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(Alliance News) - Insurance market Lloyd's of London on Wednesday reported an aggregated market loss of GBP0.9 billion for 2020, swung from a GBP2.5 billion profit in 2019.
Lloyd's said it incurred a net GBP3.4 billion in losses from Covid-19 related claims after reinsurance recoveries, pushing its combined ratio up to 110.3% in 2020 from 102.1% in 2019. Any ratio above 100% means a loss on underwriting.
Lloyd's said Covid-19 claims added 13.3 percentage points to its combined ratio. It said it expects Covid-19 claims to total GBP6.2 billion.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 6,762.30
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Hang Seng: down 0.3% at 28,492.43
Nikkei 225: closed down 0.9% at 29,178.80
DJIA: closed down 104.41 points, or 0.3%, at 33,066.96
S&P 500: closed down 12.54 points, or 0.3%, at 3,958.55
Nasdaq Composite: closed down 14.25 points, or 0.1%, at 13,045.39
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EUR: down at USD1.1725 (USD1.1730)
GBP: up at USD1.3748 (USD1.3722)
USD: up at JPY110.73 (JPY110.27)
Gold: flat at USD1,685.76 per ounce (USD1,685.50)
Oil (Brent): up at USD64.63 a barrel (USD64.21)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
1100 BST Ireland monthly unemployment
0955 CEST Germany labour market statistics
1100 CEST EU flash estimate euro area inflation
0815 EDT US ADP national employment report
1030 EDT US EIA weekly petroleum status report
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The UK's economic slump for 2020 was revised to 9.8% from a first estimate of 9.9%, according to figures from the Office for National Statistics, though this is still the largest annual fall in the country's output on record. The ONS made larger revisions to quarterly growth figures. Gross domestic product is estimated to have risen 1.3% quarter-on-quarter in the final three months of 2020, revised up from 1.0%. Year-on-year, the decline was 7.3%, also improved on revision from 7.8%. The UK economy is estimated to have fallen 19.5% in the second quarter of 2020, a downwards revision of 0.5 percentage point from a 19.0% fall previously estimated, while third quarter growth is estimated to have been 16.9%, an upwards revision of 0.8 percentage point. "Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year," said Jonathan Athow, deputy national statistician for Economic Statistics at the ONS.
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BROKER RATING CHANGES
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MORGAN STANLEY CUTS BP TO 'UNDERWEIGHT' (EQUAL-WEIGHT) - PRICE TARGET 285 PENCE
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JEFFERIES RAISES HIKMA PHARMACEUTICALS TO 'BUY' ('HOLD') - TARGET 2,870 (2,510) PENCE
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COMPANIES - FTSE 250
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John Laing Group said it has completed the sale of its 17% interest in the New Royal Adelaide Hospital to funds managed by AMP Capital. The consideration received represents "a good uplift" to the GBP69 million book value as at the end of 2020. This transaction further strengthens visibility on the 2021 special dividend, John Laing said, with total proceeds eligible to be included in the payout calculation to date amounting to GBP433 million.
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3i Infrastructure said its portfolio is performing well despite the pandemic, and the company is on track to deliver its full-year dividend target. Total income and non-income cash was GBP69 million in the six months to Tuesday, the investor in infrastructure businesses and assets said, in line with expectations though down on GBP82 million a year ago. "During the period we have been pleased by the performance of our portfolio. Our markets remain very competitive, but we have a good pipeline of potential acquisitions and continue to focus on investments that we believe will enhance the company's portfolio," said Phil White, managing partner and head of Infrastructure at 3i Investments, investment manager of the company. 3i Infrastructure is on track on deliver its dividend target for the year ending Wednesday of 9.80p per share, up 6.5% year-on-year.
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COMPANIES - MAIN MARKET AND AIM
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Deliveroo unveiled the pricing of its IPO, with the company expecting to be worth GBP7.6 billion on admission to the London Stock Exchange. The food delivery platform priced its class 'A' shares at GBP3.90 each. Last week, Deliveroo said it intended to price in a range of between GBP3.90 and GBP4.60 per share, which could have potentially valued the business up to GBP8.8 billion. At the start of this week, it narrowed that range to between GBP3.90 and GBP4.10. Though priced at the bottom of the expected range, a valuation of GBP7.6 billion should see Deliveroo comfortably slot into the FTSE 100 in the next quarterly review. Deliveroo's IPO comprises 384.6 million shares, equating to a total offer size of GBP1.50 billion or just over 21% of the company's share capital on admission. This includes 256.4 million new shares, raising GBP1 billion for the company, and 128.2 million existing shares, raising GBP500 million for Founder & Chief Executive Will Shu and other selling shareholders. Deliveroo is making a further 38.5 million shares available in an over-allotment option which, if exercised in full, would increase the offer size to around GBP1.65 billion. Conditional dealings start on Wednesday, while unconditional dealings begin in a week. Deliveroo offered 'A' shares in its IPO, while 'B' shares are held solely by Shu. Each of Shu's B shares will have 20 votes, while A shares each will have one.
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COMPANIES - GLOBAL
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Julius Baer noted that Switzerland's financial services regulator has lifted a ban on acquisitions which was imposed on the financial services firm in the wake of a money laundering probe. Julius Baer is now free to make acquisitions which could "lead to a significant increase in operating risks and in organisational complexity". Switzerland's FINMA watchdog imposted the ban in February of last year after it found that Julius Baer "fell significantly short in combating money laundering between 2009 and early 2018". The shortcomings were related to the role the company played in corruption cases involving oil and gas company Petroleos de Venezuela SA and football's governing body FIFA.
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New York state lawmakers passed a bill Tuesday legalizing recreational marijuana, with Governor Andrew Cuomo saying he will sign it into law. New York will join 14 other US states and the District of Columbia in permitting cannabis use after the bill was backed by both state chambers, where Cuomo's Democratic Party holds strong majorities. The law will allow adults 21 and over to purchase cannabis and grow plants for personal consumption at home, with a plan to divert some funds to drug treatment and education. New York will automatically clear records of people with past convictions of marijuana-related offences that would no longer be criminalized. The law also will eliminate penalties for possession of up to three ounces of the drug, about 85 grams, the new personal possession limit. The state plans to tax marijuana sales at 9%, with revenue from an additional 4% tax divided between local and county government.
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Wednesday's Shareholder Meetings
BSF Enterprise PLC - AGM
Challenger Acquisitions Ltd - EGM re issuance of shares for Cindrigo acquisition
CloudCoCo Group PLC - AGM
Drax Group PLC - GM re Pinnacle Renewable Energy Inc acquisition
Ground Rents Income Fund PLC - AGM
MGC Pharmaceuticals Ltd - GM re performance rights issue
Shoe Zone PLC - AGM
Tricorn Group PLC - AGM
Various Eateries PLC - AGM
W Resources PLC - GM re reorganisation of share capital
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By Tom Waite; thomaslwaite@alliancenews.com
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