It’s quiet out there, and we’re wrapping up early.
Thanks for following along today – we’ll be back on Monday.
London-listed lenders have hit their lowest level in almost three decades, according to a gauge of bank stock values.
The FTSE 350 Banks index, a capitalisation-weighted gauge of lenders’ stock prices, touched its lowest level since 1992 today, exceeding a previous low reached during the financial crisis.
UK lenders – forced to scrap their priced dividends in the face of the pandemic – have had a poor year, with the index down 50pc currently.
The US Commerce Department has cracked down on TikTok, announcing prohibitions on transactions involving TikTok and WeChat. Its Secretary, Wilbur Ross, told Fox Business that it will only block the app from updating in the US for now, stopping short of further action. But if no deal can be reached over the app, a full shutdown will be introduced from November 12th.
Video-sharing app TikTok and messaging service WeChat will be removed from US app stores as soon as Sunday, as executive orders from Donald Trump are implemented, the FT reports.
Markets have got that Friday feeling – there’s not a lot of news, and everything has gone a bit zzzzzzzzzzz on the equities front.
Still, there are couple of notable movements, not least British AIrways-owner IAG, which is down about 10pc – a decent shift even by its volatile recent standards.
Investors are selling off the airline operator as expectations grow that countries across Europe will ramp up travel restrictions once more in the coming weeks, in reaction to climbing virus cases.
Tesla driven caught napping at 93mph
A Canadian man has been charged with dangerous driving after police in Alberta said they found him asleep at the wheel of an electric self-driving Tesla car while it was driving at more than 93mph.
My colleague James Cook reports:
The Royal Canadian Mounted police said the Tesla Model S car was seen driving along a highway at high speed, with both people inside the car asleep with their seats reclined.
“The car appeared to be self-driving, travelling over 140 km/h, with both front seats completely reclined and both occupants appearing to be asleep,” the police said.
When police turned on their emergency lights, the car automatically accelerated to more than 90mph, police said.
How furlough totals have shifted
Looking closely at those HMRC figures reveals the uneven pace at which different sectors have taken workers off income support.
In the wholesale and retail sector, more than half of those people furloughed at the peak in early May had returned to work by the end of July.
In contrast, the majority of the arts, entertainment and recreation sector furloughs were still in place.
Liam Fox through to second round of WTO director-general selection
Liam Fox, the former minister, has advanced to the second round of the selection process for the World Trade Organisation’s next director-general.
Three candidates, Dr Jesús Seade, Tudor Ulianovschi and Hamid Mamdouh, have withdrawn from the race after being told they had not secured enough support.
He will face four other candidates in a second round of voting, which will whittle the total down to two.
Dr Fox said:
Declining trade volumes, disagreements about the normative agenda, and most importantly, a breaking down of the multilateral consensus which enabled the WTO to be established are challenges we need to tackle head-on.The WTO needs leadership at the top with an unswerving belief in the power of open markets to drive economic development and prosperity.
175,000 one-person companies on furlough at end of July
An interesting stat within today’s HMRC furlough data release: 175,000 companies with a single employee were using the furlough scheme at the end of July.
These groups might be sole traders or have some other setup – either way, that’s a huge number of companies that were theoretically inactive at the time.
Across all companies, the take-up rate for furlough was highest among those with two to four employees – who also accounted for the highest number of furloughed employments overall.
HMRC: Furloughs stood at 4.8m at end of July
Around 4.8m Brits were still on furlough at the end of July, according to the latest data from HMRC.
The figure, based partially on preliminary estimates, could be as much as 10pc higher once all returns are received and revisions made. It includes about 1m people who were back part-time.
The figures peaked at 8.8m on May 8th.
- furloughing of staff in the wholesale and retail sector peaked on 24 April at 1.85 million employments – by 31 July, initial figures show 789,000 jobs furloughed in this sector – a decrease of more than a half since the peak for the sector
- across all employer sizes, the number of employments furloughed continued to decrease between 30 June and 31 July as at 31 July,
- the sector with the highest proportion of its workforce eligible for furloughed that were actually furloughed was arts, entertainment and recreation at 45pc followed by accommodation and food services sector at 43pc – in all, 58pc of employers in the arts, entertainment and recreation sector were using the furlough scheme at the end of July and 57pc of employers in accommodation and food services
- overall, where it was possible to link the CJRS data on individual furloughed employments to other data, for the UK as a whole, 2.26 million women were furloughed at the end of July compared with 2.15 million men
Ryanair cuts October capacity further
Ryanair says it will cut its October flight capacity by a further 20pc, taking it to just two-fifths of October 2019 levels.
The budget airline anticipates a load factor of 70pc or more of its reduced flight schedule.
