|Day's range||6,137.09 - 6,262.71|
|52-week range||4,898.80 - 7,727.50|
On Friday property group Land Securities, having reopened its retail properties, revealed plans to reinstate dividend payments in November. It is one of about half the FTSE 100 businesses that have either cancelled, reduced or suspended payouts this year. It is little surprise that dividend payers more exposed to economic gyrations have cut harder.
US stocks rose on the first day of the third quarter as bullish investors took heart from cheering economic data and news of a potential coronavirus vaccine. The S&P 500 index rose 0.5 per cent in New York on Wednesday, after the ADP employment report showed US private payrolls rose by 2.37m in June following a sharp upward revision to the previous month’s data. FedEx, seen as an economic bellwether, led gainers, up 11.7 per cent after benefiting from a boom in online shopping and home deliveries.
British boardrooms will be asked to recruit at least one person from an ethnic minority background in the next three years by an influential corporate lobby group that wants to harness the momentum of anti-racist protests to push for greater executive diversity. The 30% Club, which was formed a decade ago to push for more women in board positions across the FTSE, will on Wednesday announce a series of targets for the UK for the next three years centred on bringing greater ethnic diversity to top management positions.
The first half of an already tumultuous year — and one that has packed in some of the greatest hits from previous episodes of financial turbulence — is closing. For investors there is really no half-time break, let alone a Super Bowl style show such as this epic performance by Prince from a rain-swept Miami in 2007. Instead, investors are left assessing or fretting about the extent of the coming recovery in economic activity and corporate profits.
In the Welsh and Scottish mountains, a small number of hydro power stations, some of them more than half a century old, have become a first line of defence in the battle to keep electricity flowing around Britain during the coronavirus crisis. Britain’s four “pumped storage” hydro power stations, often referred to as “green batteries”, have played a critical role in helping utility company National Grid address exceptional conditions in the energy system since lockdown. The closure of businesses pushed demand for electricity down by 20 per cent on average in April and May while unusual weather meant the grid was simultaneously flooded with record solar generation and strong output from wind farms.
The chief executives of FTSE 100 companies that have tapped government support schemes through the coronavirus crisis received higher than average multiples of staff pay, according to new research. A report by the High Pay Centre showed that the 11 FTSE 100 companies found to have used the schemes paid their chief executives an average of 80 times more than their median employee and 109 times more than their lowest-paid staff. Building materials group, CRH, was identified by the High Pay Centre as the FTSE 100 company that used a government support scheme with the highest pay differential — its chief executive was paid 207 times as much as the median employee salary.
Bookmakers heaved a sigh of relief last week as betting shops reopened in the UK and sports fixtures started to return across Europe after the pandemic-enforced break — even if they were behind closed doors with simulated cheers. Sports betting is crucial for gambling companies. According to the European Gaming and Betting Association, two-fifths of its members annual gross gaming revenue, about €2.4bn each year, is made from sports wagers.
US stocks dropped on Friday after Texas and Florida rolled back reopening measures, raising fresh fears that the coronavirus would derail an economic recovery. Banks were among Wall Street’s sharpest fallers after the US Federal Reserve told them to limit shareholder payouts. In New York the S&P 500 ended down 2.4 per cent for its lowest close since June 11.
