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(Alliance News) - Insurance market Lloyd's Of London on Thursday warned of "historic losses across the global insurance industry" as a result of the Covid-19 health crisis.
Lloyd's said it will pay out between USD3.0 billion and USD4.3 billion to its global customers for the impact of the pandemic. It said this is on par with the 9/11 terrorist attack in 2001 and the combination of hurricanes Harvey, Irma and Maria in 2017.
However, it added: "Lloyd's believes that once the scale and complexity of the social and economic impact of Covid-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events."
Lloyd's Chief Executive Officer John Neal explained: "What makes COVID-19 unique is the not just the devastating continuing human and social impact, but also the economic shock. Taking all those factors together will challenge the industry as never before."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.3% at 5,826.61
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Hang Seng: down 1.5% at 23,810.99
Nikkei 225: closed down 1.7% at 19,914.78
DJIA: closed down 516.81 points, 2.2%, at 23,247.97
S&P 500: closed down 1.8% at 2,820.00
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GBP: down at USD1.2187 (USD1.2222)
EUR: down at USD1.0807 (USD1.0845)
Gold: firm at USD1,715.43 per ounce (USD1,714.70)
Oil (Brent): unchanged at USD29.45 a barrel
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
0930 BST UK Finance mortgage statistics
1100 BST Ireland consumer price index
1000 CEST France IEA oil market report
0830 EDT US import & export price indices
0830 EDT US unemployment insurance weekly claims report
1030 EDT US EIA weekly natural gas storage report
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A new test to determine whether people have ever been infected with coronavirus is 100% accurate, UK public health leaders have said. Prime Minister Boris Johnson has previously called antibody testing a "game-changer" as it may reveal how many people have had Covid-19 without any symptoms and so may be immune. Any reliable test may help speed up measures to ease the lockdown because people could go back to work confident they were not likely to get it again. Public Health England said last week scientific experts at its Porton Down facility had carried out an independent evaluation of a new antibody blood test developed by a Swiss pharmaceutical company. The examination found Roche's serology test was "highly specific" and had an accuracy of 100%. Professor John Newton, national coordinator of the UK Coronavirus Testing Programme, said although it was still unclear to what extent the presence of antibodies indicated immunity to Covid-19, it was a "very positive development", PA reported.
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House prices could take longer to recover than sales now that England's property market has been re-opened for business, a report from surveyors suggests. The Royal Institution of Chartered Surveyors said feedback suggests that a recovery in prices could take a little while longer than a bounce back in sales levels, with property professionals suggesting, on average, prices would take 11 months to recover, compared with nine months for sales. The findings were contained in Rics's UK-wide April survey, which said 35% of property professionals believed prices could be left up to 4% lower on the re-opening of the housing market, while more than 40% thought prices could fall by more than 4%.
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Taoiseach Leo Varadkar has said the prospect of non-essential air travel from Ireland is months, rather than weeks, away. Everyone who arrives in the state to stay, whether Irish or from abroad, is being asked to self-isolate for 14 days to ensure that anyone with Covid-19 does not infect others. It comes amid calls for tougher laws to require people arriving into the country to tell authorities where they will be self-isolating. "We're an island nation and a globalised economy. We need to return to business and leisure travel at some point, but that really is premature at this stage," Varadkar said. "The EU and the aviation authorities are thinking about that and how we can return to safe air travel, but that is months rather than weeks away." The coronavirus death toll in Ireland rose to 1,497 on Wednesday after a further 10 deaths were announced.
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German inflation was slightly stronger in April than initially expected, according to figures from Destatis. Consumer price inflation was 0.9% annually in April, a notch higher than the provisional result of 0.8%. Nonetheless, April's inflation rate remained substantially weaker than in March, with the previous month's inflation rate having been 1.4%.
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BROKER RATING CHANGES
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BERENBERG RAISES HSBC TO 'HOLD' (SELL) - PRICE TARGET 390 (430) PENCE
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JEFFERIES CUTS GREENCORE TO 'HOLD' ('BUY') - TARGET 165 (235) PENCE
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HSBC RAISES KINGFISHER TO 'HOLD' ('REDUCE') - TARGET 180 (150) PENCE
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COMPANIES - FTSE 100
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Wealth manager Hargreaves Lansdown said it intends to make payouts in line with its dividend policy for the 2020 financial year as it "performed strongly" in the first four months of calendar 2020. In the four months to April 30, Hargreaves recorded net new business of GBP4.0 billion and added 94,000 new clients. Year-to-date total revenue was up 13% to GBP448.1 million, supported by record dealing volumes. Assets under administration fell to GBP96.7 billion at the end of April from GBP105.2 billion at the end of 2019. "This is a strong rebound from the difficult macro and political environment for retail investment flows during the first half of the financial year," the fund supermarket said. Hargreaves Lansdown's financial year ends June 30. Net new business growth was driven by "the usual factors" of clients using their tax allowances during the ISA season, ongoing wealth consolidation onto its platform from existing clients, and flows into cash management service 'Active Savings'. This growth was further accelerated by significant market falls in early March, as existing clients added money to their accounts and new clients joined Hargreaves Lansdown "to take advantage of the opportunity to invest at lower prices".
