AstraZeneca shares slip after analyst says vaccine will struggle to get green light in US – live updates
04:05 PM
Johnson’s winter plan: key points
From the wires, here are some of the key points from Boris Johnson’s announcement of new coronavirus rules for England:
03:58 PM
City Intelligence: AA needs its own rescue
Our Chief city commentator Ben Marlow has been writing about the impending takeover at vehicle repair company AA.
Imagine the red faces over at the AA as the self-styled fourth emergency service finds itself in need of rescue.
And who will foot the bill for this spectacular car crash? Shareholders, of course.
Yes, 35p is a generous 40pc premium to a share price that had plumbed the depths of 25p back in August, but that is scant consolation for any investors unfortunate enough to have bought in at the 250p-a-share float price.
This extract comes from our City Intelligence newsletter, you can sign up for the newsletter here for incisive analysis of the day’s biggest corporate story.
03:38 PM
AstraZeneca shares slip as analysts questions efficacy
AstraZeneca shares have slipped further after an analyst offered a stinging review of the company’s vaccine results, forcing a response from the company.
SVB Leerink analyst Geoffrey Porges said the treatment may never gain approval from US regulator the FDA, and said Astra had highlighted results from a “relatively small” number of patients.
SVB Leerink analyst Geoff Porges sharply critical of $AZN #Covid19 vaccine, calls announced efficacy results “embellished” and raises questions about safety data disclosures.
Porges predicts the vaccine will never be licensed in U.S.
— Adam Feuerstein (@adamfeuerstein) November 23, 2020
Bloomberg has more details on his comments:
The combination of lower effectiveness, a troubled trial design and the occurrence of severe safety events make Porges believe the product has no future in the U.S. The analyst also said Astra and Oxford officials would be “roundly criticized” for their lacking safety disclosure that was “hardly reassuring.”
AstraZeneca has called his comments harsh, urging patience.
03:23 PM
Follow live: Johnson to set out plans for post-lockdown tier system
Boris Johnson is to set out his plans for the return of the three-tiered system after England’s national lockdown is lifted next week.
Much of the detail has already surfaced, with church services resuming, shops reopening and the pub curfew being tweaked. However a ban on household mixing is still expected for much of the country.
The Prime Minister will address MPs remotely as he continues to self-isolate in Downing Street, as he looks to win over the growing number of Tories concerned about his erosion of civil liberties by promising to restart church services and other forms of worship.
03:12 PM
US business activity continuing to surge
US private-sector business activity continued to rise sharply during November as recovery momentum continued to build.
The latest purchasing managers’ index data shows improvement across the board, as well as a record rise in employment.
Here are the readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
US private sector business activity rose sharply in November, as growth momentum picked up further. The overall expansion was the fastest for over five-and-a-half years, as both manufacturers and service providers indicated a steeper upturn in output
02:41 PM
Wall Street rises at the open
Another Monday, another vaccine-induced rally. US stocks have opened higher following the AstraZeneca update.
02:13 PM
Johnson and Von Der Leyen to talk later this week
Times Radio’s Tom Newton Dunn is reporting that Boris Johnson and Ursula Von Der Leyen will talk over the phone later this week, suggesting we are moving closer to a deal between the two sides.
I understand No10 and the EU Commission are setting up a phone call – or even a face to face meeting – between Boris Johnson and Ursula Von Der Leyen for later in the week. Good well be a pivotal one for a Brexit trade deal.
— Tom Newton Dunn (@tnewtondunn) November 23, 2020
01:44 PM
Red Bull payout tops half a billion euros after profit rise
Red Bull, the energy drinks maker, raised a payout to its owner to over half a billion euros after a jump in sales and profit.
Bloomberg has more details:
Red Bull’s net income rose 10pc last year to €818m after revenue grew 8.6pc and payouts from subsidiaries soared, according to a filing to the Austrian company register. The payout to founder and boss Dietrich Mateschitz and Thailand’s Yoovidhya family was €554m…Thai entrepreneur and sometime duck farmer Chaleo Yoovidhya teamed up with Mateschitz in 1987 after the Austrian marketing whiz discovered the energy drink sold by Chaleo’s firm while looking to counteract jet lag on a business trip.
01:20 PM
Astra shares dip slightly after vaccine news
AstraZeneca shares have dipped slightly following today’s vaccine announcement. That’s not necessarily an indictment of the trial’s results, which appear to have been pretty solid.
