- In NEWS ON CORONATRENDS, China rolls out a vaccine, WFH looks set to become the norm, DPD boosts jobs, Cineworld closes cinemas and law firms face an increase in PI insurance
- In 5G NEWS, Samsung aims to profit from Huawei’s misery and the UK’s 5G rollout looks set to generate thousands of jobs
- In INDIVIDUAL COMPANY NEWS, Nexi and Sia announce a €15bn merger while Ola gets booted from London
- AND FINALLY, I bring you a green dog…
NEWS ON CORONATRENDS
So China rolls out an experimental vaccine, WFM looks like a permanent fixture, DPD delivers parcels and now jobs, Cineworld closes cinemas and law firms face increases in PI insurance…
China rolls out experimental Covid vaccine as it eyes global market (Financial Times, Christian Shepherd) shows that Beijing is going to expand a programme of distributing experimental coronavirus vaccines after an announcement last month by state-owned China National Biotech Group (aka Sinopharm) that it had already distributed experimental vaccines to hundreds of thousands of Chinese. This programme was actually initiated in July by the Chinese government and vaccines have been administered despite the fact that they have not fully progressed through the final stage of testing, phase three. It started off with frontline health workers and state employees going to high-risk countries but it will now be rolled out more widely. * SO WHAT? * This is clearly a high risk strategy that many of the subjects seem willing to take. As things stand currently, Sinovac, Sinopharm and CanSino Biologics have the most advanced vaccine contenders and, this month, the United Arab Emirates became the first country outside China to approve Sinopharm’s vaccine for limited use. China’s approach sounds incredibly risky, but let’s hope for all our sakes that this will be a risk worth taking and won’t have any nasty side-effects. I can’t see a similar thing happening in too many other countries because there would no doubt be massive litigation risk if things started to go wrong.
Covid-19 has changed working patterns for good, UK survey finds (The Guardian, Joanna Partridge) shows that the coronavirus outbreak is likely to change working practices permanently as a survey from the British Council for Offices (BCO) showed that the majority of white-collar workers (62% of senior execs and 58% of entry-level staff) want to have a mix of office and home-based working. The BCO’s chief exec Richard Kauntze believes that “The idea that people will return to the five-day week in the office has gone, and I think a much more blended approach is likely”. Another survey carried out by the Institute of Directors found that 75% of directors wanted more home-working after the pandemic and over 50% of them aim to reduce their long-term use of work spaces. If that is the case, Law must be rethought for mass homeworking (Financial Times) shows that the law, which is currently aimed more at traditional nine-to-five work patterns, must change to adapt to such evolution. It suggests that changes must be made in three main areas: firstly, the physical environment (law should cover things like the use of worker tracking software, who should supply the equipment and what other benefits should be supplied etc.); secondly, what to do with tax (what will be tax deductible – there are current laws governing the self-employed but how would they applied more widely?) and thirdly, how to protect worker welfare. Unions complain that this will weaken their power and give companies excuses to outsource jobs abroad. * SO WHAT? * I don’t think that we are going to see everyone returning to
their offices for five days a week as before, but I don’t think that everyone will be working from home either. A balance will need to be struck between the two that will satisfy both employers’ and employees’ needs to do their work effectively in a mutually beneficial environment. I think that there could be some life-changing benefits from more freedom (evening out property prices across the country as fewer people NEED to live in city centres, improved work-life balance as workers can to their kids’ pick-up and drop-off etc., a more creative mindset regarding how to work smartly etc.) but I also believe that there is a big chance that we will slide back into old habits again a few years down the line. I say this because if things aren’t going well for employees in a company, I think we will see a rise in presenteeism as they will naturally feel that seeing bosses and colleagues in person will mean they could be less likely to get the chop in the next round of redundancies. And if employees feel the need to be present, their bosses will also feel the need to do the same – and before you know it, we are back to nine-to-five again. Let’s hope that we can all use this outbreak and turn it into something more positive.
