Finland utility Fortum cancels annual meeting
Richard Milne in Oslo
Fortum, the Finnish utility, cancelled its annual meeting due to take place on Tuesday as a result of new measures taken by the government in Helsinki against coronavirus.
Finland’s prime minister Sanna Marin announced on Monday that public gatherings of more than 10 people would be banned, among a series of strict measures.
Fortum, Finland’s leading electricity provider, said that although its annual shareholders meeting was not a public gathering it would still postpone it to a later date.
Malaysia orders lockdown beginning March 18
Stefania Palma in Singapore
Malaysia has announced a national lockdown to counter a sharp jump in coronavirus cases.
The new measures will be implemented from March 18 to March 31. Malaysian citizens will not be allowed to travel abroad and foreign nationals will be barred from entering the country.
Muhyiddin Yassin, Malaysia’s prime minister, said drastic action was necessary “to recover the situation as soon as possible”. The south-east Asian country counts 553 cases after infections more than doubled in just two days.
Malaysians returning home will be subject to health checks and a 14-day self-quarantine.
All schools, universities, houses of worship and business locations will be closed, save for supermarkets, public markets and convenience stores. Both government and private establishments will shut down except those in strategic sectors such as telecommunications, energy, water or electricity.
Mass gatherings including sports, religious or cultural events will be banned.
UK financial regulator cutting down on meetings with companies
Matthew Vincent in London
The UK’s financial regulator has said business continuity plans working well, but that it is also cutting down on meetings with firms.
An FCA spokesperson said:
The FCA is contacting firms across sectors to understand their response to coronavirus, ensuring that they are taking steps to prioritise the welfare of their staff and customers, as well as the functioning of the markets.
We are in contact with firms to understand their contingency plans and monitoring how these are working.
From what we have seen, business continuity plans are generally working well, and we have welcomed steps that firms are taking to show flexibility in their treatment of customers.
Federal Reserve ups short-term lending again
Colby Smith in New York
The Federal Reserve once again expanded its intervention in short-term funding markets on Monday, when signs of strain emerged despite the US central bank cutting interest rates to zero and announcing a series of emergency measures to contain the volatility that has erupted in financial markets.
The New York arm of the central bank announced it would boost the size of its lending into the repo market, where investors swap high-quality collateral like Treasuries for cash, offering up $500bn in an overnight loan.
The central bank is already providing market participants in the repo market with substantial financing, having unveiled last week that it would lend out $500bn of three-month loans and $500bn in one-month loans on a weekly basis through April 13, in addition to its ongoing plan to provide $175bn in overnight loans and $45bn in two-week loans twice per week.
According to Gennadiy Goldberg, a rates strategist at TD Securities, the Fed acted because repo rates were elevated in early Monday trading. At one point, the repo rate rose to 2.5 per cent. It has since settled around 1 per cent.
The sign of funding pressure “had begun to spook the market”, he said, especially after the Fed dropped interest rates to zero on Sunday in its second emergency cut so far this month. In addition to slashing policy rates, the Fed announced a series of measures to address strains that had cropped up in key US markets, including at least $700bn in asset purchases.
Spain to close land borders
Daniel Dombey in Madrid
Spain will close its land borders in its latest attempt to reduce the spread of coronavirus. Fernando Grande-Marlaska, interior minister, said that only Spanish citizens, legal residents, diplomats and people with documented proof of force majeure or other necessities would be able to cross the land border into the country. The closure will come into effect at midnight on Monday.
Mr Grande-Marlaska said the measure would not affect truckers bringing merchandise into the country but would not comment on whether Spain would also close its air and sea borders. “The necessary measures will be adopted at the correct time,” he said.
White House takes egg-straordinary step of scrapping annual Easter Egg Roll
Demetri Sevastopulo in Washington
The White House has cancelled its annual Easter egg hunt roll, which is traditionally held on the White House grounds, following the guidance from CDC to cancel large events with more than 50 people.
While White House officials are continuing to work from the building, doctors are checking the temperature of reporters who attend the daily briefings held by Mike Pence, the vice-president who is leading the White House coronavirus task force.
While much of the region around the capital increasingly shuts down, federal employees are still reporting for work, even as many companies in the area are asking their staff to work remotely until the crisis abates.
Labour union representing mariners opposes idea of cruise operator bailout
A US labour union representing licensed mariners has opposed a possible bailout of cruise operators that have seen their businesses hit by the coronavirus outbreak.
President Trump last week praised the cruise industry for suspending sailings and later floated the idea that the federal government could offer a bailout to some travel companies, as they reel from the rapidly spreading coronavirus outbreak.
Carnival Cruise temporarily paused its fleet cruise operations across all brands. Two of the operators’ ships had become hotspots for the coronavirus. Norwegian Cruise Line has suspended cruises through April 11, while Royal Caribbean has also suspended cruises for a 30-day period.
“We should not give one dime in stimulus money to ‘flag-of-convenience’ party boats; they should be the last on the list for a federal bailout,” said Capt. Don Marcus, president of the International Organization of Masters, Mates & Pilots. “The major cruise lines have owners who live in the United States, but they register their vessels in foreign countries and sail under foreign flags”.
Instead, they called for Congress and the White House to support commuter ferries and boost incentives for “cargo vessels that fly the American flag for reasons of both national security and the free flow of commerce”.
Iran shuts down shrine in the city of Qom
Najmeh Bozorgmehr in Tehran
In an unprecedented move, Iran shut down the shrine in the city of Qom overcoming resistance by the clergy who consider the holy site a place which saves patients rather than spreading the coronavirus infection.
Local media ran a picture of the tomb of Masoumeh — sister of Reza, the eighth Imam of Shia Muslims — which was locked down on Monday. The shrine receives millions of pilgrims annually in particular during the Persian New Year which will begin on Friday.
Qom — home to the most senior clergy and tens of thousands of clerical students at the biggest seminaries in the Shia world — has been the origin of the Covid-19 in Iran.
There is a lot of anger among Iranians and the medical teams that if Qom had been quarantined as soon as the first cases were detected on February 19, the illness had not spread so fast in the country. Iran is one of the worst countries hit outside China.
The shrine of Imam Reza in the holy city of Mashhad was also shut down “temporarily” over the weekend. It is not clear how long the closures will last but the measure has happened thanks to the involvement of armed forces to further control traveling of Iranians and contain spread of the disease.
Iran also continues cancellation of Friday prayers — another unprecedented move — while mosques are not allowed to hold collective prayers.
Renault to close all plants in France
David Keohane in Paris
Renault will close all of its plants in France from this evening, following swathes of Europe’s auto sector into shutdown as it grapples with the economic impact of the coronavirus.
“From the end of the day on Monday, March 16, the Groupe Renault will suspend all production activities on French industrial sites in order to protect its employees in the context of the Covid-19 pandemic and in compliance with the measures taken by the French government,” said the company in a statement.
The shutdown concerns 12 sites and 18,000 employees in France and follows an earlier decision by Renault to close plants in Spain.
Renault added that “continuity of production activities at the group’s plants in other European countries depends on the situation in each country.” Renault has plants in Slovenia and Romania.
The French government has said it will financially support companies who reduce workers’ hours without laying them off. Renault’s shares fell close to 10 per cent on Tuesday and are down 75 per cent over the past twelve months.
The move from Renault follows similar announcements from French rival PSA and Italian-American carmaker FCA.
PSA, which owns the Peugeot, Citroën, Vauxhall and Opel brands, said on Monday that it would close all its European plants, including Mulhouse in France and the UK’s Ellesmere Port. Italy’s Fiat Chrysler will shut eight sites, including six in its home market.
Ford and Nissan also shuttered facilities in Spain, and BMW’s home state of Bavaria declared a state of emergency.
Turkey announces temporary closure of restaurants, cinemas, gyms
Laura Pitel in Ankara
Turkey has announced the temporary closure of cafes, restaurants, cinemas, theatres, gyms and other venues as it battles to halt the spread of coronavirus.
The move comes after Ankara announced it would be banning communal prayers at the country’s mosques, and shutting bars and nightclubs. It also said that all gatherings and activities by non-governmental organisations would be postponed.
Turkey has reported 18 cases of coronavirus so far.
Austrian Airlines suspends flights as Lufthansa slashes capacity
Austrian Airlines is halting flights until the end of the month as its parent, Lufthansa Group, joins rivals in implementing sweeping cuts to its service amid a collapse in demand.
Beginning on Thursday the Austrian flag carrier will suspend all flights until March 28, making it one of the first European airlines to ditch its flight schedule entirely, following a similar move by Air Baltic yesterday.
Lufthansa Group — which owns its namesake airline and Eurowings, as well as Austrian — plans to cut capacity on long haul routes by up to 90 per cent. Within Europe it said capacity would be stripped to just a fifth of its original schedule. Details of which flights will be cancelled will be published in the coming days.
Lufthansa’s announcement comes on a torrid day for aviation stocks as national governments increasingly curtail travel, sending demand tumbling. India today became the latest major economy to impose restrictions, banning arrivals from the UK and EU, mirroring a similar move by the US. The Centre for Aviation, an industry consultancy, has warned that by the end of May most airlines could go bankrupt.
Lufthansa joins its rivals, most of which also announced capacity cuts today. British Airways parent IAG slashed capacity by 75 per cent, while Air France-KLM said it would cut its own by up to 90 per cent.
“Now it is no longer about economic issues, but about the responsibility that airlines bear as part of the critical infrastructure in their home countries,” said Carsten Spohr, Lufthansa chairman.
Congress urged to give $1bn in funding to US hospitals
Hannah Kuchler in New York
The major US health associations have called on Congress to give $1bn in funding to hospitals, as they prepare to be stretched beyond their limits in the coronavirus outbreak.
The American Hospital Association, the American Medical Association, and the American Nurses Association have written to Congress asking for “comprehensive funding” for the healthcare industry to be included in any economic stimulus package.
“We respectfully ask that Congress provide additional supplemental emergency funding of at least $1 billion during this critical window of time when we are able to best prepare and respond to this outbreak,” they wrote to Senate Majority Leader Mitch McConnell and House speaker Nancy Pelosi. “We also urge that supplemental funding not be offset by cutting other health programs.”
Health systems require support to obtain scarce supplies, to provide housing and care to patients who must remain isolated, but do not need to be hospitalised, and to pay for more staff, their training, and their childcare. The money could also help hospitals compensate for cancelling elective procedures.
Major corporate bond ETF comes under heavy selling pressure
Joe Rennison reports from London:
The world’s largest high yield bond ETF came under sustained selling pressure on Monday, as investors continued to mark down the creditworthiness of companies following the coronavirus outbreak.
BlackRock’s $14bn high yield bond ETF, known by its ticker HYG, fell by as much as 7 per cent, which would mark its biggest fall since the financial crisis. It trimmed its losses to closer to 3 per cent in more recent trade.
The sharp decline caused the ETF to trade at a discount to the underlying bond market it is supposed to track, with the difference between its price and the net asset value of the bonds it holds reaching its widest level in almost a decade.
Investors have complained about deteriorating trading conditions in the underlying bond market as prices have fallen precipitously and banks have stepped back from facilitating transactions.
Investors have also raised concerns over ETFs that seek to create stock-like trading out of assets that often don’t change hands for days at a time. Steve Laipply, US head of BlackRock’s iShares fixed income ETFs, said that the growing distortion between high yield bonds and ETFs showed that ETFs have become the de facto trading vehicle for corporate bonds, as investors desperately seek ways to trade in the dysfunctional market.
We are seeing the ETF providing a window into underlying market conditions,” he said. “In our view this is not an ETF dynamic occurring right now but a bond market dynamic and the ETF is showing you in real time how conditions are evolving in the bond market.
This idea that a certain structure would be immune to bond market conditions is not true. The ETF is just showing you what trading conditions look like in the underlying market.
Singapore reports record daily jump in new confirmed cases
Stefania Palma in Singapore
Singapore has reported 17 new confirmed cases, a record daily jump for the city state which now counts 243 infections.
Eleven cases are imported, while four are connected to previous patients and two remain unlinked.
The imported cases involve three Singaporean men and women aged between 36 and 53 who traveled to France, Eastern Europe, Germany, Italy and Switzerland. They also include three British men between 28 and 61 years of age who visited France and the UK; two Singapore permanent residents aged 26 and 27 who returned from Spain; an 83 year old Belgian woman; and two Australian nationals aged 65 and 78 with travel history to the US.
The four patients linked to previous cases are all women – three Singaporean and one Indonesian aged between 30 and 64 – while the remaining two unlinked cases are Singaporean men aged 86 and 67.
Four more cases have fully recovered and have been discharged from hospital, taking Singapore’s total to 109.
Maryland closes entertainment and leisure venues
Larry Hogan, the Republican governor of Maryland, announced that the state, which borders the US capital of Washington DC, would order bars, restaurants, gyms and movie theatres to close from 5pm on Monday, Demetri Sevestopulo writes.
According to Johns Hopkins University, there are 34 cases of coronavirus in Maryland, just under 1 per cent of the 3,813 cases identified across America.
The number of people with the virus in Washington DC, Maryland and Virginia, which also borders the US capital, has now topped 100.
Mr Hogan also banned meetings or events that involve more than 50 people, following the guidance that the US Centers for Disease Control and Prevention put out on Sunday about the need to limit the number of big events across the country.
William Hill suspends dividend
Patricia Nilsson in London reports:
William Hill is suspending its dividend until “further notice”, as the UK bookmaker warned the coronavirus would have a “material impact” on revenues and profits this year.
The 86-year-old group, which in 2019 derived over half of revenues from sports betting, said it was “too soon to accurately determine the effect of Covid-19” but it was considering the possibility of UK shops closing for one month.
The company faces “truly unprecedented times”, chief executive Ulrik Bengtsson said, although he added that people had kept placing bets and “will continue to do so where possible”.
“In recent days we have seen betting on horses, greyhounds, international football and our well-established virtual sports,” he said.
William Hill expected earnings before interest, taxes, depreciation, and amortisation to drop by up to £110m this year, assuming horse raising and shops in the UK remain open.
The gambling company has a credit facility of £425m and said that it was “working closely with our banking partners to enhance our liquidity position”.
Its shares were down by nearly a third in the afternoon. Competitors Flutter and GVC also issued profit warnings on Monday, with their shares plummeting by 13 and 22 per cent respectively
EU confirms Schengen travel ban
Mehreen Khan in Brussels reports:
European Commission president Ursula von der Leyen has confirmed that Brussels will push for a travel ban from non-EU nationals into the Schengen free travel area for at least 30 days that can be extended “as necessary”.
EU27 leaders are due to sign off on the temporary travel ban, reported earlier on Monday by the FT, during a teleconference tomorrow. Mrs von der Leyen said that UK citizens remained part of the EU – until the end of the year – and thus would not be impacted by the ban.
Mrs von der Leyen said the move was designed to not put “more strain on our healthcare system”. The ban has exemptions for doctors, daily cross-border commuters, medical professionals and non-EU citizens who are long-term residents in the bloc
EU27 finance ministers are holding a phonecall this afternoon to discuss financial measures to fight the spread of the coronavirus. Mrs von der Leyen said the commission will also allow for an “unprecedented” framework to allow for state aid to all companies and businesses.
Egypt to suspend all overseas flights until end of March
Andrew England in London
Egypt has announced that it will suspend all international flights in and out of the country from Thursday until the end of the month as it grapples with rising cases of coronavirus.
Mostafa Madbouly, the prime minister, said all hotels and tourist sites would be sanitised during the period.
He said tourists currently in the country, which is home to the pyramids and other historic sites, would be able to complete their holidays, Reuters reported.
“The decisions taken by the government to fight the virus has economic repercussions, but the state’s priority is to protect citizens,” Mr Madbouly said.
He said Egyptian airlines would lose more than EGP2.25bn ($143m) as a result of the measures.
Tourism is a vital sector for the Egyptian economy as it is one of its most important sources of both employment and foreign currency earnings.
The government on Saturday said it was closing schools and universities for two weeks.
England’s healthcare regulator to suspend inspections
Gill Plimmer in London
England’s healthcare regulator the Care Quality Commission has announced that it will be stopping routine inspections of hospitals, care homes and other GP services from today.
The regulator, which is responsible for monitoring service quality and customer care for hospitals, care homes, home care services and GPs, said that its “primary objective” during the Covid-19 outbreak will be to “support providers to keep people safe during a period of unprecedented pressure on the health and care system”.
Ian Trenholm, chief executive of the CQC, said: “It may still be necessary to use our inspection powers in a very small number of cases when there is clear evidence of harm, such as allegations of abuse.”
The CQC said some of its clinically qualified special advisors would be seconded to other bodies including Public Health England and NHS England. Its customer call centres would also start helping NHS 111, the part-privatised helpline, to take non-clinical Covid-19 calls next week.
Russia cancels some sporting events
Max Seddon in Moscow reports:
Russia said it would cancel all international sporting events as coronavirus cases begin to rise in the country.
