Scotland-based brewery and pub chain BrewDog is revelling in the news that the UK’s national lockdown is set to come to an end this summer.
The company reported it has had its busiest day for bookings on record after Prime Minister Boris Johnson announced the easing of restrictions in the coming months.
Beer gardens are set to open to the public from the 12th of April and all coronavirus restrictions are poised to wrap up in June, although the government has stressed that these dates are provisional and dependent on the rate of infection tailing off.
“Tens of thousands” of eager customers have already booked tables at BrewDog sites across the UK, according to a post published on LinkedIn by the brand’s CEO and co-founder, James Watt.
BrewDog have not been the only ones to see a surge in bookings following Johnson’s announcement, with the Inn Collection Group – which has 15 venues across the north – revealing it had seen a “300 per cent spike in bookings” over the last fortnight.
“There’s no doubt there’s a massive pent-up enthusiasm,” Christian Burns, owner of six pubs in Bishop Auckland, told The Independent over the weekend. “People have seen enough of their back gardens or kitchen tables and they want to get out. If the weather’s good, for those pubs with outdoor facilities it could be an astounding April”.
Last month, brewery bosses and landlords told the Evening Standard that they were ‘in a battle to save the Great British pub’. Bars and drinking establishments have been especially hard hit by the pandemic, with lockdown restrictions all but wiping out business, but the government’s promise of outdoor dining is not enough for some.
Chief Executive of the British Beer and Pub Association (BBPA), Emma McClarkin, has already warned that as many as 29,000 pubs will not be able to welcome customers because they simply do not have a beer garden or outdoor space to accommodate them.
“If pubs do open outdoors only in April – we believe just 17% of UK pub capacity will actually open. This would result in a loss of turnover to the sector of £1.5 billion when compared to trading in normal times. That is far from reopening and recovering”.
The BBPA acknowledged that 75% of UK pubs reportedly have a beer garden or outdoor space, but said that it found just 40% of those were likely to have outdoor space adequately large enough to operate a socially-distanced service.
It also added that even larger beer gardens could “struggle to break even, as they would still have vastly reduced capacity and significant practical challenges”.
BrewDog has excelled in popularity in recent years with its vast offering of craft ales and funky product designs. The brand’s famous Punk IPA is the #1 craft beer in the UK.
It was also the first company to join Crowdcube’s exclusive Unicorn Club, with a pre-money valuation sitting at£1.8bn, and is currently being touted for an IPO on the London Stock Exchange at some point this year.
Parsley Box Group is set to join AIM in the next few weeks, and it appears that its pre-money valuation may be more than £70m, if the most recent fundraising by the main subsidiary is anything to go by.
As usual, the intention to float announcement was all puff and no pastry. No valuation was put in the announcement. There was no stated profit or loss, but it appears that the company is currently losing money.
Scotland-based Parsley Box provides ambient ready meals to people 60 years old and over. It was founded by Adrienne and Gordon MacAulay in 2017 and there were 154,000 active customers at...
Although there has been criticism of buy now, pay later finance Australia-based provider Afterpay continues to go from strength to strength. That is good news for ThinkSmart (LON: TSL) which retains a residual stake in the UK-based Clearpay, which it sold to Afterpay. This is the main source of value for the shares and the stake has significantly increased in value.
There was a 10% stake retained in Clearpay, but employees will receive some of the shares, so the net stake is 6.5%. The stake is currently valued at £106.6m according to independent valuers.
The growth in active customer numbers a...
Gold prices dipped below $1,700 on Friday as US non-farm payroll figures surpassed expectations.
America added 379,000 jobs in February, significantly more than the 180,000 forecasted by economists.
The market for the precious metal fell under pressure ahead of the employment statistics and lost ground in the immediate aftermath. The last time gold traded below $1,700 was in June 2020, just under nine months ago.
Gold price
In addition to better than forecasted job growth in February, the unemployment rate fell to 6.2%, from 6.3%.
The precious metal’s price has also been dented recently by rises in US bond yields and increasing optimism around an economic recovery.
