US: what you might have missed
The virus has now killed more people in Spain than it has in China, the original source of the outbreak. Over 700 people have died in the past 24 hours in Spain, taking the country’s total deaths to 3,434. Worldwide, there have now been more than 424,000 cases and nearly 19,000 deaths.
UK prime minister Boris Johnson has defended his handling of the crisis. Opposition leader Jeremy Corbyn said the government should have ordered more testing equipment for the virus “weeks or months ago”.
Unprecedented lockdowns continue to roll around the globe. Saudi Arabia has extended its curfew, Iran has tougher promised travel restrictions and in Australia some funerals will be live-streamed after new limits were put on attendance. Tokyo’s governor has asked the population of the world’s largest city to stay at home this weekend.
On Wall Street, stocks have added to the previous session’s strong gains as investors welcomed a $2tn stimulus deal to provide economic relief to American taxpayers and businesses.
The British heir to the throne, Prince Charles, has become the most prominent public figure in the UK to be confirmed as having coronavirus. He is said to be suffering mild symptoms.
Israel prepares to enter one-week lockdown
Mehul Srivastava in Tel Aviv reports:
Israel will be locked down for a week starting this evening, with citizens banned from walking more than 100 meters from their homes, barring exceptions for buying food, medicine or heading to work in an essential sector.
Synagogues will be shut around the country, as Prime Minister Benjamin Netanyahu finally wrestled his health minister, a devout ultra-orthodox member of parliament, into complying with the demands of the medical community.
Just under a third of Israel’s infections have originated from visitors to synagogues, according to an advisory body to the health ministry, excluding those who caught it abroad or from a family member.
The number of Israelis diagnosed with the coronavirus doubled in the last three days to 2,170, with fewer than five dead. But Mr Netanyahu has warned his cabinet that the number of infections could eventually reach as high as a million, resulting in nearly ten thousand dead, according to local television channels.
The Israeli military has prepared eight infantry battalions to assist the police in maintaining the lockdown, and keep essential services like grocery stores and pharmacies open, a spokesman said. They have not yet been deployed.
Israel was amongst the first nations to put all international travellers into a 14 day quarantine, trying to choke off infections from abroad. Since then, Mr Netanyahu has shuttered non-essential businesses, and unemployment has surged to nearly 20 percent.
Wall Street edges higher after congress agrees US stimulus deal
US stocks extended gains in early trading in the wake of US congressional leaders agreeing a $2tn stimulus deal to support the economy and financial markets amid the coronavirus pandemic.
The S&P 500 was up 2 per cent shortly after the opening bell on Wednesday. The move is, thus far, more muted than the 9.4 per cent rise the benchmark clocked yesterday, its biggest one-day gain since 2008, when investors anticipated lawmakers would sign off on the stimulus measures.
The Nasdaq Composite added 1.7 per cent, while the Dow Jones Industrial Average fared best with a 3.5 per cent advance.
Government bonds were steady. The yield on the benchmark 10-year US Treasury was flat at 0.82 per cent.
UK at-home antibody tests expected within weeks
Camilla Hodgson reports
Members of the British public will be able to order home testing kits to screen for the coronavirus within weeks, according to Public Health England.
Giving evidence to a parliamentary committee, Professor Sharon Peacock, director of the National Infection Service at PHE, said an antibody test — which would be able to tell whether someone had contracted and recovered from the virus — was being assessed by scientists in Oxford. She said she expected the analysis of the test’s accuracy to be ready by the end of the week.
Prof Peacock said the government had already ordered 3.5m tests and was in the process of ordering “millions more.”
Once researchers are confident that the tests work, they will be available to the general public from retailers such as Amazon and the chemist Boots. Whether there will be a charge for the test — an at-home blood test that will look similar to a pregnancy test — has not yet been decided.
“In the near future people will be able to order a home test,” said Prof Peacock. PHE will conduct a study, by going into people’s homes, to ensure that the tests are working correctly, she added.
BBC suspends plans for major restructuring
Mark Di Stefano in London reports:
The BBC’s director general Sir Tony Hall has suspended plans for a sweeping restructure of the news division, which was to see cuts to services and hundreds of workers lose their jobs, as the broadcaster covers the outbreak of coronavirus around the world.
Sir Tony Hall told staff in an internal call on Wednesday that consultations for the proposed cuts would be suspended for the time being, according to two people familiar with the matter.
Earlier this year, the BBC announced the broadcaster would need to make another £40m worth of cuts to make a 2022 savings target, which included 450 employees losing their jobs.
It was being led by the BBC’s editorial director Kamal Ahmed, who had proposed a more centralised story-commissioning structure. The most high-profile casualty of the plans was to be BBC2’s Victoria Derbyshire programme, which was to be taken off air and potentially made into a digital-only product.
Sir Tony’s move to put the plans on ice was welcomed by insiders at the public broadcaster. The BBC has seen record-high audience numbers across radio, TV and online, during the coverage of the coronavirus outbreak, with many producers and journalists required to attend work during the quarantine.
Putin postpones vote to extend his rule
Henry Foy in Moscow reports:
Russian president Vladimir Putin has postponed a nationwide vote that was set to extend his rule by 12 years, bowing to increased pressure to delay after being warned that the coronavirus outbreak in the country was far worse than his government’s data suggested.
Mr Putin, who had earlier vowed that the April 22 vote on changes to the constitution would go ahead and stressed that the virus spread was “under control”, used a nationwide address on Tuesday to announce his U-turn, hours after the number of Covid-19 cases in Russia jumped by a third.
“You know how seriously I feel about this [vote],” Mr Putin said, in a sombre speech. “However, our absolute priority is the health and safety of our people, which is why I think is necessary to move the vote to a later date.”
Mr Putin said a new date would be chosen once the scale of the outbreak was better understood.
“It is impossible to block the virus from entering our state. What we can do, we are already doing… The main priority is the life and health of our citizens,” he added.
On Monday the mayor of Moscow and Mr Putin’s former chief of staff used a televised meeting with the president to warn him that the number of people infected was “far more” than his government was admitting, and that the healthcare system threatened to be overrun.
Russia has reported far fewer cases than all other major European countries, and the Kremlin has sought to play down the threat of the pandemic with one eye on the scheduled vote next month.
If endorsed by a majority of the public, the constitutional changes would reset his presidential terms to zero, allowing him to run twice more after 2024, when he will have completed four terms as president.
City of London offers rent relief for tenants under pressure
George Hammond in London
The City of London Corporation has agreed to defer three months rental payment for tenants of the Square Mile, but stopped short of offering businesses a rent-free period.
The deferral will apply to a certain small office tenants and all of those in serviced offices, as well as all retail businesses, leisure businesses, restaurants and bars forced to close as a result of the nationwide shutdown due to the coronavirus. It comes as quarterly rent payments are due today.
Catherine McGuinness, the Corporation’s policy chair, said: “We recognise that many businesses based in the Square Mile are facing almost impossible trading conditions as a result of the current Covid-19 outbreak. It is only right that we stand by these tenants by offering much-needed rental relief.”
Other landlords in the capital have gone further. Last week, King’s Cross landlord Argent offered tenants three months rent-free, and the Grosvenor and Cadogan estates have made similar offers to their smaller retail and food and beverage tenants.
UK extends right to remain for foreign nationals affected by coronavirus
Andrew Jack in London
The British government has extended, to the end of May, the right to remain in the UK for foreign nationals whose visas have expired but who are self-isolating or unable to travel because of coronavirus.
It also granted the right for people to switch their immigration status while in the UK, such as from student to worker.
The move follows pressure from groups including universities, which have been concerned about the status of a large number of students from outside the EU left stranded by the pandemic.
“Those who contact the Home Office for these visa extensions will be expected to return to their home countries as soon as possible once flight and border restrictions are lifted,” the Home Office said.
Ukraine declares state of emergency as it extends quarantine
Roman Olearchyk reports from Kyiv:
Ukraine has declared a nationwide state of emergency and prolonged a quarantine imposed earlier this month for another 30 days in a bid to prevent a spike of Covid-19 cases that could overwhelm the country’s healthcare system.
There have been 113 confirmed infections in the eastern European country, with the disease affecting 13 of 27 regions as well as the capital Kyiv, prime minister Denys Shmygal said during a televised cabinet meeting. Four people have died.
“The statistics continue to worsen,” Mr Shmygal said. He and his cabinet were all wearing protective masks at Wednesday’s meeting, television footage showed.
Earlier this month the country closed schools, restaurants, shopping malls, banned mass gatherings and shut down regular passenger flights while also prohibiting visits from foreign tourists.
Two senior ministers in past days called for deeper restrictions including the closure of all non-strategic businesses and factories while empowering enforcement of nationwide lockdowns through martial law.
Following strong opposition from business lobby groups and the nation’s top investor, steel giant ArcelorMittal, such plans were dropped.
The state of emergency, Mr Shmygal said on Wednesday, “does not restrict the constitutional rights of citizens, but only consolidates efforts to overcome the threat.”
Target sales surge on virus related panic buying
Target said it would scale back on planned investments and as it reported an “unprecedented sales” surge in March as consumers stocked up on food, beverages, cleaning products and pantry items amid the coronavirus pandemic.
Same-store sales, a measure of sales in locations open at least a year, jumped 20 per cent from a year ago in the March-to-date period, the retailer said on Wednesday.
