Coronavirus latest: ViacomCBS streaming growth offsets decline in ad revenues

Vista Outdoor lifted by US gun demand

Vista Outdoor registered higher revenues in the June quarter as consumers’ growing interest in personal protection and hunting lifted sales of ammunition, boosting shares more than 17 per cent on Thursday.

The company, whose firearm-related products include ammunition and rifle scopes, delivered better than expected results that coincided with an ongoing rise in gun sales in the US. Vista’s guidance for the current three-month period also eclipsed forecasts.

Background checks processed by the FBI – used as a gauge of firearm sales – are on pace to set an annual record, with demand picking up during the pandemic and civil unrest. Historically, gun sales also tend to rise in advance of US elections in anticipation of potential gun control measures.

Vista said sales in its first fiscal quarter were up 4 per cent year-on-year to $479m, buoyed by 40 per cent growth in ecommerce and stronger results in the shooting sports unit. Sales growth came in at 10 per cent when adjusted to exclude divested businesses. The top line beat analysts’ view of $406m.

In shooting sports, sales rose 8 per cent – or 17 per cent when excluding divestitures – with the company citing personal protection trends and a resurgence in outdoor recreation activities during the pandemic.

Net income was $40.5m, turning around from a loss of $16.6m in the year-ago quarter. On an adjusted basis, Vista earned 51 cents a share. Analysts had expected the company to break even.

“We see continued strength going forward in both our outdoor products and shooting sports segments, with increasing participation rates across all of our categories,” Vista chief executive Chris Metz said in a statement.

Sales in Vista’s second fiscal quarter are projected to reach a range of $495m to $515m, compared with analysts’ forecast of $468m. The company estimated earnings per share of 60 cents to 70 cents, which was higher than the consensus forecast of 12 cents.

The stock was recently trading 17.1 per cent higher at $21.29, putting it on pace to close at its highest level since October 2017.

Florida reports lowest per cent positive rate since June

Florida reported on Thursday that the percentage of people who tested positive for Covid-19 fell to below 9 per cent for the first time in more than six weeks.

The state conducted 104,144 coronavirus tests over the past 24 hours, with 7,650 people testing positive. The positivity rate of 8.34 per cent was the lowest level, since June 21.

That is also the highest number of tests conducted in a day in nearly a fortnight, and follows a recent drop off to about 60,000 a day for the past three days. The lower levels reflect the closure late last week and over the weekend of many state-run testing sites due to the approach of tropical storm Isaias.

Although the latest case numbers are the biggest daily increase in five days and sit above the seven-day average of 7,000 a day, Florida has been showing some encouraging trends in terms of new infections. The average daily case rate is down from a peak of 11,870 nearly three weeks ago, according to Financial Times analysis of Covid Tracking Project data.

The latest positivity rate may still be showing the signs of the recent weather-related disruptions, but the measure has been trending down from more than 13 per cent a fortnight ago.

Florida’s fatality toll rose by 120, fewer than the 225 on Wednesday that was among the state’s biggest one-day jumps on record.

US household debt falls for first time in 6 years

Colby Smith in New York

Household debt in the US declined for the first time since 2014, driven by a steep fall in credit card balances as consumer spending plunged amid coronavirus lockdowns.

Consumer debt balances amounted to $14.27tn at the end of the second quarter, a 0.2 per cent drop from the previous period, according to figures from the Federal Reserve Bank of New York released on Thursday. The decline, which was the largest since the second quarter of 2013, was led by a $76bn contraction in credit card balances — the sharpest drop on record.

Economists at the New York arm of the US central bank attributed the slide to “the sharp declines in consumer spending due to the Covid-19 pandemic and related social distancing orders”.

Economic activity ground to a halt and unemployment surged as parts of the US acted quickly to curb the spread of the virus. A nascent recovery began to take hold in May, as lockdown measures eased, but a resurgence of the virus in the south and west has since stalled or reversed reopening plans in many of those states.

Taken together, the New York Fed found that so-called non-housing balances, which include credit card debt and auto and student loans, saw the largest decline in the report’s history, at $86bn.

Meanwhile, delinquency rates plummeted, as more consumers were granted forbearance as part of the record relief package passed by Congress at the end of March.

“Protections afforded to American consumers through the Cares Act have prevented large scale delinquency from appearing on credit reports and damaging future credit access” said Joelle Scally, Administrator of the Center for Microeconomic Data at the New York Fed.

“However, these temporary relief measures may also mask the very real financial challenges that Americans may be experiencing as a result of the Covid-19 pandemic and the subsequent economic slowdown.”

US stocks slide while sterling picks up to five-month high

Philip Georgiadis in London

US stocks slipped slightly following the release of more unemployment data, while sterling rose to a five-month high after the Bank of England appeared cool on the prospect of introducing negative interest rates.

The S&P 500, Dow Jones and Nasdaq opened down about 0.1 per cent, after futures recovered their earlier heavier losses when data showed the pace of new applications for US unemployment aid slowed last week.

Investors were monitoring political developments in Washington, where the US Senate is also locked in negotiations to extend jobless benefits that expired last month to support the US economy during the coronavirus crisis.

The pound rose 0.4 per cent to $1.317, its highest level since the turmoil in March when coronavirus-related concerns raced through markets.

The Bank of England’s monetary policy committee tempered the prospect of introducing negative interest rates in the near future, warning on the possible impact to the banking sector and noting “the MPC has other instruments available”.

The absence of a clear signal towards negative rates could spur further gains for the pound in the short term, currency analysts at MUFG said.

Strong UK construction activity data boosted hopes for the UK’s economic recovery, and helped the pound move higher.

Israeli lab to start human trials of Covid-19 vaccine in October

Ilan Ben Zion in Jerusalem

An Israeli laboratory will start human trials for a potential coronavirus vaccine in October, defence minister Benny Gantz said on Thursday.

The Israel Institute for Biological Research, a government-run research centre based outside Tel Aviv, and the Weizmann Institute have been working on a vaccine since March.

In a statement, IIBR director Shmuel Shapira said the laboratory “will start safety and efficacy trials after the autumn holidays, but the product is in hand”.

The Israeli team is one of dozens worldwide racing to produce an effective vaccine for the novel coronavirus that has claimed hundreds of thousands of lives worldwide since the beginning of the pandemic earlier this year.

Israel was widely congratulated for swiftly implementing movement restrictions to curb the disease’s spread. But since reopening the economy in early May, Israel’s infection rate per capita has skyrocketed to one of the highest in the world. The Israeli health ministry reported more than 78,000 confirmed coronavirus cases and 569 deaths in total as of Thursday.

US jobless claims slip back to 1.2m but remain elevated

Matthew Rocco in New Jersey

The pace of new applications for US unemployment aid slowed last week, but remained above 1m, as businesses continued to deal with the impact of coronavirus outbreaks in some parts of the country.

There were 1.2m initial jobless claims, compared with 1.4m for the prior week, according to seasonally adjusted figures from the Department of Labor. That was lower than economists’ forecast of 1.42m.

The number of Americans actively collecting state benefits fell to 16.1m for the week that ended July 25, coming off a sudden jump to nearly 17m the week before. Continuing claims, which peaked at 24.9m in May and are reported on a one-week delay, equalled 11 per cent of the workforce. The so-called insured unemployment rate was 11.6 per cent a week earlier.

Initial claims in the federal Pandemic Unemployment Assistance programme, which extended aid to the self-employed or other individuals who would not qualify for regular unemployment compensation, decreased last week to 655,707 from 908,800 on an unadjusted basis.

California, Florida and Texas – the three most populous states – are among those to renew curbs on businesses this summer in an effort to reverse an increase in Covid-19 infections. New cases and current hospitalisations have been on the decline in several states across the south and west, raising hopes that the sunbelt has turned a corner in its fight against the virus.

ViacomCBS streaming growth offsets decline in ad revenues

Anna Nicolaou in New York

ViacomCBS advertising revenues fell more than a quarter from April through June, as the coronavirus pandemic ravaged sales. However, strong growth in its streaming services helped the company beat earnings and revenue expectations.

ViacomCBS, the company behind the Paramount film studio, looked to highlight its growth in streaming, which the entertainment industry has widely accepted as the future of their business.

The company, like its peers, has been trying to increase subscribers and revamp its services to compete with Netflix. By the end of June, ViacomCBS reached 16m subscribers across its streaming services, while revenue from online video and streaming had grown 25 per cent year on year to $489m.

Bob Bakish, chief executive, said “we’re successfully managing through the effects of the pandemic”, pointing to the “rapid acceleration” of its streaming business.

The results however, were dragged down by a weak advertising market — where revenues fell 27 per cent from a year earlier — and the shutdown of cinemas during the coronavirus crisis, which wiped away revenues at the Paramount film studio.

Total revenues in the quarter fell 12 per cent from a year ago to $6.3bn, while adjusted earnings per share dipped 16 per cent over the same period to $1.25.

This was better than Wall Street analysts’ forecast for $6.2bn in revenues and earnings of 95 cents a share.

Shares in ViacomCBS rose 7 per cent in premarket trading. The stock has dropped 38 per cent this year, while the broader stock market is up about 3 per cent year-to-date.

Mall owner Brookfield collects just one third of quarterly rents

Alistair Gray

Brookfield Property Partners, one of the US’s biggest shopping mall landlords, said it had collected only about a third of the rent owed by retailers in the second quarter as tenants were unwilling or unable to pay in the coronavirus lockdown.

While its office portfolio held up better, pressure on the retail business helped push the real estate group, whose assets include Fashion Show Mall in Las Vegas, Oakbrook Center in Chicago and Willowbrook Mall in New Jersey, to a $1.5bn net loss for the three months to the end of June.

In a letter to stockholders, Brian Kingston, chief executive, wrote:

We believe our tenants have a contractual obligation to pay rent under the terms of their lease, especially if they have financial means to do so, and we have been pursuing our rights where necessary to ensure they do.

Brookfield tenants that have sought to get out of leases include Gap, which the property company sued during the quarter over unpaid rent.

The company’s commercial property and hospitality revenue fell 28 per cent from one year ago to $1.35bn.

The retail collection rate in May and June improved from April, when Brookfield collected only one-fifth of rents due, and the company said on Thursday that July was “trending significantly stronger”.

Fire at hospital for coronavirus in western India kills 8 people

Jyotsna Singh in New Delhi

A fire at the critical care unit of a hospital treating Covid-19 in Ahmedabad in Gujarat province has killed eight people as infections accelerate rapidly across India.

The fire was caused by a short circuit early on Thursday and spread when a staff member whose PPE kit caught fire ran around in an effort to douse it, officials said.

More than 40 other patients were evacuated and moved to another hospital, and an official investigation has been launched. Prime Minister Narendra Modi, who has served as the chief minister of Gujarat three times, tweeted he was “saddened by the tragic hospital fire”.