“We see the rising bond yields as a sign of economic optimism, which has also prompted investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Nasdaq opened 1.04% up today at $12,856.12 following news of US non-farm payroll figures exceeding expectations. US employment figures outperformed economic forecasts for February, as 379,000 jobs were added to the economy.
Robert Alster, CIO at investment management firm Close Brothers Asset Management, praised the progress of the US economy since the current President’s inauguration.
“Nonetheless, Biden’s pledge for all US adults to have received the vaccine by the end of May, a drop off in coronavirus cases, and tentative relaxation of restrictions all bode well for a continued improvement in the employment numbers.”
“A further boost will be given once the $1.9tn Covid-19 stimulus bill reaches the Resolute desk. With the injection of the vaccine and cash, the President will be hoping he can get the US economy back on the front foot.”
It follows a week of downward movement following the sell-off of technology stocks which came about as a result of the news of rising bond yields. Stocks in Apple, Tesla and Amazon dropped by $1.6tn since the index’s closing high on 12 February 2021, according to an analyst from S&P Global Market Intelligence.
Nasdaq Top Movers
Cisco Systems (3.15%), Fiserv (2.10%) and Micron Technology (1.69%) were the top movers on the index at early morning trading.
At the bottom end of the New York exchange, Okta (-3.81%), Tesla (-2.99%) and Costco (-2.16), are the day’s biggest fallers so far, as Elon Musk’s company continues its recent slump.
Coinbase
Nearly a decade after its founding, Coinbase, a trading platform for crypto buyers, is set to go public as the company has has been valued around $100bn.
The company, which will be listed on the Nasdaq exchange, earned revenue of $1.3bn in 2020, up from $534m in 2019, while recording a profit of $322m in 2020, following a $30m loss the year before.
Ark Innovation ETF
Ark Invest’s famous Innovation ETF saw its gains for 2021 wiped out this week as rising US bond yields resulted in a sell-off of a number of Nasdaq companies. The fund’s top five holdings – Tesla, Square, Roku, Teladoc and Spotify – lost on average 17% over a one month period.
US non-farm payroll figures show unemployment at 6.2%
US non-farm payroll figures significantly outperformed expectations for February, as 379,000 jobs were added to the US economy.
The figure surpassed the expected amount of 180,000, as well as exceeding January’s increase of 160,000, which was revised up from the originally reported 49,000 figure reported a month ago.
The December number was also revised to 306,000 from 220,000.
Unemployment is now at 6.2%, down from 6.3% in January, and well below April’s peak high of 14.7%.
A majority of the jobs (355,000) came from the leisure and hospitality sector, as dining restrictions were eased in parts of the country.
While healthcare, manufacturing and retail saw 46,000, 21,000 and 41,000 jobs added respectively.
Year-on-year, 8.5m fewer Americans are in work compared to February 2020. Robert Alster, CIO at investment management firm Close Brothers Asset Management, praised the progress of the US economy, while drawing attention to underlying factors at play in the US labour market.
“The dramatic increase in nonfarm payroll figures is a sign of progress as Biden completes his sixth week in office. However, it comes after a relatively weak ADP reading for private payroll figures earlier in the week, painting a picture of a labour market of two halves.”
“Wage inflation remained steady – growth looks somewhat unlikely as lower-paid workers re-join the payrolls in the coming months as hospitality and retail sectors open up.”
Alster suggested the news is a continuation of a recent trend of economic optimism since Biden was inaugurated.
“Nonetheless, Biden’s pledge for all US adults to have received the vaccine by the end of May, a drop off in coronavirus cases, and tentative relaxation of restrictions all bode well for a continued improvement in the employment numbers.”
“A further boost will be given once the $1.9tn Covid-19 stimulus bill reaches the Resolute desk. With the injection of the vaccine and cash, the President will be hoping he can get the US economy back on the front foot.”
