Business 13 SATURDAY 8 MAY 2021 Lagarde says ECB policy has alleviated, not deepened inequality The coronavirus crisis will create inequality, especially for low-income workers and young people, "and we have to look at it very carefully.

Christine Lagarde President Business | 14 QSE 10,895.72 -1.14 (0.01%) FTSE 100 7,129.71 +53.54 (0.76%) DOW 34,806.77 +258.24 (0.75%) BRENT $68.18 (+0.09)

Global stocks rally, commodities jump on US jobs report

REUTERS — NEW YORK/LONDON going to go down by the wayside, and US nonfarm payrolls increased that obviously means more liquidity The dollar slid to a two-month low, by only 266,000 jobs in April from the Fed,” said Boris Schlossberg, commodity prices jumped and major and data for March was revised managing director of FX strategy at BK global equity indexes scaled new peaks down to show 770,000 jobs Asset Management. yesterday after weak US jobs data for “US interest rates will stay at ultra- April tamped down fears that a booming were added instead of 916,000 low levels for quite a while and that is economy would ignite inflation and as previously reported. The going to keep the pressure on the dollar.” higher interest rates. report doused fears of an The dollar index fell 0.704 percent, with The data eased worries the Federal overheating economy that would the euro up 0.81 percent to $1.2162. The Reserve would reduce its massive spur inflation. Japanese yen strengthened 0.51 percent stimulus program anytime soon, while versus the greenback at 108.51 per a top White House economic adviser dollar. said the report does not mean the Biden fears of an overheating economy that Higher-rated euro zone bond yields administration needs to change its policy would spur inflation. dipped after the US employment data course. “Anybody who thought the Fed is missed expectations. Euro area The yield on the benchmark 10-year going to be tapering sooner than later, benchmark German 10-year yields A Wall Street sign is seen near the New York Stock Exchange in New York City, US, on Tuesday. US Treasury note dropped to a two- that’s not happening,” said Joseph reversed earlier gains and were trading month low of 1.469 percent and gold LaVorgna, chief economist for the flat at -0.218 percent. extended a rally that put it on track for Americas at Natixis in New York. On Wall Street, the Dow Industrials Japan rose about 0.4 percent, while The 10-year US Treasury yield rose its best week since November. Copper “There is no inflation coming on the and S&P 500 hit new peaks. The Dow Japan’s Nikkei gained about 0.2 percent. 0.5 basis points to 1.5664 percent. Spot burst to a record peak, surpassing a high labor side. The economy is booming, and Jones Industrial Average rose 0.45 Chinese blue chips closed 1.3 percent gold prices rose $16.63 to $1,831.81 an set a decade ago. the labor market recovery is still percent, the S&P 500 gained 0.79 lower on the day. ounce. Aluminum prices approached Nonfarm payrolls increased by only ongoing.” MSCI’s benchmark for global percent and the Nasdaq Composite MSCI’s emerging market currency levels last seen in 2018 and copper hit 266,000 jobs in April and data for March equity markets rose 1.02 percent to added 1.32 percent, as low rates benefit index sailed to a new record high, lifted an all-time high as investors bet on a was revised down to show 770,000 jobs 711.29. Europe’s broad FTSEurofirst 300 high-growth technology firms. by the weaker dollar after the US jobs rapid global recovery from the pan- were added instead of 916,000 as pre- index added 0.84 percent to close at Overnight in Asia, MSCI’s broadest data. “The market expectation of super- demic, led by the United States. Iron ore viously reported. The report doused 1,712.4. Both indexes set new highs. index of Asia-Pacific shares outside high rates and a squeeze on inflation is futures also vaulted to a record high. Oil prices set WTO chief welcomes US backing for vaccine patent waiver IAG expects for weekly gain travel recovery AP — GENEVA research powerhouse with Ulrike Demmer, a German despite India strong biotech and pharmaceu- government spokeswoman, from July The head of the World Trade tical sectors, spoke out against also echoed many in the virus surge Organization said yesterday the waiving the protections. industry and some analysts in US administration’s call to “The main issue is not the noting that “the limiting factor REUTERS — LONDON remove patent protections on question of patents. The main in vaccine production is pro- REUTERS — LONDON COVID-19 vaccines could help issue is the question of pro- duction capacity and high British Airways owner IAG is expand fair access to vaccines duction