India’s health services are overwhelmed by the pandemic and many prominent people including politicians such as Home Minister Amit Shah, who tested Covid-19 positive last week, have had to rely on expensive private hospitals.

India added more than 56,000 cases in the past 24 hours with a caseload of more than 1.9m, which is the third largest in the world.

The federal health ministry on Tuesday said the country’s fatality rate at 2.1 per cent was at its lowest since the pandemic hit the country. But experts have warned this should not be taken as a sign of relief as infections in the country have not peaked yet.

Germany tops 1,000 daily cases as fears of virus resurgence mount

Guy Chazan in Berlin

Germany has recorded more than 1,000 new cases of coronavirus infections in a day for the first time since May, amid mounting concern that the country could be witnessing the beginnings of a second wave of the pandemic.

The Robert Koch Institute, Germany’s main public health authority, reported 1,045 new cases on Thursday, bringing the total to 213,067. A total of 9,175 people have died of Covid-19 in Germany so far.

The RKI had previously warned that any figure above 1,000 a day would make it much harder for local health authorities to carry out effective tracking and tracing and to keep the virus under control.

Germany says that 195,000 people have recovered from the virus, though the number of people with acute infections is still nearly 9,000.

The higher number of infections has coincided with the start of the school year in several German regions and the return of holidaymakers, some of whom stayed in areas considered high-risk by the authorities.

For that reason, the German government is introducing mandatory testing at airports for all travellers from high-risk areas from Saturday. These include Luxembourg and three regions in Spain — Aragon, Catalonia and Navarra.

Millions of UK-procured masks fail to meet basic safety standards

Tabby Kinder in London

About 50m face masks purchased by the UK government from a private equity investment company cannot be used as they failed to meet basic safety requirements, according to documents filed as part of a legal challenge over Britain’s procurement of PPE during the coronavirus pandemic.

The Department for Health and Social Care bought the FFP2 respirator masks as part of a controversial £252m contract with Ayanda Capital, which advertises that it specialises in “currency trading, offshore property, private equity and trade financing”.

The contract was the largest single deal published by the government as part of its £15bn spending spree on PPE from private manufacturers, suppliers and middlemen.

However, the masks will not be used by the NHS because their ear-loop fastenings do not create an adequate seal to offer protection from the virus, a letter from the government to campaigners at the Good Law Project said.

The error could represent wasted spending of at least £156m, said the campaign group, which is seeking to challenge the government in the courts over three PPE contracts, including the deal with Ayanda Capital.

Hilton warns of long road to recovery as it posts $430m loss

Alice Hancock

Hilton, the US-based hotel group, has warned there will be “a long journey” to recovery after reporting one of the worst quarters in its history.

The company revealed a $432m loss for the three months to end of June on Thursday, down from a net income of $11m in the first quarter and a stark drop from a profit of $261m in the same period last year.

Revenues in the second quarter were $564m, down from $2.5bn in 2019, as the coronavirus pandemic pushed governments to close borders and prevent travel worldwide.

“Our second-quarter results reflect the challenges that our business has experienced as a result of the pandemic,” said Chris Nassetta, Hilton’s chief executive. He added: “While we have a long journey in front of us, we are on the road to recovery and look forward to the opportunities ahead.”

In June, Hilton announced that it was cutting about 2,100 jobs from its workforce in anticipation of a long-term reduction in travel. It has also drawn down the entirety of a $1.75bn revolving credit facility, issued $1bn in senior notes and pre-sold $1bn worth of loyalty points to boost liquidity since the virus began.

Richard Clarke, an analyst at Bernstein, said that it was “certain” that the second quarter of the year would “be the worst ever quarter in the history of the hotel sector” but, he said, that development of new hotels would likely be more resilient than after the 2008 financial crash.

Italy threatens Ryanair with ban over Covid precautions

Silvia Sciorilli Borrelli in Milan

Italy’s civil aviation authority has said it is ready to ban Ryanair from operating in Italy if it does not step up its efforts to implement measures to fight the spread of coronavirus.

Enac said in a statement that Ryanair had “repeatedly violated current anti-Covid-19 rules imposed by the Italian government to protect passengers’ health”.

The authority lifted the requirement imposing a one-metre distance between passengers in June for those carriers equipped with a specific filtering system that purifies air every three minutes.

Current rules also require airlines to take passengers’ temperatures before boarding, avoid overcrowding when boarding and exiting planes and to fill the shuttles carrying passengers to terminal buildings to a 50 per cent capacity. Enac said Ryanair repeatedly violated all these rules on flights to and from Italy.

The carrier rejected the accusations saying in a statement to Italian media it strictly abided by the rules, requiring all passengers to check in online, limit carry-on luggage and wear masks at all times.

It also said it had updated its boarding procedures to avoid crowding and that it filled its aircraft to maximum capacity because they were all equipped with the required HEPA air filtering system.

UK construction activity rebounds as homebuilding drives growth

Chelsea Bruce-Lockhart in London

The UK construction sector reported its strongest gain in activity in almost five years in July, in a boost for the government that is relying on the sector to drive the economic recovery.

The IHS Markit/Cips purchasing managers’ index for the UK construction industry rose to 58.1 in July, from a reading of 55.3 the previous month. This placed it well above the 50 mark that indicates the majority of businesses reported an improvement in activity, compared with the previous month. Economists had expected a reading of 57.0, according to a poll by Reuters.

The continued growth of the UK’s construction sector will be welcome news for the UK prime minister Boris Johnson who has used the slogan “build, build, build” to describe his intentions for reviving the economy after lockdown. The government has introduced plans to overhaul the UK planning system – to encourage building and address the country’s housing shortage.

Home building was the main driver of growth in activity in July. Contractors were also overall more optimistic about prospects for the year ahead. Yet concerns about the wider economy meant staff numbers continued to decline with one in three survey respondents reporting a drop in employment.

While the PMI measure is a good gauge of whether the industry is expanding or contracting, it does not indicate the pace of growth, or the pace of recovery from the government-imposed lockdowns.

The UK’s PMI reading for construction was well above the 48.9 reported for the eurozone on Thursday, which suggested construction activity continued to slow for the bloc’s economy.

Serco’s shares tumble after outsourcer defers its dividend

Shares in Serco, the outsourcing company that is leading the UK government’s contact tracing scheme, slumped 12.5 per cent after it ruled out reinstating its dividend.

The fall came despite revenues at the contractor jumping a quarter to £1.82bn in the first half of 2020, after it acquired an engineering company that services the US navy and scooped up £130m of coronavirus-related contracts.

Serco added more than 50 per cent to its underlying trading profit at £77.6m, compared with £50.6m a year earlier, the group said on Thursday.

However, the outsourcer did not say that it would pay a dividend after withdrawing its first scheduled payout in five years in April on the uncertain outlook as it prioritises covering deferred tax payments.

The group said it would refuse to take £1,000 payments for each worker that it re-employs as part of the UK government scheme to encourage hiring following the lockdown, given its position as a service provider for the government.

Rupert Soames, chief executive of Serco, said on BBC Radio 4’s Today that Covid-19 had a “net-zero” effect on its profits as the uptick in virus-related contracts was balanced out by the hit to contracts it received from the leisure, rail and airport sectors.

Italian industrial output rises but still below pre-Covid levels

Chelsea Bruce-Lockhart in London

Italy’s industrial production rose more than expected in June, but remains well below pre-Covid levels.

The growth in output slowed significantly from the previous month, damping hopes of a “V” shaped recovery from the lockdowns that governments imposed to try and prevent further spread of the coronavirus.

The eurozone’s third-largest economy posted a month-on-month increase in industrial output of 8.2 per cent in June, seasonally adjusted data revealed.

The rise in industrial production followed a record 41.6 per cent increase reported for the previous month, when the sector rebounded sharply from the impact of strict lockdown measures imposed by the government in March and April.

Economists in a Reuters poll had expected output in the industry to rise by 5.1 per cent in June.

Yet, compared with the previous year, production was 13.7 per cent lower in June and 12.8 per cent lower than levels reported in February, before the Covid-19 outbreak tightened its grip, the Istituto Nazionale di Statistica said on Thursday.

Industrial production refers to the output of manufacturing, mining and utilities industries. Although these industries make up a small proportion of gross domestic product, the change in production levels is a good gauge of the strength of overall consumer demand.

Nintendo earnings grow more than sixfold during pandemic

Leo Lewis and Kana Inagaki in Tokyo

Nintendo reported a 541 per cent surge in earnings during the darkest months of the Covid-19 pandemic, with net profits hitting $1bn despite a worldwide shortage of its Switch consoles and a relatively slender pipeline of in-house games.

The stunning year-on-year increase in sales and profits during the April to June quarter — far in excess of what analysts had expected — was in large part driven by sales of Animal Crossing: New Horizons, a whimsical, island-based fantasy game that captured both imaginations and discretionary spending as the world retreated into its living rooms.

For the April to June quarter, the Kyoto-based company reported a net profit of ¥106.5bn ($1bn), up from a year-earlier profit of ¥16.6bn. Sales were 108 per cent higher over the same period, with combined sales of both the portable and hybrid version of the company’s Switch console jumping from 2.13m to 5.68m units.

Animal Crossing, which was released 10 days before Nintendo’s financial year end on March 31, sold 10.63m units during the April to June quarter, giving it cumulative sales of 22.4m and putting it, over just a few months, among the top 50 best-selling games of all time.

Despite achieving half its net profit target for the full financial year in the first quarter alone, the company — infamous among investors for its conservative guidance — maintained its forecasts.

“Their guidance is not even a joke any more; it just cannot be taken seriously,” said Serkan Toto, a games industry analyst and consultant based in Tokyo, who added that profitability at Nintendo had benefited strongly from the rising proportion of games that the company now sold via digital download.

French insurer Axa scraps dividend as it takes €1.5bn Covid hit

David Keohane in Paris and Oliver Ralph in London

French insurer Axa has cancelled plans for a special dividend and withdrawn some of its financial targets for 2020 as it took a €1.5bn hit from claims related to Covid-19

Axa said that net profit fell to €1.4bn in the first half of 2020, 39 per cent below the same period last year, while revenues fell 10 per cent to €52.4bn. The Covid charge that dragged down earnings was in line with previous estimates but Axa left open the chance of it increasing in the coming months.

Axa’s share price has fallen 30 per cent far this year, and dropped 3 per cent on Thursday.

“There are, you know, questions. So, for example, one question is, will there be a second wave?” said Thomas Buberl, Axa chief executive, to the Financial Times.

The group agreed in June to cover the losses of hundreds of restaurants after a legal challenge by a policyholder.