Russia’s sports ministry said it would also ban people from provinces with confirmed coronavirus cases – which includes Moscow and St Petersburg, by far the country’s two largest cities – from taking part in any domestic sporting events. Moscow banned all sporting events until April 10 earlier on Monday.
Russia’s football association plans to rule on whether to suspend its season, one of the few currently still active in Europe, on Tuesday. Teams from Kazakhstan and Finland withdrew from the quarter-finals of the Russian-run KHL hockey league on Tuesday, which has gone ahead with matches behind closed doors.
Ms Marin deflected the criticism, saying that Finland had not followed the UK’s attempt at “herd immunity” and had announced the appropriate measures at the right time.
Finland closes borders, shuts schools, prepares to introduce emergency powers
Richard Milne, Nordic and Baltic Correspondent
Finland significantly intensified its measures against the coronavirus outbreak, closing its borders as well as schools and universities, banning any public gatherings of more than 10 people, and preparing to introduce emergency powers.
Sanna Marin, the centre-left prime minister, said the situation had worsened in Finland in recent days and so there was a need for the government to step up its action.
All over 70s will have to quarantine themselves, nearly all public buildings including museums and theatres will close, while the government can restrict freedom of movement if necessary. Kindergartens will be kept open to ensure essential workers can get childcare but most people will be encouraged to look after their children at home, Ms Marin added.
The 34-year-old prime minister had faced growing pressure in Finland about her response to the pandemic with Norway and Denmark having taken earlier many of the measures Helsinki took on Monday.
New Jersey and Connecticut join New York in shutting restaurants, bars, gyms
New Jersey and Connecticut will join New York by announcing restrictions on bars and restaurants, as well as the temporary closure of recreational venues such as gyms, movie theatres and casinos.
The coronavirus “doesn’t care about state borders”, Andrew Cuomo, New York governor said. The agreement with New Jersey governor Phil Murphy and his Connecticut counterpart Ned Lamont “will help protect the entire Tri-State Area.”
Across the three states, effective from 8pm on Monday, crowd capacity at gatherings will be limited to 50 people and restaurants and bars will be allowed to offer takeout and delivery only. Gyms, movie theatres and casinos will be closed.
A growing number of US retailers have announced in recent days they will temporarily close their stores in North America and Europe.
Portugal’s president to decide this week on emergency declaration
Peter Wise in Lisbon
Portugal’s president will decide this week on whether to declare a state of emergency that would grant the government special powers, including the suspension of constitutional rights, to respond to the coronavirus pandemic.
Marcelo Rebelo da Sousa has convened a virtual meeting of the Council of State, his top advisory body, to discuss the issue on Wednesday, the day he ends 14 days of self-imposed quarantine after being exposed to a potential risk at an event at the presidential palace.
The number of confirmed cases of the virus in Portugal rose to 331 on Monday, an increase of 86 cases, or 35 per cent, in 24 hours, according to health authorities. Three confirmed cases have fully recovered, an official bulletin said.
Portugal and Spain moved on Monday to restrict crossings of their common land border to goods vehicles and people travelling for work. Marta Temido, Portugal’s health minister, said the health screening of passengers arriving at Portuguese airports would also be tightened up. Portugal has already banned flights to and from China and Italy.
India introduces travel ban on UK and EU
Benjamin Parkin in Mumbai reports:
India has announced that it will ban incoming passengers from the UK and EU until the end of the month, aggressively accelerating its strategy to stop the virus spreading into the country.
Officials on Monday said they had instructed airlines to stop all passengers from the UK, EU, European Free Trade Association and Turkey boarding flights to India from this Wednesday.
While India last week announced that it would suspend short-term visas until mid-April, the new measures broaden the scope of existing restrictions to potentially prevent even Indian nationals currently in those countries from returning on commercial flights.
The measures, which also mandate a two-week quarantine for all passengers coming through the UAE, Qatar, Oman, and Kuwait, will remain in effect until the end of March to be reviewed thereafter.
After a slow start in which it confirmed only 3 cases in February, the number of infections in the country has risen to 114. While almost all of those involved returning travellers or their immediate contacts, authorities are broadening testing to start checking for local transmission.
Cities have moved swiftly over the past week to limit public gatherings and close schools, cinemas and malls in order to stem the virus’ spread, amid concerns that the country’s densely populated urban centres and poor health infrastructure are particularly vulnerable to contagion.
Greenland records first Covid-19 case
Richard Milne, Nordic and Baltic correspondent, reports:
Greenland has recorded its first case of coronavirus after a person in the capital of the self-governing Arctic nation tested positive.
Authorities in Nuuk said the infected person had been placed in self-isolation at home and warned of further potential infection from tourists.
However, Greenland, which is part of the kingdom of Denmark, has followed Copenhagen’s lead and barred foreigners from entering the world’s largest island from Monday.
Greenlanders and Danes are still allowed to enter the island of 65,000 people. The Faroe Islands, the third self-governing territory that is part of the kingdom of Denmark, has had 18 coronavirus cases.
Pandemic poses no systemic risk to German banks, regulator says
Olaf Storbeck in Frankfurt reports:
The coronavirus pandemic has created a “significant burden” for Germany’s financial industry, the head of the country’s banking regulator said, but has not turned into systemic risk that could undermine the functioning of the wider banking sector.
“The [German government’s] liquidity support scheme for companies has made widespread debt defaults and insolvencies significantly less likely,” Bafin’s Felix Hufeld told Handelsblatt in an interview published on Monday.
Mr Hufeld added that the support programme for struggling companies that the government unveiled on Friday will provide “considerable relief” for the country’s banks as it will stabilise their clients.
German lenders were well positioned to cope with defaults of individual companies, he said.
Shares in Deutsche Bank, which have shed more than 50 per cent since late February, extended their slide on Monday.
Mr Hufeld stressed that European regulators don’t think the current situation merits the softening of regulatory requirements but said that watchdogs will act “in a highly flexible way”, in particular with regard to capital requirements.
US Supreme Court postpones oral arguments for two weeks
Kadhim Shubber in Washington DC reports
The US Supreme Court has postponed two weeks of oral arguments that were set to start next Monday, including a hearing on cases involving Donald Trump’s financial records that was set for March 31.
The court said on Monday the postponements were “in keeping with public health precautions recommended in response to Covid-19”. The announcement is just the latest disruption to the US judicial system, with courts across the country suspending criminal and civil trials.
It said in a statement:
The Court will examine the options for rescheduling those cases in due course in light of the developing circumstances.
The US high court added that its March 20 conference, where the justices discuss cases and whether to hear new appeals, would go ahead as scheduled but that “some Justices may participate remotely by telephone”.
Oil headed for ‘most extreme’ surplus on record, analysts warn
Derek Brower, US energy editor, reports:
The collapse in demand amid a war for market share between Saudi Arabia and Russia could lead to “the most extreme global oil supply surplus ever recorded,” said IHS Markit, a consultancy, in the latest alarming forecast of the coronavirus’s impact on energy markets.
Soaring supply and plummeting demand could yield a surplus of 4m to 10m barrels a day between February and May, said the consultancy. Demand alone may be down by 10m b/d in March and April, or more than 10 per cent of the world’s total.
Before the onset of the virus, global oil demand was expected to rise by about 1m b/d in 2020.
The price collapse, which has seen Brent fall by more than half to $30/b, will lead to a huge contraction in US oil production in the next 18 months, the consultancy said.
Output could fall by up to 4m b/d from the record high of over 13m b/d struck in February.
Racing in France suspended as UK bars spectators
Horseracing in France has been suspended until mid April, while events in Britain are to take place on a “behind closed doors” basis.
French horseracing authorities, LeTrot and France Galop, said racing in the country would be suspended from tomorrow until March 17.
LeTrot president Jean-Pierre Barjon and France Galop president Édouard de Rothschild said in a statement:
By suspending all competition, we want first and foremost to protect them from the current pandemic. With this decision, the French horse racing industry also shows its solidarity and responsibility towards the entire Nation.
The decision comes less than an hour after the British Horseracing Authority confirmed its own less stringent move to run races in England, Wales and Scotland without spectators until the end of March.
The BHA’s announcement, which was flagged in advance yesterday, comes after heavy criticism that the Cheltenham meet last week went ahead with around 150,000 spectators in attendance, despite concerns over social distancing.
Nick Rust, BHA chief executive, said:
The restrictions we are putting in place to close racing to spectators and limit attendees will reduce demand on public services. We also have a range of measures in place designed in response to the government’s guidance on public health and we will continue to update these as appropriate
GVC expects hit of up to £150m
Patricia Nilsson in London reports:
GVC, the gambling group behind Ladbrokes Coral, warned that postponed or cancelled sports events would hit its earnings by up to £150m.
The company said it expected all football games to be cancelled until July, with the Euro 2020 tournament postponed until next year, hitting its earnings before interest, taxes, depreciation, and amortisation in the range of £130m and £150m.
While it estimated that stores in Italy and Belgium would remain closed for three months, the company expected betting shops in the UK to remain open for business.
In 2019, sports betting made up roughly half of the company’s £3.7bn in net gambling revenues, but chief executive Kenneth Alexander said GVC was in a “robust position to manage the impact on our operations”.
Greece to impose 14-day quarantine on arrivals
Kerin Hope in Athens
Greece will place anyone arriving from abroad in quarantine for 14 days as the country tries to contain the spread of coronavirus following a rise in new cases over the weekend.
The measure would take effect from Monday, said Aristotelia Peloni, a government spokesperson. It would apply to all arrivals, regardless of nationality
On Sunday Greece banned remaining flights from Italy and Spain, cut passenger ferry links with Italy and closed road borders with Albania and North Macedonia. The number of new Covid-19 infections rose to 103, bringing the total to 331. There have been four fatalities.
The spokesperson added that all commercial shops would close on Wednesday, leaving only supermarkets, pharmacies, banks, take-away food services and petrol stations in operation.
Germany proposes closing down most shops
Guy Chazan in Berlin reports:
The German government has proposed a shutdown of most shops in Germany, as it toughens up its response to the coronavirus pandemic.
A government statement said the measure was designed to “restrict social contact in the public sphere”. It was agreed between Angela Merkel’s cabinet and the leaders of Germany’s 16 federal states, which have the last say on what businesses can or can’t stay open.
All shops will be closed, apart from those selling food and drink. Banks, chemists, petrol stations and newsagents, as well as other types of business such as laundromats, will be exempted from the shutdown.
The measure, which was published after a meeting of the government’s corona crisis committee, comes as Germany imposed controls on its borders with its western, southern and northern neighbours.
The government decree orders the closure of bars, clubs, discos and pubs, theatres, opera-houses, concert halls, museums, cinemas, zoos, trade fairs and exhibitions, amusement arcades and bookmakers. Brothels, swimming pools and gyms will also be closed.
The statement also curbs visiting hours in hospitals and care homes. Anyone who was in a risk area in the last 14 days will be barred from entering such facilities.
Restaurants will be allowed to stay open, but must place tables at a distance from each other.
The government also stipulated that hotels should no longer offer overnight accommodation “for touristic purposes”. Restaurants will only be allowed to stay open till 6pm.
Head of Catalan regional government tests positive for Covid-19
Daniel Dombey in Madrid
Quim Torra, the head of the Catalan regional government, has tested positive for coronavirus, the latest in a series of leading politicians in Spain who have been infected.
Mr Torra’s deputy, Pere Aragones, has also tested positive, as has Isabel Diaz Ayuso, the head of the regional government of Madrid, the worst affected area in the country.
Two cabinet ministers have also tested positive, as has Begoña Gómez, the wife of prime minister Pedro Sánchez, and Santiago Abascal, the leader of the far-right Vox party.
Bank of International Settlements employee in Basel tests positive
Matthew Vincent in London reports:
The Bank for International Settlements has said a member of staff working at its Basel headquarters has tested positive for Covid-19. On Monday afternoon, the organisation reported that the individual had received medical treatment and was currently recovering at home.
A further nine staff members who had been working in close proximity to the infected employees had been told to to work from home temporarily.
News of the positive test came despite measures that BIS had put in place since the beginning of March. These included cancelling or rescheduling all physical meetings due to take place in its offices, and having “almost all staff” work from home.
However, the institution — which serves to promote monetary and financial stability internationally — said it had “rigorous business continuity measures in place” to ensure it can continue its normal operations.
What information sources are citizens relying upon?
Andrew Edgecliffe-Johnson in New York reports:
Fewer Americans are turning to the Trump administration for information about the coronavirus, reveals a survey that shows stark differences in how different countries are responding to the pandemic.
A quarter of US respondents to a survey taken last week by Edelman, the communications consultancy, said they were getting most of their information from national government sources, compared with a third of those polled in the UK, half of South Koreans and almost two-thirds of Italians.
Major news organisations were the biggest sources of information for respondents in almost all of the 10 countries Edelman surveyed, although journalists remained the least trusted experts on the crisis, with scientists, doctors and health officials the most.
Everywhere but Germany, respondents said their own employer was better prepared than their country to respond to the viral outbreak.
“Trust is local,” said Richard Edelman, chief executive, adding that he expected to see more companies step up to help respond to the crisis.
I now think that business needs to act; for instance, if schools are suspended in New York, who’s going to give them school lunch in the Bronx today?
Wouldn’t it be a great thing if Yum said we’ll feed the kids or HP made computers available: “It’s like World War II, when GM repurposed car plants to make tanks. We have to mobilise to solve [this].
Abu Dhabi outlines $2.5bn support package
Andrew England, Middle East editor, reports:
Abu Dhabi announced a AED9bn ($2.5bn) package of support to businesses and citizens as the oil-rich emirate seeks to cushion the economic impact of the coronavirus outbreak.
The capital of the United Arab Emirates said it would allocate AED5bn to subsidise water and electricity for citizens, commercial and industrial activities, as well as AED3bn to credit guarantee schemes for small and medium sized businesses. The government will provide another AED1bn to establish a fund “to enhance liquidity and sustain balance between supply and demand for stocks”.
The measures taken by Abu Dhabi, the largest and wealthiest of the seven emirates that make up the federation, come after the UAE’s central bank announced a $27bn stimulus package on Saturday.
The UAE is the region’s main trade, finance and tourism hub and its economy is enduring both the impact of the coronavirus pandemic and the oil-price war between Russia and Saudi Arabia. The government has said it will stop issuing visas, except for diplomats, from Tuesday, and has closed entertainment venues, including the Louvre museum in Abu Dhabi, cinemas and nightclubs.
Nigeria central bank announces emergency package
Neil Munshi in Lagos
Nigeria’s central bank announced an emergency package to cushion the blow of the coronavirus outbreak on Africa’s largest economy, including a 50bn naira ($163m) assistance fund and rules that would allow lenders to restructure loans.
Africa’s most populous country has only reported two cases of coronavirus and so far has not issued travel bans, closed schools or limited public gatherings, unlike some of its sub-Saharan African neighbours.
The central bank said it would allow banks to restructure the tenor and terms of loans for affected households and businesses, “particularly oil and gas, agriculture and manufacturing”.
Nigeria is Africa’s biggest crude producer, and relies on oil for over half of government revenues and most of its foreign exchange. Analysts expect the slump in oil prices to send it into another recession, just as it is emerging from the one brought on by the 2015 oil price crash.
UK property companies slide
George Hammond in London reports:
Shares in the UK’s listed developers fell sharply, with investors increasingly concerned about the prospects of a recession.
The UK’s three biggest housebuilders by volume – which together built around 50,000 homes last year – were nursing share price falls of between 12 and 17 per cent, while the FTSE 100 was down around 7 per cent.
The latest slump means housebuilders including Persimmon, Barratt Developments and Taylor Wimpey are trading at just over half what they were on February 19, the most recent peak.
Aynsley Lammin, an analyst at Canaccord Genuity, said:
Until late February, housebuilders had held up relatively well. They are well capitalised, have limited supply chain exposure to China and have a domestic workforce. Now, recession and unemployment fears are more live.
Uncertainty over jobs would make buyers think twice about taking out mortgages, and builders were likely to shut up shop on building sites, said Mr Lammin. Even interest rate cuts such as that announced by the Federal Reserve on Sunday, which are usually a boon for developers, “are pretty irrelevant at the moment,” he added.
Moscow bans public events
Henry Foy reports
Moscow has announced a ban on all public events of more than 50 people and ordered schools and colleges to close from Saturday, as the Russian capital seeks to clamp down on a small but rapidly-increasing number of coronavirus cases.
The city will also force a 14 day quarantine period at home for all citizens arriving from the US, UK, Ukraine, Belarus and European countries inside and outside the EU, a post on the mayor’s website said.
Russia announced it had 93 coronavirus cases on Monday, a rise of 30 from the day before. Twenty of those new cases were in Moscow.
US banking stocks hammered at open in Wall Street
US banking shares plunged following the Federal Reserve’s overnight move to cut borrowing costs.
