two metres to one would make it possible for many more pubs across the country to be viable.”
The car rental group announced plans to raise $1bn in a share sale while still in bankruptcy. The sale intends to take advantage of frenzied trading, with the company saying in a court filing: “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
The cinema chain announced yesterday that it was abandoning a $2.3bn deal to buy Canadian company Cineplex. Cineworld said yesterday that its Canadian target had suffered a “material adverse effect” which stopped the acquisition. The terms of the deal would not allow the deal to proceed if Cineplex’s net debt exceeded $725m. Cineplex said yesterday that it had not suffered such an effect and had not breached the agreement.
Industrials & Transport
In a filing with the US Securities and Exchange Commission the airline said cost-cutting measures and increased travel demand means it expects to stop its daily cash burn by the end of 2020. The company said it has passed “the peak in cash refund activity”. It expects its 2020 results to be materially impacted due to the uncertainty surrounding the duration and severity of the pandemic
The airline said yesterday that it was accelerating its plans to resume summer flights, with countries slowly reopening their borders. The airline will fly to almost 150 airports – about 20% of its normal network. A focus of the plans will be domestic connections with a number of routes resuming between Paris and the regions.
IN THE NEWS
Johnson pressed to relax 2-metre rule after UK economy slumps – Financial Times
Bank of England ‘ready to take action’ after economy tanks 20% – Sky News
Get out and shop, PM to tell Britain – The Times