|Bid||3.3800 x 200000|
|Ask||3.3840 x 110000|
|Day's range||3.2840 - 3.4920|
|52-week range||2.8040 - 8.2550|
|Beta (5Y monthly)||1.85|
|PE ratio (TTM)||6.61|
|Earnings date||13 May 2020|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||07 May 2020|
|1y target est||11.78|
(Bloomberg) -- China’s foreign-currency holdings fell in March by the most since late 2016, as asset prices fell and a stronger dollar pushed down the value of reserves held in other currencies.Reserves fell to $3.0606 trillion from $3.1067 trillion in the previous month, the People’s Bank of China said Tuesday.Key InsightsThe dollar strengthened amid global financial market turbulence, and asset prices in major countries adjusted significantly, the State Administration of Foreign Exchange said in a statement. Reserves declined due to the combined effect of exchange rate conversions and asset price changes, SAFE said.The Bloomberg dollar index surged to its highest since late 2016 in March as the coronavirus outbreak spread around the world, pushing investors to seek safety in havens such as the dollar and yen.The reading is lower than the median estimate of $3.0975 trillion in a survey of economists“The drop is due to falling stock prices in major economies, which pushed down the value of the reserves, rather than capital outflow,” said Zhou Hao, senior Emerging Markets economist at Commerzbank AG in Singapore.Get MoreHowever, not all analysts thought that the decline was just due to valuation effects: “The drop in China’s FX reserves is far bigger than can be accounted for by FX and portfolio valuation changes,” according to Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. in Singapore.“This suggests that the authorities may have intervened to halt the yuan’s decline during March, and could explain why there was very strong support at the 7.12 level,” he said, referring to the value of the currency in dollars.The value of gold reserves dropped slightly to $100.79 billionSee table for more details: China’s End-March Forex Reserves at $3.0606 trillion(Updates throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Governments are helping businesses survive the debilitating effects of the coronavirus by allocating state funds to various rescue packages to keep companies alive and preserve as many jobs as possible. With unprecedented amounts of economic stimulus planned to combat an unparalleled situation, it’s essential that the authorities spare at least some attention to what a post-pandemic exit strategy might look like. Once the virus is subdued and the lockdowns end, governments should convert a chunk of the aid they’ve distributed into equity stakes in the recipients, with the ensuing portfolio of holdings assembled into sovereign wealth funds.Norway currently has the world’s biggest sovereign wealth fund, overseeing about $945 billion and funded by the nation’s oil revenue. Singapore has had a wealth fund for more than four decades. Egypt, Senegal and Turkey have all set up wealth funds in recent years to manage their state-owned companies, with South Africa saying earlier this year that it plans a similar move.Countries in Europe have toyed with the idea in the past. In August, a draft proposal for a “European Future Fund” suggested an initial 100 billion-euro ($110 billion) pot could be set aside to invest in strategic industries in the European Union. But as my colleague Ferdinando Giugliano argued at the time, the EU is not a sovereign state, and such a fund would just divert existing budget resources rather than tapping a pool of wealth.In the U.K., the May 2017 Conservative Party manifesto proposed what it called Future Britain funds, which would “hold in trust the investments of the British people, backing British infrastructure and the British economy.” The pitch said the money would come from “shale gas extraction, dormant assets and the receipts of sale of some public assets.” Almost three years later, there’s still no sign of those plans being enacted. (That’s probably just as well given their paltry financial underpinning; as myself and my colleague Marcus Ashworth wrote at the time, those sources would have provided a minuscule capital base, even before fracking was banned in Britain.)But the current crisis provides an opportunity for individual countries to make good on those vague promises by setting up wealth funds that are big enough to count as full-blown assets to society, given the scale of financial assistance that’s likely to be required to get through these dark days.They could start by assigning existing state investments to wealth funds. The U.K. government, for example, still owns about 60% of Royal Bank of Scotland Group Plc, more than a decade after bailing out the ailing lender to the tune of more than 45 billion pounds ($56 billion) as part of a wider rescue of the domestic banking industry. The German government has a stake of almost 16% in Commerzbank AG, while Belgium and France have control of Dexia SA, split 53% to 47%.The global financial crisis made many banks wards of their states. Formalizing those stakes in wealth funds would be a way to start building state-owned asset portfolios. During normal times, governments could be sleeping equity partners. But in times of crisis — like now — governments would have a more direct pathway to influence lenders to help borrowers weather any economic storm. For the U.K., creating a wealth fund would solve the issue of preserving vital domestic infrastructure without handing free money to foreign conglomerates. The owners of Heathrow Airport, for example, include Qatar Holding, the government of Singapore’s GIC Pte Ltd., and the China Investment Corp. By making aid conditional on receipt of equity, Britain would be getting a stake at current distressed values in return for bailout funds.Today’s situation demands aid packages for a swathe of industries feeling the pain, including automakers and travel companies. If having such a broad range of stakes feels too interventionist, wealth-fund holdings could be restricted to infrastructure that’s vital to the economic functioning of a country. Though that could prove to be a tough distinction; given initial lockdown experiences, an argument could be made that suppliers of internet broadband and food delivery should qualify.For those who still insist the state should stay out of private enterprises, note that governments are already effectively telling companies how to run their affairs in return for aid. Earlier this week, Germany asked