Here’s what you need to know this AM.
1. Cathay Pacific lost US$1.3 billion in H1
Cathay Pacific said it lost US$1.3 billion in H1 2020 as airlines continue to feel the pandemic sting.
There may be some good news though. Yesterday, Cathay shares rallied by 13% as news of Hong Kong airport potentially resuming transfer flights to mainland China circulated.
Cathay typically relies on mainland traffic for a large portion of revenue.
Cathay Pacific’s Chairman Patrick Healy said the airline and its Cathay Dragon unit flew only 4.4 million passengers in the first six months, down from 18.3 million a year earlier. Passenger revenue tumbled 72%. It flew an average of just 500 passengers a day in April and May.
2. The UK officially enters an economic recession, its first in 11 years.
The UK has officially entered a recession, after economic output shrank by 20.4% in Q2.
This crash in GDP in the April-June period is the worst since quarterly records began in 1955 and follows a 2.2% contraction in Q1.
Industries most exposed to lockdown measures such as services, production and construction saw record drops.
“Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will,” said Finance Minister Rishi Sunak.
3. SoftBank claws back after historic loss last year
In the crazy world of tech, anything can happen. SoftBank posted $12 billion quarterly profit, mainly boosted by its stake in the newly established Sprint-T Mobile tie up, and a general global tech rally.
The $100 billion Vision Fund, which suffered an $18 billion loss in the previous quarter, saw an investment gain of $2.8 billion as shares in Uber & Slack surged within the past few months.
SoftBank also announced it would set up a new $555 million fund to invest in Amazon, Apple, Facebook and other established tech giants.
Now still in “crisis mode,” Masayoshi Son said securing cash is his top priority.
4. Gold prices fell on vaccine optimism and equity markets jump
Gold prices fell by 5% yesterday, crashing from its record high of $2,000 as US. equity markets resumed its rally on the back of more help from Washington.
Generally, gold serves as a hedge against uncertainty and the asset has seen a surge due to the pandemic and a weak global economic outlook.
Better-than-expected economic data, combined with vaccine optimism helped accelerate the sell-off, but the outlook remains bullish for gold as global uncertainties are far from over.