The S&P 500 bank index, after a 15-minute break, plummeted 17 per cent in the worst fall for the gauge since the depths of the 2008-09 financial crisis.
JPMorgan Chase, Bank of America and Citigroup dropped nearly 20 per cent, while Wells Fargo fell 14 per cent. Goldman Sachs and Morgan Stanley, Wall Street’s two biggest investment banks, shed more than a tenth.
The halt at the opening on Wall Street was the third emergency break in six days and followed a cut overnight from the US Federal Reserve to near zero per cent.
European countries plan ban on entry into Schengen travel zone
Michael Peel, Sam Fleming and Jim Brunsden in Brussels
European countries plan a ban on entry to the 26-state Schengen passport free travel zone in the most radical response yet to the continent’s escalating coronavirus pandemic, officials said on Monday.
The proposed action – expected to be announced later on Monday – would cover all non-essential visits from third countries, with exemptions including for citizens of Schengen countries, people familiar with the work said.
EU officials were still finalising the sweeping move, which comes after a sharp rise in cases of infection in Europe triggered a wave of unilateral decisions by member states to all but seal their borders. The plan will still need to be signed off by national leaders, while officials stressed details remained under discussion and could change ahead of the announcement.
The European Commission declined to comment.
The ban is aimed at non-essential travel to the Schengen area in an effort to curb the coronavirus’s spread across Europe, officials said. The Schengen countries include 22 EU members, as well as Iceland, Norway, Switzerland and Liechtenstein. The five EU states not in Schengen – Ireland, Cyprus, Croatia, Romania and Bulgaria – may be invited to also implement the restrictions, officials said.
The status of the UK – which is in a post-Brexit transition period after leaving the EU in January – was not immediately clear.
Exemptions to the ban under discussion include for EU citizens, residents and their family members, as well as workers in crucial sectors such as healthcare and transport, officials said.
Diplomats said that the measure was discussed on a phone call this morning between French president Emmanuel Macron, German chancellor Angela Merkel and the heads of the European Commission and Council.
On the call, Mr Macron attacked national moves to close borders and called for a European response.
Brussels is set to announce the plan after a videoconference among G7 leaders this afternoon.
US airline stocks plunge
Shares in US airlines fell sharply in the opening minutes of trading on Wall Street, as carriers around the world outline plans to slash capacity in the wake of tumbling demand.
United, American Airlines and Delta each lost around 15 per cent of their value in early Monday trading.
In the past 24 hours, United Airlines of the US, IAG — parent of British Airways, Aer Lingus and Iberia — Air France-KLM, easyJet, Finnair, Air New Zealand and Aeroflot all unveiled drastic measures to cut costs after several countries, including Germany and Spain, closed their borders.
Romania declares state of emergency for 30 days
Valerie Hopkins in Budapest reports:
Romania’s president Klaus Iohannis has decreed a state of emergency for the next 30 days, making it legal to impose price caps on medicine and medical equipment and public utilities.
Mr Iohannis announced the closure of all schools and said that more measures could be taken soon including the gradual closure of borders as well as restaurants, bars and cafes.
Romania has confirmed 158 coronavirus cases while nine people have recovered.
The outbreak came to the southeastern European country just after a motion of no confidence ousted prime minister Ludovic Orban.
Over the weekend, Mr Orban, 56, was reinstated as premier and held the first cabinet meeting by video conference, because he was under self-quarantine after a senator from his party was tested positive for coronavirus. On Friday, the government began a 14-day period of self-isolation.
S&P 500 sinks more than 7% at the open, triggers circuit breaker
US stocks were halted for volatility shortly after the opening bell, dropping more than 7 per cent and continuing a wave of selling that stretched from Asia and into Europe.
The S&P 500 was down 8.1 per cent after the market open, triggering circuit breakers that kick in at 7 per cent and pause trading for 15 minutes.
Stocks in Europe were down sharply as investors failed to be soothed by the Federal Reserve’s decision on Sunday to cut US interest rates to zero and joined forces with other global central banks in a bid to prevent a severe economic downturn caused by the coronavirus pandemic.
The FTSE 100 was off 7.5 per cent, while Europe’s broad Stoxx 600 dropped 9.4 per cent. In Asia, Australia’s S&P/ASX 200 tumbled 9.7 per cent, while Hong Kong’s Hang Seng fell 4 per cent.
Investors raced for the relative safety of government bonds, pushing yields lower. The yield on the benchmark 10-year US Treasury sank 22 basis points to 0.736 per cent.
Brent falls below $30
Derek Brower and Gregory Meyer report:
The oil price collapse accelerated on Monday, with international benchmark Brent falling below $30 a barrel, amid a collapse in demand due to the coronavirus.
Brent was down by more than 12 per cent in early afternoon trading in London, to $29.76 a barrel, its lowest price since 2016, as traders digested the magnitude of a demand shock that analysts say could wipe millions of barrels off consumption this year.
West Texas Intermediate, the US benchmark, was down by around 10 per cent, trading at around $28.61 a barrel and was threatening to break beneath its 2016 low.
The oil market has been slammed by the combined hit of coronavirus to demand, while Saudi Arabia and Russia have started a price war after falling out over how oil producers should respond. Oil traded near $70 a barrel in early January.
Prices last traded below $30 a barrel in 2016, when WTI bottomed around $28 a barrel. But traders warn a significant hit to demand, possibly of 10 per cent of global consumption or more, could be seen in coming weeks as more cities shut down.
Meanwhile, New York wholesale gasoline futures plunged another 25 per cent after falling by a third last week and reached a record low of 67.78 cents a gallon as people curtailed driving to prevent spreading the virus. By mid-morning in New York, prices were about 72 cents a gallon.
Carmaker PSA to close all European factories
David Keohane in Paris and Peter Campbell in London report:
France’s PSA is to shut all factories across Europe as it struggles to cope with the impact of the coronavirus outbreak, hitting more than a dozen sites in countries including Germany, Britain and France.
The closures will be phased this week, with every site closed until at least March 27.
By mid-morning in Paris, the share price of PSA — whose brands include Peugeot, Citroen, Vauxhall, Opel and DS — had dropped more than 16 per cent amidst a broader sell off for the auto industry.
Following a meeting with its unions, the company said:
Due to the acceleration observed in recent days of serious Covid-19 cases close to certain production sites, supply disruptions from major suppliers, as well as the sudden decline in the automobile markets, the Chairman of the Executive Board with the members of the crisis unit, decided the principle of the closure of the vehicle production sites, according to the following schedule and until March 27.”
The affected sites and their closing dates are:
• March 16: Mulhouse (France), Madrid (Spain)
• March 17: Poissy, Rennes, Sochaux (France), Zaragoza (Spain), Eisenach, Rüsselsheim (Germany), Ellesmere Port (United Kingdom), Gliwice (Poland)
• March 18: Hordain (France), Vigo (Spain), Mangualde (Portugal)
• March 19: Luton (United Kingdom), Trnava (Slovakia)
Japanese yen rises more than 2 per cent
Eva Szalay , Currencies Correspondent, reports:
The Japanese yen surged across the board and gained more than 2.5 per cent against the dollar in European trading hours amid the continued slump in equity markets. The currency made similar gains against the euro.
Stock markets have plunged despite coordinated policy action from major central banks on Sunday evening that saw the US Federal Reserve lowering key rates to zero and launching a “kitchen sink” package to combat the impact of the virus.
The failure to reassure investors pushed the yen higher as safe-haven flows accelerated. The dollar traded at Y105.17 before settling around Y105.38. The Bank of Japan responded to the Fed’s cut by increasing their target for annual ETF purchases and introducing a new lending programme to support businesses as well as increasing its commercial paper and corporate bond purchases. The BoJ, however, kept its key rate at 0.1 per cent.
Derek Halpenny, global head of research at MUFG Bank, said the package was more aggressive than expected, but highlighted that the BoJ has less room for policy manoeuvre than the Fed.
We doubt though that today’s BoJ action will prove sufficient to prevent the yen from strengthening further.
Signs spread slowing in Italy, whispers head of Lombardy
Miles Johnson in Rome reports:
The leader of the Italian region that has been worst-hit by the coronavirus has said he is seeing some early signs of the the outbreak slowing.
Attilio Fontana, president of the northern region of Lombardy where almost half of Italy’s active cases are located, told Italian radio on Monday that the rate of increase in cases could be falling.
“Let us hope it is the start of a reversal of the trend. I am saying it in a whisper, that this could be the start of a reversal,” he said.
Prime minister Giuseppe Conte said in an Italian newspaper interview on Monday that the outbreak was still spreading quickly in Italy.
Levi Strauss to temporarily close stores in US and Canada
Levi Strauss will temporarily close its stores in the US and Canada from Monday, becoming the latest retailer to shut locations in North America in an effort to help limit the spread of coronavirus and in response to the guidance of public health officials.
Stores will remain closed through March 27. Store employees will be paid for all scheduled hours during the closure.
Over the weekend, Nike said it would temporarily close its stores in the US, Canada and western Europe through to March 27, while Apple announced similar plans for its shops outside greater China.
Norwegian warns situation escalating ‘by the hour’
Richard Milne, Nordic and Baltic Correspondent, reports:
Norwegian Air Shuttle is temporarily laying off nearly all its workers and cutting 85 per cent of its flights as the embattled low-cost airline warned the coronavirus-inspired crisis was “escalating by the hour”.
About 90 per cent of its workforce will be laid off temporarily, or 7,300 workers from pilots and cabin crew to administrative staff.
The Norwegian airline has cancelled all long-distance flights except those from Scandinavia to Thailand and most European flights save between Norway and Nordic capitals.
Jacob Schram, chief executive, said:
What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded. Several governments in Europe have already said that they will do everything they can to ensure that their airlines can continue to fly when society returns to normality. We appreciate that the authorities of Norway have communicated that they will implement all necessary measures to protect aviation in Norway, consequently securing crucial infrastructure and jobs.
Iran’s Revolutionary Guard on ‘wartime footing’ in battle against Covid-19
Najmeh Bozorgmehr in Tehran
Iran’s top commander of the Revolutionary Guards said on Monday that his forces and the medical sector were on a “wartime footing” in their battle against coronavirus.
“All guards forces in the provinces alongside medical sciences’ universities are effectively on a wartime footing,” Major General Hossein Salami said, according to Fars news agency which is affiliated to the elite force.
“We have reached preparedness to contain this disease and have figured out the protocols need for this battle.”
The elite force’s ground and marine forces had allocated 24 hospitals and 13 makeshift centres as well as 380 clinics to help treat patients, he said.
Maj Gen Salami added that so far 6,000 patients had been admitted in its Baghiatallah hospital in Tehran, the largest hospital dedicated for Covid-19 patients. “Every day, about 500 patients are admitted in this hospital which is a huge cycle while this cycle is also happening in other hospitals in the cities of Sari and Mashhad.”
He added that 650,000 voluntary forces of the guards, basij, were also involved to help disinfect streets and distribute around 100,000 foodstuff packages among the poor.
Iran’s supreme leader Ayatollah Ali Khamenei — who is also chief commander of all armed forces — last week ordered military forces to increase their efforts to contain further spread of the disease.
Russian virus cases increase sharply
Russia said on Monday that it has registered 93 coronavirus cases, up from 63 a day earlier, Henry Foy writes.
Four have recovered, Tatiana Golikova, deputy prime minister said, adding that 86 of the cases were people who had entered the country carrying the infection.
While Russia’s number of infections has lagged behind other European nations, the government began building a 500-bed dedicated hospital on the outskirts of Moscow to add to an existing hospital converted to treat the epidemic, in a sign that the Kremlin fears the number of cases could grow rapidly.
Sicily takes steps to distance itself from mainland Italy
Miles Johnson in Rome reports:
Sicily has moved to isolate itself from the Italian mainland, allowing only goods and essential movement of people between the peninsula and the island during the coronavirus outbreak.
“Connections and ordinary transport of people to and from Sicily” would be suspended, Paola De Micheli, Italy’s transport minister, said following a request from the Sicilian regional government.
Business activity in New York state in March hit lowest since 2009
Business activity in New York state staged a dramatic tumble in March to hit its lowest level since the financial crisis and firms feeling the least optimistic since 2009.
The headline general business conditions index in the New York Federal Reserve’s Empire State manufacturing survey tumbled by a record 34 points to a reading of minus 21.5 in March from positive 12.9 in February.
That was its lowest level since 2009, the NY Fed said in a statement, and was well below the median forecast among economists for a reading of 4.
The weak data speak to the one of the most immediate negative impacts from the coronavirus – other than peoples’ health – which was the disruption of supply chains. Given survey responses were collected between March 2 and 10, respondents have yet to weigh in on the impact of the rapidly growing number of restrictions that have been placed on travel, gatherings, schools as well as the closure of businesses.
The survey showed new orders turned negative, dropping 31 points to minus 9.3, indicating overall orders fell, while delivery times were “slightly longer” and inventories were somewhat higher. While the index for the number of employees held steady, the data revealed workweeks had been shortened.
“Firms no long expect general business conditions to be better over the next six months,” the NY Fed observed. The index for future business conditions declined to 1.2, a 22-point drop from February and to its its lowest level since 2009.
Rusal is first Russian industrial group to impose homeworking
Henry Foy in Moscow reports:
Rusal, the world’s largest aluminum producer outside of China, has ordered all non-essential staff to work from home, in the first example of a major Russian industrial company taking such a step in an attempt to stop the spread of coronavirus.
The Russian aluminium monopoly, which operates smelters across Siberia, said that from Tuesday all “employees from head office and staff who are not involved in the production process” should work from home.
“Only those employees whose presence is indispensable to ensure the production is uninterrupted will be present at the production sites,” the company said in a statement on Monday, adding that all business travel had been cancelled.
Russia has 64 confirmed cases of coronavirus and no deaths. But it has steadily closed off its borders to foreigners and visitors from heavily affected countries.
“The current health situation does not only create a serious challenge for the whole economy but above all it puts our employees at risk,” Evgenii Nikitin, Rusal’s chief executive, said.
Rusal has introduced unprecedented measures across the whole company in order to ensure the uninterrupted production process and to protect our employees.
Travellers will be able to pay Rs3,100 ($42) for their room, inclusive of three meals a day, two bottles of mineral water, and WiFi and television in the budget hotels, and authorities expect to fill the rooms in the coming days.
New Delhi requisitions airport hotel rooms for use quarantine use
Amy Kazmin in New Delhi reports:
Authorities in New Delhi are requisitioning rooms in several airport hotels to serve as “pay as you go” quarantine facilities for affluent Indians that have found the government’s own quarantine facilities too squalid.
Since Friday, the Indian government has required any of its citizens that are returning from trips to countries worst-hit by coronavirus – including China, Italy, South Korea, France, Spain or Germany – to undergo a mandatory 14-day quarantine before they can return to their homes and families.
However, many travellers asked to stay in official quarantine facilities have expressed discomfort with the poor, often unhygienic conditions, with many sharing social media videos showing grim conditions, including broken walls, stained sinks and blocked-up toilets.
In Maharashtra, several travellers have attempted to escape the designated quarantine facilities, a phenomenon to which their overall poor conditions are thought to have contributed.
However, in New Delhi on Monday, Arvind Kejriwal, the chief minister, said that the local government has required three of the city’s airport hotels – including the Lemon Tree, the Red Fox and the IBIS – to set aside a total of 182 rooms for travellers that could will be allowed to spend their quarantine time there, if they could pay for it.
Spanish cases pass 9,000 as figures revised upwards
Daniel Dombey in Madrid reports:
Spain now has more than 9,000 documented cases of coronavirus — a jump of 1,400 in 24 hours.
An official release said that 9,191 people had tested positive for the virus, an increase of more than 18 per cent on the previous day’s tally of 7,793. The number of deaths has increased to 309 from 288.
More than half the total of all those with the virus — 4,165 — are in Madrid, where the head of the regional government, Isabel Diaz Ayuso, has also contracted the virus.
At present, 432 people nationwide are in intensive care and 530 have recovered.
ING predicts recessions in the UK, eurozone and Japan
Valentina Romei in London reports:
Dutch bank ING expects the UK, eurozone and Japan to fall into recession in the first half of this year, as the spread of the coronavirus gathers pace.
The US is still expected to grow in the first quarter as the virus’s spread is less advanced there, but ING expects the economy is set to shrink an annualised quarter on quarter rate of 8 per cent annualised in the three months to June.
James Knightley, ING US economist, said:
The supply crunch in manufacturing, the panic in the financial sector and the collapse in airline travel, hotel stays and leisure activities mean we could see a quarterly GDP contraction of the scale reached during the height of the financial crisis, particularly given the prospect of some city lockdowns.
The eurozone economy is set to be hit hardest in the first quarter, as many countries go into full or partial lockdown, the bank said.
Despite a strong fiscal response from the UK government and a 50 basis point cut in interest rates, the UK economy is expected to shrink 0.6 per cent this year.