Covid-19 is likely to be one of the most expensive events ever for the insurance industry, with payouts expected across a range of policies from business interruption to travel. Swiss Re estimates that claims will cost the industry between $50bn and $80bn, putting it on a par with a large natural catastrophe.

India’s central bank to launch one-off debt restructuring scheme

Amy Kazmin in New Delhi

The Reserve Bank of India will allow banks to restructure loans to companies in distress due to the coronavirus pandemic, without forcing lenders to reclassify such loans as stressed assets, as it seeks to preserve the stability of the financial system.

Shaktikanta Das, the RBI governor, unveiled the one-time debt restructuring scheme on Thursday, after a monetary policy committee meeting at which members voted unanimously to keep rates on hold, citing elevated inflationary pressures.

Mr Das did not offer many details on the restructuring scheme, and said a committee would be appointed to lay out its principles, including safeguards, entry norms, post-restructuring monitoring and other details to ensure a credible rules-based programme, rather than just ad hoc restructuring.

The expert committee to establish conditions of the restructuring programme will be led by veteran banker KV Kamath. Only loans that were classified as standard as of March 1 — before the pandemic hit — would be eligible for restructuring under the programme, Mr Das said.

The RBI had announced a moratorium on debt repayments shortly after India went under one of the world’s strictest coronavirus lockdowns, and that moratorium has since been extended until Aug 31.

However, lenders have warned that once the moratorium ends, many otherwise healthy companies will struggle to repay loans given the ongoing disruptions as local authorities impose new lockdowns to cope with another surge in coronavirus cases.

Lufthansa posts biggest ever quarterly loss

German airline Lufthansa has reported its biggest ever quarterly operating loss and said it can no longer rule out job cuts in its home country, despite having taken a €9bn government bailout last month.

The flag carrier, which has already said it will shed 22,000 jobs and retire 100 of its aircraft, posted a €1.7bn operating loss for the three months to June, as passenger traffic and its revenues collapsed. For the six-month period, the total loss was €2.9bn. 

In the second quarter, Lufthansa carried 1.7m passengers, a 96 per cent drop on the same time last year. Quarterly revenues dropped 80 per cent to €1.9bn. 

“We are experiencing a caesura in global air traffic,” chief executive Carsten Spohr said. “We do not expect demand to return to pre-crisis levels before 2024. Especially for long-haul routes there will be no quick recovery.” 

Lufthansa, which has made 8,300 staff redundant during the Covid-19 crisis, added that while its “objective was to avoid redundancies as far as possible”, the market conditions and the “course of the negotiations on necessary agreements with the collective bargaining partners” meant “this goal is no longer realistically within reach for Germany”. 

The restructuring would make it possible “to refinance the funds of the stabilisation package as quickly as possible,” Lufthansa said. 

ITV hit by slump in advertising

Alex Barker in London

ITV has suffered the most severe advertising decline in its broadcasting history, plunging 43 per cent in the second quarter, but said it saw “signs of improvement” in a market ravaged by coronavirus.

While overall viewing figures rose during the lockdown, the broadcaster was hit by the slump in advertising and the shutdown in production, with revenues falling 17 per cent to £1.2bn in the six months to June 30. Advertising revenue fell 21 per cent in the first half of the year.

ITV scrapped its interim dividend and said it was unable to give guidance for the third quarter “given the level of uncertainty”. But it pointed to an improving trend in advertising, with some big brands returning to spending and total advertising revenue down 23 per cent in July.

About 230 ITV productions were affected by the lockdown, causing problems for broadcast schedules as well as sales of shows to other buyers. ITV said 70 per cent had now been “delivered or are back in production”.

“While our two main sources of revenue – production and advertising – were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory,” said Carolyn McCall, chief executive.

Hammerson looks to raise almost £1bn to get through pandemic

George Hammond in London

Shopping centre owner Hammerson is aiming to raise more than £800m to see it through the coronavirus crisis, which has caused a collapse in rental income and raised questions over the future of the retail industry. 

The FTSE 250 company announced plans on Thursday to raise £274m from the sale of its 50 per cent stake in its European shopping outlet business, VIA Outlets, and a further £552m from a rights issue. If it fails to raise the cash — which equates to almost double its current market capitalisation of £435m — it risks breaching covenants with its lenders. 

Coronavirus has thrown many retailers and retail landlords into crisis, and precipitated the collapse of Hammerson’s biggest rival, Intu, into administration in June. 

Hammerson struggled to recoup rent it was owed by tenants, which include John Lewis and Debenhams. It has collected 72 per cent of the rent owed for the first half of the year, and just a third of what is owed for the third quarter — which is paid in advance by tenants. 

German factory orders bounce back at record pace in June

Harry Dempsey in London

German factory orders rebounded by a record amount in June in a sign that industry in Europe’s biggest economy is powering back into action after easing coronavirus-related restrictions.

Incoming orders rose 27.9 per cent in June from a month earlier, the Federal Statistical Office revealed on Thursday, after plunging by a record volume in April. The increase in June was the largest since records began in 1991 and almost three times as much as the jump in May. Analysts at SEB said that the rise “showed a significantly larger increase than expected”.

However, factory orders remained 11.3 per cent lower compared with February 2020 before restrictions had been put in place to stop the spread of coronavirus in Germany, underlining the distance yet to be travelled to attain a full recovery from the devastating impact of coronavirus.

The increase in orders from domestic customers were particularly strong at 35.3 per cent, while international orders from outside of the eurozone rose 22 per cent, most likely helped by a strong economic recovery in China.

Manufacturers of capital goods made strides, as orders rose 45.7 per cent. Meanwhile, Germany’s automotive sector staged a significant recovery, as orders rose by two-thirds. But the level of orders for automakers remained 12.2 per cent lower than pre-pandemic levels.

Turnover in Germany’s manufacturing sector rose 12.5 per cent between May and June, the statistics office added.

Carsten Brzeski, economist at ING, said that “hopes for a ‘V’-shaped rebound, not necessarily recovery, stay alive,” referring to the shrinking order books for German manufacturers over the two years prior to the pandemic.

Aviva hints at pulling UK insurer out of most international markets

Oliver Ralph in London

Aviva chief executive Amanda Blanc has hinted that she could pull the insurer out of most of its international markets as she focuses the business on the UK, Ireland and Canada.

Aviva’s biggest business is in the UK but it also operates in continental Europe, Asia and north America.

Ms Blanc, who was appointed last month, said: “We will focus Aviva on our strongest businesses in the UK, Ireland and Canada and aim to be the UK’s leading insurer.

We are going to focus on those businesses where we have the necessary size, capability and brilliant customer service to generate superior shareholder returns. This is where we will invest and grow.

She was speaking as Aviva reported results for the first half of 2020. The company resumed dividend payments after suspending them earlier in the year because of the coronavirus crisis.

Glencore scraps $2.6bn dividend

Neil Hume in London

Glencore has decided not to pay a proposed $2.6bn dividend after reporting a drop in half-year profits due to weaker commodity prices and the impact of the coronavirus pandemic.

The Swiss-based miner and commodity trader said it was focused on strengthening its balance sheet as net debt rose 12 per cent to $19.7bn in the six months to June.

The increase in borrowings came as Glencore tapped its credit lines to take advantage of falling oil prices in March and April to buy cheap barrels of crude and sell them in the futures market for a profit.

As a result Glencore’s ‘marketing’, or trading arm, reported a record earnings before interest of $2bn, helping to offset a weak performance from its mining arm, which was impacted by lower prices for thermal coal – one of its key commodities – and lockdowns in South Africa and South America.

This led Glencore to report adjusted earnings before interest, depreciation and amortisation of $4.8bn in the six months to June, down 13 per cent on the same period a year ago but ahead of market expectations.

Overall, Glencore announced a net loss of $2.6bn for the period after taking $3.2bn of impairment charges, including a $1bn hit on the value of its struggling Colombian coal assets.

Glencore chief executive Ivan Glasenberg said he expected net debt to be within the company’s target range of $10bn-$16bn by the end of the year.

Notwithstanding our cash-generative business and secure liquidity positions, the Board has concluded that it would be inappropriate to make a distribution to shareholders in 2020, instead prioritising the acceleration of net debt reduction.

ING sets aside additional €1.3bn as quarterly profit plunges 79%

Nicholas Megaw in London

ING, the Netherlands’ largest bank, has become the latest major European lender to report a rising impact from coronavirus-induced loan defaults, causing profits in the second quarter to plunge 79 per cent.

The Amsterdam-based lender, which runs retail banks in more than a dozen countries, set aside an additional €1.3bn to deal with expected future defaults, following on from a €661m provision in the first quarter.

The figure was higher than consensus analyst forecasts of €1.1bn, though some had been braced for an even larger charge after a cautious update ahead of the results last week.

ING warned last week that it would take a more than €300m writedown on goodwill linked to previous acquisitions, echoing a similar move by fellow multinational bank Santander.

The majority of ING’s provisions and writedowns were centered on its corporate banking division, which fell to a net loss of €302m

EmoticonBank of England holds rates

Delphine Strauss in London

The Bank of England has tempered its previous prediction that the UK economy would rebound swiftly from the recession caused by the coronavirus crisis, saying on Thursday that GDP would not exceed pre-pandemic levels until the end of 2021.

The monetary policy committee (MPC) left interest rates on hold at 0.1 per cent with its stock target for asset purchases also unchanged at £745bn.

It said the initial hit from lockdown measures had not been quite as severe as it had projected in May, although it still expected output to be more than 20 per cent lower in the second quarter of 2020 than it had been in the final quarter of 2019.

The MPC was also more optimistic about the outlook for unemployment than it had been in May, predicting the jobless rate would peak at about 7.5 per cent at the end of this year before declining gradually.

Consumer price inflation was expected to fall further below target, averaging around ¼ per cent in the latter part of the year, and to be around the MPC’s 2 per cent target in two years’ time.

The BoE, while cautioning that medium-term forecasts were unusually uncertain, said output would not exceed the level reached at the end of 2019 before the end of 2021.

Sterling rose following the interest-rate decision and economic forecasts, and was recently 0.4 per cent higher at $1.3160.

Unicredit net profit drops 50% as Covid hits fees in second quarter

Silvia Sciorilli Borrelli in Rome

Lower fees across the second quarter resulted in a 5 per cent fall in revenues for UniCredit as Covid-19 lockdown restrictions took its toll across the lender’s core markets. Net profit dropped by 50 per cent.

Italy’s largest lender by assets said its total revenue was €4.2bn in the second quarter, down 4.8 per cent compared with the previous quarter and down 7 per cent year-on-year.

Net profit for the quarter was €500m, down 50 per cent compared with a year earlier.

Commercial and investment fees suffered a negative impact. Commercial fees were €1.4bn, down almost 12 per cent year-on-year while investment fees stood at €487m, down 16.8 per cent over the period.