companies seeking help to suspend their dividends, with France also asking the same from firms that defer tax liabilities. German Economy Minister Peter Altmaier also wants senior executives to “contribute in emergencies, especially with respect to bonus payments,” according to an interview with the Frankfurter Allgemeine Zeitung at the weekend.One of the new realities of the post-virus economy will be increased state involvement in business. Companies are likely to come under pressure to shorten their supply chains and bring more manufacturing back home, wherever home may be. The lines of production will become shorter, as regional ties replace at least some of the worldwide outsourcing that has been a keystone of the globalized economy. That will be easier to enforce if governments’ holdings give them seats on corporate boards.Shareholdings would give governments additional clout to influence better corporate behavior as more nations embrace their responsibilities to the future of the planet. Until now, asset managers have long been leading the drive to force firms to give greater emphasis to environmental, social and governance issues.A decade ago, a key complaint about the rescue of the global financial system was that public money was used to compensate for private risk taking gone awry. While this crisis is undoubtedly different, there’s still a danger that as governments pledge billions of dollars, euros and pounds to businesses, public support will wane as the scale of the financial challenge becomes apparent. Building equity stakes that belong to the nation will help offset voter mistrust about the wisdom of such largess, allowing everyone to participate in the economic recovery that the disbursements are designed to facilitate.As the saying goes, never let a serious crisis go to waste.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Financial regulators are applying all of the lessons of the 2008 credit crisis at record speed. In the past few weeks, they’ve worked with central banks to pump liquidity into markets and to make it easier for banks to lend. It’s essential now that lenders keep providing money to companies and households whose incomes have evaporated in the Covid-19 lockdowns. If the banks stop functioning, what hope for the rest of the economy?The next chapter in European regulators’ crisis playbook is ensuring that the banks don’t hand much of their excess capital to investors or keep paying hefty bonuses to senior staff. Supervisors are trying to make sure that financial firms remain solid by easing their capital rules, thereby freeing up hundreds of billions of dollars — that places a heavy burden on the banks to act responsibly. Shares in British banks, including HSBC Holdings Plc and Barclays Plc, fell sharply on Wednesday after they halted dividends at the Bank of England’s request.Regulators are also preempting a popular backlash by discouraging cash bonuses to bankers. This makes perfect sense, given the support that lenders have already received by way of looser regulation and state loan guarantees.As we’ve heard from supervisors and banking executives in recent weeks, banks — for now — remain part of the solution to the unprecedented economic shock, rather than the problem. This isn’t 2008.The excessive banker pay that fueled the risk binge in the run-up to the Lehmans meltdown is still fresh in people’s minds. What’s more, during the global financial crisis, banks often took too long to suspend dividends and buybacks, leaving themselves thinly capitalized as losses piled up and hastening the need for government bailouts. Excessive pay during and soon after the crisis, including at bailed-out institutions, rightly infuriated the taxpayers that were left footing the bill.More than a dozen years after the financial crisis, a number of Europe’s biggest lenders — Royal Bank of Scotland Group Plc, ABN Amro Bank NV and Commerzbank AG — are still at least partly state owned. Little surprise then that the U.K. regulator “expects banks not to pay any cash bonuses to senior staff, including all material risk takers,” while the European Banking Authority is urging firms to pay conservative bonuses and consider deferring awards for a longer period and in shares.It could be worse. While bankers won’t be able to cash in on their deferred compensation from previous years’ share awards after stocks plunged, they will have already received their 2019 variable cash compensation by now, and they’ll have plenty of time to prepare for next year.Take the 1,700 traders and bankers at Barclays, who’ll be affected by the measures. About 45% of their average pay of 825,000 pounds ($1 million) consists of fixed pay, 22% comes from share awards, and 23% is a cash bonus (of which 58% is deferred), according to Citigroup Inc. analysts. While cash is king — especially during an economic crisis — getting more of that pay package in shares wouldn’t necessarily be a disaster, even if people had to wait a few years to sell. Assuming stocks don’t bounce back too far from their current levels, bankers might be getting a lot of very cheap stock in 2021.And however painful the hit, regulators are probably just insisting on something that the markets will probably take care of over the rest of the year anyway. The first quarter may have been a bumper three months for trading in financial markets because of all of the volatility, activity could well be subdued over the coming quarters as the recession really hits. That would depress bonuses anyway. The very best financiers will expect to see their fixed pay rise to sweeten the blow, but for most of the thousands of bankers and traders fortunate enough to keep their jobs, lavish compensation will be a thing of the past. The crisis will be as Darwinian for investment banking as it is for every other pocket of the economy. Hanging on to your chair will be your 2021 bonus.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Fitch has put Deutsche Bank on a negative credit outlook and cut the rating of Germany's second biggest listed lender Commerzbank to BBB due to the coronavirus crisis. The credit ratings agency also lowered its view of other German lenders, saying in a statement released on Monday that it "considers the risks to banks' credit profiles to be clearly skewed to the downside". Fitch, which last year downgraded Deutsche Bank to BBB, said the negative outlook was due to "heightened near-term risks to the bank's earnings, capitalisation and additional execution risks to its restructuring".
