Irish shares join in global rally on hopes Covid-19 death toll will ease
Global stocks rallied yesterday in frenetic buying
as investors were buoyed by the prospects of some end
to the Covid-19 crisis after
the increase in death rates appeared to ease around the world.
Irish shares joined in the remarkable rally with the biggest casualties of the crisis — the two stockmarket-listed Irish house builders and Ryanair — chalking up huge gains in the session, while the banks also climbed.
Cairn Homes and Glenveagh Properties surged around 14%; Ryanair rose 13.5%; and AIB and Bank of Ireland gained by 4.5% and 4%.
In London, the wave of buying swept over winners and losers of recent weeks with even shut down retailers like newsagent and bookseller WH Smith benefiting from the optimism.
Shares in the bookie firm that owns Ladbrokes, GVC, surged over 18% after it halved its estimate for a monthly hit to profits from the Coronavirus-driven shutdown in international sports.
GVC, which previously estimated it would lose £100m (€113m) in core profit, said it had managed to reduce that figure to £50m, and still hoped to find more savings.
The gambling industry on the one hand is seeing a bump in online gaming by people stuck at home under lock- downs, but has seen its big cash co, sports betting, hammered by a shutdown in sports activity that may last months.
GVC said that the cancellation of sports events and closure of retail outlets had significantly reduced its revenue from
mid-March. However, in the first quarter of 2020, its net gaming revenue inched 1% higher, with online growing 19%.
“While our global and product diversification is standing us in good stead during the current uncertainty, the Covid-19 pandemic is posing an unprecedented challenge to our business,” said chief executive Kenneth Alexander.
The company, like dozens of other European listed companies in the past month, also said it was withdrawing its interim dividend to conserve cash.
“Overall, the trading update reinforces our confidence that GVC has the liquidity to comfortably operate through the current suspension of sports and is well placed to benefit when the industry returns to normality,” analysts at Berenberg said.
WH Smith said it had secured new lending facilities of £120m to get it through the Coronavirus crisis which are conditional on raising new equity.
As a result, the group is in
an advanced stage of preparation for an equity issue of a maximum of 13.7% of its issued share capital through a placing of shares.
“These financing arrangements, coupled with a broad range of mitigating actions to manage the cost base and cashflow, will provide sufficient liquidity
to deal with this most challenging of trading environments,” it said.
Additional reporting Reuters
