Daily Mail - 03.03.2020

(^) Page 69
City Editor: Alex Brummer http://www.thisismoney.co.uk Business Editor: Ruth Sunderland
City Finance
70,888
mortgages approved for
house purchases in January

• the most for four years

Major airlines have seen

more than £15bn wiped off

their value in just six days

as coronavirus clobbers

the travel industry.

Efforts by central banks to

reassure investors’ frayed

nerves helped prop up the

FTSE 100 yesterday.

But it was not enough to pre-

vent another rout on airline

stocks, as shares in British air -

ways owner IaG plunged another

8.2pc. It means 30pc – some

£3.8bn – has been wiped off the

aviation giant’s value in just six

days of trading.

Easyjet was also among the

FTSE fallers, and like IaG is now

worth 30pc less than when the

markets opened last Monday.

Dart, the owner of jet 2, fell 9pc

yesterday, meaning the company

has lost 41pc of its value in just

over a week.

as Ba and ryanair cancelled

hundreds more flights, one ana-

lyst described airline stocks as ‘in

the doldrums’, while another

warned they could thwart any

recovery in the stock market.

on another turbulent day for

the travel industry, the Bank of

England attempted to calm

investors reeling after the worst

week on the stock markets since

the financial crisis.

Echoing statements from other

central banks, including the US

Federal reserve, it said it was

working to ‘ensure all necessary

steps are taken to protect finan-

cial and monetary stability’.

The statement appeared to pro-

vide some consolation to inves-

tors as the FTSE 100 edged up

1.1pc or 74 points to 6654.89.

Having warned last week that

bookings will be hit by the coro-

navirus outbreak, Ba announced

it is cancelling another 204 flights

between March 17 and 28.

This includes flights from Lon-

don Heathrow and Gatwick to

New York’s jFK airport and much

of Europe, including France, Italy,

Switzerland, Belgium, Germany,

Ireland and austria.

ryanair also announced it is

cancelling up to a quarter of its

flights to and from Italy, which

has been badly affected by the

Holiday giants

face relegation

FaLLoUT from the stock market

collapse looks set to trigger a shake-

up in the blue-chip FTSE 100, with

Tui and Carnival facing relegation.

The next reshuffle of FTSE 100

members, based on their market

value, takes place on March 23, but

the moves are based on the closing

price of shares tonight.

Shares in travel company Tui have

fallen 32pc in six days, while cruise

firm Carnival has seen its value fall

25pc. The companies have been

hammered by a slump in demand

for holidays as worried families

abandon travel plans.

Troubled healthcare group NMC

also looks set to be booted out the

FTSE 100 after its shares collapsed

amid an accounting scandal.

Panic buying

boosts Ocado

OCADO shares jumped after it

revealed that customers worried

about coronavirus are stockpiling

food and other goods.

Investors piled in after the online

supermarket emailed customers

to advise them to place orders

further in advance because of

‘exceptionally high demand’.

It added: ‘More people than

usual seem to be placing particu-

larly large orders.’

Bernstein food retail analyst

Bruno Monteyne said: ‘If a major

outbreak happens, that will

quickly lead to panic buying,

empty shelves and food riots.’

Worldwide factory slump UK recovery under threat

CoroNavIrUS is wreaking havoc in fac-

tories around the world.

In a string of bleak reports, research group

Markit said manufacturing activity was

shrinking in China, japan and South Korea

as well as in Germany, France and Italy.

Even the US suffered a slowdown.

The reports came as the organisation for

Economic Co-operation and Development

warned that the outbreak could slash glo-

bal growth in half and plunge many coun-

tries into recession.

‘The coronavirus Covid-19 presents the

global economy with its greatest danger

since the financial crisis,’ the watchdog said

last night.

a key index of manufacturing activity in

China, where 50 is the cut-off between

growth and decline, fell from 50.1 to 40.3

last month – the lowest level since the sur-

vey began in 2004.

The snapshot underlined the damage

done to the economy in China where the

outbreak has killed almost 3,000 people and

infected around 80,000.

It has spread to more than 60 countries,

shutting shops, offices and factories as well

as schools and other public areas.

Manufacturing in japan fell at its fastest

pace in nearly four years last month while a

slump in activity in Italy – home to one of

the largest coronavirus outbreaks outside

asia – has left it on the brink of recession.

Ben May, director at oxford Economics,

said: ‘Developments over the past couple of

weeks suggest that the economic disrup-

tion from coronavirus will be larger, broader,

and more long-lasting than we envisaged.’

THE post-election recovery in British manu-

facturing could run out of steam because of

the coronavirus.

research group IHS Markit said its index

of activity in UK factories – where scores

above 50 show growth – rose from 50 in jan-

uary to 51.7 in February.

That was the strongest score for ten

months and suggested that the economy

has perked up since the election.

The report showed business confidence at

a nine -month high ‘reflecting planned

investment, product launches, improved

market conditions and more settled politi-

cal outlook’.

But it warned of disruptions to supply

chains due to the coronavirus outbreak.

rob Dobson, director at IHS Markit, said:

‘The UK manufacturing sector remained in

recovery mode in February, as reduced lev-

els of political uncertainty translated into

further growth of output and new orders.

‘Supply-chain disruptions were emerging

rapidly, however, as the Covid-19 outbreak

led to a lengthening of supplier lead times,

raw material shortages, reduced invento-

ries of inputs, rising input costs and reduced

export orders from asia and China.

‘With supply-chain headwinds rising, and

trade negotiations with the EU starting, it

remains to be seen whether the recovery

can stay on course.’

Samuel Tombs, chief UK economist at

Pantheon Macroeconomics, said: ‘Note that

80pc of responses to Markit’s survey were

before the virus spread to Western econo-

mies. accordingly, we have to brace for a

sharp fall in manufacturing output.’

coronavirus chaos

£3.8bn

£3.5bn

£1.8bn

£1.6bn

£1.5bn

£1.2bn

£1bn

£790m

IAG

Ryanair

Easyjet

Lufthansa

Tui

Dart

Air France

KLM

Wizz

30pc

24pc

30pc

26pc

31pc

41pc

30pc

25pc

FALL IN THE PAST SIX DAYSFALL IN THE PAST SIX DAYS

Saga delays

Titan sell-off

ovEr-50s group Saga has post-

poned the sale of one of its biggest

holiday businesses because of the

coronavirus travel chaos.

Saga has put on hold an auction

of Titan Travel, which several pri-

vate equity firms had looked at.

Titan provides escorted holidays

to countries such as the US and

Egypt, and is thought to be worth

more than £100m.

The tourism sector has been pum-

melled by the virus crisis. Saga is

already under fire after activist

investor Elliott advisers took a 5pc

stake in the group last year.

The US group wants Saga to sep-

arate its tourism arm from its finan-

cial services business.

£15 billion

airline rout

BA and Easyjet among shares hammered in...

by James Salmon

and Hugo Duncan

Daily Mail, Tuesday, March 3, 2020^

Covid-19 outbreak. It said there

had been a ‘significant step up in

passenger no shows’. The budget

airline said there had been a

‘notable drop in bookings’ but

that it was too early to tell what

impact the deadly disease would

have on its earnings.

Michael Hewson, chief market

analyst at CMC Markets UK,

warned airlines and travel com-

panies could hold back a wider

stock market recovery. He said:

‘For this rebound to stick you

really need to see a rebound in

travel and leisure.’