Banking stocks are attracting by far the highest volume on the FTSE this morning, as they do most mornings, but today the volume is about 50% higher after banks decided to stop or delay dividend payments in order to preserve cash to handle the crisis. The volume in Lloyds shares has nearly doubled as the bank lost 6% in value, and Barclays, HSBC and Royal Bank of Scotland are following in short succession.
Barclays bank may be one to watch the most closely as the bank is already trading ex-dividend. It was due to pay out shareholders on Friday.
The merciless flow of negative coronavirus news is also eroding the rest of the FTSE 100-listed firms. Even supermarkets like Tesco are clocking significant losses now that the early panic buying has turned from a flood into a trickle.
Carnival’s bold bond plan lifts stock
The only stock still trading in the black is cruise operator Carnival after the company made a bold decision to raise $3bn in three year bonds in order to keep afloat. Although the US and the UK offer fairly substantial rescue packages to companies who have been hit as badly by the coronavirus as Carnival – the Diamond Princess was quarantined off the coast of Japan shortly after the outbreak of the virus in China – the cruise operator will fall through the administrative cracks as it is incorporated in Panama.
Brent drops on supply data
Now we have it in black and white. Saudi Arabia’s promise to pump more oil because of a disagreement with Russia over trying to control declining oil prices has materialised in March and the country together with other United Arab Emirates produced an additional 90,000 bbl of oil a day. With this additional production - which is also likely to be matched by Russia - it will be difficult for oil prices to move any higher from current levels while the coronavirus is in full swing.