CORONAVIRUS IMPACT: Page 2 China pumps $79bn into economy with cut in cash reserve for banks

Saturday, March 14, 2020 Rajab 19, 1441 AH POST-BREXIT TRADE: Page 12 Barnier shows GULF TIMES ‘ambitious’ draft UK deal to BUSINESS EU members

Container traffic Qatar ‘ratifi es’ Singapore through Qatar’s ports rises 9.6% Convention on Mediation m-o-m in January By Santhosh V Perumal re-exports) were QR22.38bn. By Peter Alagos it is eff ectively the mediation version of Business Reporter In the case of total imports Business Reporter the New York Convention and, as such, (valued at cost insurance will give teeth to mediated agreements in and freight), it amounted to their own right across borders when rati- The overall container traff ic QR9.88bn. atar recently ratified the UN fi ed,” Sheikh Dr Thani said. through various ports in Qatar Mesaieed Port berthed Convention on International Qicca general counsel Dr Minas was 6.86mn tonnes at the end as many as 129 vessels in QSettlement Agreements Result- Khatchadourian said the Singapore Con- of January 2020, according to January 2020, which showed ing from Mediation, also known as the vention will make settlement agreements the off icial figures. a 8.5% decrease on yearly ‘Singapore Convention on Mediation’, arising out of mediations “easier to en- The net tonnage through basis; while it was up 4% according to the Qatar International force.” Qatar’s ports witnessed 46.5% month-on-month. The net Centre for Conciliation and Arbitration If a Singaporean party to a mediated shrinkage year-on-year; while tonnage through the port (Qicca). settlement has assets in Singapore or in it increased 9.6% month- stood at 1.71mn tonnes in the Qicca board member for International any other Convention country, then the on-month in January 2020, review period, which saw Relations Sheikh Dr Thani bin Ali al- other party, such as a Qatari enterprise said the figures released by 20.4% and 8% decline year- Thani said Qatar is the third state after may be able to enforce the settlement the Planning and Statistics on-year and on monthly basis. Singapore and Fiji to ratify the Conven- agreement in an expedited manner under Authority in its latest monthly Doha Port berthed 23 vessels tion, which was signed by 52 countries. the Convention, Khatchadourian pointed bulletin. this January, showing a In accordance with Article 14 (1), the out. The total number of vessels 64.3% surge year-on-year but Singapore Convention shall enter into Sheikh Dr Thani: Significant addition. Khatchadourian: Easier to enforce. “With the entrance of the Conven- calling on Qatar ports stood at registered a flat course month- force on September 12, 2020 (ie. six tion into application next September, the 452, which registered 40.5% on-month. The container months after deposit of the third instru- resolution of cross-border commercial be enforced in the same way as any other courts of signatory countries are expected and 2.4% decline respectively traff ic stood at 1.78mn tonnes, ment of ratifi cation, acceptance, approval disputes, as mediation is seen as not only contract. to handle applications — either to enforce on annual and monthly basis which more than tripled on or accession). a faster, less expensive form of dispute “In an international context, this can settlement agreements, or to allow a party respectively this January. a yearly basis and witnessed This Convention is a new multilateral resolution but also as more likely to pre- prove to be diffi cult, lengthy, and costly. to invoke the agreement to prove that the The off icial data was devoid a robust 57.8% surge on treaty developed by the UN Commission serve commercial relationships. As such, there has been limited incen- matter has already been resolved. of details regarding number monthly basis. on International Trade Law (Uncitral). In a statement to Gulf Times, Sheikh tive to use mediation in international “In short, the Singapore Convention of vessels and net tonnage Haloul Port saw as many The Convention provides a uniform, ef- Dr Thani said mediation has been gaining disputes as the New York Convention gives Qatari companies an additional rea- through Ras Laff an port in as five vessels berthed in fi cient framework for the recognition popularity worldwide for many years as already provides a ready framework for son to consider the role of mediation in an January 2020. January this year, registering and enforcement of mediated settlement an alternative mechanism to resolve com- enforcing arbitration awards in over 150 overall dispute resolution strategy, and in Hamad Port, which has seen 37.5% and 16.7% contraction agreements that resolve international, mercial disputes. countries. the event of a successful mediation, they the world’s largest shipping on yearly and monthly basis commercial disputes. However, he said this has had limited “The Singapore Convention is there- must structure their mediated settlement companies seek entry and respectively. The net tonnage The primary goal of the Convention is scope in cross-border disputes because fore a signifi cant addition to the interna- agreements to take full advantage of the growth in the Qatari and through the port was 503,000 to promote the use of mediation for the a settlement through mediation can only tional dispute enforcement framework as Convention,” he added. regional markets, berthed tonnes, which reported 38.3% 162 vessels in January 2020, and 19.7% decline year-on- which saw 17.4% growth and year and month-on-month 3.8% on yearly and monthly respectively. basis respectively. Al Ruwais Port had seen 133 SIIL shareholders approve company’s future plans The container traff ic through vessels berthed in January the port stood at 2.85mn 2020, which registered tonnes in January, which 24.4% and 13.6% shrinkage recorded 1.4% and 8.5% jump on yearly and monthly year-on-year and month-on- basis respectively. The net month respectively. tonnage through the port Hamad Port’s strategic was 20,000 tonnes, which geographical location off ers saw 41.5% and 14.9% fall year- opportunities to create cargo on year and month-on-month movement towards the upper respectively. Gulf, supporting countries Besides the usual handling of such as Kuwait and Iraq, general cargoes, the port is and south towards Oman, now handling the increased QTerminals chief executive demand of foodstuff and other Neville Bissett had earlier commodities. Al Ruwais port Salam International Investment (SIIL) held its ordinary general assembly meeting on March 11, wherein shareholders approved the company’s 2019 financial performance said. provides a ready solution and future plans. The general assembly also approved the renewal of its joint venture agreements with Salam Bounian, authorising the board to enter into joint ventures with In January 2020, total exports by acting as gateway for the sister company, in addition to holding their loans and issuing letters of credit and guarantees wherever necessary. The company reported net loss of QR129.6mn and it of goods (including exports of fresh commodities from was decided not to distribute any dividends for 2019. The general assembly also decided to appoint Ernst and Young as the auditors for 2020. goods of domestic origin and neighbouring countries.

US ban on European travellers, oil price shock hit QSE performance

By Santhosh V Perumal banking counters – this week which saw Trade turnover and volumes were on the (8.5%) and consumer goods (2.66%) this week transactions by 46% to 47,335. The transport Business Reporter Q-Chem, a joint venture of MPHC, plan to increase this week which saw 8,077 Doha Bank which saw Industries Qatar’s (IQ) parent entity sector’s trade volume almost quadrupled to enhance ethylene production by 7% by 2022 at sponsored QETF worth QR71,783 traded across Qatar Petroleum to acquire Yara’s 25% stake in 48.11mn equities and value more than tripled an estimated cost of QR391mn as part of its five- six deals. Qatar Fertiliser Company. to QR106.5mn on more than tripled deals to The Covid-2019 pandemic-led US’ ban on year master plan involving QR500mn capital Market capitalisation eroded 11.35% to Major losers included Ooredoo, IQ, QNB, Qatar 2,383. European travellers and the oil price shock had expenditure. QR461.26bn mainly dragged by large and Insurance, Vodafone Qatar, Nakilat, Milaha, The real estate sector’s trade volume more than their considerable influence on the Qatar Stock Notwithstanding the bullish outlook of both midcap segments this week which saw Baladna Commercial Bank, Qatar National Cement, QIIB, doubled to 304.21mn stocks and value doubled Exchange (QSE), which lost 1,079 points in key local and non-Qatari retail investors, the and Widam Food sign a partnership agreement Doha Bank, Qatar Islamic Bank, Qatar Electricity to QR234.54mn on 59% increase in transactions index and more than QR59bn in capitalisation 20-stock Qatar Index plunged 11.59% this week to supply the local market with veal meat for the and Water, GIS, MPHC and Qatar German to 6,543. this week. which saw Nakilat prepare to take on greater first time. Company for Medical Devices; even as Ezdan There was 96% surge in the industrials sector’s Foreign institutions were increasingly net ship management responsibilities in the and Qatar General Insurance and Reinsurance trade volume to 161.32mn shares, 25% in value to sellers this week which saw the QSE announce coming year and also eye potential business were seen gainers this week. QR265.93mn and 27% in deals to 8,246. rejig to its 20-stock Qatar Index whereby Al partnerships and collaborations to strengthen WEEKLY REVIEW Foreign institutions’ net profit booking The banks and financial services sector’s trade Meera Consumer Goods Company will replace its portfolio and generate positive returns for increased considerably to QR299.87mn against volume soared 83% to 192.17mn equities, value Gulf International Services (GIS), eff ective from shareholders. QR141.43mn a week ago. by 52% to QR967.96mn and transactions by 78% April. The market had touched a low of 8,160 points Islamic stocks seen declining slower than the Domestic institutions’ net buying shrank to 17,788. Domestic institutions’ substantially weakened on Monday, after which it rebounded for the main index this week which saw QIIB appoints significantly to QR177.47mn compared to The consumer goods sector reported 57% net buying also had its dampening eff ect this subsequent two sessions but only to weaken on QNBFS as its liquidity provider. QR277.84mn the previous week. increase in trade volume to 131.57mn stocks, 5% week which saw Mesaieed Petrochemical the last session, thereby extending an overall The Total Return Index lost 11.05%; Al Rayyan However, Qatari investors turned net buyers to in value to QR331.87mn and 58% in deals to 7,111. Holding Company (MPHC) say it is in a “very bearish overhang this week which saw no Islamic Index 9.21% and All Share Index 11.19% the tune of QR109.44mn against net sellers of The telecom sector’s trade volume shot up 40% good” position with adequate cash buff er to trading of sovereign bonds and treasury bills. this week which saw real estate and banking QR131.99mn a week ago. to 39.79mn shares, whereas value was down withstand the present supply chain challenges, More than 81% of the traded constituents were sectors together constitute more than 55% of Non-Qataris were also net buyers to the extent 4% to QR108.04mn and transactions by 27% to owing to Covid-19 outbreak globally, and the in the red this week which saw as many as total trading volume. of QR19.17mn compared with net sellers of 3,749. weak oil prices. 1.22mn Masraf Al Rayan sponsored exchange The telecom index plummeted 18.71%, insurance QR4.42mn the previous week. The insurance sector saw 1% dip in trade There was an across the board selling – traded funds QATR valued at QR2.25mn change (1.4.31%), banks and financial services (12.38%), Total trading volume rose 95% to 899.19mn volume to 22.02mn equities and 5% in value to particularly within telecom, insurance and hands across 79 transactions. industrials (9.77%), real estate (9.42%), transport shares, value by 40% to QR2.06bn and QR46.13mn but on 7% jump in deals to 1,515. Gulf Times 2 Saturday, March 14, 2020 BUSINESS Indonesia to support economy with $8bn stimulus

Reuters the virus spreads and global financial tors from having to pay import taxes, would be widened to cover strategic Jakarta markets tumble. while giving them a 30% corporate tax food items, such as sugar, flour and salt, Bank Indonesia’s (BI) 2020 growth discount. he said. Rules on loan restructuring for outlook was slightly higher at 5.1%, Refunds for value added tax would be small- and medium-sized companies will Indonesia announced a 120tn rupiah though governor Perry Warjiyo this week made easier for companies, especially for be eased so banks can restructure loans ($8.1bn) stimulus package yesterday said this was likely be revised down at exporters, to help manage cashflows. regardless of size, Financial Services Au- to support Southeast Asia’s biggest its March 18-19 policy meeting, to take The tax breaks, lasting six months thorities chairman Wimboh Santoso said. economy as the spread of the coronavi- into account the spread of the virus starting in April, were estimated to cost “This stimulus package is not directly rus disrupts global activity. globally. BI cut interest rates last month in the government 22.9tn rupiah. linked to the stock market, but we hope The stimulus, representing 0.8% of response to the outbreak. Indrawati last month announced a this will provide some confidence to play- gross domestic product (GDP), includes “This won’t be the last announcement 10.3tn rupiah stimulus package to sup- ers in the financial markets,” Santoso said. exempting some workers in manu- we make because the situation is very port consumer spending and tourism, Indonesia, the world’s fourth most facturing from income tax and giving dynamic,” Indrawati said as she unveiled though some analysts thought it was too populous nation, confirmed its first coro- manufacturing companies a discount details of the new tax measures. small to have a significant impact. navirus case only last week, but medical on corporate tax payments, Finance “We will prepare all instruments to She did not provide details on the professionals are concerned there may Minister Sri Mulyani Indrawati told a news mitigate and minimise the impact on rest of the latest stimulus, but said the be more. conference. companies and people,” she said. government would maintain its planned Its central bank has been buying Indrawati has previously warned that The stimulus package was expected spending despite pressures on state government bonds this week to help curb Indonesia’s economic growth could slow to widen the budget deficit this year to revenue. losses in the rupiah currency, as virus to 4.7% this year if the virus outbreak 2.5% of GDP, from an initial plan to keep it Coordinating Minister for Economic fears trigger a global market rout. slows Chinese and global growth. around 1.8%, Indrawati said. Aff airs Airlangga Hartarto also an- The country’s main stock index Indonesia’s economy grew 5.02% last The tax relief for manufacturing nounced non-fiscal measures to shield plunged 5% on Friday morning and is year. A number of other governments workers will be given to those who make the economy, including relaxing export heading for the biggest weekly drop and central banks in Asia have also an- 200mn rupiah or less a year. rules for fisheries and forestry products since October 2008. Indrawati: Indonesia will prepare all instruments to mitigate and minimise the nounced additional support measures The government is also exempting and import rules for steel. The rupiah lost 2% to 14,810 a dollar, its impact of coronavirus on companies and people. this week to shore up confidence as companies in 19 manufacturing sec- The loosening of rules on imports weakest level since November 2018.

Asian refi ners China pumps $79bn into economy may curb jet fuel with cut in cash reserve for banks

Reuters output Beijing

Reuters hina’s central bank cut the cash Singapore that banks must hold as re- Cserves yesterday for the second time this year, releasing 550bn yuan sian refi ners may curtail ($79bn) to help its coronavirus-hit jet fuel output by partially economy. Areducing processing as the The targeted reserve requirement fuel’s value versus diesel plunged cut is Beijing’s latest step to cushion after the United States said it would the economic blow of the coronavirus ban European travellers to prevent outbreak amid worries about job losses, the spread of the coronavirus. with more stimulus expected. The regrade, which is the price “The reserve cut will help supple- diff erence between jet fuel and ment liquidity at the end of the quarter, diesel with a sulphur content of increase the space for boosting credit 10 parts-per-million (ppm), fell and promote the rapid recovery of the to a discount of $3.86 a barrel on economy,” said Tang Jianwei, senior Thursday, the lowest since Au- economist at Bank of Communica- gust 13, 2015, according to data tions. from S&P Global Platts. China’s central bank has been en- US President Donald Trump couraging banks to lend more to small on Wednesday banned travel fi rms and other vulnerable sectors un- from 26 European countries for der its inclusive fi nancing push, and 30 days. On the same day, India has urged lenders to extend cheap loans said it will suspend the granting and tolerate late payments from com- of visas to travel to the country. panies hit by the health crisis. As a result of the US ban, jet “The reduction will also give confi - fuel demand may drop by be- dence to the fi nancial market to some tween 200,000-250,000 barrels extent, in response to the pessimism per day, split between the US of the recent decline in global capital and European markets over the markets,” Tang added. 30-day ban, said Mark Williams, The People’s Bank of China (PBoC) principal analyst, refi ning, at said on its website that it would cut Wood Mackenzie. “Refi ners are the reserve requirement ratio (RRR) by also likely to lower jet yields 50-100 basis points (bps) for banks that and blend more jet fuel into the have met inclusive fi nancing targets. distillate pool to accommodate The RRR for large banks is currently lower jet demand, adding fur- 12.5%. ther pressure to already weak Qualifi ed joint-stock commercial distillate cracks,” he said. banks would enjoy an additional cut of Refi ners may deal with the 100 bps, it added of the targeted cut, lower jet fuel value by cutting the ninth since early 2018, which will Pedestrians walk past the People’s Bank of China headquarters in Beijing. The PBoC said on its website that it would cut the reserve requirement ratio by 50-100 basis their processing runs to make be eff ective from March 16. points (bps) for banks that have met inclusive financing targets. less of the fuel, which is typically Financial markets had widely ex- produced during the initial dis- pected more support measures from The PBoC reiterated on Friday that ries. “Liquidity conditions in China are 25 bps later after consumer inflation For the year, growth was expected to tillation of crude into products. the government and the PBoC to get monetary policy would remain pru- loose, and it remains to be seen whether eases notably. slow to 5.4%, which would be the slow- Companies have already been the economy back on a steadier footing. dent, even if it is more fl exible in priori- the additional funds can enter the enti- Analysts polled by Reuters expected est since 1990. cutting rates to deal with sur- The country’s cabinet on Wednes- tising restoring economic growth. ty eff ectively,” said Yang Yewei, analyst China’s economic growth to tumble Policy sources have said Chinese plus aviation fuel because airline day fl agged more bank reserve cuts and It said it would not open the credit at Southwest Securities. to 3.5% in the fi rst quarter year-on- policymakers are debating whether travel has declined as countries other steps. fl oodgates, which led to a rapid build- “The constraints of credit expansion year from the previous quarter’s 6.0%. to lower the planned 2020 economic ban travel to halt the coronavirus The amount of liquidity released by up in debt in the past. mainly lie in labour, logistics and order Some believe it may even have shrank growth target of around 6%, which was spread. “This (the US travel ban) the RRR cut would be smaller than the The government has also rolled out constraints, which cause slow resump- on a quarter-on-quarter basis. tentatively agreed late last year. is the end of jet (fuel) market and 800bn yuan cut in January. fi scal support steps, including more tion of production.” Data on Saturday showed China’s Many private sector economists see there will likely have to be run The PBoC has been ramping up pol- funding for virus fi ght, tax waivers, Analysts at UBS said in a note last exports contracted sharply in the fi rst that as well beyond China’s reach at cuts from Europe,” said a source icy easing since the coronavirus out- cuts in social insurance fees and subsi- week that they expected another two months of the year, and imports this point. from a South Korean refi nery. break escalated in late January. dies for fi rms. 100 bps of RRR cuts for the remain- declined, as the health crisis triggered China has yet to issue its 2020 tar- “This will have a spillover ef- China has cut several key interest Analysts said expanding credit alone der of 2020, a further 10 bps of me- by the coronavirus outbreak caused get as the annual parliament meeting, fect into Asian markets and re- rates, and some analysts are expecting may not be enough to boost growth in dium-term lending facility (MLF) massive disruptions to business op- which originally scheduled to open on fi ners will likely have to consider another cut in the benchmark lending the near-term given the slow resump- rate cuts, and possibly a deposit erations, global supply chains and eco- March 5, has been postponed due to the run cuts,” he added. rate next week. tion in production among small facto- benchmark rate cut of no more than nomic activity. virus outbreak. Bank of Korea mulls emergency board meeting as markets slide

