N4 Pharma shares plunge 37%
N4 Pharma shares (LON: N4P) have plummeted over 37% on Monday’s opening.
Following news that recent research didn’t produce positive results, the company said it would be moving onto a new study of treatment into Covid-19.
In mid-August, the pharmaceutical company said stage two of the studies had been successfully completed, however, latest news shows that stage three was not as successful.
“Following the completion of stage-three of the proof-of-concept work and a review of the results, the company is continuing to explore the utility of Nuvec with the coronavirus plasmid and will progress to an in vivo study in due course,” said N4 Pharma on Monday.
“Whilst the single intradermal injection used in the stage-three pre in vivo study did not result in a measurable expression of the spike protein in the target cells of the murine target, neither did the positive control.
“Additional exploratory studies will continue to understand the translation potency of the coronavirus plasmid including optimisation of Nuvec plasmid loading.
“With this in mind and taken together with previous positive data, the company has decided to proceed to a full in vivo study to demonstrate the capability of Nuvec to generate Covid-19 specific antibodies.”
Nigel Theobald, the group’s chief executive, commented: “The initial pilot work of stage 3 of the Covid-19 proof of concept work was narrow in its scope and, having reviewed the results, we have taken the decision to move to a full in vivo study to establish an immune response through the production of antibodies.
“In undertaking the work we aim to demonstrate Nuvec(R)’s capabilities both as a potential delivery technology for multiple vaccines as well as for Covid-19 specifically. I look forward to providing further updates in due course,” he added.
N4 Pharma shares (LON: N4P) are currently trading -32.29% at 6,50 (0841GMT).
New Look plans CVA to avoid collapse
New Look is warning that unless it receives further rent cuts, it could go bust.
The retailer has seen sales suffer amid the coronavirus pandemic and is in the process of proposing a second company voluntary arrangement (CVA).
New Look employs 12,000 people across the UK and has 500 stores.
It will be the group’s second CVA in just two years.
The retailer will propose to pay rent at 400 of its stores based on two to 12% of its turnover.
Melanie Leech, Chief executive of the British Property Federation, said that changes to retail leases must be “underpinned by transparency and fairness, not as part of an underhanded attempt to exploit a legislative loophole to simply get out of leases freely agreed and signed by both parties”.
The retailer has seen a 30% year-on-year fall in sales, whilst sales have plummeted since shops have reopened since the lockdown.
Chief executive Nigel Oddy said in August: “Covid-19 has changed the retail environment beyond recognition, accelerating the permanent structural shift in customer spend and behaviour from physical retail to online, which we have seen in recent trading. Despite this, we still fundamentally believe the physical store has a significant part to play in the overall retail market and our omnichannel strategy.”
“However, the magnitude and speed of the shift in consumer behaviour and confidence nationwide requires a change in the way leases are structured in order to manage uncertainty so that stakeholders share both risk and upside, and to ensure continued business viability.”
The meeting date to decide on the CVA will be held on 15 September and will require a 75% vote.
Post Office in talks to sell telecoms and insurance arms
The Post Office is in talks over selling its telecoms arm and its insurance business.
The new chief executive, Nick Read, hopes to shake things up as he was appointed just last year at the government-owned business.
The Post Office is reportedly selling the telecoms arms, which has 500,000 customers and an annual revenue of £150m, for £100m. Meanwhile, the insurance arm of the business has 300,000 customers.
A source told Sky News that selling both of the divisions will allow the group to focus on mail, parcels, cash and banking services.
Read joined the Post Office almost a year ago from the Nisa convenience store group. He continues to deal with the effects of the major scandal that saw Post Office branch managers wrongly sent to prison.
Last year the group agreed to pay £58m to settle a legal claim brought by a group of 550 branch managers.
The group has declined to comment.
US budget deficit hits record highs
The US budget deficit has hit a record high of over $3tn (£2.3tn), as the government continues to spend billions on coronavirus relief.
Within the first 11 months of the financial year, the US government spent a total of $6tn – $2tn of which was on Coronavirus relief.
The country only took in $3tn worth of taxes during this same period of time, leaving a difference that is over double what it was during the 2009 financial crisis when the full fiscal 2009 deficit totaled $1.4 trillion.
Nancy Vanden Houten of Oxford Economics said in a research note: “While we expect policymakers to enact another fiscal relief package, it won’t come soon enough to have an impact on this year’s deficit.”
There is one month left in the US’ financial year, which could see the budget deficit grow even higher.
Alan Blinder, a professor of economics and public affairs at Princeton University, told the BBC earlier this year: “So far, the answer has been everything is fine, as to how much borrowing the United States government can do before investors start to feel satiated with US debt. But there is a legitimate question.”
The non-partisan Congressional Budget Office has estimated the full-year deficit in the US to reach $3.3tn.
Job losses could exceed one million in 2020, new study finds
A new study has shown that UK job losses in Autumn are expected to exceed 700,000.
According to the Institute for Employment Studies (IES), between 500,000 and 700,000 redundancies could be announced during autumn.
This is on top of 240,000 redundancies that have been announced already this year, taking the total number of job losses of 2020 to over a million.
The figures come amid the UK’s deepest recession.
“It would also be comfortably the highest level since this data series began in 1995,” said the report ”Sadly, much of this restructuring appears now to be inevitable and reflects both significant structural changes (either a result of, or accelerated by, the pandemic) and the damage already done to those firms most affected by the crisis.”
The government’s furlough scheme is coming to an end in October, which will see a new wave of job losses.
As the Autumn budget approaches, there is pressure from the government to support those affected.
Tony Wilson, the IES director, said: “We can do a lot more to minimise the job losses and support those who are most at risk.”