(Bloomberg) -- U.K. equities have underperformed every year since the 2016 referendum, and have been a consensus underweight among money managers. Just as the long-shunned market was starting to recover from years of political instability and uncertainty over ties with the European Union, the coronavirus pandemic has left the country facing its worst recession in 300 years.As the lockdown gradually eases, with English pubs, restaurants and cinemas set to reopen in July, clarity on negotiations with the EU before the end of the transition agreement in December may revive investor interest in a market that’s trading near historically cheap levels.The FTSE 100 Index has lagged behind major indexes over the past four years, and in local currency terms is trading near levels it was at just before the vote four years ago. In dollar terms, its underperformance is even more striking, with a nearly 20% drop.A tentative market recovery following Boris Johnson’s decisive electoral victory has been hampered by the lockdowns in the country that’s among the worst hit by Covid-19. A collapse in oil prices has also dragged on the megacap FTSE 100, given the almost 12% weight of energy stocks in the index.Years of underperformance have pushed U.K. stocks’ discount to global equities to an extreme, one of the reasons the U.K. is the most preferred equity market in UBS Wealth Management’s asset allocation. The manager sees an improvement in earnings revisions on the back of higher oil prices, while noting the recent underperformance.“The U.K. market should benefit from a rotation out of defensive growth stocks into value names, given its large exposure to value sectors such as basic materials, energy, and banks, which account for a combined 40% of the FTSE 100,” UBS WM strategist Claudia Panseri wrote in a note last week.The exposure could be a double-edged sword. While the U.K. is traditionally seen as a high-dividend market, the pandemic’s impact has resulted in heavyweights including Royal Dutch Shell Plc cutting payouts.British equities were downgraded to underweight last week by Citigroup Inc. strategists, who said the market’s dividend base remained highly concentrated, with over a quarter of the payouts coming from the “at-risk” energy sector.The U.K. remains the most unloved region for fund managers, according to Bank of America Corp.’s June fund manager survey, which showed a net 29% as underweight. That said, allocation to U.K. equities increased by 4 percentage points this month, the survey showed, while staying well below the long-term average.Positioning on the U.K. market could also largely depend on sterling moves, which are likely to be driven by the Brexit outcome. Rising risks of no deal could add pressure on the currency. And while the FTSE 100 has long moved in opposition to the pound, the two asset classes are currently experiencing their longest period of positive correlation since 2014.Credit Suisse strategist Andrew Garthwaite, who expects the British currency to reach $1.29 by the end of the year, upgraded U.K. small caps to overweight on Wednesday. The strategist sees falling credit spreads and fiscal stimulus also supportive, while small caps’ strong exposure to industrial and consumer cyclicals make them the preferred play when the Purchasing Manager Index is rising.“The FTSE small cap index versus FTSE 100 looks unusually cheap, despite its recent de-rating,” Garthwaite wrote in a note, adding that U.K. small caps have significantly stronger earnings revisions than large caps, which is not reflected in the prices.The base case for Goldman Sachs Group Inc. economists is that the EU and the U.K. will strike a “thin” free trade agreement by the end of the year.The deadline for an extension request is at the end of June, and the government already stated it will not ask for another delay. That leaves until Nov. 26 to reach an agreement with the EU in a manner that will leave enough time to ratify a deal before the end of the transition period on Dec. 30.While the EU is leading the fiscal stimulus effort, the U.K. has also been active and more could be on the cards, especially after investors expressed concerns over the Bank of England’s slowdown in asset purchases. Signs of economic recovery have also materialized after manufacturing and services data on Tuesday beat expectations, and the Citi Economic Surprise Index bounced.(Update with Credit Suisse view on small caps, Sterling paras 11-12)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Matt Patsky confronts corporations on everything from their carbon footprints to the diversity of their workforces. But now, in the wake of racial unrest sweeping America, Patsky is having a reckoning of his own.“I get a ‘D’ on diversity,” says Patsky, whose $3 billion Trillium Asset Management pressed investors to divest from South Africa during its anti-apartheid struggles. Just 10% of his 44 employees come from minority backgrounds -- a number that he said warrants a “C” relative to the broader financial industry. “We have to start walking the talk and make the same changes we’re asking companies to make.”White people make up about 80% of employees in socially responsible investment firms, according to a January 2019 study published by industry consultants and financial advisers about racial disparities in the workforce. Black people account for just 7% of employees among the firms that were surveyed.Even the largest groups that represent socially responsible investors are behind the curve. A cursory look at the website of the United Nations-backed Principles for Responsible Investment, the world’s biggest industry body for social investing, shows few Black employees. The website for the Forum for Sustainable and Responsible Investment shows a staff that’s comprised mainly of White people. Its board has four people from minority backgrounds.The lack of Black people and other minorities may explain why the world of ESG has fallen short on pushing corporations on race.