Barclays’ Emily Field says investors may be reassured that the treatment isn’t a failure, but will be looking more towards other opportunities:
Taking a step back, as it relates to the AZN equity story, we think this is a good enough result such that it removes the downside from abject failure of the vaccine. Furthermore, in today’s release, AZN CEO Pascal Soriot reiterated the company’s “no-profit pledge” in that it does no tinted to make any profits from AZD1222 throughout the duration of the pandemic.
Thus, we think the most appropriate way to frame today’s news for AZN is that it is a clearing event; as we don’t see the vaccine as being particularly financially impactful to AZN, given that this news is now “out of the way,” it allows the AZN conversation to move back to the company’s key growth oncology products
01:01 PM
PM to hold press conference at 7pm
The Guardian’s Jessica Elgot tweets:
New – A press conference at 7pm with the PM (remotely) and Chris Whitty as well as Andrew Pollard, director of the Oxford Vaccine Group
— Jessica Elgot (@jessicaelgot) November 23, 2020
12:45 PM
Aviva continues sell-off
Aviva is to sell its 80pc stake in Italian life insurer Aviva Vita to UBI Banca, its joint venture partner, for €400m (£355m) in cash.
My colleague Michael O’Dwyer reports:
The general and life insurer has already sold its Singaporean business as it seeks to focus on its operations in the UK, Ireland and Canada,.
It is reported to be in talks to sell its French business for up to €3bn to a consortium led by German insurer Allianz.
Amanda Blanc, chief executive of Aviva, said: “Our strategy is about focus and delivery. The sale of Aviva Vita is another important step forward as we reshape our portfolio and follows the recent announcement of the majority sale of our Singaporean business.”The FTSE 100 insurer is considering options for its other Italian operations, which comprise wholly-owned Italian life and general insurance businesses and a 51pc stake in a joint venture with UniCredit.
12:30 PM
PMIs: Full reports
My colleagues Tom Rees and Tim Wallace have full reports on this morning’s PMIs readings:
11:59 AM
Market moves
With almost four hours of trading gone, European markets are still slightly higher, but off their session highs.
11:52 AM
Pandemic hits Daily Mail owner’s profits
Revenues and profits at the publisher of the Daily Mail and the i newspaper have suffered a “significant disruption” due to the pandemic.
My colleague Ben Woods reports:
Pre-tax profits at Daily Mail and General Trust (DMGT) halved to £72m for the year to September, with revenues down 14pc to £1.2bn.
The decline was largely driven by pressure on its newspaper business, which was hit by a slide in print advertising and sharp drop in circulation from Metro, its free title targeting commuters on public transport.
However, the company said it had “confidence in the future” and lifted shareholder payouts from 23.9p to 24.1p, prompting investors to send shares up 1pc to 687p in morning trading.
11:08 AM
Barnier: Still working on a deal, but ‘fundamental divergences’ remain
The EU’s chief Brexit negotiator tweets:
???? After technical discussions this weekend, negotiations continue online today with @DavidGHFrost and our teams. Time is short. Fundamental divergences still remain, but we are continuing to work hard for a deal.
— Michel Barnier (@MichelBarnier) November 23, 2020
11:04 AM
Qantas boss: We’ll require international travellers to be vaccinated
Alan Joyce, the chief executive of airline Qantas, has confirmed in an interview with Australia’s Channel 9 that the airline will say international travellers must be vaccinated in order to board its aircraft – once treatments are widely available.
11:01 AM
Pound rises on Brexit and vaccine hopes
The pound has risen solidly today, hitting its highest level since September on hopes of Brexit progress and continued optimism about progress on Covid-19 treatments:
10:51 AM
KPMG appointed to investigate Petropavlovsk deals
Russia-based gold miner Petropavlovsk has appointed KPMG to investigate historic deals in the face of concerns about its corporate governance.
My colleague Rachel Millard reports:
KPMG will look into transactions involving the company and its subsidiaries in the three years to August 2020, focusing on related-party transactions, Petropavlovsk said.
Shareholders voted 84pc in favour of the investigation at a meeting in August as boardroom turmoil rocked the company.
Chairman James Cameron, who took over in August following a shareholder coup that resulted in several board members being ejected, said: “The current board is committed to transparency and to exposing any historic instances of failed corporate governance, as well as to the recovery of any misappropriated funds or assets.”
