What to watch: New Persimmon CEO, German business confidence, stocks fall

Edmund HeaphyFinance and news reporter
Yahoo Finance UK
The mood in the German executive floors brightened considerably in June. Photo: Markus Schreiber/AP Photo
The mood in the German executive floors brightened considerably in June. Photo: Markus Schreiber/AP Photo

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

Persimmon appoints National Express boss as CEO

Scroll to continue with content
Ad

Housebuilding giant Persimmon (PSN.L) on Wednesday said that it had appointed National Express (NEX.L) boss Dean Finch as its new chief executive.

Finch will take up the position later in 2020, following the departure of current boss David Jenkinson.

Jenksinson unexpectedly announced plans to step down in February after just a year in the role.

Persimmon, the UK’s largest housebuilding firm, is among the many companies that was forced to pause construction during the UK-wide coronavirus lockdown. But the company said it had reached two-thirds of its previous capacity by May.

“Dean is a seasoned, well-respected and proven chief executive with an exceptional record,” said Roger Devlin, Persimmon’s chairman.

“In his current role he has delivered substantial strategic and operational progress over a sustained period, delivering value for all stakeholders in the business while developing a distinct and cohesive culture, focused on customer care and service”.

German businesses show surge of optimism in June

The mood in the German executive floors brightened considerably in June as companies began to feel more optimistic as they emerged from the coronavirus pandemic, according to Germany’s Ifo Institute.

The Ifo Business Climate Index rose to 86.2 points in June, from 79.7 in May, which is the biggest increase ever measured by the Institute since it began in 1990.

“Companies' assessments of their current situation were somewhat better. Moreover, their expectations leaped higher,” Ifo president Clemens Fuest said in a statement. “German business sees light at the end of the tunnel.”

Bosses in Germany’s manufacturing sector were significantly more upbeat this month. While they still see their current status quo as “bad,” industrial companies’ expectations for the future are positive.

Construction companies are also feeling more optimistic, and the survey recorded a continuing upward trend in business confidence in the services sector for the next six months.

4,500 airport baggage handlers at Swissport face redundancy

The leading airport baggage and ticket handler Swissport is planning to slash more than 4,500 jobs, warning its revenue has been wiped out by the pandemic.

The company announced on Wednesday it will let go of 53% of its UK workforce, with air travel not expected to return to pre-virus levels for several years. It has workers at airports across the UK, and is reported to be Britain’s main airport ground handling company.

“The unfortunate fact is that there simply aren’t enough aircraft flying for our business to continue running as it did before the COVID-19 outbreak, and there won’t be again for some time to come. We must adapt to this new reality,” said its CEO for Western Europe Jason Holt in a memo to staff shared with Yahoo Finance UK.

He said the company’s revenue had been “almost completely lost” during the pandemic so far, with income down 75% in May.

Holt told staff in the memo the cuts were necessary to survive and secure a “lifeline of funding” from lenders and investors.

Grab puts partnership with scandal-hit Wirecard on hold

Asian ride-share company Grab said it is distancing itself from German payments company Wirecard (WDI.DE), which is embroiled in a scandal over €1.9bn (£1.7bn, $2.1bn) missing from its balance sheets.

Uber competitor Grab said on Wednesday that it was putting its partnership with Wirecard on hold until further notice, while a number of other big clients are reportedly keeping a close eye on the situation at the electronic payments provider.

“We have not yet started the integration work for the Wirecard partnership and are pausing the partnership until further notice,” said a Grab spokesman in Singapore.

“The big question is whether they retain the Visa and Mastercard licenses,” Mirabaud analyst Neil Campling told Bloomberg. “Without those they have no business.”

Wirecard, which has already been the target of investigations over its accounting practices by the Financial Times last year, last week claimed that €1.9bn had gone missing, after auditor EY said it was unable to sign off on the 2019 accounts.

European stocks sink amid surge in infections

European stocks fell on Wednesday as new outbreaks in Germany and Japan and a “disturbing surge” in the US raised fears about a spike in coronavirus cases across the world.

The pan-European STOXX 600 index (^STOXX) fell by around 1.8%. London’s FTSE 100 (^FTSE) was down by around 2.3%.

Germany’s DAX (^GDAXI) declined by around 2.2%, while France’s CAC 40 (^FCHI) was 1.9% in the red.

Late on Tuesday, officials in the German state of North Rhine-Westphalia imposed a second localised lockdown after more than 1,500 workers at a meat processing plant tested positive for coronavirus.

The number of daily infections in Tokyo on Tuesday reached their highest level in nearly two months, while Anthony Fauci, the White House’s top infectious diseases expert, warned that the US was experiencing a “disturbing surge” in coronavirus cases.

“This isn’t a second wave, but rather a continuation of the first,” said Connor Campbell, a financial analyst at Spreadex.

“Understandably investors were rather worried about this news,” he said.

What to expect in the US

Futures were pointing to a lower open for US stocks on Wednesday.

S&P 500 futures (ES=F) fell by more than 1.1%, while Dow Jones Industrial Average futures (YM=F) declined by 1.2%. Nasdaq futures (NQ=F), meanwhile, were down by around 0.8%.

What to read next