(Alliance News) - The following is a summary of top news stories Thursday.
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COMPANIES
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International Consolidated Airlines Group said it will raise EUR2.74 billion through a share issue to strengthen its balance sheet and reduce leverage. The Anglo-Spanish airline said it will issue 2.98 billion shares at a price of EUR0.92 each. The subscription price represents a 36% discount to Wednesday's closing price. The FTSE 100-listed company said the funds raised will strengthen its balance sheet and reduce leverage. Turning to trading, the British Airways parent said June saw a significant increase in bookings to 30% of prior year levels by the end of the month, following an almost complete cessation of new booking activity in April and May. Since July, IAG said it has experienced an overall levelling off of bookings. Short-haul bookings have fallen slightly following the re-implementation of quarantine requirements by the UK and other European governments for travellers returning from some countries. As a result, the company said its capacity planning scenario for 2020 has been lowered to minus 63% in terms of available seat kilometres compared to 2019 from minus 59% previously.
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Wm Morrison Supermarkets reported a much lower interim profit due to costs associated with Covid-19, though lifted its dividend with a "confident outlook". The Bradford-based supermarket chain posted a GBP145 million pretax profit for the 26 weeks ended August 2, a 28% drop from its GBP202 million profit the year before. Morrison explained that its profit has been temporarily hurt by considerable Covid-19 costs, amounting to around GBP155 million in the first half. These extra costs were partially mitigated by business rates relief totalling GBP93 million, giving a net half-year Covid-19 cost impact of GBP62 million. Revenue in the first half fell 1.1% to GBP8.73 billion from GBP8.83 billion due to very low fuel demand during and after the UK lockdown, though the company said this is now rebuilding.
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Dixons Carphone said sales were up in all markets and it had a strong online performance, adding that it is considering listing a minority stake of its Nordics business. UK & Ireland Electricals revenue was up 12% on a like-for-like basis in the 16 weeks ended August 29, with online sales three times higher year-on-year while stores were closed and have continued at more than twice the prior year's sales since stores reopened. UK & Ireland Mobile total revenue was down 56%, with sales and cashflow in line with plans following closures of UK standalone stores. International like-for-like revenue was up 16%, including 17% Nordics growth and 12% growth in Greece. Nordic online sales were up 49% and were more than 100% higher in Greece. The company is exploring a listing for a minority stake in its Nordics business, which has performed well in the last 10 years.
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Insurance giant Lloyd's of London is expecting to pay out billions in claims sparked by Covid-19, as the cost of the pandemic surpassed many other major disasters. The insurance market said that it believes that up to GBP5 billion will be claimed on a gross basis, helping to push the company into a loss for the first half of the financial year. The news comes four months after Lloyd's revealed that it would pay out between USD3 billion and USD4.3 billion, around GBP2.3 billion to GBP3.3 billion, to customers because of the pandemic's impact. But on Wednesday it revealed that payouts are likely to exceed this level, meaning the crisis will cost more than three disastrous hurricanes in 2017, which cost Lloyd's USD4.8 billion dollars, and the September 11 attacks in New York, after which Lloyd's paid out USD4.7 billion. Lloyd's said it lost about GBP400 million before tax in the first six months of the year, as it took a GBP2.4 billion hit from the pandemic. Excluding the pandemic, Lloyd's would have delivered an underwriting profit of GBP1 billion, it said.
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Toyota Motor Corp's Research Institute-Advanced Development unit said it has set up a USD800 million global growth-stage investment fund. The fund, Toyota noted, will invest in growth-stage companies that are focused on autonomous mobility, automation, artificial intelligence, machine learning, data and analytics, connectivity, and smart cities. "In addition to sourcing deals from Toyota AI Ventures, Toyota's early-stage venture capital fund, Woven Capital will also invest in other venture capital funds in order to broaden and accelerate its global coverage," Toyota added. The new fund - Woven Capital LP - will be part of Toyota's new holding company, Woven Planet Holdings Inc, which will begin operations in January 2021.