In an emailed statement, it added:
[W]hile it is too early yet to make final decisions on our winter schedule (from November to March), if current trends and EU governments’ mismanagement of the return of air travel and normal economic activity continue, then similar capacity cuts may be required across the winter period
Here are some of the top stories from the Telegraph Money team:
John Laing sells rail programme stake for £421m
Shares in infrastructure investor John Laing have risen this morning, after it announced the £421m divestment of its stake in the InterCity Express Programme Phase 2 – a project which supplies rolling stock for the East Coast Main Line.
The FTSE 250 group has entered an agreement to sell the 30pc stake to AIP management, a Danish investment company.
The sale price – which is pre-disposal costs – represents a “strong uplift” on stake’s£333m valuation on June 30th, John Laing said.
Under its dividend policy, John Laing investors will receive approximately 5pc–10pc of gross proceeds from the sale via its annual payout.
Chief executive Ben Loomes said:
This is an excellent example of how John Laing creates value through developing greenfield infrastructure, working closely with its partners to manage its projects through to operation, and then delivering strong realisation results for the Group’s shareholders.
Investec expects two-thirds profit slump
Johannesburg-based lender Investec said it expects its first-half profit to fall as much as 68pc as a result of the pandemic.
In a statement this morning, the FTSE 250 group said the “challenging economic backdrop” was likely to cut its earnings per share to around a third or a quarter of 2019 levels.
It said it is cutting its London staff headcount by 13pc, equivalent to 210 roles, as part of efforts to “simplify and focus the business”.
Chief executive Fani Titi said:
The business has proved resilient in a period characterised by COVID-19 stringent lockdowns in the first quarter, followed by a gradual reopening of the economies. Severe GDP contractions and volatile financial markets negatively impacted revenues.
The group already spun off its asset management business in March to create Ninety One.
It squashed any hopes of a payout to investors, saying:
In light of the prevailing guidance from both the South African and UK regulators regarding dividend declarations, the group does not anticipate declaring an interim dividend. Subject to any changes to this guidance the group will declare a dividend in its normal distribution cycles.
European markets slip
European markets haven extended yesterday’s losses at the open, heading for a downbeat end to the week.
Sterling is pretty unaffected by this morning’s retail sales data (which was broadly in line with expectations):
Evening Standard: New London lockdown looms after cases spike
A spike in London Covid-19 cases risks new curbs on socialising and nights out, the Evening Standard reports.
The paper says:
The number of cases per 100,000 over seven days has shot up from 18.8 to around 25, the Evening Standard can reveal.The Standard has also seen the official plan drawn up to co-ordinate London’s response to the increase in cases that health chiefs are now braced for.
Called “London Epidemic Response Escalation Framework”, it sets out a programme of intensified measures each time a “trigger point” is crossed.
The first trigger points will be officially crossed when today’s data is published, and if the plan is followed exactly, health chiefs would be expected to hold a city-wide reassessment of how the disease is spreading and make preparation for extra testing and measures to slow transmission in the community.
A London surge will be confirmed in figures out today – and we have seen the confidential plan that suggests the capital in on track for local curbs on socialising and nights out being brought in in just a fortnight.https://t.co/uKbuhFcVcA
— Joe Murphy (@JoeMurphyLondon) September 18, 2020
Euronext teams up with banks for proposed transaction
In its own statement, Euronext says it will team up with CDP Equity (backed by Italian investment bank Cassa Depositi e Prestiti) as well as lender Intesa Panpaolo to acquire Borsa Italiana.
The proposed combination of Borsa Italiana and Euronext would create a leading player in continental European capital markets. This transformational project would position the newly formed group to deliver the ambition of further building the backbone of the Capital Markets Union in Europe, while at the same time supporting local economies.
Italy, through Borsa Italiana, would become the largest revenue contributor to the enlarged Euronext group.
LSEG in exclusive discussions with Euronext over Borsa Italiana bid
London Stock Exchange Group says it has entered in ‘exclusive discussions’ with rival bourse operator Euronext, over proposed sale of the Italian stock exchange.
Divesting Borsa Italiana is likely to be a key requirement to satisfy competition regulator as LSE undertakes a $27bn takeover of data giant Refinitiv.
The FTSE 100 company said it “received and reviewed a number of competitive proposals from several parties”.
There can be no certainty that a transaction will result from these discussions and any potential sale will be dependent upon the outcome of the European Commission’s review of the Refinitiv transaction and that transaction closing in accordance with its terms.
EasyJet nabs Tui finance boss
EasyJet has appointed Tui’s Kenton Jarvis as its new finance chief, replacing outgoing CFO Andrew Findlay who announced he was exiting in May.
My colleague Simon Foy reports:
Mr Jarvis is currently head of the travel giant’s aviation division and has worked at the company for 17 years.
EasyJet said: “He has served on the management board for Tui iand proven his ability to drive savings and successful turnaround programmes.