That was boosted by a more than 50 per cent jump in comparable sales in essentials and food and beverages categories. “Strength also emerged” in areas that support in-home activities, including home office and entertainment. However, sales in clothing and accessories fell 20 per cent from a year ago.
The company also said it expected higher first-quarter costs in part because of increased pay and improved benefits for its staff.
Target said it would remodel only about 130 stores this year, down from its previous goal of about 300 previously, as it tried to minimise disruptions and focus on meeting consumer demand.
Target also withdrew its prior guidance first-quarter and full-year earnings and sales guidance, citing “uncertain outlook for consumer shopping patterns and government policy related to Covid-19”.
European markets slip back into positive as sentiment strengthens
European equity markets have wobbled back into positive territory in early afternoon trading, as investors reacted to leaders in Washington agreeing a $2tn stimulus package to shore up the US economy.
The broad Stoxx 600 is up 1 per cent, following a short dip into negative territory in late morning trading. London’s FTSE 100 and the French CAC index are both up 1.13 and 1.35 per cent respectively. Germany’s Dax has slipped to minus 1.05 per cent after gaining as much as 2.7 per cent in early morning trading.
Wall Street looks set to open lower after the S&P had its best day in more than a decade on Tuesday. Futures markets point to a loss of more than 1 per cent for the benchmark index when it opens for trading.
Market fluctuations throughout the day on Wednesday reflect wider uncertainty felt by global investors.
Sweden bucks global trend with ‘experimental’ virus strategy
Richard Milne in Oslo
Sweden has become an international outlier in its response to the coronavirus outbreak by keeping schools open and adopting few other restrictions, as the Scandinavian nation embarks on what one health expert called a “huge experiment”.
Sweden is the largest European country with the fewest limits on where people can go and what they can do. Schools for children up to the age of 16 remain open, many people continue to go to work and packed commuter trains and buses were reported this week in the capital Stockholm.
Johan Carlson, head of Sweden’s public health agency, last week defended Sweden’s approach, saying the country “cannot take draconian measures that have a limited impact on the epidemic but knock out the functions of society.”
However, some epidemiologists believe the authorities are taking huge risks. “We have no idea — it could work out. But it could also go crazily in the wrong direction,” said Joacim Rocklov, an epidemiologist at Umea University.
Read the full story here.
First batch of Chinese medical supplies arrives in Pakistan
Farhan Bokhari in Islamabad reports:
China’s first plane-load of medical supplies to help Pakistan combat the coronavirus arrived in Karachi on Wednesday, as health officials in Islamabad reported that nearly one thousand people had been infected. At least seven people infected by the virus have so far died in Pakistan.
A senior government official told the FT that Beijing had promised to deliver at least 12,000 kits for testing of coronavirus patients and more than 1.6m protective masks. “We expect more cargo flights from China in the coming days. We also expect China to deliver ventilators and there will also be Chinese doctors coming to aid Pakistan,” he said.
Beijing’s role in helping Pakistan cope with the crisis has increased China’s already-widespread influence in the country as Islamabad’s main military and economic ally. On Wednesday, Pakistan ordered the suspension of all domestic flights following an earlier order to shut down international flights, train services and buses running between cities.
Prime minister Imran Khan’s government, along with provincial administrations, has already enforced a lockdown across Pakistan. But critics say the country needs to quickly adopt harsher measures including tight curfews to minimise the risk of a further spread of the infection.
“The government is still behind the times that we live in,” said one opposition leader who spoke to the FT. “The prime minister has not shown the wisdom to pick up the phone, call up opposition leaders and ask them for support to this common cause. It’s a national issue and we need nationwide unity”.
Support for UK self-employed to be announced tomorrow
George Parker, political editor, reports:
Chancellor Rishi Sunak will announce a new package of help for the self-employed tomorrow.
Earlier, Boris Johnson promised a package of measures to help the self-employed through the coronavirus crisis “in the next couple of days”, as MPs criticised what they claimed was a tardy response.
Mr Johnson said he shared the desire of Ian Blackford, SNP Westminster leader, to give self-employed workers “parity of support” with those in employment.
Mr Blackford, speaking at prime minister’s questions, said the measures should have been in place before the prime minister ordered a “lockdown”.
Oil producer Occidental slashes expenditure again
Derek Brower, US Energy Editor reports:
Occidental Petroleum, the US’s biggest domestic oil producer, announced another sharp cut in capital expenditure, its second in just over two weeks, in response to the coronavirus-led collapse in global crude demand and prices. The move comes just days after activist investor Carl Icahn reached a truce with the company’s board.
Occidental said capex in 2020 would now be $2.7bn to $2.9bn, down another 20 per cent from the $3.5bn to $3.7bn announced on March 10; and almost a halving from the $5.2bn to $5.4bn in its original budget for the year.
Annual production would be beneath 1.3m barrels a day, or 6 per cent lower than planned, it said. Corporate and operating costs would be $600m lower, on top of $1.1bn the company already announced.
The company slashed its dividend by 90 per cent earlier this month. Last week rating agency S&P downgraded $37bn of its debt to junk status, citing the high leverage Occidental has taken on since buying Anadarko for $56bn last summer.
Its share price has fallen about 70 per cent in the past three weeks and its market capitalisation is now less than $10bn, compared with $42bn just before the deal to buy Anadarko in August 2019.
Coronavirus: free to read
The Financial Times is making key coronavirus coverage free to read to keep everyone informed during this extraordinary crisis. You can access the new hub for these stories at ft.com/coronavirusfree.
Here are a few of the latest stories:
-Sweden bucks global trend with experimental virus strategy
-How the viral app Houseparty is entertaining a generation in lockdown
-Coronavirus: what employers need to know about Sunak’s worker rescue plan
Corbyn criticises Johnson’s handling of the crisis
George Parker, political editor, reports:
Jeremy Corbyn has used his last stint as Labour leader at prime minister’s questions to criticise Boris Johnson’s handling of the coronavirus crisis.
Mr Corbyn said the government should have ordered more testing equipment for the virus “weeks or months ago” and denounced the shortage of protective equipment for health and care workers.
Mr Johnson said testing was being increased from 5,000 tests a day to 10,000 and then 25,000 and insisted the government had been focused on the issue “for weeks and weeks”.
The Army was helping to deliver protective equipment to hospitals. Mr Johnson said 7.5m pieces of equipment had been delivered in the past 24 hours.
Portugal’s first budget surplus as democracy set to be short-lived
Peter Wise in Lisbon reports:
Portugal has posted its first budget surplus in almost half a century of democracy, recording a surplus of 0.2 per cent of gross domestic product for 2019. But the former bailout country expects to return to a deficit this year because of the impact of the coronavirus pandemic.
Statistics Portugal (INE) said on Wednesday the budget was estimated to have moved from a deficit of 0.4 per cent of GDP in 2018 to a surplus of 0.2 per cent, or €404m, last year. It is the first time Portugal has posted a budget surplus since 1973, the year before an almost bloodless revolution restored democracy after 48 years of authoritarian rule.
The government had forecast a small budget deficit in 2019 and a 0.2 per cent of GDP surplus this year. However, António Costa, the prime minister, said this week Portugal would almost certainly not achieve a surplus in 2020 because of the damage the pandemic was inflicting on the economy and the need to support the health service, companies and jobs.
The surplus reflects a remarkable turnround since the deep recession triggered by the European debt crisis, which in 2011 forced Portugal to negotiate a €78bn bailout from the EU and the IMF. In the same year, the Lisbon government posted a budget deficit equivalent to 11.2 per cent of GDP.
Portugal has also made progress in reducing one of the highest levels of public debt in the EU. According to INE, the debt fell to 117.7 per cent of GDP last year, down from 122 per cent in 2018.
UK urged to look ahead to organise vaccine manufacturing
Camilla Hodgson in London reports:
The UK government should be looking at where a potential vaccine for coronavirus could be manufactured, disease specialists told a parliamentary committee on Wednesday.
Dr Melanie Saville, director of Vaccine Research and Development at the Coalition for Epidemic Preparedness Innovations, said identifying manufacturing facilities is something policymakers should be doing today if not “yesterday,” even though a Covid-19 vaccine has not yet been developed.
Waiting for a vaccine to be ready before finding manufacturing capacity “will delay the process for 6 months to a year,” she said. A facility will need to be able to produce and quality control the product.
Also giving evidence, Andrew Pollard, professor of Paediatric Infection and Immunity at the University of Oxford, said the UK government had invested in a new domestic manufacturing facility – a project that was started before the coronavirus outbreak – but that the scheme was “only just starting.”
UK regulator admits some Libor switch deadlines may be missed
Matthew Vincent in London reports:
Britain’s financial regulator has admitted that some deadlines for companies to stop using the tainted Libor lending benchmark may be missed because of coronavirus.
In an update on transitioning away from the London Interbank Offered Rate, the Financial Conduct Authority said on Wednesday that the pandemic was having “an impact on the timing” of firms switching to alternative rates. It concluded:
In segments of the UK market that have made less progress in transition and are therefore still more reliant on Libor, such as the loan market, it is likely to affect some of the interim transition milestones.
Libor underpins the pricing of up to $400tn-worth of products around the world but a series of scandals over how it was set damaged trust in its use.
Companies had been due to stop issuing new lending or derivative products linked to Libor by the end of September this year, and to switch all existing contracts and lending arrangements to other risk-free rates by the end of 2021.
However, the FCA insisted that the 2021 final deadline had not changed. Phil Lloyd, head of market structure of NatWest Markets said: “The main message coming across loud and clear is to keep planning for the end of Libor as before.
