What to watch: Hargreaves Lansdown lands £4bn in pandemic, luxury watch sales plummet, and stocks under pressure

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Hargreaves Lansdown CEO Chris Hill. Photo: Hargreaves Lansdown

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

Hargreaves Lansdown lands £4bn during the pandemic

Stockbroker Hargreaves Lansdown (HL.L) topped the FTSE 100 on Thursday after reporting continued inflows of cash and customers during the pandemic.

Shares in Hargreaves Lansdown rose more than 6% after the company reported £4bn ($5bn) of net new money coming onto its platform in the four months to 30 April.

"During this exceptionally volatile and challenging period, Hargreaves Lansdown has performed strongly, adding 94,000 net new clients and £4bn of net new business,” chief executive Chris Hill said.

“There remains much uncertainty in the coming months and hence, like many businesses, we cannot predict levels of new business or client activity.

“However, we are confident that the strategy we have invested in, with our focus on the needs of UK investors and savers and delivering the highest level of client service, means that we are well positioned to deliver continued attractive long-term growth."

Luxury watch sales plummet

Watches of Switzerland has reported a 30% drop in UK sales in the first quarter of the year, as the pandemic hit demand for luxury watches.

The UK’s largest retailer of Rolex, Cartier, Omega, TAG Heuer and Breitling watches said sales in both the US and UK had been hit by the closure of stores due to lockdowns.

Watches of Switzerland (WOSG.L) slashed sales growth forecasts for the year as a result.

“Prior to the Covid-19 pandemic, the group had been on track to deliver double-digit sales growth, reflecting our strong brand partnerships, favourable market conditions and accelerating momentum in the US,” chief executive Brian Duffy said.

“We are working hard behind the scenes to ensure that when our stores do re-open, they do so safely and in line with best practice so that our customers and colleagues will be able to shop and work confidently in a safe and healthy environment. Store openings are proceeding in Florida and Georgia in the US and to date, the experience of those colleagues and customers has been positive.

“As we look ahead to a post-lockdown environment, we are anticipating a prolonged period of lower traffic, particularly in airports.”

Stocks under pressure

Global stocks continued to sell-off on Thursday, as US-China tensions flared and US Federal Reserve chair Jerome Powell warned about the economic fallout of the COVID-19 pandemic.

Donald Trump tweeted on Thursday evening: “We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference – and all those innocent lives lost!”

On Thursday morning, the FTSE 100 (^FTSE) opened down 1.5%, the DAX (^GDAXI) shed 1.1%, and the CAC 40 (^FCHI) lost 1.1%.

Overnight in Asia, Japan’s Nikkei (^N225) closed down 1.7%, the Hong Kong Hang Seng (^HSI) fell 1.5%, the Shanghai Composite Index (000001.SS) declined by 0.9%, and South Korea’s KOSPI (^KOSPI) slipped by 0.8%.

US futures were pointing to a lower open later today in New York. S&P 500 futures (ES=F) dropped by 0.2%, Dow Jones Industrial Average futures (YM=F) were down by 0.3%, and Nasdaq futures (NQ=F) were 0.1% lower.

Insurers to payout $4.3bn over pandemic

Insurance marketplace Lloyd’s of London said its members are set to pay out $4.3bn over the COVID-19 pandemic and warned the entire industry could lose a record $200bn.

Lloyd’s of London said on Thursday its members will pay out between $3bn and $4.3bn on a range of policies covering the pandemic. Most claims are for cancelled events, property cover, and disrupted travel.

The pay out will be “on a par” with the insurance cost of the September 11 terrorists attacks in 2001 and equivalent to all the payouts made for hurricanes Harvey, Irma and Maria in 2017 combined.

Lloyd’s said the final bill from the pandemic would likely “be far in excess of those historical events” once “the scale and complexity of the social and economic impact of COVID-19 is fully understood”.

WH Smith’s travel sales collapse

WH Smith said on Thursday (SMWH.L) that it had seen a 400% surge in online book sales over the past month, as the coronavirus crisis forced the mainstay of the UK high street to shut the majority of its stores.

The newspaper and stationary firm saw an 85% decline in overall sales in April, with revenue from its 599 outlets in airports and railway stations plummeting 91% during the month.

“Since March, we have seen a significant impact on our business as a result of COVID-19, with the majority of our stores closed around the world,” WH Smith said on Thursday (14 May).

Last month, the retailer was forced to seek a cash injection from investors to bolster its balance sheet, raising around £162m through a share placing. It also secured an additional £120m credit line from its lenders.