Maitland/AMO Morning Monitor – Friday 18 September 2020

18th September 2020

In the news

  • Donald Trump's envoy to Northern Ireland warns Boris Johnson against creating a "hard border by accident".
  • Leading scientists propose two-week national lockdown in October, with Matt Hancock refusing to rule it out.
  • UK retail sales grow for the fourth consecutive month, driven by supermarket and home improvement purchases.
  • A study of Moderna's COVID-19 vaccine could yield answers as early as October.

Politics today

  • House of Commons will not be sitting today.

Stock market moves

  • In Europe, the FTSE 100 and Eurostoxx 600 have both opened down.
  • The Renminbi was on track for its best week in 10 months, despite Asian-Pacific shares faltering this week. The Hang Seng is up 0.3% today, with the Topix up 0.4%.
  • US stocks fell on Thursday following signs of weakness in the labour market, however stock futures held steady overnight.
  • Sterling has fallen to both the dollar and the euro respectively.

Corporate announcements

* Maitland Client

London Stock Exchange Group PLC LSEG – Borsa Italiana Group Update
  • Further to the announcement on 31 July 2020 regarding MTS and Borsa Italiana group, London Stock Exchange Group received and reviewed a number of competitive proposals from several parties for each of MTS and the Borsa Italiana group as a whole.
  • LSEG confirms it has now entered into exclusive discussions with Euronext N.V. in relation to the sale of the Borsa Italiana group.
Investec PLC Trading Statement
  • Over the five months to 31 August 2020, third-party FUM increased by 14.1% to £51.4bn (31 March 2020: £45.0bn) and net inflows were positive at £391m.
  • NAV per share expected to increase from 414.3p (FY2020) to between 422p and 428p.
  • Operating income remained under pressure, given the operating environment. 
  • Fani Titi, CEO, said: “The business is well positioned to support its clients through this challenging environment. We will continue to ensure the safety and wellbeing of our people and the integrity of our balance sheet. I wish to thank my colleagues for their dedication to our clients and communities around us.”
John Laing Group PLC Divestment Update
  • John Laing Group today announces that it has entered into an agreement to sell its 30% interest in the InterCity Express Programme Phase 2 on behalf of certain of its managed or advised funds, for a total cash consideration of up to £421m.
  • The consideration represents a strong uplift on John Laing’s valuation of £333m as at 30 June 2020.
  • Ben Loomes, CEO, said: “We are delighted to have successfully completed the sale to AIP of this high-quality, availability-based asset at a strong uplift to book value.  This is an excellent example of how John Laing creates value through developing greenfield infrastructure, working closely with its partners to manage its projects through to operation, and then delivering strong realization results for the Group’s shareholders.”
City of London Investment Trust PLC Annual Financial Report
  • NAV per ordinary share fell 14.6%.
  • Share price has fallen 16.2%.
  • Revenue earnings per share fell to 15.7p (2019: 19.8p).
  • Philip Remnant, Chairman, said: “Looking forward, there are an unusually large number of uncertainties, which mainly relate to Covid-19. It is possible that there could be a second wave of infections in the autumn/winter. If so, governments are likely to try to implement local rather than nationwide lockdowns which would be less damaging for the economy. Alternatively, it may be that the worst of the virus has been seen and there are strong hopes for an effective vaccine in 2021. The policy response to the lockdown has been extraordinary, but it is not clear what will be the long-term effect of the build up of government debt or how the central banks will ever reduce their stock of government bonds.”
Grit Real Estate Income Group* Disposal of 39.5% interest in Anfa & Update
  • The Company disposes of a 39.50% indirect interest in AnfaPlace Mall, reducing its retail sector exposure to c.24.9%.
  • August rental collections of 98.5% of Grit attributable contracted lease income.
  • The Board now expects Net Asset Value per Share at 30 June 2020 to decline by between 18% to 22% predominantly as a result of downward valuations of its property portfolio (led mainly by the Company’s retail sector exposure), increased provisions for financial liabilities and impairments of financial and other assets.
  • Bronwyn Corbett, CEO, said: “We remain positive on the medium-term prospects for AnfaPlace Mall and the opportunities that recently promulgated Moroccan OPCIs will provide for strong capital appreciation, liquidity and access to robust capital markets, however the uncertainty surrounding the impact of Covid-19, specifically in the retail sector, make it prudent for us to reduce our interest in the asset at this time. This is aligned with the Groups strategy to diversify from retail and focus on the industrial, corporate accommodation and office sectors, which we expect to continue to be more resilient and deliver enhanced value to our shareholders. The disposal will contribute to the rebalancing of our sector exposure with the sale reducing our retail exposure from 32.1% to c.24.9%.”