“This expertise will be critical as easyJet enters a period of recovery from the most severe restrictions of the pandemic.”The carrier said it will provide an update on Mr Jarvis’ start date in due course.
He joins the airline at the height of its worst ever crisis. EasyJet dire financial position was highlighted in its third-quarter trading update in August, which showed it carried 117,00 passengers and had revenue of only £7m.
In the same period a year ago it flew 26.4m people, bringing in £1.76bn.
Clothing stores taking hardest footfall hit
In a further worrying sign for clothing retailers, they reported the biggest slump in footfall across all retailers, according to the ONS’s latest surveys.
Across textile, clothing and footwear stores, 85.7pc said they had experienced a drop in footfall as a result of the pandemic compared to normal expectations for that time of year.
The ONS said:
The highest percentage of businesses reporting decreased footfall were textile, clothing and footwear stores at 85.7pc. As expected, the lowest percentage of businesses affected by decreased footfall were non-store retailing at 9.1pc. Since online-only retailers make up most of the non-store sector, footfall was not relevant to 63.6pc of businesses that responded to this question.
Tracking the relative recovery of different sector shows the uneven pace of recovery, despite all sectors moving closer to normality (that is, pre-virus levels) in recent months.
Clothing remains the the poorest perform: dropping hardest when lockdown began, and the further off a full recovery now:
Online and food stores are bright spots
Despite the overall recovery in retail sales, a closer look at the figures shows the recovery has been far from even.
Across all seller types, only non-store retailing (i.e., online) and food stores experienced stronger sales volume between January and August this year than during the same period in 2019.
How sales have shifted
Retail sales is one of the few areas of the economy to have experienced an undeniable ‘v-shaped’ recovery, with total sales volume up 4pc last month compared to February (before the pandemic hit).
But the pace of gains is slowing rapidly, and retailers will be looking nervously at the upcoming holiday period – a crucial time any year, but particularly after the sharp sales hit many took during lockdown.
Overall, sales between January and August were down 4.8pc compared to the same period in 2019, despite the recovery.
Retail sales slow in August
Just in: the figures are in, and the expectations were pretty on the money: total retail sales rose just 0.8pc in August, leaving them 2.8pc higher year-on-year.
July’s inc. fuel growth was revised up slightly, to 3.7pc.
Here are the figures:
- Retail sales inc. fuel month-on-month: +0.8pc
- Inc. fuel year-on-year: +2.8pc
- Exc. fuel month-on-month: +0.6pc
- Exc. fuel year-on-year: +4.3pc
Retail sales: What experts expect
These are the predictions from analysts and economists for today’s figures (per Bloomberg’s polling):
- Retail sales inc. fuel month-on-month: +0.8pc
- Inc. fuel year-on-year: +2.7pc
- Exc. fuel month-on-month: +0.4pc
- Exc. fuel year-on-year: +4.2pc
Agenda: Retail report looms
Good morning. The latest official data on UK retail sales, set for release at 7am, is expected to show a slowdown during August amid the impact of the Treasury’s hugely-popular Eat Out to Help Out scheme.
Elsewhere, it’s a typically quiet Friday, with European stocks expected to drift slightly lower after yesterday’s poor performance.
5 things to start your day
1) Czech billionaire takes big stake in Sainsbury’s: Royal Mail’s biggest investor Daniel Kretinsky becomes supermarket’s fourth-largest shareholder with a 3pc holding.
2) Almost half of firms set to swing jobs axe: CBI survey of almost 250 companies reveals a two-speed labour market emerging as ahead of a resurgence in the virus.
3) Lithium explorer makes ‘significant’ discovery in Cornwall: Cornish Lithium hopes to meet demand for electric car batteries in the UK.
4) Ryanair suffers investor rebellion over executive pay: Budget airline boss Michael O’Leary handed €458,000 bonus despite collapse in revenue and profit in wake of coronavirus crisis
5) The future of rail: Are we on track for a Beeching part 2? Calls to reverse Beeching cuts were growing before Covid-19. Now rail passenger numbers have collapsed. Where does that leave our network?
What happened overnight
Asian shares were slightly higher on Friday despite some investor attention shifting again to the uncertainties in global economies amid the coronavirus pandemic, as reflected in the overnight fall on Wall Street.
Japan’s benchmark Nikkei 225 was little changed but inched up less than 0.1pc in morning trading to 23,326.00. South Korea’s Kospi added 0.3pc to 2,412.37. Australia’s S&P/ASX 200 was little changed at 5,887.30. Hong Kong’s Hang Seng rose 0.2pc to 24,398.87, while the Shanghai Composite edged up 0.5pc to 3,286.68.
Coming up today
Retail sales (UK); producer prices (Germany); consumer sentiment (US).