Softbank attacks Moody’s after debt downgrade
Kana Inagaki in Tokyo, Arash Massoudi and Robert Smith in London
SoftBank has demanded that Moody’s remove all of its bond and currency ratings on the Japanese conglomerate, after the rating agency issued a two-notch downgrade that cut its debt deeper into junk status.
The group led by Masayoshi Son immediately accused Moody’s of making its decision based on “biased and mistaken views”.
The unusual demand came just two days after SoftBank said it planned to sell $41bn in assets to pay down its heavy debt load and fund a share buyback. Those actions have triggered a 55 per cent jump in SoftBank shares, which touched a four-year low last week as investors panicked over its hefty debt exposure.
“[SoftBank Group] believes that Moody’s ratings action is based on excessively pessimistic assumptions regarding the market environment and misunderstanding that SBG will quickly liquidate assets without any thorough consideration,” the company said.
Read more here
States ask EU for ‘bold decisions’ on fiscal policy
Daniel Dombey, Madrid and Guy Chazan, Berlin
Nine EU states, including France, Italy, Portugal and Spain, have called on the bloc to take “bold decisions on fiscal policy… to buttress our economies”, including the “activation of all existing common fiscal instruments… and a common debt instrument”, while calling for Brussels to lay out a clear European strategy to fight the pandemic.
A letter to Charles Michel, president of the European council, from the leaders of Belgium, France, Greece, Ireland, Italy, Luxembourg, Slovenia and Spain argues that the “case for such a common instrument is strong, since we are all facing a symmetric external shock, for which no country bears responsibility, but whose negative consequences are endured by all.”
It adds: “This common debt instrument should have sufficient size and long maturity to be fully efficient and avoid roll-over risks now as in the future.” However, Germany and other northern European countries have resisted such moves.
Asked about eurobonds, Dennis Kolberg, a German finance ministry spokesman, said Berlin had:
Already agreed a comprehensive package of measures and there is an ambitious, targeted programme on the European level…. We have with the ESM a powerful, functioning and tried and tested tool which can provide support forcefully and quickly…
We have already agreed on significant measures, we are talking to each other about what we still need to do, beyond the massive package that has been put together on the national, European and international level.
Spain and Italy are the two EU countries worst hit by the coronavirus so far, with the highest death tolls not just in Europe but the world. A total of more than 10,000 people have died in the two countries to date.
The letter also says that EU countries “need to make sure that essential value chains can fully function within the EU borders and that no strategic assets fall prey of hostile takeovers during this phase of economic difficulties.”
It calls for the European Commission to provide “agreed guidelines, a common base for the collection and sharing of medical and epidemiological information, and a strategy to deal in the near future with the staggered evolution of the epidemic.
And signatories will “put all our efforts to guarantee the production and distribution of key medical equipment and protections, to deliver them in an affordable and timely manner where they are most needed.”
Netherlands detects Covid-19 in sewage system
Mehreen Khan in Brussels
The Netherlands public health authority has found evidence of Covid-19 virus in the country’s sewage system and recommended testing sewer water to gauge the spread of the pandemic.
Dutch authorities on Wednesday said they found the presence of the virus’s DNA in waterworks four days after the country’s first reported case on February 27. The virus is likely to have come from infected stool samples entering the sewage system through people’s toilets.
The Netherlands public health authority has used methods on water samples to detect other forms of bacteria like polio and measles. They warned that sewage workers should take extra health precautions and suggested that the presence of the virus in the waterworks can act as a proxy for the spread of the disease in the country.
Tokyo residents told to stay home on fears of ‘explosion’ in cases
Leo Lewis and Kana Inagaki in Tokyo report:
Tokyo’s governor has asked the population of the world’s largest city to stay at home this weekend, after its hospitals reported a record rise in new coronavirus infections.
The announcement by Yuriko Koike, which came less than 24 hours after Tokyo announced the postponement of the summer Olympics, raises fears that Japan could be on course for an “explosive spike” after a comparatively slow rate of increase in recent weeks.
Japan’s 1,200-plus cases in a population of 127m have raised a series of questions over whether its different approach from other countries – it has tested very selectively – was a success or disguising a hidden crisis.
“We are not heading for an immediate lockdown,” Ms Koike said. “But concern has risen this week about an explosion in infections and we are now entering a critical phase.”
On Wednesday, Tokyo saw the biggest single-day increase of 41 infections following a rise of 17 infections on Tuesday and 16 infections on Monday.
Ms Koike also requested that people work at home on weekdays if they have not already done so, and to refrain from dining out in the evenings. She also asked universities to delay the start of classes from early April, which is the start of the new school year for Japan.
Lancet editor warns over quality of NHS protective equipment
Camilla Hodgson in London reports:
The editor in chief of the prestigious Lancet medical journal has warned that the protective equipment being sent to frontline NHS workers is not fit for purpose.
Speaking to a House of Commons committee on Wednesday, Dr Richard Horton said the availability of personal protective equipment, such as masks and gloves, had increased in recent days. But he warned that some of the equipment was “not of a high standard” and some boxes of supplies had arrived with stickers on them that showed they had passed their expiry dates.
The equipment being sent to doctors and nurses is “putting health workers at risk,” he said. “That seems to me not what we should be doing.”
London underground passenger numbers drop by 90 per cent
The number of London’s tube commuters has fallen by 90 per cent following government instructions to curtail all non-essential travel to limit the spread of the coronavirus.
There had been concerns that many workers were still commuting into the city amid scenes of over-crowding this week, but data from Wednesday morning indicated that travel on the underground had fallen by a third compared to the previous day. Bus journeys were down by 20 per cent.
“The network is to be used by critical care workers only,” said Andy Lord, managing director of the London Underground in a statement.
The majority of people are playing their part and avoiding travel, but more people need to stop travelling immediately to save lives.
We want to continue to run a core Tube service so that NHS staff and other key workers can make essential journeys. Around a third of our own staff are themselves ill or have to self-isolate, so we are simply not able to run a full service.
Drink producers face going bust after government collects alcohol duty
Judith Evans in London
Thousands of small breweries and wine and spirits companies in the UK say they may go out of business after the government decided to collect alcohol duty payments as usual on Wednesday despite the coronavirus crisis.
The tax, which raises more than £10bn a year, is levied on producers and importers, but local alcohol producers had asked for a suspension of quarterly payments due on Wednesday after pubs and restaurants were closed, cutting into sales.
The Society of Independent Brewers said thousands of companies were at risk. The Campaign for Real Ale said: “This could have meant the difference between many hundreds of independent breweries standing a chance of surviving this crisis, or closing their operations permanently and never reopening.”
Miles Beale, chief executive of the Wine and Spirit Trade Association,said: “Many businesses will [now] be faced with the extremely hard decision of whether to pay tax bills or pay staff.”
Germans hoard household goods
Martin Arnold in Frankfurt reports:
German hoarding of household goods in response to the coronavirus led to an eight-fold increase in sales of disinfectant in the country earlier this month, according to new data collected by the federal statistics agency.
Sales of other products, such as soap, toilet roll, flour and pasta, have also surged in Germany as people responded to the pandemic by hoarding, or as the Germans call it Hamsterkäufe, which means shopping like hamsters.
Disinfectant sales shot up across the country in the first week of March, before falling dramatically last week after shelves were emptied of the products, according to the statistics agency.
Meanwhile, soap sales quadrupled last week, while toilet paper and rice sales trebled and tinned tomato sales more than doubled. The week before, sales of other products that people tend to stockpile in times of crisis had doubled, such as flour, yeast and pasta.
Iran confirms 43 healthcare worker fatalities
Monavar Khalaj in Tehran reports:
Iran’s health ministry said at least 43 physicians, nurses and other healthcare workers have lost their lives to the coronavirus, accusing the US of being “the main culprit” because it has imposed sanctions against the Islamic republic.
Kianush Jahanpur, a ministry spokesperson, said on Wednesday:
The government of the United States is the main culprit … in any difficulties facing patients, especially those suffering of rare or special disease, an outbreak of Covid-19 as well as these 43 individuals who have lost their lives … We can not deny the delay in preparation of medical supplies into the country due to this inhumane behaviour.
Imports of food and medicine are not subject to sanctions. But Iran says restrictions introduced after US President Donald Trump abandoned the nuclear deal agreed between the Islamic republic and world powers have frequently delayed imports because they have cut it off from the international financial system.
Many nurses and physicians have complained of a lack of equipment and support since the first cases of the virus were officially reported in Iran on February 19.
150,000 people sign up to help health service in UK
150,000 have signed up to help the UK health service during the virus pandemic, less than 24 hours after the government put out a call for volunteers.
Britain’s National Health Service faces a severe strain, with the number of cases needing hospitalisation expected to rise sharply in the coming weeks.
UK virus modeller says health service can cope under new strategy
Camilla Hodgson in London reports:
The author of a landmark study which warned that the UK’s coronavirus strategy would overwhelm the health service and result in more than 500,000 deaths has said the NHS will now be able to cope under the revised plan.
On Wednesday, Professor Neil Ferguson, director of the MRC Centre for Global Infectious Disease Analysis at Imperial College London, said the current stricter social distancing policies meant intensive care units would “get very close to capacity” but would not “be breached at a national level.”
Prof Ferguson led the research team which found that the UK’s former, more relaxed mitigation policy would lead to eight out of 10 people becoming infected with Covid-19, and 510,000 deaths. The paper helped convince Number 10 to adopt a much more aggressive method of containing the disease, which was stepped up this week to a nationwide lockdown.