The lender said it started to see signs of improvement in June in Italy, Germany and Austria. Overall, lower costs across the period partially offset the lockdown’s impact, the bank said.

Toyota ekes out quarterly profit despite coronavirus disruptions

Kana Inagaki in Tokyo

Toyota has defied a coronavirus-driven collapse in sales and plant closures to become one of the few global carmakers to eke out a quarterly profit.

Shares in the world’s second-largest carmaker rose nearly 3 per cent on the steady results, which were backed by a faster-than-expected recovery of sales in China and a reduction in business expenses amid shorter working hours and a shutdown of travel.

For the April to June quarter, Toyota reported a 74 per cent year-on-year drop in net profit to ¥158.8bn ($1.5bn). While that came in below analyst expectations, the Japanese group outperformed most of its rivals from Volkswagen, General Motors to Nissan which all suffered losses during the three months.

The profits came even as Toyota saw its global vehicle sales drop 32 per cent to 1.8m units during the quarter with markets in the US and Europe hit particularly hard.

The company also disclosed its annual net profit guidance for the first time, projecting a 64 per cent drop to a ¥730bn profit. It maintained its operating profit forecast of ¥500bn for the fiscal year through March 2021.

Spanish employers face dilemma over furloughed workers

Ian Mount in Barcelona

Like many business owners in Spain’s beleaguered tourist sector, Francisco Muñoz is facing a difficult choice. When lockdown began in March, Mr Muñoz put the 12 employees of his Bubó Tapas Bar in Barcelona’s El Born district on Spain’s furlough regime.

But even when confinement ended, he kept the bar closed — first because health regulations halved its capacity and the city authorities had rejected his request for outdoor tables, and then because local outbreaks brought international tourism to a halt again.

Now rising costs are squeezing his business as the latest extension of the furlough scheme — which is set to expire at the end of September — increases his contribution to social security payments for his furloughed employees to €5,000 per month.

Read more here

Second wave and restrictions in Victoria impact heavily on Australian economy

Jamie Smyth in Sydney

A second wave of Covid-19 infections in Australia’s second most populous state of Victoria – and the subsequent imposition of tough new restrictions – will blow a A$10bn-A$12bn ($7.2bn-$8.6bn) hole in the country’s economy in the September quarter, according to government forecasts.

Prime Minister Scott Morrison said on Thursday the pandemic was expected to detract 2.5 per cent from GDP in the three months to end September and the national unemployment rate could now peak at 10 per cent rather than the previously forecast high of 9.25 per cent.

“This is a heavy blow, a heavy blow,” he told journalists.

Mr Morrison said 80 per cent of the economic costs would stem from Victoria. The remainder would result from the impact on confidence in other states and supply chain interruptions linked to the shutdown of some industries.

Australian authorities are battling a fast-spreading outbreak in Melbourne, where 471 new cases were reported on Thursday, bringing the total number in the state to almost 13,500. The state government has imposed a nightly curfew and closed all but essential businesses.

Australia enjoyed significant early success in suppressing the spread of the virus, following an outbreak in February. But a second wave of infections in early July, linked to blunders in Victoria’s hotel quarantine system, has forced the state to implement a second lockdown and request assistance from Australian Defence Forces.

Philippines GDP drops at fastest rate since 1981

Alice Woodhouse in Hong Kong and John Reed in Bangkok

The Phillipine economy contracted at the fastest rate since 1981 in the second quarter, slipping into a recession, following the introduction of strict lockdown measures to prevent the spread of coronavirus.

The country’s economy shrank 16.5 per cent in the three months to the end of June compared to the same period in 2019. Economists polled by Reuters had forecast a 9 per cent drop.

The reading for the second quarter comes after 0.7 per cent fall in the first three months of the year following the disruption caused by the eruption of the Taal volcano south of Manila. The fall in the second quarter pushed the economy into a technical recession, which is defined as two consecutive quarters of contraction.

“A failure to contain the virus, continued restrictions to movement and inadequate policy support mean the Philippines is also likely to experience one of the region’s slowest recoveries,” said Alex Holmes, Asia economist at Capital Economics.

Mr Holmes said lockdown, which was reimposed on metro Manila and surrounding regions this week after a spike in infections, would further weigh on recovery.

The Philippines has reported nearly 116,000 Covid-19 cases and 2,123 deaths from the disease to date, the second highest number for both indicators of any country in south-east Asia, after Indonesia. It recorded 3,463 new infections recorded on Wednesday.

The Philippine Statistics Authority said the main sectors contributing to the fall were manufacturing, construction and transportation.

Twitter freezes account of Trump presidential campaign

Hannah Murphy in San Francisco and Demetri Sevastopulo in Washington

Twitter froze the account of the Trump campaign on Wednesday for violating its misinformation rules after it posted a video in which the US president said children were “almost immune” to coronavirus.

The clampdown came just hours after Facebook removed the same post from Donald Trump’s personal account on the platform.

Twitter said on Wednesday that the tweet from the @TeamTrump account, which showed a video of the president in a Fox News interview, was “in violation of the Twitter rules on Covid-19 misinformation”.

“The account owner will be required to remove the tweet before they can tweet again,” the spokesperson added.

Facebook had taken action on the same post, saying the video “includes false claims that a group of people is immune from Covid-19 which is a violation of our policies around harmful Covid misinformation”.

Read more here

China reports 27 new Covid-19 cases in Xinjiang

Health authorities in China reported a further 27 Covid-19 cases in the western region of Xinjiang to the end of Wednesday as new infections slow.

The outbreak in Xinjiang, which is home to China’s Uighur ethnic minority, was first discovered in mid-July in the regional capital Urumqi. The new cases take the official tally for the outbreak to 635.

Officials in Urumqi launched mass testing and imposed restrictions on the movement of people to limit the spread of the virus.

Liaoning, which discovered an outbreak in the port city of Dalian in late July, reported a further three cases. The province in China’s north-east has recorded 93 cases since July 22, according to FT calculations.

A further seven imported cases take China’s official Covid-19 tally to 84,528.

Recruiters report sharpest rise in UK job seekers since 2008

Delphine Strauss in London

UK recruiters are reporting the steepest rise in the number of people seeking work since the depths of the financial crisis, as companies dismiss staff who had previously been furloughed.

The increase in the supply of temporary staff in July was the biggest in 23 years of records, according to the Recruitment & Employment Confederation.

Its latest monthly survey, conducted with KPMG, showed that more than four-fifths of recruiters reported increases in staff availability, with the supply of permanent staff rising at the sharpest pace since December 2008.

This follows seven years up to the start of the Covid-19 pandemic, when most recruiters reported finding it harder to fill posts.

Read more here

Kim Jong Un sends aid to locked down border city

Edward White in Wellington

Kim Jong Un has ordered officials to send food and money to Kaesong almost two weeks after the border city was locked down over fears of coronavirus transmission, according to North Korean state media.

Pyongyang in late July declared a state of emergency in the city after a North Korean defector returned from South Korea in late July. The move marked the first time the secretive state has acknowledged the global pandemic has potentially breached its borders.

State news agency KCNA reported on Thursday that the decision to send a “special supply of food and funds to the city to stabilise the living [conditions] of its citizens” came at a meeting held by Kim and top officials on Wednesday.

Kaesong, which is located near the demilitarized zone separating the two Koreas, remained “completely locked down under the state’s maximum emergency system”, according to the report.

International experts have warned that any coronavirus outbreak threatens to devastate North Korea.

Its healthcare system is incapable of handling a serious crisis with a dearth of basic preventive equipment. Many of the country’s 25m people already suffer ill health.

North Korean watchers — including a US general, top Japanese officials and foreign health experts who have worked inside the country — have also raised doubts over whether Pyongyang’s sweeping restrictions on travel and trade, in place since late January, have prevented coronavirus from spreading inside the country.

India’s yogi tycoon angers critics with coronavirus ‘cure’ kit

Stephanie Findlay and Jyotsna Singh in New Delhi

As the world’s leading pharma companies race to develop vaccines for coronavirus, one man in India claims to have already found the cure.

Baba Ramdev, a black-bearded yoga televangelist close to Prime Minister Narendra Modi, is pushing ahead with sales of coronavirus kits containing traditional ayurvedic remedies, despite official warnings against branding them as a cure for the disease.

Mr Ramdev and his company, Patanjali Ayurved, have emerged as among the corporate winners in a country that is one of the hardest hit by coronavirus. But his controversial medications have drawn fierce opposition from critics who say India’s ayurveda industry should be better regulated.

Read more here

Asia-Pacific stocks diverge, gold holds near record high

Asia-Pacific stocks were mixed and gold remained near a record high as negotiations continued in Washington over a further round of economic stimulus.

The Topix in Japan was down 0.4 per cent, South Korea’s Kospi added 0.9 per cent and the S&P/ASX 200 in Australia rose 0.3 per cent. Futures tip the S&P 500 to open up 0.1 per cent.

Mitch McConnell, the Senate’s top Republican, has said the Senate will be in session next week, delaying summer holidays in a bid to find agreement on the stimulus package.

Overnight on Wall Street, the S&P 500 closed 0.6 per cent higher, shrugging off an employment report that suggested recovery in the labour market had slowed following a resurgence in coronavirus cases.

Gold, which is seen as a haven in times of uncertainty, dipped 0.2 per cent to $2,035 a troy ounce after hitting a record high on Wednesday.

The dollar index, a measure of the greenback against a basket of peers, was holding steady after retreating in the previous session on disappointing payroll figures.

Etsy sales surge on rush to buy face masks

Dave Lee in San Francisco

Etsy, the marketplace for handmade products, reported an enormous surge in sales for the second quarter — helped by visitors to its site buying almost 30 million face masks.

In the early days of the pandemic, Etsy issued a call-to-action to its sellers to turn their skills to producing masks. Since then, 100,000 individual sellers have sold at least one mask, Etsy said, with customers on the site searching for “face mask” and other related terms around 11 times per second.

In total, Etsy’s gross merchandise sales (GMS) — the total value of all goods sold on the platform — increased 145 per cent on 2019’s second quarter, to $2.7bn. That figure includes $227m from Reverb, the musical instrument marketplace owned by Etsy.

Total revenue for the period was $429m, versus $181m in 2019. Net income was up 429 per cent.

Etsy saw strong growth in non-mask sales too, it was keen to stress, easing investor fears that a lack of summer weddings would hit the site hard. Etsy’s active buyer base is up 39 per cent to 60m, and non-mask GMS in the quarter was up 93 per cent, year-on-year.

“We have a solid foundation for long-term growth and are well positioned to build on our momentum,” said Josh Silverman, Etsy’s chief executive.

