Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

A Mediterranean summer

Written by Javier Maquieira, associate
Edited by Harriet Moll, creative director
22 May 2020

Good morning,

My fondest summer holiday memories always take me back to the Mediterranean. Coming from an Atlantic facing city in rainy Galicia, the summers I spent in places such as Minorca, Costa Brava, and the Greek islands felt like truly exotic experiences that I filled with daily quests to find the least touristy spots.
 
Having moved to Scotland straight from Barcelona almost two years ago, I often think about those sunny, hot days, especially when the weather in Edinburgh decides to be rainy, windy and cold – all at the same time. Unsurprisingly, lockdown has me longing for the moment I can visit my family and friends back in Spain and finally dispose of my uncharacteristic paleness.
 
By the look of things, that day might come sooner than expected. With the summer holidays fast approaching, countries such as Greece, Italy and Spain have begun to announce plans to restart their tourism industries.
 
Italy, once the country hardest hit by the coronavirus in Europe, is set to welcome European visitors as soon as early June, as it quickens its exit from lockdown and lifts a 14-day mandatory quarantine period for arrivals. Bars, restaurants and cafés have started to reopen since Monday, along with world-famous landmarks such as St Peter’s basilica in Rome. The Italian prime minister, Giuseppe Conte, described the decision to restart economic activities as a “calculated risk, knowing that the epidemiological curve could rise again.”
 
Further east, in Greece, although the holiday season is planned to begin on 15 June, direct international flights to the country’s tourist destinations won’t resume until July. What’s more, prime minister Kyriakos Mitsotakis confirmed that holidaymakers will have to undergo Covid-19 tests upon arrival, rather than being quarantined.
 
Meanwhile, ministers in Spain have shown more caution than their Italian and Greek counterparts. Although the tourist industry accounts for 12% of the Spanish economy and provides 13% of jobs, the minority coalition government of Pedro Sánchez is currently pursuing a gradual, region-by-region approach to deescalation as it seeks to guard the country against any new outbreak.
 
Spanish health authorities are focussed on allowing domestic tourism by July, a move that should then open the door for international visitors. As things stand, however, holidaymakers planning to visit the country this summer are more likely to stay in Mallorca or Ibiza than the busy streets of Barcelona or Madrid, according to the Spanish foreign minister, Arancha González Laya.
 
I for one am counting the phases, regions and quarantine days that separate me from enjoying some time in my little corner by the Atlantic Ocean, closer to those I hold dear.

News

The Scottish first minister announced yesterday that restrictions are likely to be eased slightly from May 28 in Scotland. Nicola Sturgeon unveiled a four-phase “route map” to restart society while suppressing the virus, with the first phase set to allow meetings outside with people from one other household. The situation will be reviewed every three weeks, with decisions being made as evidence allows.
 
Donald Trump confirmed the US is withdrawing from the Open Skies Treaty, a major arms pact aimed at reducing the risk of military miscalculations in Europe. The US president said Russia’s actions had prompted him to make the decision but denied it would increase tensions with Moscow.
 
China is preparing to impose national security laws banning subversion, separatism and other acts against the central government on Hong Kong. Beijing’s move has been seen as effectively erasing the “one country, two systems” framework, raising the prospect of further international unrest.

Business and economy

EasyJet plans to resume “a small number” of routes with enough customer demand on 15 June, including domestic flights across the UK and France. The airline announced that all passengers and cabin crew will be required to wear self-provided masks to protect them against the coronavirus.
 
China has dropped setting a GDP growth target for the first time in decadesamid “great uncertainty” caused by the coronavirus outbreak. Chinese premier Li Keqiang said at the opening of the National People’s Congress that the government would instead “give priority to stabilising employment and ensuring living standards”.
 
AstraZeneca is ramping up its capacity to supply one billion doses of the University of Oxford’s potential Covid-19 vaccine if trials are successful. The pharmaceutical giant said it has already taken orders for at least 400 million doses and plans to negotiate further deals to ensure global delivery.

Columns of note

Ed Conway argues in The Times that Britain has ended up adopting economic policies typically considered German and French, paying the taxes of millions of workers, offering guaranteed loans to businesses, and helping to finance multinationals. The UK seems to be drifting closer to Europe rather than further away despite having left the EU, concludes Conway. (£)
 
In The Herald, Rebecca McQuillan fears some have started to relax their attitudes towards social distancing at a moment of maximum jeopardy, as people in Scotland long for progress back to normality.

Cartoon source: The New Yorker

Markets

What happened yesterday?

London stocks closed in the red on Thursday amid growing tensions between the US and China after the US Senate passed a bill that could see some Chinese companies banned from listing on American exchanges. The FTSE 100 ended the session down 0.86% at 6,015.25, while sterling fell 0.17% against the dollar to $1.2224 but was 0.06% firmer against the euro at €1.1159.
 
In company news:
 
Whitbread was 12.36% lower as the pub and hotel operator announced its intention to raise £1bn by way of a fully underwritten rights issue and warned of a potential loss in 2021.
 
Pets at Home was in the red by 4.26% after the pet supplier retailer said full-year revenue topped £1bn for the first time but first-half pre-tax profit would take a hit from the Covid-19 pandemic.
 
Inchcape was also weaker by 7.75% as the car leadership reported a 32% decline in revenue for the four months to the end of April and a 76% fall in like-for-like revenues in April.
 
On the upside, Intertek rallied 7.84% after announcing it would go ahead with its final dividend as the company reported a 4.6% fall in revenue for the first months of 2020.

What’s happening today?

Finals
Burberry Grp
Utd. Utilities

Interims
Future

AGMs
Bango, Barr (A.g.), Breedon, Centrica, Cip Merchant, Headlam Group, Jsc Halyk Reg S, One Media, Phosagro S, Sdx Energy, Spectris

Source: Financial Times

did you know

Pirates wore eye patches to have one eye adjusted for the top deck and the other already adjusted for the darkness when going below deck.

Parliamentary highlights

House of Commons

No business scheduled

House of Lords 

No business scheduled

Scottish Parliament 

No business scheduled

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