“I am the first to admit that we aren’t where we want to be,” says Fiona Reynolds, chief executive officer of the London-based PRI, which represents about 3,000 firms that together oversee more than $100 trillion for clients. About 22% of PRI’s staff is comprised of minorities, including Black and Asian people. “We’re urging the global financial-services community to join us at the PRI in recommitting to make these issues our top priority.”In PRI’s network of ESG investors -- those who consider environmental, social and governance issues alongside financial metrics -- few have a track record of pushing companies to do better on race. Before George Floyd, an unarmed Black man, was killed on May 25 by a White Minneapolis police officer, racial equality was largely absent from the discussion.BlackRock Inc., the world’s largest asset manager, committed Monday to increase its Black workforce by 30% by 2024. The New York-based firm also will double the proportion of senior leaders who are Black from the current 3% level, CEO Larry Fink wrote in a blog post.“We need to do better,” Fink wrote.Calvert Research and Management, another of America’s biggest socially responsible investment firms, plans to put racial equality at the top of the list for shareholder resolutions in 2021, as this year’s proxy season is already concluding.ESG has shown it can be a force for good. Through a mixture of carrot and stick tactics, involving everything from lobbying to voting against directors and even divestment, ESG investors have helped persuade a growing number of companies to disclose their carbon footprints, with some even pledging to dramatically reduce their emissions.Responsible investors also have helped advance gender equality in the workplace by pressing companies to add women to their boards and senior management teams, says Mirza Baig, global head of governance at Aviva Investors in London.“We have made considerable progress on gender equality, but I think that has to some extent been at the detriment of the same level of razor focus on issues to do with ethnicity and class,” Baig says.Kimberley Lewis, who works for Federated Hermes’s stewardship and engagement unit EOS in London, agrees, saying the view among ESG investors that tackling obstacles to gender diversity will naturally pave the way for greater racial equality has yet to be proven.A U.K. report published earlier this year by businessman Sir John Parker, EY and the government found that at least 31 companies in the FTSE 100 have zero board members from ethnic minorities. The report concluded that it “will be challenging” to meet a goal of having at least one director from an ethnic minority background on the boards of all FTSE 100 companies by 2021.Patsky says Trillium, which was bought earlier this year by Australia’s Perpetual Ltd., is rarely asked about its own diversity and inclusion policies even as it continuously questions publicly listed corporations. To make up for lost ground, Patsky says his firm will be more aggressive in hiring minorities. Trillium recently recruited Lisa Hayles, who is Black, from Boston Common Asset Management to work with institutional clients.Patsky said he plans to convey, both internally and externally, how Trillium recruits using the so-called Rooney rule, which requires the inclusion of a diverse slate of candidates for a given role.According to the study by financial advisers and consultants, Black people account for 22% of firms’ workforce and boards that are run by people of color, and just 4% for the firms that are led by Whites, said the study, which looked at almost 700 employees, including board members, at 15 U.S.-based mutual fund groups.Sonya Dreizler, one of the report’s authors, said she doesn’t buy the argument that the lack of diversity in corporate America is down to a “pipeline problem” -- a line often espoused by executives to explain why their workforces are mainly White.“It’s a network problem,” said Dreizler, who runs the Solutions with Sonya consulting firm in San Francisco. “People mainly hire through their networks, and if your network is made up of white guys who you golf with, then you’re highly restricted.”Parnassus Investments, which manages some of the U.S.’s biggest ESG-focused funds, is working on plans to “support topics related to racial diversity and inclusion,” Chief Marketing Officer Joe Sinha wrote in an email, adding that the head of the firm’s ESG group, Iyassu Essayas, is Black.At Domini Impact Investments, whose founder Amy Domini is a pioneer of responsible investing, the company said it’s seeking to boost the diversity of its personnel. About 4% of Domini’s 26 employees are Black and about one-fifth are non-White.(Adds Trillium’s push against apartheid in second paragraph and details about how it recruits staff in the 17th.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Global stocks pushed higher on Tuesday as signs of a recovery in business activity in Europe raised investors’ hopes for a rapid economic rebound. European stocks were on course for their best day in a week, as the regional Stoxx 600 index and London’s FTSE 100 both added 1.5 per cent. Germany’s Dax was the best performer, gaining 2.7 per cent. On Wall Street, S&P 500 futures gained just over 1 per cent. Surveys of business executives in Europe’s three largest economies suggested they were markedly more upbeat in June than in the previous months.
