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FTSE 100 in slightly wobbly lift-off as traders punt on an end to lockdowns

  • FTSE 100 index gains 27 points
  • easyJet flies higher after update
  • Ex-div status knocks M&G, St James's Place and Reckitt Benckiser

9.20am: Gains for travel stocks more than offset ex-div effects on the Footsie

Travel-related stocks are leading the Footsies advance early doors as traders punt on lockdowns in Europe being lifted sooner than previously expected.

The FTSE 100 was up 27 points (0.5%) at 5,624, with low-cost airline easyJet PLC (LON:EZJ), up 7.6% at 649.2p, top of the tree after its trading update.

“Investors have been given some much-needed reassurance by easyJet this morning,” said Helal Miah at The Share Centre.

“However, the key issue of when flights can resume remains. While out of its control, measures that management has taken should see the company be able to endure prolonged grounding of flights – the most extreme being a situation where flights are grounded for nine months and it could burn through £3bn in cash.

“The carrier is demonstrating its survivability to investors in these extreme circumstances and were somewhat assured that its a more viable airline than most others; however, despite this mornings rally in the shares, its still a long way off for the pre-lockdown levels,” Miah noted.

“While it should come out relatively well on the other side, the question is how the economy shapes up afterwards and whether spending on travel resumes to pre-lockdown levels or not. Given that we are about to have the sharpest reduction in activity since the great depression with unemployment set to soar, wed be very hesitant to buy the shares given the heightened risk. Of course, they remain an option for the very brave,” he added.

Ex-dividend status – yes, some companies are still paying em – has taken a chunk out of the share price of asset management firms M&G PLC (LON:MNG) and St Jamess Place PLC (LON:STJ), which are down 10% and 3.9% respectively, and a smaller nibble out of household goods maker Reckitt Benckiser Group PLC (LON:RB.), which is 2.5% lower at 6,162p.

8.50am: Positive progress

The FTSE 100 bucked the global trend as it shrugged off coronavirus pandemic worries and ignored the worsening economic outlook in the US to open in positive territory.

The index of UK blue-chips opened 23 points higher at 5,620.41.

However, later today well see whether the now-closely-eyed US weekly jobless numbers temper sentiment on this side of the pond.

On Wall Street, a near 450-point drop by the DowJones Industrials Average overnight was prompted by March retail sales figures, which were every bit as bad as expected, and a slew of quarterly earnings statements from the major American banks, which made for grim reading.

Here in the UK, the conversation has turned to the potential alleviation of the lockdown restrictions after the government's chief medical officer Chris Whitty suggested we may have hit the peak of the outbreak.

“There is a huge importance that should be based on when lockdown will end for a number of countries, as this will point to exactly when normal economic circumstances could well return,” said James Hughes of Scope Markets.

“Spending is absolutely key for these economies to recover from the position they will find themselves in. However, spending can only occur if the employment picture remains manageable.”

That discussion around the end to lockdown had easyJet (LON:EZJ) flying 7.8% higher after an update showing it has secured more funding, while cruise giant Carnival (LON:CCL) sailed ahead 6.6%.

There was also some respite for cinema group Cineworld (LON:CINE), which jumped 15% higher as investors anticipated a gradual return to normal activities in the UK.

But pensions and savings group M&G (LON:MNG), which is heavily invested in global markets, saw its shares subside 9.5%.

Proactive news headlines:

Collagen Solutions PLC (LON:COS) has revealed it is in discussions with a “number of parties” as it confirmed it will conduct a “formal review of its strategic options”. “These options include, but are not limited to, the potential sale of the company or the sale of one or more of the company's assets,” the group added in a statement. The company said it has appointed Goodbody Stockbroker as a joint financial adviser alongside England and Company and is inviting would-be buyers to lodge indicative offers by 5pm on May 15.

Clinigen Group PLC (LON:CLIN) said there had been only “marginal disruption” to its business against the backdrop of the coronavirus lockdown as it unveiled a new licensing a distribution deal. The pharma and services group has signed a global agreement with Porton Biopharma for the drug Erwinase/Erwinaze. The treatment has been developed for people with acute lymphoblastic leukaemia who have developed hypersensitivity to E. coli-derived asparaginase.

Europa Metals Ltd (LON:EUZ), the lead-zinc and silver projects developer, has hailed high-grade recovery results from the second phase metallurgical testing at its Toral project. The key findings of an updated independent metallurgical report on the project, situated in the Castilla y León region in north-west Spain, included 83.7% lead (Pb) recovery to a 60.0% Pb concentrate; 87.1% silver (Ag) recovery to 1,350 parts per million (ppm) Ag within Pb concentrate; and 77% zinc (Zn) recovery to a 59.1% Zn concentrate. The results demonstrate the potential for high-grade saleable and marketable Pb and Zn concentrates, Europa said, and were at the higher end of managements expectations.

