Norway’s oil fund reports dismal quarter as equities tumble

Richard Milne in Oslo reports:

Norway’s $930bn oil fund has had one of its worst quarters on record on falling equity markets but the world’s largest sovereign wealth fund is preparing to buy up to $50bn in shares.

The oil fund had a return of minus 16.2 per cent this year up until Wednesday, chief executive Yngve Slyngstad told a press conference on Thursday.

The fund’s equity investments returned minus 22.8 per cent while bonds were flat. That led the share of equities of the total assets of the fund to fall from 70.8 per cent at the end of 2019 to 65.3 per cent on Wednesday. The share of bonds rose from 26.5 per cent to 31.5 per cent.

Mr Slyngstad said that would soon unleash an automatic rebalancing rule under which the fund would seek to buy equities to bring their share back up to the 70 per cent set in its mandate.

Death toll in Iran rises to 2,234 as citizens urged to return home

Monavar Khalaj reports:

The death toll reached 2,234 in Iran on Thursday, from 2,077 the day before, and officials urged millions of Iranians on New Year vacation to return to the cities they live in as soon as possible.

The health minister on Thursday said 29,406 people had tested positive for the virus as the government warned that anyone who did not return home would have their vehicles seized for a month and be fined 5m rials ($110). The government is due to impose further restrictions on its citizens on Friday.

Meanwhile, president Hassan Rouhani said the government plans to seek permission from the supreme leader Ayatollah Ali Khamenei to withdraw $1bn from the country’s sovereign wealth reserve for injections in to the health sector and to fund unemployment benefits. The government is also set to offer loans to businesses provided they do not lay-off workers.

Iran is forecasting a rise in the number of people who test positive for coronavirus as around 40 per cent of the 80m population did not follow repeated requests to stay home and observe social distancing rules, while around 8.5m travelled, according to officials.

ECB shakes off limits on new €750bn bond-buying plan

Martin Arnold in Frankfurt reports:

The European Central Bank has given itself an unprecedented level of flexibility in its plan to buy €750bn in additional bonds to contain the financial fallout from the coronavirus pandemic, which analysts say could leave it open to legal challenges.

Almost all constraints that applied to the ECB’s previous asset-purchase programmes have been removed or significantly loosened, according to the legal decision detailing the ECB’s latest plan, which was published on Wednesday night in the official journal of the EU.

The details of the new programme support the declaration by Christine Lagarde, the ECB’s president, who said on Twitter after it was announced last week: “There are no limits to our commitment to the euro.”

Describing the decision as “a bombshell”, Pictet Wealth Management strategist Frederik Ducrozet said: “There is a risk that the ECB faces legal risks and a political backlash down the road.” But he added that it “strengthens the ECB’s quasi-fiscal support to the most vulnerable sovereign states”.

Crucially, a self-imposed limit to buy no more than a third of any country’s eligible bonds will not apply to the extra €750bn of bonds it has committed to buy this year in response to the coronavirus crisis under its Pandemic Emergency Purchase Programme.

Writing in the Financial Times yesterday, former ECB president Mario Draghi called on states to “fully mobilise their entire financial systems” — from bond markets to banking systems — without bureaucratic delays in order to combat the crisis.

US searches for ‘unemployment’ jump

US employment data, due out later on Thursday, will provide some of the first concrete evidence of how the pandemic is hitting the American economy.

Analysts expect it will show a sharp rise in jobless claims to 1.6m in the week to March 21.

“The wide range of estimates, from about 1 million to 4 million, show that we lack historical references to really understand the impact of this unique and probably massive crisis hitting the economy,” said Christopher Dembik, head of macro analysis at Saxo Bank.

Analysts at UBS have showed that as of March 21, weekly Google search interest in unemployment as a per cent of all searches in the US had increased by almost eight times v the previous week. It is now 70 per cent above its post-financial crisis peak, they said.

The FT’s US economics editor Brendan Greeley reports that the unemployment insurance system has to scale up quickly, as benefits once kept low to discourage laziness will be raised to encourage people to stay home.

Big Read: The global hunt for a coronavirus drug

FT journalists have done a deep dive into the frantic global search for a Covid-19 treatment, with a vaccine still some 18 months away.

The Big Read digs into the main options scientists are considering, and describes the myriad challenges they face as they attempt to find or create a drug that will help staunch the global pandemic.

The piece is part of the FT’s free to read series, which is composed of key stories that we are making available to keep everyone informed during this extraordinary crisis.

Read the full story and make sure to bookmark the free to read hub at

Dutch economy heads for recession

Mehreen Khan reports:

The Dutch economy is on course for a recession which at its worst could result in the economy shrinking by 7.7 per cent this year, according to the country’s national economic forecaster.

In the first major attempt to calculate the economic damage caused by the pandemic, the Netherlands Bureau for Economic Policy Anaylsis (CPB) laid out four possible scenarios for the economy – all of which outline a recession this year. In the most extreme scenario, the recession will wipe out 7.7 per cent of GDP and result in a sustained downturn. The most optimistic sees the economy shrink by 1.2 per cent.

“Under three of the four scenarios, the economic downturn will be more severe than in the 2008–2009 crisis,” said the CPB.

Pieter Hasekamp, director of the CPB, said:

The longer the restrictions on physical contact remain in place and thus continue to deepen their impact, the greater the likelihood of problems in the financial system and of a deeper recession also in other countries, which in turn will further delay economic recovery.

The Dutch government has launched a €20bn national stimulus programme to support business and households.

Italian bonds rally as ECB removes barriers to asset purchases

Tommy Stubbington in London reports:

Italian bonds have rallied after the European Central Bank said it would ditch some of the self-imposed limits on its €750bn of asset purchases to fight the coronavirus crisis.