(Bloomberg) -- China’s central bank cut the interest rate it charges on loans to banks by the biggest amount since 2015 as authorities ramp up their response to the worsening economic impact from the coronavirus pandemic.The People’s Bank of China reduced the interest rate on 7-day reverse repurchase agreements to 2.2% from 2.4% when it injected 50 billion yuan ($7.1 billion) into the banking system, according to a statement Monday. The central bank said this will keep liquidity sufficient to help the real economy.The first cut to a PBOC policy rate since February is in line with a pledge by the Communist Party’s leadership on Friday to increase support to the economy through increased sales of sovereign debt, as domestic and international demand slumps due to the pandemic. The step brings the PBOC closer in line with the stance of global peers, who have loosened policy dramatically in recent weeks.“The larger-than-usual rate cut is an expression that China is willing to join the coordinated consortium for economic stabilization,” said Raymond Yeung, chief China economist at Australia & New Zealand Banking Group in Hong Kong. “Small and medium-sized businesses are collapsing for lack of cash flow.”Further Cuts ExpectedA reduction in the central bank’s main tool to adjust the price of market liquidity also signals coming reductions in its main one-year funding tool, and potentially a corresponding cut to the benchmark deposit rate. Reductions to policy rates should also be reflected in the main market benchmark of the cost of lending to companies, the loan prime rate.“Lowering banks’ lending rates without a reduction in the cost of their liabilities will squeeze banks’ net interest margin, eroding their profitability and capital base,” said Ding Shuang, chief Greater China and North Asia economist at Standard Chartered Bank Ltd. “A benchmark deposit rate cut is necessary.”China will increase its fiscal deficit as a share of gross domestic product, issue special sovereign debt and allow local governments to sell more infrastructure bonds as part of a package to stabilize the economy, according to a Politburo meeting on Wednesday, Xinhua reported late Friday.What Bloomberg’s Economists Say...“We expect the authorities to urge banks to expand lending, particularly to smaller and private companies. To achieve this, more liquidity will be injected by the PBOC via both broad-based and targeted methods, such as reductions in the required reserve ratio and offering liquidity via targeted MLFs.”\--David Qu, Bloomberg economistSee full report hereIn a separate statement published late Friday, the People’s Bank of China called for better coordination of global macro policies, while re-emphasizing it will keep liquidity sufficient to help with the real economy and watch out for inflation risks.Plenty of Room LeftThe cut Monday signals the PBOC has entered “a stage with stronger counter-cyclical adjustment,” out of consideration of both domestic demand and the global virus outbreak, Ma Jun, a PBOC adviser, said in a statement sent to the media after the rate cut. “The PBOC doesn’t use its bullets all at once. China still has plenty of room in monetary policy.”Economists have lowered their median forecast for economic growth to 2.9% for 2020, the slowest pace since 1976, when the Cultural Revolution wrecked the economy and society. Until the past few days, China’s policy makers had maintained a relatively cautious program of easing, mindful of the nation’s heavy debt load and of risks to financial stability.While the Politburo statement and the PBOC move signal the response is moving up a gear, it still falls short of a no-holds-barred stimulus.The leaders of the Group of 20 said last week they were injecting more than $5 trillion into their economies to fight the effects of the outbreak. Central banks globally have slashed interest rates and started quantitative easing programs.“Certainly, the policy easing is continuous and today’s liquidity injection at least suggests that the policy aid will be mildly constant and will be more proactive when the authorities deem necessary,” said Zhou Hao, an economist at Commerzbank AG. “China is joining the global easing wave.”(Updates with Bloomberg Economics, details of actions of other nations.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
MILAN/MADRID/FRANKFURT, March 24 (Reuters) - Corrado Sforza Fogliani is on the frontlines of European efforts to keep the region's economy alive amid the coronavirus pandemic. Buried in paperwork and with Rome and banking lobbies still at odds over who should be on the hook for defaults when a six-month debt holiday ends, Banca di Piacenza's loan officers have only been able to process a fraction of the 1,000 applications they have received.