capacity,” German quality standards, not patents.” confident travel will recover Oil prices eased yesterday but but might not be the most Health Minister Jens Spahn said, Some, however, have argued from July onwards after fore- were set for a weekly gain “critical issue,” as officials in noting that producing vaccines that there are factories that casting only a minimal increase against the backdrop of Europe increasingly insisted like one developed by German could produce the shots if the in its capacity to 25 percent for optimism over a global that more vaccine exports are vaccines. They argue that would firm BioNTech - and manufac- protections were suspended the April to June quarter. economic recovery, though the the more pressing priority. allow more factories around the tured with Pfizer -is very and the know-how shared. IAG, which also owns Iberia COVID-19 crisis in India WTO Director-General world to produce the shots, complicated. But in remarks to the and Vueling in and Aer weighed. Ngozi Okonjo-Iweala (pic- increasing the supply, especially It “is not something you can Florence-based European Uni- Lingus in Ireland, declined to Brent crude futures were tured) told a virtual conference in poorer countries. The simply do with a license in some versity Institute’s annual State forecast how much it would fly down 12 cents, or 0.2 percent, that the trade body aimed to decision ultimately is up to the factory somewhere, somehow, of the Union conference, the from July but said the recovery at $67.97 a barrel by 1343 GMT find a “pragmatic solution that 164-member WTO, and if just whether it’s in Germany or India WTO’s Okonjo-Iweala said that would be properly underway and US West Texas Interme- assures access to developing one country votes against a or Chile,” he said. Instead, he the patent waiver “may not be by then after more than a year diate (WTI) crude fell by 10 countries to deal with vaccine waiver, the idea will fail. stressed - as the pharmaceutical the critical issue” on increasing of pandemic restrictions. cents, or 0.2 percent, to $64.61. inequity, whilst at the same While many world leaders industry has - that developed vaccine volume. “We consider in the second Both Brent and WTI are on time making sure we don’t dis- welcomed the US step, few see countries whose vaccination Other key steps include half that we are going to be track for second consecutive incentivise research and inno- any waiver as the only or even campaigns are going well should reducing restrictions on the flying and we are prepared for weekly gains as easing restric- vation.” Activists and humani- best way to expand access to export more shots. export both of vaccines and the that,” IAG Chief Executive Luis tions on movement in the tarian institutions cheered the vaccines and end the pandemic “We’ll be exporting a lot ingredients needed to make Gallego told reporters yesterday United States and Europe, American reversal in policy - and they’ve taken the US to more. I can only welcome if the them, sharing the know-how after the company posted a loss recovering factory operations Wednesday and urged others task for not sharing more of the United States change their behind the shots, training man- of €1.14bn ($1.4bn) in the first and coronavirus vaccinations to follow suit in order to remove vaccines that already exist with policy and make vaccination ufacturing personnel and quarter. pave the way for a revival in the intellectual property pro- the rest of the world. doses available for other coun- increasing manufacturing Before July, however, fuel demand. tections on the COVID-19 For instance, Germany, a tries,” he said. capacity globally. Gallego said government action In China, data showed was needed on some issues, export growth accelerated such as opening travel corridors unexpectedly in April while a between countries with high private survey pointed to strong Chip demand fuels biggest jump in Taiwan exports since 2010 vaccination rates, including the expansion in service sector United Kingdom and the United activity. BLOOMBERG States. However, crude imports by The rise to 25 percent of the world’s biggest buyer fell Taiwan’s exports beat estimates as surging pre-pandemic capacity puts 0.2 percent in April from a year sales of semiconductors and other electronic IAG’s plans behind those of earlier to 40.36 million tonnes, components propelled overseas shipments rival airlines, and is only a or 9.82 million barrels per day to the fastest growth in more than a decade. marginal increase from the (bpd), the lowest since The value of exports increased 38.7 19.6 percent it flew in the first December. percent in April from a