In a legal decision on Wednesday evening, the ECB said a previous pledge to buy no more than 33 per cent of any individual country’s bonds would not apply to the Pandemic Emergency Purchase Programme, which was announced last week in a bid to stop the spread of coronavirus triggering a sovereign debt crisis.

Italy’s 10-year yield fell 0.07 percentage points to just below 1.5 per cent, the lowest in nearly two weeks. Short-dated yields fell even further, while bonds issued by Portugal and Greece joined in the rally.

Yields — which move inversely to bond prices — had spiked after the ECB’s latest policy meeting two weeks ago, when a comment from president Christine Lagarde implied the central bank was no longer backstopping the eurozone’s weaker debt markets. Last week’s PEPP announcement brought yields back down, a move extended by Wednesday’s relaxing of the rules governing bond purchases.

“In a nutshell, the decision removes virtually all constraints on asset purchases, in a further boost to the credibility of the ECB’s commitment,” said Frederik Ducrozet, a strategist at Pictet Wealth Management.

German cases rise to 36,500

Tobias Buck in Berlin reports:

Germany recorded 4,954 new Coronavirus cases over the past 24 hours, taking the total number of proven infections to 36,508 – the third-highest in Europe behind Italy and Spain.

The number of patients who have died from the disease rose to 198, according to official data from the Robert Koch Institute released on Thursday morning. That compared with 149 dead the day before.

Germany’s case fatality rate has been notably lower than that in other countries, though there are signs that deaths are accelerating. The latest increase in recorded deaths was the highest since the start of the crisis.

More than one in four dead were reported in Heinsberg, a district in the federal state of North-Rhine Westphalia that was among the first to see a spike in cases.

Russia’s Gazprom quarantines workers at vast Siberian gas field

Henry Foy reports from Moscow:

Russian gas producer Gazprom has quarantined 20 employees at a key gas field that provides supplies to Europe, after workers showed symptoms of coronavirus following contact with an infected person.

Gazprom said production at the massive Bovanenkovo field, which supplies the Nord Stream pipeline that accounts for about one-sixth of the EU’s total gas imports, was continuing as normal.

The quarantined shift workers at the remote gas field in northern Siberia, one of the largest in the world, were isolated after coming into contact with a person carrying the virus on a flight from Moscow 10 days ago, Gazprom Dobycha Nadym, a subsidiary of Gazprom, said in a statement on Thursday.

Coronavirus tracked: the latest figures as the pandemic spreads

Steve Bernard reports:

Global cases of the Covid-19 virus rose by 48,461 yesterday to stand at 472,686. This is the highest daily rise since the outbreak began. The death toll also rose by 2,390 to 21,308.

The number of new recoveries rose by 5,349, bringing the total number of people free from the virus to 114,228.

The US added 13,355 cases as the virus continued to spread, there are now 68,489 reported cases of Covid-19 in the country. Spain added 7,457 cases – an increase of 21 per cent on the previous day.

The UK, which reported figures much later than usual yesterday, saw its cases rise by more than 1,000 for the second day, adding 1,452.

Germany’s Bosch says it has developed quick Covid-19 test

Joe Miller reports:

Bosch says it has developed a test for Covid-19 that can deliver a diagnosis in under 2.5 hours, and does not need to be taken to a lab.

The German manufacturer said the test, developed in just six weeks, can also check for nine other respiratory diseases, including the flu, using a single sample.

“It will speed up the identification and isolation of infected patients,” said chief executive Volkmar Denner of the device, which was developed in collaboration with the Northern Irish medical technology company Randox Laboratories.

The test will be available in Germany in April, and in Europe soon after, the company added.

ABN Amro hit by $200m loss on a single client

Nicholas Megaw and Philip Stafford report:

Dutch bank ABN Amro has announced a $200m hit to its profits after recent market volatility led to the failure of a client in its business catering to proprietary trading firms.

ABN Amro Clearing was forced to close out the positions of its client at a significant loss after the firm was unable to meet margin calls on its trades in US options and futures. The resulting net loss of $200m (€183m) on the client is equivalent to 9 per cent of the group’s full-year profit.

Shares in ABN fell 5 per cent at the start of trading on Thursday, compared with a 2 per cent drop in the broader Stoxx 600 index.

ABN — which is majority controlled by the Dutch state after being bailed out during the last financial crisis — had already been under pressure since the start of the coronavirus pandemic because of its heavy exposure to the energy sector.

Its clearing bank earns much of its business sitting between exchanges and clearing houses, processing more than 20m securities and derivatives trades a day on behalf of customers such as high-frequency traders and market makers. Many of them are based in the Netherlands and Chicago.

Trading groups have been urging regulators to loosen rules around options trading, warning that current standards were adding to market volatility.

Airbus halts UK wing production and cuts German hours

Peggy Hollinger in London reports:

Airbus is suspending wing production in the UK and cutting working hours in Germany for three weeks as it reviews output across the board in light of the spreading coronavirus.

The European aircraft maker this week reopened its factories in France and Spain after a near week-long shutdown to implement health and safety measures. However, the factories have come back online at significantly reduced production rates, raising questions over more permanent production cuts as airlines move to defer or even cancel deliveries after being forced to ground their fleets.

The UK sites at Broughton in Wales and Filton in the southeast of England would take an extended Easter holiday for three weeks while Bremen in Germany would work on reduced hours. Airbus would continue to evaluate its production flow, based on the constraints of the new ways of working, it said.

Few analysts expect production to return to levels before the coronavirus outbreak, which is forcing a widespread revision of longer term expectations for cash and profit by Airbus and its US rival Boeing. The US group has called on Washington for state aid to survive the crisis.

