The ECB has finally decided to extend from 1 October this year until 1 January 2021 the recommendation to banks to not pay dividends to their shareholders. Nicolas Hardy, Analyst of Financial Institutions at Scope, thinks this measure is positive in the short term, but could be questioned in the long term as EU banks are facing different operating conditions in the wake of the pandemic.
DWS | Although the current pandemic has been many times more serious than the SARS outbreak, the recent pattern in European equity markets looks strikingly similar to what happened in Asia after the 2003′ disease. That could be a mixed blessing.
The gold price has been rising steadily and on Monday (27 July) hit an all-time high of $1,944/oz, beating its previous record high of $1,922 from 2011. Even as it reaches new highs, analysts at Schroeders don’t think it’s time to grow concerned about the price of gold, or gold equities. Here’s why.
Spanish telecommunications’ giant Telefonica, together with Italy’s TIM and Mexico’s Claro, have tabled a 2.706 billion euros joint offer for the assets of Brazil’s Oi, the fourth largest telco in Brazil. This bid is 10% over the minimum auction price of 2.5 billion euros required by the company. Telefonica is market leader in Brazil with a share of 33% followed by TIM and Claro, with 24% each.
The economic growth of both economies has fallen sharply in the Q2 of the year due to the coronavirus restriction measures. Germany’s GDP saw a decrease of 11.7% on yoy rate. The country was plunged into the deepest recession in post-war history. On the other side of the Atlantic, the US GDP was down 32.9% in annualised terms, the biggest fall since the current historical series began in 1947. Spain and France accompany them with record contractions of 22,1% and 19%, respectively.
The European Commission has signed a 63 million euro contract with US pharmaceutical Gilead to ensure the supply of the drug ‘Veklury,’ its trade name for Remdesivir, to some 30,000 patients with severe symptoms of Covid-19 during the summer months.Late last month, the US Department of Health and Human Services struck a deal to buy nearly all of Gilead’s projected production until the end of September.
As reported in its Q1’20 financial results on May 7, IAG had a solid balance sheet and liquidity position prior to the health crisis. It had cash and undrawn credit lines amounting to 10 billion euros as of April 30. So the board’s announcement that it will carry out a 2.75 billion euros capital hike to strengthen its balance sheet (61% market capitalisation) was surprising.
Monex Europe | The FOMC kept rates unchanged, extended its swap facility, and added language to its statement emphasizing that the path of the US economy depended heavily on the path of the virus. In our view, outcome-based forward guidance is likely as early as September, when the FOMC will have a new batch of projections, as well as hard data indicating the costs of the second wave of COVID-19 infections.
Geraint Harvey, Daniel Wintersberger, Peter Turnbull via The ConversationUK | Several airlines have announced sizeable redundancy programmes due to Covid-19 spreading, but previous crises show that there are viable alternatives to job cuts. After the 2008 financial crisis airlines like Southwest adopted different measures including work-sharing, temporary pay cuts and furlough. As a result, they were less likely to experience industrial strife and the business recovered more quickly.
Boris Johnson’s government will impose a 14-day quarantine on travellers from Spain in response to the surge in reported Covid-19 cases in our country. This decision has fuelled discontent both in the Spanish government and in the tourism sector. This means about 12% of GDP, with the British accounting for 20% of all tourists. Furthermore, the Spanish industry could lose foreign tourism revenues of €8.7 Bn between August and September, reports the Spanish tourist institution Exceltur.