(Bloomberg) -- New York state ordered non-essential workers to stay home, a move followed hours later by neighboring New Jersey and then by Illinois. Italy reported 627 fatalities, the most in one day anywhere, as the death toll in Europe’s epicenter topped 4,000.President Donald Trump banned all non-essential travel from Mexico, exempting commerce. He also deferred student loan payments.The U.K. and the U.S. warned that social distancing may be in place longer than expected. The European Union said the looming recession may be much worse than previously anticipated.It took three months to reach 100,000 cases but only 12 days for the next 100,000.Key Developments:Cases top 250,000, more than 10,000 deadInfections rise to almost 20,000 in both Spain and IranBiennial Farnborough Airshow postponed until 2022Four U.S. senators sold stock after virus briefings in JanuaryNew York City reports 5,151 cases of Covid-19, 29 fatalitiesLatin America isn’t ready for the virus onslaught headed its waySubscribe to a daily update on the virus from Bloomberg’s Prognosis team here.Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here. To see the impact on oil and commodities demand, click here.Illinois Issues Shelter-in-Place Order (4:20 p.m. NY)Illinois Governor J.B. Pritzker ordered residents to shelter in place starting Saturday, following California, New York and New Jersey in restricting the movement of residents to combat the coronavirus.Earlier this month, Pritzker closed schools, dine-in service at bars and restaurants and banned gatherings of more than 50. Chicago earlier ordered sick residents to remain home.N.J. to Shut ‘Nonessential’ Businesses (4 p.m. NY)New Jersey Governor Phil Murphy said he will sign an executive order requiring all “nonessential” businesses closed to help slow the spread of the virus. Murphy said he would give more details when he signs the order Saturday.“The only way we’re going to beat this darn virus is if we literally stay home and stay away from each other,” Murphy said at a news conference in Paramus.World Needs 80-100 Times More Tests, WHO Says (2:30 p.m. NY)The number of coronavirus tests needed in coming months is probably 80 to 100 times the 1.5 million that the World Health Organization supplied so far, said Mike Ryan, the agency’s head of health emergencies. Governments need to step up their commitments because there are more than 26 million health-care workers around the world who need to have protective gear, he said.“The greatest tragedy for me among all the tragedies we’re seeing is the prospect of losing a part of our workforce, those doctors and nurses and hygienists and others who put themselves in the front line,” Ryan said.Nigeria to Conduct Trials of Chloroquine (2:30 p.m. NY)Nigeria’s Lagos State government plans to conduct a clinical trial on the effectiveness of the malaria drug chloroquine in the prevention and management of coronavirus infection, according to Health Commissioner Akin Abayomi.The trial will be carried out against “the fast spreading news that chloroquine could be effective in preventing and managing Covid-19,” Abayomi said in emailed statement on Friday.U.S. President Donald Trump touted the drug at a press briefing Thursday, urging regulators to approve its use for the coronavirus.U.K. to Help Pay Workers Wages (1:30 p.m. NY)The U.K. government said it will step in and help pay its citizen’s wages during the coronavirus pandemic “for the first time in the nation’s history.”The state will cover 80% of the salary of workers that firms can’t afford to retain as a result of the crisis. That is up to a total of 2,500 pounds ($2,900) a month, Chancellor of the Exchequer Rishi Sunak told reporters on Friday.“You will not face this alone,” Sunak said.Read full story here.Crowds Swarm New Jersey Test Site (1:23 p.m. NY)New Jersey closed its first drive-through test site to people beyond the 1,000 already in line, and even they may not get swabbed today.The line had grown too long less than four hours after its planned 8 a.m. opening at Bergen Community College in Paramus. The site was to get 2,500 new coronavirus test kits, with supplies replenished weekly.Read full story here.Brazilian Lawmakers Hold First Remote Voting (12:45 p.m. NY)Brazil’s Congress held its first-ever remote voting session as part of efforts to proceed with crucial legislative work while restricting movement of people in Brasilia’s often-crowded parliament.In a video conference broadcast on their official website, senators approved a calamity decree allowing President Jair Bolsonaro to increase anti-virus spending.Cuomo Orders All Non-Essential Workers Home (12:20 p.m. NY)Governor Andrew Cuomo ordered New Yorkers to stay at home for the foreseeable future, except for essential services like grocery stores and mass transit.He said the new orders would go in place on Sunday. The state’s death toll has reached 35. New York has more than 7,100 coronavirus cases, the most in the U.S.“This is the most drastic action we can take,” Cuomo said.Read full story here.First Virus Deaths in Peru (12:15 p.m. NY)Three people died on Thursday after becoming infected by the coronavirus, Peru’s Health Ministry says on Twitter.Two men -- one 47 and the other 69 -- died in Lima after visiting Spain. The third victim was a 78-year-old man.Medical experts worry that Latin America, which has so far reported relatively few cases, is unprepared for a larger outbreak.London Pubs, Restaurants Set to Be Told to Close (11:27 a.m. NY)London’s pubs, restaurants, leisure centers, and cinemas will be told to close to stop the spread of coronavirus, under plans expected to be agreed to on Friday, a British official said.Social Distancing Will Last Several More Weeks (11:08 a.m. NY)Americans will have to practice social distancing for at least several more weeks to mitigate U.S. cases of Covid-19, Anthony S. Fauci of the National Institutes of Health said Friday.