Sponsored by Vietnam Holding. Photo Credit: Michael Tatarski
Vietnam’s COVID-19 Vaccine Plans Come Into Focus
While the Vietnamese government’s response to the pandemic has been among the most effective in the world over the last year (see below), their strategy regarding an eventual vaccination campaign is now becoming clear. The Prime Minister has now requested vaccinations to commence.
As recently as mid-January, it wasn’t clear when the country would receive any vaccine doses.
Then, a huge outbreak hit the small northern province of Hai Duong, with cases eventually recorded in over a dozen cities and provinces, including Hanoi and Ho Chi Minh City.
Leadership has responded by dramatically speeding up the vaccine delivery timeline, and also the scale of their purchases. However, for now, there is no indication of how this vaccination drive will impact ongoing inbound flight restrictions.
On the morning February 24, 117,600 doses of the Oxford/AstraZeneca (AZ) vaccine arrived on a Korean Air flight from Seoul at Tan Son Nhat Airport in Ho Chi Minh City.
These doses are part of the government’s agreement to buy 30 million doses from AstraZeneca, an agreement announced weeks ago with what was then a vague timeline.
Now, the Ministry of Health is saying that 150 million doses of COVID-19 vaccines will reach Vietnam in seven batches either by the end of this year or early 2022.
Initial timelines estimate that another 1.5 million AZ doses will arrive by the second quarter; 1.2 million through the COVID-19 Vaccines Global Access (COVAX) program and 363,000 purchased directly from AZ. Remaining frontline workers (500,000 people) will receive these doses, along with diplomats (4,080 people), customs and immigration officers (9,200 people) and just over 1 million members of the military.
8.2 million more AZ doses will be purchased and delivered within Q2, covering remaining military personnel, public security police officers (304,000 people), teachers (550,000 people), and people over 80 years old.
In Q3, 10.9 million AZ doses are expected, 3.6 million from COVAX and 7.32 million directly from AZ. These will be for anyone else over 80, essential service providers, and people with chronic diseases.
Through early 2022, 14.4 million more AZ doses will be distributed for remaining people with chronic illnesses.
By the end of this year or early next year, COVAX will supply 25.2 million doses intended for the chronically sick who haven’t already been vaccinated and people aged 65-80.
The remaining 90.5 million vaccine doses will come from to-be-determined foreign and domestic vaccine producers through the first half of 2022 for the rest of the 65-80 population and people over the age of 18 not covered by previous batches.
That last batch is the most uncertain, as local media has simply said that the government is still in talks with Pfizer and other foreign vaccine companies, as well as Russia for the Sputnik vaccine – though we do know that two Vietnamese companies expect to have functioning vaccines sometime this year.
If all of this goes to plan, that would mean 75 million out of 97 million people in Vietnam would be vaccinated by the middle of 2022.
The big question for people outside of Vietnam is how all of this will impact international flight restrictions, and on that there is still no clarity. It’s clear at this point that the Vietnamese government will be exceedingly cautious in reopening the border, and even with this good vaccine news, hopeful foreign visitors shouldn’t expect major changes anytime soon.
There is increasing interest in Vietnam particularly with increased political risk in other parts of ASEAN (Thailand and Myanmar). Vietnam has shown its mettle during the pandemic year, which was also the year in which it successfully chaired ASEAN, hosted several foreign leaders and inked several key trade agreements. The short term risk in 2021 was the spread of new Covid variants, which Vietnam so far has evidenced a strong grip on. If Vietnam’s vaccine rollout can be successfully implemented, then 2021 could well be a breakthrough year for Vietnam.
In early 2020, the UK Government was quoted as saying the Coranavirus thrives on ambivalence, which unfortunately was in abundance in the more supposedly ‘developed’ markets. The leadership in the UK was distracted at the end of January by ‘getting Brexit done’, and according to UK media, even during the weeks that followed, its Prime Minister was unable to attend key Cobra meetings where the virus was being discussed.
Vietnam’s government, on the other hand, took quick and resolute action during the largest national holiday in the year – the Lunar New Year ‘Tet’ holiday – in late January. Vietnam has rightly won many new admirers for how its policymakers acted, and the country has emerged from the pandemic with a high level of credibility.