The company added: “The board believes that it has already identified several areas which warrant further enquiry and will be providing such information to KPMG.”
10:25 AM
UK PMIs reaction: Job losses are key concern
Here’s some reaction to this morning’s PMI readings, which beat expectations but have sparked concerns over job cuts.
Samuel Tombs from Pantheon Macroeconomics says:
Markit’s composite PMI indicates that the second lockdown has been far less damaging for the economy than the first. It remained greatly above April’s record low of 13.8 and May’s 30.0 level. What’s more, the PMI fails to capture the magnitude of changes in activity within firms. Many businesses that cannot operate as normal seem to be continuing to trade in some form this time, for instance by offering “click and collect” or takeaway services.
James Smith from ING concurred that the the UK faces a smaller downturn than in the spring:
This is partly explained by the fact that the economy never came close to regaining all the lost ground post-lockdown. GDP was still down some 8pc on pre-virus levels in the September data.
But it’s also because more of the economy is open this time – the likes of construction and manufacturing have continued to run (the manufacturing PMI actually increased this month).
It’s not all (comparatively) positive, however. Thomas Pugh from Capital Economics cautioned that the signs of a burgeoning labour market blow remain:
[The] drop in the composite employment balance (from 43.4 in October to 42.1 in November) suggests that firms are still laying off workers. A surge in unemployment once the furlough scheme ends, possibly from 4.8pc in September to as high as 9.0pc, could prolong the crisis.
09:55 AM
Cineworld shares jump as it secure debt lifeline
Cineworld has secured a debt lifeline worth as much as $750m (£563m) as it seeks to ride out the pandemic.
My colleague Simon Foy reports:
The world’s second-biggest cinema operator said its lenders had agreed to waive its debt covenants until June 2022, and the company secured $450m in new loans.
Shares climbed more than 16pc to 53.5p in early trading.
Cineworld said: “Together these steps will provide the group with financial and operational flexibility until lockdown restrictions in key jurisdictions are eased and studios are able to bring their enhanced pipeline of major releases back to the big screen.”
On Friday, The Telegraph revealed that hedge funds, which provided a $250m loan to the company in June, had offered sufficient extra funding to help the company survive the crisis.
09:37 AM
Activity slows – but less than expected
The UK’s latest set of purchasing managers’ index readings offer a mixed picture: private sector activity went into reverse, albeit are a far gentler pace than economists had feared.
Manufacturing growth actually accelerated, but wasn’t enough to offset a services slowdown prompted by the latest bout of restrictions.
Here are the readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
Business activity across the UK private sector decreased in November, which ended a four-month period of expansion. The downturn was driven by the fastest reduction in service sector output since May amid temporary business closures among leisure and hospitality companies. In contrast, manufacturing production expanded at a robust pace during November and the rate of growth accelerated since the previous month.
Here are some of its key findings:
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The latest manufacturing PMI survey nonetheless pointed to a sharp lengthening of supplier delivery times amid severe delays at UK ports
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Manufacturing growth was mainly linked to a sustained recovery in production volumes after stoppages at the start of the pandemic.
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Total new work received by UK private sector firms decreased Comment for the second month running
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November data indicated that job shedding accelerated across the UK private sector, with the rate of decline in staffing numbers the steepest for three months
IHS Markit‘s Chris Williamson said:
A double-dip is indicated by the November survey data, with lockdown measures once again causing business activity to collapse across large swathes of the economy. As expected, hospitality businesses have been the hardest hit, with hotels, bars, restaurants and other consumer facing service providers reporting the steepest downturns.
Some comfort comes from the data suggesting that the impact of the lockdown has not been as severe as in the spring, and manufacturing has also received a significant boost from inventory building and a surge in exports ahead of the UK’s departure from the EU at the end of the year, providing a fillip for many companies. However, while the lockdown will be temporary, so too will this pre-Brexit boost.
09:29 AM
UK PMIs expected to show sharp slowdown
We’ll get the latest PMI readings for the UK in a minute. They’re expected to show a severe services-sector slowdown prompted largely by the second lockdown in England.