(Bloomberg Opinion) -- Many of the world’s leading investors are concerned that the recent gains in the U.S. stock market are overdone, given the uncertain economic outlook and the risks of a second wave of the Covid-19 virus. But American equities are in very good company.Investing in U.S. stocks is “simply playing with fire,” Jeremy Grantham, whose firm GMO oversees about $60 billion, told CNBC on Wednesday. Ray Dalio’s Bridgewater Associates warned last week that a decline in U.S. corporate profit margins could lead to a “lost decade” for equity investors. And in a June 18 note, Howard Marks of Oaktree Capital Management LP wrote, “The potential for further gains from things turning out better than expected or valuations continuing to expand doesn’t fully compensate for the risk of decline.” No wonder the world is increasingly talking about bubbles.The 40% rally in the benchmark S&P 500 index, since it reached a low for the year on March 23, is “the fastest in this time ever,” Grantham said, as well as the only one in history “that takes place against a background of undeniable economic problems.” Nobel Prize-winning economist Paul Krugman wrote in the New York Times about what he deemed “market madness in the pandemic.”And yet the gains in the past three months aren’t restricted to U.S. stocks. Instead, they are mirrored in broader equity indexes. Even those that don’t have the benefit of a Microsoft Corp. (which has a 5.74% weighting in the S&P and is up 44% since U.S. stocks bottomed), an Apple Inc. (5.69% weighting, up 57%), an Amazon.com Inc. (4.3% of the index, 40% gain) or a Facebook Inc. (2.19% weight, up 60%) have recovered.The gains in Japanese stocks have matched those of the U.S., driven in large part by companies in sectors including machinery, marine transport and oil and gas — “an awful lot of dull, dirty, cyclical stuff,” as Jonathan Allum, a London-based strategist at SMBC Nikko Securities Inc., put it in a recent research report.Even regional European benchmark indexes, including the U.K. FTSE 100, Germany’s DAX index and France’s CAC 40 index, have staged rallies similar in size to the S&P 500’s. In fact, if you compare the price gains since the S&P reached its nadir for the year, Germany’s market index has even outpaced its U.S. counterpart.All of which suggests that the recent blaming of the U.S. market renaissance on so-called Robinhood Bros — U.S. day traders seeking to replicate the thrill of sports betting by gambling instead on stocks — misses the broader picture. There’s been a widespread comeback in equities across the geographical board. Moreover, it’s not just stocks that have come roaring back. In the debt markets, yields on non-government bonds have dropped precipitously, after spiking higher as the pandemic started to trash the global economy. For companies borrowing in dollars in the fixed-income market, money has never been cheaper, with the yield on the benchmark index covering $6.5 trillion of bonds declining to a record low in recent days, as the Federal Reserve began buying corporate debt as part of its quantitative easing program.Skeptics of the rally in financial assets can point to the real and present danger that a resurgence of virus infections, and further lockdowns, would stymie an economic rebound. There’s also the potential for shockwaves surrounding the forthcoming U.S. election.But more agnostic observers see the markets looking further ahead and weighing the massive intervention of central banks as the prime determinant of the outlook for equities. “While news headlines can make us think the second-wave and election stories are the biggest drivers for markets, it is the Fed story that will endure over the medium term,” Mark Haefele, the chief investment officer at UBS AG’s global wealth management unit, wrote last week.It seems that as long as the world’s central banks are willing to continue their prime-pumping efforts to stop the global economy from falling off a cliff, investors everywhere are happy to maintain their faith in the value of financial assets. Only time will tell whether they’ll be rewarded for their market piety.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
True, broadly, progress has been made, with FTSE 100 companies on average now meeting the goal of having women take a third of all board positions, with just over 33 per cent, and the rest of the FTSE 250 at 32 per cent. However, many companies have appointed female non-executive directors (Neds) to meet this target. Research last autumn showed that only 7 per cent of FTSE 100 companies had a female chief executive officer at the helm, while FTSE 250 firms have even fewer female CEOs with just five companies having a woman leading the business.
Senior officials from the US and Russia meet in Vienna on Monday for a new round of arms-control talks. The Trump administration wanted Moscow to persuade China to join the negotiations, but Beijing is not interested and Russia has previously said it would not try to change its mind. Also on Monday, lawyers acting on behalf of a father and son accused by Japan of helping former Nissan boss Carlos Ghosn flee the country are due to appear before a federal judge in Boston to challenge their arrest by US authorities at the request of Japan, which wants to extradite them.
It’s a big week ahead, with June’s prelim PMIs due out. We can expect COVID-19 and stimulus to also influence. Dire PMIs it will get choppy.
Prudential reached a reinsurance deal to sell its $500 million stake in U.S. business Jackson to a leading retirement services company Athene Holding.
The UK remains likely to avoid “no deal” Brexit – again, at end-2020. But with coronavirus-related spending likely to push the budget deficit above 10% of GDP this year, public debt-to-GDP will exceed 100% and potentially rise further in the medium term.