“A sizable hit to consumer activity — particularly concentrated in travel and hospitality, and mostly hitting during the second quarter — means the UK is likely to enter a technical recession” said James Smith, UK economist at ING.
BioNTech and Fosun Pharma set up $135m vaccine partnership
Clive Cookson in London reports:
BioNTech, the big German biotech, has teamed up with Fosun Pharma of China in the race to produce a coronavirus vaccine. The two companies announced today a $135m partnership, with Fosun agreeing to make a $50m equity investment in BioNTech and paying BioNTech a further $85m in vaccine development and commercialisation fees.
More than 20 companies and public laboratories worldwide are trying to develop a vaccine against Covid-19. Several, including BioNTech, are using so-called mRNA technology. This injects genetic instructions for human cells to make coronavirus proteins which stimulate the immune system to recognise and fight Covid-19 infection.
BioNTech says that, given regulatory approval, it could begin clinical testing of its BNT162 vaccine on healthy volunteers in late April, starting in Germany. The first candidate vaccine for Covid-19, produced by Moderna in the US, starts clinical testing this week.
Assuming these confirm that the vaccine is safe and elicits an immune response, more extensive clinical trials would take place in China in collaboration with Fosun, as well as in Europe and US.
The company is also in advanced talks with Pfizer, the US pharmaceutical giant with which it is already collaborating on flu vaccines, to work on coronavirus too.
At the weekend there was a political storm in Germany over alleged attempts by the US to persuade CureVac, another German biotech developing an mRNA coronavirus vaccine, to move its research across the Atlantic.
IMF prepares $1tn response to pandemic
James Politi in Washington reports:
The IMF said it was ready to mobilise its entire lending capacity of roughly $1tn to help countries hit by the coronavirus outbreak, as it called for governments around the world to deliver “sizeable support” to the global economy from fiscal stimulus.
In a blog the day after the Federal Reserve slashed its main interest rate to near zero, Kristalina Georgieva, the managing director of the IMF, said it was time for national governments to boost spending to support collapsing demand.
Wage subsidies for businesses affected by shutdowns can help prevent cascading bankruptcies and massive layoffs that will have lasting effects for future recovery and negative impact on aggregate demand. Cash transfers to low-income households can support consumption and preserve minimum living standards.
Her comments came ahead of a teleconference call among G7 leaders to coordinate the response to the coronavirus outbreak, which is bringing many advanced economies to a standstill.
The IMF had already pledged to offer $50bn of its funds to help countries weather the pandemic, but bumped that figure up sharply on Monday to cover its entire lending capacity of about $1tn.
BBC delays plan to charge over-75s the compulsory licence fee
Mark Di Stefano in London
The BBC has announced the plan to start charging over-75 year-olds the compulsory licence fee will be delayed for two months because of the threat of the coronavirus outbreak on vulnerable older people.
The public broadcaster was to due to send out letters to millions of people around the country in the coming weeks, notifying older Britons that they’d need to pay the BBC’s £157.50 charge for the first time.
BBC chairman Sir David Clementi said the changes which were due to come into effect on June 1, will now be delayed for two months.
“The BBC board has decided to delay changes to over 75s licence fees,” Sir David said in a statement. “We are in exceptional circumstances. Now is not the right time.
“We are fully focussed on delivering our services to the public at this difficult time.”
The new digital culture secretary Oliver Dowden said he was “pleased” with the decision: “It will be welcome news to millions of older people who now don’t need to worry about their TV licence during this challenging period.
“It is right that the BBC have recognised the exceptional circumstances posed by the coronavirus outbreak and the need for the whole country to pull together in the national effort.”
Microsoft Teams hit by outage as numbers working from home surge
Patricia Nilsson in London reports:
Microsoft Teams, the office communications tool used by roughly half a million companies, was down for more than two hours this morning, amid a surge of people attempting to work from home.
The company tweeted just before 11am UK time that an issue with its chat service had been “mitigated”. Many people, however, responded to the message, claiming they were still experiencing issues.
Countries affected by the coronavirus are increasingly advising people to self-isolate, with some having implemented complete lockdowns or closed borders, leaving businesses in uncharted territory as they battle to continue running operations with staff at home.
Microsoft did not respond to requests for comment on why the tool broke down, but it is the second major outage of its office communications tool this year.
The outage came a few hours after a similar issue faced Microsoft’s Xbox Live service, suggesting that a surge in demand was behind the breakdowns of both office and entertainment tools.
Gold falls 4 per cent amid precious metals selloff
Henry Sanderson in London reports
Gold prices have tumbled by 4 per cent today to their lowest levels this year and platinum fell by as much as 26 per cent as precious metals followed the renewed selloff in global stock markets.
Gold fell to $1,466.4 a troy ounce, its lowest level since early December, as traders looked to sell liquid assets amid growing fears about the coronavirus.
Last week gold fell by 9 per cent in its worst weekly performance since 1983. The metal has lost $237 from its year high of $1,703 a troy ounce on March 9.
The selloff has raised questions about gold’s status as a “safe-haven” asset, which is supposed to perform well in times of market trouble.
Craig Erlam, senior market analyst at Oanda in Europe, said:
You would typically expect it to perform well in such risk-averse conditions … But the huge down days are proving just as problematic for the yellow metal as the up days, with margin covering taking its toll.
Still, Mr Erlam said gold will “come back into favour” once stock markets stabilise.
In 2008, during the financial crisis, gold initially sold off before recovering to end the year higher, according to John Reade, an analyst at the World Gold Council.
Gold has also been a victim of a liquidation of so-called “risk parity” funds, automated investment vehicles that are designed to do well in almost any market environment, according to analysts. Some of these funds also held gold, Mr Reade said.
Platinum fell by as much as 26 per cent on Monday to trade at $558 an ounce, its lowest level in over 17 years. The metal used in catalytic converters and jewellery is on track for its biggest one-day loss on record. Palladium, another precious metal used in catalytic converters, fell by 12 per cent while silver was off by 14 per cent.
European Commission VP Frans Timmermans self-isolating
Michael Peel in Brussels reports:
One of the European Commission’s top officials is in self-imposed quarantine after meeting a French government counterpart who has tested positive for the new coronavirus, Brussels has said.
Frans Timmermans, a commission executive vice-president, put himself in isolation because he met Brune Poirson, French secretary of state to the minister for ecological transition, earlier this month. It was announced at the weekend that Ms Poirson had tested positive for the Covid-19 infection.
Mr Timmermans is so far not showing any symptoms and is “feeling perfectly fine”, Eric Mamer, Commission chief spokesperson, told reporters in Brussels on Monday.
Aeroflot under ‘colossal’ pressure
Max Seddon in Moscow reports:
Russian flag carrier Aeroflot says it is under “colossal financial pressure” after closing routes to most European countries due to the coronavirus outbreak.
Aeroflot said that it would encourage staff to take as much holiday as possible, according to the Interfax news agency. The airline will also close two Moscow sales offices to focus on helping Russians abroad return home.
Spokeswoman Julia Spivakova said:
Given how much it costs, and how long it takes, to train our flight crew and ground crews’ several unique skills, keeping our staff together is a fundamental issue for the company’s stability.
Russia banned most flights to EU countries last week except for the capitals of countries that have yet to close their borders fully, and ended most flights to China, South Korea, and Iran in February. The country has confirmed 63 coronavirus cases so far and closed its border with Belarus earlier on Monday.
Hungary to close land borders to foreign passenger traffic
Valerie Hopkins in Budapest
Hungary has announced the closure of its borders, joining other central European nations in drastic measures to slow the spread of coronavirus.
The country will close its land borders to passenger traffic, premier Viktor Orban said in parliament, noting that only Hungarian citizens can enter Hungary at the borders.
He further added that cinemas and nightclubs would be closed, while restaurants, cafes and shops will be open only until 3pm. Schools at all levels have been closed since Friday, and from midnight on Monday, all public events are banned indefinitely.
Mr Orban also said “A very serious wave of unemployment is threatening Hungary,” saying the whole economy is in trouble, though primarily tourism and hospitality are in trouble. He said his government would be rolling out job protection measures soon.
Head of Madrid regional government tests positive
Daniel Dombey in Madrid reports:
Isabel Díaz Ayuso, the head of the regional government in Madrid, the most affected part of Spain, has tested positive for coronavirus, she said on Monday.
The authority insisted this “does not change at all her role as head of the autonomous Madrid executive”, adding that she should work from home.
Madrid registered a 75 per cent fall in peak-time traffic on the metro this morning compared with a week ago.
UK accounting regulator warns of challenges in preparing accounts
Tabby Kinder in London reports:
The UK accounting watchdog has warned of uncertainty on the outlook for a number of listed companies in its latest guidance about the impact of coronavirus on corporate reporting and capital markets.
The Financial Reporting Council said companies and auditors faced practical difficulties in preparing their accounts, such as restrictions on travel, meetings and access to company sites in some countries such as China, the US and Italy — among the worst hit jurisdictions.
However, it warned the preparers of financial reports and audit firms not to compromise on the delivery of financial statements:
Audits should continue to comply fully with required standards … In current circumstances additional time may be required to complete audits and it is important that this is taken, even at the risk of delaying company reporting.
Several auditors have warned that companies who are approaching their financial year-end will see delays to their accounts, qualifications about the reliability of their figures, and warnings to investors about the company’s ability to operate.
Burford Capital, an Aim-listed litigation fund, delayed its annual results last week due to the impact of Covid-19 on its finance team.
Grant Thornton, the sixth largest UK accounting firm, wrote to its clients to say it would struggle to sign off many of their accounts with a “going concern” opinion — meaning it believes the company can continue trading for 12 months – due to the uncertainty in markets. “We are already seeing clients delaying the signing of their accounts due to the view that they cannot forecast accurately,” the letter said.
Bahrain confirms first Gulf death
Simeon Kerr in Dubai reports:
Bahrain announced the Gulf region’s first death from coronavirus, a 65-year-old female national who had underlying health problems.
She had returned on an indirect flight last month from Iran, where the death toll has reached 853 with 129 new deaths in the past 24 hours amid almost 15,000 infections.
The first death in Bahrain comes as Gulf states move towards virtual lockdowns as infections accelerate towards 1,000.
Dubai on Monday closed bars, pubs and lounges until the end of the month. Qatar ordered restaurants and cafes to close for customers until further notice, allowing delivery services to continue. Oman has also suspended Friday prayers.
Earlier on Monday, Saudi Arabia closed public spaces and suspended government operations, except for health, security and remote education, for the next 16 days.
JPMorgan offers work from home option to staff worldwide
Laura Noonan in Dublin reports:
JPMorgan Chase is offering work from home arrangements to everyone in its global workforce whose roles can be performed out of the office.
America’s biggest bank announced the move in an email to employees on Sunday night, just two days after it told them that between 25 and 50 per cent of staff in eligible roles would be working from home on rotation.
“Our response to the ongoing spread of the Covid-19 coronavirus continues to evolve,” the latest memo from JPMorgan’s operating committee said.
Effective immediately, we are asking all managers globally to allow employees to work from home to the extent feasible. This will further facilitate social distancing in the communities we call home while continuing to serve our clients and customers.
A person familiar with the situation said the updated guidance reflected several US cities’ decisions to close restaurants and bars, and guidance from the Center for Disease Control to avoid gatherings of more than 50 people, as well as the closure of New York’s school system.
JPMorgan has a global workforce of almost 260,000, including tens of thousands in its network of US branches. On Friday the bank confirmed that two employees at its New York headquarters tested positive for the virus.
The bank said it is “actively reviewing” how it can support branch employees and will announce details “very soon”.
Cases in Malaysia and Indonesia jump
Stefania Palma in Singapore reports:
Malaysia and Indonesia have reported jumps in coronavirus cases. The number of patients in Malaysia has more than doubled in two days, with Kuala Lumpur on Monday reporting 125 new cases that take the total to 553.
Ninety-five cases are linked to the cluster involving a mass religious gathering at Kuala Lumpur’s Sri Petaling mosque that was attended by 16,000. The cluster counts 338 infected individuals.
Malaysia’s health ministry said 12 patients are in intensive care units and require respiratory assistance.
Indonesia has reported 17 new cases, taking the total to 134. The south-east Asian country counts five deaths.
Italian 10-year yield climbs as spreads widen against Bunds
Tommy Stubbington in London reports:
Italian bonds remain under pressure this morning, with the 10-year yield climbing above 2 per cent for the first time since July. The move is uncomfortable for Christine Lagarde, who has tried to walk back comments in her press conference last week which triggered the sell-off in Italy.
The governor of the European Central Bank apologised to other members of the governing council over her remark that it is not the central bank’s job to “close the spread” in bond markets, a reference to the extra borrowing costs Italy and other eurozone members have to pay relative to Germany.
Monday’s selling, which comes despite the ECB last week announcing an extra €120bn of debt purchases this year, is not confined to Italy, with spreads in every other country widening versus German Bunds, considered the safest bonds in the currency bloc.
Greece has been hardest hit, with the 10-year yield climbing above 2.4 per cent. Spanish and Portuguese bonds are widening in a worrying echo of the region’s debt crisis.
US stocks set for another big fall
US equities are set to follow another global sell-off, with futures – and an exchange traded fund tracking the contracts – pointing decisively lower on Monday morning.
Futures for the S&P 500 were down 4.8 per cent during the European morning, but hit 5 per cent lower, known in trader parlance as “limit down”, during Asian trading.
The SPY ETF, which tracks the S&P 500, was down 9.6 per cent.
Amid heightened volatility, the benchmark S&P 500 on Thursday tumbled more than 9 per cent to notch up its biggest one-day drop since Black Monday, only to recover nearly all of that decline in the following session after President Donald Trump declared coronavirus a national emergency in the US.
Stocks in Europe and the UK were nursing declines in the order of 8 per cent to 9 per cent on Monday, while Asian markets were the first to deliver a negative reaction to the Federal Reserve’s decision on Sunday afternoon, US time, to cut interest rates to zero.
Corporate bond prices tumble
Joe Rennison reports from London:
Corporate bond prices plummeted on Monday, seemingly dismissing the Federal Reserve’s stimulus package announced on Sunday to try and restore calm to financial markets.
Junk-rated US corporate bonds sank 3.4 per cent in overnight trading, according to a widely tracked exchange traded fund known by its ticker HYG. A similar ETF with the ticker JNK dropped 3.2 per cent. In Europe, the iShares core Europe corporate bond ETF sank 1.9 per cent in morning trading.
The cost of protecting against the default of junk-rated European companies also shot higher, with an index of 75 high-yield credit default swaps run by Markit moving above 600 basis points for the first time since August 2012.
Investors are reassessing the creditworthiness of corporations across the globe as the full economic impact from the outbreak of the coronavirus is yet to fully unfold.
“While the Fed has stepped in to do its part, spreads are likely to move wider as governments and companies take appropriate actions to control the outbreak and ‘flatten the curve,’ impairing economic growth,” noted analysts at Well Fargo Securities.
Indian central bank holds rates steady for now
Amy Kazmin in New Delhi reports:
The Reserve Bank of India said on Monday that it willing to use all policy tools at its disposal to help mitigate the hit to the Indian economy from the global coronavirus outbreak, but declined to follow other central bank to immediately cut interest rates.
Shaktikanta Das, the RBI governor, said that the RBI’s monetary policy would consider possible rate cuts in the near future. The MPC is due to meet next in early April, but Mr Das also did not rule out an out-of-cycle cut.
“We will take a clearer view of the impact of the global slowdown on the Indian economy,” Mr Das said in a press conference. “Domestic liquidity conditions remain comfortable, and it is important that policy space be used appropriately and suitably timed to have maximum impact.”
Our response will be calibrated, neither premature nor delayed,” he said. “We will make every effort to see whatever instrument, whatever policy announcements we make will have desire effect and impact.
The RBI governor’s assurances came as officials reported that the wholesale price index rose just 2.26 percent in February, down from an increase of 3.1 percent in January.
The drop in wholesale price inflation follows a softening in the consumer price index to 6.58 percent in February, down from 7.59 in January.
The RBI will also carry out rupee-dollar swap auctions on March 23, and said India’s foreign exchange reserves are sufficient for any exigency.
EU securities regulator makes investors increase disclosure of short positions
Matthew Vincent in London
Europe’s stock market regulator is making investors increase their disclosure of bets against companies shares, “to ensure the orderly functioning of EU markets, financial stability and investor protection” amid the coronavirus crisis.
On Monday morning, the European Securities and Markets Authority said it had taken a temporary decision to lower the threshold for reporting the short selling of shares on EU markets. Under the new rules, traders and investors must report their shorting if the value exceeds 0.1 per cent of the issued share capital of any company. Previously, the threshold had been 0.2 per cent of a company’s share capital.
Short-selling is the practice of borrowing shares and selling them in the market, in the expectation that their price will fall and they can be bought back more cheaply and returned – generating a profit. In times of market volatility, however, widespread short selling can exacerbate price falls.
