Corona Capital: Travel stocks, Scooters, UK houses

Shangri-La Asia

10/11/2020 10:56

(The authors are Reuters Breakingviews columnists.  The
opinions expressed are their own.)
    By Breakingviews columnists
    HONG KONG/LONDON, Nov 10 (Reuters Breakingviews) - Corona
Capital is a column updated throughout the day by Breakingviews
columnists around the world with short, sharp pandemic-related
insights.

    LATEST
    - Travel stocks
    - SoftBank scoots
    - Housing dividend

    FLIGHT OF FANCY. Wanderlust is a powerful force. Travel
stocks enjoyed a boost as Pfizer’s  PFE.N  promising vaccine
trial inspired investors to dream of holidays. Airline operators
soared, with British Airways owner International Airlines Group
 ICAG.L  and Air France-KLM  AIRF.PA  closing up around 25% on
Monday. The rally extended to Asia, with hotel chain Shangri-La
Asia  0069.HK  and casino group Wynn Macau  1128.HK  booking
double-digit gains. Luggage-maker Samsonite  1910.HK  was among
the best performers on Hong Kong’s benchmark index.
    But it might be a little early to start packing. The number
of trips worldwide is likely to take at least two years to
recover to pre-pandemic levels in the most optimistic scenario
forecast by Euromonitor. Habits could change permanently, too:
some 40% of passengers plan to travel less frequently in future,
an Inmarsat survey shows https://www.inmarsat.com/press-release/covid-19-will-drastically-change-travel-habits-forever-reveals-biggest-airline-passenger-confidence-survey.
 That means most companies will still be cost-cutting and
struggling to survive for the long haul. (By Katrina Hamlin)

    TESTY DRIVE. Masayoshi Son is riding a Covid-19 tailwind on
his scooter, but the journey looks a little perilous. The
SoftBank Group  9984.T  chief executive’s Vision Fund 2 vehicle
is leading a $250 million investment https://www.tier.app/tier-raises-250-million-series-c-funding-led-by-softbank
 in German electric-scooter sharing startup Tier Mobility. The
deal values the two-year-old company at just below $1 billion,
the Financial Times reported https://www.ft.com/content/24d21036-96ef-499c-80e5-653d4aea3e52,
 compared with $194 million in a February fundraising, according
to Pitchbook.
    Scooters have had a good ride in the pandemic, as people
shun crowded buses and trains. Bikes, meanwhile, have been in
short supply  urn:newsml:reuters.com:*:nL5N2EV1Q4. Yet like ride-hailing, another of
Son’s favoured industries, the e-scooter sector is
hyper-competitive. In Berlin alone, Tier has at least eight
rivals, according to a Breakingviews count. Nor does Tier have
any obvious connection to artificial intelligence, which is
Son’s professed overriding investment theme. He’d better watch
out for bumps in the road. (By Karen Kwok)

    SAFE AS HOUSES. Trust UK housebuilders to turn public
subsidies into investor gold. On Tuesday, 8.6 billion pound
Persimmon  PSN.L  said “firm selling prices” would allow it to
declare a second interim dividend https://www.persimmonhomes.com/corporate/investors/regulatory-news-(rns)/rns-news/2550768
 in barely as many months. The 70 pence per share payout follows
a 40 pence distribution in September, thus fully replacing a
postponed 110 pence dividend declared for 2019.
    New Chief Executive Dean Finch cited robust demand for new
homes – which translated into nearly 1.4 billion pounds of
committed future sales, a 43% year-on-year rise – as
justification for the generosity. State aid may have something
to do with it: UK housing sales grew by double-digit percentages
after the government eliminated most property purchase taxes
until March 2021. Still, Finch will be wary of personally
benefitting too much: his predecessor was forced to step down
after pocketing an embarrassingly large bonus fuelled by
government-subsidised sales. (By Christopher Thompson)
    
     
    On Twitter http://twitter.com/breakingviews
    
     
    - SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe
  

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
UPDATE-BREAKINGVIEWS-Corona Capital: Warren Buffett, Burger
boost     urn:newsml:reuters.com:*:nL8N2HV329
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Liam Proud and Oliver Taslic)