Good morning, it's Paul here. This is the usual placeholder article, for reader comments from 7am. The full report will be ready by 1pm. Update at 12:48 - I need a bit more time to complete today's report, so will be working until 4pm today, adding new sections. Today's report is now finished.
The newsflow from coronavirus continues to be appalling. I was deeply disturbed by the actions of the police over the weekend - e.g. harassing dog walkers, etc. This is completely unacceptable, and will be triggering one of my letters to my MP. I understand the need to discourage or ban gatherings of people, but turning the UK into a police state where we get challenged for walking our dogs, is totally unacceptable. History shows that democracy is easily destroyed, using some kind of disaster as the pretext for emergency powers which start as temporary, and end up permanent. I see there are concerns about this in Hungary and Poland also.
I see that Carluccio and Chuiquito restaurant chains have gone bust. The first of many no doubt. It's just not possible for many retail/hospitality companies to continue operating at zero turnover. Therefore the economic devastation that this lockdown is producing, is likely to become apparent very quickly. I'm extremely nervous about investing in those sectors, and have now sold most of my positions (e.g. Next (LON:NXT) and Restaurant (LON:RTN) ) as it's dawned on me just how difficult the recovery is likely to be, and the costs of the lockdown could easily be ruinous. There's no shame in sitting on the sidelines, to wait for greater clarity.
Other press reports which caught my eye over the weekend, are that shopping centre Hammerson (LON:HMSO) are suffering because it is struggling to collect in rents from tenants that have been forced to close. This is now a widespread problem. The big question is whether landlord balance sheets will be robust enough to absorb the short term lack of cashflow from tenant rents, plus the write-down in valuation of shopping centre assets. I haven't looked at Hammerson yet, but have looked at the detail for Newriver Reit (LON:NRR) (in which I hold a long position) and my number-crunching says to me that NRR should survive, and therefore looks a bargain right now, taking a 6+ month view.…
