BUSINESS

SATURDAY 21 MARCH 2020

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UN chief says Global hotel room revenue global recession slumps 5.5% due to COVID-19 in February REUTERS — BENGALURU

‘a near certainty’ Hotel room revenue slumped 5.5 percent globally in February from REUTERS — NEW YORK a year earlier as the coro- The world’s navirus outbreak brought United Nations Secretary- wealthiest outlines steps to combat virus the airline industry to a General Antonio Guterres halt and travel bans hurt (pictured) has warned that a nations poured FROM LEFT: Austrian Economy Minister Margarete Schramboeck, Vice-Chancellor , vacation plans, data from global recession “is a near unprecedented aid Chancellor , Health Minister and Interior Minister analytics firm STR showed certainty” and current national into the traumatized address a press conference yesterday at the Chancellery in Vienna, to comment on the government’s yesterday. responses to the coronavirus measures to fight the novel coronavirus. Austrian Chancellor Sebastian Kurz said his country would STR, which runs a pandemic “will not address the global economy extend strict measures put in place to stem the coronavirus pandemic until April 13, 2020. benchmarking platform global scale and complexity of on Thursday as for over 68,000 regis- the crisis.” “This is a moment tered chains, groups and that demands coordinated, coronavirus cases individual properties, decisive, and innovative policy ballooned in said occupancy fell 7.8 action from the world’s leading Stocks edge higher as market percent across the hotel economies,” Guterres told Europe, the current industry. reporters via a video epicenter, even as Revenue per available conference. “We are in an weighs stimulus package room (RevPAR) - a key unprecedented situation and they waned at the metric for the industry - the normal rules no longer pandemic’s point of SATISH KANADY 8.50 percent decline. QNB accounting for 35.17 percent, in Hong Kong fell 85.9 apply.” “A global recession - origin, China. THE PENINSULA advanced 14.06 percent com- followed by Banking and percent in February from perhaps of record dimensions pared with the previous week. Financial Services sector (23.86 a year earlier and 82.2 - is a near certainty,” he said. After two blistering weeks of The Banks and Financial percent) and Industrial sector percent in mainland The world’s wealthiest fierce sell-off, Qatar stock Services sector led the trading (16.65 percent). Of the total China, STR data showed nations poured unprecedented market regained a solid value, accounting for 52.06 listed companies, 25 ended earlier this week. aid into the traumatized global 4.21percent in the past week, percent, followed by Industrial higher in the past week, while The highly contagious economy on Thursday as coro- thanks to the market inter- sector (14.35 percent) and Real 20 fell and two companies novel coronavirus that has navirus cases ballooned in vention. Estate sector (11.98 percent). remained unchanged. exploded into a global Europe, the current epicenter, The week witnessed QSE QNB led the trading value Analysts expect GCC equity pandemic has forced even as they waned at the pan- benchmark index rallying three accounting for 22.35 percent of markets to remain volatile in major hotel operators demic’s point of origin, China. straight sessions, after the the total value, followed by near term and prefer defensive including Hyatt Hotels, So far there have been Supreme Committee for Crisis Masraf Al Rayan (12.64 percent) sectors with relatively inelastic Marriott and IHG to offer almost 219,000 infections and Management announced a demand for their products and waivers on cancellations more than 8,900 deaths. massive stimulus package on WEEKLY MARKET WATCH services. Kamco Invest’s analysts and changes in bookings “Our world faces a Sunday. The market closed the noted that their most preferred for travelers in several common enemy. We are at war week flat on Thursday at defensive sectors are Utilities, countries and also shut with a virus,” Guterres said. “I 8,576.59points. QSE is 17.73 and Commercial Bank (6.79 Telecoms and Consumers. hotels. call on world leaders to come percent down year-to-date. percent). Total trading value GCC market sell-off over American hotel and together and offer an urgent The Banking and Financial increased by 13.91 percent to the past two weeks was mainly travel industry executives and coordinated response to Services sector, which tanked QR2.34bn from the previous due to the oil market logjam. met with US President this global crisis.” Guterres, 12.38 percent in the previous week’s QR2.06bn. Trading “The 25 percent decline in the Donald Trump on Tuesday who was prime minister of “We must absolutely be week, rebounded 8.75 percent volume was decreased by 5.23 oil prices came as a double blow to discuss a potential Portugal from 1995 to 2002, strong in supporting them in the past week. Real estate percent to QR852m, from for the oil exporters in the $250bn aid package, as called on countries to scale up because the