“We are reasonably confident that at a national level we will be at capacity,” he said, though caveated that this was only a prediction. He said he expected that, given the current lockdown strategy, the majority of the population would not become infected. However, up to “5-10 per cent” of London’s population could become infected in the next few months.
Prof Ferguson said he expected ICU demand to peak in the next 2-3 weeks, because the more stringent measures put in place this week would not begin to show their effects immediately. That is because many of the people who will be ill in two weeks are already infected.
Mali reports first case
Neil Munshi, west Africa correspondent, reports:
Mali has reported its first coronavirus cases, becoming the 44th country to record a case in Africa which has seen its spread speed up in recent days.
Health experts have warned that Africa is the region least prepared to deal with the pandemic because of widespread equipment shortages and generally weak healthcare infrastructure. The continent now has roughly 2,400 cases and many countries have implemented stringent social distancing restrictions.
But testing capacity is limited in most countries and there are questions about whether lockdowns are feasible in places where many people live hand to mouth and must work each day in order to feed themselves and their families.
Mali is currently at the centre of roiling violence that has left more than 1m people displaced in the western Sahel, where humanitarian actors have raised concerns about the virus’ potential spread in crowded refugee camps.
So far most cases in Africa are connected to people returning from Europe, though instances of community transmission are increasing. Both cases in Mali involved people who had returned from France in recent weeks.
European stocks shed big gains and turn lower
European equities markets took a turn for the worse in late-morning dealings, with major indices sliding into negative territory.
The broad Stoxx 600 was down 0.4 per cent in recent trade, having been up 4.8 per cent at its peak. London’s FTSE 100 fell 0.5 per cent, also shedding significant gains from earlier in the day.
S&P 500 futures also hit their lows for the day, leaving them down 1.2 per cent.
The declines on Wednesday, which follow a historic rally the previous day, highlight the tumult that has taken hold of global financial markets.
Spain’s Covid-19 death toll exceeds that of China
Daniel Dombey in Madrid
Over 700 people have died in the past 24 hours in Spain after contracting the coronavirus as the pandemic continues to rip through the country.
According to figures released by the health ministry on Wednesday, 3,434 people have died so far, compared with 2,696 on Tuesday. This means that the virus has now killed more people in Spain than it has in China, the original source of the outbreak, where almost 3,300 people have died. Only in Italy, where to date almost 7,000 people have died, has coronavirus been more lethal so far.
Authorities in Spain say they hope this week will mark the peak of transmission of the virus, although the surge in deaths and intensive care cases is likely to come one to two weeks later.
At present there are a total of 47,610 confirmed cases of the virus, a 20 per cent increase on Tuesday’s figures, while there are 3,166 people in intensive care, also a 20 per cent increase. The ministry said 5,367 people had now recovered, a 40 per cent jump from 24 hours before.
Tiny UK diagnostics firm to deploy simple coronavirus test in 8 weeks
Andy Bounds in Manchester
A tiny British diagnostics company said it was eight weeks away from deploying a simple coronavirus test, more than tripling its share price in morning trading.
Genedrive in Manchester said it could make more than 10,000 tests an hour for use in standard laboratory equipment worldwide. It is also working on a second test which could be used outside hospitals in health clinics and GP surgeries to see if patients had the disease. Lack of testing has forced hundreds of millions worldwide to isolate themselves because they do not know whether they could infect others.
Genedrive, which already produces a Hepatitis C test administered on a handheld device, also said it had just clinched a deal with the US Department of Defense to supply 500 detectors for biological warfare agents.
The shares started the day at 9p and hit 32p at one stage. At 10.50am they were at 28.5p.
UK companies given extra month to pay dividends
Daniel Thomas in London reports:
British companies have been given an extra month to pay dividends by the London Stock Exchange in a bid to ease the burden on businesses facing a cash flow crisis owing to the coronavirus outbreak.
The LSE said that companies would be given an extra 30 days, after which the dividend must be paid or cancelled. “If any dividend is to be cancelled and not paid, this should be notified by the issuer without delay,” it said.
More than a dozen companies in the UK – and many more around the world – have already cancelled their final dividends as they seek to ensure enough cash stays on balance sheets to see them through the crisis.
“As a result of market conditions and issuers implementing their contingency plans, the Exchange has received enquiries from issuers and their advisers regarding deferral or cancellation of their dividend payments”, it said in a statement.
The Exchange continues to closely monitor the impact of the Coronavirus (COVID-19) situation and is considering all available options to ensure markets continue to function well and to support market participants.
UK records nearly half a million Universal Credit claims in nine days
Chris Giles in London
The scale of the coming surge in unemployment was laid bare in Parliament on Wednesday with officials saying almost half a million people had claimed universal credit in the past nine days.
Speaking to the Work and Pensions Committee, Peter Schofield, the top official at the Department for Work and Pensions said that since 16 March, 477,000 had registered online for the UK’s main safety net benefit.
With 105,000 registering on Tuesday this week alone, Mr Schofield said the “system is working” and urged MPs not to try to change the benefit in the short term because it could cope with large numbers, but not if the system needed reprogramming.
About a quarter of the people who registered last week asked for advance payments, indicating that the majority did not face immediate need for cash, but the scale of the increase was enormous, officials and the secretary of state admitted.
The number of claims in nine days is almost exactly equal to the fall of unemployment over the past five years and it stood at 1.34m at the turn of the year.
Researchers at Oxford compare stringency of 73 countries’ measures
Andrew Jack reports:
Countries around the world differ widely in the measures taken in response to coronavirus and the speed with which they were adopted, with Croatia currently among the most stringent and the US much more relaxed, according to a tracker launched by a team of researchers at Oxford University.
The analysis by the Blavatnik School of Government at Oxford is assessing 73 countries according to a scale of their response, focusing on 11 measures, including restrictions on movement, school and workplace closures, policies on mass gatherings, fiscal and monetary measures and investments in vaccines and emergency healthcare.
The study, which is being regularly updated, stresses the complexity of assessing measures and converting them into a single index, and is not making a judgement on the effectiveness of the different approaches. But it will provide a baseline for comparison of public health outcomes.
“There is significant variation in both the measures that governments adopt and when they adopt them,” it concludes. The US and Germany are among the lowest scoring in terms of stringency.
G20 leaders to meet via videolink to coordinate response
Guy Chazan in Berlin reports:
Saudi Arabia is to host a G20 video conference on the coronavirus pandemic, Angela Merkel’s spokesman said.
The virtual meeting will take place on Thursday from 13:00 to 14:30 German time.
Ms Merkel, who is in self-isolation after coming into contact with someone who was infected with the coronavirus, will take part.
The aim was to plan a “coordinated response of the G20” to the global crisis. “It’s absolutely correct, in view of the enormous global effects [of the pandemic] that the G20 want to coordinate their actions internationally,” Steffen Seibert, Ms Merkel’s spokesman, said on Wednesday.
Prince of Wales tests positive for virus
Robert Wright reports:
The British heir to the throne has become the most prominent public figure in the UK to be confirmed as having Coronavirus, as officials confirmed Prince Charles had tested positive for Covid-19.
In a statement, Clarence House, the Prince’s official residence, said the prince, 71, had tested positive.
He has been displaying mild symptoms but otherwise remains in good health and has been working from home throughout the last few days as usual.
The prince’s wife, the Duchess of Cornwall, had also been tested but did not have the virus, the statement added. The pair were tested by the National Health Service in Aberdeenshire, where the prince has a residence at Birkhall, on the queen’s Balmoral estate.
“In accordance with government and medical advice, the prince and the duchess are now self-isolating at home in Scotland” the statement said.
Clarence House added that it was impossible to ascertain from whom the prince caught the virus because of the large number of public engagements he had undertaken in recent weeks.
India’s virus battle shows struggle of global south
The FT View:
India has put 1.4bn inhabitants under quarantine — probably the largest exercise in history. Its struggle to contain the outbreak is emblematic of special challenges facing much of the developing world. Its response will carry lessons for others.
Over the past week Indian states have enacted progressively stricter laws, especially on travel. While it is far from alone in having been slow to tackle the virus, India’s abrupt, dramatic lockdown risks already being too late.
Western countries’ experiences with Covid-19 are already harrowing, with medical systems stretched beyond breaking point. Without the very best health responses, and outside help, the impact of the pandemic on the emerging world could prove immeasurably worse.
Read full story here
Saudi Arabia extends curfew
Ahmed Al Omran in Riyadh reports:
Saudi Arabia extended its curfew and imposed more restrictions on domestic travel as the kingdom struggles to contain the spread of the coronavirus.
The official state news agency that King Salman has approved a ban on residents of the country’s 13 regions to move from one part of the country to another. The nighttime curfew that began Monday will now start at 3pm, instead of 7pm, in the capital Riyadh and the holy cities of Mecca and Medina.
The latest measures come after Saudi Arabia reported the first death from Covid-19 and 205 new cases on Tuesday, the highest increase in a single day since the kingdom announced its first case on March 2.
Russian President Putin to give national address later today
Henry Foy in Moscow reports:
Russian president Vladimir Putin will give a national address later on Tuesday concerning the spread of coronavirus in Russia after cancelling his scheduled meetings, his spokesman said.
The address had been prompted by Mr Putin’s meetings on Monday where he was warned by a senior aide that official data showing a low number of Covid-19 cases was underestimating the outbreak and that the true spread was far worse.
