17 Mar VIRTUAL AGMS ON THE AGENDA; PROFIT GUIDANCE THROWN OUT; V SHAPED RECOVERY LIKELY
Starting today, Cannings will be providing a short daily lunchtime COVID-19 insights summary, including top international and local company news, as well as significant investment market news.
In this inaugural business intelligence summary, we have included relevant insights and articles published over the last few days.
- WSJ explains why markets are so volatile and it is not just about coronavirus: “The market today is dominated by computer-driven investors that rely on signals such as volatility and momentum”. Read more here.
- The Fed slashed its benchmark interest rate to new zero and announced it would buy $500billion in Treasury securities in $200 billion in mortgage bonds to prevent market strains from turning a public health emergency in to a financial crisis. But it still has some other tools. Read the full article here.
- Virtual AGMS on the agenda
- Recent news from the US suggests virtual AGMS may be just around the corner with the SEC providing guidance on what corporate must do to conduct virtual AGMs – see here for guidance.
Australian company news
- Listed company communication
- Qantas has announced international capacity will be cut by around 90% and domestic capacity cut by around 60% until at least the end of May 2020. We noted that the company announcement focused, with empathy, on the impact to its two key stakeholder groups, People and Customers. Read more here: Qantas ASX update on coronavirus response
- Chanticleer has reported on Qantas’ update saying that despite ‘yet another dark moment for the aviation sector’, there are ‘three rays of light’ in the announcement, that is Joyce’s quick movements and the work done to boost Qantas’ profitability has given the company some stability, Qantas isn’t going cap-in-hand to government and deamnd for freight services. Read the full article here.
- Profit guidance gets thrown out
- Many ASX listed companies this week have withdrawn guidance including Coca-Cola Amatil who after reiterating guidance for mid single digit EPS growth less than a month ago have said that it was no longer appropriate to continue providing earnings guidance. Read the company announcement here. CCA was down 5% on the back of the announcement.
- Yesterday’s Chanticleer column observed that profit guidance now means nothing: “Forget profit, focus on cash” the column cited saying “nobody known how bad the pandemic will be”. The article listed a string of events that lefts ‘investors reeling’ yesterday including: “first the Reserve Bank of New Zealand’s emergency rate; then the Federal Reserve emergency rate cut and restart of quantitative easing; then the Reserve Bank of Australia’s fresh initiatives on liquidity; and then the Australian Securities and Investment Commission’s decision to limit the number of trades on the ASX – all spoke to the fact that regulators and policymakers simply have no idea how long this crisis will last and how deep it will get.” Read the full article here. The Australian also reports on companies walking away from guidance here.
Australian market news
- V shaped recovery more likely
- ARK Invest’s Catherine Wood on why a V-shape recovery is looking more likely here.
- Insights from King & Wood Mallesons on proxy voting as a solution for AGMs during coronavirus conundrum. Here is a link to KWM’s article.
- And an SMH interview with Eley Griffiths co-founder and MD Ben Griffiths on when to know the share market has bottomed.
Our daily briefing is not meant to be a summary of media coverage but rather, insights that may be helpful in understanding how organisations are communicating with stakeholders in a time of crisis – and what comes next. Sign up via email.