ESMA said it lowering the reporting threshold was “a precautionary action that, under the exceptional circumstances linked to the ongoing Covid-19 pandemic, is essential for authorities to monitor developments in markets”. It stated that “current circumstances constitute a serious threat to market confidence in the EU”.
It may also consider “more stringent action if required”.
Investors must make their short selling disclosures to their own country’s regulator or “national competent authority”.
Brussels to discuss European role in hunt for vaccine
Michael Peel reports
European Commission president Ursula von der Leyen will hold talks on Monday with CureVac, the German company trying to come up with a vaccine against coronavirus, Brussels has said.
Berlin is seeking to stop the company moving its research to the US, amid fears Washington may seek a monopoly on any breakthrough in the fight against the disease.
Ms von der Leyen plans to speak to CureVac executives about how the company’s activities could be “supported in Europe”, Eric Mamer, Commission chief spokesperson, told reporters on Monday.
Transport for London’s financial woes deepen
Passenger numbers on the London Underground have fallen by nearly a fifth over the past week, deepening a financial crisis on the capital’s transport network.
Transport for London forecasts reduced income of up to £500m from the falling passenger numbers, as tourism dries up and companies urge their staff to work from home.
Ridership numbers have fallen 19 per cent on the tube over the past week compared with the same period a year ago, and there has been a 10 per cent reduction in passengers on London’s bus network.
Already facing significant budgetary issues from the delayed Crossrail project, TfL said it will be “looking to the government to provide appropriate financial support to ensure that the core transport network continues to operate safely and reliably”.
Earlier on Monday the FT reported that Sadiq Khan is seeking to renegotiate £2bn of existing loans with the government in order to borrow an extra £650m to deal with cost overruns on the delayed Crossrail line.
London’s Mayor has already dropped his flagship policy of freezing all prices on the UK capital’s public transport network.
Geneva latest Swiss canton to close bars and restaurants
Sam Jones in Zurich reports:
The canton of Geneva, home to the headquarters of the World Health Organization, has ordered bars, restaurants and cafes to be closed from 6pm on Monday.
The canton declared a state of emergency on Monday morning. It has become the seventh of Switzerland’s 26 cantons, which under the Swiss political system have significant autonomy, to do so. Others include the southerly cantons of Valais, Ticino and Graubünden, which share a mountainous border with northern Italy, the region in Europe worst-hit by the pandemic.
The federal government in Bern has held back from enforcing a nationwide ban on public social life, contrary to guidance from the WHO, which has advised governments to enact radical policies of social distancing.
On Friday Bern announced measures to restrict venues to a maximum of 50 people and closed schools across the country. Unlike neighbouring countries, however, much has been left up to individual business to decide in the enforcement of the rules.
The governing national council met again on Sunday evening to review measures in light of other European countries’ actions, but has not yet decided to take further steps.
The number of cases of the novel coronavirus in Switzerland jumped over the weekend: rising by more than 60 per cent in 24 hours to 2,200 as of Sunday afternoon. The Federal Office of Public Health will report updated figures mid-afternoon Monday.
UK postpones final meeting of first-ever climate assembly
Camilla Hodgson in London writes
The fourth and final meeting of the UK’s first ever climate assembly has been postponed due to the coronavirus pandemic, organisers said on Monday.
The final weekend of the citizens’ assembly for climate change was convened for March 20-22 to produce a series of non-binding recommendations for parliament about how to decarbonise the economy.
Participants had also been due to discuss how to remove existing greenhouse gas emissions from the atmosphere.
Organisers said it would be rearranged for a later date.
Once completed, the assembly’s report is expected to be debated in parliament and inform the government’s strategy for reaching its legally binding target of net zero emissions by 2050.
Activists have stressed it is crucial that this strategy is outlined well before November, when the UK will host the COP26 climate summit, in order for the UK to look like a credible climate leader.
London Metal Exchange says ring-dealer member has tested positive
Henry Sanderson in London reports:
The London Metal Exchange said one of its trading members had tested positive for the coronavirus, prompting a deep clean of its red-sofa trading “ring,” where the world’s metals prices are set every day.
The LME said it was informed on Sunday “that a member of staff of an LME Ring-dealing member has been diagnosed with Covid-19.”
The exchange said that open-outcry trading would continue at the ring in London and it would “facilitate this as long as desired and practicable.”
The LME said it has a contingency plan to move trading to Chelmsford if necessary and also move to electronic pricing.
The LME has one of the last open outcry trading floors in Europe, where traders still shout buy and sell orders for metals around a circular red sofa. Each metal is traded in five-minute sessions.
Spanish cases rise by more than 1,000 overnight
Daniel Dombey in Madrid reports
There are now 8,744 documented cases of coronavirus in Spain — an increase of more than 1,000 overnight.
The government said that 297 people have died so far from the outbreak and 3,215 are hospitalised, 410 of them in intensive care. So far, 521 people have recovered.
The outbreak is heavily concentrated in the Madrid area, where there have been 4,665 cases and where some 70 per cent of the people in intensive care are located.
“Health services are stressed because of the increase in cases,” said Fernando Simón, the doctor helping to coordinate the country’s response. He added that there was now a greater risk that the outbreak would extend to other regions.
Kenyan nurses strike over lack of training as coronavirus cases rise
Donald Magomere in Nairobi reports:
Nurses at a key Nairobi hospital have gone on strike, raising safety concerns, a day after President Uhuru Kenyatta announced two more cases of coronavirus in Kenya.
The move comes after health secretary Mutahi Kagwe announced that over 1,100 health workers had been trained to combat the virus. So far,120 beds have been set aside at Mbagathi Hospital for potential cases in the country.
However, nurses at Mbagathi claim they are unprepared, insisting only a few have been trained to handle the virus or suspected cases.
Iran warns against Persian new year travel
Najmeh Bozorgmehr in Tehran writes
Iran’s president Hassan Rouhani has urged people not to travel during the Persian New Year holidays to begin on Friday, warning travellers they will be monitored on roads and could be quarantined or forced to return home if they display any symptoms of coronavirus.
While many Iranians have chosen self-isolation, many others have ignored official warnings to continue their normal lives, although panic buying of foodstuffs continues in Tehran.
Iran’s health ministry announced on Monday that 853 people died of Covid-19, up from 724 on Sunday. The number of people who have tested positive rose to 14,991 from 13,938.
Dozens of politicians, clerics and members of parliament have tested positive while at least another half a dozen have died of the disease.
Volkswagen on brink of closing main German plant
Joe Miller in Frankfurt and Peter Campbell in London report
Volkswagen is suffering severe supply chain disruption that could force the carmarker to curtail production at several European plants including its Wolfsburg headquarters factory in the coming days, according to two people familiar with the company.
The German carmaker is struggling to source parts from Italy and Spain, and its emergency stockpiles of parts are beginning to run down.
The Wolfsburg plant, which makes some of the brand’s flagship products, including the Golf and the Tiguan and Touran sports utility vehicles, is currently up and running, though on-site restaurants have been closed.
Staff working on the line have been told to bring their own food, and to board internal shuttles from the back door in order to avoid infecting drivers.
“We now see a lot of challenges in the supply chain,” said a VW spokesman. “Things are getting more complicated and the situation is changing rapidly”.
We have far more suppliers for European production in Italy and Spain than in China.
Carmakers across Europe have closed some sites because of supply shortages or falling demand. Fiat on Monday announced the closure of eight sites until the end of March, while Ferrari has also closed its plants in the country. Renault, Ford and VW’s Seat brand have all shut their Spanish plants because of problems sourcing parts.
VW’s supercar brand Lamborghini has already closed production in northern Italy, while the company’s Slovakian plant is expected to close as early as Monday, the country’s prime minister said on Sunday.
German carmakers are also facing logistics issues, after the country closed many of its borders on Sunday, and Bavaria, which is home to BMW and VW’s Audi brand, declared a state of emergency.
VW confirmed that 31 out of 33 its joint-venture plants in China have now re-opened, and sales are beginning to pick up again in the country.
French drugmaker warns Europe lacks vaccine manufacturing capacity
Sanofi has warned that Europe lacks the vaccine manufacturing capacity to cope with pandemics like the coronavirus, and called for a government agency dedicated to response planning as in the US.
Paul Hudson, chief executive of the French drugmaker, told the Financial Times that the outbreak has brought the issue of national sovereignty of healthcare systems “sharply into focus”.
Read more of that interview in this article by Leila Abboud and Sarah Neville.
Ukraine’s largest cities to shut down restaurants and stores as flights cease
Roman Olearchyk in Kyiv reports
Ukraine’s largest cities announced plans to close stores, shopping malls and restaurants as the country prepared to halt passenger airline traffic.
The measures are aimed at preventing an uncontrolled spike in novel coronavirus infections that could overwhelm the country’s dilapidated healthcare system came as confirmed national cases of Covid-19 had increased from three to five with one fatality.
“Friends! Difficult times await us,” Vitaly Klitschko, the mayor of Ukraine’s capital city Kyiv said in a video address on Monday.
Stressing that grocery stores, pharmacies and gasoline stations would remain open while restaurant food delivery would be permitted, Mr Klitschko added: “We understand that these are inconveniences for the city’s residents and losses for business, but they are necessary and temporary.”
On Sunday, two of Ukraine’s largest cities – Lviv near the Polish border and the Black Sea port town of Odessa – announced similar measures.
Ukraine last week closed schools, banned large gatherings and restricted travel across front lines in the country’s far east where government forces continue into a sixth year to battle Russian-backed separatists.
The drastic measures came amid fears that much of the coronavirus cases in the country of 44m had gone unreported due to low amount of testing by authorities.
Ryanair says grounding of entire fleet ‘cannot be ruled out’
Ryanair said it is possible it will be forced to ground its entire fleet as it becomes the latest carrier today to slash capacity as international travel restrictions trigger a disintegration in flight demand.
The Irish low-cost carrier pointed to travel bans — partial or complete — in countries across Europe from Italy to Norway as it said it expected the majority of its aircraft to be grounded in the next 7 to 10 days.
It added that even in countries where the fleet was not grounded, social distancing restrictions could make flying “impractical, if not, impossible”. It expects capacity to be reduced by up to 80 per cent in April and May and said “a full grounding of the fleet cannot be ruled out”.
The statement from Ryanair mirrors similar announcements this morning from airline groups including British Airways owner IAG and Air France-KLM, which anticipate cutting capacity by up to 75 per cent and up to 90 per cent respectively. Low cost rival easyJet said the survival of European carriers cannot now be “guaranteed”.
Chief executive Michael O’Leary said:
We are doing everything we can to meet the challenge posed by the Covid-19 outbreak, which has over the last week caused extraordinary and unprecedented travel restrictions to be imposed by National Governments, in many cases with minimal or zero notice.
The group said it was implementing a raft of emergency measures to cut costs including deferring share buybacks, freezing recruitment, temporarily laying off some staff and asking others to take voluntary leave.
Czech Repubilc imposes quarantines, movement restrictions
The Czech Republic has quarantined several municipalities in the east of the country and imposed a series of new restrictions on movement as it battles to quell the spread of coronavirus, James Shotter writes.
Government officials said that people would only be able to move around for very limited activities, including going to work ,shopping and visiting relatives, until March 24.
Interior minister Jan Hamacek said:
It is not house arrest.
People can go to work, go shopping, but they should stay home whenever possible.
The local quarantines will apply to 21 municipalities including Litovel and Unicov in the east of the country, and include a total ban on citizens entering and leaving. Around 24,000 people live in the affected area.
In an effort to mitigate the impact that the strict anti-coronavirus measures would have on individuals and businesses, the finance ministry said that it would postpone the deadline for tax returns until July.
The Czech Republic, which has so far recorded 298 cases of the novel virus, has taken some of the most stringent steps in Europe to respond to the crisis.
It has declared a state of emergency, all but sealed its borders, closed schools and all non-essential shops, and imposed a ban on public gatherings of more than 30 people.
Shares in Primark owner briefly plunge, triggering ‘fat finger’ speculation
Shares of Associated British Foods, the owner of Primark, briefly lost all of their value in Monday morning trading, prompting speculation of a ‘fat finger’ error.
Shares dropped to 0.01 pence before being suspended at 9am London time. By 10.20am the stock was back trading at £16.32 per share, a drop of 12 per cent on the day.
In a trading update before market open, the company had said it could no longer provide earnings guidance for the remainder of the year after Primark stores in Italy, France, Spain and Austria were forced to close due to the coronavirus outbreak.
Virus hits international university applications
More than a third of students planning to study at universities in other countries now expect to change their plans because of coronavirus, global education editor Andrew Jack writes.
Of 3,000 prospective students surveyed by higher education rankings company QS, 35 per cent said their plans had been affected.
Of this group, 54 per cent said they planned to defer their entry to next year and 14 per cent said they no longer planned to study abroad.
Students from Pakistan followed by those from Nigeria and Kenya were amongst those most likely to defer or cancel foreign study, according to the data, providing an indication of the pressure British and other universities reliant on international students will face in coming months.
Michelin shuts plants in France, Italy and Spain
David Keohane in Paris writes
French tyre maker Michelin will shut its factories in Italy, Spain and France from tomorrow “for a minimum of one week” as it too grapples with the impact of the coronavirus.
Michelin said in an emailed statement:
The Michelin group made the decision yesterday to close for a minimum of one week its industrial sites located in the countries most affected in Europe to date by the pandemic.
Depending on the development of the situation, this cessation of activity may be extended and possibly extended to the other factories of the Michelin group in Europe.
The only factory that will remain open is Michelin’s Bassens site, which the group said “provides productions essential to the continuity of the group’s activities in the world and some critical productions.”
Even before the virus hit the global economy, Europe’s car part suppliers had been cutting back production having found themselves between the rapid and costly shift towards electric vehicles, the introduction of tough emissions standards in Europe and waves of cheap imports from China.
Thailand to shut schools and universities
Thailand is to shut universities and schools, close boxing stadiums and other entertainment venues, and postpone the Thai new year’s holiday Songkran after reporting a spike in cases of coronavirus, John Reed writes.
The measures, announced by deputy prime minister Visanu Krua-ngam, are due to be proposed for approval at a weekly cabinet meeting on Tuesday.
Thailand had been slower to close schools, ban public gatherings, or limit the entry of foreign visitors than some other south-east Asian countries. The Philippines, for example, on Monday announced a “community quarantine” covering all of Luzon island.
But on Monday Thailand reported 33 new cases of COVID-19, bringing the total number confirmed in the country to 147.
Taiwan imposes international travel curbs
Taiwan on Monday introduced draconian measures to discourage its citizens’ international travel, Kathrin Hille in Taipei writes.
This came as Taiwan announced 8 new coronavirus cases, taking its total to 67 and representing its biggest daily increase in confirmed cases so far.
Those diagnosed were people who had recently traveled to Italy, Germany, Greece, the Czech Republic, the Philippines, Egypt, Spain and Turkey.
Taiwan had managed to keep the increase in infections at very low levels for weeks. But since March 10, it reported 11 new confirmed cases, all of which the health authorities assume were people who had become infected abroad.
In response, Taipei added all of eastern Europe, Central Asia and the Middle East to the area under its highest-level travel warning, under which its citizens are required to avoid all non-essential travel.
Moreover, the government said Taiwan citizens defying such a top-level travel warnings would no longer be receive the government’s compensation for time spent in precautionary quarantine upon return, would be charged for costs arising from their screening or isolation, and could even see their full names published if they tested positive after their return.
Teachers and students in primary and secondary schools will be barred from traveling abroad until the end of the term, said Chen Shih-chung, health minister.
While Taiwan delayed the return to school after Lunar New Year by two weeks when the outbreak in China was at its worst, schools are no longer closed.
A freewheeling democracy with a highly export-dependent economy, Taiwan’s public has so far readily accepted travel restrictions and quarantine regimes. Seeing their country’s low case count, some Taiwanese have become more relaxed about the risk of infection.
“We feel sorry for having to take such severe measures,” Mr Chen said. “But you have to understand that we face a global pandemic. We already warned you, so if you still insist on going, you will have to take the responsibility yourself.”
Mr Chen said the virus was currently spreading even faster than it had in the early days of the epidemic and urged his compatriots to be careful. “Containing the last wave was already very hard, but this one is coming even faster, so you really have to exercise restraint,” he said.
The Epidemic Command Centre said it had decided extend its harshest travel warning to many countries with low announced case counts because it doubted those. “Turkey until recently officially had only 5 confirmed cases – and we have now picked up the same number of infections after a tour group of just 15 people went there,” said Mr Chen. “So we doubt that in some areas, governments are either not testing, or they are testing and not announcing the accurate numbers.”
Chinese ride-hailing group launches errand service
Christian Shepherd in Beijing reports:
Chinese ride-hailing giant Didi Chuxing has launched an on-demand errand running service, as the company battles fallout from a dearth of orders during the coronavirus outbreak.
Softbank-backed Didi announced on its official social media that its drivers can now be hired to pick up groceries, buy bubble tea, deliver flowers or do a number of daily tasks in 21 major cities, including Shanghai, Hangzhou and Shenzhen.