We have all been ordering more online under lockdown leading to Parcel delivery boom prompts DPD to employ 20,000 new staff (Financial Times, George Steer) which confirms the coronavirus trend that is also benefiting rivals such as Amazon, Hermes and DHL Express. DPD is owned by France’s La Poste and forecasts a 23% increase in package deliveries this year, resulting in a 30% revenue uptick. Amazon and Hermes have added a combined 20,500 staff in the UK while DHL Express Europe has added 3,000. DPD said that these jobs are permanent, as opposed to seasonal, as they reflect continued increased demand.
Then in Cineworld set to shut all UK and US screens (Financial Times, Alice Hancock and Anna Nicolaou) we see that the world’s second biggest cinema chain is likely to announce the closure of 90% of its screens indefinitely. This may or may not have been precipitated by the recent news of yet another postponement of the latest Bond film and will last until more Hollywood releases are confirmed. Over 30,000 jobs hang in the balance worldwide, including 5,500 in the UK. * SO WHAT? * The problem is that people are not keen on going to the cinema under the current environment. Christopher Nolan’s recent sci-fi epic Tenet cost about $200m to make but has only made $41m so far in America. If you add to that the complications of the company trying to back out of a previous bid to buy Canadian group Cineplex, things just aren’t looking good right now. I just don’t know whether such companies will be able to survive as I would have thought they are unlikely to be high on governments’ priority lists.
In Law firms hit with big increases in professional indemnity insurance (Daily Telegraph, Michael O’Dwyer) we see that law firms have been hit with massive increases (20-30%) in the cost of professional indemnity (PI) insurance as it is feared that the economic downturn will result in a hike in claims. Such insurance covers the cost of claims made against lawyers for mistakes or negligence. * SO WHAT? * Although lawyers see a particularly high number of claims in recession, financial advisers, architects, engineers and surveyors also see a spike.
Samsung tries to make hay and UK jobs are to get a boost in rollout…
Samsung mounts 5G offensive as countries review Huawei networks (Financial Times, Edward White) shows that Samsung Electronics is trying to make ground on rivals such as Nokia and Ericsson in 5G networks. Given the battering that Huawei is still facing, the race for rivals to take their place is hotting up as demand for 5G is not slowing down. * SO WHAT? * You will recall that Samsung
recently signed a $6.6bn contract to supply 5G equipment to US group Verizon until the end of 2025 – and there is plenty of scope for this to increase as Ericsson and Nokia currently have a 70-80% market share in global network equipment.
5G rollout to deliver 5,000 tech jobs (The Times, Ashley Armstrong) suggests that the rollout of 5G networks will result in thousands of news jobs as Liberty Global (owner of Virgin Media) and Telefonica (O2’s parent) have pledged to create 4,000 new jobs and 1,000 new apprenticeships to accelerate 5G. The two agreed a £31bn merger in May to form a proper challenge to BT and Sky. Sounds great, no?
INDIVIDUAL COMPANY NEWS
Nexi and Sia announce a €15bn payments combo and Ola gets the cold shoulder…
Italy’s Nexi and Sia set to unveil €15bn merger (Financial Times, Silvia Sciorilli Borrelli) heralds a potential combination of Italian payments providers Nexi and Sia to become one of Europe’s biggest fintech groups. The combo has been under negotiation for about two years. * SO WHAT? * This would herald the birth of a potential European “champion” as the world of payments continues to consolidate in an industry where scale is key.
Then in Uber-rival Ola to appeal as it is banned from London (Daily Telegraph, Ed Clowes and James Titcomb) we see that TfL has told Ola, the rival that was trying to take advantage of Uber’s problems in London, that it has now been deemed to be not “fit and proper” to hold a licence due to the discovery of a number of flaws in Ola’s operating model. It will have 21 days to appeal and will continue to operate during this process. Uber will no doubt be pleased!
Some of today’s market, commodity & currency moves (as at hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!
|FTSE 100 *||Dow Jones *||S&P 500 *||Nasdaq*||DAX *||CAC-40 *||Nikkei **||Shanghai **|
|Oil (WTI) p/b||Oil (Brent) p/b||Gold Per t/oz||£/$||€/$||$/¥||£/€||$/₿|
(markets with an * are at yesterday’s close, ** are at today’s close)