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(Alliance News) - Airlines and travel firms on Friday continued to batten down the hatches as people around the world stayed at home to avoid catching a deadly virus.
Covid-19 is most dangerous for the elderly, and Saga, which provides products and services for life after 50, noted early Friday that the health and safety of customers and colleagues is its "number one priority".
Therefore, the company said it has suspended operations of its cruises until the beginning of May. The decision comes despite "very positive" demand for Saga's cruises, with bookings of around 80% of the full year revenue target, it said. While cancellations had increased in recent weeks, Saga said the average booked load factor for the remaining five cruise departures in March was 79% and the average booked load factor for five April departures was 85%.
The move by Saga followed a similar decision by much-larger peer Carnival on Thursday. Its Princess Cruises division will voluntarily pause its global operations in response to the "unpredictable circumstances" evolving from the spread of covid-19 virus.
"In proactive response to the unpredictable circumstances evolving from the global spread of covid-19 and in an abundance of caution, Princess Cruises announced that it will voluntarily pause global operations of its 18 cruise ships for two months, impacting voyages departing March 12 to May 10," the travel leisure company said.
Saga shares were up 1.9% early Friday, while Carnival was down 1.9%.
Here is what you need to know at the London market open, as prices staged a partial rebound from Thursday's rout:
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MARKETS
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FTSE 100: up 3.4%, at 5,413.23
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Hang Seng: down 1.0% at 24,068.41
Nikkei 225: closed down 6.1% at 17,431.05
DJIA: closed down 2,352.60 points, 10%, at 21,200.62
S&P 500: closed down 9.5% at 2,480.64
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GBP: up at USD1.2579 (USD1.2512)
EUR: up at USD1.1170 (USD1.1077)
Gold: up at USD1,590.60 per ounce (USD1,572.65)
Oil (Brent): up at USD34.46 a barrel (USD32.82)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
0830 EDT US import and export price indices
1000 EDT US University of Michigan survey of consumers
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EU negotiators will not travel to London next week for the second round of talks on a post-Brexit trade deal due to the coronavirus outbreak, it has been announced. In a joint statement, the EU and UK negotiating teams said they were looking at "alternative ways" of continuing the negotiations, including video conferencing. "Given the latest Covid-19 developments, UK and EU negotiators have today jointly decided not to hold next week's round of negotiations in London, in the form originally scheduled," the statement said. "Both sides are currently exploring alternative ways to continue discussions, including if possible the use of video conferences." Boris Johnson is adamant he wants a comprehensive trade deal in place by the end of the year, and that he will not seek an extension to the current Brexit transition period.
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The US central bank announced a massive increase to its cash injections into American financial markets to quell the growing uncertainty caused by the coronavirus pandemic. The New York Fed, which has ramped up short-term funding to markets in recent days, said it will offer USD500 billion in three-month funds called repurchase agreements or "repos" on Thursday and Friday, and USD500 billion in one-month repos on Friday. Over the coming month, it will provide USD500 billion a week of one- and three-month repos. That is on top of the at least USD175 billion daily in overnight funding, and twice-weekly offers of at least USD45 billion in two-week repos. "These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak," the New York Fed said in a statement.
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New York Governor Andrew Cuomo banned public gatherings of more than 500 people, including shows in Manhattan's iconic Broadway theatre district. Only schools, hospitals, nursing homes and mass transit facilities are excepted from the rule – which goes into effect for Broadway at 5:00 pm Thursday, and 24 hours later everywhere else, Cuomo told journalists. The governor also said that the occupancy of every seated facility was to be reduced by 50%, even if the occupancy is normally 500 or less.
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A Chinese government campaign to cast doubt on the origin of the coronavirus pandemic is fuelling a row with the US, with a Beijing official promoting conspiracy theories and Washington calling it the "Wuhan virus". The spat comes as China tries to deflect blame for the contagion and reframe itself as a country that took decisive steps to buy the world time by placing huge swathes of its population under quarantine. With cases falling in China and soaring abroad, Beijing is now rejecting the widely held assessment that the city of Wuhan is the birthplace of the outbreak. Foreign ministry spokesman Zhao Lijian went a step further on Thursday, saying on Twitter that "it might be US army who brought the epidemic to Wuhan" – without providing evidence.
