Barclays scraps final divi, Taylor Wimpey cancelling bonuses
London open
The FTSE 100 is expected to open 211 points lower on Wednesday, having closed up 1.95% at 5,671.96 on Tuesday.
Stocks to watch
Barclays scrapped its final dividend and future share buybacks as it responded to the impact of the coronavirus pandemic. The bank on Wednesday said it had taken the decision to help “serve the needs of businesses and households through the extraordinary challenges presented by Covid-19”, adding that it would also cancel interim payouts for 2020.
Executives at house builder Taylor Wimpey agreed to cancel bonuses and take a 30% base salary for the duration of the coronavirus lockdown. The company said it would review the decision if the lockdown continued beyond June 30, adding that it had made the changes “to conserve cash, with a particular focus on protecting the long term financial security of the business as a whole, for the benefit of all of the company's stakeholders”.
Primary Health Properties updated the market in light of the Covid-19 coronavirus pandemic on Wednesday, reporting that 90% of its contracted rental income was usually either paid directly or indirectly by the UK and Ireland governments, and reporting that collection had continued to be “robust”. The FTSE 250 company said that, as at 31 March, 79% of its first quarter rent had been received, up from 73% year-on-year, with the balance expected to be received over the next two weeks. It also said that at the end of March, its net debt stood at £1.09bn, and on a pro-forma basis its loan-to-value ratio was 44.8%.
Newspaper round-up
The government has been warned it could be forced to abandon targets for ending low pay in Britain by raising the legal minimum wage, as the economic costs of Covid-19 mount. The Low Pay Commission, the independent body which advises ministers on legal wage floors, said the government target to increase the national living wage to two-thirds of average earnings by 2024 could be in danger. – Guardian
JD Sports has become the latest store chain to stop paying rent to its landlords as the high street lockdown has a devastating impact on fashion retailers. JD confirmed that it had not paid the quarterly rent, which was due last week, for its 390 UK stores. The retailer is understood to be in discussions with its landlords about the next bill, due in June. – Guardian
About 11m people have downed tools across Britain as the coronavirus forces employers to shut down factories, offices and building sites to slow the spread of the pandemic, according to a major new survey. The forced stop to the economy means as many one in three workers are now at home and unable to do their jobs, the study by Bank of America has found. – Telegraph
The government is considering saying which critical construction works must continue to avoid a collapse of the building industry, even if further social or working restrictions are imposed. Alok Sharma, the business secretary, led talks on the proposals with senior ministers yesterday. The business department has recommended that a list of priority projects be published in the next two weeks, according to a strategy paper seen by The Times. – The Times
One of Britain’s largest accountancy firms has invited thousands of staff to agree to a 40 per cent pay cut or a voluntary sabbatical to reduce costs during the coronavirus crisis. Grant Thornton said that the move would help it to support staff and clients while navigating “clearly exceptional times”. It encouraged British workers yesterday to consider taking the pay cut, with a similar reduction in hours, until the end of May, or a sabbatical, under which they would be paid 30 percent of their standard pay, until June. – The Times
US close
US stocks closed lower on Tuesday, shrugging off some strong manufacturing data out of China to wrap up the worst first quarter on record for the Dow and S&P 500.
At the close, the Dow Jones Industrial Average was down 1.84% at 21,917.16, while the S&P 500 was 1.60% softer at 2,584.59 and the Nasdaq Composite saw out the session 0.95% weaker at 7,874.83.
The Dow closed 410.32 points lower on Tuesday after closing out the previous session in the green as Johnson & Johnson identified a lead candidate for coronavirus treatment and the White House extended measures to contain the spread of the outbreak.
Sentiment initially boosted on Tuesday from the announcement of a more realistic government approach to contain the pandemic after Donald Trump extended the timeline for social distancing guidelines until 30 April over the weekend - which many believe will help limit the economic fallout from the Covid-19 pandemic in the long run.
News that China's official manufacturing purchasing managers index for manufacturing rose to 52.0 in March, up from a record low of 35.7 seen in February, also helped paint market participants a picture of how long it may take the US economy to recover from the outbreak.
China's official non-manufacturing purchasing managers index also climbed in March - up to 52.3 from a record-low reading of 29.6 in February.