India outlines $22bn relief package

Amy Kazmin in New Delhi reports:

India has announced a $22bn relief package to aid impoverished Indians facing severe hardships due to the shutdown of most economic activities by a nationwide curfew.

Nirmala Sitharaman, the finance minister, said the Indian government will provide 5kg of free wheat or rice and 1kg of pulses every month per household for the next three months. The food will be made available through the public distribution system that India already uses to provide subsidised grains to the poor.

The government has also announced a series of direct cash transfers, including Rs1,000 one-time payment to 30m senior citizens, widows and disabled people. It will also provide payments of Rs500 per month, for each of the next three months, to 200m women who hold no-frills bank accounts set up under a government scheme.

New Delhi has also instructed states to tap into a $4.1bn construction workers welfare fund to provide additional relief to about 35m registered construction workers, most of whom have been sent home as work has been brought to a halt.

The government has said it would also provide health insurance cover of $66,000 for all front-line healthcare and hospital workers for the next three months.

Singapore bolsters stimulus package with additional $34bn

Stefania Palma in Singapore reports

Singapore will unleash the largest stimulus package in its history to counter the fallout from the coronavirus outbreak.

The city state on Thursday announced an additional S$48.6bn ($33.6bn) scheme, which together with measures introduced in February, takes the overall plan to S$55bn, or 11 per cent of Singapore’s GDP.

“This is a landmark package, and a necessary response to a unique situation,” said Heng Swee Keat, finance minister and deputy prime minister.

We are facing an unprecedented crisis of a highly complex nature. In economic terms alone, this will likely be the worst economic contraction since independence

The package builds on the first scheme to help protect jobs, support businesses and strengthen the local economy.

The island nation will finance the scheme with current and past reserves. Halimah Yacob, Singapore’s president, has given in-principle support to draw up to S$17bn from past reserves to help fund the relief plan. This move, subject to parliamentary approval, would mark just the second time Singapore has drawn on this pool of cash, after drawing down S$4.9bn to help finance a S$20.5bn stimulus package during the global financial crisis in 2009.

Moscow ramps up restrictions as Russian infections jump

Henry Foy in Moscow reports:

Russia’s number of coronavirus cases jumped by another record amount on Thursday to reach 840 people infected, as the mayor of Moscow ordered a shutdown of public spaces and non-essential businesses next week.

Russia has recorded lower numbers of cases than other European countries but has seen a sharp spike in recent days, prompting the Kremlin to switch from saying the situation was “under control” to ramping up measures to contain the spread of the outbreak.

The number of confirmed cases of Covid-19 rose by 182, or 28 per cent, authorities said on Thursday.

At the same time, Moscow mayor Sergei Sobyanin said the capital’s restaurants, bars, cafes, major parks and all services “requiring the presence of a person” such as hairdressers and beauty salons would be closed from March 28 to April 5. Food shops and pharmacies would remain open.

The measures come hours after Moscow announced it would suspend all international flights to and from the country from 00:00 on Friday.


European market rally sputters with stocks down 2%

A vigorous rally in Europe’s stock markets has run out of fuel with markets opening on Thursday with significant losses.

The continent’s Stoxx 600 slipped almost 2 per cent after the opening bell, having soared 11.8 per cent during the previous two trading days. The index has not posted such a large two-day gain since a tumultuous period during the financial crisis. UK, German and French market barometers all fell more than 2 per cent.

Investor confidence has been lifted by a flood of stimulus programmes that have been launched by central banks and governments around the world. However, analysts remain wary about the extent of the economic damage the Covid-19 outbreak will cause, especially as the situation worsens in major economies such as the US.

UK regulators unveil measures to ease company reporting

Matthew Vincent in London reports:

Britain’s three main financial regulators have told companies and auditors to adopt new approaches to providing information for investors amid the coronavirus disruption — including taking extra time to publish accounts, reassessing potential losses, and overcoming difficulties in collecting audit evidence.

Under new guidance from the Financial Conduct Authority, all London-listed companies will be allowed an extra two months to publish their audited annual financial reports. They will now be be given six months from the end of their financial year, rather than the usual four, to issue the information to shareholders.
But the regulator warned investors not to assume that a company delaying publication was in difficulty.

At the same time, The Financial Reporting Council has said that the content of companies’ financial reports and the work of auditors must change. These changes will include modified audit opinions where auditors have been unable to gather all the necessary evidence to complete the audit in full, and more disclosures of “material uncertainties” casting doubt on a company’s ability to continue as a going concern.

Auditors will still be expected to obtain “sufficient, appropriate audit evidence to support their audit opinion”. However, where Covid-19 social distancing measures prevent this, they may do so using communications technology or working from home.

In addition, the Prudential Regulation Authority has provided new guidance to UK banks and building societies on whether loan payment holidays granted to borrowers affected by coronavirus should be accounted for as a default, or require an expected loss provision.

Intu receives less than a third of rent after retailers refuse to pay

George Hammond reports from London

Intu, the embattled retail landlord, has received less than a third of the rent it is owed by tenants, as retailers that have been forced to close refuse to pay up.

The company, which owns the Trafford Centre in Manchester and is one of the UK’s largest shopping centre owners, said it was paid just 29 per cent of the rent it was due for the second quarter of the year on Wednesday’s payment deadline. That compares with 77 per cent for the same period last year.

All of Intu’s shopping centres are operating at skeleton capacity, with essential shops such as supermarkets remaining open, but most retail shut. A number of big retailers, including Primark and Debenhams, had indicated they would not pay due rent on rent day.

The landlord has £184m in cash and facilities on hand, it said, and is cutting back on spending “for the foreseeable future”.

British Land, another large retail landlord, announced it was suspending future dividend payments to preserve cash on Thursday.