Bloomberg situation,” the ministry said. The latest nations,” said Chang, who previously growth projections for South Korea’s Seoul comments send a strong signal that the worked at the BoK during the global economy. board is likely to hold an unscheduled financial crisis. The bank has downplayed the meeting to discuss what additional re- If the bank doesn’t act now, it may necessity of an immediate rate cut, The Bank of Korea said it was consider- sponse is needed as the virus pandemic weigh on the South Korean won and saying that sort of action could have ing an emergency board meeting amid escalates. hurt exports as other currencies around side eff ects such as a property bubble, moves by the country’s leaders to The staging of a meeting would likely the world slide on rate cuts, he said. instead opting to bolster cheap loans address the severe economic hit from fuel speculation of a rate cut similar South Korea has been among the for businesses hurt by the coronavirus the coronavirus as markets around the to the move the bank took during the worst-hit countries outside China by outbreak. world plunge. Mers outbreak in 2015. the virus. The BoK board is scheduled to Board members of the South Korean Following continued sharp slides in Nearly 8,000 people have been convene next month for a regular rate- central bank have been discussing the markets around the world, trading on diagnosed with the virus in South Korea decision meeting, but the bank has a need for a special monetary meeting the KOSPI was halted yesterday morn- with 67 deaths so far. history of holding emergency meetings. since Thursday, the BoK said yesterday ing with the index down more than 8%. The death toll during the outbreak of In 2008, the BoK lowered its interest in a text message. The bourse later restarted and pared the Middle East respiratory syndrome rate by 75 basis points at an unsched- The bank also said it would take losses to less than 4%. Korean 10-year came to 38. uled meeting as the financial crisis steps to stem excessive foreign ex- bond futures at one point dropped the Moon’s administration has already deepened. change movements. most since at least 2011. submitted an 11.7tn won extra budget The problem for the BoK now is that President Moon Jae-in called for “They are probably saying ‘Uh-oh’ to parliament to help businesses hit by it has much less room for easing than unprecedented steps for the economy now,” said Chang Min, a researcher at the outbreak. in 2008 when the key interest rate slid at a meeting the same day with BoK the Korea Institute of Finance, referring With the plan still awaiting approval, from over 5%, Chang said. Lee Ju-yeol, governor of the Bank of Korea, attends a monetary policy meeting in Seoul. governor Lee Ju-yeol and Finance to off icials at the BoK. “Everything is go- there’s already talk that it should be Still, the bank may reduce the rate by The BoK has downplayed the necessity of an immediate rate cut, saying that sort of Minister Hong Nam-ki. ing so diff erently from their assessment increased. 25 basis points in an emergency move action could have side eff ects such as a property bubble, instead opting to bolster cheap Lee and Hong later agreed to last month, with markets tumbling and The BoK, meanwhile, kept its interest before another cut at an April meeting, loans for businesses hurt by the coronavirus outbreak. overcome the “emergency economic central banks cutting rates in other rates on hold last month while cutting he added. Gulf Times Saturday, March 14, 2020 3 BUSINESS

India govt’s India’s central bank to use FX foreign visa ban could shave 50 reserves to stem market rout bps from Bloomberg Mumbai growth: Citi

ndia’s central bank pledged to use Bloomberg its record $481bn foreign-currency Mumbai Iarsenal to stem a market rout that’s threatening growth in an already-slow- ing economy. ndia’s move to restrict over- The Reserve Bank of India wants to seas travellers from enter- keep the rupee stable and will continue Iing the country is likely to using long-term repurchase operations weigh on economic growth and and other liquidity tools at its disposal, cause a loss of precious foreign according to an offi cial, who asked not to exchange, Citigroup said in a re- be identifi ed in line with the bank’s rules. port published this week. The RBI announced a $2bn injec- Travel and tourism accounted tion into the foreign-exchange market for 9.2% of India’s gross domes- Thursday to support the rupee, and fol- tic product in 2018 and provided lowed yesterday with a plan to add li- for 8.1% of total employment, quidity through short-term repurchase according to the World Travel operations. and Tourism Council. The assurances came a day before Foreign tourist arrivals wild swings in Asian global markets reached 10.9mn in January on a yesterday, with the rupee plunging to a 12-month rolling basis; if non- record low and trading in Indian equi- resident Indians are included, ties halted for 45 minutes after the main the number could reach as much indexes plunged 10%. The currency and as 18mn, Citi said. stocks later pared losses. Policymakers are being pushed to India’s economy depends increase stimulus to help the economy on domestic consumption cope with the coronavirus outbreak and but the travel and tourism the failure of one of the nation’s biggest industry has been growing private banks. of late, providing much Market speculation had been growing needed foreign exchange. for an off -cycle RBI interest-rate cut, In March-April 2019, 1.7mn but the offi cial ruled out a move before foreign tourists came to the next scheduled decision on April 3. India and spent $4.8bn The collapse of Yes Bank is weighing on the nation’s growth outlook as credit “A 50% drop in overall travel markets dry up. and tourism activity for one It’s likely to snuff out any hopes of a quarter could shave close to quick recovery in India’s shadow lend- 40-50 basis points from annual ing sector, which has been struggling headline GDP growth,” though for the past 18 months. the timing of the outbreak “India is caught in very strong cross- means the blow might be spread currents,” said Priyanka Kishore, head An Indian ten rupee banknote and US one-hundred dollar banknotes are arranged for a photograph in Mumbai. India’s central bank pledged to use its record $481bn over two fi scal years, analysts led of India and Southeast Asia econom- foreign-currency arsenal to stem a market rout that’s threatening growth in an already-slowing economy. by Citi’s chief India economist ics at Oxford Economics in Singapore. Samiran Chakraborty wrote. “Credit conditions look set to remain fi ce also is exploring the need for higher got some good news on Thursday as ramanian told reporters in New Delhi “If the decline in oil prices is allowed India on Wednesday sus- tight following developments at Yes spending to prop up growth, according infl ation data showed price growth eas- yesterday. The government and RBI are to completely pass through to retail pended most visas in a bid to halt Bank. At the same time, the economic to people familiar with the discussions. ing for the fi rst time in seven months, to working in tandem and will respond markets, we estimate this could pull the spread of coronavirus as the damage from the virus is unlikely to be Authorities estimate the virus will 6.6% in February. whenever needed, he said. headline CPI down by at least 100 bps in World Health Organisation de- negligible, especially if it triggers a glo- shave about 30 basis points off India’s There’s scope for RBI to consider the The slump in oil prices is an added the second quarter of 2020,” said Rahul clared the outbreak a pandemic. bal recession.” growth target of 6%-6.5% for the fi scal impact of moderating infl ation, chief benefi t for India, the world’s third- Bajoria, an economist at Barclays Plc in Existing visas, with some ex- Prime Minister Narendra Modi’s of- year starting April 1. The central bank economic adviser Krishnamurthy Sub- largest crude importer. Mumbai. ceptions, will be suspended until April 15, the government said. India’s economy depends on domestic consumption but the travel and tourism industry has been growing of late, providing much needed foreign exchange. Japan govt factoring in risk of Olympics cancellation In March-April 2019, 1.7mn foreign tourists came to India and spent $4.8bn, or 16% of Reuters cancellation will upend even their most Trump fl oated the possibility of a one- government offi cials see the need to it is “expanding moderately as a trend,” 2019 foreign spending, Citi said. Tokyo pessimistic scenario on the prospects year postponement for the Games, al- prepare for the risk of a cancellation. sources familiar with its thinking say. Adjusting the numbers to ac- of such a recovery, according to multi- though he later praised Japan’s “mag- The crunch time for policymakers is Government and BoJ economists count for non-resident Indi- ple sources. nifi cent” venue. around end-April, when the BoJ meets have yet to fi rm up estimates on how ans and presumed 10% natural ven as Japan has stressed that “You need to be prepared for the The damage to the economy from a for another rate review and issues fresh much an Olympics cancellation could growth, the “foreign exchange the Olympics will proceed as chance of a cancellation and the loss cancellation would be huge, marking a quarterly economic projections. cost the economy. earning loss could be in excess of Eplanned, government and cen- that could cause,” said an offi cial with severe blow to household and corporate Their hope is that by then, the epi- But some say private forecasts of $8bn if we consider the suspen- tral bank offi cials are more seriously direct knowledge of the government’s sentiment, already souring from event demic will have subsided and Tokyo around ¥7tn ($66bn) – or 1.4% of gross sion of tourist activity to last for weighing the risk of cancellation when deliberation on the matter. cancellations, slumping tourism and can host the Games as planned. domestic product – may be too opti- two months,” the report said. making projections for this year’s eco- “The government’s economic pack- travel curbs, the sources say. If not, the rosy projections of Japa- mistic. March is the last of India’s nomic outlook, sources said. age, to be compiled in April, will prob- “In times like now, keeping public nese policymakers – that the economy Even a postponement of the Olym- peak tourist months, but the The Bank of Japan is expected to ably take into account this risk,” the of- sentiment from cooling too much is will rebound in the latter half of this pics would be damaging. start of the season when many loosen monetary policy next week to fi cial said. extremely important,” another offi cial year and sustain a moderate recovery – The economy shrank in October- Indians travel abroad. ease the hit to business sentiment from Prime Minister Shinzo Abe’s govern- said on condition of anonymity as he could unravel, the offi cials say. December due to the hit from last year’s Assuming Indians do not trav- the coronavirus outbreak and the sub- ment has repeatedly stressed that the was not authorised to speak publicly. “It will be a huge problem if little sales tax hike, and it could contract el abroad this March and April, sequent market volatility. Tokyo Olympic Games will go ahead as “If the Olympics is cancelled, con- progress is made in containing the vi- again in the current quarter as the virus Citi estimates the net foreign- Such a move would still be based planned. sumption could freeze.” rus by end of next month,” a third offi - curbs global trade and tourism. exchange earning loss at $5bn. on an assumption that the economy However, there are growing doubts Some analysts had believed the cial said. “If the Olympics is cancelled, “If conditions (regarding the epi- That means the current-ac- will make a quick V-shaped recovery, as the coronavirus outbreak worsens world’s third-largest economy was al- the economy could crumble.” demic) are bad enough to cancel the Ol- count defi cit for the fi rst quar- fuelled in part by a boost in demand around the globe, prompting quaran- ready in danger of tipping into reces- With the market rout already denting ympics, that in itself is a huge problem ter of the fi nancial year running from the Olympics in July. tines, travel restrictions and cancella- sion before the virus outbreak wors- morale, the BoJ is expected to down- for the economy,” said a fourth offi cial. through March 2021 could be However, policymakers assessing the tions of sporting events. ened. grade its assessment of the economy “It will be a completely new shock to $2.5bn higher than their $9bn scale of the damage fear an Olympic On Thursday US President Donald Some ruling party lawmakers and next week from the current view that the economy.” estimate.

Zhang Yiming, founder of TikTok owner ByteDance, gears up for the global stage

Reuters secondary market. That was not just down to government. Zhang declined to comment a cover of former Google CEO Eric Schmidt’s Beijing/Hong Kong luck, say those who know him. on whether CFIUS was satisfied with TikTok’s book, “How Google Works.” He delivers town As early as 2013, when the company was current handling of data. hall speeches every two months to talk about just a year old and barely made any revenue, Earlier this week, the company announced his bi-monthly goals, a conscious nod to The founder of China’s ByteDance, owner Zhang started planning its global expansion, it had set up a “transparency centre” in Los Google’s open work culture. He also eschews of the wildly successful TikTok app, has for according to Joan Wang, an early investor Angeles to show regulators and the public Chinese convention and tells employees not years aspired to make ByteDance the first in ByteDance and managing director of SIG how it manages data and content on the to call him “boss” or “CEO”. Chinese firm to rival US Internet giants on the China. Zhang told Wang over numerous platform. One major ByteDance investor told And Zhang insists the company’s product global stage. meetings and phone calls he believed his Reuters some backers had suggested a spin- development is already global. On Thursday Zhang Yiming made a key AI-based recommendation algorithms used off of TikTok last year, but the company didn’t A new Indian social media app called move to achieve that. in its Chinese-language news aggregator consider that option. Helo is an example of a product ByteDance Creating new leadership positions for Jinri Toutiao, could be expanded to diff erent Sources familiar with the company also has designed from the ground up for a local ByteDance’s China business, Zhang said in a languages and content formats. told Reuters Zhang retains voting control of market. “We believe the short-term digital letter to employees he would now focus on “The resources at the time seemed far the firm, which has raised billions of dollars advertising market in India is small, but the global expansion and fresh initiatives such as from enough for achieving his global goals,” from prominent investors including SoftBank growth potential is large,” he said. education. Wang said. Group Corp, KKR & Co Inc and Sequoia Lark, the workplace productivity app, was In a recent, exclusive interview with Reu- Chasing global success Capital China. also optimised for a global roll-out. ters, Zhang spoke expansively of his vision ByteDance declined to comment. Zhang discarded an initial plan to start with of ByteDance as a fully global company in TikTok is in talks with the Committee on His intensified pursuit of global success a focus on China and insisted it be targeted at the image of Google and Facebook, even as Foreign Investment in the United States comes amid rising censorship risks in China the United States, Europe and Japan from the it faces a national security review by the US about measures to allow it to avoid divesting after the government in 2018 shut down one beginning, a company source said. government over TikTok’s data practices. the Musical.ly assets it acquired and were of ByteDance’s top products, a joke app, for But there are some signs that political Some US government agencies have later integrated into TikTok, sources have “lowbrow and vulgar” content. pressure in the US is altering plans: Lark is banned employees from using TikTok over said. The CFIUS review came amid rising US- Zhang said he spent two-thirds of his time shifting its focus from making a big push data security concerns. China tensions and US concerns about how outside China last year and likes to indulge in the US to markets including Japan and “There are a lot of misunderstandings out user data would be handled. in London’s West End musicals and museums. Europe, sources said. there,” Zhang said from a hotel room in New ByteDance has also been working to He plans to spend even more time abroad A ByteDance spokesman said Japan, Sin- York, where he spoke to Reuters via video separate TikTok from many of its Chinese this year as part of an eff ort to “understand gapore and India are its primary markets. call using ByteDance’s work productivity businesses, seeking to provide CFIUS with more context.” The Chinese version of Lark, called Feishu, Zhang Yiming, chief executive off icer and founder of Bytedance, app Lark. “We are more localised in diff erent assurances, Reuters has reported. IPO plans unclear has recently gained much momentum as the poses for a photograph in Beijing. In a recent, exclusive interview markets than people think.” “I am not directly involved in this situa- coronavirus outbreak has created a surge in with Reuters, Zhang spoke expansively of his vision of ByteDance TikTok has taken the social media world by tion,” Zhang said, when asked about how Zhang has consciously borrowed strate- demand for work-from-home tools. ByteD- as a fully global company in the image of Google and Facebook, storm, especially in the United States, vault- talks with CFIUS were going. gies from US Internet giants including ance in 2018 began early-stage preparations even as it faces a national security review by the US government ing ByteDance to a valuation that sources He said overall he was “optimistic” about Alphabet Inc’s Google – ByteDance’s off ices in for an overseas float to off set political uncer- over TikTok’s data practices. have told Reuters is close to $100bn in the the company’s interactions with the US Beijing are decorated with posters including tainties at home. Gulf Times 4 Saturday, March 14, 2020 BUSINESS Travel industry under siege as coronavirus contagion grows

Reuters American Airlines Group Inc and United in a statement. The International Air outbreak. The Indian government Qantas Airways Ltd earlier in the week. CGS-CIMB analyst Raymond Yap said Sydney/Chicago said they would continue normal flights Transport Association (IATA), a global said it would extend the deadline for Virgin shares fell to a record low in early the global spread of the virus meant to and from Europe for the next week industry group representing airlines, submission of early bids for ailing state trade but later rebounded to close 32% the fall in demand for Singapore but would be reducing capacity to called on governments to consider carrier Air India until April 30 in part higher amid a late rally in the broader Airlines regional flights was likely to The fallout from the coronavirus spread Europe by around 50% in April. extending lines of credit, reducing due to the virus situation. Australian market. spread to long-haul flights, hurting the across the Pacific yesterday, with American also said it was cutting infrastructure costs and cutting taxes. Asia-Pacifi c hit hard Qantas shares closed 12.6% lower. take-up rate in the lucrative business Australian travel firms issuing profit international capacity by 34% for the “There is a heightened concern there Virgin and Flight Centre joined a and first-class cabins. warnings and Japanese carriers cutting summer travel season and accelerating will be increased airline bankruptcies Virgin Australia Holdings Ltd, Auckland growing list of travel companies, Japan’s ANA Holdings Inc and Japan capacity, while US airlines rushed to the retirement of its Boeing Co 757 and in 2020 given the fallout from the International Airport Ltd, Flight Centre which includes the big US airlines, that Airlines Co Ltd (JAL) were down more cut flights to Europe in the wake of new 767 planes. coronavirus,” Cowen analyst Helane Travel Group Ltd and Corporate Travel are freezing hiring, halting executive than 7% in afternoon trade, having also travel restrictions. Delta Air Lines Inc also said it would Becker said. Management Ltd said they would take bonuses and off ering unpaid leave. fallen on Thursday. US travel curbs on much of continental significantly reduce its US-Europe “We expect some governments to step hits to earnings from reduced travel Airline stocks in Asia were also JAL said it would cut 1,468 domestic Europe announced by President Donald schedule after Sunday as it continues to in to help some airlines, but ultimately demand. recovering in later trade, with flights between March 20 and March 28 Trump on Wednesday deepened the watch customer demand. we expect more airlines to fail this Australia’s No 2 carrier, Virgin Australia, Singapore Airlines Ltd shares steady stemming from lower demand because sector’s misery that began after the German airport operator Fraport said year than last year,” she said in a note said it would off er discounted fares and at 0550 GMT. Earlier in the day, sporting and cultural events had been virus emerged in China late last year yesterday that passenger numbers at to clients, citing Cirium data that 41 cut some flights from Sydney to Los Singapore Changi Airport announced suspended in Japan. and reduced traff ic. its key Frankfurt airport dropped by airlines with 324 aircraft went bankrupt Angeles as demand for trans-Pacific seat capacity for the month of March ANA will cut the number of daily flights United Airlines Holdings Inc warned around 30% in the first week of March last year. travel fell. was down nearly 30% from what was from Japan to Los Angeles and New of US travel disruption as the virus due to the coronavirus epidemic. Cash-strapped low-cost carrier “You will see us continue to be very originally scheduled. Singapore will York and reduce operations to other spreads domestically and major tourist “We have to assume that the strong Norwegian Air Shuttle ASA said on disciplined with capacity as the deny from Monday entry or transit to cities in North America from Monday, attractions like Walt Disney Co’s theme decline in air traff ic volumes will Thursday it would cut 4,000 flights situation evolves,” Virgin Australia chief visitors who have been in Italy, France, it said. It also said there will be fewer parks in California and Florida said they continue during the next few weeks and temporarily lay off up to half of executive Paul Scurrah told reporters, Spain or Germany in the last 14 days, flights to Europe including France, would close. and months,” CEO Stefan Schulte said its employees due to the coronavirus echoing similar comments by rival the health ministry said yesterday. Germany and Belgium.