Government mandated travel restrictions and quarantine measures dealt a blow to Didi’s daily ride-hailing business, as traffic plummeted and some cities halted public transport.
Daily active users on Didi’s app fell by half in the early days of the outbreak and some drivers in the capital Beijing said they often had to wait two hours for an order.
At the same time, orders by home-bound customers over delivery services, such as Alibaba-backed Ele.me and Tencent-backed Meituan, have spiked during the outbreak.
Major airlines call for ‘extraordinary’ government support
The three global airline alliances — which together represent around 60 carriers — have come together to urge governments to provide “extraordinary support” to the industry as it flounders amid a collapse in demand.
Members of oneworld, SkyTeam and Star Alliance said they were calling on governments “to evaluate all possible means” to assist the sector as they backed a call by the industry body, the International Air Transport Association, for regulators to suspend slot usage rules for the summer.
The groups said IATA figures have already indicated revenue losses of up to $113m. This could increase by more than $20m following US restrictions on European travel, they said.
Star Alliance chief Jeffrey Goh said:
The unprecedented circumstances triggered by the coronavirus outbreak pose an existential threat not only to the airline industry but more generally to global trade and commerce, and social connectivity. As airlines stretch their limits to manage the crisis, it is equally critical for governments and stakeholders to avoid further burdens and step up with measures.
The groups also want stakeholders such as airports to make allowances, saying operators should take a look at modifying landing charges and fees “to mitigate the financial pressure faced by airlines”.
Global death toll climbs by most in one day
Steve Bernard in London reports:
The global death toll rose by the most in a single day on Sunday while Italy remains the hardest hit.
Sunday added 686 deaths, bringing the total globally to 6,518. Cases rose by 12,924 to 169,702. Italy was once again the hardest hit with an additional 3,590 cases and 368 deaths.
Here are the latest maps and charts:
What to expect from the EU’s fiscal firefight
Sam Fleming, Martin Arnold, Jim Brunsden and Michael Peel write:
Central banks have been acting aggressively to respond to the coronavirus. In the euro area, the question now is what the fiscal response will look like, and a critical video-meeting of finance ministers today will give some early insights.
Officials do not expect this to mark a singular, make-or-break moment in this crisis, but merely the initial response in a protracted attempt to rescue the euro area economy.
What will the finance ministers announce at their eurogroup meeting? Most importantly, they will endorse a package of measures promulgated by the European Commission on Friday, including a pledge to apply maximum flexibility to the region’s budget rules.
This will include making the most out of an “unusual events” clause that allows countries to temporarily abandon attempts to meet debt and deficit reduction targets.
A more aggressive escape clause from the budget rules, which would apply across the euro area, will be kept in ministers’ back pocket for the time being.
Ministers will also be seeking to wield an impressive aggregate figure encapsulating the financial firepower that governments have committed to the cause of shoring up their economies. Calculating this has not been straightforward.
The ECB has been tracking government announcements and using an ultra-conservative method: one that excludes any measures that cannot be quantified or that will be recouped later like deferred tax payments. It estimates that the 19 eurozone members have made €39.04bn of virus-related spending commitments.
Equalling only 0.33 per cent of eurozone GDP, that amount pales in comparison with the €200bn spending programme coordinated by Brussels and EU member states after the 2008 financial crisis, which was worth 1.5 per of GDP.
But the number almost certainly understates just how large the commitments from member states have been — and will likely be dwarfed by any figure the euro area manages to stitch together later today.
Turkey to close bars and nightclubs
Laura Pitel in Ankara reports:
Turkey announced that bars and nightclubs will be closed from today as the number of confirmed coronavirus cases in the country rose to 18.
Ankara has taken steps aimed at preventing an outbreak of the virus, including halting flights from affected countries, closing schools and universities, and asking those returning from foreign travel to self-quarantine for 14 days.
Even amid those measures, the number of confirmed cases of Covid-19 has increased rapidly since the first instance was detected on Tuesday last week. Fahrettin Koca, the health minister, said late on Sunday that 12 new cases had been diagnosed, bringing the total to 18.
The decision to close bars has proved controversial in Turkey, a Muslim-majority country that has long suffered tensions between those who espouse a more secular lifestyle — including drinking alcohol — and those who believe in more conservative values.
Social media users asked why the government was closing venues serving alcohol but not cafes, restaurants or mosques.
Leaked UK warning that 8m may need hospitalisation
Sarah Neville and George Parker in London report:
Four out of five Britons are expected to become infected with the coronavirus and almost 8m may need to be taken into hospital in a “reasonable” worst-case scenario, according to a leaked document from Public Health England which provides the bleakest assessment so far of the course of the outbreak.
The assessment comes as prime minister Boris Johnson announced the start of daily press conferences to inform the public on measures to fight the coronavirus, amid criticism of the government’s communications strategy.
You can read more on the UK response here.
New Delhi closes gyms, theatres and cancels markets
Amy Kazmin in New Delhi reports:
India’s capital city, New Delhi, on Monday broadened restrictions on commercial activities and social gatherings until March 31, as it seeks to prevent the spread of coronavirus.
The government has ordered the closure of all gyms, nightclubs, theatres, and weekly bazaars, widening the scope of closures ordered last week, when all schools and cinemas were ordered to shut until the end of the month.
The local administration has also ordered that attendance at any social, religious, or family gathering be restricted to just 50 people, with the exception of marriage functions, which will be allowed to be bigger.
Concern is growing about the potential spread of the virus though large scale religious gatherings, including at popular Hindu temples, which Indian authorities have been reluctant to shut down.
The Delhi government’s edict is the first to specifically cap crowds at religious gatherings.
New Delhi has just 7 confirmed cases of the coronavirus, two of whom have recovered, and been discharged from hospital, and one of whom, an elderly lady with other underlying health problems, has died.
But there are additional cases in Delhi’s periphery, including its satellite city Gurgaon, and suburbs in the neighbouring state of Uttar Pradesh.
India has a total of 110 confirmed coronavirus cases, scattered across the country.
Travel stocks set for historic fall
Plummeting airline stocks are driving Europe’s travel shares towards their worst ever day of trading.
The Stoxx travel and leisure index was recently off 15 per cent, which if sustained to the close, will mark its worst ever one-day drop.
Airline stocks have tumbled in a volatile first hour of European trade after a slate of drastic capacity reduction announcements and question marks over the future of the industry in the continent.
BA-parent IAG was down more than 30 per cent at one point, while Air France KLM fell as much as 20 per cent after both groups slashed capacity for the coming months as demand for flights dries up. Both subsequently paired some of those losses but remain sharply lower.
Low cost carrier Easyjet was still heading for its worst ever day, with shares down 30 percent, after it warned there was “no guarantee” carriers would survive “what could be a long-term travel freeze and the risks of a slow recovery”. Rival Ryanair was off 22 per cent.
Oil approaches four-year low as demand hit
David Sheppard in London reports:
Oil prices tumbled on Monday with the US benchmark approaching a four-year low as the coronavirus spread starts to hammers demand in Europe and North America.
US benchmark West Texas Intermediate hit a low of $29.75 a barrel, down about 5 per cent and dipping below $30 for the first time since a sell-off on March 9. It was recently trading at $30.14 a barrel.
Brent crude, the international market benchmark, fell almost 7 per cent to $31.48 a barrel, with its premium over WTI shrinking to the lowest level in years.
The oil market has been knocked by the combined impact of coronavirus to demand, while Saudi Arabia and Russia have started a price war after falling out over how oil producers’ should respond. Oil traded near $70 a barrel in early January.
Prices last traded below $30 a barrel in 2016, when WTI bottomed around $28 a barrel. But traders warn a significant hit to demand, possibly of 10 per cent of global consumption or more, could be seen in coming weeks as more cities shut down.
Shares in the largest energy and natural resource companies were some of the largest fallers in London as the FTSE 100 shed 5 per cent.
At the open:
– Royal Dutch Shell down 8%
– BP down 6%
– Glencore down 7%
– Centrica down 7%
– Premier oil down 15%
– Tullow down 13%
Germany advises citizens to avoid travel abroad
Guy Chazan in Berlin reports:
The German government has advised citizens not to travel abroad, amid intensifying restrictions on movement imposed by Germany and its neighbours to curb the spread of coronavirus.
Travellers should expect “increasingly drastic restrictions on air transport and other travel, quarantine measures and curbs on public life in many countries”, an update on the foreign ministry website said.
“The risk that you will no longer be able to return home due to the increasing restrictions is currently high in many destinations,” the ministry said.
It said changes to immigration regulations and quarantine measures were often being introduced without notice and with immediate effect. “Many travellers have been affected in several countries and prevented from returning or continuing their journey,” it said.
Previously the foreign ministry had only advised against travel to countries particularly affected by the coronavirus outbreak, such as Italy or Iran. It also issued a travel warning for the Chinese region of Hubei, where the virus was first detected.
In the past few days, more and more countries have been closing their borders to travellers from Germany, including Denmark, Poland and the Czech Republic. In other countries, such as Israel, Australia, Russia and China, those travelling from Germany must enter quarantine for 14 days.
Germany imposed strict controls on its borders with five neighbours on Monday morning.
European stocks fall further
European stocks deepened their declines in the first hour of trading, as bourses tumbled on escalating fears of a significant recession as many countries across the region enter lockdown.
Among the major market headlines:
• London’s FTSE 100 was down nearly 8 per cent, Germany’s Dax slipped 7.5 per cent and in France the Cac 40 shed nearly 10 per cent of its value.
• Travel and leisure stocks were pummelled. The Stoxx index tracking the sector was recently down 15 per cent as airlines felt the brunt of selling pressure. British Airways owner IAG fell more than 25 per cent.
• Investors moved into typical haven assets, as government bonds, the Japanese yen and Swiss franc all rallied.
UK government to hold talks with airlines over possible state support
Jim Pickard, chief political correspondent, reports
The British government will hold talks this week with the aviation industry amid calls for a concerted state intervention to bail out airlines stricken by the onset of the coronavirus pandemic.
Grant Shapps, transport secretary, said he would meet executives this week to discuss their varied calls for government intervention to rescue the beleaguered industry.
The chairman of Virgin Group has urged the government to provide up to £7.5bn of emergency state support to rescue the UK aviation industry, which has been decimated by the coronavirus pandemic.
Peter Norris was set to send a letter early this week to the prime minister, chancellor and transport secretary warning them that the entire aviation sector — airlines and airport operators — faces pressing financing issues, according to an industry source.
Mr Shapps said there would be an “aviation summit” this week for him to take the “collective response” of the airlines. A government economic committee led by chancellor Rishi Sunak will meanwhile consider what measures could or should be taken.
“There are very many ways we can help,” he told the BBC Radio 4 Today programme. “There are a variety of different asks coming through which is why I’m meeting the airlines this week. But they are clearly at the forefront of this because global travel has come close to a halt in many areas.”
Sweden offers businesses $31bn to cushion virus blow
Richard Milne, Nordic and Baltic Correspondent, reports:
Sweden is offering its businesses more than SKr300bn ($31bn) in support in a bid to minimise the fallout to both companies and workers from the deadly coronavirus pandemic.
The centre-left government in Stockholm announced on Monday morning that it would cover almost half of workers’ salaries if they are temporarily laid off, with companies paying half, ensuring employees receive more than 90 per cent of their pay. The state will also take over sick leave payments and allow companies to defer taxes.
The moves came after Denmark presented plans on Sunday night for the state to cover three-quarters of the salaries of laid-off workers with companies paying the rest, and employees giving up five days of holiday.
Tui to suspend holidays and cruises to help mitigate Covid-19 effects
Alice Hancock in London reports:
Tui, the world’s largest tour operator, announced late on Sunday night that it would suspend all of its package holiday, hotel and cruise operations temporarily in order to help “global governmental efforts to mitigate the effects of the spread of the Covid-19”, it said.
Shares in the German package holiday group fell 35 per cent in early Frankfurt trading. They have fallen nearly 78 per cent since February 11.
The Tui board withdrew the company’s earnings guidance for the year and said that they had decided to apply for state aid guarantees in order to see the company through the crisis.
Tui employs 70,000 people worldwide and serves 21m European customers. It also has 18 cruise ships.
Last week, Tui started freezing pre-payments due to hoteliers for summer bookings as it sought to shore up its cash position. It has stopped hiring and is encouraging some employees to take unpaid leave.
In its statement on Sunday, Tui said it had available loan facilities of around €1.4bn. “We are taking substantial cost measures to mitigate the earnings effect,” it said.
Airline stocks pummelled as capacity slashed
Airline stocks have been hit heavily in early European trade after a raft of capacity reduction announcements as the impact from the coronavirus outbreak tightens its grip.
Shares in BA parent IAG fell more than 20 per cent after it said this morning it would cut capacity by 75 per cent over the next two months. Air France-KLM, which said capacity would be reduced by up to 90 per cent over the coming days, saw an 18 per cent share price dip.
Low-cost carrier easyJet, which this morning warned of an existential risk to the survival of European airlines, experienced a 26 per cent share price dip. Germany’s Lufthansa was down 11 per cent.
Demand for flights has plummeted over recent weeks, triggering capacity cuts across the board by airlines, as countries increasingly restrict entry in an effort to stem the spread of Covid-19.
UK Labour MP Kate Osborne tests positive for Covid-19
Laura Hughes in London reports:
The Labour MP Kate Osborne has been diagnosed with coronavirus, raising pressure on authorities to tighten access to parliament.
She is the second MP to test positive for Covid-19, after UK junior health minister Nadine Dorries was diagnosed with the virus last week.
On Friday, the House of Commons announced that parliament would limit visitor access this week and introduce overseas travel restrictions “in order to preserve the operation of parliament”.
In a statement posted on Twitter, Ms Osborne said: “I have been diagnosed with coronavirus (#covidー19uk) following a period of self isolation and subsequent testing.”
I will continue to self isolate until I have fought off the illness, but in the meantime I would encourage everyone to band together and support the most vulnerable in our communities.
European markets dive at the open
European stocks tumbled, as massive central bank intervention failed to staunch the wave of volatility that has swept across global markets.
The FTSE 100 slid 4.7 per cent at the open, falling to its lowest level since November 2011 and taking losses this year for the London blue-chip index to more than 30 per cent. The sell-off was widespread across Europe: Germany’s Dax and France’s Cac 40 were 4.6 per cent lower.
The Stoxx Europe 600 index, which tracks the region’s largest companies, fell nearly 5 per cent to its lowest since summer 2013.
The Federal Reserve cut US interest rates before financial markets opened on Sunday and joined forces with other central banks in a bid to prevent a severe economic downturn caused by the coronavirus pandemic.
Despite the central bank action, which is without parallel since the financial crisis, S&P 500 index futures fell as much as 5 per cent, triggering exchange circuit breakers.
Philippines extends lockdown to cover most populous island
John Reed in Bangkok reports:
The Philippines has extended a lockdown of greater Manila imposed on Sunday to cover all of Luzon island, the country’s most populous, where 48m people live.
President Rodrigo Duterte’s spokesman Salvador Panelo announced the move in a message to reporters on Monday.
Mr Duterte has “announced an enhanced community quarantine in the entire Luzon”, Mr Panelo said, adding that details of the measures would follow.
On Sunday metro Manila, one of south-east Asia’s largest urban areas (population 12m), was put under community quarantine, with flights, land, and sea travel to and from the capital region suspended until April 14.
The Philippines has confirmed 140 cases of Covid-19 and 12 deaths.
Macron, Merkel and EU leaders to discuss coronavirus border closures
Victor Mallet in Paris reports
French President Emmanuel Macron will have a conference call with European leaders on Monday at 10am local time to discuss the coronavirus crisis, especially the issue of border closures unilaterally imposed by countries such as Germany.
The Elysée presidential palace said Mr Macron would speak to German Chancellor Angela Merkel as well as Charles Michel, head of the EU Council, and Ursula von der Leyen, who leads the European Commission.
France has closed schools, cafés and restaurants and urged its citizens to limit their movements to slow the spread of the pandemic, but it has argued that closing borders is pointless and privately criticised EU member states for doing so without consultation.
DIY group Kingfisher closes stores in Spain and France
Jonathan Eley in London reports:
Kingfisher, the DIY conglomerate, said all its stores in Spain and France had closed and that it was taking “immediate and significant” action to reduce costs. However it said it could not yet predict the financial impact for the current financial year.
The 221 French stores, trading under the Castorama and Brico Depot brands, will remain closed until April 14, and the 28 Spanish outlets, which the company is trying to sell, until March 29.
France accounts for around 36 per cent of Kingfisher’s revenue. About 1,100 stores in the UK, Ireland, Poland, Romania, Portugal and Russia remain open.
“We are committed to supporting local authorities and governments to limit the spread of the virus, and the health and safety of our colleagues and customers remains our top priority,” said chief executive Thierry Garnier. “Our teams are also evaluating the best ways to satisfy emergency needs in our markets, particularly for electricity, heating and plumbing.”
