Well that's all from us today, thanks for following along. We'll be back bright and early tomorrow morning.
Here's a quick summary of today...
Stock markets rose on both sides of the Atlantic today as hopeful economic data prompted bargain hunting.
Some of Asia's equities markets also made solid gains.
On Wall Street, the Dow extended opening gains to trade about 250 points higher in the late New York morning as big tech posted gains, with both Microsoft and Apple stock more than 3pc higher.
Key European indices were up by around 2pc or more at the close after manufacturing sector surveys in the region pointed to a return to growth.
Earlier, Japan's Nikkei 225 had received a boost from data showing the economy contracted less than first thought in January-March.
Shanghai also surged following a forecast-beating reading on factory activity from Caixin, days after an official report pointed to a much improved manufacturing sector.
What to look forward to tomorrow:
Interim results: BP, Calisen, Centamin, Direct Line, IWG, Rotork, Spectris
Heineken has said that it won't pay an interim dividend after swinging to net loss, as revenue and volumes fell due to the impact of the coronavirus pandemic.
The Dutch beer giant posted an 19.2pc decline in net revenue in the first half of 2020 to €11.16bn (£10bn) as measured under international financial reporting standards (IRFS).
Its preferred measure of organic growth showed a 15.5pc hit to net revenue.
Heineken said it won't make any structural layoffs this year due to the pandemic.
04:07 PM
Europe closes higher
European stock markets closed firmly higher today despite fears of a second wave of Covid-19 infections.
The FTSE 100 climbed 2.29pc to 6,032.85 while the FTSE 250 jumped 1.33pc 17,158.12
David Madden of CMC Markets said:
US politicians still haven’t come to a compromise in relation to the $1 trillion stimulus package. Republicans and Democrats are still squabbling over the finer details of the scheme, but traders are clearly hopeful that some sort of agreement will be achieved in the end.
US lawmakers from the political divide know all too well that a cash injection is required but for the time being they are not prepared to find a happy medium. The health crisis is still bubbling away in the background. South Africa and Mexico have seen a jump in the number of coronavirus cases.
There is talk that Germany will introduce new measures for fear of a second wave. The Australian state of Victoria has declared a state of emergency, and there are fears that other parts of the world will re-introduce tough restrictions too. US-China relations are under strain again as there is talk that President Trump will take a tough stance on some tech companies that are backed by the Chinese government.
Gold prices are lower today because of the rebound in the US dollar. The inverse relationship between the two markets has weighed on the yellow metal.
Earlier in the session, the gold hit a fresh record high but the strength of the dollar prompted some profit taking. The risk-on appetite of traders is also a factor in gold’s slide as some dealers are diverting funds into equities.
WTI and Brent crude are higher this afternoon on the back of the broader positive sentiment. In the past 24 hours, we have seen manufacturing reports from China, the eurozone, the UK, and the US, and they all showed growth on the month. The announcements point to a continued recovery in the world economy.
03:33 PM
British fintech firm Curve to raise £100m in fresh funds
The London-headquartered firm is looking to raise between £100m and £120m in a Series C round
Curve is preparing to raise more than £100m in an investment round that would arm the British fintech start-up with fresh funds to accelerate its push to become the “Amazon of banking”.
The London-headquartered company is looking to raise between £100m and £120m in a Series C round, according to Sifted. It would be one of the largest rounds in Britain’s fintech scene since the start of the pandemic, and would build on its £44m raised last year.
The company offers a card to customers that links their accounts with other banks in one place, allowing them to track payments for multiple cards at once. Curve users can also use a smartphone app to make contactless payments with a card of their choice.
After a rocky start, the Western markets blossomed as August’s trading got underway – even if there is plenty out there to undermine Monday’s aggressive gains.
Connor Campbell of SpreadEx says:
As Microsoft takes the heat out of Trump’s anti-TikTok statement by pursuing the US arm of the teen-sensation video-sharing app – one could argue the President was scoring easy political points by taking a ‘hard’ stance on China when talks between Microsoft and ByteDance were already underway – the Dow Jones shot-up 190 points after the bell.
This lifted the Dow back above 26600, a level it has struggled to hold above in the last week or so. The index’s gains might have been more in line with those seen in Europe if the dollar didn’t take back 0.6% against the pound, 0.5% against the yen and 0.2% against the euro.
