Rolls-Royce to raise at least £3bn, Smith & Nephew sees markets recovering
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The FTSE 100 is expected to open 30 points higher on Thursday, having closed down 0.52% at 5,866.10 on Wednesday.
Stocks to watch
Aircraft engine maker Rolls-Royce has unveiled plans to raise at least £3bn to shore up its balance sheet in the face of the coronavirus pandemic. The company on Thursday announced a 10-for-three £2bn rights issue and £1bn bond offering. It has also agreed a new £1bn two-year term loan facility conditional upon the rights issue completing. Roll-Royce has been hammered particularly hard by the collapse in air travel as it is paid by the number of miles flown by aircraft using its engines.
Medical technology company Smith & Nephew announced on Thursday that it is expecting a third quarter underlying revenue decline of about 4%. The FTSE 100 company said all three of its franchises showed “significant” recovery, following an overall underlying revenue decline of 29.3% for the second quarter. It said the improvement was strongest in its orthopaedics franchise, as global levels of elective surgery continued to recover.
Newspaper round-up
Coronavirus could be contained in pockets of the country because Britain is not yet seeing the same national outbreak it did in spring, the chief medical officer for England has said. Chris Whitty said that the second wave was looking more localised than the first and illness and deaths could end up “very highly concentrated” in some areas. - The Times
Rolls-Royce was under intense pressure to nail down its equity capital-raising last night amid growing shareholder concern that the board has failed to move quickly enough and has opened itself up to short-sellers. Shares in the aero-engine maker have been falling for days and dropped by another 7 per cent to a 17-year low of 130p yesterday. - The Times
Britain’s rapid recovery from its Covid-19 slump is being put at risk by undue pessimism and a “Chicken Licken” fear that the sky is about to fall in, the chief economist of the Bank of England has said. Andy Haldane, one of the nine members of Threadneedle Street’s monetary policy committee, used the example of the children’s story character to warn of a self-fulfilling prophecy in which excessive gloom led to weaker growth. - Guardian
More than a third of UK employers plan to make staff redundant over the next three months, according to research warning of a cascade of job losses caused by the coronavirus pandemic. With a month to go until the end of the government furlough scheme on 31 October, 37% of more than 2,000 managers polled by YouGov said they were likely to make staff redundant by the end of the year. - Guardian
Tens of thousands of patients could die because the NHS suspended such a large proportion of normal care to focus on tackling Covid-19, MPs have warned. Illnesses that went undetected or untreated included cancer and heart disease, the Commons health and social care committee says in a hard-hitting report. - Guardian
TSB is to cut one seventh of its workforce and close a third of its branches in a drastic move to adjust to changing customer behaviour and the headwinds created by the pandemic. The bank said it was shedding 969 jobs and shutting 164 branches, with Debbie Crosbie, chief executive, announcing it was necessary to accelerate a three-year cost cutting plan first announced in November. - The Times
US close
Stocks on Wall Street finished in the green on the last trading day of the third quarter on Wednesday, on optimism that there would be bipartisan support for another fiscal stimulus bill before the 3 November elections.
The Dow Jones Industrial Average ended the session up 1.2% at 27,781.70, the S&P 500 added 0.83% to 3,363.00, and the Nasdaq Composite was 0.74% firmer at 11,167.51.
In remarks to broadcaster CNBC, Steve Mnuchin said he expected to be able to reach an agreement with Democrats.
Together with a raft of better-than-expected readings on the economy, his remarks light a fire under share prices.
Investors appeared to throw off their hesitancy following an inconclusive or "unedifying" - in the words of Markets.com's Neil Wilson - televised debate between White House hopefuls Donald Trump and Joe Biden overnight.
"We await to see whether the spectacle has had any impact on the up to one in ten voters yet to make up their minds,” Wilson said.