Kingfisher said it is reducing operating expenditures, reducing stock and goods not for resale (GNFR) purchases, taking actions to optimise working capital, stopping all but essential capital expenditure, and making use of tax payment and other government relief measures.
It pointed out that it has just over £1bn in total available liquidity and £136m of financial debt, which does not include its lease liabilities.
The group is due to report results for the year to end January on March 24.
It said that up to March 14 it had experienced no impact on demand as a result of the spread of coronavirus, with group same-store sales up 2.3 per cent after adjusting for the impact of the leap year.
Fiat to shut most European car plants temporarily
Peter Campbell in London reports:
Fiat is temporarily shutting most of its European car plants after the coronavirus outbreak led to a collapse in demand.
The carmaker will close six sites in Italy, one in Poland and one in Serbia until March 27.
The move “enables the group to effectively respond to the interruption in market demand by ensuring the optimisation of supply”, the company said on Monday.
Fiat closed four Italian factories last week for deep cleaning and to prepare for production using fewer staff, in order to keep its workers more than one metre apart. It had planned to re-open the facilities on Monday.
However car sales, particularly in its Italian homeland, have fallen sharply. Italian car sales dropped by 9 per cent in February, but the country has been all-but locked down during March as the outbreak spread, with people banned from leaving home except for essential work or to buy food.
The shutdown allows “the group to be ready to commence production promptly once market conditions allow”, Fiat said on Monday.
Several carmakers have closed facilities temporarily in Europe, for a number of reasons stemming from coronavirus.
In Spain, Ford, Renault and Volkswagen have all closed sites because of supply issues, while Ferrari in Italy also closed its plant for two weeks, citing supply issues.
On Sunday, Slovakia’s prime minister said it was likely that VW’s plant in the country will also close in the coming days.
Many European shares still not open
Dozens of European stocks have not opened five minutes after the typical opening of trade, in a sign of the volatility that has hit the region’s markets.
The composite Stoxx 600 was down 4.8 per cent in recent trade, but futures had signalled falls of closer to 6 per cent.
South Korea cuts rates to new record low
Edward White in Seoul reports:
South Korea’s central bank has cut interest rates to a record low after an emergency meeting on Monday in an urgent bid to shore up the country’s economy against fallout from the coronavirus pandemic.
The Bank of Korea cut the country’s benchmark lending rate to 0.75 per cent, from 1.25 per cent previously.
The BoK’s move came after the US Federal Reserve cut interest rates to zero as it tries to head off a global economic downturn.
South Korea’s economy has been hit hard by the virus with widespread disruption to its export industries, including technology and car manufacturers, as well as slumping consumer demand.
In response, Seoul has announced a nearly $10bn boost to an already-record high stimulus and Moon Jae-in, the president, has signalled that more unprecedented action will be needed by the government.
Earlier on Monday, the Korea Centers for Disease Control reported 74 new cases nationwide, a three-week low, down from a peak of 909 cases reported on February 29.
The total case number in the country of 51m is now 8,236, while 75 people have died from the virus, reflecting a mortality rate of below 1 per cent. Monday’s report marked the lowest number of new cases since 74 were reported on February 21 – the number of daily cured patients has also been outpacing new infections in recent days.
Officials have, however, continued to warn the public over the potential for new clusters to emerge following incidents at a call centre and a church over the past week.
Rio Tinto slows expansion of mine in Gobi desert
Neil Hume in London reports:
Rio Tinto has slowed work on the underground expansion of its copper mine in Mongolia’s Gobi desert, raising the prospect of further delays at its most important project.
The Anglo-Australian miner said the movement of goods and people in Mongolia and across its border with China had become more difficult after the first case of the coronavirus was recorded in the country and the government took action to limit its spread.
As a result work on a multibillion underground expansion of the Oyu Tolgoi copper mine has been slowed, Rio said.
“There is restricted access for teams from Rio Tinto, Oyu Tolgoi and our construction partners to oversee development and provide specialist technical services,” the company said in a statement. “The availability of specialist service providers at the site is essential to safely continue work on technical activities such as the headframe commissioning of Shafts 3 and 4.”
Rio said operations in the open pit at Oyu Tolgoi continued to operate as normal and deliver copper to customers in China.
The underground expansion of Oyu Tolgoi is Rio’s most important growth project and will increase its production of copper, at a time when the shift to renewable energy is driving growing demand for the metal for use in electric vehicles and wind turbines.
China reopens schools in Xinjiang and Guizhou
Christian Shepherd in Beijing reports:
China has reopened schools for some students in the southwestern province of Guizhou and the northwestern region of Xinjiang, in a sign of the government pushing for a return to normal after the coronavirus outbreak put classes on hold for two months.
In both regions, lessons have resumed for students in grades 9 and 12 who are set to take exams this year, Chinese state media said. The older students are returning to prepare for the country’s nationwide university entrance exam.
The sparsely populated province of Qinghai became the first in China to reopen schools last week, when it began allowing students to return to 144 institutions approved by the authorities.
All three provinces had a small number of confirmed cases compared to the rest of the country. Major cities including Beijing and Shanghai have yet to set a firm start date for classes.
Despite schools continuing to teach via online classes, parents across China have raised concerns that the lack of in-person teaching could hamper prospects for children set to take exams this year.
Human rights activists also fear that insufficient care for virus patients has been provided in Xinjiang, where a Communist party security campaign has detained over a million Turkic Uighurs and other Muslim minorities, often leaving children separated from parents in boarding schools.
Germany’s Hypo-Vereinsbank closing a third of its branches
Olaf Storbeck in Frankfurt reports
Germany’s Hypo-Vereinsbank is closing down one in three branches as the Munich-based lender cuts down on giving personal advice to its clients in reaction to the coronavirus pandemic in Germany.
In a statement issued on Monday morning, the UniCredit-owned bank said it would ensure that clients will continue to have access to banking advice – either through the phone or in larger branches with high footfall. The lender also said it will install transparent partition walls to physically separate employees and customers “where necessary”.
By Tuesday, 101 of its 337 branches in Germany will be temporarily shut on a rolling weekly schedule. The branches that will close this week are going to re-open in seven days, with 101 others temporarily shutting.
Primark owner ABF pulls earnings guidance after store closures
Jonathan Eley in London reports:
Associated British Foods said it could no longer provide earnings guidance for the remainder of the year after Primark stores in Italy, France, Spain and Austria were forced to close due to the coronavirus outbreak.
The stores account for a fifth of its selling space and 30 per cent of its annual sales, and would normally have generated around £190m in sales over the coming four weeks.
“The remainder of the estate, including the UK…has seen like-for-like sales declines over the last two weeks and these have accelerated over the past few days as a result of reduced footfall,” it added. “We are managing the business appropriately but do not expect to significantly mitigate the effect of the contribution lost from these sales”.
The UK, with almost 190 stores, generates 41 per cent of Primark’s sales.
However, it added that there had been no material impact in its sugar, grocery, ingredients and agriculture businesses and that the threat of supply disruption from coronavirus in China had receded.
First-half profits – the group reports on April 21 – would be ahead of forecasts due to better margins in grocery and at Primark, it added.
Flutter estimates ‘material impact’ on sales and earnings
Flutter Entertainment said the cancellation or postponement of sports and fixtures worldwide, which last year generated about 78 per cent of sales through bets, will have a “material impact” on its revenue and earnings.
The owner of Paddy Power estimates that if it has to close its UK and Irish shops and horse-racing fixtures are cancelled in the UK, Ireland and Australia, earnings before interest, taxes, depreciation, and amortisation will be “incrementally” reduced by about £30m a month.
Where restrictions are in place until the end of August, including the summer’s European football championship, but the shops remain open and horse fixtures go ahead, ebitda for the group will be about £90m-£110m lower.
“Quantifying the precise earnings impact on the group is difficult at this point as we do not have visibility on the duration of restrictions on sporting events,” Monday’s statement said.
Before the cancellations were announced, trading in the quarter was ahead of the group’s expectations, the statement said.
Peter Jackson, chief executive, said:
The challenge currently facing our business and the industry more widely is unprecedented in modern times.
While our near-term profitability will be impacted by the essential measures being taken globally, the board will remain focused on protecting shareholder value and managing the business through these turbulent times.
Air France-KLM slashes capacity as it scrambles to cut costs
David Keohane in Paris reports
Air France-KLM is ratcheting up its efforts to save costs in the face of the damage being wrought on the airline sector by the spreading coronavirus and as governments prepare to rush to help the sector.
The group said it had identified additional cost saving measures that would save €200m in 2020, and was cutting back its capital expenditure by €350m. The plunge in demand means Air France will ground its entire Airbus 380 fleet and KLM its entire Boeing 747 fleet.
It said it would be reducing capacity — in term of available seat kilometers — by 70 to 90 per cent in the coming days, mirroring a similar move by rival IAG, which said capacity would be slashed by three quarters in the next two months.
The airline is meeting with employee unions Monday morning to discuss significantly cutting back working hours, according to people familiar with the matter.
However, said Air France-KLM in a statement:
In spite of the measures taken, the deterioration of the environment linked to the epidemic and the sharp reduction in its activity that has resulted today lead the group to forecast a sharply deteriorated financial trajectory compared to the outlook presented at the publication of its annual results.
The airline “estimates that the drop in revenues from the passenger business resulting from the reduction in capacity will only be offset by around 50 per cent by the drop in variable costs before cost savings measures.”
It share price has fallen 50 per cent over the past month.
Last week, Air France-KLM chief executive Ben Smith said in a video to staff that the company faced an “unprecedented situation”. Air France and KLM both also drew down revolving credit facilities of €1.8bn and the group says it now has more than €6bn in cash and cash equivalents.
The French government is also preparing to come to the aid of Air-France KLM, which is 14.3 per cent state owned, with state loans rather than an increased shareholding currently the preferred option.
However, those same officials have stressed that a capital injection remains on the table if the situation worsens.
In this extremely difficult context, the Air France-KLM Group has welcomed the statements made by the French and Dutch governments, which have each indicated that they were studying all possible means to support the group.
Hong Kong to charge for quarantine stays
Hong Kong has said it will start to charge people staying in quarantine provided by the government as facilities fill up with arrivals.
The announcement came on the same day that Cathay Pacific said it was reinstating flights from London amid demand from residents and students to return to the city.
The government will charge HK$200 ($26) a day for meals and accommodation starting from Tuesday. Arrivals have the option to pick home quarantine or stay in an official facility. There are now 700 people in the facilities, taking them to near capacity. The government said some people were abusing the system by travelling back and forth to mainland China.
Cathay Pacific announced it had reinstated a further three flights from London to Hong Kong this week, taking the total number of reinstated flights for the week to nine. The airline had slashed schedules amid a slump in demand, but it said Hong Kong students and residents were “eager to come home as soon as possible”.
The government has required people arriving from mainland China to quarantine for 14 days since February 8. The restrictions were expanded to arrivals who had visited dozens of European countries, South Korea, Iran and parts of Japan in the past 14 days to undergo quarantine for two weeks. Those arriving from the UK, US, Ireland and Egypt will also be subject to quarantine requirements from Wednesday.
The number of coronavirus cases in Hong Kong has remained low, but the number of imported cases has ticked higher in recent days. Six of the seven new cases reported on Sunday had travelled overseas during the incubation period. The city now has a total of 148 cases.
IAG’s Willie Walsh delays retirement as airline group slashes capacity
The chief executive of the parent of British Airways is postponing his retirement while low-cost rival easyJet has said “there is no guarantee” European airlines will survive the coronavirus outbreak, which has sent flight demand plummeting.
IAG — which owns BA and and Spain’s Iberia — said on Monday that its capacity would be down 75 per cent over the next two months, having dropped 7.5 per cent in the first quarter, after it suspended flights to China and Italy and cut capacity to Asia and governments from the US to India restricted entry.
Willie Walsh, the group’s outgoing chief executive, who was set to retire this month, will stay on in the role so that his successor, Iberia boss Luis Galego, can “lead the response in Spain” which has been one of the worst hit European countries.
Mr Walsh said there had been a “substantial decline in bookings” across the group’s airlines and expects weak demand “well into the summer”.
We are therefore making significant reductions to our flying schedules. We will continue to monitor demand levels and we have the flexibility to make further cuts if necessary.
The IAG announcement came as rival easyJet said it was “taking every action to remove cost and non-critical expenditure from the business”.
In particularly stark comments, the low cost carrier said:
European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery.
It said the industry’s survival in the continent would “depend significantly on European airlines maintaining access to liquidity, including that enabled by governments across Europe”.
European stock markets set for major falls
European and US stock markets were set to tumble, even after the Federal Reserve joined forces with other global central banks to unveil a sweeping package of measures not seen since the financial crisis in a bid to stop a severe economic downturn.
London’s FTSE 100 was set to fall as much as 6 per cent when it opens for trading in less than an hour, while futures also pointed to significant declines for Germany’s Dax and France’s Cac 40.
S&P 500 index futures fell as much as 5 per cent, triggering exchange circuit breakers and tipping steep falls when Wall Street begins trading later in the day.
Global stock markets have been on a tumultuous ride over the past three weeks, as traders struggle to price the looming economic disruption stemming from the outbreak of the virus.
“We think the global economy screeching to a halt is more worrying than the Fed is comforting,” said Jim Reid, a strategist at Deutsche Bank.
Finnair slashes capacity in ‘biggest crisis in history of aviation’
Richard Milne, Nordic and Baltic correspondent, writes:
Finnair is cutting 90 per cent of its capacity and its dividend amid what the Finnish flag carrier described as the “biggest crisis in the history of aviation” thanks to the coronavirus outbreak.
The Finnish airline warned of a substantial financial loss this year and was working urgently on a funding plan including credit lines, loans, and the sale and leaseback of aircraft.
Finland’s government, which owns more than half of the shares, “will actively support” Finnair, the airline said.
Topi Manner, Finnair’s chief executive, added:
It is now clear that the coronavirus is by far the biggest crisis in the history of aviation. The substantial deterioration of our financial outlook is fully attributable to the coronavirus. At the same time, it has nothing to do with Finnair’s underlying competitiveness, which remains intact.
Europe: what you might have missed
The Bank of Japan became the first G7 nation to act following the US Fed’s unexpected weekend interest rate cut with a massive increase in purchases of equities and other assets to counter the economic blow from the coronavirus outbreak.
Asian stocks and US futures dropped on Monday despite aggressive measures from the Federal Reserve, including cutting rates to near zero for the first time since the global financial crisis.
Australia’s share market was particularly badly hit, diving 10 per cent in its worst day since 1987. The fall came even as regulators ordered high frequency traders to cut the volume of trades by up to a quarter in a bid to reduce the strain on the exchange.
Hotels on the famed Las Vegas strip have begun closing their doors as the coronavirus spreads in the US. New measures were unveiled elsewhere in the country: bars and restaurants in New York and Los Angeles were restricted to take-out only and public venues, such as cinemas, were closed.
China reported 12 imported cases of the coronavirus to the end of Sunday, out of 16 cases reported across the mainland. There have now been 123 imported cases. The overall number of cases rose to 80,860.
Russia closes border with Belarus to limit spread of coronavirus
Henry Foy reports from Moscow
Russia has closed its border with Belarus in a bid to protect itself from coronavirus, preventing the movement of people across one of its busiest frontiers.
Belarus is Russia’s closest ally and millions of citizens from each country hold residency permits for the other, with practically frictionless movement across the border.
“We also decided to close the border with Belarus to people, alongside a number of other proactive steps,” said Mikhail Mishustin, Russia’s prime minister.
“We will continue to do everything to protect our country from this new threat, act in advance, take comprehensive measures so as not to allow, first of all, the massive spread of coronavirus,” he said, in remarks reported by state-owned newswires.
Russia said on Sunday it had recorded 63 cases of coronavirus. Belarus has 27, it said on Friday.
India’s SBI Cards slides on debut as coronavirus rattles markets
Benjamin Parkin reports from Mumbai
One of India’s largest listings in years had a difficult start as the global shock of coronavirus batters Indian equity markets.
SBI Cards, the credit-card arm of India’s largest public-sector lender the State Bank of India, opened at Rs658 per share on Monday, down almost 13 per cent from its issue price. Shares eventually pared losses to trade 3 per cent lower.
The IPO attracted strong investor demand and was over 20 times subscribed when the company took orders earlier this month, aiming to raise Rs103.5bn ($1.4bn). Analysts said SBI Cards, India’s second-largest credit provider in a country with low card penetration, offered an enticing opportunity to tap a fast-growing market for financial tools.
But Indian stocks have suffered in the days since as foreign investors moved their money out of the country, concerned that India’s already weakened financial system was vulnerable to the economic disruption of the COVID-19 virus. Overseas investors have pulled $4bn out of Indian equities since late February.