“If you look at the trajectory of the curves of outbreaks in other areas, it’s at least going to be several weeks. I cannot see that all of a sudden next week or two weeks from now, it’s going to be over. I don’t think there’s a chance of that. I think it’s going to be several weeks,” Fauci said on The Today Show.FAA Closes Airspace Near Indianapolis (10:26 a.m. NY)The FAA has vacated three airspace work areas in Indianapolis after an air traffic control supervisor tested positive for COVID-19.Flights through the airspace handled by those sectors were rerouted, according to FAA in emailed statementIRS Moving Tax Day to July 15 (10:25 a.m. NY)U.S. Treasury Secretary Steven Mnuchin says people and businesses will have more time to file and make payments without interest or penalties.American Air Flies First Cargo-Only Flight in 36 Years (10:22 a.m. NY)American Airlines Group Inc. is shifting some of its biggest idled jets to ferry just cargo -- the carrier’s first flights without passengers in nearly four decades.The Boeing Co. 777-300s will fly medical supplies, military mail, e-commerce packages and high-demand office equipment as more people work from home, the airline said in a statement. The wide-body flights begin Friday, with two round trips over four days between Frankfurt and the airline’s home base at Dallas-Fort Worth airport.Read full story here.Brazil Bans Visitors from Europe and Asia (10:17 a.m. NY)Brazil will bar travelers from about three dozen European and Asian nations from entering the country. The ban doesn’t apply to Brazilians or foreigners living in the country and will last for 30 days starting Monday.Dutch Death Toll Jumps to 106 (9:15 a.m. NY)The Netherlands reported 30 more deaths, the biggest daily increase since the first coronavirus case was confirmed at the end of February. The total number of fatalities now stands at 106, according to Dutch health authorities.Frankfurt Airport Operator Furloughs Thousands (9:10 a.m. NY)Fraport AG put at least 18,000 of its 22,000 employees in Frankfurt on furlough until the end of May to offset the coronavirus impact. The company said in a statement that Frankfurt airport will also shut the shortest of its four runways, but intends to maintain flight operations and continue work on its new terminal.Amazon Prime Slows Europe Streaming (9:05 a.m. NY)Amazon.com Inc.’s Prime Video will follow Netflix and Google’s lead in reducing the speed of streams across Europe to ensure networks can handle increased use amid the coronavirus outbreak, which has sent thousands of workers home and shut schools.Social Distancing Could Be Needed Most of Year: U.K. Advisers (8:42 a.m. NY)U.K. government’s scientific advisers say social distancing measures to suppress the coronavirus outbreak may be necessary for “at least most of a year.” In documents published Friday, the U.K. scientific committee said: “It was agreed that a policy of alternating between periods of more and less strict social distancing measures could plausibly be effective at keeping the number of critical care cases within capacity.”In an NBC interview, National Institute for Allergy and Infectious Diseases Director Anthony Fauci said social distancing may be needed for at least several more weeks. “I cannot see that all of a sudden next week or two weeks from now, it’s going to be over,” Fauci said.Commerzbank Sticks With Target as Impact ‘Unforeseeable’ (8:37 a.m. NY)Commerzbank AG said it’s too early to quantify the impact of the coronavirus pandemic on the economy and its own outlook for the year. In its annual report published Friday, the German bank kept its forecast for a profit this year, while warning of numerous risks that “could affect the 2020 profit forecast to a considerable, though not reliably quantifiable, extent should events take an unfavorable turn.”Gilead’s Likely Remdesivir Approval Prompts Piper Upgrade (7:20 a.m. NY)Piper Sandler raised Gilead to overweight from neutral and said President Donald Trump’s comments on remdesivir at a Thursday press conference show the “tremendous pressure to approve the Covid-19 drug within days.”Separately, Sorrento Therapeutics says it has produced a pre-clinical batch of STI-4398 protein to immediately begin testing its neutralization and blocking activity in preventing SARS-CoV-2 virus from infecting ACE2-expressing cells.Singapore Suspends Large Events, Steps Up Social Distancing (7:17 a.m. NY)Singapore will prohibit events and gatherings of 250 or more people as it steps up measures to slow the spread of the coronavirus. The government said there were 40 new virus cases as of 12 p.m. on Friday, taking the total to 385. Thirty of the new infections came from abroad, the majority of them Singapore residents returning home.Cases Rise to Almost 20,000 in Spain, Iran (6:50 a.m. NY)Iran reported 1,237 new coronavirus cases and 149 deaths, bringing the country’s total to 19,644 cases and 1,433 fatalities. The health ministry also noted that 6,745 people had recovered from the virus so far, adding that 13 provinces have had a noticeable decrease in new cases.In Spain, cases rose by 2,833 to 19,980 and the death toll surged by 31% to 1,002.WHO Suspects Thailand Community Transmission Rising (6:40 a.m. NY)The WHO is concerned about the possibility that the transmission of the virus is more widespread in the community following recent increases in the daily confirmed cases. Thailand reported 50 more cases earlier on Friday, taking its total to 322 -- of the country’s total new cases, 41 are