Chinese equities rally

After a weekend of unrest in major Chinese cities, the authorities have signalled they would work towards rolling out the coronavirus vaccines to the older members of their populations. The over 65s have a low rate of vaccination compared to other developed economies and has prevented the reopening of the economy.

Chinese equities rallied on the news and sparked a global risk-on rally.

FTSE 100 miners gain

The optimism from China spilled over into the FTSE 100’s natural resources sector with the mining names dominating the top gainers on Tuesday morning.

easyJet shares slip

easyJet had a record 4th quarter but overall results softer performance in the summer due to flight cancellations overshadowed recent progress as shares fell.

“Bottom line profits remain a little out of reach for easyJet, who’ve seen a wave of headwinds over the year from Omicron early on, to airport disruptions and flight cancellations more recently. Rather than head for the emergency exit, easyJet’s made the best of a bad year and full year results mask a positive fourth quarter, where on some profit measures easyJet posted record numbers,” said Matt Britzman, Equity Analyst at Hargreaves Lansdown.

The pound gains ahead of BoE speech

Traders were betting on positive comments from the Bank of England’s Andrew Bailey ahead of his speech later on Tuesday. The Bank of England are meeting once more before the end of the year and markets will hang on his every word for hints of whether the bank hikes 50bps or 75 bps.

Oil rallies

Oil has faced threats of OPEC+ production increases and concerns about global growth in recent weeks. Today, the prospect of China’s demand increasing saw oil rally.

The Cheltenham-based ‘cool’ clothing group has confirmed that talks are underway with the Elliott Advisers-backed Bantry Bay Capital to help the refinance the £70m asset-backed facility that has to be completed in January.

Superdry (LON:SDRY) designs trend-setting affordable, premium quality clothing, accessories and footwear and its products are sold globally.

With some 695 branded stores, 220 physical stores and 475 franchisees and licensees, spanning 50 countries and employing some 4,000 people globally, the group has a strategy for delivering continued growth through its multi-channel approach that combines operating Stores, its Ecommerce sites, and through offering Wholesale.

The company has a declared mission “To be the #1 sustainable style destination” through its very distinct collections and defined by consumer style choices.

The group currently has an Asset Backed Lending Facility of up to £70m which is due to expire at the end of January 2023.

As of the end of October the group had only drawn down £45.3m of that facility, while current projections suggested the group would remain cash positive throughout most of the first half of the calendar year. 

With the early October Final Results Statement the company reported that it had positive discussions with prospective lenders but had not yet secured committed funding beyond January. 

Until those discussions conclude, the Directors stated that a material uncertainty exists around the going concern of the group, although they remained confident of a positive outcome.

Bantry Bay is a London-based specialist lender providing commercially-driven and creative debt capital solutions to corporates undergoing change.

The Elliott Advisors supported company focuses on asset-based financings, ranging from £10m to £100m+, for corporates underserved by the mainstream debt market, across a wide array of industries.

During the summer it was involved in a £60m facility out to Matalan, while it is said to be involved currently in discussions to fund some £35m to the Wilko retail chain.

The £104m capitalised Superdry group’s shares responded rapidly to the news with a heavily traded 4p rise to 130p.