Shaftesbury warns on rent collection, LondonMetric pays fourth quarter divi
London open
The FTSE 100 is expected to open 10 points higher on Wednesday, having closed down 2.11% at 6,335.72 on Monday.
Stocks to watch
Shaftesbury warned that at least half its rent could go uncollected in the second half as the London West End property company reported a near-8% drop in the value of its portfolio. The value of Shaftesbury's wholly owned properties fell 7.9% to £3.5bn during the six months to the end of March. As a result the company swung to a loss of £287.6m from a £38.7m pretax profit a year earlier. Shaftesbury said it was in talks with about 800 tenants to agree arrangements on rents and charges during the Covid-19 crisis. The company said it expected to collect up to 50% of rents in the second half.
Property manager LondonMetric paid a fourth quarter dividend as it reported a slight fall in full year net asset value and maintained a '”can pay, should pay” rent payment policy with tenants during the coronavirus lockdown. The company declared a final quarter dividend of 2.3p a share, making 8.3p for the year, a rise of 1%, while net rental income rose to £116m from £93.8m. NAV fell to 171.7p from 174.9p.
Paragon Banking Group reported an underlying profit of £57.2m in its first half on Wednesday, down from £79.8m year-on-year, as it posted £27.7m in Covid-19 related charges, consisting of £3.7m in income and £24m of impairments. The FTSE 250 company declared no interim dividend, but said a distribution for the full year would be considered at year-end.
Newspaper round-up
Personal after-hours shopping trips, online beauty appointments and entertainment for those queuing outside will form part of Selfridges’ coronavirus-era shopping offer when the retailer reopens on 15 June. The luxury department store group, which operates four shops in the UK, including its London flagship on Oxford Street, will not be able to reopen services such as beauty makeovers, hairdressing or its cafes and cinema because of Covid-19 restrictions. It is hoping a mix of virtual experiences and live entertainments – such as DJs – will help shoppers feel no less pampered. – Guardian
Property sales in most of England have swiftly rebounded to the same levels they were just before the lockdown, although London lags behind the rest of the country and markets in Scotland and Wales remain closed, according to website Zoopla. Pent-up demand has also meant firmer prices, said Zoopla, with the average asking price of sales agreed in the last week 6% higher than the same week in June last year. Its figures are in sharp contrast with those from Nationwide, which last week said house prices across the UK were falling at the fastest rate since the financial crisis. – Guardian
One of Britain's most powerful investors has hit out at HSBC and Standard Chartered for backing an authoritarian crackdown in Hong Kong. In a major intervention, Aviva Investors said it was deeply concerned that the London-listed banks have thrown their weight behind China's Communist regime amid the push for a new law criminalising anti-government movements in the former British colony. – Telegraph
France is pumping €15bn (£13.4bn) into its aerospace industry to safeguard 100,000 aviation jobs at risk from the collapse in air travel caused by coronavirus, ramping up pressure on the Government to launch a similar bailout. Announcing the support package Bruno Le Maire, finance minister, said France was “declaring a state of emergency to save our aeronautics industry”. – Telegraph
Analysts at Peel Hunt have spent the past few weeks totting up the amount by which British listed companies have been rethinking their capital expenditure plans. They reckon that £23 billion has been slashed from capex budgets for this year. Charles Hall, head of research at the broker, says that the results are sobering and raise serious questions about the ability of the economy to bounce back any time soon. Capital spending accounts for almost a tenth of UK GDP. – The Times
US close
Wall Street closed in a mixed state on Tuesday, as the Dow Jones Industrials looked set to pump the breaks on its comeback rally amid heightened concerns around another spike in Covid-19 cases and trade tensions between the US and the EU.
The Dow Jones Industrial Average ended the session down 1.09% at 27,272.30 and the S&P 500 was off 0.78% at 3,207.18, while the Nasdaq Composite added 0.29% to 9,953.75.
At the open, the Dow had lost 295.92 points, all but reversing the previous session's sharp gains, which saw the S&P 500 return to positive territory for the year and the Nasdaq Composite register its first record close since 19 February.
Fears surrounding a second spike in Covid-19 cases as a result of the US economy's reopening weighed on sentiment a little at the bell, with stocks that have benefited from increased optimism weaker.
With Monday's rally coming in the face of the National Bureau of Economic Research's declaration that the US had officially entered into a recession back in February, scuttling a 128-month expansion, AvaTrade's Naeem Aslam said the Dow was now set up for a correction.
"This indicates that the stock rally has gone a little too far," he said.