Pakistan Virgin Australia cuts more central bank’s reserves capacity, freezes hiring jump to

Reuters Sydney/Bengaluru $12.8bn

irgin Australia Holdings Ltd said Internews yesterday it would make deeper Karachi Vcapacity cuts, suspend fi nancial guidance, freeze hiring and off er leave without pay to staff as it grapples with he foreign exchange re- plunging demand due to the coronavi- serves held by the central rus outbreak. Tbank of Pakistan increased Australia’s No 2 carrier joined its 0.25% on a weekly basis, accord- larger rival Qantas Airways Ltd in re- ing to data released by the State ducing both international and domestic Bank of Pakistan (SBP). capacity more than once in quick suc- On March 6, the foreign cur- cession. rency reserves held by the SBP Virgin shares have plunged to record were recorded at $12,789.9mn, lows and some of its high-yield bonds up $32mn compared with are trading at less than 80% of their face $12,757.5mn in the previous week. value amid investor concerns over its fi - The central bank cited no rea- nancial position, which is weaker than son for the increase in reserves. investment-grade rated Qantas. Overall, liquid foreign cur- Airlines around the world are see- rency reserves held by the coun- ing weak demand due to Covid-19 and try, including net reserves held by many have suspended their fi nancial banks other than the SBP, stood at guidance as a result, as have travel $18,904.6mn. agents like Flight Centre Travel Group Net reserves held by banks Ltd which did so yesterday, sending amounted to $6,114.7mn. shares down more than 15%. Pakistan received the fi rst loan An industry body last week estimat- tranche of $991.4mn from the ed that passenger revenue for airlines International Monetary Fund could drop by as much as $113bn this (IMF) on July 9 last year, which year. helped bolster the reserves. In Virgin chief fi nancial offi cer Keith late December, the IMF released Neate told reporters that there were no the second loan tranche of around fi nancial or change of control covenants $454mn. Previously, the reserves on its bonds and that its next major debt jumped on account of $2.5bn in maturity not until October 2021, when infl ows from China. $350mn was due. About two months ago, the SBP The airline has more than $1bn of successfully made a foreign debt cash, and Fitch Ratings said on Tuesday repayment of over $1bn on the that it had the fl exibility to manage li- maturity of sukuk. quidity pressures in the short term that In December 2019, the foreign could stem from falling demand for air exchange reserves surpassed the travel. $10bn mark owing to infl ows Virgin, predominantly a domestic from multilateral lenders includ- airline, said its second-half capacity ing $1.3bn from the Asian Devel- will be reduced by 6%, up from the 3% opment Bank (ADB). cut announced last month, and will be Foreign investment of over further trimmed to 7.7% in the fi rst half A Boeing 737 aircraft operated by Virgin Australia Holdings takes off from Sydney Airport. The airline said yesterday it would make deeper capacity cuts, suspend financial $3bn in the debt market in the of 2021. guidance, freeze hiring and off er leave without pay to staff as it grapples with plunging demand due to the coronavirus outbreak. current fi scal year also played an The airline also put in place a freeze important role in the growing for- on all external recruitment and the use are making sure we minimise the cash unpaid leave. Jeff eries analyst Anthony “Even with the appreciation that Vir- The airline said bookings to some eign currency reserves. of consultants for rest of 2020 and said burn,” said Virgin chief executive Paul Moulder said he was surprised the air- gin has a higher leisure skew and pre- leisure destinations in Queensland and Earlier, the reserves had spi- its chairman and independent directors Scurrah. line was not making deeper cuts in the dominately a domestic airline, we could Western Australia were tracking ahead ralled downwards, falling be- would take a 15% temporary cut in their He said job cuts were possible, but domestic market, where it is trimming have expected capacity cuts of 10% in of the same time last year, in a sign that low the $7bn mark, which raised base fees. the airline was fi rst trying to manage 5% of capacity in the half ending June the domestic market,” he told clients in Australians were booking more holi- concern over Pakistan’s ability to “All of the actions we are taking today through attrition, a hiring freeze and 30 and 6.2% for the 2021 fi rst half. a note. days at home meet its fi nancing requirements. Manila lockdown to hit Philippine growth, boost rate-cut bet

Bloomberg be worse than last year’s 5.6%, despite the domestic product would grow 6.5%-7.5% this Manila low base.” year, but the virus could shave as much as 1 President Rodrigo Duterte said on Thursday percentage point off that estimate, Economic night he’s placing the capital region on Planning Undersecretary Rosemarie Edillon A monthlong lockdown in the Philippine lockdown until April 14, restricting entry told the Philippine Senate last week. capital to contain the spread of coronavirus for travellers from countries with local Philippine government agencies will be is set to curb economic growth and make an transmission and suspending domestic travel reduced to skeleton crews, meaning they interest-rate cut next week more likely. to and from Metro Manila. probably won’t be rolling out any major Growth could weaken to below 6% in the first “Consumption will bear the brunt of the infrastructure projects or hiring workers, quarter of the year, according to Nicholas slowdown, with restricted movement for Mapa said. Mapa, an economist at ING Bank in Manila. Filipinos and curfews in eff ect,” Mapa said Capital formation will likely be subdued, with With more than 12mn people, the Manila yesterday. “Growth will likely drop below 6% limited appetite for long-term investments in region accounts for 40% of the Philippines’ in the first quarter and likely stay at this level” such a volatile situation, he said. gross domestic product, a figure that rises to if the outbreak persists. “Expect more substantial stimulus from the nearly two-thirds if you include surrounding The lockdown also makes an interest rate BSP and the national government to insulate localities, he said. cut next week a certainty, with the possibility the economy,” Mapa said. The Philippine Stock Exchange Index of the central bank moving by a bigger- Investors “note that the Philippines has the dropped by more than 11% early yesterday, than-projected 50 basis points, said Gareth most space in terms of stimulus, both on then recouped part of the decline after a Leather, an economist at Capital Economics monetary and fiscal policy, and they have yet 15-minute trading halt and as state pension Ltd. The central bank lowered its benchmark to wield it.” funds were ordered to buy shares. interest rate last month by 25 basis points to Other measures, mainly economic, are in The index was down 5% at 5,449.58 as of 3.75% – its fourth cut in the past year – in what place. 11:37am. The peso fell for a third straight day, it described as a pre-emptive move. Finance Secretary Carlos Dominguez said to 51.285 to the dollar. The bank won’t hold an off -cycle rate yesterday he had instructed the Government “While the lockdown announced last night meeting, Governor Benjamin Diokno said Service Insurance System and the Social is not as draconian as compared to other Thursday. Security System to at least double their Employees unload a bag of rice in order to demonstrate the process of loading, unloading and countries, social distancing will be the norm He has quarantined himself after coming into daily average purchase of stocks to support weighing rice in a National Food Authority warehouse in Quezon City, Metro Manila. A monthlong and this will invariably hurt many sectors contact with an infected person, and doesn’t the equities market. The government also lockdown in the Philippine capital to contain the spread of coronavirus is set to curb economic growth of the economy,” said Nicky Franco, head of plan to hold a press briefing following the imposed a 60-day freeze on prices of basic and make an interest-rate cut next week more likely. The country’s GDP growth could weaken to below research at Abacus Securities Corp in Manila. March 19 policy meeting. Skeleton Crews goods in Metro Manila, Trade Secretary 6% in the first quarter of the year, according to Nicholas Mapa, an economist at ING Bank in Manila. “Right now it’s not impossible for 1Q GDP to The government had forecast that gross Ramon Lopez said in a televised briefing. Gulf Times Saturday, March 14, 2020 5 BUSINESS

Stocks go from 10% slump to 4% gain in wild day for Asian equities sink, India market

Bloomberg and head of research at YES Mumbai Securities India Ltd in Mumbai. The slump in assets threatens to hurt India’s already fragile extending global Indian stocks posted their economy that’s expanding at biggest advance since the slowest pace in 11 years. The September on a day when Reserve Bank of India’s eff orts losses of 10% set off a market- to calm the currency market wide circuit breaker, the nation’s by announcing $2bn of the FX first such suspension since swaps on Thursday weren’t 2009. enough to lift sentiments. The But brokers in dealing rooms rupee rose 0.3% to 73.9950 after markets meltdown in Mumbai are still trying to falling by as much as 0.4% to soothe the frayed nerves of 74.5250 per dollar, a record low. AFP their clients, who much like their “Past lows are not a line in the Hong Kong peers across the globe, endured sand,” and there is a risk of the the worst week for equities in rupee hitting 78 and then 80, more than a decade. said Vishnu Varathan, head sian equities tumbled yesterday, “We’re getting calls asking what of economics and strategy at extending a global rout that saw is to be done now, should we Mizuho Bank Ltd in Singapore. Amarkets experience their worst hold or add more capital, and our Such a big sell-off “will ignite day in decades as fears of a worldwide advice to them is there will be major concerns because of recession caused by the coronavirus pan- opportunities once the sentiment the ability of such moves to demic wiped trillions off valuations. stabilises,” said Ketan Karkhanis, exacerbate capital outflows.” Shell-shocked investors fl ed for the senior vice president and head, RBI said in a statement on hills as governments across Europe and in equity relationship services at Thursday that it is closely the United States struggled to get a grip ICICI Securities Ltd in Mumbai. monitoring the global situation on the crisis that has swept the planet The S&P BSE Sensex rallied 4% and “stands ready to take all and shut communities down. to 34,130.5 points at the close necessary measures” to ensure Central bank moves to support fi nan- in Mumbai, erasing losses of the normal functioning of cial markets have also failed to staunch as much as 10.3% that led to financial markets. The rupee the bloodletting, while Donald Trump’s the 45-minute trading halt. has come under pressure as decision to shut the US border to Euro- This makes it the largest daily foreigners unloaded $1.2bn pean travellers added to the panic. trading range on the main index worth of local bonds and $2.7bn “Markets remain in a freefall as uncer- in recent years. Still, the India of shares so far this month, data tainty persists with no reliable anchor NSE Volatility Index, the stock compiled by Bloomberg shows. which can create near-term stability,” market’s fear gauge, ended at Sovereign bonds also fell, with Ben Emons, at Medley Global Advisors in levels not seen since May 2009, the yield on benchmark 10-year New York, said. signalling market turbulence bonds climbing nine basis However, after a morning session will likely persist. points to 6.32% after surging by wipe-out across the region, most mar- India become the latest equity 17 points on Thursday. kets clawed back losses, even if they were market to take a pause on Harihar Krishnamoorthy, still in negative territory as traders picked Friday, a day when Korea, a treasury market veteran, up bargain-basement stocks. the Philippines, Thailand and said the current rout can’t be Tokyo, which fell as much as 10% at Indonesia witnessed rapid compared with 2013. The year one point, ended down 6.1%, while Hong declines that triggered circuit of the taper tantrum had a Kong was 1.1% lower having plunged breakers. The slide followed the larger impact on Indian assets around 7% earlier. worst Wall Street session since in the absence of tailwinds from Seoul, Bangkok, Manila and Singapore 1987, with investors spooked lower oil prices, which can lead all managed to cut their losses by more that emergency fiscal and to annual savings of $50bn, than half, while Mumbai was up more monetary stimulus won’t be he said. For the cash-strapped than 2% just hours after a trading halt enough to stave off a recession. government of an oil-importing kicked in because it had fallen more than “What’s certain is that 2020 is nation, the collapse in crude 9%. Manila also rose having lost almost likely to be volatile on account prices couldn’t have come at a 10%. Shanghai ended down 1.2 %. Pedestrians wearing face masks walk past an electronic board showing the Nikkei 225 index on the Tokyo Stock Exchange. The of US equities losing steam, better time. Analysts at Kotak But the standout was Sydney, which Nikkei 225 closed down 6.1% to 17,431.05 points yesterday. poor global economic numbers, Institutional Equities estimate swung more than 12% to end 4.4% possible credit crunch overseas that a $10 per barrel drop in the higher. 1989, the year the Berlin Wall fell, while the spread of Covid-19 have increased hit a record high against the Indian rupee and our own challenges,” said price of oil lowers the inflation “Despite continued uncertainty over Paris suff ered its biggest one-day loss on the prospect of a severe global economic while the South Korean, Australian and Amar Ambani, senior president rate by 30 basis points. the coronavirus spread, some market record. growth downturn,” he added. Canadian dollars, Thai baht, and South players with more optimistic outlooks Analysts said Trump’s ban on travel The crisis has hit the travel industry African rand were all more than 1% down. will see current levels as good buying op- from Europe deeply rattled investors, and particularly badly as new restrictions The greenback was up more than 2% portunities for medium and long term measures intended to shore up business prompt mass cancellations, while sport- on the Indonesian rupiah, while it also plays,” Nick Twidale, at IC Markets in and markets were proving insuffi cient. ing events have been scrapped globally rose against the yen despite the Japanese Sydney. The New York Federal Reserve an- and everything from museums to Disney unit’s safe-haven position. Forager Funds’ Steve Johnson de- nounced measures to inject an additional theme parks have shut. Jeff rey Halley, senior market analyst scribed the day’s trade as “completely $1.5tn into fi nancial markets this week “In mere weeks, the market has shifted at OANDA, added: “Most worryingly, US and utterly nuts”. In early trade, London and launch a bond-buying programme, gears from a transitory health scare to a bond yields rose...when really the situa- rose more than 6%, Frankfurt jumped 4% while the European Central Bank un- full-blown global recession,” said Axi- tion was ripe for a mass stampede to the and Paris more than 3%. US futures also veiled emergency eff orts but did not in- Corp market strategist Stephen Innes. US Treasury market driving down yields. pointed higher. clude an interest rate cut. “Global supply chains are no longer “That suggests two things: One, credit Even oil prices, which have been rav- “The turmoil in markets has moved just ‘disrupted’ but are now in the proc- is tightening — a gruesome scenario for aged this week, surged almost 4% after a up another notch over the past 24 hours ess of shutting down completely,” he business. quick intra-day turnaround. with President Trump’s European trav- added. Two, investors are now moving to the Still, trading fl oors remain nervous el ban and underwhelming stimulatory Markets have also been shaken by an ultimate haven, hoarding cash in boxes places following a virtual implosion on measures adding more fuel to the fire of oil price war between Saudi Arabia and under the bed.” Wall Street and in Europe. uncertainty, instead of providing a dose Russia, compounded by fears that travel In Tokyo, the Nikkei 225 closed down The Dow lost 10% in its worst session of reassurance,” wrote National Aus- restrictions will further dampen energy 6.1% to 17,431.05 points; Hong Kong — since 1987, while London also had its tralia Bank’s senior FX strategist Rod- demand. Hang Seng ended down 1.1% to 24,032.91 worst day since that year. rigo Catril. On currency markets, the dollar surged points and Shanghai — Composite closed Frankfurt had its blackest day since “New containment measures to slow against high-yielding, riskier units and down 1.2% to 2,887.43 points yesterday.

BoJ may boost purchases of commercial papers Wild week for EMs sees biggest sell-off since 2008 Bloomberg Tokyo Bloomberg second day as markets struggled to cope with Singapore an exodus of foreign capital. A slide of more he global dash for cash than 8% in South Korea’s Kospi also set off a has hit Japan where the circuit breaker Friday for the first time since Toutstanding amount of Emerging-market stocks headed for their the September 11, 2001, US terrorist attack. commercial paper is at record biggest weekly loss in more than a decade Stock markets in Eastern Europe pared losses. levels, surpassing the peak set on concern central banks and governments Analysts’ average earnings estimates for the before the collapse of Lehman will fail to stop the coronavirus epidemic from MSCI Emerging Markets Index have fallen Brothers. sapping global growth. for an eighth week to the lowest level in six Outstanding issuance at the The MSCI Emerging Markets Index of shares months. end of February was ¥22.8tn has tumbled 13% during the past five days, the “There’s a whole host of uncertainties out ($217bn), a monthly record, ac- steepest decline since the height of the global there and markets aren’t sure that the policy cording to data going back to financial crisis in October 2008. measures they have seen so far are coherent, April 2007 from Japan Securities The gauge has now dropped 24% from its cohesive and co-ordinated enough to tackle Depository Center Inc. January peak with analysts slashing earnings what’s at hand,” said Vishnu Varathan, head of The surge has fuelled specula- estimates. economic and strategy at Mizuho Bank Ltd in tion the Bank of Japan may boost The index steadied on Friday amid some Singapore. purchases of commercial paper to optimism the US may introduce more Emerging-market sovereign dollar bonds are bring down short-term fi nancing stimulus measures and as China cut reserve also heading for their worst week since 2008, rates, as companies struggle to requirements. according to JPMorgan Chase & Co’s EMBI deal with eff ects of the coronavi- The rapid spread of coronavirus around the Global Diversified Index. The extra yield on the rus spread. world has roiled global financial markets, securities over US Treasuries has widened to “There is a tendency by compa- triggering trading halts in stocks and sending the most since 2009. nies to secure more funds amid the bond yields to record lows despite emergency President Donald Trump added to the risk-off frenzy surrounding the coronavi- measures adopted by central banks and mood in markets on Wednesday by restricting rus, with the outstanding issuance governments. travel to the US from Europe. amount growing by the day,” said The equity rout has wiped almost $2tn in The panic caused by the coronavirus, which Kenji Sato, a manager at money- Pedestrians cross a road in front of the Bank of Japan headquarters in Tokyo. The BoJ raised its commercial value from developing-nation shares this week the World Health Organisation declared a market dealer Central Tanshi Co paper buying on March 4, off ering to purchase ¥400bn compared to the ¥350bn announced in its monthly through Thursday. pandemic this week, has spurred the Federal in Tokyo. “There is scope for the plan at the end of February. The MSCI Emerging Markets Index of equities Reserve to pledge a cumulative total above BoJ to boost commercial paper rose 0.4%, while its currency counterpart $5tn in liquidity to keep short-term financing purchase amounts.” pand its stimulus measures at its ing to purchase ¥400bn com- asset purchases.” “The increase rebounded 0.6% rates from spiking. Funding stress is showing up meeting next week as it seeks to pared to the ¥350bn announced in CP purchases is in line with The Colombian and Mexican peso led this Liquidity management by central banks is “the globally as companies stockpile limit the blow from the coronavi- in its monthly plan at the end of Kuroda’s statement and in line week’s declines, with some currencies paring bright spot in this crisis, unlike 2008,” said cash in an attempt to ride out rus outbreak and reassure volatile February. with the global trend of credit is- losses on Friday. Jason Daw, a strategist at Societe Generale SA the pandemic. In the US, getting markets, according to people fa- The move came after a March suance,” said Mari Iwashita, chief Sovereign credit spreads widened 137 basis in Singapore. money via commercial paper is at miliar with the matter. 2 emergency statement from market economist at Daiwa Secu- points this week, according to JPMorgan “While liquidity provision is necessary to its most costly since 2009 relative The central bank is likely to Governor Haruhiko Kuroda, rities Co. indexes, as bond yields spiked in Ecuador, ease the pain, we think it is insuff icient to to overnight index swaps, spurring show a more aggressive stance on pledging to supply “ample li- “Increasing the amount of CP Argentina and Ukraine change the course of risk assets such as EM the Federal Reserve to pump more buying assets, they said. quidity and ensure stability in purchases naturally will be among Circuit breakers triggered equity trading halts currencies, which are being sucked into a black liquidity. The BoJ raised its commercial financial markets through ap- the options the BoJ can take as a in Thailand, the Philippines and Indonesia for a hole of unknown economic risks.” The Bank of Japan will likely ex- paper buying on March 4, off er- propriate market operations and means to help liquidity go around.” Gulf Times 6 Saturday, March 14, 2020 BUSINESS Dollar is king after liquidity fears fuel stampede from risk