Despite the ongoing threat of a ‘second wave’ of coronavirus cases in mainland Europe, and the UK government’s various lockdown U-turns in the past few days, the region’s indices were positively giddy this Monday.
The DAX climbed 2.9%, with the CAC up 2.35%. The FTSE, meanwhile, overcame its HSBC and covid-19-related issues to rise 2.3%, lugging itself above 6000 once again.
03:18 PM
Handover
European markets look set for a pretty healthy close, the FTSE now up more than 2pc. It’s time for me to hand over to my colleague LaToya Harding, who will steer the blog into the evening. Thanks for following along today!
02:53 PM
Russians hackers suspected of stealing document from Liam Fox – Reuters
US–UK trade documents that leaked ahead of last year’s General Election were stolen from former trade minister Liam Fox’s email account, Reuters reports, citing two sources.
The sources, who spoke on condition of anonymity because a law enforcement investigation is underway, said the hackers accessed the account multiple times between July 12 and Oct. 21 last year.
They declined to name which Russian group or organisation they believed was responsible, but said the attack bore the hallmarks of a state-backed operation.
The Kremlin did not immediately respond to a request for comment on Monday.
Among the stolen information were six tranches of documents detailing British trade negotiations with the United States, which Reuters first reported last year were leaked and disseminated online by a Russian disinformation campaign.
Exclusive with @GuyReuters - Classified U.S.-UK trade documents leaked by Russian actors ahead of the 2019 UK election were hacked and stolen from the email account of former UK trade minister @LiamFoxhttps://t.co/aeKU9bLVfX
Barry Manilow sells treasure trove of hits to Hipgnosis: Barry Manilow, the singer of hits including Copacabana, Mandy and Could It Be Magic who has sold more than 85 million records, has become the latest artist to sell his catalogue to Hipgnosis Songs Fund.
7-Eleven owner pays $21bn for Speedway stores: The Japanese owner of 7-Eleven is making a $21bn (£15.9bn) bet on US convenience stores with a deal to buy almost 4,000 petrol stations to cement its position in North America.
02:25 PM
US manufacturing sector growth picks up
Activity in US factories accelerated at the fastest pace since March 2019 in July as orders picked up.
The Institute for Supply Management’s PMI gauge rose to 54.2, easily clearing the growth threshold of 50. Meanwhile, a separate PMI by IHS Markit rose to 50.9, indicating a minor expansion in activity.
The reading suggests the business environment is beginning to steady out after the deep drops triggered by Covid-19.
Here are some highlights from Markit report, the less established f the two:
Overall growth was marginal but stemmed from the first upturns in output and new orders for five months
The contraction in employment softened despite further evidence of spare capacity as new sales rose
Input prices rose solidly amid increased demand for inputs, whilst firms partially passed on higher costs to clients through an uptick in charges
Output rose only modestly in July, albeit the first expansion in production since February
Despite historically subdued demand conditions, companies were more upbeat regarding the outlook for output over the coming year
02:10 PM
Purplebrick sees record rise in listings
Purplebricks - Handout
Estate agency Purplebricks has reported a record 7,000 listings during July as movers rushed to take advantage of the stamp duty cut.
My colleague Rachel Millard reports:
The AIM-listed business said it was encouraged by signs of the housing market rebounding since lockdown, but cautioned the outlook remains uncertain. Chancellor Rishi Sunak has cut stamp duty on purchases below £500,000 until next March in an effort to help the housing market recover.
For the year ending April 30 2020, sales fell 2pc to £111.1m. It squeezed more out of customers, earning £1,394, per instruction, including its £999 flat fee for homes outside of London, compared to £1,243 last year.
It is planning on tinkering with its pricing structures in autumn, including testing splitting payment between listing and completion.
01:39 PM
US stocks gain at the open
Wall Street has started the week in the green with tech stocks leading the rally.
US market data
12:46 PM
Non-Standard Finance scraps cash-raising plan
Doorstep lender Non-Standard Finance has halted plans to raise cash from investors after the City regulator found problems in its guarantor loans division.
My colleague Michael O’Dwyer reports:
NSF could face a hefty compensation bill if it is found to have treated customers unfairly.