Base Resources Limited (LON:BSE) has told investors that operations at the Kwale project in Kenya continue uninterrupted, with procedures in place to minimise the coronavirus (COVID-19) risks to its personnel and communities. In a quarterly update, the company highlighted production increases from the prior quarter across all products. It also noted ongoing demand from customers, with ilmenite and rutile prices continuing to strengthen in the quarter. Base said it is maintaining its production guidance for 2020.

Keywords Studios PLC (LON:KWS) has said a surge in video game playing as a result of the coronavirus pandemic is driving “increased demand” for its development services. In an outlook statement accompanying its final results, the AIM-listed firm also said trading in 2020 had started “in line with market expectation” and that it had only suffered a “limited impact” on its business from the outbreak.

Learning Technologies Group PLC (LON:LTG), the digital learning specialist, said it has yet to see a material impact on its trading performance from the coronavirus (COVID-19) pandemic. In its results statement covering 2019, the company said the current financial year has started well and it expects 2020 revenues to be largely unaffected by the global economic upheaval, although new business wins may be delayed and payment periods may be extended.

Woodbois Limited (LON:WBI) has reported a 10% year-on-year rise in revenues to US$4.9mln in its first quarter, highlighting “no discernible slowdown in demand” for its timber and forestry services. In an update on Thursday, the AIM-listed group said the first full quarter of production at the newly re-tooled sawmill in Gabon saw production increase by more than 100% over the previous quarter, with recovery levels of 40%, higher than the 34% average for 2019.

Kodal Minerals PLC (LON:KOD) has told investors that its exploration permits have been renewed for the Dabakala and Korhogo gold properties in Côte d'Ivoire. Each has been extended for an extra three years, expiring in April 2023, the group said.

Haydale Graphene Industries PLC (LON:HAYD) said it has sufficient reserves to adequately manage the anticipated impact of the coronavirus (COVID-19) outbreak. In a statement, Haydale said its directors are taking prudent steps to preserve the companys cash position as it is seeing a slowdown in a number of its markets, particularly in the US where demand for Haydales Silicon Carbide blanks has been indirectly affected by the huge reduction in air travel, which has compounded the ongoing impact of the slowdown at one of the major US manufacturers in the aviation industry.

Tlou Energy Ltd (LON:TLOU) told investors it can constructively advance project finance efforts whilst on-the-ground access in Botswana is restricted amidst the coronavirus (COVID-19) pandemic. In a quarterly update, the company said that “discussions with potential project finance partners progressed during the quarter with the company evaluating debt or equity funding or a mix of both." It added: “Tlou's objective is to source the lowest cost of capital with the least risk going forward.”

Gore Street Energy Storage Fund PLC (LON:GSF), London's first listed energy storage fund, has announced that pending completion of certain bank administration requirements, Sanne Limited has been appointed to provide administration and accounting services to the company. It added that JTC (U.K.) Limited continues to provide company secretarial services to Gore Street under its existing contract, as amended on April 14, 2020.

Kavango Resources PLC (LON:KAV), the exploration group targeting the discovery of world-class mineral deposits in Botswana, announced it has reached an agreement with certain directors and managers for the settlement of arrears of remuneration by the issue of convertible unsecured loan notes. The group noted that to preserve the company's cash resources, directors and senior managers have been deferring their remuneration for some time and a balance of £91,855 was due in this respect. It said it has now agreed with directors and senior managers to issue £109,987 nominal of the convertible notes for cash of £18,132 and in payment of the balance of arrears of remuneration, repayable, if not previously converted, on March 31, 2021, which bear a coupon at the rate of 10% per annum and a conversion price the same as the groups recent placing price in the recent financing, namely 0.8p per ordinary share.

Gaming Realms PLC (LON:GMR) has said it will be deferring the publication of its full-year results for the year ending December 31, 2019, until April 28. The company had previously indicated its intention to publish during the week commencing 13 April 2020. The group said its audit is substantially complete, however, the disruption of the coronavirus (COVID-19) pandemic has delayed finalisation, as has been the case with many other companies. Alongside the reporting of its FY19 results, the group said it will also be updating on its current trading.

Silence Therapeutics, PLC (LON:SLN), a leader in the discovery, development and delivery of novel RNA therapeutics for the treatment of serious diseases, has said that its annual report and financial statements for the year ended December 31, 2019, are available for download on the company's website: Read More – Source