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(Alliance News) - Share prices in China plunged on Monday, with Shanghai closing down more than 5%, after fears of a hard Covid lockdown sparked panic buying in Beijing.
Long queues for compulsory mass testing formed in a large central district of the Chinese capital.
China is already trying to contain a wave of infections in its largest city Shanghai, which has been almost entirely locked down for weeks and reported 51 new Covid deaths on Monday.
Shanghai has struggled to provide fresh food to those confined at home, while patients have reported trouble accessing non-Covid medical care – and the rising cases in the capital triggered fears of a similar lockdown.
Downtown Beijing's most populous district Chaoyang, home to around 3.5 million people, ordered mass testing from Monday for residents and those coming to work there. The area hosts embassies and the headquarters of many multinational firms.
Queues snaked around malls and outside office complexes on Monday as people waited to be swabbed for samples by health workers in protective gear.
The Shanghai Composite stock index closed down 5.1% on Monday, while the Hang Seng index in Hong Kong was down 4.0% in late trade.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.7% at 7,393.94
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Hang Seng: down 4.0% at 19,820.58
Nikkei 225: closed down 1.9% at 26,590.78
S&P/ASX 200: Sydney market closed for holiday.
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DJIA: closed down 981.36 points, or 2.8%, at 33,811.40
S&P 500: closed down 2.8% at 4,271.78
Nasdaq Composite: closed down 2.6% at 12,839.29
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EUR: down at USD1.0720 (USD1.0778)
GBP: down at USD1.2733 (USD1.2848)
USD: down at JPY128.07 (JPY128.87)
GOLD: down at USD1,916.15 per ounce (USD1,929.57)
OIL (Brent): down at USD102.35 a barrel (USD106.44)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's key economic events still to come
1000 CEST Germany Ifo business climate index
1100 CEST EU construction output
1100 BST UK CBI industrial trends survey
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UK Prime Minister Boris Johnson could be forced to resign after the Sue Gray review into claims of Covid rule breaches in the government is published, according to a report. Gray, a senior civil servant, was forced to delay the publication of her investigation into alleged parties held in Downing Street and Whitehall during England's coronavirus lockdowns due to the Metropolitan Police commencing their own inquiry. In an interim report published in January, the Cabinet Office official said there had been "failures of leadership and judgment" in No 10 over the so-called 'partygate' saga. The Times, citing an official it described as being familiar with the contents of the complete report, said Gray's full findings were even more personally critical of Johnson and could end his premiership. No 10 declined to comment.
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UK house prices rose to a fresh record high in April despite growing economic pressures, figures from property portal Rightmove showed. UK house prices hit a high of GBP360,101 in April, up 1.6% from GBP354,564 in March. It was also the third straight monthly increase for house prices. On an annual basis, the Rightmove house price index rose 9.9% in April, slowing slightly from 10% in March. Rightmove said that despite growing economic pressures, the 2022 housing market continues to set new milestones for price and activity levels. Further, it said high buyer demand for limited stock for sale suggests that while price growth may slow down, sustained price falls are unlikely.
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The UK aviation watchdog should be given stronger powers to protect passengers hit by the kind of international travel disruption seen during the pandemic, members of Parliament have recommended. The call by the Transport Committee comes after almost two years of disarray for the travel sector during the coronavirus crisis, with quarantine restrictions, testing and locator forms part of efforts to tackle the virus. In a report published on Monday, UK Aviation: Reform For Take-Off, the Commons committee recommended that the UK Civil Aviation Authority should be given "more teeth" to enable the regulator to slap fines on airlines that do not completely refund customers when required to do so by law. The 55-page document also calls for ministers to publish an aviation recovery plan by June "as a priority" and for an airline insolvency bill to be introduced in the next session of parliament to better protect consumers, employees and taxpayers. The committee welcomed previous assertions by ministers that travel restrictions will only be applied in "extreme circumstances" in future, and said that the UK government "must compensate the industry for the economic loss suffered" if measures impacting the sector are reimposed.
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BROKER RATING CHANGES
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Morgan Stanley cuts Antofagasta target to 1370 (1500) pence - 'underweight'
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Goldman Sachs cuts Antofagasta price target to 1890 (1900) pence - 'neutral'
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Deutsche Bank cuts Marks & Spencer to 'hold' (buy) - price target 185 (255) pence
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COMPANIES - FTSE 100
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Miner Anglo American received a blow after a regulator in Chile deciding against recommending an extension at a mine. Anglo American has been in engaged in an environmental assessment process at the Los Bronces integrated copper project in Chile since 2019. The miner was eyeing a mine life extension at the asset by expanding the Los Bronces open pit to include "higher grade ore from a new underground section of the mine". However, the Environmental Assessment Service of Chile, or SEA, rejected a permitting application for the Los Bronces extension. "The SEA has confirmed that LBIP satisfies all relevant environmental regulation, but bases its adverse recommendation on an alleged lack of information during the evaluation process to fully remove any doubts about a potential risk to public health. The SEA's recommendation is despite the strong support for the project offered to date by 23 of the 25 technical services bodies and government ministries that form part of the assessment process," Anglo American said. A firm decision on the extension will come next week, Anglo American added.
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British Land said it has sold a 75% interest in the majority of its Paddington Central mixed-use development in central London for GBP694 million to GIC, a Singaporean sovereign wealth fund. The sale price is 1% below the September 2021 book value and represents a net initial yield of 4.5%. The sale will hit earnings per share by 1.6 pence on a yearly basis, prior to any reinvestment of proceeds, the company said. Net tangible assets per share will fall "marginally", and the transaction will reduce leverage by 500 basis points, British Land said. "This transaction delivers against one of our key strategic priorities of proactively recycling capital out of mature assets where we have created considerable value. Proceeds from the transaction will be invested into value accretive development opportunities we own across our portfolio as well as growth areas including development-led urban logistics in London and innovation campuses," the company said. The sale establishes a joint-venture, with British Land owning a 25% interest. Paddington Central was acquired in 2013 for GBP470 million. At the time, it consisted of three buildings, a retail and leisure area and two development sites. Now, it also includes five office buildings, two residential buildings and a hotel.
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AstraZeneca said its biologics license application for the tremelimumab drug has been backed for priority review in the US. The drugmaker is eyeing approval for the drug to be used in tandem with Imfinzi to treat sufferers of unresectable hepatocellular carcinoma, a common type of liver cancer. The US Food & Drug Administration has a set a date in the fourth quarter of 2022 to issue a regulatory decision on the drug combo.
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COMPANIES - SMALL CAP
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Podcast producer Audioboom reported maiden annual profit, helped by revenue doubling. In 2021, revenue jumped to USD60.3 million from USD26.8 million in 2020. Audioboom swung to a pretax profit of USD1.7 million from a USD3.3 million loss. In addition, it said revenue for the first quarter of 2022 was a record USD19.7 million, more than doubled from USD9.5 million a year earlier. Back in February, Sky News had reported both Amazon and Spotify were mulling takeover bods for Audioboom. Audioboom Chief Executive Stuart Last said on Monday: "Our ambition is to build the world's leading podcasting business, and I am delighted with the start we have made in 2022 and look forward to the future with confidence." The AIM listing has a market capitalisation of just under GBP338 million.
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Monday's shareholder meetings
Belluscura PLC - AGM
Capital Gearing Trust PLC - GM re non pre-emptive share issue
Cloudbreak Discovery PLC - GM re Crescita equity drawdown agreement
Hikma Pharmaceuticals PLC - AGM
JPMorgan US Smaller Cos Investment Trust PLC - AGM
Polymetal International PLC - AGM
Symphony International Holdings Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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