The findings are a blow to the troubled lender, whose boss was forced in June to deny that his company was on the brink of collapse when it revealed that the pandemic had triggered material uncertainty about whether it could continue as a going concern.
It was forced to halt lending during the pandemic and the economic crisis is likely to increase customer defaults.
NSF may have to agree a financial restructuring with its own lenders in order to survive, analysts at Goodbody said.
NSF said on Monday that Alchemy, an investor in distressed companies and NSF’s largest shareholder, was still supportive of providing fresh capital to the lender.
12:30 PM
Full report: Factories lead recovery
My colleague Tim Wallace has a full report on this morning’s manufacturing PMI readings. He writes:
Domestic demand drove the improvement, with orders returning to growth for the first time since February.
Consumer goods and intermediate goods were the biggest contributors, while demand for investment goods also improved.
Senior plunges after announcing cuts and scrapping dividend
Senior will make further job cuts as the FTSE 250 engineer – which counts Airbus and Boeing as major customers – continues to be hammered by coronavirus.
My colleague Alan Tovey reports:
Posting interim results on Monday, Senior said that it planned to axe 620 jobs in the second half of the year, almost one in 10 of the workforce.
The redundancies come on top of the 1,329 employees it shed in the year to the end of June, close to 20pc of its global staff.
Senior, which makes parts for airframes and engines, was already suffering from reduced demand because of the grounding of Boeing’s 737 Max airliner before Covid-19 hit.
In the six months to the end of June, it suffered a 30pc fall in revenue to £409m. This drove the company to a £136.5m pre-tax loss, largely caused by a £110m goodwill impairment and £20m in restructuring costs.
Senior also abandoned paying a dividend, causing its share price to take a sharp hit today.
11:51 AM
UK PMI reaction: Pent-up demand may wane
The UK manufacturing sector’s rapid recovery in July may not mean that problems are over for Britain’s factories, says Pantheon Macroeconomics’ Samuel Tombs, who writes: “we remain concerned that the current strength of output partly reflects the release of pent-up demand after the lockdown, which ultimately will fade away by the autumn”.
He added:
[The] slight decline in the PMI between the flash and final readings, referring to July 13-22 and July 13-28, respectively, suggests that demand weakened a little as the month progressed.
Meanwhile, the 43.3 level of the employment index in July – the sixth consecutive sub-50 reading –suggests that manufacturers are continuing to plan for demand to eventually stabilise at a level well below pre-Covid levels. All told, then, the manufacturing sector appears to be reviving faster than most others from the Covid-19 slump, though it remains likely that its recovery still will fall short of being V-shaped.
Mr Tombs noted that the output index was its highest margin above the orders index since January 2016, indicating manufacturers have been clearing backlogs of work:
Pantheon Macroeconomics - Pantheon Macroeconomics
11:38 AM
Market moves
After a shaky start, European indices have pushed a little higher today, clawing back some of last week’s losses.
11:11 AM
DW Sports collapses with 1,700 jobs at risk
DW Sports - Nick Potts/PA Wire
Fitness chain DW Sports has called in administrators after being starved of income during the coronavirus lockdown, putting 1,700 jobs under threat.
My colleague Rachel Millard reports:
The company has 73 gyms and 75 retail sites across the UK. Some 25 stores have already closed, with the rest moving to closing down sales before putting down the shutters permanently.
Administrators will try to find buyers for some or all of the sites.
Sister company Fitness First, which has 43 gyms, is unaffected.
Chief executive Martin Long said being forced to close both its shops and gyms for months left it with a high fixed-cost base and zero income.
Read her developing report here: 1,700 jobs at risk as DW Sports collapses
Virgin Galactic signs memorandum of understanding with Rolls-Royce over new engine
Virgin Galactic has reached a non-binding memorandum of understanding with Rolls-Royce, under which the FTSE 100 engineer will develop engine propulsion technology for high speed commercial aircraft.
The announcement offers a moment of relief for Rolls-Royce, which is the FTSE 100’s biggest faller today (see 10:19am update).
The group’s North American chairman and chief executive Tom Bell said:
Rolls-Royce brings a unique history in high speed propulsion, going back to the Concorde, and offers world-class technical capabilities to develop and field the advanced propulsion systems needed to power commercially available high-Mach travel.