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Persimmon said its restart of construction work is going "smoothly". The housebuilder will open its sales offices in England on Friday, with social distancing and hygiene measures in place. Persimmon began a phased return to work in England and Wales on April 27, and the process is continuing smoothly and to plan, it said, with the week beginning May 4 seeing 65% of production capacity restored. The group's businesses in Scotland remain in shut however. In the eight weeks ended May 10, Persimmon secured 1,351 gross private sales reservations, with a total of 1,300 legal completions being made in the same period. Cancellation levels remain in line with historic trends.
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Royal Dutch Shell said all conditions for the final investment decision on a new liquefied natural gas processing unit at Nigeria LNG have been met. Nigeria LNG is a joint venture, 49% owned by state-owned Nigerian National Petroleum, 26% by Shell through its subsidiary Shell Gas, 15% by Total and 10% by ENI. Conditions for the FID included formal commitment from the organisations slated to provide financing for the project. Once operational, the new unit Train 7 will add 8 million tonnes per annum of capacity to the Bonny Island facility, taking the total to around 30mtpa. "While remaining mindful of prevailing macro-economic challenges, Shell continues to see NLNG as a great resource that can deliver value to the people of Nigeria and investors alike," said Maarten Wetselaar, director of Shell Integrated Gas & New Energies, adding: "Natural gas is a core component of our strategy to provide more and cleaner energy solutions."
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COMPANIES - FTSE 250
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Books and stationery retailer WH Smith said it had a "good" first half but it has seen sales all but wiped out in April due to Covid-19. Revenue was up 7% in the six months to February to GBP747 million, though down 1% on a like-for-like basis. The travel unit - comprising shops in train stations and airports selling snacks and magazines - saw revenue growth of 19%, or 2% like-for-like, while the high street arm saw a 5% fall in sales, down 4% on a like-for-like basis. Pretax profit for the half slipped to GBP63 million from GBP65 million a year ago. "There was very little impact of Covid-19 on our first half results, however inevitably the performance in the second half will be very different," said Chief Executive Carl Cowling. Covid-19 has taken a toll on the firm since March, as governments imposed travel restrictions and stay-at-home orders in order to stem the virus's spread. In April, group total revenue was down 85% on the same period last year, as expected, with travel revenue down 91% and high street revenue down 74%. The board will not be making an interim dividend payment, WH Smith said. It paid out an interim dividend of 17.2p a year ago.
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COMPANIES - GLOBAL
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Deutsche Telekom hailed its first-quarter performance, with the telecommunications firm booking earnings growth despite the Covid-19 pandemic. In the three months ended March, net revenue rose 2.3% year-on-year to EUR19.94 billion from EUR19.49 billion. Net profit was 1.8% higher annually, coming in at EUR916 million from EUR900 million. "Despite the global spread of the coronavirus and the consequent restrictions imposed in many countries since March, Deutsche Telekom had a strong start to the 2020 financial year," the company said.
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Uber Technologies is offering USD6 billion in stock in its takeover bid for meal delivery group Grubhub, a source familiar with the talks told AFP. The two firms were not in agreement on a deal that would unite two of the three largest US players in the food delivery segment, according to the source who declined to be identified. The USD6 billion share offer was first reported by The Wall Street Journal. Grubhub shares, which had jumped nearly 30% on the reports of a tie-up earlier this week, slipped back 3.7% on Wednesday, giving it a market capitalisation of USD5.34 billion. Uber shares rose 1.9% on Wednesday for an equity value of USD57.26 billion.
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Thursday's Shareholder Meetings
Safestyle UK
Serco
Direct Line
Next
Computacenter
Prudential
Quilter
Just Eat Takeaway.com
Gresham Technology
Flutter Entertainment
Spire Healthcare Group
Telit Communications
Genel Energy
Cairn Energy
Forterra
Triple Point Social Housing REIT
Horizonte Minerals
European Assets Trust
Eurocell
TI Fluid System
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By Tom Waite; thomaslwaite@alliancenews.com
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