virus is coming to regained 1.16 percent from the QR899m, while number of region as the growth in the oil thousands of hotel health spending and to help them and their health systems sharp 9.42 percent fall in the transactions jumped by 15.40 production comes at a time workers began furloughs less-prepared nations tackle are extremely weak, so they previous week and Telecom percent to reach 54,623. when world oil demand is due to the fast-spreading the crisis, including by sup- need very strong support from regained 10.47 percent from the Market capitalization rose under severe pressure due to coronavirus. porting the efforts of the World the developed world and if that previous week’s 18.71 percent by 6.05 percent to QR489bn. COVID-19”, Kamco Invest IHG said yesterday Health Organisation. support is denied we could plunge and Transportation In terms of trading volume, noted in its latest ‘GCC Equity demand for hotel rooms “A wealthy country must have catastrophic conse- sector gained 7.39 percent from real estate sector led the pack, Market Outlook’. is at record lows. not be convinced that it has quences,” he said, warning only to deal with its own cit- millions could die. izens. It’s in the interests of a He said that when it came wealthy country to contribute to the global economy the Eurozone govts should 'get their acts together' to a global response because liquidity of the financial the crisis can come from system must be guaranteed REUTERS — FRANKFURT ideas such as raising cash waste a crisis. Therefore it’s wherever, at any moment,” he and that banks must use their through a common “safe asset” important that euro area gov- said. resilience to support their Eurozone governments should or via existing institutions of the ernments agree at this critical Guterres said he would customers. “get their acts together” and European Union to finance the moment on some kind of a safe take part in the emergency “G20 leaders have taken respond to the coronavirus response to the outbreak. asset that could provide sturdy Group of 20 nations summit steps to protect their own cit- pandemic and its economic “At this critical juncture, it is support for financing,” he added. planned for next week. izens and economies by fallout in a bold and coordi- essential that euro area govern- His Spanish counterpart, “My very strong appeal to waiving interest payments. We nated way now that the ECB has ments get their acts together and Pablo Hernandez de Cos, called the G20 is to have a particular must apply that same logic to secured cheap financing for it, agree to a coordinated European for adopting a common fiscal concern with African countries the most vulnerable countries two ECB rate-setters said fiscal response,” Finland’s central policy using the euro zone’s and other countries in the in our global village and alle- yesterday. bank chief Olli Rehn (pictured) bailout fund, known as the developing world,” Guterres viate their debt burden,” he The central bank governors told a press conference. European Stability Mechanism, the EU’s common budget or told reporters. said. of Finland and Spain revived “There’s a saying: never the European Investment Bank, other “risk sharing” tools.

“Weaknesses in the Real Estate Price Index remains flat Regulators call on banks to halt financial system are exacerbating the despite market turmoil: Ezdan report distributions, de-leverage trading potential feedback THE PENINSULA — DOHA vacant land, multi-use buildings, multi-use space, and residential REUTERS — WASHINGTON trading books and unwind massive rise in corporate lev- loops, which risk Over the past week real estate buildings. Doha Municipality deals, such as swaps and secu- erage and liquidity mismatches deepening the price index has witnessed spearheaded other municipal- Banks should immediately halt rities-lending portfolios, that do in the non-bank lending sector. downturn and stability in rates of sales and ities in terms of highest deal share buybacks, dividends and not support the real economy. On Sunday, the largest clinched deals despite the value by selling a land lot in Al- most staff bonuses to bolster The statement to finance eight US banks announced they impeding eventual absence of exceptional deals that Kharayij at QR24.4m spanning capital and increase the leaders in the Group of 20 had suspended stock buyback economic recovery.” can contribute to the rise of the over an area of 5324 square capacity to lend to the real industrialised economies was programs at least through the index, amid fluctuations of meters at a price of QR426 per economy, a group of former issued amid a scramble for end of June as they redeploy liquidity requirements, saying market, according to a report by square foot. senior regulators said in a dollar liquidity globally as busi- capital to support the US those efforts should be imme- Ezdan Real Estate. This period hasn’t seen statement to G20 finance nesses suffer revenue hits from economy in the face of a wid- diately suspended. Ezdan reported 75 sales exceptional real estate sales that ministers and