year earlier to about three months of 2021. The recovery in oil demand, $35bn, the second-highest total and close to Britain, which along with however, has been uneven as the record in March, the Ministry of Finance Spain is one of IAG’s main surging COVID-19 cases in India said yesterday. That was stronger than the markets, was set to publish reduce fuel consumption in the median estimate for a 27.6 percent increase yesterday its “green list” of world’s third-largest oil in a survey of economists. low risk places where people importer and consumer. Imports gained 26.4 percent, with the can travel without needing to The resurgence of trade surplus widening to $6.18bn. The intro- quarantine on their return. COVID-19 in countries such duction of 5G and digital transformation will Gallego said IAG was A logo of Taiwan Semiconductor Manufacturing Co (TSMC) is seen at its headquarters. as India, Japan and Thailand drive demand for Taiwan’s tech components expecting only a small list of is hindering gasoline demand until the first half of next year, the finance countries initially with more recovery, energy consultancy ministry’s chief statistician Beatrice Tsai said while South Korea’s overseas shipments for Microelectronics Corp and Nanya Technology being added from June FGE said in a client note, at a briefing yesterday. Supply constraints the month surged more than 41 percent. Corp have both announced new investments onwards. though some of the lost will continue throughout 2021 leading to The strength of global demand could worth billions of dollars while Taiwan Sem- Air France-KLM expects to demand has been offset by first-half export growth of up to 20 percent, propel Taiwan to its strongest economic iconductor Manufacturing Co. increased its operate 50 percent of its pre- countries such as China, the fastest pace in almost a decade, she said. growth in more than a decade. Economic 2021 capital expenditure target to around pandemic flight capacity in the where recent Labour Day Exports are likely to rise between 25 officials have expressed increasing confi- $30bn. second quarter, picking up to holiday travel surpassed 2019 percent and 31 percent in May, according to dence that full-year growth will likely surpass One issue that could potentially hamper 55 percent to 65 percent in levels. Tsai, who also noted that textile exports were 5 percent after first-quarter growth topped output is an ongoing water shortage. The July-September. Lufthansa “Gasoline demand in the boosted by strong demand in April, probably 8 percent. Government statisticians are drought may slow export growth from the expects to fly at about 40 US and parts of Europe is helped by problems with Xinjiang cotton. scheduled to release their latest forecasts on second quarter onward as companies may percent of its pre-pandemic faring relatively well,” FGE Yesterday’s numbers underscore the May 28. be unable to increase chip production, Iris capacity for 2021 as a whole. said. “Further out, we could rapid rebound in global trade as the US and Taiwanese companies are investing Pang, chief economist for Greater China at IAG’s first-quarter oper- see demand pick up as lock- parts of Europe begin to emerge from the heavily at home in an effort to keep up with ING Bank, warned in a note last week. Even ating loss before exceptional downs are eased and pent-up worst of the coronavirus pandemic. Chinese surging overseas demand for technology in the best scenario, according to Pang, items of €1.14bn was slightly demand is released during the exports surpassed economist estimates in components, semiconductors in particular. output levels would only be able to stay the better than the €1.17bn loss summer driving season.” April, rising 32.3 percent in US dollar terms, In the past month alone, United same as the first quarter. forecast by analysts. 14 BUSINESS SATURDAY 8 MAY 2021 Spain upbeat on finding replacement for 'ECB policy has alleviated, departing Nissan, eyes battery plant not deepened inequality' BLOOMBERG REUTERS — The European Central Bank’s Spain is optimistic that an alternative monetary policy has helped project will be found to save thousands lessen inequality during the of jobs threatened by Nissan’s decision to pandemic, President Christine shut its three plants in the Barcelona area Lagarde (pictured) said. by the end of the year, a government Policy makers’ efforts to lift official told Reuters. inflation in the 19-nation euro A factory to produce electric vehicle area through large-scale asset battery cells is among 17 proposed projects purchases, long-term loans that have been submitted by 13 companies and record-low interest rates and must