The week in investor relations: Markets hit by Trump virus news and companies reconsider dividend cuts
– US stock futures fell sharply after US President Donald Trump said he had tested positive for coronavirus, reported the BBC. The Dow Jones, S&P 500 and Nasdaq all indicated they would drop at least 1.5 percent at market open. The president revealed he and his wife Melania had coronavirus via Twitter.
– Ferguson, the British plumbing company, saw its shares rise 6 percent after it told investors it would reinstate its dividend, reported the Financial Times (paywall). So far this year, 41 companies have discussed bringing back dividend payments, noted the article, citing data from broker AJ Bell.
– The BBC noted that Rolls-Royce would seek to raise £2 bn ($2.57 bn) in a rights issue following what it called a ‘sharp deterioration’ in the civil aerospace industry. The British aerospace company said it will also issue new debt. Rolls-Royce had earlier spoken to sovereign wealth funds about a possible capital injection, according to media reports.
– Legal & General Investment Management, which manages £1.2 tn for clients, has developed a new climate change model that it will integrate across all its investment decision-making, according to the FT. The model will assess risks such as nature disasters, regulatory changes and the effects of transitioning to a low-carbon economy.
– Tokyo Stock Exchange (TSE) suffered its worst ever technical glitch on Thursday when trading was halted for the whole day, reported Reuters. ‘I feel painfully responsible for all the confusion this incident has caused for investors and market participants,’ said Koichiro Miyahara, TSE’s CEO, during a news conference.
– The UK’s Financial Reporting Council (FRC) said there is ‘plenty of room for improvement’ in the way asset owners and managers report on their stewardship responsibilities, noted the Wall Street Journal (paywall). UK firms must file a report to become signatories to a new stewardship code, which came into effect at the start of 2020. In a review of early submissions, the FRC called for improved reporting on purpose and governance structure.