What to Watch: Lloyd's set for £6bn in COVID claims, Deliveroo slumps, and markets await Biden

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·4 min read
The Lloyd's building, housing Lloyd's of London is seen on a near-deserted Leadenhall Street in the City of London. Photo: Ben Stansall/AFP via Getty Images
The Lloyd's building, housing Lloyd's of London is seen on a near-deserted Leadenhall Street in the City of London. Photo: Ben Stansall/AFP via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Lloyd's set for £6bn in COVID claims

Insurance marketplace Lloyd's of London has slumped to a £900m ($1.2bn) loss after a sea of claimed linked to COVID-19.

Lloyd's said it was expecting £6.2bn of claims linked to the pandemic of which £2.6bn was re-insured.

Lloyd’s of London chief executive John Neal said it was "an extremely challenging year" due to the pandemic, “a high frequency of natural catastrophe claims and the UK’s formal exit from the EU."

“Against this unprecedented backdrop we have made good progress across our performance, digitalisation, and culture transformation plans," Neal said.

Watch: Amazon backed Deliveroo slumps in trading debut

Deliveroo slumps

Deliveroo's share price plunged as much as 30% on its IPO debut on the London Stock Exchange on Wednesday.

Shares were priced at 390p but dropped to 331p at the open. They were trading as low as 276p shortly after the open. The slump knocked £2bn ($2.7bn) off the company's value.

Deliveroo's 390p offer price had valued the business at £7.6bn.

Fuller's slips on fundraising plan

Shares in brewer Fuller, Smith and Turner (FSTA.L) slumped 5% after the company announced plans to raised £53m issuing new shares.

Fuller's said it would shore up finances after sales were hammered by the coronavirus pandemic. The London-based pub owner said revenues across its managed pubs and hotels for the year to date are set to have fallen by about 80% against the same period last year.

It told investors on Wednesday morning that it will place 6.45 million shares at a price of 830p each as part of the raise. Shares fell to near 825p.

“It was clear the demand for our premium pubs and hotels was as strong as ever when we were allowed to trade last year, which gives us confidence for the weeks and months ahead," chief executive Simon Emeny said.

“The additional financial flexibility we are seeking to put in place will enable us to further capitalise on the opportunities open to us as we execute our recovery plan and regain growth momentum.”

Markets await Biden

European stocks treaded water on Wednesday morning, as investors awaited details of a $4tn (£3tn) infrastructure spending plan in the US.

The DAX (^GDAXI) and the CAC 40 (^FCHI) were both flat shortly after the open. The Euronext 100 (^N100), which tracks the share prices of Europe's 100 biggest firms, was down 0.1%. The FTSE 100 (^FTSE) was down 0.3%.

Attention across the markets was focused on a major speech by US President Joe Biden on infrastructure spending coming up later today. Biden is set to deliver his speech at 4.20pm ET (9.20pm UK). Wall Street looked quiet ahead of the announcement. S&P 500 future (ES=F) and Dow Jones futures (YM=F) were pointing to a marginally lower open later today in New York, while and Nasdaq futures (NQ=F) were up 0.2%.

Asian markets were weak overnight despite the data. Japan's Nikkei (^N225) fell 0.9%, the Hong Kong Hang Seng (^HSI) slipped 0.2%, the Shanghai Composite (000001.SS) closed down 0.4% in China, and the South Korean KOSPI (^KS11) dropped 0.3%.

UK GDP upgraded

Official statistics have confirmed the UK economy grew slightly in the final quarter of 2020.

The Office for National Statistics (ONS) on Wednesday said further analysis suggested that UK GDP grew by slightly more than expected in the final quarter of 2020. The UK economy expanded by 1.3% in the final three months of last year, the ONS said, up from an initial estimate of 1% growth.

Third quarter growth was also revised up slightly, while the ONS downgraded its estimate for the second quarter. The stats body said the economy contracted by 19.5% between April and June last year during the first national lockdown, which was worse than first forecast.

The data means the UK economy shrank by 9.8% in 2020, which was broadly unchanged from an initial estimate of a 9.9% slump. 2020 marked the worst annual GDP slump in 300 years as COVID-19 brought the country to a standstill. The economic damage felt in the UK outpaced the impact in other developed economies.

House price growth slows

House price growth nationally slowed in March, as the expected end to the Stamp Duty holiday curtailed a recent property market boom.

Nationwide said annual house price growth slowed to 5.7% in March, down from a rise of 6.9%. On a monthly and seasonally adjusted basis, prices fell slightly by 0.2%.

"Given that the wider economy and the labour market has performed better than expected in recent months, the slowdown in March probably reflects a softening of demand ahead of the original end of the stamp duty holiday before the Chancellor announced the extension in the Budget," said Robert Gardner, Nationwide's chief economist.

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