be aware their for the facilities, junior industry minister has supported the economy actions can also risk exacer- Raul Blanco said in an interview, without and underpinned the labor bating the problem by creating specifying who was behind the battery market, she said yesterday. financial imbalances. plan. And “contributing to more jobs Lagarde acknowledged the Most proposed projects are linked to has a direct impact on reducing argument that asset-purchase electric mobility, officials have previously inequality. programs have boosted The logo of Nissan is seen through a fence at Nissan factory at Zona Franca during the said. Lagarde also said the coro- financial assets held by the coronavirus outbreak in Barcelona, Spain. Sweden’s Volta Trucks, which pro- navirus crisis “will create ine- wealthy, but ultimately duces electric vehicles, is among the few quality,” especially for low- defended the ECB’s policies for bidders that have publicly announced their “We are optimistic until the last The government has backed the plans income workers and young contributing to growth. She interest in the plants, where it could make minute,” Blanco said when asked whether for such a factory to be built in the country people, “and we have to look also said her institution doesn’t its Volta Zero. It is part of a consortium of a viable alternative project would emerge to help reduce reliance on batteries from at it very carefully.” The ECB share the same scope as the companies that has submitted a bid. to save jobs. China, and hopes to build it in a public- President’s remarks come a Fed to focus on inequality. Nissan’s factories employ around “We are working tirelessly.” The pri- private partnership using EU recovery few days after Federal Reserve “We’re not operating with 3,000 people directly, and up to 20,000 ority of a task force on the plants’ future funds. Chair Jerome Powell said that the same mandate as the Fed. indirectly when taking into account is to guarantee the maximum number of Blanco said the Barcelona site might the benefits of the US economic The Fed has a dual mandate, suppliers. jobs, he added. be more suitable for a smaller battery recovery are cutting hard along we have a single mandate” of As their closure nears, as part of the However, Blanco said a planned project from other companies. lines of race and income. At the price stability, she said. Japanese carmaker’s global restructuring, project by Volkswagen’s Spanish brand Ramon Tremosa, the business chief of same time, the Bank of Inter- “Clearly the fiscal authorities unions are growing impatient at what they SEAT and utility Iberdrola to build a ’s government, asked unions for national Settlements’ General are the ones whose job it is to perceive as a lack of progress in finding battery cell factory in Spain would likely patience, arguing that the plans that have Manager Agustin Carstens address those questions and alternatives. They have urged authorities be too big to be housed at Nissan’s been submitted for the Nissan site showed argued Thursday that central actually have the tools to to accelerate their efforts and plan a 500,000-square-metre main plant in that the northeastern region remained banks don’t have the tools to address the distributional protest on May 13 in Barcelona. Barcelona. attractive as an auto sector hub. tackle inequality on their own, impact.” Norway wealth fund rethinks hiring plans amid ‘huge’ cyber risk ADB to end

BLOOMBERG people with a criminal record, no coal, oil and matter how brilliant they are, he said. Norway’s sovereign wealth fund is The focus on cyber security has gas financing widening its recruitment net to include prompted the fund to rethink some of people without college degrees as it its traditional recruitment require- REUTERS — SINGAPORE searches for the brightest minds to ments. “In general, we’re more open protect its $1.3 trillion portfolio from than we used to be,” said Ada Magnaes, The Asian Development Bank growing armies of hackers. head of HR. (ADB) will no longer finance Nicolai Tangen, the Oslo-based “Education and formal require- coal mining or oil and natural fund’s chief executive, says he occa- ments are however still important to gas activities, it announced in sionally picks up the phone himself to us,” even though applicants won’t be a draft policy statement “encourage good candidates to apply,” expected to have the kinds of university yesterday, a move welcomed as part of the recruitment process. or college degrees normally needed to by environmental groups, "That’s as the kinds of attacks the get past the screening process. which said it was a decade fund encounters get “more and more