MOVERS OF MONDAY 9 NOVEMBER 2020

Francesca Morgan
Market Report
16:09, 9th November 2020

 

Shares in the FTSE 250 Index have jumped by 5.48% in afternoon trading to 18,900.04p on the back of today’s milestone news that the coronavirus vaccine being developed by Pfizer and BioNTech has been found to be 90% effective in preventing people from getting the virus.

The news saw stock markets surge, with the FTSE 100 jumping by 5.5% - adding £82bn to the value of its shares and resulting in its best trading day since March, Sky News reported.

Phase 3 of Pfizer's trial involved 43,538 participants from six countries where each participant received two doses of either the immunisation or a placebo, with 90% protected from the virus within 28 days of having their jabs. To date, no safety concerns have been raised or reported.

The two companies are the first to show successful data from a large-scale clinical trial of a coronavirus vaccine, a major victory in the fight against Covid-19 which has surged globally.

Pfizer and BioNTech have described the discovery as a "great day for science and humanity", while the news saw stock markets surge globally, with the FTSE 100 jumping by 5.5% - adding £82bn to the value of its shares and resulting in its best trading day since March.

While this index surged as much as 5.7% to 6,246.69 following the news, the midcap FTSE 250 climbed over 5%, the pan-European Stoxx 600 soared over 4%, putting it on course for its best day in six months, and futures for the US benchmark S&P 500 index hit a record high. 

Travel and leisure stocks, which have been the hardest hit by the pandemic, were among the best performing sectors on the stock market today, with SSP Group, Cineworld Group, Carnival and EasyJet up today by 51.69%, 39.83%, 35.8% and 32.96%, respectively. 

“The Pfizer announcement is not yet a panacea, but adds to investor sentiment which had already been buoyed by the Biden victory, and has sent markets to strongly positive levels,” commented Richard Hunter, Head of Markets at Interactive Investor, City A.M. reported.

SPP Group (LON:SSPG) FOLLOW shares soared by 51.69% to 283.7p after news of vaccine 

The operator of food and beverage outlets in travel locations worldwide was amongst the plethora of stocks which resurged today after Pfizer’s COVID-19 vaccine announcement.

In recent weeks, SSP Group announced that it has secured a four-year, £15 million (€16.5m) contract to redevelop the food & beverage experience at Hobart Airport in Tasmania.

The jump follows a period of great impact on the travel sector. As a result, shares in SSP Group have more than halved since March 2020. The group has closed global units, granted salary reductions, and implemented several cost measures to preserve cash and liquidity.

“It is with regret that the prolonged nature of this crisis has resulted in us having to restructure and make considerable job losses in order to protect the business,” the company wrote to investors in September 2020, adding, “These are always extremely difficult decisions, and we are supporting our colleagues throughout this process.”

With news of the world’s first potential ‘milestone’ COVID-19 vaccine, shares received some heavy relief, jumping over 50%, albeit remaining only a portion of their pre-pandemic worth.

SSPG price chart

Everyman Media Group (AIM:EMAN) FOLLOW shares soared 41.61% to 97p with light relief

Shares in the UK cinema group also saw some light relief despite announcing last week that under the new Government guidelines its venues would be closed until further notice.

It said appropriate measures are in place to reduce the financial impact of the closure, including the reduction of operating costs, the postponement of new sites and refurbishments. 

The group informed investors that it has a strong financial position and continues to have ‘significant headroom’ in its banking facilities while the Board said it continues to have ‘every confidence in the strength of the Everyman offering and its long term opportunity.’

Shares in the world’s biggest cinema chain, Cineworld, despite only being worth a fifth of their value at the start of the year and having most of its branches closed, also gained 39%.

EMAN price chart

Revolution Bars Group (AIM:RBG) FOLLOW shares jumped 28.21% to 12.5p as hospitality stocks are amongst those to receive a boost

Again, it’s a similar story for the leading operator of premium bars trading across the UK, Revolution Bars Group which announced the closure of its sites in October last month after the group reported that it had lost a third of its revenue due to the 10pm COVID curfew. 

Revolution said in the three weeks before the curfew was introduced, its sales were at nearly 78% of last year's level. Since its implementation, sales have dropped to 49.4% of that level.

The curfew, which was brought in to curb the spread of COVID-19, has been viewed as “a severe blow”  the sector that was hit hard by the previous closure of all non-essential outlets and orders for people to stay at home during the first wave of the virus, said Sky News.

With Pfizer reporting today that early studies of its Covid-19 vaccine are 90% effective, certain sectors have received a boost, with travel and hospitality being at the epicentre of this surge.

RBG price chart

AO World (LON:AO.)  FOLLOW shares fell 9.84% today to 357.25p despite raised profits

Despite many underperforming stocks seeing some relief today on the back of the COVID-19 vaccine news, AO World despite telling investors in recent weeks that it expects profits to rise.

The online electrical retailer recently said that it expects half-year profit to rise by 57% for the six months ended 30 September 2020 due to strong demand in the UK and Germany.    

In a trading update released in recent weeks, AO World said that UK revenue rose by around 54% during the period with German sales increasing by 83% on a constant currency basis.    

Sales momentum continued in Q1 and Q2 despite the competitor physical stores reopening as customers turned to buying online goods due to concerns regarding COVID-19.    

“We believe we have seen a lasting step change in online penetration,” AO World said, further acknowledging that lockdowns have triggered a huge shift in consumer habits. Looking ahead, the group predicts that it is on track for its biggest ever peak trading period.    

Russ Mould, investment director at AJ Bell, said, “Anyone working or furloughed at home only has to look out of their window to see delivery vans going up and down the road all day long.”   

“Years ago, buying a new cooker would have involved a visit to a showroom and lots of chit chat. Now it's a simple check of the reviews and an order online in minutes,” he added.   

Commenting on a positive trading performance, AO Founder and CEO, John Roberts, said:    

"The last six months of trading have been like no other during my two decades in the business. AO was in good shape coming into this financial year and the global, structural shift in customer behaviour to online, accelerated by Covid, emphasised our strengths.    

“Whilst we remain mindful of the uncertain economic climate caused by the pandemic and Brexit, we are on track with plans and well set for our biggest ever peak trading period in the UK and Germany,” he added.    

The Group expects to announce its interim results for the period in late November 2020.  Shares in the Company have skyrocketed over 250% since the beginning of the year.   

AO. price chart

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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