UK companies continue to reel from virus fallout

A host of names were added this morning to the ever growing list of companies withdrawing their guidance and cutting their dividends in the face of the coronavirus fallout.

• Mobile and electronics group Dixons Carphone, which this week was forced to shut all its stores in the UK and Ireland, said the closures would hit sales by around £400m. It pulled its full-year guidance and said it would consider whether to pay a dividend.

Intu, the heavily indebted shopping centre owner, said as of yesterday it had received only 29 per cent of rent due for the second quarter, compared to 77 per cent last year. It also pulled its full-year guidance.

• Engineering group Weir said it was culling its North American oil and gas workforce by a quarter as it too pulled its full year guidance.

• Property group British Land said underlying earnings for its financial year ending this month would be “broadly in line” with expectations, but suspended dividend payments.

• Aerospace and defence group Senior also suspended its dividend and withdrew its guidance for the year.

• Adrian Marsh, who was set to join bookmaker William Hill as chief financial officer, has decided instead to stay put at packaging group DS Smith due to the virus upheaval. Ruth Prior, the bookies’ current finance chief will remain in situ while they search for someone else.

Market rally fizzles out

Philip Georgiadis in London and Hudson Lockett in Hong Kong report:

European stocks were set to record opening losses, as a sharp rally in global stocks lost steam on Thursday.

Futures trade pointed to losses of around 2.5 per cent for the FTSE 100, while other major bourses across the region were primed for similar falls at the opening bell.

Wall Street was set to snap a two-day rally, while Asian stocks fell.

Markets had shot higher this week following nearly a month of sustained losses, as investors have broadly welcomed significant global monetary and fiscal stimulus programmes.

But with large stretches of the western world under lockdown and economic activity grinding to a halt, analysts said that stimulus measures could only do so much to support the rebound in global markets and evidence of a slowdown in the pace of new infections was now needed.

James McCann, senior global economist at Aberdeen Standard investments, warned that Washington could find itself “back at square one” if the economic hit to the US from the coronavirus outweighs the support offered by a $2tn relief package.

United Arab Emirates to sterilise all public transport

Simeon Kerr reports from Dubai

The United Arab Emirates will conduct a nationwide sterilisation programme for utilities and public transport from Thursday evening until Sunday morning.

The authorities will suspend transportation services, including Dubai Metro, and restrict other traffic during this time.

Social distancing has already been enforced on the metro, causing long queues as security limits the number of commuters on each train.

The health and interior ministries called on the public to remain at home over the weekend, only leaving to collect food or attend jobs in vital sectors, the state news agency reported on Thursday.

As the number of coronavirus cases rose to 333, the UAE also on Wednesday referred 64 people carrying the disease for prosecution for breaking their mandated 14 days’ home quarantine and exposing others to the virus.


French economy running 35 per cent below normal

Victor Mallet reports from Paris:

French economic activity is running at 35 per cent below normal because of the measures to contain the country’s coronavirus outbreak, according to preliminary estimates from the statistics institute Insee.

The numbers suggest annual French GDP will shrink by 3 per cent if the national lockdown currently in force lasts for a month, and by 6 per cent if it lasts two months, Insee said on Thursday. The latest predictions from the finance ministry said the economy was expected to shrink 1 per cent this year, but officials accept this is almost certain to be an underestimate.

“Right now, we estimate that activity is at 65 per cent of normal,” said Jean-Luc Tavernier, Insee director-general, stressing that calculations were tentative, based on incomplete data, and subject to revision.

The worst hit sector of the economy is construction, which accounts for 6 per cent of GDP and is estimated to be running at 89 per cent below normal. Non-food industry is down 52 per cent, commercial services 36 per cent, non-commercial services 14 per cent and the food and farming sector is down just 4 per cent.

Europe: what you might have missed

The US Senate has approved fiscal stimulus legislation worth $2tn to help sustain the American economy during the coronavirus pandemic.

Elsewhere in the country, the Pentagon on Wednesday reported the first coronavirus-positive case in its building.

South Korea announced a series of new measures to boost companies and stabilise markets in the latest bid to shore up its economy.

Disruptions to Asia’s largest fresh produce wholesale market, the Azadpur Subzi Mandi, on the outskirts of Delhi, have raised questions over the Indian government’s ability to maintain food supply chains into cities during a 21-day lockdown.

Health authorities in China reported 67 new coronavirus cases to the end of Wednesday, all of which were found in people returning from overseas.

Premier Investments, Australia’s largest retail tenant with stores in the UK, Ireland and New Zealand, is standing down 9,000 employees worldwide and suspending rent payments to landlords in response to the coronavirus crisis.

Russia bans all international flights to stem outbreak

Henry Foy in Moscow

Russia has banned all international flights in and out of the country in a sharp escalation of its policies to stem the rise of coronavirus cases in the country.

The move underlines a growing anxiety in Moscow that the government’s attempts to suppress the outbreak have not been sufficient and the crisis may be worse than previously admitted.

The country’s air regulator will cancel all scheduled and charter flights to foreign countries from 00:00 on Friday, except special flights to repatriate Russian citizens, the government said in a statement posted on its website.

Russia has already scaled back flight timetables to just major capital cities, but the move essentially seals off the country’s borders.

The escalation comes a day after president Vladimir Putin used a national address to admit the outbreak was serious enough for him to delay a national vote on constitutional changes designed to extend his rule by 12 years, and data showing cases of Covid-19 in the country are rising rapidly.

Thailand forecasts $9.2bn hit to tourism as arrivals drop

John Reed in Bangkok

Thailand’s tourism authority said it expected visitor arrivals to drop this year by a quarter, or 6m people, and result in lost revenues of Bt300bn ($9.2bn) under an optimistic scenario in which visits returned to normal in the second half.