She says Norges Bank Investment overdue. sophisticated. The powers we’re up Management - the fund’s official name The multilateral devel- against are huge,” he said. “There’s a - has already hired people in Singapore opment bank, which focuses lot of money in this fund, so it’s a pre- and New York who were “without a on eradicating poverty in Asia, A general view of the Norwegian central bank, where Norway’s sovereign wealth cious target.” formal education, practically provided no timeline for its fund is situated, in Oslo, Norway. The fund saw an intense spike in self-taught.” commitment. It also laid out attacks last year. “They’ve got exactly the mindset conditions under which fossil Hackers attempted to breach its previous year, Tangen said in an The 54-year-old CEO says he’s also and the attitude we’re looking for,” she fuel projects would continue systems more than 1,000 times in 2020, interview. Cyber security “is so interested in talking to so-called ethical said. “We believe this could compensate to receive funding, such as representing a doubling from the important for the fund,” he said. hackers. But the fund won’t touch for the lack of formal education.” where no other cost-effective technology was available. Yongping Zhai, head of the Siemens lifts guidance as recovery gains momentum ADB’s energy sector, said the draft would be deliberated by its board of directors in BLOOMBERG presents his first set of quarterly The economic fallout from October. results after taking over from Joe the coronavirus pandemic and Green groups had earlier Siemens raised its revenue and Kaeser. Kaeser spent years over- decisions by customers to hold this week urged the ADB to profit guidance for the year, the hauling the sprawling industrial back on investment limited end loans to the entire fossil latest sign that Europe’s biggest conglomerate, hiving off major demand for Siemens-built fuels sector. engineering company is bene- assets to better focus on core products and weighed on profits “The draft coal ban policy fiting from a strengthening areas including industrial appli- last year. Now the US and China, is a decade late, but it still global recovery being led by cations and the so-called digital the world’s biggest economies, helps build the economic case China. factory. are driving the recovery, helped for the energy transition to Siemens now sees net In the fiscal second quarter, by huge stimulus programs. governments and investors, China propels BMW to strong income rising to €5.7bn ($6.9bn) net income surged to €2.39bn Discussing possible risks to and will help avoid more to €6.2bn, from a previous range from €697m a year earlier. The the recovery, Busch said Siemens stranded coal assets,” said profits, Germany lags of of €5bn to €5.5bn for the fiscal figures got a €900m boost from was feeling the pinch from rising Pedro H. Maniego Jr., senior year that ends in September. It closing the sale of the Flender material costs amid gathering policy adviser at the Institute also predicted revenue growth mechanical-drive subsidiary to signs of inflation, but the for Climate and Sustainable AP — FRANKFURT have been leased to between 9 percent and 11 private equity firm Carlyle company has so far been able to Cities. customers. percent, up from the mid- to Group. Revenue gained 9 pass on higher costs to cus- “If the Bank will consider Booming sales in China helped BMW CEO Oliver Zipse said high-single-digit expansion pro- percent on a comparable basis tomers. Siemens is less exposed fossil gas as a bridge and tran- propel German luxury carmaker that the quarter showed “our jected previously. to €14.67bn, underpinned by to the chip shortage bedeviling sition fuel, it needs to stipulate BMW to stronger profits in the business model is a successful “There is strong gains at all its main businesses. other major German exporters an end,” he added. first three months of the year one, even in times of crisis.” He momentum,” Chief Executive The company’s shares have like Volkswagen, he said. Set up in the early 1960s even as its home market said the company’s focus is on Officer Roland Busch said in an risen about 19 percent since the In the reporting period, and headquartered in Manila, Germany trailed the ongoing developing digitally connected, interview with Bloomberg TV. start of the year, among the half- orders at the mobility unit took the ADB has since channelled recovery in global car markets electric cars. The company more The guidance raise - the dozen best performers on Ger- an 8 percent hit, though Siemens $42.5bn into the energy sector from the worst of the pandemic than doubled its sales of battery company’s second