Tuesday, March 31: Equity markets rounded off the quarter in a relatively sanguine manner, in contrast to outsized market moves and volatility we have witnessed over the last 4-6 weeks. The FTSE 100 experienced its worst quarter since 1987, losing almost 14%, despite leading major developed market indices intraday(+1.95%).Market moves were more marginal on the continent, with the STOXX 50 up c. 1.08% at the close.
The FTSE 100 found support across a range of Industrial/engineering, commodity and defensive stocks. One of the latter was Imperial Brands(+12.29%) as it declared current trading remained in line with views and no material impact had been felt to date due to COVID-19. The cigarette maker also announced the agreement of a €3.5bn revolving credit facility from a syndicate of 20 banks.
Smiths Group(+5.77%) was another stock that found itself in the green as the Group’s trading update pointed to underlying revenue growth of 3% for 1H, but that management would not be recommending an interim dividend and withdrew FY guidance citing the Coronavirus pandemic. Interim results were delayed following guidance from the FCA, though the Group did disclose metrics relating to balance sheet strength. Net debt was reported at £1.3bn, with liquidity said to be at £850m, and the Group eligible to secure funding of up to £600m through the Bank of England’s COVID Corporate Finance Facility. The Group also announced it would delay the separation of Smiths Medical, previously on track to complete by the end of 1H, due to the uncertainty provoked by the pandemic. The Group has also adopted hiring freezes, cancellation of discretionary expenditure and postponement of nonessential capital expenditure to protect cash levels.