Here are the predictions, per Bloomberg:
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Services: 43 (prev. 51.4)
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Manufacturing: 50.5 (prev. 53.7)
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Composite (a weighted balance of the two): 42.5 (prev. 52.1)
09:17 AM
Eurozone activity slows for first time since June
The eurozone’s economic recovery has run out of steam, with new restrictions prompting the first contraction in activity since the start of the summer.
November ‘flash’ purchasing managers’ index readings for the bloc showed its composite reading slipped to 45.1, having been bang on the no change mark of 50 in October.
The readings indicate a continued dovetailing across Europe, with manufacturing growth remaining solid as new restrictions batter services.
Here are the readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
With the exceptions of the declines seen in the first two quarters of this year, the average PMI reading of 47.6 in the fourth quarter so far is the lowest since the closing quarter of 2012 (during the region’s debt crisis) and indicative of a steep decline in GDP.]
The deteriorating performance was broad-based, albeit with the service sector hardest hit from virus containment measures.
Here are some of its key findings:
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Inflows of new orders rose in manufacturing at the slowest rate recorded over the past five months
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Hospitality, travel and consumer-facing companies reported especially weak demand
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Employment fell across the eurozone as a whole for a ninth consecutive month
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The ongoing need to cut employment was again often blamed on the development of spare capacity
IHS Markit’s Chris Williamson said:
The eurozone economy has plunged back into a severe decline in November amid renewed efforts to quash the rising tide of Covid-19 infections. The data add to the likelihood that the euro area will see GDP contract again in the fourth quarter.
The service sector has once again been the hardest hit, especially consumer-facing and hospitality businesses, though weakened demand has also taken a toll on manufacturing.
08:57 AM
Germany factory growth remains strong while services slows
Germany’s manufacturing sector continued to grow strongly in November despite new lockdown restrictions that caused services activity to slow.
Its composite purchasing managers’ index reading cleared the growth threshold of 50, indicating Europe’s biggest economy continued to expand this month.
Here are the ‘flash’ readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
Service providers recorded a marked drop in inflows of new work that was the steepest for six months, which they linked not only to the restrictions on activity, but also hesitancy amongst clients. By contrast, manufacturing order books extended their recent recovery, helped by rising exports sales, albeit with the data highlighting some loss of momentum in the rate of growth.
Here are some of the key findings:
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Flash data pointed to a broad-based increase in firms’ expectations for output in the year ahead
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Flash data showed payroll numbers rising – albeit marginally – for the first time since February
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The slowdown in manufacturing staff cuts was consistent with signs of growing capacity pressures at factories
IHS Markit’s Phil Smith said:
As expected, the introduction of new lockdown measures in November to combat the spread of Covid-19 has had a disruptive impact on German economic activity, with the flash PMI data showing the service sector suffering its worst performance since May.
However, the resilience being exhibited by the manufacturing sector, which the survey shows is benefitting for growing sales to Asia in particular, supports our view that any downturn in the final quarter is expected to be far shallower than those seen in the first half of the year
08:30 AM
France economic slowdown intensifies
A slowdown in France’s private sector grew more intense this month in the face of tightening Covid-19 restrictions.
Purchasing managers’ index results landed below the growth threshold across the board, with the slowdown spreading to the manufacturing sector.
Here are the ‘flash’ readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
Private sector activity fell at the quickest pace since May when similar lockdown restrictions were last in place. At the sub-sector level, November’s decline was predominantly driven by services, where firms recorded a sharper contraction for the second month running. Manufacturers saw production fall for the first time since May, but the rate of reduction was moderate overall.
Here are some of its key findings:
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New orders received by French businesses fell markedly
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Overall demand conditions received little support from international markets
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Private sector firms continued to cut their staff numbers
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Despite employing fewer staff, a decline in new work saw French businesses alleviate backlogs
IHS Markit economist Eliot Kerr said:
With the renewed tightening of restrictions in France at the end of October, a sharp decline in private sector activity during November was almost inevitable. However, it is somewhat positive to see that the latest contraction in activity was substantially slower than during the previous lockdown.
08:17 AM
FTSE rises slightly
European stock markets have opened slightly higher in the wake of this morning’s vaccine news.
08:15 AM
Vodafone commits to net zero by 2040
Telecoms giant Vodafone has committed to reaching ‘net zero’ carbon emissions by 2040.
It aims to eliminate emissions from its own operations and energy purchases within the next decade, and to halve emissions from sources including join ventures and its supply chains by 2030 on the way to net zero.