Its stock was up by around 4 per cent in after-hours trading, having closed on Wednesday at an all-time high — a 200 per cent improvement on the start of the year.

US reports biggest jump in deaths in a week

Peter Wells

The US reported its biggest one-day jump in coronavirus deaths in a week, with several hard-hit sunbelt states revealing near-record daily increases in fatalities.

A further 1,401 people in the US died from the disease, according to data from Covid Tracking Project, up from 1,176 on Tuesday.

Texas (236), Florida (225) and California (202) reported the largest one-day jumps among states. Georgia (142) had a record jump.

The daily death toll in the US has exceeded 1,000 a day 13 times in the past 16 days, resembling patterns previously seen in May. A further 51,825 people in the US tested positive for Covid-19 over the past 24 hours, up from 51,568 on Tuesday.

Over the past week, the US has averaged 57,019 cases a day, the lowest rate since July 11, according to Financial Times analysis of Covid Tracking Project data.

Texas (8,706), Florida (5,409) and California (5,295) reported the largest one-day jumps in new cases among states.

Florida’s total number of cases since the pandemic began topped 500,000, a tally second only to California, while a jump of 3,765 in Georgia made it the fifth US state to have confirmed more than 200,000 infections.

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Brazil’s central bank slashed 25 basis points off the benchmark interest rate, taking it to a historic low of 2 per cent as the country enters its second recession in less than five years.

Texas reported one of its largest one-day jumps in coronavirus fatalities since the onset of the pandemic, but new infections hovered around 9,000 for a second straight day.

A record number of people have been playing poker and digital slot machines on their phones while under coronavirus lockdown, forming habits that game developer Zynga thinks will lead to sustainable profits.

Colombia’s former president Álvaro Uribe has tested positive for coronavirus just a day after being placed under house arrest as part of an investigation into bribery and witness tampering.

California’s coronavirus death toll rose by 202 on Wednesday, its second-biggest single-day jump on record and up from 113 a day earlier. That took its overall total since the pandemic began to 9,703, the third-highest among all US states.

Chicago Mayor Lori Lightfoot announced on Wednesday that school students will restart the academic year learning from home as the most populous city in the Midwest contends with a renewed rise in coronavirus cases.

New York City is expected to set up “checkpoints” as part of an effort to enforce quarantine for travellers from other parts of the US. The plans call for a checkpoint at Penn Station, a major train hub. Similar measures have been taken at New York airports and other entry points, such as bridges and tunnels.

US fuel demand fell sharply last week, reflecting weaker economic performance following a surge in coronavirus cases in some states. Overall fuel demand of 17.9m barrels a day was off about 6 per cent compared with the previous week.

Coronavirus latest: US factory recovery continues as orders grow

Florida reports fewer than 5,000 new cases after storm closed test sites

Florida reported its smallest increase in new coronavirus cases and deaths over the weekend after state testing facilities were closed due to the approach of tropical storm Isaias.

A further 4,752 people tested positive for Covid-19 over the past 24 hours, the state’s health department revealed on Monday, the fewest since June 23 and down from 7,104 on Sunday.

The death toll rose by 73, from the 62 reported on Sunday, which was the state’s lowest daily death toll in about three weeks.

Monday data tend to be lower than other days of the week owing to weekend delays in reporting. But Florida’s numbers are probably also lower after officials decided late last week to close state testing sites ahead of the approach of tropical storm Isaias, which at the time had been upgraded to hurricane status.

State-run testing sites are set to reopen today.

Almost 61,000 coronavirus tests were conducted in Florida over the past 24 hours, with 9.09 per cent of those coming back positive. Those are the lowest levels for both data in at least two weeks.

For the month of July, Florida confirmed just over 321,000 Covid-19 infections, representing two-thirds of its total caseload since the pandemic began. A further 3,494 deaths were reported over the same period, nearly half of all the fatalities it has recorded since the start of the outbreak.

US factory recovery continues as orders grow

The US manufacturing sector grew at a faster pace in July, as factory activity in the world’s largest economy continued to recover from the depths of the coronavirus crisis.

The Institute for Supply Management said its manufacturing index rose to 54.2 from a June reading of 52.6, marking two consecutive months of expansion despite economists’ concerns that a rise in Covid-19 cases could slow the US economic rebound. The index first dipped below 50 in March, falling below the threshold that separates expansion from contraction. It dropped as low as 41.5 in April.

The result in July was the highest mark since March 2019 and surpassed the consensus estimate of 53.6, according to a Reuters poll of economists.

“Demand and consumption continued to drive expansion growth, with inputs remaining at parity with supply and demand,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee.

A sub-index tracking new orders jumped to 61.5 in July, up from 56.4 a month earlier. Measures of production, employment and order backlogs also improved.

The gain in the headline PMI indicated that the overall US economy grew for a third month in a row, according to the ISM. The group said a PMI above 42.8 generally indicated expansion.

Wall Street begins August on the front foot

US stocks climbed higher on Monday amid an earnings season that has surprised analysts to the upside with the impact of coronavirus not being as bad as feared.

The S&P 500 rose 0.5 per cent at market open, while the tech-heavy Nasdaq climbed 1 per cent, as the majority of companies performed better in the second quarter than analysts had been anticipating.

“Nearly 80 per cent of companies are beating expectations, with the median company beating by 16 per cent,” compared with the usual average of 3 per cent, said Mark Haefele, chief investment officer at UBS Global Wealth Management.

However, the situation still remains severe: earnings per share of companies listed on the S&P 500 are expected to be down by 35 per cent in the second quarter compared with the same period in 2019. Forecasts from the end of June expected them to be down 44 per cent, according to FactSet data.

The push higher by US stocks followed suit of counterparts in Europe and Asia, while the US dollar climbed from its lowest level in two years, adding 0.6 per cent on Monday.

Refiner Marathon sinks to loss as US fuel demand dries up

Derek Brower and Myles McCormick

Marathon Petroleum Corp, the US’s biggest independent refiner, reported an adjusted loss of $868m in the first quarter, down from a $1.2bn profit a year ago, as demand for fuel in the world’s largest market remained depressed due to the coronavirus pandemic.

The company, which on Sunday announced its plan to sell its Speedway retail unit to Seven & i in a $21bn all-cash deal, also reiterated its intention to “indefinitely idle” its Gallup and Martinez refineries and potentially convert one of them to renewable diesel.

“Our second-quarter results reflect a full three months of the challenges Covid has created for our business,” said Michael Hennigan, Marathon’s chief executive. “We began April with demand at historic lows. Despite seeing some recovery during the quarter, demand for our products and services continues to be significantly depressed.”

Before adjustments, second-quarter income came in at $9m, including a net pre-tax benefit of $1.4bn, Marathon said. It added that it was on track to meet a target to reduce capital spending this year by $1.4bn and cut operating costs by $950m.

Total revenues of about $15bn were down by more than half compared with the same period last year and slightly below analysts’ forecasts.

The Speedway deal with Seven & i came four months after an earlier proposed sale fell through, and followed pressure from activist investors to raise money and reduce leverage. Marathon’s long-term debt stood at $29bn at the end of the first quarter, against assets of $86bn.

Lockdown restrictions for Manila to tighten on Tuesday

The Philippine capital is set to reimpose quarantine restrictions to stop the spread of coronavirus on Tuesday, following warnings that the health system is at the point of being overwhelmed by a rise in cases.

President Rodrigo Duterte approved late on Sunday the tightening of restrictions on movement in Manila and nearby provinces for two weeks as part of a so-called modified enhanced community quarantine, according to local media reports.

The new restrictions include the suspension of public transport and the use of quarantine passes to leave the house to shop for essential goods or travel to work. Barber shops, salons and gyms will be shut, while retailers and manufacturing sites can operate below 50 per cent capacity.

The south-east Asian country had eased restrictions at the start of June but case numbers have steadily risen to almost 3,250 new daily cases on average in the past seven days based on calculations by the Financial Times, as the total case number pushed above 103,000 on Sunday.

On Saturday, medical association leaders wrote to the government urging it to reimpose lockdown restrictions since the healthcare system was fighting a losing battle and risked being overwhelmed by the virus.

The Philippine Stock Exchange Composite Index slumped 3.6 per cent on Monday.

Fitness group DW Sports falls into administration

Patricia Nilsson

Fitness retailer and gym group DW Sports has fallen into administration, putting 1,700 jobs at risk, after the coronavirus lockdown disrupted its business.

The company, which is owned by former footballer Dave Whelan, on Monday said it was hoping to save “as many gyms as possible” but that its 75 stores would now enter into closing down sales if they had not already closed.

Chief executive Martin Long said the government-mandated closing of its stores and gym chain for a long period had left it with “a high fixed-cost base and zero income”.

“Having exhausted all other available options for the business, we firmly believe that this process can be a platform to restructure the business and preserve many of our gyms for our members, and also protect the maximum number of jobs possible for our team members,” he said.

DW Sports, which runs 73 gyms, said its sister brand Fitness First would not be affected by the administration.

Dollar starts August on a high note after worst month since 2010

The US dollar ticked up from its lowest level in two years and global stocks edged higher after upbeat economic reports and signs corporate earnings season was not as bleak as forecast bolstered market sentiment.

The dollar index, which measures the currency against six peers, rose 0.4 per cent on Monday, after falling 4 per cent in July in the worst fall since 2010.

Lee Hardman, currency analyst at MUFG, said factors that pressured the dollar in July were still at play, but that the intensity of the recent moves meant investors would need to reassess whether it was now fairly priced against its major peers such as the euro, sterling and Japanese yen.

“The ongoing fall in US real yields and rising US political uncertainty have played a role in helping to weaken the US dollar,” he said. “While those fundamental developments remain negative for the US dollar, we have to take into account that it has already moved a long way in short period of time.”

Europe’s Stoxx 600 climbed 0.8 per cent on Monday, after slipping 1.1 per cent in July to snap three consecutive months of gains. Frankfurt’s Xetra Dax rose 1.5 per cent, while London’s FTSE 100 was up 0.2 per cent. Futures tied to the US S&P 500 edged 0.1 per cent higher.

Italy’s manufacturing sector activity grows for first time in two years

Chelsea Bruce-Lockhart

Business managers in Italy’s manufacturing sector reported an expansion in activity for the first time in almost two years in July, as the economy begins its recovery from lockdown.

Italy’s IHS Markit purchasing managers’ index rose to 51.9 in July, from 47.5 the previous month. This moved it above the 50 threshold which indicates that the majority of business managers believe business activity has improved since the previous month. A figure below 50 indicates that business leaders feel there was a deterioration in activity compared with the previous month.

The PMI figure for Italy’s manufacturing sector was higher than the 51.2 reading economists had expected, according to a poll by Reuters, and was the first reading above 50 since August 2018. A rise in domestic demand was considered the main reason for the sector’s expansion. But foreign demand remained weak and there was much evidence to suggest factories were not yet operating at full capacity.