Local media in recent days has reported that the Kremlin is mulling a postponement of a national vote on April 22 where citizens will be asked to endorse sweeping changes to Russia’s constitution that would allow Mr Putin to rule for 12 additional years.
“In the next few hours he will finalize the text of his address to citizens. This need has arisen after yesterday’s meetings” Kremlin spokesman Dmitry Peskov said. “It will be broadcast on television literally in the coming hours.”
UK companies allowed 3-month extension for filing accounts
Matthew Vincent in London
British businesses will be allowed an extra three months to file their accounts with Companies House, to prevent them incurring penalties while they try to deal with the impact of the coronavirus.
On Wednesday, the UK’s accounts registry and the business secretary, Alok Sharma, said the 4.3m businesses on the Companies House register could now apply for an extension for submitting their annual paperwork.
Under the current rules, private companies must submit their annual accounts within nine months of their financial year-end, and public companies have six months. If they are late, private companies may be fined up to £1,500 for a six months delay, and public companies could be penalised up to £7,500.
However, to assist them during the current disruption to business, they may now apply for a three-month extension, and those citing issues around Covid-19 will have it “automatically and immediately granted”. Applications may be made through a fast-tracked online system which Companies House says will take just 15 minutes to complete.
Mr Sharma said:
We are determined to help businesses in any way we can, so that they can focus all their efforts on dealing with the impact of Coronavirus, and this new offer of a three-month extension for filing accounts is part of that.
Germany records 4,000 new cases
Tobias Buck in Berlin reports:
Germany has recorded 4,118 new cases of Covid-19 over the past 24 hours, taking the total number of reported cases to 31,554 since the crisis started.
According to the latest official figures, the country has suffered 149 deaths as a result of Covid-19 – meaning Germany’s case fatality rate continues to be notably lower than in other countries.
Health officials believe that the lower case fatality rate is mostly due to the large number of tests carried out in Germany, which means the country records more mild cases of coronavirus infections and has fewer undetected cases. But they also warn deaths are certain to rise in the days and weeks ahead.
As in the past, the official German numbers were lower than those issued by Johns Hopkins University and other organisations, but the gap was less dramatic than in previous days. According to Johns Hopkins, Germany currently has 33,593 cases and 159 deaths.
Lothar Wieler, the president of the RKI, had suggested earlier this week that there were signs that the growth rate of new infections was flattening. He sounded a more cautious note on Wednesday, however, saying that it was too early to make a definitive assessment.
Norway’s financial regulator calls for banks to halt dividends
Richard Milne in Oslo reports:
Norway’s financial regulator has asked the government to ban banks and insurers from paying dividends until further notice as Nordic authorities seek to limit shareholder payouts.
A day after Sweden’s regulator urged its banks to not pay dividends, Norway’s financial supervisory authority sent out a similar message that banks and insurers should do nothing to “impair their financial strength”.
Norway has been hit by a double crisis from coronavirus and the collapse in oil prices, leading its unemployment rate to more than quadruple over the past two weeks to the highest level since the second world war.
“A ban on dividend payments and others distributions will have a profound impact. However, in view of the widespread crisis the country is in, the Financial Supervisory Authority is nevertheless of the opinion that such a measure is necessary to promote financial stability,” it said on Wednesday.
It added that the ban did not mean the dividends were “confiscated” but merely deferred until economic and financial conditions improved.
Sterling recovers more ground
Eva Szalay reports:
The pound popped higher on Wednesday morning to trade at $1.1931, gaining 1.4 per cent against the dollar. Sterling also moved 1 per cent higher against the euro, which traded at £0.986.
The recovery in sterling follows a week of heavy losses which pushed the exchange rate to its lowest since the 1980s at $1.1430. The pound is still down more than 5 per cent against the euro and over 6 per cent against the dollar since the start of the month.
“After remarkable moves last week, sterling is taking a breather,” said Chris Turner, a currency strategist at ING Bank in London. He added that the pound is attractive around current rates, but confidence in the global economy has to improve more before the currency can regain its footing above $1.20.
The pound tumbled to its lowest level on record against the currencies of the UK’s major trading partners earlier this week.
Sterling’s broad effective exchange rate, measured against a basket of currencies corresponding to the UK’s trade flows, hit a low of 72.9 on Tuesday, according to the daily reading compiled by the Bank of England. That is weaker than at any time during the Brexit process, the 2008-09 financial crisis or even the UK’s ejection from the European Exchange Rate Mechanism in 1992.
Iran to impose new lockdown rules
Monavar Khalaj reports:
Iran is set to impose further restrictions on public activities within the next two days, as the country is predicted to face a growing rate in cases.
President Hassan Rouhani said “stricter” measures such as restrictions on travel would be imposed to further limit social contact among people.
Millions of Iranians went on vacation as Iran celebrated the start of the New Year on March 20 despite the official calls on them to stay home. The government has said about 40 per cent of Iran’s 80m-strong population had travelled.
Iran’s health ministry said deaths had reached 2,077 on Wednesday, up from from 1,934 the day before.
Bahrain to close non-essential businesses and limit outdoor activities
Simeon Kerr in Dubai reports:
Bahrain will close non-essential businesses from Thursday until April 9 as the small gulf monarchy escalates measures to fight coronavirus.
Supermarkets, pharmacies and banks will remain open while restaurants will only be allowed to operate take away and delivery services. Essential workers have also been defined as manufacturers, mechanics, construction workers and those involved in the distribution of goods.
The government also urged residents to stay at home unless they need to go to work or buy essential items. Exercise outside is to be limited to a maximum of two people, with no children allowed. Gatherings in front of homes are to be limited to no more than five people. The police have been deployed to enforce social distancing measures.
South Africa’s central bank starts buying bonds
Joseph Cotterill, Southern Africa bureau chief, reports:
South Africa’s central bank said it would begin buying local government bonds to unblock strained money markets, as the country braces for a three-week lockdown of Africa’s most industrialised economy.
The central bank said on Wednesday that it would begin buying bonds on the secondary market as part of “providing liquidity and promoting the smooth functioning of domestic financial markets.”
South African bonds rallied after the announcement, with the yield on the benchmark 10-year government debt falling under 10 per cent.
The central bank did not refer to the purchases as quantitative easing and previously said it would not launch unconventional monetary policy while interest rates are far above zero. South Africa’s benchmark interest rate is 5.25 per cent, following a 100 basis point cut by the bank last week.
Kuwaiti banks offer reprieve to consumers and small businesses
Simeon Kerr reports from Dubai:
Kuwaiti banks will defer installment payments and interest on consumer loans and credit cards for six months to nationals, to ease economic pressures caused by the coronavirus.
The debt relief will also be extended to owners of small and medium sized enterprises over the same period, the Kuwait Banking Association said. It does not apply to expatriates who make up around 70 per cent of the gulf country’s 4m population.
Other gulf states have been unveiling similar measures to lighten the financial load of businesses.
Bahrain plans a package equivalent to 30 per cent of gross domestic product, including paying private sector employees for three months and waiving utilities charges over the same period. United Arab Emirates has launched a $34bn stimulus to help banks to extend debt relief to retail and corporate customers and Saudi Arabia also unveiled a $32bn plan to support businesses.
European market rally accelerates
Markets built on a historic rally after congressional leaders in Washington agreed a $2tn stimulus package in a bid to shore up the world’s biggest economy.
The continent-wide Stoxx 600 climbed 4.4 per cent after soaring 8.4 per cent in the previous session in its third-best day on record. The UK FTSE 100 rose 4.5 per cent.
Asian markets also advanced with Tokyo’s benchmark Topix index jumping 6.9 per cent and its counterpart in Seoul up 5.9 per cent. Markets in China, Hong Kong and Australia also posted significant gains.
Markets, rocked in recent weeks by government actions to stem the Covid-19 outbreak, have been bolstered by unprecedented stimulus measures from central banks and governments around the world.
Senior Senate Republicans and Democrats have said they have agreed on the biggest congressional bailout in US history after the support package had twice been delayed by arguments over what to include.
Futures markets pointed to a gain of around 2 per cent for the S&P 500 later when Wall Street opens.
Read more here.
Russia’s coronavirus outbreak worsens with 33% rise in cases
Henry Foy reports from Moscow:
Russia’s rate of coronavirus cases shot up on Tuesday, a day after a senior official warned president Vladimir Putin that the official data were underestimating the scale of the outbreak in the country.
The country recorded 163 new cases on Tuesday, its deputy prime minister said, increasing the total amount by 33 per cent to 658, marking the highest daily increase by far.
The soaring numbers come a day after Sergei Sobyanin, mayor of Moscow and Mr Putin’s former chief of staff, used a televised meeting with the president to warn him that the number of people infected with Covid-19 was “far more” than his government was admitting.
Russia has far fewer cases than all other major European countries, and the Kremlin has sought to play down the threat of the pandemic, as it seeks to hold a national vote on April 22 to pass changes to the constitution that would give Mr Putin 12 more years in power.
Coronavirus tracked: the latest figures as the pandemic spreads
Steve Bernard reports:
The Covid-19 virus continued its spread yesterday with 43,769 cases diagnosed. A total of 18,933 have now died since the outbreak began at the beginning of the year.
There was some good news yesterday though, as the daily number of recoveries rose by a record 6,810.