Bloomberg at TD Securities in Singapore. “There’s factories and stunt investment growth. US dollars as a safety buff er cannot be Asian currencies, stocks and bonds. Japan Nipponkoa Asset Management Singapore a sense that there are limits to what the Policy makers have acted in concert to underestimated.” Indonesia’s rupiah sank more than Co “Following the plunge in stocks, Fed and more importantly what mon- try to assuage worries, but to no avail. Dollar funding stress also showed up 2% while benchmark yields soared there aren’t many places where you etary policy can do. The market is des- The Bank of Japan off ered to buy in the foreign-exchange swap market. and a slump in local stocks triggered can take profi ts so they are selling JGB s fears of a global liquid- perately craving for some sort of fi scal ¥200bn ($1.9bn) of bonds in an un- Discounts that Japanese investors had a second day of trading suspension. futures to take profi ts to get liquidity.” ity crunch grow, investors say response.” scheduled operation on Friday, add- to accept on yen loans in exchange for South Korean bond futures headed for Regional central banks would need Athere’s only one safe place: The The growing fallout from the coro- ing to an earlier operation. The Re- dollars widened to the most since 2017, the biggest drop since at least 2011, to off er liquidity, especially at the dollar. navirus outbreak is fuelling a dash serve Bank of Australia added A$8.8bn underscoring demand for the greenback. prompting the central bank to consider short-end of the curve, to alleviate Funds are piling into the greenback for the dollar as investors weigh the ($5.5bn) through its daily repo opera- “Markets may temporarily calm an emergency board meeting. concerns about a credit crunch, ac- while dumping almost everything else biggest threat to the world economy tion after liquidity injections from the down should the Fed come out with Liquidity hunt: Even Japanese cording to SEB AB. from stocks to bonds and other cur- since the global fi nancial crisis. The Federal Reserve and the Bank of Cana- stronger measures,” said Lee Mi Seon, bonds weren’t spared the rout. Ten- The dollar is “re-emerging as the rencies. Trading in Indian and Indone- Bloomberg Dollar Spot Index rallied to da the previous day. an analyst at Hana Financial Invest- year yields rose 5.5 basis points to mi- ultimate safe haven,” said Eugenia Vic- sian equities was halted after steep de- a three-year high on Thursday to head “It’s shock after shock that’s now ment Co in Seoul. “But such moves nus 0.01% and JGB futures fell more torino, head of Asia strategy at SEB in clines while bonds in Australia, Japan for its biggest weekly gain since No- prompting people to liquidate even won’t be enough to reduce long-term than 100 ticks. Singapore. “Despite the injection of li- and South Korea seized up and dollar vember 2016. gold to make sure they’re keeping cash concerns.” “Both foreigners and domestic in- quidity from major central banks, they funding costs soared. At the heart of the concerns is the in pockets,” said Vishnu Varathan, Emerging markets: The rush into vestors are coming into JGB futures to are not fl owing into Asia. As Asia brac- “There is a mad dash for cash,” said fear that liquidity may be drying up head of economics and strategy at Mi- the greenback has come at the expense seek liquidity,” said Shinji Hiramatsu, es for tighter USD funding, long USD/ Prashant Newnaha, a senior strategist across the globe as the virus shutters zuho Bank Ltd in Singapore. “Holding of other assets including emerging a senior investment manager at Sompo Asia seems to be the way to go.”

FX volatility hurtles towards 2008 highs US futures rebound from as traders seek refuge

Bloomberg worst sell-off in 30 years Athens What seemed unthinkable for Bloomberg currency volatility just a few weeks New York ago could soon be a reality. Turbulence has awoken from lethargy that sent hedging costs to S stock index futures rebound- record lows last year to reach multi- ed from the worst sell-off in 30 year highs. Uyears, surging to exchange- It may just be prepping the scene mandated levels that prevent further to revisit levels seen when the gains as hopes for a more robust policy global financial crisis crippled response increase. markets in 2008, several gauges Contracts on the S&P 500 that ex- suggest. pire in June rose to 2,582 in New York, At a time when the economic effects hitting the 5% cap on gains from a ref- of the pandemic remain unknown, erence price calculated by in the fi nal the ability of central banks to 30 seconds of trading. The underlying respond to the crisis is questioned index sank 9.5% on Thursday, leav- and a stock rout deepens, investors ing it 27% from a record set just three have no hesitation about paying up weeks ago and ending the longest bull and hedging. run in history. One-month implied volatility in Following the 10 worst days in S&P dollar-yen rose above 24% on 500 history, the average return is a Thursday to trade at levels unseen gain of 2.94%, according to Bespoke since January 2009. Investment Group. Thursday was the One-week volatility posted its fi fth biggest drop on record. widest one-day advance on record “The nature of the beast that we on Monday, only to hit a fresh cycle have been living with over past two high on Thursday. weeks is the inevitable relief bounce, The yen three-month cross-currency which in turn gets sold,” said Michael basis swap, meanwhile, is heading Purves, Tallbacken Capital Advisors for its widest drop since September LLC chief executive offi cer. “But one on a one-day net basis, and its fourth of the positive seems to be simply re- widest since 2015. turning to some sort of central-bank The moves follow a rush to borrow policy sort of working.” dollars as investors seek refuge Investors are looking to the Federal against the risk of a global recession, Reserve to fi ll the stimulus vacuum by and mark a sharp turnaround from supporting the economy and keeping last year. markets functioning. It unleashed a Volatility dropped after US-China trillion dollars on Thursday, but failed trade tensions and concerns of a to halt the stock market rout. The People pass the New York Stock Exchange yesterday. US stock index futures rebounded from the worst sell-off in 30 years, surging to exchange-mandated levels hard Brexit kept most central banks Trump administration hasn’t off ered that prevent further gains as hopes for a more robust policy response increase. from considering any tightening a fi scal stimulus package that was able plans. to calm investor nerves. unprecedented plan for $5tn in bond- number of economists are now warn- system, adding to investor gloom. composition of the Treasury market Risk reversals in dollar-yen, a gauge Bulls with ever fewer tidings to buying from the Federal Reserve could ing a downturn could be at hand – a Volatility has been rampant, with “The Fed announced a large pro- that shows the premium at which point at for hope can derive a modi- mollify investors rattled by the grow- Bloomberg Economics model places the S&P 500 seeing average daily gramme that was likely an attempt calls trade over puts and reveals cum of faith from valuations. After the ing likelihood that the coronavirus the odds of a recession happening swings of 5.7% over the past fi ve ses- to over-awe the market,” said Dennis market positioning and sentiment, rout, the index trades at 15 times last will plunge the global economy into over the next year at 52%, the highest sions. The index hasn’t seen two Debusschere, head of portfolio strat- are now trading at record levels in year’s profi ts, Bloomberg data show. recession. since 2009. back-to-back up days in a month. egy at Evercore ISI. “Will it succeed? favour of yen calls. Reduce those by the average rate in That was enough to send stocks into The wild swings have triggered Measures of share turbulence have Who knows. Will it signifi cantly re- The increased demand for yen seven decades of economic down- free fall on Thursday. trading halts during the cash session also spiked this week, with the Cboe duce plumbing concerns in credit calls in the past week is so steep it turns, and it’s still in the vicinity of “There’s no good news and it’s twice times this week. On multiple Volatility Index closing above 40 for markets? Yes.” suggests investors in panic mode. average. weighing on the market’s psyche,” said occasions, futures also reached the 5% the fi fth straight session. The Fed has been under height- Another driver of higher hedging The European Central Bank on Tom Essaye, a former Merrill Lynch bound on gains or losses stipulated by March contracts that expire in eight ened pressure to act as investors lost costs is that volatility is cheaper Thursday took a series of steps which trader who founded “The Sevens Re- the Chicago Mercantile Exchange. days are also subject to the price lim- faith in the US government’s ability to compared to turbulence in stocks still managed to disappoint inves- port” newsletter. “Everybody is wait- Those levels exist only because in- its. For them, they’ll be barred from produce a coherent policy response. and equities. tors and irritate politicians. Then on ing for good news, for the government vestors disappointed by Trump’s re- dropping further if they fall to 2,347 Trump addressed the nation Wednes- As the correlation between foreign- Friday Asian central banks including to act, to come out with a big impres- sponse to the outbreak dealt a fresh – or 5% from the reference price, or day with few details on fi scal stimu- exchange spot prices and volatility those of Korea, India and Japan moved sive plan – and we just keep waiting. blow on Thursday after the president from rising further if they rise to 2,595. lus plans but announced restrictions grows, there is even greater scope to to soothe markets. And the longer we wait, the more peo- said he doesn’t support House Demo- The Federal Reserve took steps on on travel from Europe to the US that turn to currencies to own exposure Norway slashed its key rate in an ple are doubting it so it’s adding to the crats’ package of measures to respond Thursday to ease what it called “tem- deepened the sense of alarm. over risk moves. unscheduled meeting. volatility.” to the virus. porary disruptions” in Treasuries. “We’re in for a bumpy ride,” Kim Even comments from the China That’s a shift from Thursday, when The spreading coronavirus and oil- At the same time, the director of Under the Fed’s existing program to Forrest, chief investment offi cer National Health Commission that measures proposed by President Don- price shock have ushered in the most the National Institute for Allergy and buy $60bn a month in securities, the at Bokeh Capital Partners, said in the peak of the virus outbreak in the ald Trump fi nally fell fl at and the Eu- volatile period in markets since the Infectious Diseases conceded that the purchases will be widened to include a phone interview. “Volatility will country is generally over weren’t ropean Central Bank’s easing of capi- fi nancial crisis, with investors react- lack of widespread testing for the virus coupon-bearing notes across a range continue until investors understand enough to offer any calm. tal constraints did little. Not even an ing to increasingly negative news. A is “a failing” of the US public health of maturities to match the maturity what’s happening.” For battered junk bond market, an old risk grows louder each day

Bloomberg meaning they have at least one BBB- or tries where it’s too late for them,” said Tom increasing travel fears, and Moody’s Inves- New York equivalent rating. Murphy, head of investment-grade credit tors Service may downgrade it as well. The The wall of worry that hangs over BBB at Columbia Threadneedle Investments. cost to protect debt of Macy’s Inc, which debt is helping to fuel an exodus from the That’s not to say that all of the nearly already has one high-yield rating, and Investors have long been sounding the corporate-bond market. A record $7.27bn $3tn worth of BBB debt will fall to high Kohl’s Corp hit record highs on Thursday. alarm: An unprecedented number of was yanked from investment-grade bond yield. For many investors and strategists, Some $270bn of BBB debt already companies had loaded up on cheap debt funds in the past week, on top of $4.8bn they’re squarely concerned with that trades at speculative-grade levels, ac- that left them hanging, just barely, onto pulled in the prior week. $868bn pile of debt sitting perilously in cording to Bloomberg Intelligence. That’s investment-grade credit ratings. A weak Billions of dollars of fallen-angel debt the lowest rung of investment grade. roughly 9% of the entire rating tier. business cycle, they said, could push those pouring into the market is the last thing Within that universe, companies like Investors have been calling for this rude companies into junk territory. that junk bond investors need as they try Occidental Petroleum are already feeling awakening for a while. And, in fact, many Now, that warning is moving closer to navigate what’s been three straight the pressure. companies took such warnings to heart than ever to reality. The double blow of a weeks of brutal losses. That additional The oil producer, which has recently and made 2019 the year of the “debt diet,” global pandemic and plunging oil prices is supply would threaten to further depress seen some of its bonds trade at less than marked by some of the largest issuers, like tipping the economy into recession. That prices and drive up junk yields that have 70 cents on the dollar, cut its dividend for AT&T Inc and Verizon Communications is making the lowest tier of investment- soared to 7.26 percentage points over the first time in 30 years to conserve cash, Inc, getting their balance sheets in order. grade companies vulnerable to down- Treasuries. In mid-February, that gap was yet analysts are still skeptical about its But most companies don’t have enough grades to high-yield status – a designation just 3.31 percentage points. ability to reduce debt. cash on hand to absorb a decline in earn- that could drive up their borrowing costs “There are a number of issuers priced Ford, with one junk rating already, may ings, “implying job cuts may come faster and set off a wave of selling from investors for perfection,” said Jonathan Terry, an get another sooner than expected as the and deeper than they have in previous who aren’t permitted to hold such low- investment-grade portfolio manager at virus hurts demand for cars, according economic downturns, excluding the finan- quality debt. Wells Fargo Asset Management. “Any the disease threatens their supply chains, may have to take action. While many to research firm CreditSights. Either com- cial crisis,” BMO strategist Daniel Belton Most at risk are debt-laden companies slippage in earnings is going to put them demand or both. It’s also rippled through companies can cut their dividend or sell pany would instantly become the largest said in a report on Wednesday. highly exposed to the economy, such closer to that edge.” credit markets, sparking selloff s reminis- assets to free up cash, not everyone has high-yield issuer if its debt left investment- Moreover, a big hit to corporate earn- as Ford Motor Co, Petroleos Mexicanos That slippage is already taking place. cent of when Lehman Brothers collapsed. those options, and for those who do, grade indexes. ings will “awaken anxieties” even about and Occidental Petroleum Corp. In all, The wobbly economy has prompted com- A drop in earnings will make debt that it still may not be enough to stave off Several smaller issuers are at risk, those companies that are already in the they hold roughly $868bn of debt that is panies to draw on credit lines, cut profit much more onerous, boosting lever- downgrades. too. S&P Global Ratings said it may cut process of deleveraging, said Citigroup Inc just one level above speculative grade, outlooks, or withdraw forecasts entirely, as age ratios to the point that credit raters “There will be companies across indus- Royal Caribbean Cruises Ltd to junk amid strategist Daniel Sorid. Gulf Times Saturday, March 14, 2020 7 BUSINESS

Vitol in talks to buy Global banks, wary of some China Venezuelan oil from Mexican IPOs in US, walk away from deals company