central bankers disruption caused by the ening health crisis, although The Council, which includes deals citing Real Estate Regis- contribute to raising the total on Thursday. spreading coronavirus the Wall Street giants did not Sir Paul Tucker, a former tration Department’s figures value of sales. However, Al The Systemic Risk Council outbreak. comment on dividends or deputy governor of the Bank of during the period from 8 to 12 Rayyan Municipality also (SRC), a non-partisan body “Weaknesses in the remuneration. England, and Jean-Claude March 2020, with a total value recorded the second largest which comprises a number of financial system are exacer- The SRC also repeated crit- Trichet, a former president of exceeding QR265.2m, and the property sale deal, which officials who navigated the bating the potential feedback icisms of deregulatory the European Central Bank, also operations were distributed over amounted to QR16.5m for a com- financial system through the loops, which risk deepening the measures taken by the Trump added to calls for central banks 7 municipalities: Umm Salal, Al mercial building in the Al-Aziziya 2008 crisis, said regulators downturn and impeding administration and other gov- to provide direct liquidity to Khor, Al Thakhira, Doha, Al region spanning over 1175 square should also require banks to eventual economic recovery,” ernments in the world, to businesses hurt by business Rayyan, Al Shamal, Al Daayen meters at a price of QR1305 per gradually de-leverage their the group wrote, pointing to a reduce bank equity and disruption. and Al Wakra. The sales included square foot. SATURDAY 21 MARCH 2020 BUSINESS 15 Container shipping firms brace Greece hoteliers fear for coronavirus hit to trade ‘disaster’ if virus REUTERS — FRANKFURT/ company, which handles one Jansen (pictured) said the lockdown persists COPENHAGEN in every five containers shipped impact of the pandemic was by sea worldwide, scrapped its impossible to determine for the AFP — ATHENS The Greece Leading container shipping firm 2020 earnings guidance due to time being, but the company A.P. Moller-Maersk scrapped its uncertainty over the affects of was preparing for a blow to Greek hoteliers yesterday government has 2020 earnings forecast the pandemic. trade. warned that the tourism announced a yesterday, while rival Hapag- Smaller German rival But there could be upside if sector, which makes up Lloyd warned of slowing Hapag-Lloyd said the outbreak the crisis is followed by a around a third of the support package growth until at least June, as the would curb business growth at sudden restocking, he told economy, faced a “general of around €10bn, coronavirus pandemic takes a least until the middle of the reporters. In addition, he said, disaster” if lockdowns linked heavy toll on global trade. year, but that falling fuel costs it was positive that order books to the coronavirus pandemic including EU funds, The container shipping should help lessen financial for new vessels were histori- stretched beyond May. to help shore up the industry, a bellwether for inter- impact on the company, which cally low and few ships were “None of us want to con- national trade, has been blown The impact of the has set aside funds to help cope idle. sider that we will not be economy. off course by the new virus, pandemic was with the crisis. While China, where the working after May,” Grigoris which brought parts of China impossible to Analysts said they were virus emerged, and other Tassios, head of the Hellenic There are six confirmed to a standstill before spreading reassured that Maersk was Asian countries have started hoteliers federation told state deaths from COVID-19 in around the world, leading con- determine for the keeping its dividend and share to recover probably faster TV ERT. Greece. A seventh death was tainer lines to re-route cargoes time being, but buy-back programme - share- than some had expected, other “If this happens we are reported on Friday. and reduce calls to Chinese the company was holder rewards that have been continents are now more heading towards general dis- Greece had already pro- ports. sacrificed by many other affected. aster, not only for the gressively tightened restric- Despite lower volume preparing for a blow companies. Analysts at Fearnley Secu- (tourism) sector but for the tions on trade and public growth, Maersk still expects to to trade. Hapag shares also rose rities warned container national economy,” he said. gatherings. make higher first-quarter around 7 percent in a rallying shipping volumes probably Greece’s tourism ministry The Hellenic chamber of earnings than a year ago stock market after reporting a would weaken in the second on Thursday ordered a tem- hotels this week said it calcu- thanks to savings and steps to battered shares more than 7 jump in 2019 profit and pro- and third quarter as the porary shutdown until the end lated a ¤522m ($572m) blow offset the higher cost of low- percent higher by 1045 GMT. posing a higher dividend. Western hemisphere becomes of April of full-time hotels to to the tourism season