10:57 AM
Hiscox expects bigger hit from virus
Bronek Masojada - Paul Grover
Insurer Hiscox said it expects to take a bigger hit than previously forecast due to Covid-19 as it fell to a $139m (£107m) loss in the first half of 2020.
My colleague Michael O’Dwyer reports:
The FTSE 250 firm pencilled in $232m of net payouts, including the $150m of likely claims it previously flagged for sectors such as event cancellation and travel.
The additional provision includes expected payouts under business interruption policies in Europe and travel bonds that refund holidaymakers whose trips have been cancelled if their travel agents have gone bust.
Bronek Masojada, Hiscox’s chief executive, said it had been a tumultuous few months for the company which has found itself at the centre of the storm over insurers’ resistance to pay out on interruption cover for small businesses that have suffered losses during the pandemic.
Mr Masojada said the problem required an industry-wide solution and that his firm had been in the spotlight because “some very effective campaigners” have specifically targeted it.
Lawyers at City firm Mishcon de Reya have threatened the firm with a class action-style legal claim on behalf of small businesses.
Asked if the saga had hurt Hiscox’s reputation, Mr Masojada said: “At the end of the day reputation as one one claim at a time, and that's where the operational resilience comes through. We've done a good job in other areas.”
10:31 AM
Meal subsidy scheme gets underway
With August upon us, the Government’s ‘Eat Out to Help Out’ launches today. Under the scheme, meals at participating restaurants can be bought at half their usual price from Monday to Wednesday this month (up to a limit of £10 off per person).
To get people into the mood for discount dinners, the Treasury has published a video with lots of happy and healthy looking people enjoying food in well-lit environments:
The hope is that the subsidies will be enough to draw Brits back to restaurants, offering some relief to the beleaguered hospitality and leisure sector. Here’s how meals out have picked up in recent weeks, according to data from booking app OpenTable:
10:08 AM
Money round-up
Here are some of the day’s top stories from the Telegraph Money team:
Medium-sized firms ‘can only survive for nine months’: Nine in 10 British companies with revenue between £50m and £350m will only remain in business for the next nine months if trading does not improve - but there are signs of life for the beleaguered firms.
Metro Bank has agreed to buy peer-to-peer lender RateSetter in a deal worth up to £12m as it aims to grow its consumer lending offering.
Under the terms of the deal, Metro will initially pay £2.5m for the group, with up to £0.5m payable a year after the deal completes, and up to £9m more on the third anniversary of the deal.
The deal does not include RateSetter’s Australia operations.
Wow - that is insane. How much did investors plough into that business?? https://t.co/XUzQOQ41lD
Metro said “RateSetter's originating and underwriting capability will enable the bank to rapidly accelerate this ambition via an existing, scalable platform”.
The acquisition marks the end of one of the country’s largest and oldest peer-to-peer lenders as a standalone business. It was completed at an even lower price than some analysts had predicted, highlighting the disruptive impact the coronavirus has had on the sector.
Daniel Frumkin, Metro’s boss, said:
The ability to enhance our offer of unsecured lending to our customers is an important strategic ambition as we continue to evolve the Bank and increase our returns.
09:40 AM
UK city mobility remains low
Movement in Britain’s cities remains low despite a steady rise, according to data released by navigation app Citymapper. The group found only 43pc of London-based users were on the move at the week, compared to pre-virus levels.
On a smoothed, seven-day average, the recoveries in Birmingham, London and Manchester show them catching up with the trend across global cities.
An important caveat with this data: it represents only people using the app, which is likely to bias it towards movement on foot or via public transport.
09:19 AM
Rolls-Royce shares hit lowest level since 2004
The FTSE 100’s flat today, but that hasn’t stopped a couple of chunky downwards moves. HSBC, down 5.5pc, is producing the biggest drag on the index, but Rolls-Royce has also crossed a remarkable threshold, with its share price falling 7pc to the lowest level since 2004.
The engineering group has suffered hugely since the pandemic hit, with a fall in aviation demand dragging it down despite the relative security of its military contracts. Speculation that it will tap investors for cash has added to pressure on its price.