“Overall, July data appear to suggest the sector is on its way to recovery, with output expectations also remaining positive,” said Lewis Cooper, an economist at IHS Markit. “But, after such an extreme blow, there is masses of ground to make up. It is essential that demand conditions continue to improve.”

Mr Cooper added: “Any reintroduction of lockdown measures due to a ‘second wave’ of the pandemic has the potential to derail the recovery.”

Italy’s economy was already shrinking before the pandemic hit. But the shock of the virus has since pushed the country into its fourth recession in just over a decade.

Preliminary data released on Friday showed output had fallen by 12.4 per in the three months to June, from the levels recorded over the previous quarter. This was the steepest contraction of output in nearly four decades.

Italy’s manufacturing PMI was broadly in line with the equivalent measure reported in other major European countries such as France and the UK, which reported readings of 52.4 and 53.3 respectively.

Carmaker Hyundai reveals 13% drop in July sales

Song Jung-a in Seoul

Hyundai Motor reported a 13 per cent drop in July sales as the coronavirus pandemic continued to pummel demand for new cars, but the rate of decline slowed from the previous month, helped by strong domestic sales.

Overseas sales fell 20.8 per cent from a year earlier to 235,716 units last month even as domestic sales jumped 28.4 per cent to 77,381 units as South Korea was able to largely contain the virus outbreak and extended auto tax cuts. The performance was better than a 22.7 per cent decline in June sales.

Hyundai, which is the world’s fifth-largest automaker together with affiliate Kia Motors, has forecast a modest recovery in auto demand in the second half but said auto sales would likely match 2019 levels only around 2023.

Hyundai reported a 62 per cent drop in second-quarter net profit as sales fell 19 per cent in the April-June period. Shares of Hyundai shares gained 0.4 per cent to Won127,000 on Monday while the benchmark Kospi index was little changed.

Spain’s manufacturing sector activity picks up in July

Chelsea Bruce-Lockhart

Activity in Spain’s manufacturing sector improved more than expected in July, providing some welcome respite for one of the continent’s economies hardest hit by the pandemic.

The IHS Markit purchasing managers’ index rose to 53.5 in July, from 49.0 one month earlier. This brought the figure above the 50 point threshold, beyond which indicates the majority of business managers reported an improvement in business activity compared with the previous month.

July’s manufacturing PMI was higher than the 52.0 reading expected by economists, according to a group polled by Reuters. An improvement in both domestic and international demand were thought to drive the change.

However, further manufacturing job losses were also reported, while optimism about the future remained subdued.

“There remains some way to go until we see a return to levels of activity recorded before the Covid-19 pandemic intensified” said Paul Smith, Economics Director at IHS Markit, adding: “Manufacturers are generally cautious in their view of how the rest of the year and the first half of 2021 will work out.”

The rise in Spain’s manufacturing PMIs was welcome news after a series of data releases on Friday indicated that it has been one of the economies worst affected by coronavirus.

Preliminary data released late last week showed Spain’s economy had fallen into recession in the first half of the year, with output contracting by 22 per cent. The drop in output wiped out all the gains made in the seven years since its last recession and was more severe than the fall in gross domestic product seen elsewhere in Europe. More than a million people lost their jobs in the process.

Spain has since seen a fresh wave of coronavirus cases, which threatens to hold back its recovery. The country is currently reporting an average of 2,300 new cases a day.

UK estate agents report brisk business from stamp duty holiday

UK estate agent M Winkworth has reported its busiest July for five years after chancellor Rishi Sunak temporarily removed stamp duty land tax for homes worth £500,000 or less.

“Since 8 July 2020, when the chancellor announced an easing of the stamp duty threshold from £125,000 to £500,000 until 31 March 2021, the Winkworth network has seen a significant recovery,” the group said.

The stamp duty holiday, which was part of a package of measures announced by Mr Sunak in an attempt to stimulate economic activity during a recession prompted by Covid-19 lockdowns and distancing restrictions, saves buyers of £500,000 homes £15,000 in moving costs.

“This has now been our busiest July in at least the past five years,” Winkworth chief executive Dominic Agace said. “The changes in stamp duty have turbo-charged the market.”

Online estate agent Purplebricks gave a similar update on Monday, telling shareholders in a statement alongside its annual results that July had been its busiest ever month in the UK, with 7,000 homes newly listed on its platform.

The estate agency industry was hit hard by Covid-19 restrictions on people’s movements in March to May, however. Both Winkworth and Purplebricks said they remained uncertain about how their businesses would do for the rest of the year.

Shopping centre owner Hammerson to raise capital as tenants withhold rents

George Hammond

Hammerson is looking to investors to help it through the next few months, as the shopping centre owner scrambles to plug a hole left by tenants withholding rent. 

The company, which owns the Bullring in Birmingham, Brent Cross in London and Victoria Gate in Leeds, confirmed on Monday that it was considering raising new equity via a rights issue.

Hammerson is also aiming to bolster its balance sheet with the sale of its 50 per cent stake in its European shopping outlet business, VIA Outlets, to its partner in the venture, the Dutch pension fund asset manager APG.

The company’s announcement confirmed a report from Sky News on Saturday.  

The mall-owner is looking to get cash into the business after rents from tenants dried up. The closure of non-essential retail between March and May, and the slow pace with which shoppers have returned, has meant Hammerson collected just 16 per cent of the rent it was due on June 24, the date at which tenants are meant to pay for the following three months. 

That has since increased to more than 30 per cent, according to the company. 

Hammerson’s share price has fallen almost 80 per cent this year, from £3.10 at the start of January to 64 pence on Monday morning. 

Stocks edge higher on signs of economic recovery

Global stock markets were mostly higher following earnings reports and economic data that pointed to signs of an economic recovery from the coronavirus pandemic.

Futures for Europe’s Stoxx 600 climbed 0.4 per cent, suggesting that the continent-wide stock index will open higher when trading begins. The FTSE 100 was set to add 0.1 per cent.

Japan’s benchmark Topix index was up 1.8 per cent on Monday late afternoon while China’s CSI 300 of Shanghai and Shenzhen-listed stocks added 1.1 per cent.

The gains for equities came as the Caixin purchasing managers’ index, a private gauge of operating conditions in China’s manufacturing sector, showed the biggest improvement in almost a decade, while corporate earnings season in Europe has not been as bad as feared.

Ross MacDonald, an analyst at Morgan Stanley, said that more than two-thirds of European companies had beaten expectations in second-quarter earnings, despite being the worst quarter for profits on record.

“With second-quarter results still on track to deliver an upside surprise, there has been a clear troughing out in expectations for the hit to 2020 profits,” he said.

Greater Manchester declares major incident as Covid-19 cases rise

Authorities in Greater Manchester have declared a “major incident” following a rise in coronavirus cases in the northern English region.

The move to prepare multiple local agencies to work together to improve their response to the virus comes after the government announced new lockdown measures for Manchester and nearby areas last week.

On its website, Manchester City council said citizens should not be alarmed by a major incident being declared.

“This is standard practice for complex situations which require a co-ordinated multi-agency response,” Richard Leese, leader of the council said.
“Although the Council and partner organisations have been working closely to tackle the impacts of the pandemic since early this year, declaring a major incident means we can ramp this up further.”

The Greater Manchester region became subject to new lockdown measures last week, which ban members of different households from meeting inside homes or in pubs. The new rules, which cover an area of almost 5m people. also apply to East Lancashire and parts of West Yorkshire.

Insurer Hiscox lifts estimate for Covid-19 claims to $232m

Oliver Ralph

Insurer Hiscox has increased its estimate of Covid-19 claims from $150m to $232m.
The insurer said that claims have come in on a variety of policies, including property, event cancellation and travel.

Hiscox has also been caught up in the controversy about whether customers can claim on business interruption policies. It was one of eight insurers involved in a High Court case against the Financial Conduct Authority last month.

The claims pushed Hiscox to a $139m loss for the first half of the year, against a $168m profit in the same period last year.

In May, Hiscox raised £375m in an equity issue designed to allow it to take advantage of rising prices for commercial insurance. The company said on Monday that prices for commercial insurance sold in London had risen by 13 per cent so far this year.

Dividend boost to UK investors as £1bn restored

Daniel Thomas and Attracta Mooney in London

UK companies have restored more than £1bn of dividends in recent weeks, underlining that some have fared better during the pandemic than first feared and providing a boost to beleaguered investors.

BAE Systems last week became the latest FTSE 100 company to announce that it would start paying a dividend again, worth about £300m, following packaging group Smurfit Kappa and property company Land Securities.

Other companies in the FTSE 250 and Aim markets — including Nichols, which makes soft drinks such as Vimto — have followed suit.

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UK managers forced to take pandemic pay cuts

Daniel Thomas in London

Just under one-fifth of senior UK managers took pay cuts during the coronavirus pandemic and almost half said business had suffered as companies were forced to put operations on hold.

A poll of almost 2,000 members of the Chartered Management Institute on behalf of the Financial Times showed companies were gradually beginning to restart operations as lockdown restrictions were eased.

However, many warned they were far from restoring normal operations, including a widespread return to offices or international travel, and Brexit was again on the radar for companies as they set out plans for the rest of the year.

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HSBC profits plunge as loan-loss provisions jump

Primrose Riordan in Hong Kong and Stephen Morris in London

HSBC unveiled a jump in reserves set aside for bad loans and a steep drop in profits in the second quarter due to coronavirus, as the bank warned of the impact of tension between the US and China on its business.

Europe’s biggest lender said on Monday that quarterly provisions for potential loan losses surged to $3.8bn from $555m a year ago, surpassing the $2.7bn predicted via analyst estimates compiled by the company.

Group pre-tax profit for the quarter plunged 82 per cent to $1.1bn year on year, missing the $2.5bn estimated by analysts.

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Officials eyeing need for stiffer rules in New South Wales

Officials say they are carefully eyeing the emergence of new Covid-19 cases in Australia’s most populous state, New South Wales, to ensure it doesn’t follow the massive outbreak in neighbouring Victoria.

NSW recorded 13 new cases of coronavirus on Monday, including a new infection from Victoria. Three cases were travellers from overseas.

Gladys Berejiklian, NSW premier, said more testing teams had been deployed to Sydney’s main airport to screen arrivals from Melbourne, which has been put into a harsh lockdown since Sunday after thousands of new cases emerged in recent weeks.

Officials are considering tighter restrictions on the state’s border with Victoria but added that NSW would continue to allow its residents there to return. “It is very difficult to tell someone you can’t come back home.”

Health officials said a sustained increase in cases would see a review of NSW’s rules, which currently recommend but not mandate face masks in public.