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BROKER RATING CHANGES
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BERENBERG RAISES SPECTRIS TO 'HOLD' ('SELL') - TARGET 2250 (2065) PENCE
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CITIGROUP RAISES BARCLAYS TO 'NEUTRAL' (SELL) - PRICE TARGET 113 (165) PENCE; RAISES LLOYDS BANKING TO 'BUY' (NEUTRAL) - PRICE TARGET 49 (61) PENCE; RAISES RBS TO 'BUY' (NEUTRAL) - PRICE TARGET 155 (210) PENCE
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CITIGROUP RAISES COCA-COLA HBC TO 'BUY' ('NEUTRAL') - TARGET 2450 (3100) PENCE
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COMPANIES - FTSE 100
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The chief executive of BT Group has tested positive for Covid-19, becoming the first publicly confirmed case of a FTSE 100 chief executive who has coronavirus. Philip Jansen, 53, tested positive for the virus on Thursday afternoon and is self-isolating, as advised by Public Health England, the company said. In a statement to the PA news agency, Jansen said: "Having felt slightly unwell I decided as a precaution to be tested. As soon as the test results were known I isolated myself at home." The BT boss said he decided to go public because he had attended an industry event earlier in the week with other mobile phone operators. Attendees are now being contacted and given further advice, BT said.
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Tour operator TUI has decided to halt pre-payments and suspend contracts with some of its hotels to survive the severe downturn in the travel industry caused by coronavirus, the Financial Times reported. "We are in close contact with our hotel partners worldwide, jointly reviewing options for capacity management, to mitigate the impact for both Tui and its partners," the company told the newspaper. TUI also said it has frozen recruitment and was considering cutting staff hours. According to the FT, citing hoteliers in Spain and Greece, TUI was in talks with a number of operators to invoke "force majeure" clauses in contracts and temporarily stop payments.
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COMPANIES - FTSE 250
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Premier Oil said it continues to perform well with production to the end of February of 76,600 barrels of oil equivalent a day. The company's annual output guidance stands between 70,000 to 75,000 barrels of oil equivalent a day, excluding the proposed UK acquisitions. With regards to the proposed acquisitions and extension to the company's credit facilities, the court hearing to sanction the creditor schemes of arrangement is scheduled to start on Tuesday next week, Premier noted. Elsewhere, Premier said it retains "significant" liquidity. It has unrestricted cash of USD135 million and undrawn facilities of USD330 million, as at the end of February. As well as maintaining liquidity, Premier is focused on managing its forward covenant position which could be hurt by the current oil price weakness, the company said.
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COMPANIES - OTHER MAIN MARKET AND AIM
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UK independent hospital company Spire Healthcare said it has been asked for, and has offered, its support to the NHS during "this challenging time". The move follows a meeting with NHS England and representatives from across the private sector to discuss future COVID-19 planning. "The exact nature, extent and the timing of this support is yet to be determined; in the meantime, we continue to offer a full service to our patients," the company said in its statement Friday.
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UK manufacturer, distributor and recycler Eurocell reported pretax profit up 5% in 2019 to GBP23.1 million, as revenue grew by 10% to GBP279.1 million. Excluding acquisitions, revenue was 8% higher year-on-year, the company noted. Eurocell said it opened four new branches during the year and saw an increase in use of recycled material to 13,400 tonnes from 9,500 tonnes in 2018. The company declared a 6.4 pence a share dividend for 2019, up 3% from 6.2p paid a year prior. "Despite the impact of very wet weather so far this year, we have made a good start to 2020. Sales and margins for the first two months are in line with our expectations, and notwithstanding macroeconomic and political uncertainty, we expect to deliver further progress this year," said Chief Executive Mark Kelly.
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COMPANIES - INTERNATIONAL
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American Airlines has significantly reduced flights over the summer, it announced. American Airlines is cutting international capacity by 34% over the summer season compared to the normal schedule. This includes a 50% cut in April's trans-Atlantic flight numbers. There will also be a reduced service to South America, the company continued, with all flights to Argentina suspended. The move follows the announcement by President Trump that the US will not allow travellers from the EU's Schengen border-free zone into the country for 30 days, calling the move an "aggressive" effort to contain the spread of Covid-19, the disease caused by the new coronavirus. The decision does not affect visitors from Britain and Ireland, or US citizens returning from Europe.
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US database software firm Oracle said it had an "extremely strong" quarter with earnings per share up. Revenue for the third quarter ended February 29 amounted to USD9.80 billion, up 2% on a year ago. This was boosted by Cloud Services & License Support revenue growing 4% to USD6.93 billion. Operating income was up 4% to USD3.53 billion, while net income fell 6% to USD2.57 billion as the firm's income tax provision rose 47% to USD505 million. Non-GAAP earnings per share were up 11% to USD0.97. The company increased its share repurchase authorisation by USD15 billion and declared a quarterly dividend of USD0.24 per share.
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Software firm Adobe reported strong quarterly growth late on Thursday but did warn on the impact of covid-19 on future trading. Adobe's revenue for its first quarter ended February 28 climbed 19% on the year before to USD3.09 billion. Net income rose 42% to USD955 million, and San Jose-based Adobe's diluted earnings per share were 44% higher at USD1.96. Earnings per share were hit by USD0.07 due to the cancellation of some events following the covid-19 outbreak, Adobe warned. Covid-19 is leading to businesses deferring bookings, reducing marketing spending, and delaying consultancy services implementation, Adobe noted.
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Friday's Shareholder Meetings
no events scheduled
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