08:53 AM
Pound rises
The pound has continued its rise against a weakening dollar today, with the US currency under pressure from a moderate shift towards risky assets, and some concerns about how the country is handling (or, indeed, failing to handle) its own Covid-19 health crisis.
08:50 AM
PMIs, compared
You can quickly browse through this morning’s PMI readings using the drop-down selector below:
08:41 AM
Reaction: ‘Slow train to recovery’
Responding to those figures, Duncan Brock from the Chartered Institute of Procurement & Supply (which helped IHS Markit gather responses) said:
The makers were on the march again in July as production started to flow more easily and businesses saw new orders rise at the fastest pace since the end of 2018.
Driven largely by demand from the domestic market, clients looked towards building more localised supplier bases as opportunities for trade were unblocked with the end of the UK’s lockdown. However, overseas customers failed to deliver any positive news. Export orders fell for the ninth month in a row, exposing the ongoing fragility of the broken global marketplace due to the pandemic.
The employment situation also remained bleak, as job shedding continued and businesses re-modelled their strategies to the shrinking opportunities. With a ravaged economic landscape it will be a slow train to recovery, managing the ebbs of flow of potential disruptions to come.
08:35 AM
UK manufacturing PMI at highest since 2018
Rishi Sunak - Phil Noble/PA Wire
Just in: the final UK manufacturing PMI for July came in at 53.3 – slightly weaker than the 53.6 indicated by the flash reading.
The reading is the highest since the end of 2018, with business sentiment at a more than two-year high.
IHS Markit, which gathered the data, said:
Manufacturers linked the expansion to a further loosening of the lockdown conditions in place due to the coronavirus disease 2019 (Covid-19). This allowed manufacturers to restart, or raise, production in response to clients reopening.
It should be noted that, while a positive start to the recovery, it will take several months of growth to fully recoup the output lost since the start of the pandemic.
It found:
Manufacturing production was raised for the second successive month and to the greatest extent since November 2017
Growth was especially marked in the consumer and intermediate goods industries
New orders expanded for the first time since February, mainly reflecting a strengthening of domestic demand.
In contrast, new export business fell for the ninth straight month
Manufacturing employment fell for the sixth month running in July, albeit to the least marked extent since March
IHS Markit’s Rob Dobson said:
Despite the solid start to the recovery, the road left to travel remains long and precarious. An extended period of growth is still needed to fully recoup the ground lost in recent months. This is also the case for the labour market, where job losses are continuing despite businesses reopening.
There is a significant risk of further redundancies and of furloughed workers not returning unless demand and confidence stage more substantial and long-lasting rebounds in the months ahead.
08:26 AM
Coming up: UK final manufacturing PMI
In a few minutes, we’ll get the final PMI reading for the UK’s manufacturing sector. A ‘flash’ reading of 53.6 marked a recent high, but after better-than-flash final readings for Germany and France, there’s the potential for a stronger result.
08:16 AM
Eurozone manufacturing returns to growth
As might be expected given this morning’s other readings, manufacturing activity across the eurozone returned to growth in July.
A reading of 51.8 beat the growth threshold of 50, marking the first increase in monthly activity since January 2019.
IHS Markit, which gathered the data, said:
The euro area’s manufacturing economy recorded its first growth in a year-and-a-half during July as output and demand continued to recover in line with the further easing of restrictions on activity related to the global coronavirus disease.
IHS Markit - IHS Markit
It found:
Driving the overall upturn in the euro area manufacturing economy during July were returns to growth in both production and new orders
Latest data pointed to improved demand from both domestic and international markets
Despite returns to growth of both output and new orders, latest data implied that firms continued to operate below capacity
Backlogs of work declined during July for a twenty-third successive month, albeit only slightly, whilst firms again made cuts to their workforce numbers
Looking ahead to the coming 12 months, business confidence continued to recover in July, rising since June to its highest level since January
IHS Markit’s Chris Williamson said:
Increased unemployment, job insecurity, second waves of virus infections and ongoing social distancing measures will inevitably restrain the recovery
The next few months numbers will therefore be all important in assessing whether the recent uplift in demand can be sustained, helping firms recover lost production and alleviating some of the need for further cost cutting going forward.
08:04 AM
Germany and France both beat ‘flash’ manufacturing estimates
Germany - Lukas Schulze/Getty Images
Final manufacturing PMI readings for France and Germany are in: both countries have beaten their ‘flash’ readings, with Germany returning to growth for the first time since the pandemic began to disrupt global demand.