“Well clearly, we’re following what’s happening in NSW very, very closely,” one of Australia’s deputy chief medical officers, Michael Kidd, said in an interview on Monday.

“We’ve had … between 10 and 20 cases each day of community transmission, and [seen] a magnificent job in picking up the contacts of all those people,” Prof Kidd said.

Virus drives shift away from coal except in China

Christian Shepherd in Beijing and Stephanie Findlay in New Delhi

The coronavirus pandemic has accelerated a global shift away from coal with the exception of China, which has expanded plans to build power stations using the fuel, data show.

The first half of 2020 marked the first ever six-month decline in global coal power capacity, said Global Energy Monitor, a San Francisco-based non-governmental organisation.

Authorities around the world commissioned 18.3 gigawatts of capacity and retired 21.2GW, led by the closure of plants in Europe. South and south-east Asian nations have also curtailed plans to build plants.

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ADB urges green restart for regional public transport

The Asian Development Bank said on Monday it would urge governments around the region to rebuild coronavirus-hit public transport infrastructure using more green technology.

A report released by the Manila-based lender said the pandemic had a “profound impact” on transport, as lockdowns had forced millions to work and learn from home and consumers had shunned physical shops to order food and other supplies online.

Public transit has not bounced back in Asia as lockdowns ease, due to perceptions that it is relatively unhygienic compared with private vehicles or walking, ADB noted.

“The two key challenges ahead are addressing capacity on public transport to maintain safe distancing requirements, and how best to regain public confidence to return to public transport,” said Bambang Susantono, the bank’s vice-president for knowledge management and sustainable development.

The report said that there is a short window of opportunity for cities to promote the adoption of low-carbon alternatives to lock in air-quality gains from the lockdowns.

China factory activity grows at fastest rate since 2011

China’s manufacturing sector showed further signs of improvement in July, with output and new orders growing at the fastest pace in almost a decade, as the domestic economy recovered from the pandemic.

The Caixin manufacturing purchasing managers’ index rose to 52.8 in July, its highest level in more than nine years and up from 51.2 a month earlier. Readings above 50 mark expansion.

Companies surveyed reported output and new orders expanded at the fastest rate since January 2011 as the Covid-19 outbreak was largely under control within China’s borders.

International demand, however, contracted for a seventh consecutive month as the pandemic continued to hit overseas demand.

“Overall, flare-ups of the epidemic in some regions did not hurt the improving trend of the manufacturing economy, which continued to recover as more epidemic control measures were lifted,” said Wang Zhe, senior economist at Caixin Insight Group. “However, we still need to pay attention to the weakness in both employment and overseas demand.”

Companies reported cutting staffing levels in July amid efficiency drives or by not replacing employees who had left.

India’s home minister joins list of BJP figures with Covid-19

Amy Kazmin in New Delhi

One of India’s most senior leaders has been admitted to hospital with the potentially deadly coronavirus, one among a series of top Bharatiya Janata party stalwarts to be afflicted.

Amit Shah, the powerful home minister, tweeted that he had been tested after showing “initial symptoms.”

BS Yeddyurappa, chief minister of the BJP-ruled southern state of Karnataka, also confirmed that he had been infected with the deadly pathogen on Sunday night, and was in hospital.

He is the second state chief minister to be afflicted with the virus, after the BJP’s Shivraj Singh Chouhan of Madhya Pradesh tested positive last week.

Mr Shah appealed to all those who had come in contact with him in recent days to isolate themselves and get tested.

He is last known to have met prime minister Narendra Modi at a Cabinet meeting on Wednesday, though Indian officials said on Sunday that the prime minister was following social distancing protocols.

Mr Shah has also appeared at some public functions. He has been at the forefront of efforts to persuade Indians that their country has fared far better than more advanced, wealthier nations.

The home minister, pictured at right with Mr Modi at a 2017 rally, recently declared that India was fighting one of the world’s “most successful” battles against coronavirus.

Yet India has been hard hit by coronavirus, with more than 52,700 people testing positive for the virus in the past 24 hours, exceeding the number of new cases in the US.

In total, India has so far confirmed 1.8m infections, of whom 38,171 have died, including more than 750 on Sunday.

Among those who died this weekend was Kamal Rani, a member of the cabinet of the BJP state government in Uttar Pradesh.

Another UP state cabinet minister, Mahendra Singh, the minister of water, and the Swatantra Dev Singh, the chief of the BJP in the state, also tested positive for the virus on Sunday.

BJP veteran Banwarilal Purohit, 80, now serving as governor of the southern state of Tamil Nadu, also tested positive for coronavirus on Sunday and was admitted to hospital.

High-speed Covid-19 tests to be rolled out across UK

Sarah Neville in London

Millions of high-speed coronavirus tests able to return results in 90 minutes are being rolled out across NHS hospitals, care homes and labs from next week as the UK government seeks to contain a feared winter surge in infections.

The announcement follows the government’s promise to expand testing capacity to 500,000 a day by October in an attempt to keep a lid on the disease and avoid a return to tougher lockdown measures.

Sage, the government’s scientific advisory committee, has said that 80 per cent of infected people’s contacts must be tracked down within 48 hours to slow the spread of the disease — a goal that depends on rapid testing.

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China reports 36 new cases as infections appear to slow

Health authorities in China reported 36 new local Covid-19 cases to the end of Sunday as new infections in Xinjiang appeared to slow.

The western region reported 28 new cases, a sharp drop from the almost 112 cases reported for Thursday.

The new cases bring the total for an outbreak that was first reported in the region’s capital, Urumqi, in mid-July to 590, according to official figures.

Liaoning, a province in China’s north-east, also reported eight new cases following an outbreak in the port city of Dalian, taking its total to almost 90.

An additional seven imported Covid-19 cases brought China’s overall tally to 84,428.

S Korea shows signs of recovery as export decline slows

Edward White in Wellington

The decline in South Korean exports slowed further in July, reflecting early signs of recovery in an economy that is seen as a bellwether for trade in the region.

Official data showed a 7 per cent fall in exports last month compared with the year earlier.

That was ahead of a 9.7 per cent drop forecast by Refinitiv and 10.9 per cent year-on-year decline in June.

It also shows the improvement from declines of more than 20 per cent in April and May at the height of the coronavirus pandemic.

The data from Korea Customs Service marked the fifth consecutive month of declines, however the export-dependent economy has been partly buffered by some electronics exports, particularly computer chips, which have seen solid demand and prices amid a surge in online activity.

South Korean industry has also been supported by the government’s response to the public health crisis, which saw the country avoid a nationwide lockdown and widespread disruption to factories.

The IHS Markit manufacturing purchasing managers’ index rose to 46.9 in July from 43.4 in June, suggesting improved conditions for the country’s manufacturers.

While the index remained below the 50-point mark separating contraction from expansion, the result was the best since February and reflected the change since a reading of 41.3 in May – the lowest since the financial crisis.

Joe Hayes, an economist at IHS commented:

July data provides early signs of a turnround across the South Korean manufacturing sector… The output, new orders and employment components have all lifted from the lows seen in the second quarter of 2020, helped by reopening international supply chains and a gradual recovery in demand in key areas such as automotive production.

While the IMF has forecast South Korean gross domestic product to contract 2.1 per cent this year, officials in Seoul have remained optimistic that the result can be avoided.

The government is deploying unprecedented stimulus measures of about $230bn as well as a further $130bn five-year spending plan announced last week aimed at creating 1.9m jobs by 2025.

Marathon sells petrol station division to Seven & i

Kana Inagaki in Tokyo

Marathon Petroleum has agreed to sell its Speedway petrol stations business to Seven & i Holdings in a $21bn all-cash deal, five months after the Japanese owner of the 7-Eleven convenience store chain walked away due to the coronavirus crisis.

Despite earlier failing to agree on pricing, the Japanese retail giant decided to forge ahead with its largest-ever acquisition to cement its top position in the US convenience store market, extending its expansion push beyond its shrinking home market.

Marathon had been in exclusive talks with Seven & i to sell the business for about $22bn.

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Lord & Taylor chain files for bankruptcy protection

Alistair Gray in New York

The retail implosion in the US has claimed its most venerable victim, with the 194-year-old Lord & Taylor chain the latest to file for bankruptcy protection.

The upmarket group, already hit by online retailing, was forced to close all its outlets during the coronavirus shutdown.

The New York-founded chain sought Chapter 11 protection on Sunday in Virginia, putting the future of its 38 stores into doubt.

It is the latest addition to a long list of recent retail failures. Among department store chains alone, Neiman Marcus and JCPenney, two of the sector’s biggest operators, filed earlier in the pandemic.

Lord & Taylor’s bankruptcy comes a year after Hudson’s Bay Company, owner of Saks Fifth Avenue, sold the stores’ operations to Le Tote, a fashion rental subscription service.

Le Tote, based in San Francisco, agreed to pay $100m for the brand, digital channels and inventory as well as the store operations. It hoped to revive Lord & Taylor’s fortunes by combining bricks-and-mortar retail with its own subscription business.

But Le Tote also filed for chapter 11 on Sunday. The company had debt obligations of $138m at the time of the filing.

Lord & Taylor was established in 1826 by two Englishmen, Samuel Lord and George Washington Taylor, who opened the first outlet in Manhattan.

The chain’s flagship Fifth Avenue store closed in January 2019, pictured.

Japan’s manufacturing sector shows signs of improvement

Japan’s manufacturing sector showed signs of improvement in July, after the country’s state of emergency was lifted and as overseas lockdowns eased, according to the results of a private survey.

The au Jibun Bank Japan manufacturing purchasing managers’ index rose to 45.2 in July, up from 40.1 in June as output and new work fell at a slower rate. Readings below 50 mark a contraction, while those above 50 indicate expansion.

Manufacturing production volumes fell at the slowest rate in five months with respondents pointing to the lifting of the state of emergency and as factories overseas restarted production.

“Japan’s manufacturing sector remained severely impacted by the Covid-19 pandemic and subsequent downturn in worldwide economic conditions,” said Tim Moore, director at IHS Markit, which compiles the survey.

“Manufacturers that reported a turnround in production schedules typically cited a boost from easing emergency measures at home, alongside signs of recovery across the automotive supply chain and the restart of economic activity in key export destinations,” he said.

Indian Oil forecasts recovery by year’s end

Stephanie Findlay in New Delhi

The chairman of Indian Oil Corporation, the country’s biggest refiner, forecast that demand would begin to rebound only by year-end as the coronavirus pandemic hits one of the world’s largest energy markets.

Shrikant Madhav Vaidya said new lockdowns in India had knocked capacity utilisation down from 93 per cent in early July to 75 per cent by the end of the month but forecast it would stabilise in the coming months.

