MARKET REPORT: Bookies lose £2 billion as major sport events are cancelled in bid to stop the spread of coronavirus
More than £2billion was wiped off the value of Britain’s biggest bookies as a wave of sporting events were cancelled or postponed in an effort to stop the spread of coronavirus.
Shares tumbled to record lows in some cases as traders worried about the amount of money gambling firms will be able to bring in if there are fewer matches to bet on.
By last night the Miami Open tennis championship was cancelled, US National Basketball Association (NBA) games were suspended until further notice, Spain’s premier football division La Liga had suspended all matches for two weeks and McLaren had pulled out of the Australian Grand Prix after a team member tested positive for the virus.
Shares in British bookies tumbled to record lows in some cases as traders worried about the amount of money gambling firms will be able to bring in if there are fewer matches to bet on
Expectations were also growing that Uefa would suspend the Champions League and Europa League – major football moneyspinners for bookies.
The emergency measures heap more pressure on an industry which is already struggling with other crackdowns, such as cuts to the maximum amount of money punters can bet on in-store gaming terminals.
Shares in Paddy Power and Betfair-owner Flutter Entertainment were hammered, falling 15.6 per cent, or 1232p, to 6692p last night and making it one of the biggest fallers on the FTSE 100.
Flutter made around three-quarters of its £2.1billion turnover from sports betting last year.
William Hill hit an all-time low of 96.58p in early trading, but recovered slightly to 92.28p at the close, down 24.3 per cent, or 29.67p.
Stock Watch – Smart Metering Systems
Energy services group Smart Metering Systems (SMS) has sold some of its meters to funds managed by infrastructure specialist Equitix Investment Management for £291million.
SMS will pocket around £282million after expenses, which it will use to bolster its dividend.
It sold 187,000 smart meters used by industry and commercial customers, leaving it with 1.2m domestic meters and an order book for a further 2m.
Shares jumped 22.8 per cent, or 104.2p, to 561p.
Ladbrokes parent company GVC also shed nearly a fifth of its value, diving by 19.3 per cent, or 125.4p, to 524.8p, while online-oriented gaming group Playtech, which owns the SNAI Italian sports betting chain, fell 15 per cent, or 31.3p, to 177.3p.
The turbulence in the gambling sector was a symptom of more turmoil in the rest of the market.
The FTSE 100 dived by 10.9 per cent, or 639.04 points, to 5237.48, after President Trump introduced a shock travel ban on planes coming to the US from Europe that will come into force today.
The FTSE 250 fell 9.4 per cent, or 1621.81 points, to 15717.42, while over on Wall Street the Dow Jones Industrial Average shed almost 10 per cent of its value.
Brokers are still digesting what the recent stock market ructions will mean for individual companies, and many will be loath to make hard-and-fast predictions while trading is still volatile.
But UBS analysts said Just Eat Takeaway (down 10 per cent, or 605p, to 5450p) and other delivery firms could experience a ‘short-term demand uptick’ as the coronavirus outbreak caused more people to stay at home.
However, the Swiss bank said ‘prolonged disruption’ could damage the industry.
Trading platform AJ Bell was downgraded to ‘sell’ from ‘hold’ as Berenberg brokers said it was likely to be more vulnerable than its peers to weaker stock markets. Shares in the business fell 12.7 per cent, or 39.5p, to 271p.
Sales rose 3.2 per cent at FTSE 250-listed pub group Wetherspoons in the six weeks to March 8, according to a brief, unscheduled trading update it said was in response to ‘an unusually high number of media and shareholder enquiries’.
The pub group said sales had been more affected by bad weather than the coronavirus health scare and that, as of yesterday, it wasn’t aware of any of its 43,000 employees testing positive for the disease.
But its shares still followed the rest of the index, down 12.4 per cent, or 146p, to 1036p.
AIM-listed chemicals group Iofina fell 12.2 per cent, or 2.38p, to 17.05 after announcing that millionaire Brexit backer Arron Banks is not intending to make an offer for the company.