Shares in London are showing signs of stabilisation after the oil-induced gyrations of recent days. Our Trader writer Neil Wilson says: 'European markets are cautiously higher after yesterday’s decline, but the daily momentum indicators are fading. The reality of economic collapse is being seen in oil markets, but - juiced by central bank support and of course being much more forward-looking than, for instance the June oil contract – equity markets are displaying greater optimism. I’d say oil markets are telling us how bad things are right now, while equity markets tell us how good or bad investors hope/fear things will be next year.' For Neil's full article, click here.
IC TIP UPDATES:
Drax (DRX) has announced that its 2020 adjusted cash profits (Ebitda) are currently set to come in line with consensus expectations of £398m. This is despite an estimated £60m hit from the Covid-19 pandemic. The disruption largely relates to the customers business, now expected to be loss-making based on lower power demand and a potential increase in bad debt from SMEs. The biomass supply chain for power generation has thus far held up well. More insulated from falling power prices, contracted forward power sales provide earnings visibility for the next two years. With net debt falling 3 per cent since the year-end to £818m, the final 9.5p dividend declared for 2019 is being maintained. Buy.