Bloomberg Bloomberg Hong Kong Houston

lobal banking giants have grown Vitol Group, the world’s biggest more wary of underwriting ini- independent oil trader, is nego- Gtial public off erings by Chinese tiating a purchase of Venezue- companies in the US, concerned about lan crude, according to docu- rising reputational risks after a string of ments and e-mails reviewed by disappointing deals. Bloomberg. This would be the The heightened scrutiny augurs a first time Vitol dealt with the harder sell for Chinese fi rms once the Latin American nation’s oil after market overcomes the current tumult. the US ratcheted up sanctions Even before the rout in equities that in January 2019 in a bid to oust began last month, 26 of the 33 Chinese Maduro. companies that went public in the US The proposed deal would be during 2019 were trading at less than for a cargo of about 500,000 their off er prices, according to data barrels, which Vitol may compiled by Bloomberg. take it to its ATPC refinery in That’s one of a number of concerns Antwerp, the documents show. among market participants. Geopoliti- The Rotterdam-based energy cal strains between the US and China, trader is considering buying particularly in technology, continue to the oil from Libre Abordo SA pose a challenge – the January trade de CV, a little-known Mexican deal notwithstanding. company that says it’s providing A push in Washington to consider humanitarian aid to Caracas in measures to reduce American capital exchange for crude. That would fl owing to Chinese securities adds to allow Vitol to steer clear of the the political element. US sanctions. Along with limited institutional in- Merchants can strike lucra- vestor demand for some names, it all tive deals from doing business means the hurdles may be too high for with countries like oil-rich Ven- smaller deals that lack transparent fi - ezuela, troubled by economic nancial backgrounds. collapse and sanctions that “Major investment bank interest in have undercut its ability to sell China’s off shore IPOs has been drop- the commodity that is its main ping,” said Brock Silvers, a managing source of income. Unable to sell director at Adamas Asset Manage- its oil and navigate the global ment in Hong Kong. “Given overhang- The corporate logo of Morgan Stanley is seen on a building in San Diego, California. Morgan Stanley discontinued work on the IPO of online insurance platform Huize financial system, Venezuela ing risks and lessened opportunities Holding in February, corporate filings show. has resorted to cashless barter for profi t, banks have begun to rethink deals that bring food and participation.” erg-compiled data show. There’s by provenance of investors on some deals overseas underwriters. International Suisse declined to comment. In De- gasoline. Among recent deals that saw global no means a wholesale retreat by Wall – a so-called “friends and family” co- banks have been walking away from cember, China’s largest rival to We- “Vitol operates its business banks walking away: Street from Chinese listings, and it’s hort that helps pump up order books, some smaller IPOs because the risks of Work, Ucommune, lost three interna- in full compliance with all Morgan Stanley discontinued work not unusual to see lenders pull out of potentially beyond true levels of mar- getting involved in these deals can be tional banks that had been working on relevant laws and regulations, on the IPO of online insurance platform individual transactions – or even a ket demand. Parallel practices have greater than the reward, said a person its planned US listing. including sanctions relating to Huize Holding Ltd this February, cor- whole sector of issuers, such as with spurred angst in China’s bond market. familiar with the matter who asked not Credit Suisse, Citigroup and Bank Venezuela,” the company said porate fi lings show. peer-to-peer credit providers early last “Sometimes the Chinese network to be named. of America dropped off the IPO, peo- in a statement. “Vitol would Credit Suisse Group AG dropped off year. But the recent moves are notable, is very strong and sometimes they Credit Suisse stopped work on the ple familiar with the matter said at the only consider receiving product the IPOs of Bitcoin mining equipment market participants say. may get suppliers or customers to EHang and Canaan listings after its time. Citi and Bank of America both of Venezuelan origin if it had maker Canaan Inc, drone maker EHang “The current environment has buy their shares,” said Ringo Choi, experience with 36Kr Holdings Inc in declined to comment. the relevant assurances that it Holdings Ltd and Xiaomi-backed pod- dampened enthusiasm,” Stephen the Asia-Pacific IPO Leader at Ernst November. With stock markets increasingly could do so lawfully.” cast app Lizhi Inc, fi lings show. Peepels, head of US securities for the & Young Global Ltd in Hong Kong. After a $20mn IPO, 36Kr tumbled volatile, market conditions elevate the The proposed deal was being Credit Suisse, Citigroup Inc and Asia-Pacifi c region at law fi rm Hogan “Banks may become concerned if more than 60% from its off er price – risks for underwriters concerned about discussed by a Vitol trader Bank of America Corp dropped off Lovells, said of increasing US-China they cannot do proper diligence on even after the size of the off ering was any post-IPO slumps. based in London, the docu- the planned IPO of Ucommune Group strains. “If they’re not confi dent that the investors or if some shareholders slashed by almost two-thirds and it “If you go through the whole process ments show. The cargo was Holdings Ltd, China’s largest rival to they can deliver good performance on become too influential.” was priced at the bottom of the range and at the end of the day it doesn’t hap- expected to be priced at $15.50 WeWork – late last year, according to the IPO price” then big banks would It’s not a factor that banks discuss marketed. pen, fi rst of all there are a lot of costs a barrel below Dated Brent people familiar with the matter then. rather avoid having their investor cli- publicly, as they seek work on big- The Swiss bank had concerns about involved,” said Stephen Chan, a partner benchmark, with payment to be The Chinese IPOs in the US last year ents involved, he said. ger offshore IPOs and indeed look market conditions around the time of at law fi rm Dechert LLP in Hong Kong. made in euros or Mexican pesos posted an average decline of 21%. Deal Another dynamic that’s sown con- to build a business in China’s do- the EHang and Canaan deals, a person “And also it’s a reputational issue if you against invoices of humanitari- sizes were cut in 14 of the 33, Bloomb- cern among some bankers is the murky mestic market, newly opening up to familiar with the matter said. Credit can’t bring a deal to life.” an goods, one document shows. In another document, Vitol says that if all goes well the company “could look at additional volume going forward.” Venezuela, once Latin Amer- ica’s largest oil producer, now China traders sense victory over markets, as well as virus churns out less oil than North Dakota. Plagued by widespread Bloomberg visited the city in the central Hubei Thursday, the hashtag ‘US stocks trig- Richly Rewarded” was widely shared stocks languished during the 11-year corruption, triple-digit inflation Beijing province on Tuesday, a move widely ger circuit breaker’ had more than online last month. Another is Yu Din- run bull market in the US, with the and a refugee crisis almost as read as a sign that the Communist 730mn views on Weibo, China’s version gheng at Shenzhen Flying Tiger Invest- Shanghai Composite gaining just 38% bad as war-stricken Syria, the Party believed the situation was under of Twitter, and 130,000 comments. ment & Management Co, who is confi - while the S&P 500 rallied as much as country struggles to sell its oil mong China’s equity trad- control. While offi cials fi rst came un- As one commentator wrote on Wei- dent about the government’s ability to 400%. after sanctions cut off access to ing community, a risky trium- der fi re for their initial botched han- bo: “US stock futures are nearing the support sentiment. China’s investors have also contend- the US, the biggest destination Aphalism is taking root. The na- dling of the virus, the extreme steps circuit breaker again – where are our “We still have a lot of cards on hand, ed with six bear markets since March for its crude. tion, the argument goes, is shielded that followed appear to have curbed its China bulls? Come out and show them be it monetary, fi scal or industrial 2009, and a massive bubble fi ve years After China’s biggest energy from global volatility and patriotic in- spread for now. what we’re made of with a big surge policies,” he said by phone. “In a state ago where attempts to contain panic company CNPC stopped buying vesting will be rewarded. Contrast the top-down approach today! Lets give them something to where power is highly concentrated, only spurred a further bout of selling. oil from Caracas, Venezuela It’s not hard to see why. The Shang- taken by Beijing with the perceived fume about!” you can get high effi ciency as long as Investors were so exasperated with the relied heavily on Russia to ped- hai stock benchmark has fared bet- chaotic response in the US and Europe, Such comments aren’t unusual on the decisions made are the right ones.” record $2.3tn loss in 2018 that they re- dle cargoes. But once the US ter than every major gauge in the past where new infections are rocketing. social media in China (or in the US, Chinese state media has been quick sorted to black humour as an outlet. imposed sanctions on Rosneft month, with others tumbling into bear The violent movements of global eq- where President Donald Trump has to promote the market’s resilience, But having faced overseas criticism Trading SA (RTSA), the Russian markets. uity markets are mirroring the growing tweeted about the stock market doz- given its obvious value in strengthen- for years about the lack of maturity company withdrew from the Against the S&P 500 Index, the Chi- panic overseas, with volatility spiking ens of times). But professional inves- ing support for the Communist Party. in the nation’s stock market, China’s Venezuelan market. nese index is near its highest level in al- to levels not seen since the global fi nan- tors are also starting to adhere to the When global markets sank to start the traders are relishing this moment of Cargo loadings of crude and most two years. It fell about 1.2% Friday cial crisis and US equities plunging the view that the resilience of Chinese week, a video posted by Hu Xijin, the stability. deliveries of gasoline to Maduro while benchmarks in Japan, Taiwan and most since 1987. fi nancial markets refl ect a kind of col- infl uential Global Times chief editor, While the risk is growing that such by Rosneft PJSC’s subsidiaries Korea all saw losses exceeding 2.5%. Given the recent trade war, and ac- lective renaissance. said China was an “independent an- outperformance could quickly evapo- RTSA and TNK Trading Interna- Fuelling Chinese confi dence is a cusations in the US that this a “Chinese One of those investors is Lin Qi, a chor of confi dence” and that optimism rate, investors are for now seizing the tional SA fell to zero, according sense that the country is gaining vic- virus,” a sense of competitive patriot- money manager at Lingze Capital in among the people was riding high. opportunity to make some serious to shipping data compiled by tory over the coronavirus that fi rst ism is adding stridency to the upbeat Shanghai whose article “Those Who It’s long been a bitter ride for inves- money, and bolstering the nation’s Bloomberg. spread in Wuhan. President Xi Jinping tone in Shanghai and Shenzhen. On Buy on Behalf of the Nation will Be tors in Chinese equities. The nation’s pride to boot.

Oil crash is a double-edged sword for LNG with projects at risk

Bloomberg straints from the coronavirus. “With els throughout the year, it could force taking FID in 2020 and 2021 will likely Singapore signifi cant downward pressure on backers and fi nancial institutions to translate into lower global supply be- spot LNG prices and oil prices, it could rethink their plans. tween 2024 and 2027, Giles Farrer, re- be the double-whammy that really “It has been: ‘times are tough now, search director at WoodMac, said on il’s rout may have been an un- starts to make some projects seem un- but the world will need this LNG, so Wednesday in a report. “This drop in expected boon for the biggest economic,” Jeff Moore, an analyst with we can’t let these short-term fun- supply could be good news, as this ul- Obuyers of liquefi ed natural gas, S&P Global Platts, said in an e-mail. damentals aff ect the longer-term timately will help bring the market into but its knock-on eff ects may come “If oil prices stay low for much of this strategic decisions’,” Angus Rodger, a balance,” Sanford C Bernstein analysts back to bite. year, I would imagine it could have a Singapore-based research director at said on Thursday in a report. “And the That’s because more than a dozen material impact on supply projects Wood Mackenzie Ltd, said in an inter- longer it takes for projects to be ap- proposed LNG export projects from looking to reach FID this year.” view earlier this week. “If we continue proved, the better the price recovery the US to Mozambique are at risk of Before oil’s recent crash, Bloomb- rattling at the bottom, it will have an will ultimately be for the market.” being delayed or scrapped as crude ergNEF had marked four projects as impact at some stage on companies’ Futures for the Japan-Korea careened to levels that make most of highly likely to reach FID in 2020, while willingness to make large capital com- Marker, a benchmark for LNG de- them unprofi table. another 15 were seen as potential can- mitments.” livered to northern Asia, are down If fewer of them come to fruition, didates or “wildcards,” according to a Most developers are looking to sell about 50% over the last year to that would ease a widening supply glut report published last month. BNEF is LNG at $8 per million British thermal $3.140 per million Btu. later this decade and potentially lift currently reassessing the timeline for units, which has become diffi cult un- Meanwhile, an LNG contract with a prices amid breakneck demand growth potential FIDs in light of the market der market prices, according to Trevor 12% slope to Brent crude is currently in Asia. crash and coronavirus outbreak. Sikorski, head of natural gas, coal and at about $3.93, compared with $8.27 in Almost 20 proposed export plants The multibillion-dollar export ter- carbon at London-based industry early January. are vying for a shrinking pool of capi- minals typically sell their output at a consultant Energy Aspects Ltd. “Companies looking to sanction tal after a record number of terminals price linked to crude and much will de- Brent crude’s forward curve shows new investments, both large one and reached fi nal investment decisions pend on how long the rout lasts. While oil hitting about $55 per barrel by 2029, smaller ones, will be running them on A Tokyo Electric Power Company employee and members of the media stand last year. Even before crude’s drop, projects are fi nanced based on long- a price level that isn’t profi table for any a much lower scenario, at least in the during a ceremony held inside the company’s liquefied natural gas storage tank developers were under pressure from term models because they take years of the proposed LNG projects, accord- short term,” said Woodmac’s Rodger. under construction at the Futtsu gas-fired thermal power plant in Japan. Oil’s rout a slump in global gas prices, milder to build and then operate for decades, ing to Sanford C Bernstein & Co. They will be making “decisions based may have been an unexpected boon for the biggest buyers of liquefied natural winter temperatures and demand re- if oil and gas prices stay at current lev- On the fl ip side, fewer LNG projects on maybe lower oil price scenarios. gas, but its knock-on eff ects may come back to bite. Gulf Times 8 Saturday, March 14, 2020 BUSINESS

