Breakingviews - Corona Capital: Self-lockdowns, Gambling, ANA

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LONDON/HONG KONG (Reuters Breakingviews) - Corona Capital is a column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.


- Lockdown economics

- French betting

- Japanese airline

MOCKDOWN. UK pub chain Marston’s is learning that some Brits will lock themselves down – even if the government won’t. The 280 million pound group on Thursday said that like-for-like sales fell 12% in September, compared with a 6% rise in August. The end of a UK subsidy scheme for eating out, and Prime Minister Boris Johnson’s recent 10 p.m. pub curfew, undoubtedly made a difference. But punters also seem to be reacting to rising infection rates. Office for National Statistics data shows that fewer people are meeting up in cafés, bars, restaurants, public places and each other’s homes.

While grim for pubs, it arguably simplifies things for Johnson: the implication is that people are self-regulating and avoiding crowds. That weakens the argument of some lockdown critics, who claim that harsh restrictions impose an unsustainable economic cost. Marston’s shows that the “health vs. wealth” trade-off is not so stark. (By Dasha Afanasieva)

PLACE YOUR BETS. Wise gamblers know the house always wins. Francaise des Jeux underlined the adage on Thursday: shares in the French lottery operator rose 6% after Chief Executive Stephane Pallez said full-year sales would fall by a modest 7% in 2020, to 1.9 billion euros, while cost cuts mean the EBITDA margin should rise to 21%. That implies FDJ could make nearly 400 million euros in annual EBITDA – a 15% increase from 2019.

It’s a jackpot for President Emmanuel Macron’s landmark privatisation project. Since an initial public offering last November, FDJ shares have gained roughly three-quarters, compared with a nearly one-fifth decline for France’s CAC 40 index. And though FDJ may suffer from the closure of France’s ubiquitous tobacconists, an important revenue source, there is still plenty of growth left online: digital betting stakes rose by over two-fifths during the third quarter. New lockdowns may boost that further – even if it leaves punters out of pocket. (By Christopher Thompson)

EXTENDED RUNWAY. ANA is next up on the funding tarmac. The owner of All Nippon Airways, Japan’s biggest carrier, has secured about $3.8 billion in subordinated loans, according to multiple media reports, following earlier indications of a possible equity hike. The risk is being spread among a group that includes Sumitomo Mitsui Financial and Mizuho Financial.

ANA, whose shares have fallen by a third this year, says nothing has been decided, but like airlines everywhere it is torching money. Operating activities burned through 135 billion yen ($1.3 billion) in the quarter ended in June. Cutting salaries by 5% and offering early retirement packages, as Kyodo news service has reported ANA is doing, will help a bit. And Tokyo is trying to negotiate travel bubbles. As the company figures out its next strategic steps, the capital should at least help it keep circling. (By Pete Sweeney)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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