Top global finance headlines: World stocks rise and investors moving away from tech
£200 million wiped off ITV market value, Rolls-Royce posts a loss of £4 billion and more.
The coronavirus pandemic continues to deliver surprises on the financial front this week, impacting old and new companies alike, while British royalty revelations have an unintended impact on market value.
ITV market value drops
British free-to-air television channel ITV had almost £200 million wiped off its market value after veteran journalist and well-known personality Piers Morgan quit as host of its popular breakfast show, Good Morning Britain.
Morgan’s critical remarks on Meghan Markle’s mental health, following an interview with the Duchess of Sussex and US talk show queen Oprah Winfrey, resulted in 41,000 complaints from viewers.
Rolls-Royce reports loss
British multinational aerospace and defence company Rolls-Royce posted a loss of almost £4 billion in 2020, due to the impact of Covid-19 on air travel. The company told BBC that "the worst is behind us".
Rolls-Royce has embarked on fundraising, cut 7,000 jobs and disposed of assets to stabilise its finances. However, the company expects to lose another £2 billion in cash this year and a further 2,000 jobs as it continues to restructure the business.
CEO Warren East remained optimistic, forecasting that the company will turn cash positive in the second-half of 2021.
World stocks rise
World stocks this week rose higher following a report on US consumer prices, which served to calm investor nerves about inflation and lifted the Dow Jones Industrial Average to a record close.
However, Reuters reports that analysts largely expect inflation to pick up as vaccine rollouts lead to a reopening of the American economy.
Concerns remain that the $1.9 trillion Covid-19 relief package, signed by US President Joe Biden, could overheat the economy.
Investors moving away from tech
The Covid-19 pandemic proved to be a boon for tech companies in general, with lockdown measures throughout the world forcing a fast transition to work-from-home and enabling communication technologies.
However, The New York Times now reports that investors, who had fuelled a bulls market for companies like Zoom, have started to look elsewhere. In the past month, the shares of Zoom fell off 22 percent and Peloton 24 percent.
The trend hasn’t only impacted the smaller and medium companies, with Apple, for example, dropping 11 percent in the last month.
World banks looking at cryptocurrency again
Central banks around the world are setting up working groups to discuss the merits of central bank digital currency (CBDCs). This after the first cryptocurrency Bitcoin was initially banned by many countries when it first appeared in 2009, due to concerns over financial stability.
A survey by the Bank for International Settlements (BIS) found that most developed economies are considering the idea, reported World Finance. Cryptocurrencies started as a libertarian dream that would free money from the central banks and tax authorities.