because sulphur fuel, it said, sending its However, the Danish Hapag CEO Rolf Habben the focus of the outbreak. limit the spread of the of the virus. coronavirus. It added that over 92 The merchant marine percent of its members had South African ministry yesterday barred already seen a drop of more travel to the Greek islands to than 70 percent in room Airways all but permanent residents. bookings At peak season in “It’s going to be a difficult the summer, Greek hotels suspends all summer,” Tourism Minister alone employ over 200,000 Harry Theoharis told ERT people. intercontinental yesterday. The Greek government flights till May Seasonal hotels were shut- has announced a support tered days earlier. package of around €10bn, “To protect hotel staff, the including EU funds, to help RUETERS — JOHANNESBURG government has decided to shore up the economy. suspend the operation of all- Tassios said much would South African Airways (SAA) year hotels to the end of depend on how the outbreak said yesterday that it would April,” the ministry said. of the virus unfolds in the rest immediately suspend all inter- The measure will take of Europe. continental flights until the effect on Sunday. Britain and Germany in end of May in response to a The ministry said three particular are among Greece’s government travel ban aimed hotels apiece would be top markets. at stopping the spread of the allowed to operate in Athens “We’ll have to see if we’ll coronavirus. and Thessaloniki, and one per even want to be bringing State-owned SAA, which regional capital. people in after April,” he told is under a form of bankruptcy Officials have not spec- ERT. protection, flies to the United ified what will happen with According to the Bank of States, Britain, Germany, Aus- hotels hosting migrants – Greece, the country’s tourism tralia and Brazil on its inter- although the government had sector in 2019 saw a 12.8- continental routes. Amending budget law already announced earlier percent increase in earnings Earlier this week it said this month plans to end sub- to €18.15bn, and a 4.1 percent French Economy and Finance Minister Bruno Le Maire addresses deputies at the French National that it had already cancelled sidised accommodation for increase to 31.3 million Assembly in Paris on Thursday (March 19) during a debate on a draft amending budget law. 162 intercontinental and them. visitors. regional flights until the end of this month. President Cyril Ramaphosa on Sunday announced bans on AirAsia’s Fernandes returns as boss after Airbus probe travel to countries considered “high-risk” for the corona- virus, including the United AFP — KUALA LUMPUR wrongdoing but stepped aside AirAsia’s “aircraft acquisition related to the sponsorships, the States, Britain and Germany. while the matter was probed. was justifiable and at prices review found. Separately, the specialists AirAsia boss Tony Fernandes Airbus had agreed to pay favourable to (the airline)”, the AirAsia’s board had appointed in December to try (pictured) has returned to his $4bn in fines to regulators to statement said. accepted the review findings to save SAA on Friday asked post after being cleared by an settle the case, but the scandal The airline’s sponsorship of and decided to reinstate Fern- creditors for a two-month independent probe, the was further illuminated by a sports team also followed andes and Kamarudin to their extension for their business Malaysian carrier said Britain’s Serious Fraud Office proper procedures and was not executive positions, the airline rescue plan for the cash- yesterday, weeks after stepping (SFO) releasing the names of related to purchases, the said. strapped airline until May 29. aside amid a $4bn Airbus graft several airlines allegedly review found, according to Fernandes has been one of SAA hasn’t made a profit scandal. involved – including AirAsia AirAsia. Airbus’s most loyal customers since 2011 and has received AirAsia founder and CEO and its long-haul unit AirAsia Court documents had and his Malaysia-based budget more than 20 billion rand Fernandes and executive X. linked sponsorship payments airline, which he bought for ($1.2bn) in bailouts over the chairman Kamarudin Meranun But in a statement Friday, to AirAsia’s decision to order one ringgit (23 cents at the last three years. left their roles last month after AirAsia said that independent 180 Airbus aircraft. Fern- current rate) in 2001, is the Another struggling state- Airbus settled a court case in reviewer BDO Governance andes and Kamarudin used European manufacturer’s owned airline, SA Express, sus- Europe and allegations Advisory found the airline had to own a Formula One team, largest customer for single- pended operations until emerged the planemaker paid “robust” aircraft procurement but have denied that it was The pair had disclosed their aisle jets. further notice from bribes to win contracts. processes. involved in any bribery interests to AirAsia’s board and Airbus is the only plane Wednesday. They denied any The review found that scandal. abstained from decisions supplier to AirAsia.

