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(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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Insurance market Lloyd's Of London said that the Covid-19 pandemic will be the mostly costly event in history. To date, Lloyd's said it will have to pay out USD3.0 billion to USD4.3 billion to customers for the fallout of the virus. Lloyd's noted this could rise if the national lockdowns continue. Event Cancellations have made up 31% of payouts, with Property Covers at 29%, Credit Lines 11%, and other insurance classes making up the remaining 29%. The market said the payouts are on par with the amount issued after the 9/11 terrorist attack in 2001 and the combined total for hurricanes Harvey, Irma and Maria in 2017.
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Prudential said first-quarter sales in Asia were weighed down by the effects of Covid-19 on mainland China and Hong Kong. Asia APE sales excluding Hong Kong and China were up 1% for the three months ended March 31 compared to a year before, while total Asia APE sales fell 24% to USD986 million. APE sales are "a measure of new business activity that comprises the aggregate of annualised regular premiums and one-tenth of single premiums on new business written during the year for all insurance products, including premiums for contracts designated as investment contracts under IFRS 4," the company explained. Prudential is planning a minority initial public offering for its Jackson National Life Insurance Co unit in the US, preparations for which are continuing "alongside active evaluation of other options".
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Hargreaves Lansdown said it has performed strongly in the first four months of 2020 despite the "exceptionally volatile and challenging period". In the four months to April 30, Hargreaves recorded GBP4.0 billion of net new business, with 94,000 new clients joining the firm. In the same period last year, Hargreaves recorded GBP2.9 billion in net new business. Net new business growth was driven by the "usual factors", Hargreaves said, of existing clients using tax allowances during the ISA season, ongoing wealth consolidation onto its platform from existing clients and flows into its cash management service, Active Savings. Despite this, Hargreaves ended the period with GBP96.7 billion in assets under administration, down 8.1% from GBP105.2 billion at December 31. Hargreaves said its current intention to is to keep its dividend for financial 2020, due to its "strong" trading results.
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3i Group reported a decline in net asset value per share, reflecting the expected blow to its portfolio company projections in the wake of the Covid-19 pandemic. The private equity and infrastructure investor reported a diluted NAV per share of 804 pence as at March 31, the end of its financial year. This represents a 1.3% drop from year earlier's 815p. As a result, total return for the year was GP253 million, down from GBP1.25 billion the year before, while return on opening shareholders' funds was 3%, down from 18%. Its portfolio value increased 7.3% to GBP8.10 billion on March 31 from GP7.55 billion the prior year, gross debt was flat at GBP575 million, and net cash fell 45% to GBP270 million from GBP495 million. Liquidity was at GP1.25 billion, having been GBP1.42 billion the year before. 3i maintained its dividend per share at 35 pence, with a 17.5p per share final dividend scheduled to be paid in July subject to shareholder approval.
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MARKETS
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London shares were lower as fear of a second wave of coronavirus infections intensified. Prudential was the worst blue-chip performer, down 5.5%. US stock market futures were pointed slightly higher as investors await the latest data on US jobless claims figures.
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FTSE 100: down 2.3% at 5,768.82
FTSE 250: down 2.7% at 15,450.14
AIM ALL-SHARE: down 1.3% at 809.46
GBP: flat at USD1.2225 (USD1.2222)
EUR: down at USD1.0811 (USD1.0845)
GOLD: firm at USD1,718.14 per ounce (USD1,714.70)
OIL (Brent): up at USD30.23 a barrel (USD29.45)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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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%.
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It could be four to five years before the Covid-19 pandemic is under control, a senior global health official has said. Soumya Swaminathan, the World Health Organization's chief scientist, told the FT's Global Boardroom digital conference: "I would say in a four to five-year timeframe, we could be looking at controlling this." Influential factors include whether the virus matures, the containment measures put in place and the development of a vaccine, she told the conference. She said that a vaccine "seems for now the best way out", but there were "lots of ifs and buts" about its efficacy and safety, as well as its production and equitable distribution, the newspaper reported.
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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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US President Donald Trump has called on governors to reopen schools that were closed because of the coronavirus while taking issue with Anthony Fauci's caution against moving too quickly in sending students back to class. The president accused the nation's top infectious diseases expert of wanting "to play all sides of the equation", a comment that suggested he is tiring of the nation's top infectious disease expert. "I think they should open the schools, absolutely. I think they should," Trump told reporters at the White House on Wednesday. Fauci had urged caution in testimony before a Senate committee on Tuesday, although he made clear that he believes reopening decisions will likely differ from one region to the next.
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A northeastern Chinese city has partially shut its borders, cut off transport links and closed schools after the emergence of a local Covid-19 cluster that has fuelled fears about a second wave of infections in China. Authorities in Jilin, with a population of more than four million, suspended bus services and said it will let residents leave the city only if they have tested negative for Covid-19 in the past 48 hours and complete an unspecified period of "strict self-isolation".
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