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(Alliance News) - Stock prices in London are seen opening flat on Friday after economic data from China raised concerns about the fragility of the world's second-largest economy's emergence from the coronavirus crisis.
In early UK company news, budget airline easyJet announced the sale and leaseback of 23 aircraft. NewRiver REIT saw improving footfall across its retail properties, and drugmaker Verona Pharma reported a widened loss.
IG futures indicate the FTSE 100 index is to open just 5.68 points higher at 6,191.30. The blue-chip index closed down 94.50 points, or 1.5%, at 6,185.62 Thursday.
easyJet said it has completed the sale and leaseback programme for a total of 23 aircraft, generating total proceeds of GBP608 million. The value was at the upper end of the GBP500 million to GBP650 million anticipated range, which easyJet first highlighted in its trading update in May.
easyJet said it will use proceeds from the deal to maximise liquidity and strengthen its financial position. The airline said that following the successful conclusion of this sale and leaseback programme, it has now raised over GBP2.4 billion since the beginning of the Covid-19 pandemic.
NewRiver REIT said its trading performance in the first quarter ended June 30, was in-line with revised expectations.
Further, the real estate investment trust said rent collection continues to improve in the second quarter. Of the total second-quarter rent demanded so far, 80% has either been collected or had alternative payment terms agreed with occupiers, NewRiver said.
NewRiver noted that since the easing of lockdown measures in the UK, footfall has continued to improve across its retail portfolio. The retail property investor said that, across its retail portfolio, 93% of occupiers by gross income are now open. In addition, the remaining 7% comprises of stores that are expected to reopen in the coming weeks, as occupiers progress phased reopening plans, it added.
"We continue to have limited exposure to the structurally challenged retail sub-sectors that have been particularly impacted by Covid-19, with no department stores in our portfolio, minimal exposure to mid-market fashion, and no exposure to casual dining operators such as Byron, Carluccio's, or any of the brands owned by The Restaurant Group or The Big Table Group," NewRiver noted.
Verona Pharma said it has received a notice to proceed from the US Food & Drug Administation to study ensifentrine in patients with Covid-19. Verona is developing a drug known as ensifentrine, which opens patients' airways and reduces inflammation in the lungs.
For the half-year ended June 30, Verona's pretax loss widens to GBP19.6 million from GBP17.8 million.
"We plan to initiate a randomized, double-blind, placebo-controlled pilot clinical study to evaluate ensifentrine delivered via pressurized metered-dose inhaler formulation as a treatment for patients hospitalized with Covid-19 at the University of Alabama at Birmingham. Clinical data from prior studies of ensifentrine in other respiratory diseases have demonstrated ensifentrine improves lung function and reduces cellular markers of inflammation in the lungs. We believe ensifentrine, with its novel mechanism of action, has the potential to improve oxygenation and lung function assisting recovery from Covid-19," said Chief Executive David Zaccardelli.
"To date, the impact of Covid-19 on clinical development programs has been limited, but we continue to monitor the situation and have put in place mitigation strategies to reduce the risk of Covid-19 related delays. In March, due to the pandemic, we postponed the start of the second, multiple dose, part of the Phase 2 study with the pressurized metered-dose inhaler formulation of ensifentrine in patients with moderate to severe COPD. I am pleased to report that we now plan to initiate the second part of this study in the third quarter of 2020 with results anticipated in the first half of 2021," added Zaccardelli.
The Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite is up 0.2%, while the Hang Seng index in Hong Kong is down 0.1%.
China's retail sales dropped in July, official data showed Friday. The key indicator of consumer sentiment shrank by 1.1% on-year, falling short of forecasts and suggesting many are still reticent about going out to spend time and money, even as China appears to have the virus largely under control. The latest data follows a drop of 1.8% on-year for retail sales in June.
Industrial production grew by 4.8% in July, the same as the previous month but below predictions of 5.2% growth.
CMC Markets analyst Michael Hewson commented: "Earlier this morning, we got the latest retail sales and industrial production numbers from China for the month of July, and they continue to point to a weak recovery in the region.
"As such today's European open is expected to see stocks come in broadly unchanged, with the main focus on the latest iteration of eurozone second-quarter GDP, which is expected to come in unchanged and US retail sales later this afternoon."
In the US on Thursday, Wall Street ended mostly lower, with the Dow Jones Industrial Average down 0.3%, S&P 500 down 0.2% and Nasdaq Composite up 0.3%.
The US Senate on Thursday adjourned until September for summer recess, despite not reaching an agreement over a fresh round of stimulus to help the virus-battered economy and struggling Americans.
Congress and the White House have spent the past few weeks debating what to include in the package, but have been unable to come to an agreement.
The pound was quoted at USD1.3067 on Friday morning, down from USD1.3084 at London equities close Thursday.
The euro was priced at USD1.1817, lower from USD1.1830. Against the yen, the dollar was quoted at JPY106.85, flat from JPY106.90.
In commodities, Brent oil was trading at USD45.11 a barrel Friday morning, flat from USD45.18 a barrel Thursday evening in London.
Gold was quoted at USD1,953.86 an ounce, slightly higher from USD1,947.60 an ounce at the London equities close Thursday.
In Friday's economic calendar, there is a eurozone GDP reading at 1000 BST. Then in the afternoon, there is US retail sales at 1330 BST, with industrial production at 1415 BST and the Michigan consumer sentiment index at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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