After last week’s big moves across the global financial markets, the FED and geopolitics will be in focus along with a sprinkle of economic data…
(Bloomberg) -- As the coronavirus pandemic is reshaping the business world and boosting online retailers and streaming services, another corner of the digital economy is thriving at least as much: cybersecurity.Software maker Avast Plc expects long-lasting benefits from people around the world switching to home office as online workspace faces growing security threats, Chief Executive Officer Ondrej Vlcek said in an interview.Avast shares have rallied since mid-March, almost doubling its market value as a surge in remote working boosts sales and helps the Prague-based company recover from an earlier privacy scandal. It’s now joining the FTSE 100 Index, the first from the European Union’s eastern flank to win the blue-chip accolade in London just two years after selling shares.“There are surprisingly few technology companies in FTSE 100,” Vlcek said before the index changes were announced on Wednesday. “Not only are the tech stocks now more resilient than most other industries, but Covid-19 has also been associated with a significant increase in cyber attacks. So I don’t see it as a coincidence that we’re being added now.”Read more: FTSE Reshuffle Shows Lockdown Impact With Travel Out, DIY InCyber criminals are increasingly trying to exploit weaknesses of the new digital universe where millions of people log on to work from home. That’s boosting demand for defense against attacks like ransomware or data theft. Avast, which provides protection for individuals and small enterprises, sees such business boost lasting after the health crisis abates.“People will still be trying to avoid packed trains and other crowds,” Vlcek said. “The global pandemic will be an impulse for employers who previously didn’t encourage work from home to rethink their approach.”Read more: Danske Creates Permanent Work-From-Home Option for BankersExpectations of Avast’s promotion helped lift the share price to a four-month high of 518 pence two days ago. It has since retreated, trading at 490.2 pence on Thursday as of 12:53 p.m. in London, almost twice the price at which the company sold shares in its May 2018 IPO.While some other companies are delivering even bigger returns, among them Zoom Video Communications, Avast has outperformed the tech-heavy Nasdaq 100 benchmark and some of its behemoths like Amazon.com Inc.Avast shares have now almost fully recovered from the impact of reports that its marketing subsidiary Jumpshot was selling sensitive customer data. After the scandal early this year prompted some users to uninstall the company’s software, Avast decided to wind down the unit at a cost of about $25 million and stay away from the data-analytics business.While monetizing user data is helping profits of Internet giants such as Facebook or Google, the practice is raising concerns about potential abuses and attracting more scrutiny from regulators.The Avast CEO said testing such avenue was “a mistake and gross misjudgment,” but it has helped the company realize it should focus more on services for those willing to pay for better control of their privacy.“Not only do we find that much more compatible with our core mission and our values, but we also see the data-privacy segment as having a bigger potential from the business-strategy point of view,” Vlcek said. “I see a huge opportunity for companies like Avast in that our business model no longer depends on data mining and this could help us stand out.”Floppy DisksAvast founders Eduard Kucera and Pavel Baudis created their first anti-virus program in 1980s communist Czechoslovakia, when malware was mostly spread by floppy disks. Now, the company says it has more than 400 million users worldwide, prevents about 1.5 billion attacks per month, and its market capitalization is 5 billion pounds ($6.3 billion).That makes Avast the second-biggest publicly traded Czech company, even as its home country is far from being a hotbed for startups. Ex-communist central Europe still relies overwhelmingly on traditional manufacturing with lower-paid jobs and has been struggling to embrace more advanced services and technologies that are more common in the West.Most of Avast’s more than 1,700 employees, including the CEO, are based in the Czech Republic, but its smaller offices in California and London tend to host a majority of the product managers. They create the most value by coming up with new ideas and making them commercially viable.Still, the company expects a long-term shift toward remote working, which will transform white-collar jobs around the world as more people will look for careers outside their home countries or even continents.“The increased role of remote work is an equalizer of sorts in that it makes it less relevant where you live,” said Vlcek. “It’s good for workers, who won’t need to commute, it’s good for the environment, and it could be extremely good for diversity and inclusion of, for example, women with small children.”(Updates with share price in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Zacks Analyst Blog Highlights: Bayer Aktiengesellschaft, InflaRx, Legrand, Innate Pharma and DiaSorin
Europe stocks rally on hopes that the European Union will unveil large stimulus package to reduce the economic fallout from the coronavirus pandemic.
Euro Zone stocks were supported as the European Commission (EC) prepares to unveil a plan to help the EU economy recover.
Geopolitics and COVID-19 news will be in focus in the week ahead. Economic data will also influence though much depends on the U.S and China…
There’s an interesting battle building up in the FTSE 100 ( UK100 ), after which we should have a much better idea of whether this rebound has legs or they’re going to be swept from underneath it.