Chief executive Nick Read said:
We are committed to reduce our carbon footprint through improved energy efficiency, renewable energy supply, reducing our network waste and new environmental criteria when we select suppliers.
08:04 AM
McBridge says trading outlook unchanged
Household goods manufacturer McBride says its trading outlook remains unchanged following a shift in demand patterns prompted by the pandemic.
In a brief trading update ahead of its annual general meeting today, the group said:
The early part of the financial year has experienced demand patterns similar to those seen in the Covid-19 affected last four months of the year ended 30 June 2020. Changes to consumers’ behaviours seen in the earlier stages of the pandemic have largely continued with strong demand for bleach, auto-dish and surface cleaning products offset by lower demand for laundry products.
It said earnings growth is expected to be weighted towards the first half of the year, reflecting weak comparatives from 2019 and improved efficiencies. Despite this, its board kept guidance unchanged, taking a “cautious” stance in view of the pandemic.
07:36 AM
Astra vaccine can be stored in a regular fridge
In positive news, the Astra/Oxford vaccine can be stored at normal refrigerated conditions (two to eight degrees Celsius).
The company said it will “immediately” prepare regulatory submission of the data to authorities around the world “that have a framework in place for conditional or early approval”.
The Government has pre-ordered 100 million doses of the Astra/Oxford vaccine.
07:16 AM
Breaking: AstraZeneca vaccine 70pc effective
AstraZeneca has said its Oxford vaccine has shown an average efficacy of 70pc in clinical trials.
However, when the vaccine was given as a half dose, followed by a full dose at least one month apart, it was 90pc effective.
The company said “no hospitalisations or severe cases of the disease were reported” during the study.
In recent weeks, Pfizer and Moderna said their vaccine candidates were 94pc and 95pc effective, respectively.
Andrew Pollard, Astra’s chief investigator of the Oxford Vaccine Trial, said:
These findings show that we have an effective vaccine that will save many lives. Excitingly, we’ve found that one of our dosing regimens may be around 90pc effective and if this dosing regime is used, more people could be vaccinated with planned vaccine supply.
07:04 AM
Agenda: FTSE set to rally
Good morning. The FTSE 100 is set to be buoyed by growing optimism over Covid-19 vaccines, and a potential Brexit trade deal which now looks within reach.
Later today, Boris Johnson is likely to announce England’s exit strategy from lockdown, which will include a tougher three tier system than before.
UK manufacturing and Services flash PMIs figures will also be released.
5 things to start your day
1) Call for release guidelines after shares spike on vaccine news: Pressure is growing for market-shifting data to first be made public through the RNS, after Moderna data was briefed out prior to its publication.
2) Sainsbury’s bows out of financial services after supermarket banks challenge fails: The retail giant had high hopes for its banking branch, but it has become clear that the big players are still in control.
3) British companies risk billions in new costs if EU blocks data sharing deal: Firms could be forced to agree to new expensive contractual clauses should they want to transfer information between trading blocs after the Brexit transition period ends.
4) Driverless car start-up Wayve gets Richard Branson’s backing as it targets US rivals: The Cambridge firm has emerged as one of Britain’s brightest prospects in the cutting edge sector after securing backing from Virgin Group.
5) House prices peak but beware the slide of March: The post-Covid property frenzy has taken the market by surprise but experts fear the hangover is just months away.
What happened overnight
Asian stocks rose on Monday as investors looked ahead to quarterly US economic data amid unease about anti-coronavirus curbs on business and wrangling over the American presidential election.
Market benchmarks in Shanghai, Seoul and Sydney rose while Hong Kong retreated. Japanese markets were closed for a holiday.
The Shanghai Composite Index rose 0.6pc to 3,397.32 while the Hang Seng in Hong Kong lost 0.2pc to 26,388.89.
The Kospi in Seoul jumped 1.9pc to 2,602.94 and Sydney’s S&P-ASX 200 added 0.5pc to 6,570.90.
New Zealand, Singapore and Jakarta also gained.
Coming up today
Corporate: DMGT, Carr’s (Full year results); Sysgroup, Codemasters, Mind Gym, Lxi Reit, Nextenergy, Sirius (Interim results)
Economics: UK/EU trade deal; Germany, France, UK manufacturing and services flash PMIs (Nov)