Once again the US was hardest hit adding 11,100 cases. New York state is the epicentre of the outbreak in the country with 26,348 confirmed cases, almost half of the nation’s 54,916 cases.
Spain is struggling to contain the virus adding 6,922 cases, the largest single day rise of any European country.
European regulator urges consistency in financial reporting
Matthew Vincent reports:
Europe’s securities regulator has urged companies to be consistent in their application of accounting rules amid the coronavirus outbreak.
On Wednesday morning, the Paris-based European Securities and Markets Authority issued a statement instructing businesses to avoid divergence in the way they apply International Financial Reporting Standards – in particular IFRS 9. This standard requires companies to assess whether the credit risk of a financial instrument has increased over a reporting period.
ESMA has said that since governments around the world have introduced economic support for businesses to lessen the impact of Covid-19 – such as suspension of loan and mortgage repayments – companies should not automatically assume there has been a significant increase in credit risk.
According to the regulator, if the support measures provide temporary relief to debtors affected by the Covid-19 outbreak and the net economic value of the loan is not significantly affected, there should not be a big change to their accounting treatments.
The European Banking Authority has also issued a related statement regarding the accounting implications of Covid-19, consistent with ESMA’s guidance on financial reporting.
UK parliament set to close
Sebastian Payne reports:
The UK parliament is expected to close on Wednesday night for the Easter holidays, after the Coronavirus Act is put into law to hand the government emergency powers to deal with the crisis.
The legislation is going through the House of Lords today and is expected to sail through unamended. It will then receive royal assent tonight. Jacob Rees-Mogg, leader of the Commons, has duly tabled a motion to put parliament into recess until April 21 – a week earlier than previously planned.
Politicians and staff working on the parliamentary estate have been under pressure to work from home and their constituencies during the lockdown across the country. Speaker Lindsay Hoyle urged MPs this week to observe social distancing measures and called for legislation not to go to votes to avoid cramped scenes in division lobbies.
Robert Jenrick, the communities secretary, told the BBC on Wednesday that today is likely to be the last day parliament sits. But he insisted “it will return” at an undeterminable point in the near future.
It will return in the usual way after the Easter recess is over so that members of parliament can continue to hold the government and ministers like myself to account for the decisions we’re taking every day.”
Thai economy set for worst performance since Asian financial crisis
John Reed in Bangkok reports:
Thailand’s economy will shrink by 5.3 per cent this year, the country’s central bank said, in what would be its worst performance since 1998.
The Bank of Thailand had previously forecast growth this year of 2.8 per cent, but it said that south-east Asia’s second-largest economy would contract sharply because of COVID-19.
The coronavirus has hit hard in an economy that relies heavily on tourism and exports. On Friday the central bank cut the main lending rate to a record low of 0.75 per cent.
Prime Minister Prayuth Chan-ocha said he will declare a state of emergency on Thursday, invoking a decree that will give his government the power to impose curfews, restrict gatherings, and censor or close media.
Norwegian oil major Equinor to slash costs
Nathalie Thomas in Edinburgh reports:
Equinor has become the latest energy major to announce billions of dollars in spending cuts and review planned activities as the global oil and gas industry is battered by both falling demand from the coronavirus pandemic and a price war.
The Norwegian major said it would slash capital expenditure this year by around 20 per cent, from $10-11 billion to $8.5bn, reduce spending on exploration activity by $400m and cut operating costs by $700m.
The company had already previously announced it would suspend its share buy-back programme, similar to other European majors such as Royal Dutch Shell.
Equinor’s president and chief executive Eldar Sætre insisted that Equinor was in a “strong financial position to handle market volatility and uncertainty”.
European stocks open higher
European stocks rose for a second day on Wednesday, as a tentative sense of optimism rippled through global markets despite the continuing spread of the coronavirus.
London’s FTSE 100 rose 1.4 per cent, while in Paris the Cac 40 was up 1.9 per cent and the Dax jumped 2.7 per cent in Frankfurt.
The Stoxx Europe 600, which tracks the region’s largest companies, rose 1.3 per cent. The index soared 8.4 per cent on Tuesday, the third-biggest increase in a single day on records that stretch back to the 1980s.
Investors have been heartened by enormous stimulus packages and signs that president Donald Trump is agitating to reopen the US economy sooner than expected.
Deutsche Bank’s Jim Reid said:
We’re at a fascinating point in markets now as on one hand Europe is on almost total non-essential shutdown mode without an easy exit strategy, whereas the US is straddling between this and the sentiment in Donald Trump’s words that the country “was not built to be shutdown”.
Oman Air to suspend flights from Sunday
Simeon Kerr in Dubai reports:
Oman’s national carrier will suspend passenger flights from Sunday as the sultanate shuts down to prevent the spread of the coronavirus after cases rose to 99.
Flights will end at noon on March 29 until further notice, the state news agency reported. Domestic flights to the Musandam governorate and cargo operations will continue.
Japanese trading house Marubeni warns of $1.7bn loss
Kana Inagaki in Tokyo reports:
Japan’s Marubeni has warned of an annual loss of ¥190bn ($1.7bn) after falling crude prices caused by the coronavirus turmoil eroded the value of the trading house’s resources assets.
For the fiscal year that ends in March, the company had earlier forecast a net profit of ¥200bn. It blamed the sharp reversal on a ¥390bn writedown involving its oil and gas assets in the Gulf of Mexico and the North Sea after it downgraded its crude price assumptions following the recent collapse in oil prices.
Marubeni also wrote down the value of its US-based grains merchant Gavilon, which it bought for $2.7bn in 2013, and of its Chilean copper mining business.
TDK, the electronic components maker, also cut its full-year operating profit forecast by 21 per cent to ¥95bn, blaming falling sales in China due to the global pandemic.
Australian funerals to be live streamed after attendance limits imposed
Jamie Smyth in Sydney
Australian funeral directors have assured the public that they will do their best to live stream services, after strict new limits on attendance were imposed due to the coronavirus crisis.
The government has decreed that from midnight on Wednesday only 10 people will be allowed to attend funerals, while five people will be allowed at weddings.
The measures are part of a new suite of restrictions aimed at slowing the spread of the virus, which has infected more than 2,300 people in Australia.
Funeral service providers have assured the public services will go ahead, and are promising to step up live streaming and webcasting of services to enable people who cannot attend to pay their last respects.
Shares in InvoCare, the nation’s largest funeral service provider, slumped 13 per cent to A$9.67 on the ASX, which gained 5.5 per cent, as investors digested the impact of the tighter attendance rules on the business.
UK-listed SSP announces cash call
FTSE 250-listed travel catering group SSP has announced an emergency cash call as it faces “unprecedented disruption” as a result of the Covid-19 outbreak.
The company, which operates food and retail outlets in railway stations and airports, said it would raise additional funds via a share placement and has also agreed a new £112.5m bank facility.
SSP said that in a “very pessimistic” scenario assuming an almost total shutdown of the travel sector for the next six months, revenue would fall around 80-85 per cent year-on-year.
SSP is also one of a number of companies that has announced it plans to slash its dividend this year to conserve cash. Others announcing changes to their dividend programmes on Wednesday morning included:
European markets set to rise after historic rally
European stock futures climbed on Wednesday, leaving the continent’s bourses set to push higher again after one of the best days on record.
Futures tracking the composite Stoxx 600 rose 2 per cent, with the main indices in London and Frankfurt expected to rise by a similar margin.
The Stoxx 600 soared 8.4 per cent on Tuesday, the third-biggest increase in a single day on records that stretch back to the 1980s. Wall Street’s benchmark S&P 500 surged 9.4 per cent. The narrower Dow Jones Industrial Average, which is less closely watched by investors but is one of the oldest US market indices, soared 11.4 per cent in its strongest showing since the Great Depression in 1933.
Markets sentiment has been boosted by aggressive stimulus measures employed by central banks and governments around the world. A $2tn stimulus deal, agreed in the early hours of Wednesday in the US Congress, has provided a further boon to confidence that has been severely shaken by the Covid-19 outbreak.
India bans export of drug touted as coronavirus cure
Stephanie Findlay in New Delhi
India banned the export of hydroxychloroquine, a drug used to treat malaria that has been touted as a possible cure for coronavirus.
Exports of the drug are “prohibited with immediate effect,” said the Indian government in an advisory on Wednesday.
Hydroxychloroquine exports will only be allowed from special economic zones, for existing supply contracts, and on humanitarian grounds.
India is one of the world’s largest producers of hydroxychloroquine, traditionally used for prevention and treatment of malaria. Interest in the drug surged after US President Donald Trump touted it as a potential treatment for coronavirus. Taken incorrectly, the drug can be lethal.
Indian drugmakers IPCA Laboratories and Cadila Healthcare are two of the biggest producers of hydroxychloroquine, said pharma analyst Kunal Dhamesha at SBICap Securities.
“In my view government would try to secure what India needs first, and then allow exports,” said Mr Dhamesha, adding that “demand will increase significantly in the US.”
Malaysia extends lockdown by two weeks after spike in cases
Stefania Palma reports from Singapore
Malaysia has extended its national lockdown by two weeks in a bid to contain a jump in coronavirus infections.
The lockdown, originally set from March 18 to March 31, will run until April 14.
“Just be mentally and physically prepared to stay at home for a reasonably longer period of time…I know you feel burdened but I don’t have a choice,” Muhyiddin Yassin, Malaysia’s prime minister, said in a national address, adding the lockdown may be extended further if necessary.
