UK and Coronavirus – reviewing a difficult week for Boris’s government
Investment grade artist – Richard Hambleton, proving real value to investor’s portfolios during turbulent times.
Jean-Michel Basquiat
Price increase of £2,670,300 in 19 years
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Richard Hambleton
Price increase of $312,600 in 12 years.
Keith Haring
Price increase of $3,975,500 in 17 years.
Once an artist passes their artwork becomes limited to an archive of artwork they created whilst they were alive. In this case, Hambleton’s artwork from the start of his career i.e. the 1980s is becoming much harder to source as investors are seeking these works to build up their collections.
Below is Basquiat’s most memorable artwork originally sold for $19,000 in 1984 and progressed to sell for $110.5 million in the Sotheby’s auction in 2017.
To conclude, logic suggests that the Hambleton market will follow in the same footsteps as his predecessors Jean-Michel Basquiat and Keith Haring. Hambleton’s works have already seen some good capital growth since his death in 2017, the above artwork we showed is not a standalone example either. Investors and collectors worldwide are now stockpiling his work with a common-sense approach that it will rise in value in the coming years. FTSE 100 led lower by financials with Hong Kong exposure
Following the demerger of M&G Investments, Prudential is highly reliant on Asian earnings and disruption in Hong Kong could be highly damaging to 2020 earnings.
Burberry was one of the top risers after the luxury brand said it had seen a strong rebound in Asian sales as demand returns after lockdown measures are lifted. Whitbread was also stronger as the Premier Inn owner rebounded following the announcement of a rights issue.
Despite falling on Friday, the FTSE 100 is now down just 20% in 2020 having rallied 20% from the 23rd March low. However, there are concerns that the market hasn’t fully priced in the risk of coronavirus on the economy.
“After the shock of the COVID-19 lockdown, we have to go through a regular recession with high unemployment, low capex, low demand and that’s not what’s priced in at the moment,” said Andrea Cicione, head of strategy at TS Lombard. Burberry sees ‘strong rebound’ in Asia
FTSE 100 retreats on China concerns and poor UK data
easyJet shares fly as flights set to resume in June
Johan Lundgren, easyJet CEO commented on the resumption of flights:
“I am really pleased that we will be returning to flying in the middle of June. These are small and carefully planned steps that we are taking to gradually resume operations. We will continue to closely monitor the situation across Europe so that when more restrictions are lifted the schedule will continue to build over time to match demand, while also ensuring we are operating efficiently and on routes that our customers want.
“The safety and wellbeing of our customers remains our highest priority, which is why we are implementing a number of measures to enhance safety at each part of the journey, from disinfecting the aircraft to requiring customers and crew to wear masks. These measures will remain in place for as long as is needed to ensure customers and crew are able to fly safely as the world continues to recover from the impact of the coronavirus pandemic.” Whitbread announces rights issue to navigate COVID-19
Dow Jones keen to rebound after Moderna vaccine doubts
The buoyant start for the US gave a boost to European equities, which had initially suffered a sluggish opening. The DAX rose 0.7% to 11,170, while the CAC followed with a 0.2% increase, pushing it past 4,450 points.
Speaking on the UK, Spreadex Financial Analyst Connor Campbell stated,
The FTSE was up 0.6%, pushing the UK index back towards 6050. This as the pound fell 0.2% against the dollar and 0.6% against the euro. The fact Bank of England chair Andrew Baily refused to rule out negative interest rates – like Fed head Jerome Powell appeared to do last week – likely aided the FTSE and hurt the pound. Meanwhile against the euro specifically a better than forecast consumer confidence reading from the across the Eurozone gave the single currency a boost – it was also up half a percent against the greenback.
Marks and Spencer profit drops as strategy shifts towards food
The acquisition of a stake in Ocado Retail was probably the highlight of this strategy shift and is already providing M&S with a return. M&S acquired a 50% stake in Ocado Retail in 2019 for £750m to help boost their food offering as clothing sales continued to disappoint.
Marks and Spencer recognised a £2.6m profit from it’s investment in Ocado Retail in the 7 months to 1st March.
Shareholders will be pleased with the early news from the Ocado acquisition as sales at Ocado Retail jumped 40.4% in the 9 week period to 6th May, due to lockdown restrictions causing rocketing demand for home deliveries.
The market took the results well and shares rose over 2% on Wednesday morning. However, Marks and Spencer shares are down 63% over the last year, seeing them lose their position in the FTSE 100.
£1bn Action plan
Marks and Spencer outlined £1bn worth of measures to help bolster the cash position which included £500m in cost reductions. The group, which closed 54 legacy stores in 2019/20, had previously announced it was scrapping its final dividend to improve the balance sheet. “Last year’s results reflect a year of substantial progress and change including the transformative investment in Ocado Retail, outperformance in Food and some green shoots in Clothing in the second half,” said Steve Rowe, Marks & Spencer CEO. “However, they now seem like ancient history as the trauma of the Covid crisis has galvanised our colleagues to secure the future of the business. The way our people have rallied to support our customers and communities has been awe-inspiring.” “From the outset we recognised that we were facing a crisis whose effects and aftershocks will endure for the coming year and beyond: Whilst some customer habits will return to normal others have changed forever, the trend towards digital has been accelerated, and changes to the shape of the high street brought forward. Most importantly working habits have been transformed and we have discovered we can work in a faster, leaner, more effective way. I am determined to act now to capture this and deliver a renewed, more agile business in a world that will never be the same again.”Severn Trent increases dividend
Liv Garfield continued to thank the Severn Trent team; “I want to say thank you to all of my awesome colleagues; it has been a challenging time, and across each and every part of the business, they have shown amazing commitment to ensuring our customers have continued access to one of life’s essentials. We know that this is a difficult time for our customers, and I am incredibly proud of the ways in which the business has responded. We also understand that for many people this will be a difficult time financially, and we have stepped up our support for those on our Priority Services Register and customers that need extra help with their bills.”
“Our business remains strong and we have made further progress against the things that really matter to our customers with leakage, supply interruptions and water quality complaints all improving. We have invested £3 billion in our long- term future over the past five years and are now very focused on emerging from this crisis in the best possible shape to deliver against the exciting plans we have set out for the next five years.” 