“Although most of those who were furloughed by their employers are now back at work, there are still many parts of the economy where perfectly viable businesses cannot bring people back because of the ongoing disruption caused by the pandemic. So we need tightly targeted support to help these firms ride out the next few months, where they can commit to not laying staff off.”
Global equities finish an erratic week on a subdued note
In a week of sharp ups and downs, global equities were perhaps ready for a quiet day as Friday swung around, and a quiet day is what they got.
The Dow Jones led the pack, up 0.81% to 27,756 points – or put another way, just shy of the 28k mark it has seen as something of a second home since breaking its all-time record last December.
Following close behind were Asian equities, with Shanghai’s SSE Composite up 0.79% to 3,260, the Hong Kong Hang Seng Index up 0.78% to 24,503 and Tokyo’s TOPIX up 0.72%, at 1,636 points.
Failing to really be inspired by the US entry this afternoon, Eurozone indexes lagged behind, with Germany’s DAX down by 0.17% to 13,187 and France’s CAC up by a modest 0.16%, to 5,032 points. Just ahead was the FTSE, up by exactly 0.50%, to 6,033, as the last bell of the week sounded in London.
This last spurt of energy was in UK equities was likely led by a mixture of the Sterling’s slow recovery after a rough start to the week, and slight giddiness at July’s better-than-expected GDP reading.
Talking on the Pound Sterling and the outlook for the coming week – between Chinese data and continued big tech volatility – Spreadex Financial Analyst, Connor Campbell, commented:
“[…] the pound also effectively sat on its hands, up 0.1% against the dollar but down the same amount against the euro. News of 6.6% growth in July meant little to the currency given the deafening no deal Brexit alarm bells that have been ringing all week.”
“Turning to next week and it’s a bit of a gauntlet for investors, with a Chinese data dump in the early hours of Tuesday morning – including the all-important retail sales reading – followed by the latest UK jobs report; a Fed meeting on Wednesday night; and September’s Bank of England get-together at Thursday lunchtime.”
“And that’s not to mention the volatile state of the US tech sector, which is still twisting and turning in the wind.”
Peloton revenue surges 172% thanks to lockdown demand
Peloton (NASDAQ: PTON) sales and shares surged after the group became a popular purchase during the lockdown.
As gyms closed across the world, sales at Peloton grew to 3.1m – over double than the membership base a year previously.
Shares jumped 10% on the news as the group revealed fourth-quarter revenue surged 172% at $607.1m. Analysts on average expected a revenue of $583 million.
Chief executive John Foley said: “Demand… remains strong and member engagement remains elevated, despite improving weather and the gradual reopening.”
Peloton has said revenue forecast for the next financial year is expected to reach at least $3.5bn – higher than Wall Street’s expectations.
“FY 2020 was a transformative year for Peloton. We made great progress in scaling our business, from manufacturing and logistics, to member support and field operations,” said the group in a statement.
“We launched operations in Germany, our first foreign language market, and continued to grow our footprint in the United States, Canada, and the United Kingdom. By the end of FY 2020 our Peloton membership base grew to approximately 3.1 million, compared to 1.4 million Members in the prior year. Fueled in part by the challenges associated with COVID-19, Member engagement reached new highs with 164 million Connected Fitness Subscription workouts completed in FY 2020.”
Economy grows 6.6% as UK continues recession recovery
New figures from the Office for National Statistics (ONS) have revealed the UK economy to surge by 6.6% in July.
Whilst it was lower than the 8.7% growth in June, the growth shows a steady path to recovery.
The economy remains 11.7% the peak lows amid the Coronavirus pandemic, as the UK fell into the worst recession on record.
The latest figures come as the furlough scheme is coming to an end. There is growing pressure on the government to extend the scheme or provide support to those who still cannot work amid Coronvirus and social distancing rules.
Darren Morgan, director of economic statistics at the ONS, said: “While it has continued steadily on the path towards recovery, the UK economy still has to make up nearly half of the GDP lost since the start of the pandemic.”
In the latest figures, the service sector grew by 6.1%, the production grew by 5.2%, and construction surged by 17.6%.
Rishi Sunak commented on the update: “While today’s figures are welcome, I know that many people are rightly worried about the coming months or have already had their job or incomes affected.”
“That’s why supporting jobs is our first priority and why we’ve outlined a comprehensive Plan for Jobs to ensure nobody is left without hope or opportunity.”
“We’re helping people return to work with a £1,000 retention bonus for jobs brought back from furlough. And we are creating new roles for young people with our Kickstart scheme, introducing incentives for training and apprenticeships, and supporting and protecting jobs in the tourism and hospitality sectors through our VAT cut and last month’s Eat Out to Help Out scheme,” he added.
Ashmore reveals profit rise amid assets under management decline
Ashmore (LON: ASHM) has revealed full-year results for the year ending 30 June.
Pre-tax profits at the asset manager rose 1% to £221.5m, despite a fall in assets under management amid the Coronavirus pandemic.
Assets under management fell 9% to $83.6bn. The group has proposed a final dividend of 12.10 pence, leading to a total dividend of 16.90 pence.
Shares fell by 0.2% in early trading on Friday.
Mark Coombs, the group’s chief executive, said: “Ashmore has delivered a solid operational and financial performance over the past year, against a backdrop of significant market dislocation in the third quarter as a result of the worldwide Covid-19 pandemic.”
“The group’s business model, based on a consistent global operating platform, has proven its resilience in this challenging period and, after the initial negative impact in the third quarter, the investment processes are delivering outperformance as markets recover and client flows have continued to stabilise.
“The economic and social effects of the virus will continue for some time and the medium to long term impact remains uncertain. However, the huge diversity of emerging markets means that countries will be affected and will respond differently, thereby providing a wide range of potential return scenarios for active managers,” he added.
Ashmore shares (LON: ASHM) are trading +0.1% at 392.00 (0939GMT).