Malaysia’s confirmed cases have more than doubled in just one week. The country counts 17 deaths and 1,796 cases, the bulk of which are linked to a mass religious gathering at Kuala Lumpur’s Sri Petaling mosque.
Europe: what you might have missed
Republicans and Democrats struck a $2tn deal to provide economic relief to taxpayers and businesses, in what stands to be the largest congressional bailout in US history.
Singapore, Australia, Brunei, Canada, Chile, Myanmar and New Zealand signed an agreement to keep supply chains connected and trade lines open in a bid to counter the fallout from the coronavirus.
New Zealand declared a state of national emergency, providing the authorities with greater powers to tackle the spread of the coronavirus across the Pacific nation.
Japanese stocks exploded higher on a banner day for Asia-Pacific equities, as traders capitalised on momentum from Wall Street’s best day in more than a decade.
Australian companies announced a swathe of layoffs on Wednesday with Virgin Australia and clothing retailer Mosaic Brands saying almost 15,000 workers will be stood down.
Three sailors on USS Theodore Roosevelt test positive for coronavirus
John Reed reports from Bangkok
Three US sailors have tested positive for the coronavirus on board the USS Theodore Roosevelt in the South China Sea, the US Navy said, in the first case known of COVID-19 being found on a US military ship.
The men were tested on Tuesday, and will be flown off the ship, which has about 5,000 people on board, it said.
“Surveillance testing of three sailors was indicative of Coronavirus Disease 2019 (COVID-19),” Lieutenant (junior grade) Rachel McMarr, a spokeswoman with the US Pacific Fleet said, confirming earlier statements by Navy officials.
“The individuals are isolated in accordance with the Centers for Disease Control and Prevention guidelines until the sailors can be flown off the ship.”
Ms McMarr said that shipboard health workers were conducting “a thorough contact investigation” to determine whether any other sailors might have been in close contact with the three and possibly been exposed.
The Navy did not specify the location of the ship, which called this month in Da Nang, Vietnam, but said it was in the Philippine or South China Sea.
Republicans and Democrats strike $2tn stimulus deal
Lauren Fedor reports from Washington
Republicans and Democrats have struck a $2tn deal to provide economic relief to taxpayers and businesses amid the coronavirus crisis, in what stands to be the largest congressional bailout in US history.
After marathon negotiations on Capitol Hill stretched into the early hours of Wednesday, White House legislative affairs director Eric Ueland told reporters: “We are done. We have a deal.”
Senate majority leader Mitch McConnell said on the Senate floor: “The Senate has reached a bipartisan agreement on an historic relief package for this pandemic.”
Mr McConnell had been wrangling with Chuck Schumer, the Senate’s most senior Democrat, since Saturday over Republicans’ proposals for the huge stimulus, which includes bailouts for large companies hit by the spread of coronavirus and means-tested “helicopter money” for US taxpayers.
Amazon and Flipkart suspend services in India
Amy Kazmin reports from New Delhi
India’s largest ecommerce companies, Amazon and Walmart-owned Flipkart, as well as specialised online grocery firms such as Big Basket, have suspended all services amid massive confusion about whether they can operate during the country’s new 21-day lockdown period.
The shutdowns have heightened concern among urban middle class Indians about the breakdown of food supply chains into cities, after Prime Minister Narendra Modi’s Tuesday night television announcement ordering all of India’s 1.37bn people to stay home for the next 21 days.
On its website, Big Basket, a major Indian online grocery company, informed its customers “we are not operational today due to restrictions by local authorities on movement of goods. We are working with the relevant authorities to enable delivery as soon as possible.”
Amazon’s grocery service, Amazon Pantry was also suspended in the capital New Delhi.
In a Tweet, Albinder Dhindsa, the founder of Grofers – another online grocery service, said that that the company’s app had collapsed under an unprecedented surge of orders on Tuesday night. Earlier on Tuesday, he tweeted that local police had shut down the Grofers warehouse which is typically used to supply around 20,000 households with essential items.
In his Tuesday night speech, Mr Modi had assured Indians that essential supplies would remain available, but that Indians would have to rely on ecommerce companies and other home delivery services.
Carlos Slim donates $40m for medical equipment to fight coronavirus
Jude Webber reports from Mexico City
Carlos Slim, Mexico’s richest man, will donate 1bn pesos ($40m) through his charitable foundation for the purchase of medical equipment including ventilators for the fight against coronavirus.
In conjunction with the education ministry, the PruebaT distance-learning platform developed by the foundation will be made available to students at state schools which have been closed nationwide.
Employees of the telecom mogul’s Grupo Carso conglomerate will keep their jobs even if some activities are halted because of the coronavirus emergency, the foundation and Grupo Carso said in a statement.
President Andrés Manuel López Obrador earlier praised Mr Slim for committing to firing no employee and urged other businesses to follow suit.
Seven countries sign agreement to keep supply chains connected
Stefania Palma reports from Singapore
Singapore, Australia, Brunei, Canada, Chile, Myanmar and New Zealand have signed an agreement to keep supply chains connected and trade lines open in a bid to counter the fallout from the coronavirus.
“We affirm the importance of refraining from the imposition of export controls or tariffs and non-tariff barriers and of removing any existing trade restrictive measures on essential goods, especially medical supplies, at this time,” the joint statement said.
The countries also committed to keeping “critical infrastructure” including air and seaports open to support global supply chains.
The statement comes as some seaports suspend operations and land transport is disrupted by border controls, said a spokesperson at Singapore’s ministry of trade and industry. Airfreight charges have also jumped “multiple times” as mass flight cancellations squeeze airfreight capacity, they added.
The agreement builds on a joint statement Singapore had initiated with New Zealand, which was issued last week.
“Singapore welcomes other like-minded partners to join our continued efforts” to keep trade lines and supply chains functioning, the ministry spokesperson said.
Fitch cuts to negative part of €1.3tn European money market funds sector
Siobhan Riding reports from London
Fitch downgraded to negative its outlook for a large segment of the €1.3tn European money market fund sector in a sign that the problems that rocked funds last week were spreading across the Atlantic.
The rating agency warned that heavy outflows from so-called low volatility net asset value funds were threatening the products’ liquidity positions, paving the way for potential fund suspensions.
The funds, which invest in short-term corporate debt and commercial paper, suffered large investor withdrawals in the week to March 20 as a result of the coronavirus-induced market turmoil. Outflows from the funds denominated in US dollar and sterling reached their highest level since the 2008 financial crisis, with dollar funds losing $46.9bn and sterling funds losing £16.6bn, according to Fitch.
Stress in the European money market funds sector mirrors the situation for US prime funds, which experienced heavy withdrawals and declining liquidity levels last week. However, the rating agency said European funds faced additional risks relative to US counterparts because they did not benefit from the same kind of government support.
Fitch said that while US funds run by Goldman Sachs and BNY Mellon had benefited from liquidity injections from their parents, European money market funds were banned from receiving support from an affiliated entity.
Asset sales undertaken by the European funds to meet redemptions depleted their weekly liquidity levels, with some funds temporarily falling below the 30 per cent regulatory threshold.
New Zealand declares state of emergency
Jamie Smyth in Sydney
New Zealand has declared a state of national emergency, providing the authorities with greater powers to tackle the spread of the coronavirus across the Pacific nation.
The declaration, which was made shortly after midday on Wednesday, followed a jump in the number of cases to 205, a rise of 50 cases in a day.
Sarah Stuart-Black, director of civil defence emergency, told reporters the declaration would give authorities the power to close roads, stop people from doing activities that may spread the virus and bar people and traffic from certain areas. People should be going out for a reason such as a trip to the supermarket, ‘not just a bit of a mooch’, she said.
“The state of national emergency has been declared because of the unprecedented nature of this global pandemic and to ensure the Government has the powers it needs to slow the spread of COVID-19 and reduce its impact,” said Ms Stuart-Black.
New Zealand is due to outline the consequences for New Zealanders who do not abide by the tough new self-isolation and social distancing rules later on Wednesday or early Thursday, according to local media.
Mexico coronavirus cases rise to 405
Jude Webber reports from Mexico City
Mexico reported 405 confirmed cases of coronavirus on Tuesday, 38 more than the previous day, and five deaths as authorities said the virus was spreading within the community.
The health ministry said there were a further 1,219 suspected cases in the country.
Latin America’s second-biggest economy began a nationwide social distancing campaign this week but President Andrés Manuel López Obrador has urged people not to panic. Over the weekend, he was still recommending families frequent local restaurants to keep the economy afloat.
Japanese stocks jump following Wall Street lead
By Hudson Lockett and Leo Lewis
Japanese stocks exploded higher on a banner day for Asia-Pacific equities, as traders capitalised on momentum from Wall Street’s best day in more than a decade.
The move was powerful enough, said traders, to ignore the first ever postponement of an Olympic Games, Tokyo’s sharpest spike in new coronavirus cases and a dismal slew of overnight news on the widening pandemic.
Japan’s Topix benchmark stock index climbed 5.3 per cent, taking gains this week to about 9 per cent, while Australia’s S&P/ASX 200 rose 3.3 per cent and South Korea’s Kopsi index gained 4.5 per cent. China’s CSI 300 rose 2.5 per cent and Hong Kong’s Hang Seng jumped 3.1 per cent.
Markets are increasingly putting faith in an unprecedented intervention by governments around the world, and the gains in Asia came as members of the US Congress said they were close to agreeing a nearly $2tn economic support package.