“We are projecting (and hoping for) a return to normalcy in the second half of 2020,” Tanes Petsuwan, Tourism Authority of Thailand’s deputy governor, told the FT in emailed answers to questions. “If that happens, we forecast this year’s arrivals will touch 30 million, down 24 per cent over 2019.”

However, Mr Tanes said TAT was working with “a number of scenarios ranging from best to worst case”.

The official’s remarks came as Prayuth Chan-ocha, the Thai prime minister, from Thursday introduced a temporary emergency rule giving it new powers to fight the spread of Covid-19, and officials warned the kingdom might impose a national lockdown without warning to avoid panic buying.

Tourism contributes more than 10 per cent of GDP in south-east Asia’s second-largest economy, but arrivals have collapsed because of the pandemic. Thai Airways, the loss-making state-owned carrier, this week cancelled all its international routes except for Munich and Zurich, destinations regularly used by King Maha Vajiralongkorn.

Asia’s largest fresh produce market hit by Indian lockdown

Jyotsna Singh in New Delhi

Asia’s largest fresh produce wholesale market, the Azadpur Subzi Mandi, on the outskirts of Delhi, has been severely disrupted by India’s abrupt 21-day lockdown, raising concerns about the government’s ability to maintain critical food supply chains into cities.

Rajendra Sharma, former chairman of the Agricultural Produce Marketing Committee Azadpur, said that on the first day of the nationwide curfew, both incoming supply trucks, and those seeking to enter the market to collect fresh produce, were stopped by police from reaching the vast market.

“The government made the announcement without doing its homework,” he said. “We are facing massive disruption. Purchasers are not being allowed into the city, supply trucks are stuck at the borders.”

On Thursday, some trucks had reached the market, and a small number of buyers had been able to enter the market. But Mr Sharma warned that if the flow did not improve further, retail prices of vegetables would rise.

The Indian government has promised to maintain the flow of essential commodities, and permitted shops to remain open. But shop shelves are increasingly bare, after days of panic buying, and due to limits on the movements of trucks carrying fresh supplies.

Yemen combatants agree to ceasefire as coronavirus threat looms

Simeon Kerr in Dubai

The warring parties in Yemen have agreed to a ceasefire in a bid to protect the conflict-ravaged country from the threat of coronavirus.

On the fifth anniversary of the Saudi-led coalition’s intervention in the impoverished nation’s civil war, the rebel Houthi movement and the ousted government agreed late on Wednesday to a call from the UN secretary general, António Guterres, for an immediate cessation of hostilities.

Saudi Arabia has endorsed the Yemeni government’s backing of an end to the fighting that has killed tens of thousands of people in a country already identified by the UN as the world’s largest humanitarian crisis.

The Saudi-led coalition called for de-escalation and practical humanitarian and economic steps to alleviate the suffering of Yemeni people and prevent an outbreak, a spokesman said. The Houthis welcomed the Saudi statement, saying they were waiting to see it applied practically.

The coalition intervened in Yemen in March 2015, seeking to restore the government ousted by the rebels allied to Riyadh’s regional rival Iran with an extensive air and ground campaign.But the war descended into a bloody stalemate, with Saudi Arabia and forces loyal to the ousted government unable to make gains beyond southern Yemen into the mountainous northern Houthi heartlands.

Five years of fighting have left the country devastated and pushed it to the brink of famine, with a resurgence of fighting along frontlines in Al Jawf and Marib undermining recent UN attempts to secure a political settlement.

Concerns have grown that the country’s battered infrastructure and weak healthcare system, already struggling with cholera and malnutrition, is ill equipped to deal with any viral outbreak.

The World Health Organization earlier this week sent testing kits and protective gear for medical staff workers to the government’s base in the southern port of Aden and the Houthi-held capital of Sanaa, where workers have been disinfecting the streets fearing an outbreak.

No cases have been reported yet.

US Senate passes $2tn fiscal stimulus in bipartisan vote

James Politi in Washington

The US Senate has approved fiscal stimulus legislation worth $2tn to help sustain the American economy during the coronavirus pandemic, in an overwhelmingly bipartisan vote after a week of intense negotiations between the Trump administration and Congress.

The upper chamber passed the bill unanimously, of those who had voted, overcoming an 11th-hour protest by a group of Republican senators who opposed the expansion of unemployment benefits for workers fired from their jobs – one of the central provisions of the package.

The stimulus package will now move to the House of Representatives, which is controlled by Democrats, for its final legislative green light, likely on Friday, before it can be signed and enacted by US president Donald Trump.

The large fiscal boost to the US economy contained in the bill has cheered investors in recent sessions, triggering a rally in equities that gave markets some room to breathe after a series of bruising losses.

As well as the expansion of jobless benefits, the bill also provides for direct transfers of money to millions of Americans, $500bn in funds to help stricken sectors of the economy, more than $350bn in loans to small businesses, and aid to hospitals.

“We’ve shut down major parts of the economy. And [Mr Trump] wants to make sure not only do we protect [American workers and business] but the economy is ready when he’s ready to open the country,” Steven Mnuchin, the treasury secretary who was the lead negotiator for the Trump administration, told Fox News on Wednesday.

The vote in the Senate came as Johns Hopkins University’s coronavirus tracker showed that US cases of the disease had soared past 68,000, with more than 1,000 deaths resulting from the pandemic.

Despite the huge price tag, many on Capitol Hill are expecting that a new round of stimulus may well have to be negotiated in the next few weeks or months.

Japan stocks fall as Tokyo coronavirus cases jump

Hudson Lockett in Hong Kong and Leo Lewis in Tokyo

The rally in global stocks lost momentum in Asia as 11th-hour objections threatened to stall a $2tn coronavirus economic relief package in the US.

