By Powerscourt on 07/09/2020
Powerscourt Coronavirus Briefing – 07 September 2020
ANALYSIS
The UK on Sunday recorded a substantial jump in coronavirus numbers, with the total of new infections growing almost 50% in a single day.
According to official figures, Britain recorded 2,988 new infections on Sunday compared with 1,813 on Saturday and the highest daily rise in figures since May. Although some of the rise may be accounted for by the changes in how the tests are reported, the significant size of the jump and the fact it is happening nationally makes it clear there is some significant resurgence in numbers.
Meanwhile there is growing evidence that people are finding it harder to get tested for the virus, with reports of people being sent on 100 mile plus round trips to get tests. The UK’s Secretary of State for Health, Matt Hancock, on Sunday warned that the resurgence was primarily being driven by young people, and urged them to take extra care not to infect older family members.
The UK is not alone in Europe: both Portugal and Italy have reported their highest daily increase in coronavirus cases since lockdown was lifted in May, stoking fears that the centre of gravity for the virus could shift back to Europe. As an illustration, New York, is now averaging 700 cases a day, down from 9,000 at peak in April. The battle is shifting to university campuses across the US. The New York Times reports that State University of New York’s Oneonta campus saw 500 cases after students held large parties.
The UK data comes at the worst possible time for the government, with schools open for the first time in six months. Government and employers are both pushing to get employees back into physical offices amid concerns about the impact that working from home is having on the network of businesses in financial centres which support major employers.
The FT reported that Blackstone and Advent International, two of the world’s top private equity firms, have introduced coronavirus testing for staff and are paying for taxis to the office, as employees return to their desks after months of remote working. Over the weekend it emerged that employees of media group Bloomberg will be able to claim up to $75 per day against the cost of returning to work.
More than half of people in the UK think the government has not handled the pandemic well, a survey suggests. Data from the Health Foundation, based on a survey of 2,246 people in July, shows that 56% think the government has not handled COVID-19 well, compared to 39% in May.
Indian shares traded lower on Monday after the country became the world’s second largest coronavirus centre, overtaking Brazil. A total of 90,802 new cases were registered overnight in India, taking the total number of cases to 4.2 million. Globally, shares opened lower on Monday. The US is closed for Labor Day.
WHAT ARE COMPANIES SAYING?
Retail & Consumer
Primark
Full-year profits at Primark will be “at least at the top end” of the company’s forecast £300m-350m range after a recovery in trading as stores reopened. Parent company Associated British Foods said Primark would now need to carry over only around £150m worth of stock into next year and expects a “significant reduction” in an exceptional charge of £284m previously booked against surplus inventory. It will benefit from a recent weakening of the dollar, as this will make clothing sourced from Far Eastern suppliers cheaper in sterling and euro terms. “The average basket size was initially significantly higher than last year, reflecting some pent-up demand, and while this outperformance has reduced in recent weeks it remains higher than a year ago,” the company said in a statement, though it added that transaction numbers have increased. However, sales growth continues to be held back by a slower recovery in trading at city centre destination stores which are more dependent on tourist traffic.
Industrials
Emirates
The airline will restore full salaries from October in a bid to retain staff, but it also warned of further cost-cutting on the outlook for a “slower recovery”. In a memo to employees, the government-owned carrier thanked staff for their sacrifice in helping the airline to reduce costs “through the worst turbulence in our history”. Thousands of staff, including hundreds of pilots, have been made redundant, while much of the workforce took a 50 per cent pay cut in April amid the global travel slump caused by the pandemic. Ahmed bin Saeed Al Maktoum, Emirates’ chairman and chief executive, wrote: “This does not mean we are out of the woods – there are many challenges ahead in an environment of considerable uncertainty, and we will need to respond accordingly and decisively”.
Hochschild Mining
Hochschild Mining has issued new production forecasts after the precious metals miner was forced to suspend guidance in April as Covid-19 ripped through South America. The FTSE 250 gold and silver miner operates three underground mines, two in southern Peru and one in Argentina. Due to mine closures the company, which is headquartered in Lima, expects to mine 24-25m ounces of silver this year and 280,000-290,000 ounces of gold. When it first set targets for the year in November, the figures were 35m for silver and 432,000 of gold. Hochschild flagged higher costs although its flagship Inmaculada in Peru mine is back running at full capacity. Sustaining costs will be $14.5-$15.0 for silver and $1,250-$1,290 per gold in 2020, up from $12.5-$12.9 and $1,015-$1,045 previously, the company said on Monday. Shares in Hochschild were up 3.2 per cent at 240p in early trading with the revised guidance broadly in line with market expectations.
Financials & Real Estate
SoftBank
Shares in SoftBank fell 8 per cent in Tokyo on Monday after weekend revelations that the Japanese conglomerate was the mystery “whale” that had driven US technology stocks to record highs. Traders in Tokyo said the report had helped crystallise the perception among some investors that SoftBank’s behaviour as a company increasingly resembled that of a hedge fund, populated with former investment bankers with a massive appetite for risk. SoftBank shares fell 5.4 per cent in the first half hour of trading before continuing their decline as the session progressed. The benchmark Nikkei 225, in which SoftBank is the second biggest component, according to Bloomberg data, was off 0.3 per cent. Before the fall on Monday the stock had gained 33 per cent this year
Blackstone
The private equity firm has introduced coronavirus testing for staff and are paying for taxis to the office, as employees return to their desks after months of remote working. It also requires staff to test negative for Covid-19 before returning to its New York headquarters. Testing will be voluntary at its smaller London office but all employees must register on an app that they have no symptoms before any return.
IN THE NEWS
No-deal can be a good outcome, insists PM – The Times
Airport bosses warn Boris Johnson of ‘irreparable’ damage without tests on arrival – The Telegraph
UK plan to undermine withdrawal treaty puts Brexit talks at risk – Financial Times