related to existing cases from Thai boxing stadiums and the nightlife sector.Disease Is Doubling at Even Faster Rate Now (6:15 a.m. NY)While the number of cases doubled to 200,000 cases in the 12 days through Thursday, on Friday the tally already was halfway to the 300,000 mark. The number of cases in France has doubled in four days, said Christian Lindmeier, a spokesman for the World Health Organization. When countries don’t have enough tests, they should triage, he said.The WHO said it developed new guidelines to investigate the extent of infection among the population with antibody tests. Thirteen countries have begun to implement some of the investigation protocols, and another 18 said they plan to do so. More widespread testing would give better information about the disease.The United Nations plans to give details next week about a humanitarian response as 100 million people in war zones face extreme risks related to the outbreak, said Jens Laerke, a spokesman for the UN humanitarian office.Altria CEO Tests Positive (6:11 a.m. NY)Altria said CEO Howard A. Willard III contracted the Covid-19 virus and is taking a temporary medical leave of absence. Chief Financial Officer William F. Gifford Jr. will take over Willard’s responsibilities until he returns.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Germany may impose a nationwide lockdown in the coming days as Bavaria became the first state in the country to enforce severe restrictions on citizens in an effort to stem the spread of the coronavirus.The southern region, a hotspot for confirmed cases, banned public gatherings and threatened stiff fines for anyone flouting the rules. The measures take effect at midnight Friday and will last for an initial two weeks, with Germany’s other 15 states expected to follow suit. A senior minister in Chancellor Angela Merkel’s cabinet warned that if people continue to socialize, all Germans may be confined to their homes.“We are almost completely winding down public life in Bavaria,” Premier Markus Soeder said at a news conference in Munich Friday. “From tomorrow it’s even more imperative: stay at home and only go out in exceptional circumstances,” he said, adding that restaurants will be closed down across Germany.Merkel will consult regional leaders Sunday to discuss the latest efforts to contain the virus and a cabinet meeting is planned for Monday, after which further restrictions could be announced. Germany has more than 15,000 confirmed cases and 44 deaths.As they struggle to contain the spread of the disease, officials are also moving to help companies suffering from the impact of the outbreak on the economy.The government will create a fund worth 500 billion euros ($538 billion) to provide firms with loan guarantees and injections of cash, Der Spiegel magazine reported. State aid of as much as 180 billion euros would be made available under the plan, which would lead to an increase in federal government borrowing, the report said. Finance Minister Olaf Scholz earlier threw his weight behind the government buying stakes in companies struggling to avoid bankruptcy.In a break from its policy of running balanced budgets, Merkel’s coalition wants to ask parliament for authorization for sweeping spending leeway, people with direct knowledge of the discussions said Thursday. The Cabinet is set to sign off on the request in the coming days.The historic move would be necessary under German law, which caps outlays under normal circumstances via a constitutional mechanism, known as the debt brake, which only allows for excess spending in crisis situations. The government has already pledged to lend as much as 550 billion euros ($594 billion) via state-owned development bank KfW.Scholz said that, if necessary, the federal government could buy company stakes using a fund set up to deal with the financial crisis a decade ago.Liquidity Shortage“We used something similar in 2008 to 2009, although that was focused on the banking sector,” Scholz told Deutschlandfunk radio Friday.“It could very well be that a company suddenly has a shortage of liquidity, and we are trying to address that with our liquidity program,” he added. “But at some point share capital will be required and we’re ready again to use the financial markets stability fund to make our contribution.”Germany set up its 480 billion-euro bank rescue fund in October 2008, the month after the collapse of Lehman Brothers Holdings Inc sparked a global credit crunch.The majority of its firepower consisted of guarantees, but the fund also took stakes in banks by injecting billions of euros of capital. More than a decade later, Germany still holds shares in Commerzbank AG and is continuing to wind down the assets of failed lender Hypo Real Estate Holding AG.As the economic fallout widens, companies in sectors like transport, retail and tourism are reeling and some of Germany’s corporate titans -- from Volkswagen AG to Daimler AG -- have taken unprecedented steps to idle plants.BMW AG this week abandoned hopes for another record year in sales, predicting deliveries will be “significantly below” 2019 levels and profitability the weakest in years.The government could purchase a stake in Deutsche Lufthansa AG -- which said Thursday it will stop 95% of flights -- as part of a rescue, a person familiar with the plan said last week.(Updates with Bavaria restrictions)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Gold investors appear to be bowing out of an increasingly erratic market.Open interest in the precious metal, a tally of outstanding futures contracts, has plunged to the lowest in more than seven months. The drop comes as volatility measures for bullion surge to multi-year highs.Gold futures swung between gains and losses Thursday, dropping as much as 1.2% as the dollar advanced. Pressure to dump bullion to raise cash and cover losses in other markets has sent the metal tumbling this month, blunting the boost from easier monetary policy worldwide, which is a usually boon to the non-interest-bearing metal.