DJIA WORLD INDICES Company Name Lt Price % Chg Volume Indices Lt Price Change Dow Jones Indus. Avg 21,560.45 +359.83 Apple Inc 255.49 2.92 9,972,957 S&P 500 Index 2,509.41 +28.77 American Express Co 86.40 3.44 554,862 Nasdaq Composite Index 7,309.12 +107.32 Boeing Co/The 162.28 4.80 2,232,817 S&P/Tsx Composite Index 12,761.38 +252.93 Caterpillar Inc 90.57 -1.83 686,917 Mexico Bolsa Index 37,905.54 +1,268.84 Cisco Systems Inc 33.43 0.69 4,556,613 Brazil Bovespa Stock Idx 74,782.70 +2,200.20 Chevron Corp 75.41 -1.11 1,381,199 Ftse 100 Index 5,312.71 +75.23 Walt Disney Co/The 94.49 2.92 3,803,796 Cac 40 Index 4,084.52 +40.26 Dow Inc 22.96 -3.00 1,690,574 Dax Index 9,121.25 -39.88 Goldman Sachs Group Inc 158.94 5.48 475,697 Ibex 35 Tr 6,529.20 +138.30 Home Depot Inc 194.36 1.98 583,410 Nikkei 225 17,431.05 -1,128.58 Intl Business Machines Corp 101.60 -1.18 1,112,098 Japan Topix 1,261.70 -66.18 Intel Corp 48.24 5.93 4,980,720 Hang Seng Index 24,032.91 -276.16 Johnson & Johnson 127.66 1.79 1,566,085 All Ordinaries Indx 5,590.68 +219.76 Jpmorgan Chase & Co 93.97 6.72 2,181,385 Nzx All Index 1,632.60 -83.49 Coca-Cola Co/The 47.31 0.32 1,718,535 Bse Sensex 30 Index 34,103.48 +1,325.34 Mcdonald’s Corp 169.61 -0.31 695,420 Nse S&P Cnx Nifty Index 9,955.20 +365.05 3M Co 133.00 -0.43 677,788 Straits Times Index 2,634.00 -44.64 Merck & Co. Inc. 73.41 -1.40 1,768,605 Karachi All Share Index 25,291.96 -19.01 Microsoft Corp 143.66 3.31 10,407,385 Jakarta Composite Index 4,907.57 +11.82 Nike Inc -Cl B 73.31 -1.20 1,684,448 Pfizer Inc 30.79 2.56 3,786,862 Procter & Gamble Co/The 106.73 4.80 1,349,121 Travelers Cos Inc/The 101.63 -0.54 333,644 TOKYO Unitedhealth Group Inc 248.85 -0.62 829,997 United Technologies Corp 100.36 -2.09 851,116 Company Name Lt Price % Chg Volume Visa Inc-Class A Shares 164.41 2.70 1,163,137 Nidec Corp 11,000.00 -9.17 2,757,400 Verizon Communications Inc 52.34 2.23 2,859,182 Isuzu Motors Ltd 743.00 -9.14 5,823,200 Walgreens Boots Alliance Inc 42.87 4.51 1,080,451 Unicharm Corp 3,156.00 -5.37 4,610,200 Walmart Inc 105.08 0.99 1,378,141 Nomura Holdings Inc 388.00 -5.96 39,850,300 Exxon Mobil Corp 35.21 -5.30 6,598,858 Daiichi Sankyo Co Ltd 5,696.00 -3.28 4,729,200 Subaru Corp 2,074.00 -3.74 10,407,800 Sumitomo Realty & Developmen 2,571.00 -13.38 4,764,300 FTSE 100 Ntt Docomo Inc 2,873.50 -1.29 14,906,900 Sumitomo Metal Mining Co Ltd 2,138.50 -3.82 3,387,000 Company Name Lt Price % Chg Volume Orix Corp 1,379.00 -3.80 15,880,500 Asahi Group Holdings Ltd 3,251.00 -7.64 4,167,700 Anglo American Plc 1,305.60 5.77 6,179,002 Keyence Corp 31,270.00 1.26 1,549,100 Associated British Foods Plc 1,827.00 -1.38 867,052 Mizuho Financial Group Inc 112.50 -4.66 450,899,000 Admiral Group Plc 1,976.00 4.72 754,961 Sumitomo Mitsui Trust Holdin 2,697.00 -8.41 3,578,200 Ashtead Group Plc 1,800.50 5.82 1,378,878 Japan Tobacco Inc 1,957.50 -4.00 19,660,100 Antofagasta Plc 640.80 4.71 2,709,086 Sumitomo Electric Industries 1,029.50 -7.17 7,495,300 Auto Trader Group Plc 443.00 1.93 2,558,853 Daiwa Securities Group Inc 386.50 -2.18 16,491,600 Aviva Plc 269.40 -0.96 16,668,434 Softbank Group Corp 3,764.00 -5.05 60,864,800 Astrazeneca Plc 6,239.00 -1.19 2,950,451 Panasonic Corp 769.70 -8.63 20,201,900 Bae Systems Plc 518.00 2.90 8,457,176 Fujitsu Ltd 9,074.00 -6.51 2,246,200 Barclays Plc 101.28 3.86 119,263,620 Central Japan Railway Co 15,180.00 -4.92 1,269,000 British American Tobacco Plc 2,657.50 2.80 6,014,675 Nitori Holdings Co Ltd 13,250.00 -6.56 816,400 Barratt Developments Plc 529.00 -4.62 5,492,212 Ajinomoto Co Inc 1,689.00 -2.96 5,414,800 Bhp Group Plc 1,020.20 8.56 17,378,966 Daikin Industries Ltd 11,860.00 -5.38 2,773,500 Berkeley Group Holdings/The 3,632.00 -0.25 791,747 Mitsui Fudosan Co Ltd 1,754.50 -10.67 13,416,800 British Land Co Plc 387.00 0.81 4,642,655 Ono Pharmaceutical Co Ltd 1,965.00 -3.08 3,068,200 Bunzl Plc 1,659.50 -0.42 929,273 Toray Industries Inc 447.60 -10.43 21,548,700 Bp Plc 273.25 -0.64 69,847,113 Bridgestone Corp 3,117.00 -3.23 6,435,500 Burberry Group Plc 1,371.00 5.02 1,741,661 Sony Corp 5,811.00 -1.21 26,823,200 Bt Group Plc 111.78 4.16 35,159,260 Astellas Pharma Inc 1,579.00 1.22 22,647,600 Coca-Cola Hbc Ag-Di 1,823.50 6.26 902,504 Visitors exit the Borsa Italiana, Italy’s stock exchange, which is part of the London Stock Exchange Group, in Milan. The FTSE Hoya Corp 8,367.00 -2.90 2,471,500 Carnival Plc 1,156.50 -10.28 2,934,640 Nippon Steel Corp 899.80 -3.94 11,921,700 MIB closed up 7.1% to 15,954.29 points yesterday. Centrica Plc 43.36 -0.44 33,837,785 Suzuki Motor Corp 3,215.00 -6.76 5,145,000 Compass Group Plc 1,181.00 -4.83 5,958,177 Nippon Telegraph & Telephone 2,357.00 -1.81 15,327,100 Croda International Plc 4,136.00 1.52 561,841 Jxtg Holdings Inc 326.70 -7.35 41,545,200 Crh Plc 2,053.00 1.68 1,923,835 Murata Manufacturing Co Ltd 4,989.00 -4.06 9,466,200 Dcc Plc 4,182.00 -3.64 1,239,178 Kansai Electric Power Co Inc 949.70 -11.66 8,963,700 Diageo Plc 2,435.00 2.48 6,199,396 Denso Corp 3,395.00 -4.01 5,126,800 Direct Line Insurance Group 276.00 1.17 5,377,076 Sompo Holdings Inc 3,057.00 -5.30 3,030,800 European stock markets and Evraz Plc 225.50 10.87 5,331,796 Daiwa House Industry Co Ltd 2,480.50 -7.77 4,111,800 Experian Plc 2,097.00 0.38 2,207,189 Dai-Ichi Life Holdings Inc 1,080.00 -6.13 11,411,400 Easyjet Plc 779.20 -2.50 3,218,233 Mazda Motor Corp 575.00 -5.58 11,910,300 Ferguson Plc 5,456.00 1.37 608,210 Komatsu Ltd 1,709.50 -5.05 18,978,900 Fresnillo Plc 547.40 -1.58 1,340,590 oil comeback rally fi zzles West Japan Railway Co 6,104.00 -6.84 1,851,500 Glencore Plc 133.50 5.02 51,246,395 Kao Corp 7,400.00 -4.82 5,320,200 Glaxosmithkline Plc 1,394.20 -0.74 12,231,871 Mitsui & Co Ltd 1,457.00 -3.99 18,186,000 Gvc Holdings Plc 480.10 -7.57 5,301,058 Daito Trust Construct Co Ltd 9,602.00 -4.31 882,700 Hikma Pharmaceuticals Plc 1,714.00 -1.32 393,784 Otsuka Holdings Co Ltd 3,424.00 -4.94 3,090,900 Hargreaves Lansdown Plc 1,301.50 7.47 1,321,399 on global recession fears Oriental Land Co Ltd 12,160.00 0.75 3,751,700 Halma Plc 1,837.50 1.46 826,824 Sekisui House Ltd 1,729.50 -5.05 5,623,300 Hsbc Holdings Plc 458.95 3.23 68,811,200 Secom Co Ltd 7,677.00 -5.22 2,254,600 Hiscox Ltd 1,070.00 2.29 1,225,982 AFP a state of emergency, it appears nobody no closer to ending their price war. Tokio Marine Holdings Inc 4,534.00 -4.31 4,484,100 Intl Consolidated Airline-Di 352.80 5.60 10,413,319 wants to be (holding) risk assets,” said Fears that travel restrictions and Aeon Co Ltd 1,883.00 -2.46 8,147,600 London Intercontinental Hotels Grou 3,326.50 -0.15 1,293,323 market analyst Chris Beauchamp at business closures will further dampen Asahi Kasei Corp 686.30 -7.08 9,295,300 3I Group Plc 727.40 1.96 2,609,344 online trading fi rm IG. energy demand have also pushed down Kirin Holdings Co Ltd 1,947.50 -4.42 8,004,300 Imperial Brands Plc 1,389.60 2.86 7,057,655 Marubeni Corp 536.90 -5.36 18,087,500 rebound in European and US The rally just provided more people prices. Informa Plc 504.00 -2.44 7,029,748 Mitsubishi Ufj Financial Gro 397.10 -5.09 239,996,000 stocks on hopes Washington with an opportunity to sell, he added. The price of Brent crude is now Intertek Group Plc 4,543.00 3.56 552,995 Mitsubishi Chemical Holdings 625.20 3.48 33,498,000 would agree on new stimulus “In reality, it is hard to see much down by 50% from the start of the year Itv Plc 84.70 1.03 21,466,215 A Fanuc Corp 14,325.00 -7.73 3,993,200 Johnson Matthey Plc 2,026.00 1.05 460,152 measures fi zzled yesterday as traders upside for stock markets until the US and just over third from the start of the Fast Retailing Co Ltd 46,230.00 -5.36 3,843,600 Kingfisher Plc 137.20 -1.82 9,068,500 closed out a week of carnage over fears has fought its way through the vi- month. Ms&Ad Insurance Group Holdin 2,780.50 -5.15 3,183,700 Land Securities Group Plc 689.00 -0.61 3,387,615 the coronavirus pandemic will trigger rus, something that may be at least On currency markets Friday, the Kubota Corp 1,204.00 -4.44 6,654,500 Legal & General Group Plc 191.15 4.54 28,239,969 Seven & I Holdings Co Ltd 3,422.00 -6.63 5,898,500 a global recession. a month away, and until then rallies, dollar hit a record-high against the In- Lloyds Banking Group Plc 37.69 1.88 278,936,164 Inpex Corp 596.00 -12.15 28,354,200 While the Dow shot 5.8% higher at even 10% ones, will be sold,” said dian rupee. London Stock Exchange Group 6,638.00 4.44 1,951,517 Resona Holdings Inc 308.20 -4.88 33,924,200 the opening bell, having dived 10% Beauchamp. The greenback fought back also Micro Focus International 429.95 -7.60 2,178,819 Fujifilm Holdings Corp 4,299.00 -6.97 4,581,500 against the yen despite the Japanese Marks & Spencer Group Plc 97.24 -10.34 15,588,366 on Thursday in its worst session since Despite Friday’s gains, Europe’s Yamato Holdings Co Ltd 1,393.00 -7.56 4,383,900 Mondi Plc 1,336.00 2.77 2,374,946 1987, in midday trading it was up just main stock markets were still down unit’s haven position. Chubu Electric Power Co Inc 1,271.00 -6.95 5,144,800 Melrose Industries Plc 139.45 -1.20 18,119,411 1.6%. In Europe, stocks also surged heavily for the week. “Most worryingly, US bond yields Mitsubishi Estate Co Ltd 1,476.00 -9.23 16,437,000 Wm Morrison Supermarkets 168.95 2.49 8,654,426 higher as they sought to erase Thurs- London was down 17%, Frankfurt rose...when really the situation was Mitsubishi Heavy Industries 2,648.00 -6.30 4,041,200 National Grid Plc 855.40 2.37 8,768,761 Sysmex Corp 6,468.00 1.44 1,350,500 day’s massive losses, with Milan up and Paris 20%, and Milan 23%. The ripe for a mass stampede to the US Nmc Health Plc 938.40 0.00 - Shiseido Co Ltd 5,792.00 -6.23 6,466,400 over 17% at one point, but it fell back markets has wiped trillions of dollars Treasury market driving down yields,” Next Plc 4,441.00 1.23 785,714 Shionogi & Co Ltd 4,770.00 -6.73 2,730,800 and ended the day with a 7% gain. off the globe’s combined company val- said Jeff rey Halley, senior market ana- Ocado Group Plc 1,167.50 8.40 2,698,319 Terumo Corp 3,072.00 -5.10 7,440,100 #N/A Invalid Security 0.00 0.00 - London, Frankfurt and Paris, which uations in just a few weeks. lyst at OANDA. Tokyo Gas Co Ltd 2,184.50 -4.94 3,689,700 Prudential Plc 865.60 -2.17 12,202,550 all posted double digit losses on Thurs- “In mere weeks, the market has “That suggests two things: One, Tokyo Electron Ltd 18,840.00 -6.39 3,519,100 Persimmon Plc 2,036.00 -4.99 2,934,005 day, were all up over 7% at one point. shifted gears from a transitory health credit is tightening — a gruesome sce- East Japan Railway Co 7,330.00 -6.09 3,061,800 Pearson Plc 528.60 3.40 2,347,777 But London closed up 2.5% and Paris scare to a full-blown global reces- nario for business. Itochu Corp 2,014.00 -5.98 14,453,500 Reckitt Benckiser Group Plc 5,330.00 3.50 1,823,440 Ana Holdings Inc 2,442.00 -7.59 6,603,800 1.8%. Frankfurt, which dipped in and sion,” said AxiCorp market strategist Two, investors are now moving to Royal Bank Of Scotland Group 130.15 3.54 20,580,241 Mitsubishi Electric Corp 1,175.50 -3.21 17,323,100 out of negative territory despite the Stephen Innes. the ultimate haven — hoarding cash in Royal Dutch Shell Plc-A Shs 1,107.00 -1.77 21,233,021 Sumitomo Mitsui Financial Gr 2,644.00 -5.39 21,017,200 government pledging unlimited loans “Global supply chains are no longer boxes under the bed.” Royal Dutch Shell Plc-B Shs 1,075.60 -2.22 31,586,044 Relx Plc 1,507.00 0.27 8,110,281 to businesses, ended the day 0.8% just ‘disrupted’ but are now in the In London, the FTSE 100 closed up Rio Tinto Plc 3,231.50 8.88 5,939,552 higher. process of shutting down completely,” 2.5% to 5,366.11 points; Frankfurt — Rightmove Plc 533.20 3.37 3,104,635 SENSEX Markets had pushed higher on signs he added. DAX 30 ended up 0.8% to 9,232.08 Rolls-Royce Holdings Plc 459.90 1.93 7,557,182 that the White House and Congress Oil prices, which also initially re- points; Paris — CAC 40 closed up 1.8% Rsa Insurance Group Plc 425.90 0.02 3,990,742 Company Name Lt Price % Chg Volume are getting close to agreeing on more bounded from Thursday’s losses, sank to 4,118.36 points and Milan — FTSE Rentokil Initial Plc 430.00 1.82 3,025,788 Adani Ports And Special Econ 292.75 1.77 21,079,070 measures to support the US economy. back into the red as the day wore on as MIB ended up 7.1% to 15,954.29 points Sainsbury (J) Plc 176.45 0.86 8,037,812 Asian Paints Ltd 1,797.70 -2.48 3,878,660 yesterday. Schroders Plc 2,199.00 4.81 1,322,356 “Now, as Trump prepares to declare it appeared Saudi Arabia and Russia are Axis Bank Ltd 568.80 4.70 25,599,380 Sage Group Plc/The 576.80 3.00 2,837,760 Bajaj Finance Ltd 3,952.55 5.84 4,849,922 Segro Plc 743.20 1.25 3,588,853 Bharti Airtel Ltd 491.85 5.79 23,807,651 Smurfit Kappa Group Plc 2,210.00 4.74 788,219 Bharti Infratel Ltd 227.25 2.69 10,869,358 HONG KONG HONG KONG Standard Life Aberdeen Plc 206.90 1.07 13,078,586 Bajaj Auto Ltd 2,357.10 0.78 883,265 Ds Smith Plc 270.30 0.90 6,605,660 Bajaj Finserv Ltd 7,742.00 4.09 595,673 Company Name Lt Price % Chg Volume Company Name Lt Price % Chg Volume Smiths Group Plc 1,025.50 0.94 1,592,181 Bharat Petroleum Corp Ltd 376.05 9.22 25,412,132 Scottish Mortgage Inv Tr Plc 526.50 2.63 5,629,907 Ck Hutchison Holdings Ltd -5.29 Cipla Ltd 425.55 7.80 6,096,909 55.45 29,408,740 Hong Kong & China Gas 14.70 -1.87 74,922,199 Smith & Nephew Plc 1,293.00 -1.97 4,787,736 Hang Lung Properties Ltd -0.60 Coal India Ltd 154.10 -0.29 43,328,031 16.50 27,247,477 Bank Of Communications Co-H 4.78 -2.05 66,318,900 Spirax-Sarco Engineering Plc 8,070.00 3.79 223,244 Ck Infrastructure Holdings L -5.23 Dr. Reddy’s Laboratories 2,885.10 1.22 986,034 48.95 6,257,201 China Petroleum & Chemical-H 3.69 0.54 383,125,418 Sse Plc 1,295.00 4.14 4,936,495 Hengan Intl Group Co Ltd 1.39 Eicher Motors Ltd 17,672.15 4.71 279,403 58.30 9,475,787 Hong Kong Exchanges & Clear 238.20 -0.08 12,435,490 Standard Chartered Plc 431.20 3.11 13,183,515 China Shenhua Energy Co-H 0.74 Gail India Ltd 84.55 5.75 29,168,003 13.56 58,815,669 Bank Of China Ltd-H 2.99 -0.33 708,065,269 St James’s Place Plc 778.60 2.80 1,848,808 Cspc Pharmaceutical Group Lt -0.12 Grasim Industries Ltd 604.95 8.06 6,184,972 16.44 65,280,217 Hsbc Holdings Plc 45.70 -2.04 127,327,773 Severn Trent Plc 2,257.00 2.82 990,860 Hang Seng Bank Ltd -0.36 Hcl Technologies Ltd 492.90 -0.09 6,859,998 139.40 5,902,216 Power Assets Holdings Ltd 52.30 -5.42 9,819,649 Tesco Plc 218.60 3.50 42,981,153 China Resources Land Ltd -0.88 Housing Development Finance 2,066.80 10.19 14,173,637 33.90 28,161,053 Mtr Corp 40.60 -0.85 9,057,392 Tui Ag-Di 357.90 -7.09 4,356,266 Ck Asset Holdings Ltd -3.00 Hdfc Bank Limited 1,069.80 4.75 33,171,603 42.10 21,529,512 China Overseas Land & Invest 25.25 -2.32 32,067,219 Taylor Wimpey Plc 149.20 -4.76 18,456,484 Sino Biopharmaceutical 0.91 Hero Motocorp Ltd 1,883.95 -1.22 1,184,616 11.08 101,593,335 Tencent Holdings Ltd 365.00 0.39 57,400,466 Unilever Plc 3,837.50 -0.36 3,524,473 Henderson Land Development -2.32 Hindalco Industries Ltd 127.45 6.03 15,365,436 33.65 19,374,865 China Unicom Hong Kong Ltd 5.00 -4.58 79,110,946 United Utilities Group Plc 864.00 6.17 3,173,347 Aia Group Ltd 0.44 Hindustan Petroleum Corp 197.60 7.27 10,630,895 69.10 74,608,006 Link Reit 73.30 -2.98 17,512,593 Vodafone Group Plc 105.06 1.08 89,176,243 Ind & Comm Bk Of China-H 0.00 Hindustan Unilever Ltd 2,033.20 -1.11 3,667,035 5.25 777,849,097 Sino Land Co 8.99 -3.85 16,864,458 John Wood Group Plc 227.10 -5.88 7,583,145 Want Want China Holdings Ltd -3.92 Icici Bank Ltd 447.20 5.06 67,105,024 5.63 31,493,901 China Resources Power Holdin 8.26 -5.38 16,913,115 Wpp Plc 551.00 -0.90 5,498,067 Sun Hung Kai Properties -1.07 Indiabulls Housing Finance L 163.60 0.00 37,208,693 102.00 12,665,871 Petrochina Co Ltd-H 2.58 0.78 433,210,613 Whitbread Plc 2,562.00 -0.70 965,128 New World Development -3.73 Indusind Bank Ltd 803.75 2.43 21,139,779 8.77 39,910,347 Cnooc Ltd 7.93 1.54 294,020,441 Geely Automobile Holdings Lt 0.47 Infosys Ltd 642.35 1.77 16,903,140 12.86 99,031,244 China Construction Bank-H 6.34 0.16 1,042,913,308 Swire Pacific Ltd - Cl A -0.96 Indian Oil Corp Ltd 92.25 4.95 41,589,406 61.90 3,576,385 China Mobile Ltd 52.90 -4.60 62,702,608 Sands China Ltd -5.06 Itc Ltd 162.25 4.14 61,592,332 30.95 40,751,358 TOKYO Wharf Real Estate Investment -0.15 Jsw Steel Ltd 214.90 5.76 12,883,941 33.90 12,617,832 Clp Holdings Ltd -3.72 Kotak Mahindra Bank Ltd 1,470.05 0.34 11,408,950 77.70 10,883,548 Country Garden Holdings Co -1.86 Company Name Lt Price % Chg Volume Larsen & Toubro Ltd 1,051.45 3.43 8,117,968 9.49 70,910,037 Aac Technologies Holdings In -1.29 Mahindra & Mahindra Ltd 428.85 1.30 6,230,433 45.75 24,459,499 GCC INDICES Japan Airlines Co Ltd 1,927.00 -12.51 11,023,400 Shenzhou International Group -6.66 Maruti Suzuki India Ltd 5,838.60 3.46 1,480,275 84.05 17,135,322 Indices Lt Price Change Recruit Holdings Co Ltd 2,937.00 -4.18 14,243,300 Ping An Insurance Group Co-H -1.17 Ntpc Ltd 98.05 3.92 49,533,058 80.40 84,255,041 Softbank Corp 1,426.00 -0.49 26,169,000 China Mengniu Dairy Co 26.70 -1.11 16,114,552 Oil & Natural Gas Corp Ltd 65.90 5.44 73,052,306 Doha Securities Market 8,230.41 -382.95 Kyocera Corp 5,691.00 -7.06 4,433,600 Sunny Optical Tech 1.98 Power Grid Corp Of India Ltd 167.90 1.08 25,097,373 118.50 21,363,956 Nissan Motor Co Ltd 382.70 -1.97 50,526,300 Boc Hong Kong Holdings Ltd 23.40 -1.68 23,991,908 Reliance Industries Ltd 1,105.30 3.98 33,509,757 Kuwait Stocks Exchange 4,234.40 +6.85 T&D Holdings Inc 795.00 -3.75 6,230,100 China Life Insurance Co-H -2.96 State Bank Of India 242.00 13.83 155,703,140 15.76 115,894,794 Toyota Motor Corp 6,084.00 -3.57 15,844,300 Citic Ltd 8.24 -2.37 45,278,393 Sun Pharmaceutical Indus 384.20 8.29 15,802,656 Oman Stock Market 3,733.72 -98.32 Kddi Corp 2,763.00 -9.47 24,717,500 Galaxy Entertainment Group L -2.34 Tata Steel Ltd 326.70 13.65 33,842,310 48.05 44,119,273 Nitto Denko Corp 4,405.00 -6.57 2,606,000 Wh Group Ltd 7.13 -1.66 114,557,744 Hitachi Ltd 2,889.00 -4.56 8,892,500 Tata Consultancy Svcs Ltd 1,806.30 2.06 8,029,725 Takeda Pharmaceutical Co Ltd 3,105.00 -7.95 19,281,800 Tech Mahindra Ltd 655.95 0.94 4,553,639 Jfe Holdings Inc 740.00 -2.25 9,549,100 Titan Co Ltd 1,084.35 0.71 4,337,351 Sumitomo Corp 1,215.00 -7.29 15,465,200 Tata Motors Ltd 89.75 1.99 106,153,102 Canon Inc 2,131.50 -5.96 13,869,600 Upl Ltd 410.85 -7.38 9,712,611 “Information contained herein is believed to be reliable and had been obtained from sources believed to be reliable. The Eisai Co Ltd 6,866.00 -7.09 2,487,500 Ultratech Cement Ltd 3,788.90 3.42 1,378,943 accuracy and completeness cannot be guaranteed. This publication is for providing information only and is not intended Nintendo Co Ltd 33,220.00 -4.60 3,190,900 Vedanta Ltd 84.05 5.26 45,056,264 as an off er or solicitation for a purchase or sale of any of the financial instruments mentioned. Gulf Times and Doha Bank Shin-Etsu Chemical Co Ltd 9,467.00 -8.27 4,480,700 Wipro Ltd 197.40 -0.85 6,521,699 or any of their employees shall not be held accountable and will not accept any losses or liabilities for actions based on Mitsubishi Corp 2,246.50 -4.38 14,996,000 Yes Bank Ltd 25.55 2.00 276,663,954 this data.” Smc Corp 38,440.00 1.00 765,200 Zee Entertainment Enterprise 182.80 -4.12 12,852,019

Gulf Times 10 Saturday, March 14, 2020 BUSINESS

Executives worldwide slash their own pay in coronavirus crunch

Bloomberg mostly symbolic but could also presage Europe — a move that sent European a reduction. A few years ago, American lower down in the organisation more companies that provide services like New York more drastic measures. airline and travel stocks to their lowest Airlines CEO Doug Parker elected to than the people at the top since a airport security and baggage handling “Whenever a CEO asks for concessions level since 2013. Two weeks ago, Thai forgo salary and bonuses and instead significant part of compensation at — Certis and Sats — will absorb salary in times of financial strain, the first Airways said senior executives would gets paid solely in equity awards. the top is comprised of incentives, cuts of as much as 15%, Straits Times From Dallas to Singapore and beyond, question is almost always: ‘Are you voluntarily give up a quarter of their Shares of American have tumbled 43% which presumably are not cut,” said reported. corporate managers are surrendering feeling the pain, too?’” said Michael salaries for six months. this year through Wednesday. Robin Ferracone, CEO of executive- “CEOs are acutely aware of how millions of dollars of compensation as Maslansky, CEO of communications Others have followed with salary cuts The concessions won’t have a major compensation advisory firm Farient the market and public react to their anticipation builds that the worst is yet advisory firm maslansky + partners. or pay freezes, including El Al Israel impact at most firms. Salaries make Advisors. peers” who elect to reduce their pay, to come with the coronavirus. “The only way to make an employee- Airlines, Singapore Airlines, Air New up only a fraction of compensation The virus has squeezed companies in Maslansky said. “So when the first one Top executives and board members wide pay cut possible is if management Zealand, Australia’s Qantas Airways, packages for US executives at big many industries. goes, others quickly follow.” at more than 20 companies on four leads by example.” UK-based Virgin Atlantic, Sweden’s SAS public companies, with the rest coming Singapore’s national postal service At Anheuser-Busch InBev, CEO Carlos continents — about half of them airlines The virus outbreak, declared a and Cebu Air, the largest budget carrier as bonuses or equity awards. Corporate will cut and freeze pay for upper-level Brito last month was denied a bonus for — agreed to cuts, freezes or forfeitures pandemic on Wednesday by the World in the Philippines. bosses abroad tend to get paid far less. managers. Executive directors at Hong the second half of 2019 after costs ate of salaries and bonuses in recent weeks. Health Organisation, has sickened In the US, the top two bosses at United For example, the salary cuts for United’s Kong-based jeweller Chow Tai Fook will into the company’s profit growth and The tally also includes firms that handle at least 125,000 people globally Airlines will give up their salaries at Oscar Munoz and Scott Kirby will save take a 30% pay cut through April to ride the coronavirus sapped demand for its airport baggage, organise trips and sell and killed more than 4,600, forcing least through midyear. At Dallas-based the company less than $1mn, according out the diff icult times along with their beers in parts of China, where traff ic to jewellery. many companies to curtail or change Southwest Airlines, CEO Gary Kelly will to calculations by Bloomberg News. employees. bars and nightclubs ground to a halt. In some cases, the cuts were coupled operations. take a temporary cut of 10%. JetBlue A 20% pay cut for SAS CEO Rickard Australian travel agencies Helloworld “If you own a bakery and don’t make with planned employee furloughs or The reductions have been especially Airways’ Robin Hayes will forfeit 20% of Gustafson would save the firm roughly Travel and Webjet will cut pay for any money one year, you don’t get a broader payroll reductions. But other prominent among airlines, occurring base pay. $260,000 annually. But some firms their top leaders by as much as 30%, bonus — this is the same thing,” Brito chief executive off icers have trimmed even before President Donald Trump Delta Air Lines didn’t immediately may elect to make deeper cuts if the while other executives also will take said at a news conference in Leuven, their pay voluntarily in a show of on Wednesday announced a 30-day respond to emailed questions about situation worsens. reductions. Belgium. “After a bad year, that’s when solidarity — moves that usually are restriction on travel to the US from whether CEO Ed Bastian has considered “Widespread cuts probably hurt people And senior leaders at two Singaporean you see leaders rising to the occasion.”