Two. Have a common enemy
Vietnam’s leaders at the national and provincial level, and the people in the urban and rural community, had a clear common sense of purpose: defeat the coronavirus. This meant being willing to sacrifice some liberties, and to adopt measures such as mask-wearing when there were (and bizarrely, remain today) detractors in the ‘western world’ to the use of face-coverings. The use of propaganda art, in conjunction with traditional media and social media (including TikTok) focused the communities on fighting the unseen enemy and defeating it fairly resolutely.
Three. Rally around a common cause
The UK had a few rallying points during its battle with the early phases of the Coronavirus. One was the indefatigable (and now deceased) Captain Sir Tom Moore who chose to mark his 100th birthday by walking round-and-round-the-garden to raise money for the National Health Service, raising 33 million pounds more than his target. The NHS also featured in a regular collective gathering of ‘clapping’, an idea – like quarantine itself – imported from Italy.
Vietnam’s rallying point was rather more unusual. A 43-year-old Motherwell supporter who flew a plane to Vietnam for Vietnam Airlines, and brought more than passengers with him. He inadvertently caused a cluster of infections in a popular bar in Ho Chi Minh City’s District 2. He became very sick, and his lungs became like sacks of cement, putting him at death’s door, and with a real chance of being Vietnam’s only Covid-19 fatality. He spent close to 100 days in an ICU, much of it in a coma, where he received excellent healthcare. Known as ‘Patient 91’ the Vietnamese population rallied to his support, with several people even offering to be lung-donors to save the life of the British pilot. Thankfully he made a full recovery and is now safely back in Scotland. He said that he would have died anywhere other than Vietnam.
Vietnam kept its track record of zero deaths for several months, with long periods without any community-spread cases. Even now, a year on, Vietnam has recorded less than 40 deaths from the Coronavirus. It has also managed to keep its economy open for most of the year, as a result enjoying the highest growth rate in the world for 2020.
Vietnam Holding held a webinar on 26th February hosted by its investment manager Dynam Capital, outlining its vision for the next five year trends in the growth market of Vietnam. The Webinar recording is at https://vimeo.com/518007876#t=9s
Hear more from Vietnam Holding at the UK Investor conference on 23rdMarch.
EasyJet’s share price sat at 1,508.50p in February 2019 before news of global travel restrictions caused a fall to 475p per share at the beginning of April. However, the airline has gained ground since, climbing back up to 1,014.50p per share, particularly in recent weeks, as the government outlined plans to lift restrictions. Since the beginning of 2021 EasyJet’s share price is up by 32%.
EasyJet share price
Potential for Growth
In February, the Prime Minister announced a four-stage plan for easing lockdown measures in the UK, with a return to international travel proposed for 17 May. The date, just before the beginning of the summer holiday season, unleashed a surge of pent-up demand, as EasyJet reported a dramatic rise in the number of holiday bookings.
Chief executive of easyJet, John Lundgren, commented on the figures: “We have consistently seen that there is pent-up demand for travel and this surge in bookings shows the signal from the government that it plans to reopen travel has been what UK consumers have been waiting for.”
“Monday’s announcement was incredibly helpful but, this was opportunistic on the back of recent market conditions irrespective of [the] announcement,” said Mark Lynagh, co-head of Emea debt markets at BNP Paribas, who worked on the deal. He added that this “plays into the optimism around the recovery that we’re going to see and there is a view that low-cost carriers like easyJet are well placed to benefit from that”.
Risks
EasyJet reported a £1.3bn loss towards the end of 2020, down from a £430m profit the year before. Even if the airline industry does recover, it could be a long road back for EasyJet, as many of its costs have remained constant throughout the pandemic.
Otherwise, there is the question of if and when travel can return to normal. Even once most people have received a vaccine jab, if the disease lingers, then international travel could be restricted beyond May 17.
“The challenge is to find a way to live with it without keeping huge restrictions in place,” says Azra Ghani, professor of infectious disease epidemiology at Imperial College London.