“Gold is not really managing to hold its own in the current market environment,” Daniel Briesemann, an analyst at Commerzbank AG, said in a note.Gold futures for April delivery rose 0.1% to settle at $1,479.30 an ounce at 1:30 p.m. on the Comex in New York.Bart Melek, head of commodity strategy at TD Securities, said surging volatility has prompted momentum-tracking commodity trading advisors to exit gold.On Wednesday, the Senate cleared the second major bill responding to the coronavirus pandemic and White House economic adviser Larry Kudlow said the government might take equity positions as part of an aid package. The European Central Bank launched an extra emergency bond-buying program worth 750 billion euros ($811 billion).Haven-seeking investors have turned from gold to the U.S. dollar instead, which soared to a record Thursday.“While stimulus measures/rate cuts -- including the ECB emergency bond-buying program -- are usually positive for gold, we think any support will be short-lived,” said Vivek Dhar, an analyst at Commonwealth Bank of Australia. “There is a clear preference for the U.S. dollar over gold as global market risks intensify, and that should pressure gold prices lower in the near term.”In other precious metals, silver rose on the Comex, while platinum fell and palladium rallied on the New York Mercantile Exchange.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Germany’s financial watchdogs eliminated a key capital requirement for the country’s banks to keep credit flowing and give flexibility to lenders such as Deutsche Bank AG and Commerzbank AG that have been hit hard by the recent selloff in stocks and credit risk.The countercyclical capital buffer, meant to strengthen banks during good times for a downturn, will be cut to 0% starting on April 1 and remain there until at least through December, the Finance Ministry said in a joint statement with financial supervisor BaFin and the Bundesbank. As a result, banks will be able to release more than 5 billion euros ($5.5 billion) of capital they were in the process of building up.That brings the volume of excess capital that German banks have on hand to digest losses and keep lending to about 225 billion euros, according to people familiar with the matter. That includes 120 billion euros of capital that the lenders held on top of their regulatory demands and 100 billion euros that the European Central Bank freed up last week, said the people, who spoke on condition of anonymity.After more than a decade of tightening financial strength requirements, bank regulators around the world are loosening the reins to prevent the economy from seizing up. The task for banks is daunting as many corporate clients are at risk of defaulting on loans while others will probably require additional funds as supply chains are disrupted, stores and restaurants shut down and public life grinds to a halt.“The move shows how critical the situation is in Europe,” ABN Amro Bank NV strategist Tom Kinmonth wrote in a note. “German regulators fought tough competition for a long period to raise the buffer and now have to remove it almost straight away.”ECB Freed Up $112 Billion at Banks to Bolster Credit Amid VirusThe ministry met BaFin as well as Germany’s central bank last week to discuss eliminating the buffer, Bloomberg reported at the time.German banks are well capitalized on the whole and the industry isn’t showing liquidity bottlenecks, according to the statement.The buffer applies to the German operations of banks, meaning those lenders with the biggest focus on the country will feel the most relief. Deutsche Bank AG, which has one of the most international footprints among German lenders, started the year with a countercyclical capital buffer of 0.08% while smaller competitor Commerzbank AG had a 0.12% requirement.German banks as well as their European competitors presented their regulators with a long list of demands last week to help them weather the fallout from the virus. The ECB loosened several capital demands on Thursday and nudged national authorities to follow suit on their own requirements.“One of the justifications to remove the buffers is to ‘free up lending capacity’,” wrote Kinmonth. “However, more realistically, banks will now try to actively reduce their provided credit lines” given the increase in risk.(Updates with capital reserves in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Gold tumbled again as investors rushed to raise cash to cover losses in other volatile markets, with global leaders striking a pessimistic tone over the likely economic impact of the coronavirus crisis.In a sign of the wild swings seen in markets during the health crisis, U.S. equity futures rebounded from their biggest drop since 1987, advancing alongside the dollar. President Donald Trump has warned of a possible recession and that the economic disruption from the virus could last into summer.A wave of central bank stimulus and a pledge from the leaders of the Group of Seven to do whatever is necessary to ensure a globally coordinated response has failed to quell investor concerns about the economic hit from the coronavirus.Spot gold dropped 2.9% and was at $1,470.71 an ounce by 11:56 a.m. in London. Prices are down more than 13% from a seven-year high reached earlier this month, and tumbled the most since 1983 last week.Other metals also extended losses, with silver dropping more than 5%, platinum losing 4% and palladium falling 2.2%.The sell-off in precious metals “reaches historic dimensions,” Commerzbank AG analyst Daniel Briesemann said in a note.