Breakingviews - Corona Capital: W-shaped recovery, UK investors

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


- Euro zone economy

- Retail investing boost

FROM V TO W. Europe’s economic recovery is faltering under a new wave of coronavirus restrictions. Italy and Spain on Sunday became the latest countries to reimpose lockdown measures to halt the spread of Covid-19. The government in Rome ordered bars and restaurants to close at 6 p.m., while Spanish Prime Minister Pedro Sanchez announced a state of emergency that includes nighttime curfews and travel restrictions.

As in other European countries, the new measures are a setback for pandemic-stricken service industries. They could also prompt some European economies to shrink again. The European Central Bank in September projected that euro zone GDP would still expand in the fourth quarter, even in the event of a serious new outbreak. But economists at RBC now think the euro area will shrink slightly. Their counterparts at Nomura expect economic output in the United Kingdom to contract in the next two quarters. The hoped-for V-shaped recovery is beginning to look more like a W. (By Peter Thal Larsen)

PROMOTION FOR PUNTERS. British retail investors are getting an endorsement from the London Stock Exchange. The bourse’s parent company on Monday said it’s investing in financial technology startup PrimaryBid. The UK-based group provides a way for smartphone-carrying retail investors to find out about imminent cash calls by companies in which they hold stock, enabling them to buy in if the company has made arrangements.

The solution has proved popular during the pandemic because many cash-strapped firms rushed to raise capital quickly, bypassing the time-consuming process of offering retail shareholders the opportunity to buy in. Companies including Ocado, Taylor Wimpey, William Hill, and Compass used PrimaryBid to access smaller investors.

Monday’s $50 million funding round, which also includes Fidelity and ABN Amro Ventures, will help PrimaryBid expand further. But retail investors still need some coaxing. Just 1% of Compass’s small shareholders participated in the catering group’s offering. The LSE endorsement should help. (By Karen Kwok)

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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