Coronavirus impact on Virus is ending a 16-year plane economy ‘short-term boom for Boeing and Airbus issue’: Mnuchin

Bloomberg 11, 2001. During that span, the com- AFP London pound annual growth rate of revenue Washington for Boeing and Airbus and their con- stellation of suppliers was about mi- oeing Co and Airbus SE, which nus 11%, by Aboulafi a’s calculation. President Donald Trump is “very close” until recently couldn’t make The correction would be more to reaching a stimulus agreement with Bplanes fast enough to satisfy devastating if airlines hadn’t already US lawmakers to fight the economic airlines, are suddenly contending cut back because of other problems: damage from the coronavirus with the opposite risk: churning out The 737 MAX grounding last year, outbreak that has sent markets jets with no buyers. industrial foul-ups that have de- plunging and disrupted businesses, Demand for new aircraft is drying layed Airbus’s narrow-body jets and Treasury Secretary Steven Mnuchin up as customers wary of the coro- durability issues that have plagued said yesterday. navirus shun air travel, ending the the three major jet engine manu- The fears surrounding the virus has longest boom in aviation history. facturers, said consultant Adam Pi- pushed Wall Street indices into a That 16-year surge began as airlines larski, former chief economist for bear market, shut down Disneyland emerged from another infectious McDonnell Douglas before it merged and Broadway, and led major sports disease crisis, the one related to Se- with Boeing. leagues to cancel or postpone their vere Acute Respiratory Syndrome, “If all the airplanes that were or- seasons, but Mnuchin called the or Sars. Now the new virus points to dered that were supposed to be de- slowdown a “short-term issue.” leaner times. livered would have come, this bubble The president is committed to getting In less than a month, the tumult would’ve been enormous,” Pilarski a “major stimulus package” through has clipped about $175bn in market said. “But we started defl ating it by Congress, Mnuchin told CNBC, but he value from the US aerospace indus- having incompetent manufacturers. did not provide specifics. try, a critical source of American Luckily it’s all of them.” Options include a payroll tax cut and exports. And the future looks just as Still, United President Scott Kirby other ways to provide funds for people grim. Passenger revenues could drop is among those warning there will who cannot work because of the virus. as much as $113bn this year if the vi- be more airline failures, particularly “There’s no question there’s a short- rus spreads extensively, according to outside of the US. When carriers term economic issue, but we will get the International Air Transport As- shut down, they leave behind fl eets through this.” sociation, the largest global airline of used planes — further crimping Mnuchin spoke after the Dow had trade group. demand for new models. dived 10% in Thursday trading, even “I personally think it will get Assembly of Boeing’s 787 Dreamliner at the company’s factory in Everett, north of Seattle. Boeing and Airbus, “Airlines are desperate to cut ca- as the US Federal Reserve moved to worse before it gets better,” said which were rolling in cash while airlines went on a $1.15tn buying binge stretching back to 2008, are now intently pacity, costs and crew, but cannot do inject $1.5tn of cash into markets this Domhnal Slattery, chief executive focused on preserving capital and avoiding making “white tails.” it quickly enough,” said Shukor Yu- week and broadened its purchases offi cer of Avolon Holdings Ltd, the sof, founder of aviation consultant of US Treasury debt — both moves third-largest global aircraft leasing cording to a person familiar with the discussions with some customers cial, production and fi nance teams Endau Analytics in Malaysia. “There reminiscent of the global financial company. matter. to defer pre-delivery payments, ac- monitor a number of parameters on will soon be airlines going out of crisis in 2008. Boeing and Airbus, which were Chicago-based Boeing was al- cording to a person familiar with the a daily, weekly and monthly basis,” a business.” Mnuchin vowed in the interview that rolling in cash while airlines went ready contending with a drop in ad- matter. spokesman said. A line of unused luggage trolleys banks would have enough liquidity, on a $1.15tn buying binge stretch- vance payments from customers of Boeing said it is closely monitor- Airline traffi c is expected to con- stand in the empty departure termi- saying once the virus is overcome “the ing back to 2008, are now intently its 737 MAX aircraft, grounded after ing the market and customer needs. tract this year for only the fourth nal at Ben Gurion International air- economy will be stronger than ever.” focused on preserving capital and two crashes. Now that plane is near- The company has already drawn time since the Great Depression, al- port in Tel Aviv, Israel, on March 10. He also encouraged people to buy avoiding making “white tails.” That’s ing a return to service at a time when down $7.5bn of the $13.8bn it bor- though the full impact will depend Others are more optimistic, not- stocks, rejecting the need to close the industry term for buyer-less air- few airlines want new aircraft. rowed in January to help bolster cash on how long the Covid-19 virus con- ing that other outbreaks ended in markets, and said he would be willing craft. Even well-heeled carriers such FlyDubai is seeking concessions until the MAX is back in the market. tinues to spread, said Ron Epstein, a matter of months, and pent-up to fly commercial airlines. as Delta Air Lines Inc and United from Boeing on price and delivery “Managing our liquidity and bal- an analyst with Bank of America demand for travel will return. Over “Not everybody who has sniff les will Airlines Holdings Inc, are carefully schedules for the 251-plane order, ance sheet are key focus areas,” a Corp. Oil prices are also plunging af- more than a half century, commer- have the coronavirus,” Mnuchin said. assessing plans to add new jetliners. according to a person familiar with spokesman said, adding that it will ter Saudi decided to remove pricing cial aviation has weathered so-called The Dow regained about 5% in early Travel restrictions related to the the matter. The talks are wrapped “assess all levers to help provide ad- curbs, giving airlines less incentive “black swan” events where air traffi c trading Friday. pandemic are preventing airline rep- into compensation negotiations equate liquidity as we navigate the to trade in older, less fuel-effi cient stalls, only to come back stronger in Since breaking out in China, the resentatives from China, the biggest that have yielded around $250mn current challenges.” models. the end, said John Plueger, CEO of Covid-19 virus has killed more than international market for new air- through February, the person said, During periods of tumult, Tou- “We’re defl ating from a very high Air Lease Corp, the largest publicly 5,000 people as of yesterday and planes, from even visiting Boeing’s asking not to be identifi ed discuss- louse, France-based Airbus sets up altitude and that’s concerning,” said traded US aircraft lessor. spread globally with cases topping delivery centre in Seattle or Airbus’s ing private deliberations. The MAX what it describes as a “watch tower.” Richard Aboulafi a, aerospace ana- “There’s no doubt in my mind that 134,000, according to an AFP tally. in France to test-fl y and sign owner- order has a list value of about $30bn That involves devoting extra person- lyst with Teal Group. “We’ve had one this, too, shall pass,” he said. Health authorities have warned ship papers for new jets. before customary industry dis- nel to help distressed customers de- very bad year of traffi c, and it’s going But with China reeling and glo- that the outbreak is already well- Cathay Pacifi c Airways said on counts. lay aircraft orders, as well as letting to be followed by an even worse year balisation waning, the 2020s are entrenched in the US: the state of Ohio Wednesday that it’s in talks with The collapse in long-range fl y- opportunistic buyers jump the line. of traffi c.” likely to be a sobering comedown likely has more than 100,000 people manufacturers to defer handovers, ing threatens another critical source The company was able to move more On the sidelines of last week’s from the frothy era that followed the carrying the new coronavirus, its while Malaysia’s AirAsia X has said of cash for Boeing: deliveries of its than 600 orders around in this way ISTAT Americas conference of air- 2008 fi nancial crisis. health department said Friday. it will hold off on deliveries of Air- 787 Dreamliners, which can carry between 2009 and 2011, following craft fi nanciers, manufacturers and “We’re into a decade of cooling the Meanwhile at least six US states have bus A330neo aircraft. Transatlantic passengers from Sydney to Chicago the last global economic shock. operators in Austin, Texas, execu- jets and sticking to the knitting,” Avo- ordered schools to close as confirmed discounter Norwegian Air Shuttle without refuelling. The European plane manufacturer tives looked for parallels to the indus- lon’s Slattery said. “I think it’s a dec- infections in the country climbed to ASA is seeking to postpone receipt To keep wide-body handovers to is using the same system to manage try slump that lasted two years after ade of growth, but I don’t think it’s the more than 1,660 people. of four Boeing 787 Dreamliners, ac- Asian carriers on track, Boeing is in coronavirus impact, as “commer- the terrorist attacks on September pace we saw over the last decade.” Musk’s top concern now is SpaceX getting to Mars before he dies

Bloomberg a harder time than expected pulling off its first link was likely to be spun out and taken public, with- Detroit missions to send astronauts to the International out giving a time frame, Musk said the company Space Station for the National Aeronautics and was doing “zero” thinking about an IPO. The focus is Space Administration. The first such voyage is instead on making sure the service reliant on a low While others worry about economies slipping expected as soon as this spring, later than Nasa Earth orbit satellite constellation will work. into recession and markets melting down, Elon and its contractor hoped. Boeing Co, which is also “Guess how many LEO constellations didn’t go Musk’s biggest concern is that his rocket company trying to fly astronauts for the US agency, is even bankrupt? Zero,” he said, listing off companies SpaceX may fail to accomplish its foundational further behind. including Iridium, Orbcomm, Globalstar and mission — getting to Mars — before he dies. “Unless we improve our rate of innovation dra- Teledesic. “We just want to be in the not-bankrupt “If we don’t improve our pace of progress, I’m matically, then there is no chance of a base on the category. That’s our goal.” definitely going to be dead before we go to Mars,” moon or a city on Mars,” Musk said. “This is my Morgan Stanley estimates it will cost SpaceX Musk said at the Satellite 2020 conference in biggest concern.” $10bn to $15bn to complete the Starlink network. Washington on Monday. “If it’s taken us 18 years Musk started speaking on Monday about 40 This and other variables highlight the need for just to get ready to do the first people to orbit, minutes after Tesla closed down 14% to $608, the the company to raise capital privately or publicly, we’ve got to improve our rate of innovation or, lowest in roughly six weeks, as new coronavirus analysts led by Armintas Sinkevicius wrote in a based on past trends, I am definitely going to be fears spelled the worst day for US stocks since report. CNBC reported on Monday that SpaceX is dead before Mars.” 2008. The stock pared losses along with the raising about $500mn of new funding at a roughly The 48-year-old chief executive off icer of both Tes- broader market on Tuesday, trading up 2.8% as of $36bn valuation. la Inc and Space Exploration Technologies Corp 11:20am in New York. Musk, who started his keynote about 40 minutes has been much more upbeat in past interviews The billionaire downplayed the level of attention late, said he was tardy because he had travelled about the odds that — as he puts it — humans will SpaceX is paying to publicly listing any stock of from Boca Chica, Texas, where SpaceX has been become a multi-planetary species. In November its own anytime soon. Starlink, the company’s working on Starship, the next-generation launch 2018, he told Recode that closely held SpaceX was burgeoning satellite business, plans to beam vehicle he plans to use to eventually transport aiming to get to Mars in 2024, and told Axios that broadband to consumers who don’t have Internet, humans to Mars. He estimated the annual revenue Elon Musk, CEO for Space Exploration Technologies Corp (SpaceX), speaks during an event at there was a 70% chance that he personally would or struggle with slower service, starting this year. opportunity related to the company providing the SpaceX headquarters in Hawthorne, California. “If we don’t improve our pace of progress, I’m go. While Gwynne Shotwell, SpaceX’s COO, said at a broadband is about $30bn, about 10 times greater definitely going to be dead before we go to Mars,” Musk said at the Satellite 2020 conference in But SpaceX, which was founded in 2002, has had private investor event last month in Miami that Star- than the potential for its launch business. Washington. Gulf Times Saturday, March 14, 2020 11 BUSINESS

Disney to shut California parks through March over coronavirus

Reuters designed to limit transmission Los Angeles of the highly contagious respiratory virus by curtailing close contacts among people. Walt Disney Co will close its Ohio and Maryland have Disneyland and California ordered statewide closures of Adventure theme parks in public schools. Southern California from Disney-run hotels in Anaheim Saturday through the end of will remain open through the month due to the global Monday to give guests time to outbreak of coronavirus, the make travel arrangements, the company said on Thursday. company said. No cases of Covid-19, the Disney will pay its employees disease caused by the during the shutdown and novel coronavirus, have refund payments for hotel been reported at the parks bookings, it added. in Anaheim, California, a Located about 30 miles company representative said (48km) south of Los Angeles, in a statement. the two Disney parks drew The announcement coincided 28.6mn visitors in 2018, with statewide restrictions according to the Themed on public gatherings ordered Entertainment Association. by California Governor Gavin Disneyland, which opened Newsom. in 1955, is nicknamed the Comcast Corp’s Universal “Happiest Place on Earth.” The Studios theme park in near adjacent California Adventure Los Angeles also will close on was added in 2001. Saturday with plans to reopen After Disney’s announcement, on March 28, the company S&P revised Disney’s said. credit outlook to negative Disney has announced no from stable, citing event EU Commission president Ursula von der Leyen presents the EU executive’s economic response to the coronavirus epidemic, in Brussels yesterday. The assurances by von der plans to shut its parks in Paris cancellations and travel Leyen came a day after ECB head Christine Lagarde stoked fury in Rome by implying that shoring up Italy’s precarious financial situation was not her job. and Orlando, Florida. restrictions due to Earlier on Thursday, Newsom coronavirus. ordered a statewide ban on “The negative outlook on most non-essential gatherings Disney reflects the increased of more than 250 people, uncertainty around the including sporting events, extent of the impact of the business conferences and coronavirus crisis on the concerts, but his directive global economy,” S&P said. exempted casinos and It is unusual for Disney to theatres, as well as theme and close its theme parks. EU battles virus and amusement parks. Brief shutdowns have Disney said it decided to occurred due to hurricanes voluntarily close both of its or following the September 11 Southern California parks attacks in the United States. “in the best interest of our Earlier this year, Disney guests and employees” after shuttered its parks in reviewing Newsom’s directive. Shanghai, Hong Kong and As of Thursday, 198 Tokyo to protect against promises Italy’s govt coronavirus cases have been coronavirus spread. documented in California, The company estimated in including four deaths, February that the shutdowns Newsom said. of Shanghai Disney Resort California is one of a handful and Hong Kong Disneyland of states, along with New York, alone would cost $175mn if that have adopted such drastic both remained closed for two whatever it needs “social distancing” measures, months.

