UK markets open in 4 hours 23 minutes

What to watch: Cineworld suspends dividend, WHSmith raises £166m, stocks rise

Edmund Heaphy
Finance and news reporter
A Cineworld gift card. The company announced the suspension of its dividend. (PA)

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Cineworld suspends dividend, and pay for top bosses

Cineworld (CINE.L) on Tuesday said that it would suspend dividend payments in the final quarter of its financial year amid the “extremely challenging” coronavirus crisis.

The group, which is one of the world’s largest cinema firms, has been forced to close all 787 of its cinemas during the pandemic.

Cineworld also said that its executive directors will defer their salaries and bonuses. Members of its board will also defer fees.

“Every effort is being made to mitigate the effect of the closures, to assist our employees and to preserve cash,” Cineworld said in a statement.

“These efforts include discussions with our landlords, the film studios and major suppliers, as well as curtailing all currently unnecessary capital expenditure.”

Cineworld said it was also monitoring the impact of the crisis on its $2.1bn (£1.7bn) acquisition of Canada’s Cineplex chain,

The tie-up, announced in December, is set to make London-based Cineworld the largest cinema group in North America.

“This is a painful but necessary process as before the onslaught of the COVID-19 virus, we were excited and confident about the group’s future prospects.”

WHSmith raises £166m in coronavirus share placing

WHSmith (SMWH.L) said on Tuesday that it had raised almost £166m in a share placing designed to bolster its balance sheet during the coronavirus pandemic.

The company, which operates around 1,300 books, stationery, and entertainment stores, placed 15.8 million new shares at 1050p each.

The price of the issuance amounts to a 4% discount on Monday’s closing price, and the shares represent around 13.7% of the company’s total outstanding shares prior to the placing.

Shares in WHSmith have dropped sharply in recent weeks. It is among thousands of UK retailers that have been forced to close their stores amid a UK-wide shutdown of non-essential stores.

WHSmith said the share placing would help strengthen its financial position amid the coronavirus-related uncertainty.

The chain also said on Tuesday that it had secured new financing arrangements with lenders, including a £120m banking facility from BNP Paribas, HSBC, and Santander.

Pound rallies as Boris Johnson said not to be on ventilator

The pound rallied on Tuesday after the UK prime minister was said to be breathing without a ventilator, as he battles against the coronavirus in hospital.

Boris Johnson was moved to an intensive care unit of St Thomas’ Hospital in Westminster on Monday night. Leaders around the world sent their best wishes, with US president Donald Trump calling Johnson a “very special” leader who “doesn’t give up.”

Sterling was trading 0.6% higher against the dollar (GBPUSD=X) on Tuesday morning.

Foreign secretary Dominic Raab will now “deputise where necessary” while Johnson receives care, according to a Downing Street spokesperson.

Raab is due to chair a meeting of ministers in Johnson’s place on Tuesday in the middle of a health and economic crisis, with the media questioning the limits of his authority.

Stocks climb amid further signs of coronavirus plateau in Europe

European stocks climbed on Tuesday as investors assessed data that suggested the growth in coronavirus deaths was tailing off on the continent.

The number of virus-related fatalities in Spain fell for the fourth day in a row, while Italy saw its first drop in the number of cases being handled in intensive care units.

The pan-European STOXX 600 index (^STOXX) was up around 2.1%. London’s FTSE 100 (^FTSE) rose by 2.3%.

Germany’s DAX (^GDAXI) climbed by around 3.4% after the growth in cases in the country slowed even further. The CAC 40 (^FCHI) was 2.9% in the green in France, where the number of cases has also begun to level off.

What to expect in the US

Futures were pointing to a higher open for US stocks on Tuesday.

S&P 500 futures (ES=F) rose by around 2.8%, Dow Jones Industrial Average futures (YM=F) were up by 3%, while Nasdaq futures (NQ=F) were up by more than 2.5%.