ESG ETFs see new high of $210bn assets under management
ETFs (Exchange-Traded Funds) have reached a record high of $8trn assets under management (AuM) as investors scour the market for options that meet ESG (environmental, social and governance) standards.
This is according to data collected in February by trackInsight, a global Exchange-Traded Funds analysis platform.
Funds listed in North America saw over $95bn flow in last month, nearly a 50% increase month-on-month. 3,200 ETFs are now listed on North American exchanges with $5.9bn in AuM.
February was the single large month in history for ESG funds, which saw $19bn coming in, to reach a new high of $210bn.
ESG ETFs: Flows and AuM
Bitcoin ETFs also reached record highs in February with nearly $0.25bn flowing in. Bitcoin is tracked via ETFS by $4.5bn worth of assets, a small but increasing portion of its $1trn market cap.
In contrast, Gold funds lost their lustre over February as flows went negative, losing $5 Billion for a total of $186 Billion of AuM. However, Cannabis ETFs made up seven of the top ten best-performing funds this year.
Anaelle Ubaldino, head of research and investment advisory at TrackInsight, commented on the company’s findings:
“The flexibility of the ETF wrapper means that an ever-increasing range of ideas, from actively managed strategies to ESG and thematic investments like disruptive tech and Bitcoin, are now easily available to all investors, and many are taking the opportunity to gain exposure to asset classes and strategies that were previously unavailable to them.”
“However, the proliferation of choices, not just in areas like ESG or Bitcoin, but across ETFs in general means investors are faced with a paradox of choice. So investors must do their homework and look beyond the headlines and media hype when picking an ETF as products that are similar on the surface may be very different when you look under the hood.”
FTSE 100 could benefit again from rising oil prices
FTSE 100 is down 0.53%, by 35 points, during morning trading on Friday. The index is down to 6,615.82 points as a knock-on effect of a sell-off in America brought about by a rise in US bond yields.
“After Fed chair Jay Powell’s comments last night, that the Fed was focussed on its dual mandate of unemployment and inflation, and that the central bank was a long way from meeting either, would under normal circumstances, have been enough to assuage market concerns about a premature tightening of policy,” commented Michael Hewson at CMC Markets.
“By not specifically referencing or expressing concern over the recent move higher in longer term US yields, and looking to hold the markets hand, it was perhaps not surprising that the bond sell-off continued, however whether the sell-off is sustained is a different matter entirely.”
FTSE 100 Top Movers
The Asia focused banks, Standard Chartered (2.84%) and HSBC (1.75%) and supermarket giant Sainsbury (1.48%) led up the index during the morning session.
London Stock Exchange Group (-5.87%), Scottish Mortgage Investment Trust (-5.15%) and Admiral Group (-3.17%) are the biggest fallers on the FTSE 100 so far.
ConvaTec
ConvaTec, the medical technology company, confirmed a rise in full-year revenue along with a fall in earnings during 2020. For the year ending in December 2020, ConvaTec’s revenue increased by 4% to $1.89bn, while pre-tax earnings fell by 1.1% to $350m.
According to a statement by the FTSE 100 company, ConvaTec’s performance during 2020 was driven by strong growth in the Infusion Care and Continence & Critical Care businesses, offsetting limited growth in Ostomy Care and a decline in Advanced Wound Care.
Triple Point Social Housing REIT
Triple Point Social Housing REIT recorded an operating profit in 2020 of £30.2 million, up from £26.9 million the year before.
The profit came in addition to the company acquiring 58 properties (400 units) during the year at a total investment cost of £78.9 million. The trust’s total investment portfolio now stands at 445 properties.
Oil Prices
Oil prices have climbed to a 14-month high as Brent crude oil reached $67.85 per barrel today, its highest level since January 2020. West Texas Intermediate is up to $64.8 per barrel on Friday morning.
In the UK, the FTSE 100 has benefited from strong performances from oil companies in recent weeks, in addition to mining firms, relying on both sectors for gains.