Investors were also on edge over the rising number of Covid-19 cases, as Tokyo moved closer to a full lockdown in an attempt to slow the rate of infections.

In early morning trading on Thursday, Japan’s benchmark Topix index fell 2.7 per cent after the country’s capital reported a record jump in the number of new virus infections. That prompted the governor of Tokyo, Yuriko Koike, to call on inhabitants to stay home over the coming weekend.

Elsewhere, China’s CSI 300 of Shanghai- and Shenzhen-listed shares fell 0.6 per cent, while Hong Kong’s Hang Seng dropped 1 per cent.

The losses came a day after Wall Street recorded its first back-to-back daily gains in more than a month as US legislators worked to finalise an emergency stimulus bill that would provide relief to taxpayers and businesses hit by coronavirus.

But on Wednesday evening, Republican senators raised objections to new unemployment benefits in the legislation.

Futures markets pointed to a fall of 1 per cent for the S&P 500 later on Thursday.

Singapore GDP plunges by most in a decade

Stefania Palma in Singapore

Singapore’s GDP growth tumbled by an annualised 10.6 per cent in the first quarter of 2020 from the previous quarter, according to advance estimates from the government, marking the sharpest drop in a decade.

The construction and services sectors contracted quarter on quarter due to the economic fallout from the coronavirus outbreak, while the manufacturing sector expanded by 4.2 per cent.

“As the global Covid-19 situation is still evolving rapidly, there remains a significant degree of uncertainty over the severity and duration of the global outbreak, and the trajectory of the global economic recovery once the outbreak has been contained,” said Singapore’s ministry of trade and industry. “The balance of risks, however, is tilted to the downside”.

The city state also downgraded its 2020 GDP growth forecast for a second time this year to between minus 4 and minus 1 per cent in light of the virus spreading rapidly worldwide and Singapore tightening border controls and safe distancing measures.

Singapore had originally slashed its growth estimate in February to between minus 0.5 per cent and 1.5 per cent.

Panic buying returns to Japan as cases spike

Leo Lewis and Kana Inagaki in Tokyo

Panic buying has left many of Tokyo’s store shelves empty after a record rise in new coronavirus cases prompted the city’s governor to ask residents to stay at home this weekend.

Yuriko Koike, whose overnight announcement came less than 24 hours after Tokyo and the International Olympic Committee agreed to postpone the summer Games, warned that the world’s biggest city could be on course for an “explosive spike” in new cases.

On Wednesday, there were 41 new infections in Tokyo, a record one-day rise after 17 cases were reported on Tuesday and 16 on Monday. There are 212 cases in total in Tokyo.

Ms Koike, citing medical experts, requested that residents work from home and to refrain from dining out in the evenings. She also called on universities to delay the start of classes from early April, the start of the new school year for Japan.

Mexicans told to ‘drastically’ reduce movement to curb coronavirus

Jude Webber in Mexico City

Mexico reported 475 cases or coronavirus on Wednesday, a rise of 70 from the previous day, and six deaths as Hugo López-Gatell, the health undersecretary, urged people to “drastically” reduce their movements to curb the spread of the virus.

“The vast majority of people must stay at home,” he told the government’s daily Covid-19 news conference. The federal government will halt all but essential activities such as health, energy, security and cleaning, from Thursday.

President Andrés Manuel López Obrador’s daily 7am press conference will still go ahead, but chairs have been separated to maintain a safe distance, government spokesman Jesús Ramírez said.

The president, who as recently as Sunday was urging Mexicans to go about their lives normally and to go out to restaurants to keep the economy afloat, usually travels around Mexico at the weekend.

Mr Ramírez said that for now the president’s agenda “is still on” but details would be confirmed on Thursday.

First coronavirus case reported at the Pentagon

Katrina Manson in Washington

The Pentagon on Wednesday reported the first coronavirus-positive case in is building, one of the largest in the world, amid warnings the outbreak would last for months and numbers would continue to grow.

The US Marine, who is stationed at the Department of Defense headquarters that is home to tens of thousands of staff, tested positive on Tuesday after putting himself into isolation more than a week before when an immediate family member showed symptoms.

The department said 415 military personnel and their dependents have tested positive for the illness to date. One contractor has died.

Defence secretary Mark Esper had been at pains to keep the five-sided office building free of the disease. Coffee machines, computer keyboards and doorknobs have been wiped down and people have kept six feet from each other in cases where it was not possible to switch to remote working.

But the Pentagon is now also increasing travel restrictions, freezing all troop movements for 60 days in a move that will halt exercises, deployments and affect 90,000 people.

It said US troops were still due to start drawing down from Afghanistan within 135 days.

A top Pentagon doctor, Brigadier General Paul Friedrichs, said on Wednesday cases would “continue to grow”. The virus is increasingly affecting overseas personnel and Mr Esper said this week the outbreak could last “months”.

Three sailors were evacuated after testing positive for Covid-19 on the USS Theodore Roosevelt, an aircraft carrier, which docked in Vietnam earlier this month and is now quarantining others while at sea in the Pacific.

Amazon faces pressure to protect employees from coronavirus

Dave Lee in San Francisco

Amazon is facing increasing political pressure to take more drastic action to protect its employees from the spread of coronavirus.

Presidential hopeful Bernie Sanders on Wednesday called on the company to “immediately close down workplaces that have employees who test positive for coronavirus” and to allow all workers at affected sites to self-isolate for two weeks on full pay.

Employees at as many as 12 separate Amazon facilities in the US are understood to have been diagnosed with Covid-19.

