Yahoo Finance What to watch: Jet2 taps shareholders, European markets slip back, UK economy shrank 10% in 2020
Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.
Jet2 taps shareholders
Jet2 (JET2.L) has tapped shareholders for £422m ($581m) as it seeks to bolster its finances as the coronavirus pandemic continues to cause crisis in the travel and aviation sector.
The company said the fundraising was "significantly oversubscribed" and it will provide "sufficient liquidity" going forward.
The fundraise shares being issued represent 20% of the existing issued ordinary share capital of Jet2 immediately prior to the fundraise.
Canaccord Genuity and Jefferies acted as joint global coordinators, joint bookrunners and joint brokers in connection with the placing. Cenkos Securities acted as nominated adviser to the company.
Philip Meeson, Jet2's executive chairman, said: "The directors believe the fundraise will enable management to continue to adopt a decisive, but prudent, responsible financial management approach; take longer-term strategic decisions to support sustainable long term profit growth; and improve the ability for Jet2 to exit the pandemic in a stable commercial position so that it is well positioned to capitalise on the upturn opportunity when it arrives."
However, shares were down as much as 8% in early trade, along with much of the travel sector.
European markets slip back
Europe opened marginally lower on Friday, with the FTSE 100 (^FTSE) down just 0.05% after the bell. The DAX (^GDAXI) followed suit with a 0.53% decline, while the CAC (^FCHI) is up 0.24%.
Among the bigger fallers in London was British Airways owner IAG (IAG.L), with the airline sector having a disappointing week "as it becomes increasingly apparent the summer holiday season this year is likely to see the UK population confined to the home market, with restricted access to holidays abroad," Michael Hewson of CMC Markets said.
EasyJet (EZJ.L) shares are also lower, giving up most of the gains it attained last week.
WATCH: Pandemic sees UK economy shrink by 10%
READ MORE: Airline stocks take another hit as UK travel corridors close
Carnival Cruise Lines (CCL.L) is also under pressure, after being downgraded to sell by Berenberg, with the bank saying it is “negatively disposed” towards leisure stocks in the aftermath of the pandemic. While an economic re-opening would provide a tailwind for the sector this still seems some way off.
Premier Inn owner Whitbread (WTB.L) on the other hand, while also set to finish the week lower, and down today does look like it will hang on to most of the gains we saw last week in a sign it may well benefit from a staycation season.
UK economy shrank 10% in 2020
The UK economy shrank by 9.9% in 2020 as the COVID-19 pandemic ravaged the economy.
New data published by the Office for National Statistics (ONS) on Friday showed GDP declined by 9.9% last year, which was the largest contraction on record.
The slump came after a historic recession at the start of the year, caused by the onset of the COVID-19 pandemic in February and March. The economy began to rebound in the third quarter but remains 7.8% smaller than it was at the end of 2019, the ONS said.
The annual slump wiped out seven years-worth of growth, taking the UK economy back to the size it was in 2013.
READ MORE: UK announces £20m SME Brexit support fund
"Today’s figures show that the economy has experienced a serious shock as a result of the pandemic, which has been felt by countries around the world," chancellor Rishi Sunak said.
"While there are some positive signs of the economy’s resilience over the winter, we know that the current lockdown continues to have a significant impact on many people and businesses."
The UK barely escaped shrinking at the end of 2020. The Office for National Statistics said UK GDP grew by 1% in the fourth quarter of 2020. The performance was in-line with City forecasts.
WATCH: What UK government COVID-19 support is available?