Germany’s final reading was 51, beating the growth threshold of 50, while France’s reading of 52.4 showed continued growth.
On Germany, IHS Markit found:
Underpinning the return to growth in July was a steep rise in new orders
Production increased during July, marking the first rise signalled by the survey since January 2019
However, with output often still below pre-crisis levels, manufacturers continued to make deep cuts to employment
Several firms reported using stocks of finished goods to fulfil sales
The manufacturing supply chain remained a buyers' market in July, with lower raw material prices and discounts from suppliers leading to a further marked decrease in average purchasing costs.
On France, IHS Markit said:
The rate of growth accelerated from June to reach the fastest for nearly twoand-a-half years
Subdued demand conditions were reflected by a broad stagnation in new business received by French goods producers
Weighing on overall demand was a further decrease in new export orders
Amid the absence of new order growth, French manufacturers continued to cut their staff numbers at the start of the third quarter
On the cost front, input prices continued to fall, however the rate of reduction eased to the slowest in the current fivemonth sequence of decline
07:54 AM
Italian manufacturing PMI at 51.9
Echoing Spain’s reading earlier, Italy’s manufacturing sector also returned to growth during July, according to its latest purchasing managers’ index reading.
A score of 51.9 was the first reading to beat the growth threshold of 50 in two years, and ended a sharp decline prompted by Covid-19 – which hit northern Italy’s industrial heartlands hard when the pandemic first arrived in Europe.
IHS Markit, which gathered the data, said:
Easing lockdown measures and subsequent improvements in demand conditions were linked by panellists to the rises in both production and new business.
Here are some key points:
Employment declined for the fourteenth successive month
Central to the overall expansion were increases in both factory production and incoming new business
Order book volumes rose for the first time in two years
There was evidence that factories were not operating at full capacity and choosing to limit working hours
Cost burdens rose for the first time since January amid reports of greater raw material costs
IHS Markit’s Lewis Cooper said:
Overall, July data appear to suggest the sector is on it's way to recovery, with output expectations also remaining positive. But, after such an extreme blow, there is masses of ground to make up.
It is essential that demand conditions continue to improve, and any reintroduction of lockdown measures due to a ‘second wave’ of the pandemic has the potential to derail the recovery
07:35 AM
Spanish manufacturing sector returns to growth
Spain’s manufacturing returned to growth in July, according to the latest purchasing managers’ index data.
A reading of 53.5 marked the first time the country has cleared the growth threshold of 50 since the pandemic first hit earlier this year.
IHS Markit, which gathered the data, said:
Spain’s manufacturing sector returned to growth during July as businesses continued to reopen following lockdown and firms benefited from an associated upswing in demand. Orders, purchasing and production were all reported to be up, with demand higher in both domestic and international markets.
Here are some key points:
Less positive was further job losses as firms continue to operate well below capacity
There were concurrent returns to growth in both output and new orders
Firms continued to face delays with delivery
Despite the upswings in production and order books, firms continued to operate well below capacity
Despite confidence about the future remaining inside positive territory for the second successive month, sentiment is still well below trend
IHS Markit’s Paul Smith added:
Manufacturers are generally cautious in their view of how the rest of the year and the first half of 2021 will work out, with many expecting a steady recovery – but with notable downside risks given the clear potential for a resurgence in Covid-19 and the associated negative impact on overall economic activity.
07:28 AM
John Laing chief financial officer steps down
Infrastructure investment group John Laing says its chief financial officer Luciana Germinario has stepped down with immediate effect.
In a statement, it said:
The company values Luciana’s contribution to the business, but Luciana has concluded, in agreement with the Board, that now is the right time for her to stand down.
It did not give any further details as to why she is leaving.
John Laing’s board has begun a search for Ms Germinario’s successor, with group financial controller Stuart Colvin set to fill the role in the interim.
It added “current trading and outlook remain in line with previous guidance”.
07:14 AM
Market moves
The FTSE 100 has opened flat in the first session of August, with continental indices edging slightly higher to shake off some of last week’s losses.