Just one location, a warehouse in Shephardsville, Kentucky, near Louisville, is closed for an extended “deep clean”. At the other locations, spread out across 11 states, only workers who have been in “close” contact with the affected employee have been told to stay home on full pay.

Amazon has said it is taking “extreme” measures to keep its facilities clean and operational, implementing social distancing to limit crowding, including loosening security checks to speed up entering and exiting the buildings.

Chief executive Jeff Bezos acknowledged a shortage of medical supplies for staff, such as masks.

Also on Wednesday, attorneys general from 14 states, plus the District of Columbia, wrote a joint letter demanding Amazon improve its sick pay scheme for its workers, including those at its Whole Foods grocery chain.

“Grocery stores such as Whole Foods remain one of the few places where people are regularly congregating in close quarters, and thus it is especially important to ensure that they do everything they can to minimise the risk of infection,” the letter read.

South Korea pledges ‘unlimited’ liquidity to support businesses

South Korea announced a series of new measures to boost companies and stabilise markets in the latest bid to shore up an economy battered by the global coronavirus pandemic, Edward White and Song Jung-a report.

The Bank of Korea, the country’s central bank, pledged an “unlimited amount of liquidity” to domestic financial companies for the next three months to support financial market stability.

Seoul will lower the foreign exchange liquidity coverage ratio for banks from 80 per cent to 70 per cent until the end of May, to provide the market with greater access to dollars, and exempt a levy on local financial companies to ease their tax burden in obtaining foreign currency for the next three months.

“We will make sure that enough financial support will be provided to small merchants, self-employed people and small and mid-sized companies that are most vulnerable to economic shocks,” said vice finance minister Kim Yong-beom.

Thursday’s moves add to record stimulus and unprecedented market support measures already announced by the government in Seoul.

South Korea’s new coronavirus cases ticked higher again on Thursday. The Korea Centers for Disease Control reported 104 new cases, up from 100 on Wednesday, and taking the total infection caseload to 9,241.

Alaska Airlines cuts 70% of flights for April and May

Claire Bushey in Chicago

Alaska Airlines is cutting capacity further this spring, slashing 70 per cent of flights in April and May.

The sixth-largest airline in North America said June flights “will be based on demand, but it is our expectation that reductions will be substantial for at least the next several months”.

The airline had previously said it would cut capacity by 10 per cent in April and 15 per cent in May.

Airlines worldwide are struggling as governments ban travel and passengers cancel bookings in the face of coronavirus.

The company is cutting hours for management employees and dismissing contractors and temporary workers. It is suspending its dividend, which paid $44m last quarter.

It has drawn down a $400m line of credit and secured a $425m secured loan on Wednesday.

US lawmakers have agreed on a $2tn stimulus bill that would include $50bn for passenger airlines, half in the form of grants. JPMorgan Chase analysts Jamie Baker and Mark Streeter estimate Alaska’s share of the grants at $1.6bn.

Chief executive Brad Tilden, who will take no pay until September 30, said “that given the lack of demand for air travel … hard work and aggressive control of costs and cash are required, even with additional support”.

China reports 67 imported coronavirus cases

Health authorities in China reported 67 new coronavirus cases to the end of Wednesday, all of which were found in people returning from overseas.

That takes the total number of reported imported cases to 541, with infections discovered in returnees in 13 cities and provinces.

There were no new cases in Hubei, the origin of the outbreak.

Mainland China has now reported 81,285 cases, 74,051 of which have been discharged from hospital. The death toll from the virus rose by six to 3,287.

Australia’s largest retail tenant suspends rent payments

Jamie Smyth in Sydney

Premier Investments, an Australia retailer with stores in the UK, Ireland and New Zealand, is standing down 9,000 employees worldwide and suspended rent payments to landlords in response to the coronavirus crisis.

The move by the retailer, which is Australia’s largest retail tenant and known for brands such as Smiggle and Portmans, follows tens of thousands of job losses in the retail, hospitality and travel sectors this week as tough rules on social distancing encourage people not to leave their homes.

Premier is one of the first companies in Australia to indicate that it will not pay rent to landlords — a move that will put pressure on state governments, which are mulling rental relief schemes that could impact tenants and landlords in the residential and commercial sectors.

“These extraordinary circumstances mean Premier intends not to pay any rent globally for the duration of the shutdown,” said Mark McInnes, Premier chief executive.

He said the group had maximum flexibility in Australia and New Zealand where 70 per cent of its stores were already in holdover because their leases had expired, or their leases were set to expire in 2020.

Premier said the temporary shutdown would last from later today until at least April 22.

Mexico conducts debt swap as coronavirus cases expected to rise

Jude Webber in Mexico City

Mexico’s finance ministry conducted a debt swap to help meet demand for longer-dated government paper, extend maturities and boost market liquidity amid the coronavirus crisis.

It said in a statement it had swapped 53.448bn pesos ($2.2bn) of M bonds due on June 11, 2020 for Treasury certificates known as Cetes, with the Bank of Mexico acting as financial agent. Banxico also swapped 5bn pesos of the bond with the same maturity.

The operation did not incur additional debt, an article of faith for populist President Andrés Manuel López Obrador.

Mexico has just entered the community transmission phase of Covid-19, and has 405 confirmed cases currently, but health authorities are warning that figure will rise and may not peak until August.

Mr López Obrador has committed to helping the poor and elderly weather the looming economic storm. He signed a decree on Tuesday enabling people over 65, those with chronic illness and pregnant or lactating mothers to stay away from their jobs, but still be paid. Mr López Obrador is himself 66 and many members of his government are a similar age.

The president has also promised 1m interest-free or low interest loans for small business owners and a subsidies plan for 20,000 corn farmers. He has also advanced pensions to the elderly and the finance ministry has disbursed extra funds to the military, which is helping set up medical facilities.