this year - many’s benchmark stock index said it expects a “massive accel- across the region, it said on its shutdowns. and electric vehicles in the provides a boost to Busch as he in the period. eration” in the second half. website. BMW said that its sales in quarter over the year earlier, to China nearly doubled in the 70,200. quarter to 230,120 vehicles, Zipse said that the fall in partly reflecting the shutdowns sales in Germany was less than Tesla engineer says Musk overstated Tesla autopilot reality in early 2020 as China was hit that for the total market, first by the pandemic. Sales in meaning market share had BLOOMBERG expectations set by their hard- the overall Asia region however increased, and said that sales in driving boss with regulators’ exceeded even pre-pandemic April, the first month of the new One of Tesla’s engineers told concerns. Last month, the levels. quarter, had been “significantly California authorities that Chief National Highway Traffic Safety Sales were up by double- better.” BMW net profit rose to Executive Officer Elon Musk Administration and the National digit percentages in most of €2.83bn ($3.42bn) from €574m overstated the capability of Transportation Safety Board said Europe and in the US. An in the year-earlier period. Rev- Autopilot, the company’s driver- they would investigate a fatal exception was the company’s enues rose 15 percent to assistance system, early this year. crash in Texas involving a Tesla home market in Germany, €26.78bn. Per-vehicle profita- The clarification was that crashed into a tree. No one A Tesla logo is pictured on a car in the rain in New York, US. where sales dropped 5 percent. bility, defined as operating result described in a series of records was in the driver’s seat, The earnings underscored the on sales, reached 9.8 percent, a the California Department of according to police and a fire German auto industry’s strong big increase from 1.3 percent in Motor Vehicles released to the during an earnings call in Tesla shares rose 0.9 percent marshal report. connections with China; com- the year-earlier quarter and legal-advocacy group Plainsite, January about his confidence as of 9:40am yesterday in New Four days after that incident, petitor Volkswagen said within the company’s long-term which published the documents that Tesla could achieve full York. The stock has dropped the California DMV sent a letter Wednesday that it recorded a 61 target range. Thursday. According to a March autonomy as soon as this year. about 6 percent this year. to Eric Williams, Tesla’s associate percent increase in first-quarter Chief Financial Officer 9 memo, DMV officials asked CJ While Musk has said for “Tesla is at Level 2 cur- general counsel, encouraging the unit sales there, helping it Nicolas Peter said that the Moore, a director of Autopilot several years he believes Tesla rently,” Acosta wrote in the company to “provide clear and sharply increase profits. company had not lost any pro- software, about Musk’s claims is on the verge of delivering memo in March. “Tesla indicated effective communication to cus- The company said higher duction due to the shortage of that Teslas would be capable of Level 5 autonomy - meaning its that Elon is extrapolating on the tomers, buyers and the general sales volume across key global semiconductors - the silicon fully autonomous driving this cars won’t require human inter- rates of improvement when public” about its Autopilot fea- markets as they rebound from chips that enable many of the year. vention - drivers have needed to speaking about L5 capabilities. tures, their capabilities and how the pandemic recession was electronic functions in today’s “Elon’s tweet does not match keep their hands on the wheel Tesla couldn’t say if the rate of they should be used. accompanied by improved vehicles - that has affected the engineering reality per CJ,” when using Autopilot. Tesla improvement would make it to “As Tesla is aware, the pub- prices. Earnings were also sup- auto industry worldwide. He Miguel Acosta, chief of the Cali- raised more than $2bn two years L5 by end of calendar year.” lic’s misunderstanding about the ported by better used car prices said, however, that the situation fornia DMV’s autonomous ago after Musk made several The memo is a rare window limits of the technology and its in the US, which increases rev- remains “tense” with regard to vehicles branch, wrote in the predictions about robotaxis that into how Autopilot engineers misuse can have tragic conse- enues from the sales of cars that chip supply going forward. memo. Musk tweeted and spoke didn’t materialise. have had to square the high quences,” Acosta wrote.