Bloomberg TV - Bloomberg TV
07:04 AM
Hammerson considering asset sales and equity raise
Struggling retail landlord Hammerson has said it is considering an equity raise, and is mulling the sale of its 50pc stake in VIA Outlets.
The group – which own’s Birmingham’s Bullring shopping centre – also said it has secured approval for the issuance of £300m in commercial paper under the Bank of England’s Covid Corporate Finance Facility scheme.
It confirmed it is in “advanced talks” over selling its stake in VIA – which owns shopping centres in several European cities – to joint venture partner APG.
Liberum’s Tom Musson said the equity raise could be for around £500m to £600m, adding:
Successful execution would remove a near-term covenant headache, but not solve the longer term problem, in our view. We think raising c.£1.3bn is more like the quantum needed to restore the balance sheet to a more comfortable level.
He also said investors may be hesitant to buy in given the state of the market.
06:51 AM
HSBC profits slump on bad loan provisions
HSBC - Anthony Kwan/Getty Images
HSBC’s profit fell by 65pc as it reported lower revenues and higher credit losses as a result of Covid-19.
The lender’s profit before tax fell to $4.3bn over the first half of the year, from $12.4bn during the same period last year. Revenues fell from $29bn to $26bn.
It has set aside $8bn to $13bn this year as a provision for bad loans arising as a result of the pandemic.
HSBC said the path ahead remains treacherous, warning there are a “wide range of potential economic outcomes” for the second half of 2020 and beginning of 2021 – including the development of the virus, the possibility of a vaccine, and geopolitical risks in Hong Kong and the UK.
Noel Quinn, its chief executive, said the group will press ahead with planned restructuring and job cuts, saying:
Our first half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility. Despite this, our Asia franchise showed resilience, and our Global Markets business delivered strong growth compared with last year's first half.
Having paused parts of our transformation programme in response to the Covid-19 outbreak, we now intend to accelerate implementation of the plans we announced in February.
Jefferies’ Joseph Dickerson said the larger size of potential bad loan provision has “disappointed”, calling the wide range of costs unhelpful.
06:29 AM
Agenda: FTSE set to open lower
Good morning. The FTSE 100 is set to open in the red as virus cases continue to rise in the UK, triggering fears of further local lockdowns – including in London.
It follows reports over the weekend that Boris Johnson has discussed plans to reimpose a shutdown on the capital if cases start to surge.
3) 'Wrecking ball' reversal puts 6,000 casino jobs at risk. Bosses accused the prime minister of “swinging a wrecking ball right through the middle of our industry” as plans to re-open casinos on August 1 were put on ice on Friday.
5) Vast majority of mid-sized firms in danger unless trade picks up. A survey of 500 medium-sized businesses conducted for advice firm BDO found that firms had been forced to take out an additional £21m in debt on average to fund themselves through the Covid crisis, with one in 10 unlikely to be able to fully pay it back.
What happened overnight
Shares advanced in Japan and China, where mainland-listed technology stocks surged on expectations of support from Beijing in response to U.S. moves on Chinese-owned software companies.
Equities declined in Hong Kong. Australia was flat as Victoria state further tightened virus curbs. S&P 500 futures were little changed and European ones ticked higher. Oil dipped. Gold continues to trade near record highs.
Infections are picking up again in some U.S. states, and American lawmakers are continuing talks over a virus-relief package.
A senior Federal Reserve official on Sunday urged Congress to act to support those laid off due to the pandemic and suggested a fresh lockdown. The Philippines imposed a stricter lockdown for Manila and nearby areas. Stocks in Manila had the biggest drop in Asia, down more than 3%.
Coming up today
Interim results
Hiscox, HSBC, Senior, Synthomer
Full-year
Purplebricks
Economics
Manufacturing PMI final (UK, China, eurozone, US, Japan, Germany, France, Italy, Spain); Q2 GDP (Japan)
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Footage taken by a Brazilian tourist shows several pedestrians stepping to soothe the black horse which caused damage after running through the London streets on Wednesday.
Maxine Longmuir, 69, was thrilled when she won a £2,500 holiday to Portugal on the ITV quiz show, but claims she was left devastated when she was told she was unable to rebook it
Death in Paradise fans are continuing to speculate about DI Neville Parker's replacement following actor Ralf Little's exit, with another name being thrown into the mix
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