Although none had been reached by market close on Tuesday, the prospect of a shot in the arm for the US economy drove the S&P 500 up 9.4 per cent by the close in the biggest one-day gain for the benchmark since 2008. Futures markets pointed to a dip of 0.7 per cent for US stocks later in the day.
Oil prices also picked up on the prospect of a boost to demand from government support, with Brent crude, the international benchmark, climbing 3.3 per cent to $28.05 a barrel, while US marker West Texas Intermediate rose 3.6 per cent to $24.88.
South Korean virus cases rise as Trump asks for help
By Edward White
South Korea’s new coronavirus cases ticked higher again on Wednesday as the country struggles with one of the worst outbreaks in Asia and as US President Donald Trump approached Seoul for help.
The Korea Centers for Disease Control reported 100 new cases, up from 76 on Tuesday, and taking the total infection caseload to 9,137. Six additional deaths were confirmed, pushing the death toll to 126.
Overnight, Mr Trump spoke to Moon Jae-in, the South Korean president, asking for medical equipment, according to South Korea’s presidential office. Mr Moon promised support but said US regulatory approvals may be needed.
New infections in South Korea were outpaced by recovering patients with the latest tally showing 223 new recoveries taking the total to 3,730.
While the number of new cases continues to frustrate South Korean officials, who have tightened controls on people arriving into the country and cracked down on public gatherings, the country continues to be an example of where mass testing, social distancing and contact tracing has helped to contain the outbreak.
Qantas secures $627m loan as coronavirus hits airlines
Jamie Smyth reports from Sydney
Qantas Airways has raised A$1.05bn ($627m) in debt funding to strengthen its balance sheet as the aviation sector faces an unprecedented $250bn hit to revenues due to the ongoing coronavirus crisis.
The 10-year loan from a consortium of domestic and international banks is secured against part of the Australian carrier’s airline fleet at an interest rate of 2.75 per cent. It marks one of the first successful private debt raisings by an airline since governments worldwide began closing international borders over the past week, which has forced the industry to ground thousands of aircraft.
The fund raising comes as global airlines scramble to slash costs and national governments prepare rescue packages to stave off a wave of bankruptcies in the sector. Corporate credit markets have tightened due to a liquidity squeeze and last week Moody’s put Qantas’s Baa2 credit rating under review for possible downgrade due to “unprecedented disruption to the airline industry”.
Qantas has insisted it has enough cash to ride out the crisis.
“Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances,” said Alan Joyce, Qantas chief executive.
Qantas has net debt of A$5.1bn, with no major debt securities until June 2021. The extra A$1.05bn in funding, which contains no financial covenants, increases the Group’s available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available. Qantas said it has a further A$3.5bn in unencumbered assets.
Bolsonaro downplays virus as a ‘sniffle’
Andres Schipani reports from São Paulo
Brazil’s President Jair Bolsonaro downplayed coronavirus as a “sniffle” in a provocative televised address on Tuesday evening even as the number of cases soared.
Brazil has the highest number of confirmed cases in Latin America, but the populist president’s response to the outbreak has been muted compared to that of many other regional leaders. By Tuesday, the number of recorded Covid-19 cases in Brazil had jumped to 2,201 — an almost tenfold increase in a week. The country has recorded 46 fatalities, the largest number in the region.
“The virus arrived, it is being faced by us and it will soon pass, our life must go on,” Mr Bolsonaro said, adding, “We should, yes, return to normality.”
He described the reaction to the virus as “hysteria”, slamming state governors and city mayors for taking the lead in shutting down venues, non-essential shops, and asking citizens to stay at home. “They should abandon banning public transport, shutting down businesses, and mass confinement,” the right-wing president said.
The 65-year-old former army captain went on to say that he was sure he would be unaffected if he was infected with the virus.
“What is happening in the world has shown that the risk group is that of people over 60 years of age. So, why close schools? Rare are the fatal cases of healthy people under 40 years of age. Ninety percent of us will have no symptomatic manifestation if we get contaminated … In my particular case, due to my track record as an athlete, if I were infected by the virus I would not need to worry, I would feel nothing, or at worst, I’d be affected by a gripezinha or a resfriadinho [a little cold, or sniffles].”
However, Daví Alcolumbre, an opposition politician who leads the Senate and who tested positive for the virus last week, condemned Mr Bolsonaro’s address. “In this grave moment, the country needs serious, responsible leadership,” he said.
Imported coronavirus cases in China near 500
Health authorities in China reported 47 new coronavirus cases to the end of Tuesday, all of which were imported from overseas. Those new infections take the number of imported cases to 474.
Wuhan, where the outbreak started, recorded no new cases on Tuesday. The Hubei health commission said restrictions on the movement of people in the province will be relaxed this week and will be extended to Wuhan, the provincial capital, on April 8.
The total number of coronavirus cases reported in the mainland rose to 81,218.
There were four new deaths, taking the overall number of fatalities to 3,281.
Asia-Pacific stocks gain after Wall Street rally
Stock markets in Asia-Pacific climbed on Wednesday after Wall Street notched its best day in a decade as Congress neared an agreement on a fiscal stimulus package.
Australia’s S&P/ASX 200 was up 4.5 per cent, the Topix in Japan gained 1.8 per cent and South Korea’s Kospi rose 3.7 per cent.
Overnight, the US benchmark S&P 500 closed up 9.4 per cent as optimism grew over negotiations for a $2tn economic stimulus package. The Dow Jones Industrial average jumped 11.4 per cent, its biggest one-day gain since 1933 during the Great Depression. London’s FTSE gained 9 per cent.
S&P 500 futures were down 0.8 per cent on Wednesday.
News you might have missed
France becomes fifth country to record more than 1,000 Covid-19 deaths France has become the fifth country to record more than 1,000 deaths from coronavirus as it enters its second week of lockdown. The French ministry of health said that another 240 people had died due to the virus over the past 24 hours, bringing the total number of deaths recorded in the country’s hospitals to 1,100.
Brazil coronavirus cases surpass 2,000 Brazil’s confirmed cases of coronavirus jumped to 2,201 with 46 fatalities on Tuesday as Latin America’s largest country struggles to contain the outbreak.
Trump sets Easter target to begin reopening economy President Donald Trump has stressed that he wants to open up the economy before Easter by easing the strict social distancing guidelines that his administration has urged to help curb the spread of the coronavirus.
US distributing plasma to help treat seriously ill patients The US drug regulator is distributing plasma from the blood of patients who have recovered from the coronavirus, in an attempt to boost the immune systems of the most seriously ill with antibodies to Covid-19.
Eurozone’s demand for cash leaps the most since the financial crisis Demand for cash in the eurozone increased by the most since the 2008 financial crisis last week as consumers bulk-bought household products and hoarded bank notes ahead of severe lockdowns in response to the coronavirus pandemic.
US Covid-19 cases top 50,000 The number of confirmed Covid-19 cases in the US surpassed 50,000 on Tuesday as the rate of infection in New York state doubled. US cases of the disease caused by the coronavirus climbed to 50,206, taking the global total to 409,014, according to data from Johns Hopkins University. Only China and Italy have more people that have been sickened by the pandemic.
Australian companies announce swathe of layoffs
Jamie Smyth reports from Sydney
Australian companies announced a swathe of layoffs on Wednesday with Virgin Australia and clothing retailer Mosaic brands announcing the standing down of almost 15,000 workers.
The layoffs, which both companies said were temporary measures to cope with the coronavirus crisis, follow a further clamp down on businesses and the movement of people set to take effect from midnight.
Under the new measures beauty parlours, casinos, gyms and a range of other venues will close and barbecues or other social gatherings with more than 10 people have been banned.
Canberra is also banning Australians from travelling abroad, as the number of coronavirus cases tops 2,000, more than double the number just three days earlier. However, schools in most states remain open – a controversial decision that has prompted criticism from some health experts, who have recommended implementing some of the tougher measures seen in Europe.
Brendan Murphy, Australia’s chief medical officer, said it was not credible to put in place measures for a few weeks and suddenly stop them.
“So we are very keen to put as restrictive measures in place without completely destroying life as we know it.”
Virgin said it would begin grounding 125 aircraft from and standing down 80 per cent of its 10,000 workers until at least May in response to the extraordinary situation. Mosaic Brands, which owns several retailers such as Noni B, said it would close all its stores and stand down staff due to a substantial drop in foot traffic due to social distancing rules.
The swathe of job losses across the economy has put intense pressure on social welfare services, with long lines of people queueing up outside unemployment offices and its main website crashing because of the deluge of claims.
Westpac economists forecast the jobless rate in Australia will rise from 5 per cent to 11.1 per cent by the end of June, with more than 800,000 jobs losses in the second quarter.
Star Casino also stood down 90 per cent of its 9,000 workers on Wednesday.
Nearly 80% of Nike stores in China back in business
Alistair Gray in New York
About four out of five Nike stores are open in greater China, the US sportswear company said today, offering at least some hope that economies brought to a standstill by the pandemic might be able to get back on their feet within months.
The reopenings, disclosed in Nike’s quarterly results report, mark a swift recovery from the height of China’s coronavirus crisis in February. At its peak, Nike shut three-quarters of its outlets in the region.
Nike has since closed owned stores in several other countries, including in the US, Canada and western Europe, as authorities around the world impose restrictions on discretionary shopping to control the outbreak.
Shares rose a further 6.5 per cent in after-hours trading, following a 15 per cent jump in the New York market rally today. They are still down 25 per cent for the year.