AFP Chancellor Angela Merkel, told debt at 60%, a number that Italy Czechs from leaving as of Mon- matically in the last 24 hours Brussels reporters. has more than doubled in recent day. with several countries includ- The commission’s fi repower years. Other member states includ- ing France, Ireland and Belgium to save Rome and others is limit- Italy’s debt pile will grow even ing Austria, Slovenia and Hun- closing schools and universities. he EU executive yesterday ed and would mainly involve re- more after it announced €25bn gary have suspended the rules Italy has imposed the con- unveiled a raft of meas- allocating unused EU spending, in extra spending to pull itself of the passport-free Schengen tinent’s toughest response to a Tures to protect the Euro- as well as giving governments a out of its crisis. travel zone and reimposed bor- pandemic that has killed 1,016 pean economy from the coro- free pass to bail out businesses. All eyes now are on a meeting der checks, particularly with people and infected more than navirus outbreak, and promised Brussels would also loosen Monday of EU fi nance ministers Italy. 15,000 in the peninsula in less it would do whatever it takes for rules on running high pub- who between them have the fi - “Certain controls may be jus- than three weeks. hardest-hit Italy. lic debt and defi cits, a sensi- nancial muscle to earn respect tifi ed, but general travel bans are The government has shut The assurances by EU Com- tive topic for fi nancially over- on markets that have been pun- not seen as being the most eff ec- all shops apart from pharma- mission chief Ursula von der stretched Italy. ished by the virus fallout. tive by the World Health Organi- cies and groceries in the hope of Leyen came a day after ECB head Von der Leyen said member This is especially urgent after sation,” von der Leyen said, call- stemming contagion and eas- Christine Lagarde stoked fury in states will receive “maximum the ECB’s Lagarde was forced to ing instead for health screening ing the burden on Italy’s over- Rome by implying that shoring fl exibility” to boost spending row back her dismissal of Italy’s at borders. stretched hospitals. up Italy’s precarious fi nancial beyond the legal limits, a prom- debt problem in Frankfurt on Such tests could be carried Von der Leyen said the EU is situation was not her job. ise that will also help France and Thursday. out either at borders or within also taking steps to deal with a Von der Leyen said the com- Belgium, both chronic over- Von der Leyen’s intervention member state territory. “Any shortage of protective equip- mission, the EU’s powerful bu- spenders. followed several days of criti- measure that is taken must be ment such as masks, after several reaucracy, would try to provide Countries “should feel com- cism for EU’s lack of collective proportionate,” she said. countries including Germany Italy with whatever support it fortable to take all the necessary response that was most exposed Home aff airs commissioner and France abruptly banned ex- needs to overcome the challenge measures to support the most by a series of border closures Ylva Johansson was to present ports to guard their own supplies. of the coronavirus. eff ective sectors,” she said. among partner member states. proposals on screening to a She said that after talks, Stormtroopers interact with attendees at Disneyland theme “Whatever is necessary, we Known as the stability and In the latest example, the meeting of the 27 EU interior Paris and Berlin had relented park in Anaheim. No cases of Covid-19, the disease caused support. Whatever they will growth pact, the rules theoreti- Czech Republic announced that ministers later yesterday. and are now “willing to adapt by the novel coronavirus, have been reported at the parks in need, we will answer,” von der cally limit a country’s defi cit to it would ban all foreigners from The European response to their national measures, as we Anaheim, a company representative said in a statement. Leyen, a close ally of German three % of annual output and entering the country and all the virus has stepped up dra- requested”. Green energy’s $10tn revolution faces oil crash test

Bloomberg The price of a barrel of oil remains an showering a lot of cash and building valuable carmaker by market value Some of the money raised was diverted adding to economic uncertainty London important economic indicator. But the some projects that rival the capacity of after Toyota Motor Corporation. to renewable-energy subsidies, after surrounding the virus that may hurt relentless push to move away from conventional power plants. At the same For governments worldwide, pressure setting an ambitious goal to deploy Trump’s re-election bid, says Amin. fossil fuels suggests that its geopolitical time, oil exploration is becoming less for policy measures has mounted as as much as 175GW of mainly solar and Since Trump unilaterally pulled the US In 2014, when the price of oil last impact is likely to be softer than in the viable economically, with an increased the issue increasingly resonates, in part wind power by 2022 — about twice the out of the Paris agreement, it could yet crashed, the world’s governments had past, with the imperative to combat risk that even those projects that go due to the kind of direct action and power generation capacity of the UK. tilt the presidential race in favour of a no agreement in place to fight climate global warming assuming its place. ahead no longer yield good returns media campaigning espoused by Greta “Many countries are pursuing candidate more in favour of climate change. The following year leaders “The impact of the oil price on broader and with worries about stranded assets Thunberg. electrification and decarbonisation action. signed the Paris accord. economic growth has been decoupling growing. Low oil prices off er one reason to heed to make them less dependent on the In Brussels, meanwhile, European Green investments have soared since ever since the 1980s,” said Shane “Now it doesn’t make sense to reduce that voter call, since it’s a good time volatility of oil markets,” said Adnan Commission President Ursula then. Some $1.2tn has been poured into Tomlinson, deputy chief executive your investment in renewables if the to end fossil-fuel subsidies or to raise Amin, former director general of von der Leyen doubled down on renewable energy, and global electric off icer at environmental think tank E3G. oil price crashes,” said Mark Lewis, taxes on consumption of fossil fuels. the International Renewable Energy European Union plans to achieve vehicle sales reached 2mn last year. “We could see exceptional movements head of sustainability at BNP Paribas Such a move can also help avoid the Agency. “This kind of event will only climate neutrality by 2050, despite Bloomberg NEF expects as much as in the oil price in the next few months, Asset Management. “It’s more logical to sorts of destabilising anti-government reinforce that momentum.” the emergence of what she called $10tn poured into clean energy by but I don’t think that changes the reduce your investment in oil.” protests seen in France, Iran and Also since 2014, the power of Opec’s “unforeseen challenges.” 2050. fundamental need to address climate That reality points to a broader change Ecuador when energy-price increases 14 nations to shape the market has “Today it’s no longer the question if The accord also marked a cultural change.” in investor sentiment since Paris that were proposed. been weakened by the impact of US there will be a European Green Deal or watershed, with emissions targets now Oil’s fall to some $35 a barrel from $55 aff ects companies and governments It could even be done in a way that shale production. (Opec’s Vienna base whether the EU will become climate- policed by a growing environment just last week has major implications for alike. A number of large investors have “protects or even benefits poorer is home to an Austrian government neutral but the question is how we’re movement that’s shaping politics from addressing climate change. Low prices come together under groups such households and communities,” said that now includes the Greens as junior proceeding and how far-reaching will Germany to India. In a sign of the times, incentivise more use of oil; it squeezes as Climate Action 100+ to demand Helen Mountford, vice president coalition partner.) the transition be,” Von der Leyen said activist Greta Thunberg and Tesla Inc the budgets of oil companies, putting companies put sustainability at the of climate and economics at the The US — which is not a member of the on Monday. founder Elon Musk are now two of the clean-energy projects in doubt; and heart of their business models, and that World Resources Institute. The goal group — became an oil exporter again That stance is understandable given most famous people in the world. some governments feel pressured to isn’t likely to change. of reaching out to “left-behind” on the back of its shale revolution, that EU citizens say they want the bloc So when this week Saudi Arabia prop up struggling oil companies. All Tesla has eff ectively become a proxy communities is a dynamic driving surpassing Russia and Saudi Arabia in to focus on tackling climate change and Russia joined in a price war that that drives up emissions, which is bad for how the green economy is viewed policy from the post-Brexit UK to South 2018 to regain its status as the world’s and preserving the environment as wreaked havoc on global markets news for global warming. by investors. Musk has demonstrated Africa and swaths of Latin America biggest producer. President Donald its No 1 priority, according to a recent already rattled by the coronavirus, it However, if low prices are sustained this that a mass-market electric car is viable, that suff ered waves of unrest late last Trump has cheered America’s energy Eurobarometer survey for the European looked like the major oil-producing time, there might be big positives for prompting all the major carmakers to year. resurgence as an example of taking Parliament. nations reasserting their supremacy in fighting climate change. follow his lead. He’s building his latest During the last down cycle, between back control. “Clearly we cannot ignore what’s going the short term. Instead, it may prove to Renewable energy is a more mature plant outside Berlin, in a show of his 2014 and 2016, when oil briefly dipped However, the collapse in oil prices on globally,” said EU Environment be another step in a longer-term trend industry than five years ago. As it intention to take the fight to the heart below $30 per barrel, India cut annual weakens the shale industry’s ability to Commissioner Virginijus Sinkevicius towards ending oil’s power to hold the becomes a less risky investment, it of Europe’s leading luxury car producer. fossil-fuel subsidies from $29bn to $8bn pump at a profit and even pushes some on Bloomberg TV. The global “climate world to ransom. has attracted big investors who are Tesla is after all the world’s second-most and even raised taxes on consumption. of the producers toward bankruptcies, emergency didn’t go anywhere.” Saturday, March 14, 2020 GULF TIMES BUSINESS ECB rushes to clear up Lagarde stumble on virus response

AFP seemed to mark a departure from to pursue price stability as measured by the coronavirus and measures to “We have to give families and small- Frankfurt would have. From markets, Frankfurt predecessor Mario Draghi. inflation — the scale of the misstep was control it, ECB sources said yesterday. and medium-sized firms liquidity, not “criticism of the ECB was not in the During the Italian’s eight-year term, clear from Lagarde’s unprecedented But some damage to the weight yesterday’s bureaucratic responses.” composition of the policy package, markets looked above all to the central choice to speak with broadcaster CNBC of the ECB’s word on markets and In fact, ECB chief economist Philip but in some of the messaging from The European Central Bank scrambled bank for reassurance through events immediately after her press conference. its relationship with governments Lane used a first-ever blog post on the President Lagarde. yesterday to ease eurozone jitters a like the eurozone sovereign debt crisis “The package approved today can be had already been done in Lagarde’s central bank’s website to pick up the This amounted to an important — if day after president Christine Lagarde and Brexit. used flexibly to avoid dislocations in bond appearance. pieces and hammer home exactly such unfortunate — communication failure,” spectacularly failed to convince Harshest of all was her declaration markets,” she said — meaning the ECB “Clearly, the objective was to put a targeted response early yesterday. Deutsche Bank chief economist Mark financial markets with big-bang that the ECB is “not here to close could target purchases of Italian debt maximum pressure on national The central bank will off er a new round Wall commented. measures against the coronavirus spreads”, or minimise the diff erence in to calm markets, as long as it respects governments to act, but this resulted of massive lending operations to banks A former high-flying corporate shock. yield between debt issued by highly- overall limits on sovereign holdings. in maximum pressure on markets and easier conditions on an existing lawyer, French finance minister and In the first major test since she took indebted eurozone nations like Italy and “We can concentrate on particular instead,” judged Pictet Wealth scheme known as TLTRO for lenders International Monetary Fund chief, off ice in November, Lagarde detailed a Germany’s benchmark bonds. jurisdictions according to the Management strategist Frederik passing credit on to smaller firms. Lagarde is the first-ever ECB head battery of interventions to cushion the The measure shot up in the wake of circumstances,” Bank of Italy governor Ducrozet. That showed the ECB was “safeguarding without a deep formal economics impact of the virus on the economy. her news conference, although it had Ignazio Visco told Bloomberg TV. “The European Central Bank has liquidity conditions in the banking training, promising in December to But unlike the US Federal Reserve and retreated by yesterday morning. In fact, central bank governors agreed announced its initial decisions. system” and “protecting the continued bring “my own style” to central bank the Bank of England, ECB policymakers “I’ll restrain myself to calling (Lagarde’s) to beef up their existing €20bn Will they be enough? I don’t believe so,” flow of credit to the real economy,” communications. stopped short of a headline interest words a ‘mishap’, I’d use a diff erent ($22.3bn) per month asset purchase French President Emmanuel Macron Lane wrote. Faced with the challenge of presenting rate cut. word if I weren’t a minister,” Italian programme with an additional 120bn, said on Thursday evening. ECB off icials said yesterday that the a complex package, “Lagarde did a Lagarde also raised eyebrows with her economic development minister spread as they see fit across 2020. “Madame Lagarde knows very well changes to the lending scheme off ered bad job of selling the ECB’s measures sometimes brusque tone — notably Stefano Patuanelli told Rete4 television. Those purchases could be front-loaded that she made a mistake,” former more eff ective, targeted support than and increased uncertainty on financial loading crisis-fighting tasks “first and While Lagarde’s answer was technically in the coming weeks to deal with the Italian prime minister Matteo Renzi told a symbolic cut to the already-negative markets,” judged German business foremost” onto governments — which correct — the ECB is above all mandated heaviest blows to the economy from France’s Europe 1 radio. interest rate on banks’ deposits in daily Handelsblatt.

British Airways in battle for Barnier shows an ‘ambitious’ ‘survival’ over coronavirus

Reuters draft UK deal to EU members London

AFP British Airways warned that its survival Brussels was at stake yesterday as its CEO told staff of plans to cut jobs and ground aircraft to tackle the “worsening situation” caused by hief EU negotiator Michel coronavirus. Barnier said yesterday that he Chief executive Alex Cruz told BA’s staff Chad sent an “ambitious” fi rst in a message titled “the survival of British draft of what could be a new post- Airways” that coronavirus was causing a Brexit trade deal with Britain to EU crisis “of global proportions like no other capitals. we have known”, more serious than the The European Union member financial crisis, Sars or 9/11. states will now have to decide wheth- “Please do not underestimate the serious- er and how they want to modify ness of this for our company,” read the Barnier’s proposal, as he pursues his message from Cruz, a transcript of which negotiations with London. was seen by Reuters. But even if the Brussels veteran’s Airlines around the globe are cutting text fi nds favour with MEPs and flights and costs amid plunging demand the 27 capitals, there are provisions and US travel restrictions on European that are unlikely to be acceptable to passengers, with Europe’s second biggest Number 10. airline Lufthansa reported to have asked The draft — obtained by AFP — for state aid and low-cost carrier Norwe- would ensure Britain does not diverge gian pleading for help. far from EU state aid, environmental, The industry is braced for further failures labour and quality standards, while as no carrier is exempt from the short-term trade will be overseen by a “Special- pain that has already seen British regional ised Committee on the Level Playing player Flybe collapse and Norwegian’s Field.” stock lose about 80% of its value in a But, in the case of any dispute over month. interpretation of EU law, the eventual Cruz said that BA, which along with Iberia deal’s arbitration committee would and Aer Lingus is part of the financially have to defer “to the Court of Justice strong IAG, was more resilient “than ever of the European Union to give a ruling before” with a strong balance sheet. on the question.” But the airline was under “immense pres- London has been adamant it will sure” and would “have to react fast and not sign up to any deal that gives the definitively in response to the worsening Luxembourg-based court jurisdic- situation” he said in the message. tion over Britain. As a result, jobs would be lost “perhaps If the draft is retained, the deal for a short period, perhaps longer term” would also ensure both sides “au- and the company was in discussions with thorise the fi shing vessels of the other trade unions, Cruz added. Aircraft would party to engage in fi shing activities in be grounded in a way that the airline has its waters” according to agreed quotas. never had to do before, he said. Britain may welcome the draft’s of- Michel Barnier, chief negotiator for the EU, pauses during a news conference following the first round of Brexit trade talks in Brussels on March 5. The EU states A spokeswoman for BA, which is based at fer to negotiate quotas on an annual will now have to decide whether and how they want to modify Barnier’s new proposal, as he pursues his negotiations with London. Heathrow in London, declined to comment basis, a previous British demand, but when asked how many jobs could go. London will insist on regaining full reporters: “We believe that there are and the member states. “It shows an Some in Brussels want Barnier to rangement by the end of the year, The airline employs 45,000 people. control over its coastal waters. ways of cooperating on external se- ambitious and comprehensive future rush out Europe’s vision of a close when a post-Brexit transition period While Britain was exempt from US travel Prime Minister Boris Johnson’s curity and defence that don’t require relationship is possible. working relationship with Britain, ends and European trade rules no restrictions announced on Thursday which government says it wants a simple treaty obligations.” We must give ourselves every but some member states argue he longer apply. will hit its continental European counter- free trade agreement between “sov- Next week’s face-to-face round of chance of success,” he said. should wait to see Britain’s proposal. Many businesses on both sides of parts, it has already cancelled flights to the ereign equals” and is prepared to EU-UK negotiations in London has “We will publish the text after our “Publishing the draft is not usual the Channel are keen for a close rela- US as well as Italy, China and South Korea. sacrifi ce access to the EU market in been cancelled because of the coro- exchanges and look forward to work- practice at this stage. tionship to continue, with matching New British government advice warning exchange for freedom to write its own navirus pandemic, but both sides are ing with the UK.” It will only show that the EU and rules, to minimise disruption to sup- against all but essential travel to parts of laws. keen to press on. Barnier’s British opposite number, UK are on diff erent tracks,” one Euro- ply chains. Spain yesterday could further hurt BA, Barnier’s draft includes a section There is also an unspoken race to David Frost, who is deciding when to pean diplomat told AFP. But Johnson insists Britain is ready which has 17 flights to Madrid daily, plus on coordinating EU and UK foreign publish a comprehensive draft pro- to release Britain’s alternative text for “Barnier thinks it will show an ad- to pay an economic price for the right dozens to other Spanish cities. and defence policy, which it said posal as both sides seek to gain the a deal, tweeted: “Thank you Michel vantage but it doesn’t. to set its own laws and has warned it Shares in IAG traded up 8% to 355.8 pence would be presented to London “bear- initiative in a tricky months-long ne- Barnier for making clear the EU will It will show that what we have is will walk away rather than accept an- in the hour after Cruz’s warning over jobs, ing in mind that the United Kingdom gotiation. too. fundamentally diff erent than what ything more binding than the kind of paring gains of as much as 14% earlier in has expressed clearly that it does not “We’ve sent a draft agreement on “Look forward to discussing our they have. If we do (publish), doing so deal the EU signed with Canada. the session. wish to engage in negotiations on for- new partnership to EP and Council draft soon, as we take forward new before the UK is especially not wise.” In Brussels, offi cials are far from IAG’s stock price has fallen by 42% in the eign policy matters.” for discussion,” Barnier tweeted, re- negotiating arrangements agreed Britain and the EU want to con- confi dent that any kind of compre- last month. Number 10 confi rmed this, telling ferring to the European Parliament yesterday.” clude some kind of new trading ar- hensive deal can be done in time. Norway central bank slashes rates, pumps money into banks

Norway c.bank cuts policy amid signs of a liquidity squeeze, In December it had forecast Nordea Markets said, also fore- rate to 1% from 1.5%; off ers it also announced the fi rst of a an expansion of 1.9%. “A lower casting further easing. loans to banks, relaxes series of loans to the banking in- policy rate cannot prevent the To facilitate lending, Norg- capital buff er; moves aim dustry and eased capital reserve coronavirus outbreak from hav- es Bank also cut to 1.0% from to ease economic impact requirements. ing a substantial impact on the 2.5% of risk-weighted capital of coronavirus; cuts 2020 “There is considerable un- Norwegian economy, but it the countercyclical buff er that growth view to 0.4% from certainty about the duration could dampen the downturn and obliges banks to accumulate ex- 1.9% and impact of the coronavirus mitigate the risk of more persist- tra reserves during boom peri- outbreak, with a risk of a pro- ent eff ects on output and em- ods. Oslo nounced economic downturn,” ployment,” it added. Industry group Finance Nor- Reuters the bank’s monetary policy The central bank had been due way estimated that the move, committee said in a statement. to announce its next rate deci- carried out with the endorse- “The committee is monitor- sion on March 19, but waiting ment of the fi nance ministry, orway’s central bank ing developments closely and for another six days was not a will increase Norway-based slashed interest rates is prepared to make further rate real option, said Handelsbanken banks’ lending capacity by be- Nyesterday and lined up cuts.” chief economist Kari Due-An- tween 500bn and 600bn Nor- emergency loans for banks, as The government on Thursday dresen, who earlier this week had wegian crowns ($50bn-$60bn). it warned of a sharp economic invoked emergency powers to called on the bank to act. “Cutting the countercyclical downturn triggered by the coro- close a wide range of public and “The central bank is doing buff er is a powerful and eff ec- navirus outbreak. private institutions in a bid to what it can,” she said, forecast- tive tool that meets companies’ Norges Bank cut its key policy combat the virus’s spread that it ing that it would cut base rates needs for increased funding,” its rate to 1.0% from 1.5% and sig- described as Norway’s “strong- further. chief executive, Idar Kreutzer, nalled it may cut again. est-ever peacetime measures”. Projections in the central said. The announcement was unex- As a result of the local and global bank’s monetary policy report Norway’s crown currency pected and the reduction its big- economic disruptions, Norway’s suggested a cut of 25 basis points strengthened slightly, trading gest since 2011. GDP growth is expected to slow was pencilled in for May or June, at 11.19 against the euro at 1029 A pedestrian passes the headquarters of Norway’s central bank in Oslo. “There is considerable uncertainty To safeguard the fl ow of credit to just 0.4% in 2020, Norges with a slight possibility of fur- GMT from 11.21 just ahead of the about the duration and impact of the coronavirus outbreak, with a risk of a pronounced economic to companies and individuals Bank said. ther easing after that, brokers 0730 GMT announcement. downturn,” the bank’s monetary policy committee said in a statement yesterday.