14 Apr COMPANIES ENTER TRADING HALTS; SECTORS TO BENEFIT POST CRISIS
While it seems Australia’s infection curve is flattening, COVID-19 remains the global story of the day. So, here are the insights we have collected over the long weekend to share with you.
- Extensive intervention by governments has some analysts and historians predicting the current crisis could “fuel a new era of big government”, with levers of the economy being controlled by public officials, drawing parallels with the great wars. Read the WSJ article. (Subscriber access)
- An oped in The New York Times argues that COVID-19 is “killing off the myth that we are the greatest country on earth” and reflects on lessons to be learned from how the US has managed the virus: “If our fumbling of the coronavirus is a preview of how the United States will handle that disaster (climate change), then we are doomed.”
- Smartphone uses around the world are being urged to download the DreamLab app (a collaboration between the Imperial College and Vodafone), which uses phone’s processing power while it charges to accelerate research into drugs for COVID-19. Read the article here in the Telegraph. (Subscriber access)
Australian company news
- Westpac’s interim results to be virtual and streamlined
- Westpac announced this morning a $1.4 billion hit to profits due to AUSTRAC money laundering. The bank also announced it would break with tradition for its interim results announcement on 4 May, with a short presentation and a webcast of proceedings. Read the ASX Announcement here.
- Companies enter trading halts amidst capital raising efforts
- Consider private equity in capital raisings, companies urged
- Legal firm King & Wood Mallesons has suggested listed companies in Australia consider all options when it comes to raising capital, including private equity, which could help formulate strategies for managing COVID-19 challenges. According to the Australian Investment Council, there is more than $11 billion in private equity capital free to be deployed in Australia right now. Read The Australian article here. (Subscriber access)
- Sectors to benefit post crisis
- The Minister for Industry, Science and Technology, Karen Andrews, said the Government is focusing on developing local manufacturing in sectors such as food, defence and space travel, echoing other comments about developing the country’s advanced manufacturing sector. Read more in The AFR blog. Paul Taylor of Fidelity believes the crisis is accelerating a lot of trends such as e-commerce, food and beverage delivery and “tech enabling communications”. Read more in The AFR here. (Subscriber access)
- More dividend cuts or deferrals on the horizon
- During the GFC, global dividends fell by almost 30 per cent, with earnings down around 60 per cent over a 15-18-month period. In the current crisis, this has happened in just three months, with Janus Henderson’s global equity income team believes earnings consensus and dividend expectations globally remain too high and will be subject to downgrades in coming weeks. Read the Investor Daily article here.
- Companies warned on class actions for improper disclosure
- Legal firm Herbert Smith Freehills warns companies that although the ASX has provided helpful guidance on hastening companies disclosure regarding COVID-19, there is still the potential for class action claims. Read The AFR article here. (Subscriber access)
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.