He has argued against a full-scale lockdown of Mexico — where half the country works in the informal sector, with no benefits and often living day to day.

UK confirmed coronavirus cases rise to 9,529

The number of people in the UK who have tested positive for coronavirus rose to 9,529 as of 9am GMT on March 25, according to government figures. More than 97,000 people have now been tested for the virus.

The Department of Health and Social Care said 463 patients who had tested positive for coronavirus have died.

Boris Johnson is facing pressure to speed up the rollout of coronavirus tests amid concerns that a lack of diagnostics is impeding efforts to contain the virus. The government is aiming to increase the testing to 25,000 a day by the end of April, from about 6,000 a day currently.

Asia-Pacific stocks mixed after Wall Street gains

Asia-Pacific stocks were mixed following the first back-to-back gain on Wall Street in over a month as US legislators worked to agree a $2tn emergency stimulus package.

In early trading on Thursday, the S&P/ASX 200 was up 1.2 per cent in Australia. Japan’s Topix was down 1.4 per cent and South Korea’s Kospi was down 0.8 per cent.

Those moves came after US stocks recorded their first back-to-back gains in more than a month as US legislators worked to finalise a $2tn emergency stimulus bill to provide relief to taxpayers and businesses battling the effects of coronavirus.

The US benchmark S&P 500 ended the day 1.2 per cent higher, while London’s FTSE 100 closed up 4.4 per cent.

S&P 500 futures were flat.

UK property demand plunges as virus takes hold

James Pickford in London

The level of demand from UK property buyers dropped by two-fifths last week, according to research that predicts a decline of 60 per cent in the number of sales over the next three months in the wake of the coronavirus pandemic.

Research from property website Zoopla suggested a decline in transactions would deepen over the next six months, as tough restrictions on physical movement and non-essential social contact hit the housing market. However, it said the effect on house prices would be harder to predict until the economic impact and the effectiveness of government countermeasures became clearer.

Covid-19’s impact on the UK property market is “unprecedented”, Zoopla said. “The social distancing strategy has created an immediate impediment to property viewings and valuations, which are integral to the process of buying and selling a home,” it said.

To measure demand, Zoopla analyses the numbers of people browsing properties online who show proactive interest in a home by, for instance, contacting an estate agent about it. In its latest Cities Index, Zoopla said demand had fallen by 40 per cent in the seven days to Sunday March 22, compared with the previous week.

Asia: what you might have missed

American Airlines has drawn down the $1bn loan it took out a week ago. Like other airlines, has sought liquidity as demand for air travel evaporated amid the pandemic and the travel restrictions attempting to curb it. Delta Air Lines has drawn $3bn in loans, and Southwest Airlines has tapped $2bn.

Finland is cutting off the region around its capital city Helsinki from the rest of the Nordic country in an attempt to slow the pace of the coronavirus outbreak. Sanna Marin, Finland’s centre-left prime minister, announced on Thursday evening that travel into and out from the Uusimaa region that includes Helsinki would be prohibited until April 19, with only a few exceptions.

The UK High Court has dismissed a legal challenge which had sought the temporary release of detainees in immigration removal centres if they were at risk from coronavirus. Two judges dismissed a judicial review challenge brought by Detention Action, a charity, against the Home Office on Wednesday evening.

Diplomats are turning to the department of defence to get thousands of US citizens home as international travel shuts down in a bid to stem the spread of coronavirus. The US state department said it plans to fly 9,000 people home in 66 flights in coming days, but assessed that 50,000 might seek to return to the US. It has already brought 9,000 people back from 28 countries.

European Central Bank head Mario Draghi said the coronavirus pandemic is a human tragedy of potentially biblical proportions. “Many today are living in fear of their lives or mourning their loved ones,” he told the FT. “The actions being taken by governments to prevent our health systems from being overwhelmed are brave and necessary. They must be supported.”

Walmart is granting rent relief to about 10,000 businesses that operate on its premises in the US as concerns grow over how smaller enterprises can cope with the coronavirus shutdown. The world’s biggest retailer said it was offering to waive April payments for the hairdressers, restaurant franchises, community banks and other outlets that lease space in its stores.

Four of the five largest US banks have committed to a 90-day mortgage freeze for anyone in California affected by Covid-19, state governor Gavin Newsom announced. The participating banks are Citigroup, Wells Fargo, JPMorgan Chase and US Bank. The outlier is Bank of America, which agreed to only a 30-day “forbearance”.

Nearly 100,000 French companies will receive €4bn of government support for 1.2m employees temporarily laid off as a result of the coronavirus pandemic and the resulting lockdown, the labour ministry said.

Mnuchin optimistic Senators will approve $2tn economic stimulus

James Politi reports from Washington

Steven Mnuchin, the US treasury secretary, said he expected the $2tn economic stimulus package to pass the Senate later on Wednesday despite last minute opposition from a group of Republican lawmakers to a provision expanding unemployment benefits.

“Our expectation is this bill passes tonight and gets to the House tomorrow and it passes. We need to get this money into the American economy and American workers,” Mr Mnuchin said at a White House briefing.

A group of Republican senators led by Lindsey Graham of South Carolina had earlier cast doubt on the passage of the legislation by objecting to a $600 per week increase in unemployment benefits that was part of the deal, on the grounds that it would provide a disincentive to work.

But Mr Mnuchin, who said he spoke to some of the unhappy lawmakers, said he disagreed with their position, saying it did not create “disincentives” since most Americans wanted to keep their jobs.

He also said that the idea of a $600 increase per week across the country was motivated by the need to get the money to recipients as fast as possible, and a more tailored approach would have taken longer since it would have to be delivered through each state.


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