The week in investor relations: Coronavirus brings fear to markets and Buffett gives wide-ranging interview
– Equity markets fell sharply around the world as the coronavirus spread to new countries, reported the BBC. Major indices in Europe, the US and Asia have now fallen more than 10 percent during the current rout, placing them officially in ‘correction’ territory. Amid those declines, the Dow Jones saw its biggest ever daily fall on Thursday. Overall, equity markets have experienced their worst week since the 2008 financial crisis.
– Investors are increasingly concerned over the impact the coronavirus may have on the global economy, noted MarketWatch. The center of the outbreak, China, is vital for both demand and supply for many international companies. Meanwhile, South Korea, where there is a significant outbreak, is key to many supply chains. Governments have tools to offset demand shocks but it’s harder to counter supply shocks, said Erik Nielsen, group chief economist at UniCredit Bank, in the article.
– Investment advisers are fretting over the response to the coronavirus by the US authorities, reported Reuters. They have raised concerns over the small number of people tested so far, the difficulty of locking down US cities and the ability of the White House to manage the situation effectively. The article quotes James Bianco, head of advisory firm Bianco Research, who said: ‘Much of what we’ve seen about this virus has shaken confidence in governments.’
– Legendary investor Warren Buffett gave a wide-ranging interview to CNBC in which he discussed issues such as crypto-currencies, which he said ‘basically have no value’, and US politics, stating that he would ‘certainly’ vote for Democratic presidential candidate Michael Bloomberg. He also discussed some of his stock holdings, arguing that banks are a good place to be invested right now. ‘They’re very attractive compared with most other securities I see,’ he said.
– UK pension scheme Nest has called on Barclays, the British bank, to start phasing out financing of fossil fuel companies that are not aligned with the Paris Agreement to tackle climate change, reported the Financial Times (paywall). Nest, which has 8.5 mn members, said it would support a resolution at the bank’s annual shareholder meeting in May on the issue. Barclays is the ‘largest financer of fossil fuel of any European bank,’ according to the article, citing Rainforest Action Network.
– The London Stock Exchange expects to complete its acquisition of data company Refinitiv on time, reported Reuters. ‘We remain on track to close the transaction in the second half of this year,’ said CEO David Schwimmer. The $27 bn deal is ‘facing intense early scrutiny in Brussels, raising the risk that regulators will subject the deal to a much lengthier probe than expected,’ noted the article, referencing a report this week by the FT.