Maitland/AMO Morning Monitor – Friday 29 May 2020

29th May 2020

In the news

  • UK opens door to citizenship to 300,000 HK residents extension to visa rights if China doesn’t row back on national security laws, which were rubber stamped today.
  • The UK’s HMRC has accused General Electric of fraud in a $1bn dispute over tax deductions stretching back 16 years.
  • President Trump has ordered a review of social media law which may weaken their protection against defamation claims. Yesterday the leaders of Facebook and Twitter clashed over how to tackle misinformation on their networks.
  • Following Amazon’s purchase of car company Zoox we discover that big tech is on a buying spree: Alphabet, Amazon, Apple, Microsoft and Facebook have made 19 acquisitions so far this year – the fastest rate since 2015.
  • Google is reported to be mulling buying into Vodafone Idea in India in a move that would pit it against Facebook which took a stake in Idea’s competitor Jio recently. India is the world’s fastest growing mobile market.

Politics today

  • Coronavirus furlough scheme: Rishi Sunak is expected to announce today that employers will ‘start paying a fifth of wages’ from August as works to wind the scheme down
  • Government vows ‘clean resilient recovery’ as delayed Cop26 climate summit gets a new date

Stock market moves

  • FOMO is increasingly being felt. The S&P and Japan’s Nikkei are now up a third from the March 23 nadir. Financials have had a particularly good week.
  • Yesterday in the US the S&P rose, then fell back as Trump’s China sabre rattling escalated. US Futures as of 8:15BST point toward a flat open this afternoon.
  • In Asia, most markets were flat overnight, while the Hang Seng dropped 0.7%.
  • In Europe, the FTSE 100 and Euro Stoxx 600 are both down 0.8% and 1% respectively in early trading.

Corporate announcements

* Maitland Client

Schroder Oriental Income Fund Ltd Half-year Report
  • For the six month period ended 29 February 2020, the Company’s net asset value of 232.32 pence and share price of 213 pence on 29 February produced total returns of -5.4% and -13.7%, respectively. 
  • The Company’s gearing was 5.3% at the beginning of the period, and as at 29 February 2020 the gearing was 7.5% largely as a result of the changes to NAV.
  • The Company has declared two interim dividends in respect of the first two quarters of the financial year amounting to 3.8 pence per share (H1 2019: 3.6 pence per share).
  • Peter Rigg, Chairman, said: “At the beginning of the six-month period under review, on 17 September 2019, we celebrated the inclusion of your Company in the FTSE 250 index. Since the beginning of 2020 though, markets have changed beyond recognition, with the COVID-19 pandemic having had a profound impact on many of the countries in which the Company invests.”
B&M European Value Retail S.A. Trading Update
  • Strong end to fourth quarter trading driven by exceptionally strong March performance on Grocery, with B&M UK fascia LFL revenues of +6.6% over the quarter.
  • Strong revenue growth in the first 8 weeks of the new financial year with B&M UK fascia LFL revenues of +22.7%, driven by exceptionally strong DIY and Gardening categories and despite a significant fall in customer count.
  • The B&M UK business is experiencing higher than normal operating costs in distribution and at stores resulting from the application of social distancing measures put in place to protect our customers and colleagues, as well as the payment of premium wage rates during the Covid-19 peak period.
  • B&M has donated £1m to UK Food banks and has provided £2m in discount to NHS workers.
  • Simon Arora, CEO, commented: “We have seen a significant bring-forward of demand in some key categories and the remarkably warm Spring weather in the UK has been a major factor behind this during recent weeks. We are not expecting this current level of trading to continue as normal shopping patterns resume. Clearly, there is also considerable uncertainty in relation to both the progression of Covid-19 and the economic outlook and it is therefore hard to predict future trading levels.”
GCP Infrastructure Investments Ltd Half-yearly Report and Financial Statements 2020
  • Dividends of 3.8 pence per share paid or declared for the six month period to 31 March 2020 (31 March 2019: 3.8 pence per share).
  • Total shareholder return for the period of -8.1% (31 March 2019: 4.5%) and total shareholder return since IPO in 2010 of 105.8%.
  • Profit for the period of £17.2m (31 March 2019: £33.6m).
  • Ian Reeves, CEO, said: “10 years from IPO, GCP Infra has delivered on its core objectives of regular, sustained, long-term dividend income, capital preservation and diversification for shareholders. It has done so in a market landscape that has materially shifted over the same period. The Company remains committed to continue to deliver on its core objectives and, with the targets established in this report, we believe continues to offer a highly attractive risk-adjusted return for its shareholders.”
TR Property Investment Trust PLC Final Results
  • NAV per share dropped 14.4% to 358.11p (31 March 2019: 418.54p).
  • Revenue earnings per share increased 0.3% to 14.62p (31 March 2019: 14.58p).
  • The Board has announced a final dividend of 8.80p bringing full year dividend to 14.00p an overall increase of 3.7% over the prior year dividend.
  • Hugh Seaborn, Chairman, said: “One of the strong characteristics of property as an investment has been its healthy income prospects. It is  clear that rent receipts in the immediate future will be severely disrupted across many of the companies we are able to invest in and this will vary widely with consumption focused properties likely to face disruption for longer. However, it is pleasing to report high rates of rent collection from healthcare, logistics and rented residential; all sectors we favour.”
AVI Global Trust PLC Half-year Report
  • Net asset value total return per share decreased by 24.7%.
  • Share price total return -24.3%.
  • Susan Noble, Chairman, said: “Having experienced a very sharp and painful sell off in late February and March, the Company’s NAV has staged a strong recovery in the last few weeks and up to the time of writing. The outlook is, to say the least, uncertain and there is much debate about the sustainability of the recent rally in equity markets, which appear to be looking forward to the point where lockdowns are eased around the world and economic activity returns to more normal levels.”
Energean PLC Change of Name
  • Energean announced that, following shareholder approval at the Annual General Meeting of the Company held on 21st May 2020, it has changed its name from Energean Oil & Gas plc to Energean plc.
  • Energean retains its strong commitment to sustainable development and its ESG goals, regardless of the impact of the global COVID-19 pandemic, and is building on the commitment it made in December 2019 to becoming a net-zero carbon emitter by 2050.
  • The Company’s first target is to deliver a 70% reduction to its carbon emissions by 2022, by when it expects to have delivered first gas from its flagship Karish gas development and integrated the gas-weighted Edison E&P portfolio.