D-PIMS Weekly Market Update - Week of 3rd to 9th August 2020
Today’s Monday Update:
Over the last week, most news was focused on either the economy or the Coronavirus:
• Millions of COVID-19 tests able to detect the virus within 90 minutes will be rolled out to British hospitals, care homes and laboratories to boost capacity in the coming months, health minister Matt Hancock said on Monday.
Indian drugmaker Wockhardt Ltd will supply millions of doses of multiple COVID-19 vaccines to the UK, including the one being developed by AstraZeneca and Oxford University, it said on Monday. The company has reserved fill-and-finish capacity - the final manufacturing step of putting vaccines into vials or syringes and packaging them - as part of an agreement with the UK government, it said. The UK government has also reserved one fill-and-finish production line at a Wockhardt subsidiary in Wrexham, Wales for its exclusive use for the next 18 months to secure supply.
Euro zone manufacturing activity expanded modestly last month, its first growth since early 2019, adding to hopes the sector is emerging from the hit of the coronavirus pandemic.
Rival drugmakers AbbVie Inc, Amgen Inc and Takeda Pharmaceuticals Inc on Monday said they have begun treating patients in a trial to quickly show whether a drug from each company can be repurposed and used against COVID-19, the disease caused by the novel coronavirus.
The European Union is willing to compromise, to help break a deadlock in Brexit talks by softening its demand that Britain heed EU rules on state aid in the future, diplomatic sources told Reuters. They said Brussels could go for a compromise, entailing a dispute-settling mechanism on any state aid granted by the UK to its companies in the future, rather than obliging London to follow the bloc’s own rules from the outset.
• On Tuesday, Japanese Foreign Minister Toshimitsu Motegi said he will visit Britain during the week for what he said will be difficult talks with British Trade Minister Liz Truss, with the hope of finding middle ground and concluding a post-Brexit trade deal.
Billionaire Richard Branson will fly into space on a Virgin Galactic rocketship early next year, the space tourism company he founded said, adding that it would raise new funds with a share offering. Branson’s trip to space hinges on the success of two upcoming test flight programs, Virgin Galactic Holdings Inc said, with the first powered spaceflight scheduled for this fall from Spaceport America. Virgin Galactic offers zero-gravity experiences to customers with its centrepiece SpaceShipTwo plane, and has long-term travel plans to transport passengers quickly from city to city at near-space altitudes.
• British businesses in the services and manufacturing sectors grew at the fastest rate in more than five years last month, as they began to recover from the effect of the COVID-19 lockdown, a survey showed on Wednesday. The IHS Markit/CIPS final composite Purchasing Managers’ Index (PMI) rose to 57.0 from 47.7 in June, its highest since June 2015. “UK service providers are starting to see light at the end of the tunnel after a record slump in business activity during the second quarter of 2020,” IHS Markit’s economics director, Tim Moore, said.
Scotland imposed new restrictions on the oil city of Aberdeen on Wednesday to tackle an outbreak of COVID-19 cases, closing pubs and restaurants and ordering visitors to stay away.
• Orders for German-made goods rose sharply in June, in the latest sign that Europe’s largest economy is starting to shrug off the effects of months of lockdown, but volumes were still far below pre-pandemic levels, according to Statistics Office data on Thursday.
Also on Thursday, The Bank of England (BOE) said it saw no immediate case to cut interest rates below zero, as it warned the economy would take longer to recover from its COVID slump than it previously forecast. BOE Governor, Andrew Bailey, backed the government’s decision to close its furlough scheme - which has supported 9.6 million jobs through the COVID-19 pandemic - at the end of October. “I don’t think (we should be) locking the economy down in a state that it pre-existed in, when we may have to look at some elements of structural change in the economy to respond to the world we now live in. You have to look forward,” Bailey told the BBC.
U.S. President Donald Trump on Thursday unveiled sweeping bans on U.S. transactions with China’s ByteDance, owner of video-sharing app TikTok, and Tencent, operator of messenger app WeChat. The executive orders, which go into effect in 45 days, come after the Trump administration said this week it was stepping up efforts to purge “untrusted” Chinese apps from U.S. digital networks.
• On Friday, Britain announced a £200 million scheme to help smooth post-Brexit trade disruption for businesses in Northern Ireland when European Union freedom of movement rules cease to apply at the end of the year. Senior minister Michael Gove will set out the new Trader Support Service during a visit to Northern Ireland on Friday, promising a free end-to-end service to deal with import and safety and security declarations on behalf of traders. An additional £155 million will be invested in the technology needed to make it work.
Britain’s top minister overseeing Brexit talks said on Friday that progress had been made with the European Union, so he believed the two sides would clinch a free trade agreement. “All the evidence is that we are making progress with the European Union,” Michael Gove told reporters in Northern Ireland. “I believe that there will be a successful negotiated outcome.” While the Government has always said it believed a deal was possible, the tone of the comments from Gove was distinctly more positive than in recent months.
• Over the week, the main Global Stockmarket indices were mostly up, helped by improved economic figures emerging. The investment D-PIMS Portfolios were all up over the week, particularly the high risk Portfolios. They were helped by their diverse exposure.
The value of investments and the income from them can fall as well as rise and you may not get back the original amount you invested.
Past Performance is no guarantee of, or guide to future returns.
The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.