“Gold declines remain linked to investors’ need for cash,” Stephen Innes, chief market strategist at AxiCorp Ltd., said in a report. “A constant question on every bullion investor’s mind is why is gold retreating when uncertainty and risk-off sentiment is rising? Gold’s recent declines are chalked up to margin-related selling as equities fell.”More and more countries are imposing travel restrictions and have closed schools, restaurants and canceled sporting events as deaths from the virus exceeds 7,000 globally.\--With assistance from Swansy Afonso.To contact the reporters on this story: David Stringer in Melbourne at firstname.lastname@example.org;Ranjeetha Pakiam in Singapore at email@example.comTo contact the editors responsible for this story: Alexander Kwiatkowski at firstname.lastname@example.org, Nicholas Larkin, Dylan GriffithsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Oil’s spectacular collapse deepened as widening global efforts to fight the spread of the coronavirus looked set to trigger the most severe contraction in annual demand in history.Global benchmark Brent crude fell more than 12.5% after Saudi Aramco’s chief financial officer said the company is “very comfortable” with oil at $30 a barrel. Demand for fuels is falling off a cliff as a result of global restrictions to prevent the spread of virus, with gasoline futures reaching their weakest level since at least 2005.Even a massive emergency move by the U.S. Federal Reserve to cushion the world’s biggest economy just added to the fear gripping markets. Forecasts for global oil use are being cut dramatically as government measures to contain the spread of the pandemic restrict the movement of people and throw supply chains into chaos. At the same time, giant producers are unleashing a flood of supply after the disintegration of the OPEC+ alliance.“Oil prices remain in freefall,” Commerzbank analysts including Carsten Fritsch wrote in a report. “The more countries ‘freeze’ public life, close their borders and cancel flights, the greater the impact will be on oil demand.”Oil traders, executives, hedge fund managers and consultants are revising down their estimates for global oil demand. The growing fear is that consumption, which averaged just over 100 million barrels a day in 2019, may contract by the most ever this year. That would easily outstrip the loss of almost 1 million barrels a day in 2009 and even surpass the 2.65 million barrels registered in 1980, when the world economy crashed after the second oil crisis.Travel restrictions across the globe tightened further over the weekend, with the U.S. extending its travel ban to include Britain and Ireland. Australia said anyone entering the country must self-isolate for two weeks, Spain imposed a lockdown and France closed cafes and restaurants.New York City limited restaurants and bars to takeout and delivery service, and shut nightclubs, movie theaters and concert venues. The U.S. Centers for Disease Control and Prevention recommended postponing any events with more than 50 people for the next eight weeks.The Fed cut its benchmark rate by a full percentage point to near zero and will boost its bond holdings by at least $700 billion. The move could trigger a fresh round of monetary easing around the world as countries look to keep money flowing as economic activity grinds to a halt. It wasn’t enough to calm markets though as U.S. equity futures hit limit down.\--With assistance from Sharon Cho, Dan Murtaugh, Ramsey Al-Rikabi, Andrew Janes, James Thornhill, Saket Sundria and Mike Jeffers.To contact the reporter on this story: Alex Longley in London at email@example.comTo contact the editors responsible for this story: David Marino at firstname.lastname@example.org, Pratish NarayananFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Deutsche Bank's cancellation of its 150th anniversary ceremony is not the only celebration that Germany's biggest bank is having to shelve as a result of the coronavirus outbreak. Shares in Deutsche Bank fell to a record low on Monday, sliding by as much as 17% in one its biggest drops in decades as the bank announced new measures to shield employees from the coronavirus outbreak, including the cancellation of its Berlin birthday bash on March 21. Deutsche Bank is not the only lender whose prospects are dimmed by the coronavirus outbreak, which is hitting German peers such as Commerzbank and European rivals.
Issuers sold 5.25 billion euros on Europe's debt capital markets on Tuesday, a day after stocks rallied strongly on hopes of central bank support. UK analytics company Relx raised 2 billion euros of four, eight and 12-year bonds, while U.S. industrial conglomerate Honeywell International, which recently saw a surge in demand for its protective face masks, priced 1 billion euros of four and 12-year bonds.
Capital Group has increased its stake in Commerzbank to 4.82% from 2.93%, a regulatory filing showed, making the Los Angeles-based investor one of the German bank's largest shareholders. Capital Group earlier this month bought a big stake in rival Deutsche Bank , marking a vote of confidence in that troubled lender. Shares in Commerzbank briefly jumped on the news of the Capital investment, making up some of its earlier losses, but were still trading 5% lower early afternoon in Frankfurt amid a global selloff.
You can share your thoughts with Thyagaraju Adinarayan (email@example.com), Joice Alves (firstname.lastname@example.org), Julien Ponthus (email@example.com) in London and Danilo Masoni (firstname.lastname@example.org) in Milan.