That has contributed to pressure on the rupee, which fell to a record low last week, and the benchmark Sensex index down around 20 per cent over the past month.
Asian stocks and US futures drop despite Fed move
Hudson Lockett reports from Hong Kong
Asian stocks and US futures dropped on Monday despite aggressive measures from the Federal Reserve including cutting rates to near zero for the first time since the global financial crisis.
In Asia-Pacific markets, Australia’s S&P/ASX 200 index dropped 7.4 per cent while Hong Kong’s Hang Seng fell 2.2 per cent and China’s CSI 300 shed 1.4 per cent.
Futures markets pointed to a 4.8 per cent decline in the benchmark S&P 500 index when it starts trading later in the day and at one point were limit down, suggesting a 5 per cent fall. The 10-year US Treasury yield fell 28 basis points to 0.6774 per cent.
Japan’s benchmark Topix was up 0.6 per cent after the central bank announced it would hold an emergency policy meeting. The Japanese yen, a haven during times of uncertainty, rose 0.8 per cent to ¥107.06 per dollar.
On Monday, China’s central bank injected about Rmb100bn ($14.3bn) of liquidity into financial markets via its medium-term lending facility. But traders said it was unlikely to immediately cut its benchmark lending rate as this may not help the real economy, where supply chains and other industries have been hit by coronavirus.
“Over the next month or even quarters there is going to be easing of both monetary and fiscal policy, but I don’t think they want to do it now,” said a trader at one Shanghai-based brokerage.
Following the Fed’s move, New Zealand’s central bank cut interest rates by 0.75 percentage points to 0.25 per cent.
India widens coronavirus testing to check for community spread
By Amy Kazmin in New Delhi
India is widening the scope of its coronavirus testing, as it seeks to determine whether community transmission of the deadly pathogen has begun in the country.
India has so far confirmed 110 coronavirus cases, nearly all of them in patients that have returned from trips abroad to hard-hit countries, or their own direct contacts.
But analysts have been warning that India’s testing protocols of only testing those returned from virus-hit countries, or their immediate contacts, may be masking the true extent of the spread of the disease, particularly the possibility of community spread.
Now, the Indian Council of Medical Research, the government’s top medical and public health organisation, will test 500 random samples a week from patients showing flu symptoms, who do not have links to any known coronavirus patients.
The results from this batch of tests — which will be examined today — will help determine whether India has seen any community spread of the disease, and will be used to guide further testing protocols, and public policy to contain the virus, officials said.
India has already mandated the shutdown of many public and commercial activities, and imposed strict travel restrictions to try to prevent the spread of the virus.
Bank of Japan unveils massive increase in asset purchases
Leo Lewis reports from Tokyo
The Bank of Japan became the first G7 nation to act following the US Fed’s unexpected weekend interest rate cut with a massive increase in purchases of equities and other assets to counter the economic blow from the coronavirus outbreak.
In an easing move that echoed the shock-value of the Fed’s decision, the BoJ’s measures also appeared to be designed to far exceed market expectations.
The BoJ, which unlike the Fed did not cut interest rates, said that it would increase its annual purchasing pace of exchange traded funds (ETFs) from the previous level of ¥6tn ($56bn) per year to ¥12tn. The market had expected an increase of just ¥3tn.
In a statement, the central bank said that: “The bank will take these measures with a view to doing its utmost to ensure smooth corporate financing and maintaining stability in financial market, thereby preventing firms’ and households’ sentiment from deteriorating.”
To help companies cope with the pandemic, BOJ said it would also set up a new one-year facility that will offer loans against corporate debt as collateral at an interest rate of zero per cent. It also increased its purchase of commercial paper and corporate bonds by ¥2tn.
Saudi Arabia closes public spaces to stem spread of coronavirus
Simeon Kerr reports from Dubai
Saudi Arabia has closed public spaces and suspended most government operations as coronavirus cases rise.
The state news agency said that the pause on all government services, except for health, security and remote education, would last for 16 days from Monday.
The move to restrict movement came with a ruling to close malls, parks, beaches, restaurants and coffee shops. Supermarkets, home delivery and pharmacies are exempted.
The private sector was also told to quarantine expatriate workers arriving in Saudi Arabia at home for two weeks, as well as existing workers with respiratory symptoms.
The kingdom reported 15 new cases on Sunday, bringing the total to 118.
Los Angeles to close down public venues to halt spread of virus
Eric Garcetti, the mayor of Los Angeles, announced that the city was closing down cinemas and other public venues in a bid to halt the spread of the virus.
Bars and restaurants will be able to sell food for take-out only, while gyms, cinemas and other entertainment venues will be closed, Mr Garcetti said in a tweet late on Sunday.
The announcement advances on similar statewide measures. Earlier on Sunday, Gavin Newsom, the governor of California, ordered all bars and nightclubs in the state to close, as well as the home isolation of the over 65s.
White House knocks down rumours of domestic travel ban
Demetri Sevastopulo reports from Washington
With large swathes of the US economy shut down, the Trump administration is having to push back against rumours that the White House is about to ban domestic travel.
Just before midnight on Sunday, the White House National Security Council, which has been loathe to comment on the coronavirus crisis publicly, tweeted that the rumours of an impending national quarantine were “FAKE”.
The move comes on the heels of the ban on travel from Europe to the US, which came into force at midnight on Friday, and draconian measures taken in Italy and Spain to constrain the spread of the virus.
“Text message rumors of a national #quarantine are FAKE. There is no national lockdown. @CDCgov has and will continue to post the latest guidance on #COVID19. #coronavirus,” the NSC tweeted.
The tweet came as the number of cases of infected people rose to 3,774, and members of the White House coronavirus task force warned that those numbers would spike as more people started to get tested for the virus.
The growing sense of alarm over what Donald Trump once described as a “hoax” comes as schools across the country close, companies urge workers to telecommute, and cities such as New York order the closure of bars and restaurants.
United Airlines warns of ‘painful’ cuts to payroll
By Andrew Edgecliffe-Johnson
United Airlines is planning to slash its capacity for April and May in half, and has warned its nearly 100,000 employees of “painful” cuts to its payroll.
Oscar Munoz, United’s chief executive officer, and Scott Kirby, its president, told staff at the Chicago-based carrier that the impact of the coronavirus pandemic was getting more severe.
Passenger numbers had fallen by more than 1m in the first two weeks of March alone, they warned, as they forecast that United’s revenue this month would be $1.5bn lower than the same period of last year.
“We have been determined to do everything possible to avoid painful steps that affect your paycheck. But, based on the severity of the situation, that no longer appears realistic,” they warned staff, saying that corporate officers would have their salaries cut in half.
United has begun talking to union leaders “about how to reduce our payroll expense in a way that minimises what we know will be painful for all of us,” they added, without giving details.
United said it would reduce capacity for April and May by about 50 per cent and now expects “deep cuts” to extend into the usually lucrative summer travel period.
Passenger numbers could fall much further, they warned: “Even with those cuts, we’re expecting load factors to drop into the 20-30 per cent range, and that’s if things don’t get worse.”
The news followed Donald Trump’s decision to extend travel restrictions to the UK and Ireland this weekend. American Airlines and Delta Air Lines have announced deep cuts to their international services, and all three of the largest US airlines have said they are talking to the federal government about possible assistance.
Australian shares sink after regulators order cut in trades
Jamie Smyth in Sydney and Philip Stafford in London
Australia’s share market dived 7 per cent on Monday even as regulators ordered high frequency traders to cut the volume of trades by up to a quarter in a bid to reduce the strain on the exchange.
More than A$100bn was wiped off the value of the S&P/ASX 200 index by midday, which dropped 398 points to 5140.6, amid continuing fears about the economic impact of the spread of the coronavirus.
In a statement on Monday, Australia’s corporate regulator Asic said Australian equity markets had seen “exponential increases” in the number of trades in the last two weeks. More than 2.4bn shares changed hands on Friday, compared to an average of 1.9bn in February.
While the regulator said there was no disruption to market operations, it admitted there was a significant backlog of work over the weekend.
Australian regulators have told the most active traders on the country’s equities markets to trade up to 25 per cent less than they did on Friday, as even higher volumes would put the ability of the exchange and banks to handle the deals under strain.
Evan Lucas, chief market strategist at InvestSMART Group Limited, said Asic’s action was aimed at limiting high frequency trading, which the regulator must believe is causing market volatility in a way that was neither fair nor reasonable.
Travel related stocks and banks were among the worst impacted with Commonwealth Bank of Australia shedding almost 8 per cent to A$61.20 and Flight Centre losing 13 per cent to A$16.64.
Chinese industrial production and retail sales drop
Don Weinland reports from Beijing
China’s industrial output fell to its lowest level on record and retail sales collapsed in the first two months of the year, a sign that the outbreak of coronavirus and a prolonged quarantine of millions of people will hurt China’s economy more than the hit from the Global Financial Crisis.
Industrial output tumbled by 13.5 per cent and total retail sales plummeted by 20.5 per cent year on year in January and February, the National Bureau of Statistics said on Monday.
The urban unemployment rate surged to 6.2 per cent in February, the highest level ever reported. Fixed asset investment also fell by 24.5 per cent, down from 5.4 per cent growth when it last reported the figure.
The numbers came in far below analysts’ expectations. Many China experts have been surprised that Chinese officials were willing to report figures that reveal such a devastating impact on the economy.
“The latest activity and spending data were much weaker than expected and point to a far deeper downturn than during the Global Financial Crisis,” Capital Economics said in a note.
New York to restrict restaurants to takeaway only
Joshua Chaffin reports from New York
New York mayor Bill De Blasio is set to introduce measures to limit restaurants and cafes to takeaway only in a bid to control the spread of coronavirus.
Mr de Blasio also indicated he would sign an order restricting the city’s bars and restaurants to take-out and food delivery service as well as closing cinemas, theatres and nightclubs.
Many city restaurants had already been grappling with dramatic falls in attendance because of the virus. Some have closed their doors, including Jing Fong, Chinatown’s largest restaurant.
Belinda Chang, an award-winning sommelier who has worked at top restaurants in New York and Chicago, called the situation “terrifying” for smaller operators.
“Restaurants run on the slimmest of margins and and the vast majority of restaurant employees live paycheck to paycheck, So losing even one shift can be the difference between making rent and not,” she said.
Hong Kong visitors numbers collapse in February
Visitors to Hong Kong fell by 96 per cent in February compared to a year earlier, as the impact of the coronavirus drove a massive reduction in travel numbers.
Arrivals from the Chinese mainland, which make up the majority of visitors to the city, plummeted by 98 per cent over the same period, the Hong Kong Tourism board (HKTB) said in an emailed statement.
The HKTB also said on Monday it would launch a plan to support travel and related industries, with a budget of HK$400m ($51.5m).
Dane Cheng, executive director of the HKTB, said: “Our monthly arrivals have dropped to the level of the daily average during the peak season last year, a clear sign that the travel and related industries have been hit very hard”.
The fall comes after sustained pressure on the industry last year, when the protests weighed on travel. Visitors to Hong Kong over the whole of 2019 fell by around 14 per cent.
South Korea discovers coronavirus cluster at another church
By Edward White and Kang Buseong
A new cluster of coronavirus cases at a church in South Korea has been confirmed, raising fears about future outbreaks despite a broader decline in new infections.
Officials at Seongnam, a city south-east of Seoul, said on Monday that 40 new cases of coronavirus among members of the city’s Grace River Church have been confirmed. Tests are also pending for other church members.
The new cluster came despite the number of new cases confirmed in the country falling to the lowest level in more than three weeks on Monday.
The results over recent days have spurred hopes that South Korea’s programme of mass testing and widespread social distancing is working to contain the virus but officials have continued to warn the public over the potential for new clusters to emerge.
The Korea Centers for Disease Control reported 74 new cases nationwide on Monday, down from a peak of 909 cases reported on February 29.
The total case number in the country of 51m is now 8,236, while 75 people have died from the virus, reflecting a mortality rate of below 1 per cent.
Monday’s report marked the lowest number of new cases since 74 were reported on February 21. The daily tally of cured patients has also been outpacing new infections in recent days.
South Korean stocks were choppy, swinging between positive and negative territory, in morning trading in Seoul on Monday after the US Federal Reserve cut interest rates to zero in a bid to head off a global economic downturn caused by the coronavirus pandemic.
Imported cases account for majority of new infections in China
China reported 12 imported cases of coronavirus to the end of Sunday, out of 16 cases reported across the mainland. There have now been 123 imported cases. The overall number of coronavirus cases rose to 80,860.
There were 14 new deaths linked to the virus, all of which were reported in Hubei, the origin of the outbreak, taking the total number of fatalities to 3,213.
The number of recovered patients who have been discharged rose to 67,749.
Las Vegas hotels close amid coronavirus
Dave Lee reports from San Francisco
Hotels on the famed Las Vegas strip have begun closing their doors as coronavirus spreads in the US.
On Sunday, MGM Resorts announced it was taking no new bookings at its Vdara resort, and existing guests would be moved to the Aria nearby.
That was followed by the news Wynn Resorts, owner of the Wynn and Encore casinos, would be closing both locations at 6pm on Tuesday for at least two weeks.
“The Company has committed to pay all full-time Wynn and Encore employees during the closure,” a statement from chief executive Matt Maddox said.
Australian central bank moves to boost liquidity
Jamie Smyth reports from Sydney
Australia’s central bank said on Monday it would pump more cash into the financial system to tackle a liquidity squeeze and financial regulators said they were considering easing regulatory conditions due to the coronavirus crisis.
“The funding position of the banking system is strong,” said Australia’s Council of Financial Regulators, which is chaired by Philip Lowe, governor of the Reserve Bank of Australia, on Monday.
“At the same time, trading liquidity has deteriorated in some markets and financial institutions are having to adjust to a more volatile environment.”
The Council said the RBA would conduct one month and three month repurchase operations to help boost banks liquidity and prevent a cash squeeze affecting cash strapped businesses. In addition, the RBA will conduct repo operations of six-months maturity or longer at least weekly, as long as market conditions warrant, said the Council.
Richard Yetsenga, chief economist at ANZ Bank, said by enabling financial institutions to lend their holdings of government bonds to the RBA in exchange for cash, authorities were acting to limit the risk of liquidity shortages.
“This is a strong policy step… markets are now focused on virtually all central banks taking rates to zero, and resorting to quantitative easing; including Australia,” said Mr Yetsenga.
The council said it would meet with Australia’s main lenders later this week to discuss how they could best support customers through the crisis.
In addition, the council said financial regulators are examining how the timing of regulatory initiatives might be adjusted to allow financial institutions to concentrate on their businesses and assist their customers.
These actions, which could include easing the introduction of tougher capital requirements, would emphasise the importance of a continuing supply of credit, particularly to small businesses.
US recommends organisers cancel events of more than 50 people
Demetri Sevastopulo in Washington
The US Centers for Disease Control and Prevention on Sunday evening recommended that organisers of events that are expected to draw more than 50 people should cancel those events for the next two months.
The recommendation comes as companies and institutions across the US are increasingly telling workers to telecommute and as citizens increasingly avoid restaurants and other venues where people gather in big groups.
But the CDC said the recommendation did not apply to schools, third-level education institutions and businesses.
The recommendation comes as some states in the US, including Georgia, have decided to postpone their presidential primaries. Joe Biden and Bernie Sanders, the two remaining contenders for the Democratic presidential nomination, have started holding virtual campaign rallies because of the spreading pandemic.
Mr Biden and Mr Sanders will shortly begin their first one-on-one debate on Sunday evening, which started with an elbow bump instead of a handshake. The debate had been scheduled to be held before a live audience in Arizona, but was moved to an empty studio in Washington because of coronavirus fears.
US futures tumble despite Fed intervention
By Katie Martin, Robin Wigglesworth, Colby Smith and Hudson Lockett
US stocks headed for another slide as Asian trading got under way on Monday, despite an aggressive package of measures to support markets from the Federal Reserve and other major central banks.
Futures markets pointed to a 4 per cent decline in the benchmark S&P 500 index when it starts trading later in the global day, even after the Fed said it would slash interest rates effectively to zero and kick-start a fresh programme of bond buying in response to the deepening crisis over the coronavirus pandemic. At one point the futures were limit down, suggesting a 5 per cent fall.
In early trading in Asia-Pacific markets, Australia’s S&P/ASX 200 dropped 5 per cent. Japan’s benchmark Topix rose 1.2 per cent after the central bank announced it would hold an emergency policy meeting at noon on Monday. The dollar index, which tracks the currency against a basket of its peers, fell 1 per cent. The Japanese yen, a haven during times of uncertainty, rose 1.3 per cent to ¥106.33 against the greenback.
The 10-year US Treasury yield fell 26 basis points to 0.6823 per cent. Yields fall as prices rise.
“The Fed has thrown everything at this. If we are now facing the end of central bank action, it means we are on our own,” said Seema Shah, chief strategist at Principal Global Investors. “There is a fear settling in the market, investors are terrified that this was all that was left.”