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MARKETS
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London stocks edged lower ahead of the latest European Central Bank policy decision due at 1245 BST.
"A change in rates is unlikely but a new set of stimulus measures is widely expected to be implemented before the end of the year after some EU officials warned the downside risks have intensified amid no significant change in output nor inflation since June's meeting. Today's press conference from Christine Lagarde will be crucial for investors as they desperately need further support from the ECB to continue taking stock prices higher," said Pierre Veyret, technical analyst at ActivTrades.
Wall Street is on course for a lower start, with the Dow Jones and S&P 500 both called down 0.4% and the Nasdaq seen 0.5% lower.
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FTSE 100: down 0.6% at 5,978.79
FTSE 250: down 0.3% at 17,646.17
AIM ALL-SHARE: flat at 952.75
GBP: higher at USD1.3021 (USD1.2999)
EUR: higher at USD1.1835 (USD1.1812)
GOLD: flat at USD1,946.05 per ounce (USD1,945.72)
OIL (Brent): flat at USD40.36 a barrel (USD40.32)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Hastily arranged Brexit talks will take place on Thursday after the EU reacted strongly to UK Prime Minister Boris Johnson's move to override key parts of the Withdrawal Agreement break with Brussels. An "extraordinary meeting" of the Joint Committee between the UK and EU is being held in London after Johnson unveiled proposed legislation to alter key elements of the Brexit deal with Brussels regarding Northern Ireland. Chancellor of the Duchy of Lancaster Michael Gove will meet senior EU official Maros Sefcovic to discuss the situation, as talks between the UK's chief Brexit negotiator Lord Frost and his Brussels counterpart Michel Barnier continue. The meeting between Gove and Sefcovic comes as Speaker of the US House of Representatives, Nancy Pelosi insisted there was "absolutely no chance" of Congress passing an American trade deal with the UK if the Northern Ireland peace process was "imperilled".
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Ambitious UK mass testing plans that could keep hopes of Christmas parties alive would cost as much as GBP100 billion, according to reports. Leaked documents seen by the BMJ suggest that the "Operation Moonshot" project – which would see millions of UK-wide tests carried out daily – could have a price tag close to that of the GBP114 billion budget given to NHS England in financial 2019. Boris Johnson believes the scheme could help sport and entertainment venues reopen fully and allow people to socially mix in large groups again with on-the-day tests. The deputy chief medical officer, Jenny Harries, said the success of Moonshot would depend on how it is handled. She told ITV's Peston: "We do want to get back to as much normality as we can and any opportunity to do that through a new testing programme or using different testing technology is clearly a good thing to be following, but it's not quite as simple as just doing that."
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China accused Washington of "political persecution and racial discrimination", after the US confirmed it had revoked the visas of more than 1,000 Chinese students under an order by President Donald Trump that accused some of espionage. Trump declared in May that some Chinese nationals officially in the US for study have stolen intellectual property and helped modernise China's military, as tensions between the two countries soar on multiple fronts. China's foreign ministry hit back Thursday, saying the US should "immediately stop using all kinds of pretexts to restrict and suppress Chinese students in the US for no reason." "This is outright political persecution and racial discrimination. It seriously violates the human rights of these Chinese students," said foreign ministry spokesman Zhao Lijian at a press conference on Monday. He said that China reserved the right to "further respond".
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Japan's two major opposition parties merged and elected a new leader as they try to strengthen their standing ahead of a possible snap national election. The ruling Liberal Democratic Party will pick a successor to outgoing Prime Minister Shinzo Abe next week, and several top political figures have suggested the next leader may call a quick election. The opposition parties and several independent lawmakers formally cemented an alliance in response, becoming the Constitutional Democratic Party of Japan, and elected vocal Abe critic Yukio Edano as their new leader. The new bloc commands 149 seats in the national Diet, compared with the dominant LDP's 394 lawmakers. The LDP votes Monday on their new leader, who is certain to win a parliamentary vote two days later and become the country's next prime minister.
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