The initiatives Kenya’s flower exports South African CEOs ensure follow President Cyril Ramaphosa’s wither as demand drops decision on March medical supplies, offer free data 15 to ban travellers amid virus pandemic from high-risk JOHANNESBURG REUTERS — NAIROBI people avoid large crowds. BLOOMBERG — continuity, which is critical,” countries, close Couples are stockpiling toilet said Saad. “Most of our fac- An armful of roses would paper and old people are South African companies are tories are sterile factories, so schools and restrict brighten most people’s day, sequestered at home. responding to the coronavirus in that sense you are probably people from but for Kenyan farmer Inder European leaders are sealing outbreak with social initiatives safer at work.” congregating in Nain being surrounded by off external borders for at least as well as plans to keep their While Aspen has seen a colourful blooms is a 30 days in response to the businesses operating smoothly. spike in demand in some of its large groups to nightmare. His farm is outbreak. Aspen Pharmacare Ltd., over-the-counter pain, respi- contain the virus. dumping hundreds of thou- So Nain’s roses are going Africa’s biggest drugmaker, is ratory and colds and flu med- Just over 200 sands of roses after the coro- to the rubbish heap. in talks with the government icines, supply from China is navirus made flower exports “There is no demand,” he to fast-track the production of almost back on track. people have tested collapse. said sadly. “If this were to con- certain key medicines so “You are starting to see a positive for the virus “We are just clipping the tinue for another one month, enough remain available for change in the mix of anes- since travellers from flowers and throwing them we are looking at a complete treating the sick, Chief Exec- thetics needed, to more disease hotspots away,” Nain told Reuters. shutdown.” Europe accounts utive Officer Stephen Saad muscle-relaxant type anes- Usually, the roses would fly for 70 percent of Kenya’s cut (pictured) said in an interview. thetics for respiratory issues,” such as Italy and from his farm in Kenya’s flower exports. The restrictions With schools closed, travelers from high-risk coun- Saad said. “At the same time France were first majestic Rift Valley to cus- have slashed daily orders in wireless carrier Vodacom tries, close schools and restrict you’ve got to try get stock diagnosed earlier tomers all over the world. But half, said Clement Tulezi, chief Group Ltd. is offering online people from congregating in through closed borders. The with almost 220,000 cases of executive of the Kenya Flower classes in all 11 South African large groups to contain the biggest problem is logistics.” this month. coronavirus globally, and Council, an industry body. languages and providing free virus. Just over 200 people Eskom SOC Holdings Ltd., nearly 9,000 deaths, borders During a recent trip to data services to job-search have tested positive for the the country’s struggling state- defaults on loans but is looking and businesses are shut. Few Europe, Tulezi said he saw portals, health sites and gov- virus since travelers from owned power utility, held off at ways to help customers people are thinking about shops just giving away bou- ernment services, the company disease hotspots such as Italy implementing rolling blackouts should they find themselves in flowers. quets for free, unable to sell said. MultiChoice Group Ltd., and France were first diag- this week, and any future elec- financial difficulty. Most of Nain’s roses go to them before they died. South Africa’s biggest provider noses earlier this month, tricity cuts will only be imple- “We would like to heighten an auction in the Netherlands “They (customers) cannot of pay-TV, has made certain putting pressure on a health mented if absolutely necessary, our call to our customers to to be sold throughout Europe, go out and get those flowers news channels free to air and system that also battles with the company said in a response approach us directly in the to decorate weddings and because they have fear for is broadcasting public-service high rates of HIV and to questions. Absa Group Ltd., a event of any form of uncer- funerals, given by courting their own health,” he said. “We announcements. tuberculosis. lender that last week missed tainty, including financial dis- couples or old married folks. have seen flowers being The initiatives follow Pres- “South Africa’s government profit estimates on South Africa’s tress,” said Arrie Rautenbach, But the weddings and poured out in tonnes, they are ident Cyril Ramaphosa’s has been very proactive and we struggling economy, said it’s too the CEO at Absa Retail and funerals are mostly on hold as just destroyed.” decision on March 15 to ban are focused on supply soon to speculate on possible Business Banking.