“There is demand destruction but then the country is recovering,” Mr Vaidya told the Financial Times after reporting a sharp fall in year-on-year net profit in the quarter ended June 30. “By the end of the year, I expect that things will be nearly back to pre-Covid times.”

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Asia-Pacific stocks diverge amid rising US-China tensions

Asia-Pacific stocks diverged on Monday and gold rose amid rising US-China tensions and ahead of the results of surveys on the state of the region’s manufacturing sector.

Japan’s Topix was up 1 per cent, the Kospi in South Korea shed 0.3 per cent and the S&P/ASX 200 fell 0.6. The Hang Seng index in Hong Kong is set to fall 0.7 per cent when it opens later in the morning. Futures point to a 0.1 per cent gain for the S&P 500 when US markets reopen.

Mike Pompeo, US secretary of state, said on Sunday that President Donald Trump would take action in coming days against Chinese technology companies, including TikTok and WeChat, that the US claims are “feeding data directly to the Chinese Communist party, their national security apparatus”.

Gold, which neared a record high of $2,000 an ounce last week amid concerns over the US economic recovery, was 0.3 per cent higher at $1,980 an ounce.

The dollar index was hovering near a two-year low after recording its worst month since 2010 in July as investors weighed the prospects for the US recovery.

On Friday, the US benchmark S&P 500 closed 0.8 per cent higher while the technology-heavy Nasdaq Composite added 1.5 per cent after strong quarterly results for Apple, Facebook, Amazon and Google parent Alphabet.

US reports smallest jump in new cases and deaths in weeks

The US reported its smallest increases in new coronavirus cases and deaths on Sunday in weeks, with a number of hotspot states continuing to exhibit signs of a possible plateau in new infections.

A further 48,694 people in the US tested positive for the disease over the past 24 hours, according to Covid Tracking Project, from 60,264 on Saturday. This was the smallest one-day increase since July 6.

The nation’s death toll rose by 515, the smallest increase in two weeks.

Figures from weekends and Mondays have tended to be lower than other days of the week owing to weekend delays in reporting, but the latest data were also kept low by a lack of reporting from Texas.

Texas’s data dashboard for Covid-19 underwent a scheduled upgrade on Sunday “to a system that processes electronic lab reports,” state health officials said. Last week, officials overhauled how the state would report deaths. Sunday’s figures will be posted on Monday.

California and Florida both reported the most new cases and fatalities among US states. New infections continued to show signs of remaining comfortably down from peaks last month, while deaths showed some reprieve having surged to record levels last week.

California, which this weekend became the first US state with more than 500,000 confirmed coronavirus cases, reported a further 9,032 infections on Sunday and 132 fatalities.

Florida reported 7,104 new cases and 62 deaths. Late last week, some state testing facilities were closed owing to the approach of Hurricane Isaias. Some Florida residents braved the wind and rain during the storm, pictured.

The state conducted nearly 88,000 tests over the past 24 hours, the fewest in 10 days, but the number that came back positive was 9.28 per cent, the lowest level in at least two weeks.

Deborah Birx, one of the top members in the White House’s coronavirus task force, told CNN on Sunday “we are beginning to see an impact from the mitigation procedures that many of the state and local officials have put into place”.

She warned, though, the latest phase of the pandemic in the US was “very different from March and April” in that the virus is “extraordinarily widespread” and is in both rural and urban areas.

Australian purchasing managers show optimism

The recovery in the Australian manufacturing sector gathered pace in July, according to the Commonwealth Bank purchasing managers’ index, as companies expect the economy returning to post-Covid-19 normality in the coming months.

The headline index from the seasonally adjusted survey rose from 51.2 in June to 54.0 in July, its highest reading since December 2018.

Readings below 50 signal a deterioration in business conditions on the previous month while readings above 50 show improvement.

“Producers of investment goods reported a particularly strong increase in output,” wrote economist Bernard Aw.

Total new orders rose for the first time in 10 months during July, with the rate of increase the strongest since February 2019, the data showed.

“Policy stimulus and increased infrastructure work were also factors behind the optimism,” Mr Aw wrote.

US economy in peril as jobless payments expire

James Politi and Aime Williams in Washington

US lawmakers are facing increasingly shrill warnings over the dangers to the economy as Congress and the White House struggle to reach a deal on a new fiscal stimulus package, leaving millions of Americans without vital safety net payments.

White House chief of staff Mark Meadows on Sunday said the two sides were still far apart, despite progress over the weekend following the expiry of emergency unemployment benefits.

The impasse on Capitol Hill has echoes of other US budgetary stand-offs in the past — which were also marked by moments of political brinkmanship — but with much higher stakes given the recession triggered by the coronavirus pandemic.

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The battle to save Britain’s farmhouse cheeses

The impact of Covid-19 is being felt by speciality cheesemakers across the UK, Polly Russell, a food historian and curator at the British Library, writes in the FT Magazine.

Given the relatively small size of the sector and the fact that larger industries are facing catastrophe too, concern about artisan cheese might seem a niche problem.

After all, according to figures from the Speciality Cheese Association, the sector is worth an estimated £100m a year, while standard, industrial cheese is worth in excess of £3bn.

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Singapore waives levies on foreign workers

Singapore has set aside S$320m (US$233m) to waive levies on employers who hire foreign workers in the construction, marine shipyard and process sectors, the government announced at the weekend.

The government said the move was in addition to S$1.36bn in support to the construction industry announced since the coronavirus pandemic began.

About 15,000 companies in the sectors “continue to face financial difficulties as they are unable to resume work due to Covid-19 measures”, the manpower ministry said in a statement.

Problems are likely to persist until the foreign worker dormitories, where tens of thousands of imported labourers have tested positive, are cleared of the virus, the ministry added.

Blackstone and TPG renegotiate debt after Covid-19

Joe Rennison in London and Mark Vandevelde in New York

Blackstone and TPG have agreed to make hundreds of millions of dollars of unscheduled repayments on loans funding their real estate investment trusts, in exchange for promises that their lenders will not take punitive action as the property market sours.

The private equity firms moved to renegotiate terms with their banks and other lenders as they brace for a fall in property prices in the upheaval caused by the coronavirus pandemic.

The Reits — which are managed by the private equity firms and listed on the stock market — make money by borrowing from banks and lending the cash at higher interest rates to hotel operators, apartment block developers and other owners of commercial property.

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Britons worry lockdown easing too quickly, poll finds

Just 30 per cent of British adults approve of their government’s handling of the coronavirus pandemic, a poll released on Sunday showed.

Almost half — 48 per cent — disapprove, the Opinium Research survey found, with more than half expressing concern that the government is trying to return to normal too rapidly.

The number of people who believe the UK is easing the lockdown too quickly rose 3 percentage points to 51 per cent, while those who think the lockdown is relaxing too cautiously also rose 3 points to 11 per cent.

People appear more ready to go to pubs and restaurants. The number of respondents who have gone to or who plan to go to restaurants rose to 33 per cent, up from 27 per cent two weeks ago.

The poll found 63 per cent of Britons who booked a foreign holiday this summer said it was cancelled while a further 20 per cent responded that it was postponed.

Only 13 per cent have booked a holiday outside the UK scheduled for the next three months, and 18 per cent have booked a domestic vacation.

Three-quarters of respondents think a second wave of Covid-19 is likely this year.

Opinium carried out an online survey of 2,002 UK adults on July 30-31.

Hong Kong official calls for China-Macau ‘travel bubble’

A senior Hong Kong official has suggested a “travel bubble” could be set up with China and Macau to allow travel across the boundaries that separate the regions from the mainland.

Paul Chan, financial secretary, said on Sunday that if Hong Kong gains control of its current surge, residents who take tests that prove negative could be allowed to travel to the mainland and Macau for business and leisure.

“Through the same arrangement, business people and tourists from the mainland and Macau could come to Hong Kong,” Mr Chan wrote in his weekend blog. “We would be able to resume business activities as quickly as possible, and help tourism, retail, catering and other industries.”

Ferry and hydrofoil services on the heavily travelled Macau-Hong Kong route have been suspended since February 4.

He said similar arrangements could also be gradually extended to other places where the pandemic is under control in the Asia-Pacific region.

Referring to the Hong Kong government’s decision on Friday to postpone legislative elections, Mr Chan said the virus “will not be wiped out by political disputes”.

He said only public health measures could bring Covid-19 under control. “I hope everyone will put aside their differences for the time being and work together to control the epidemic.”

Covid-19 outbreak strikes Arctic cruise liner

Richard Milne in Oslo

A large-scale Covid-19 outbreak has hit a Norwegian cruise liner operated by the first company to start up international operations since the start of the coronavirus pandemic.

Hurtigruten said over the weekend that 36 staff from its MS Roald Amundsen had tested positive for coronavirus, as had one passenger from the first of two affected cruises.

Almost 400 passengers from two cruises in July to the Arctic archipelago of Svalbard have had to go into quarantine, affecting 69 municipalities, according to Norwegian health authorities.

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Victoria declares state of disaster as infections surge

Australia’s second-largest city is locked down tighter this week after the state of Victoria declared a state of disaster, under which police are granted sweeping powers and some acts of parliament are temporarily suspended.

On Sunday, Victorian premier Daniel Andrews announced 671 more coronavirus cases, making a total of 11,557 infections in the state of about 6.5m people.

Of those, 598 are under investigation with no known transmission cause.

Mr Andrews said there were 760 “mystery cases” in the state. “We cannot trace back the source of the person’s infection, who they got it from, where or how,” he said in a Sunday press conference. “This mystery is our biggest challenge and a reason to move to a different set of rules.”

He said an 8pm to 5am curfew would be imposed on Melbourne and an adjoining municipality from Sunday evening.

Police would be out in force, he said. “This is all about limiting movement.”

On Sunday, police and defence force personnel began foot patrols of the city, including the popular Docklands area, pictured.

“With that many [mystery] cases you must assume you have even more. We must err on the side of caution and go further and go harder.”

From 6pm on Sunday, Victoria introduced a new series of stage 4 restrictions — the most stringent. “The stay at home conditions are enhanced with additional limits,” Mr Andrews said. “It is no longer available to go beyond 5km from home.”

Only one person could exercise at a time, he said. “So no three sets of tennis, no rounds of golf.”

Mr Andrews said there could be no groups bigger than two people, with “commonsense exceptions for children who need to be looked after”.

The state death toll rose to 123, with seven more fatalities, all people aged in their 70s to 90s, and all but one in care homes.

Victoria, with about 25 per cent of the country’s population, has nearly two-thirds of its Covid-19 cases.

On Saturday, Victoria reported another 397 new Covid-19 cases and three more deaths. The national death toll reached 200 over the weekend, with Victoria accounting for about 60 per cent of those.

China corn prices a fertile ground for speculators

Sun Yu in Beijing

Coronavirus has prompted a surge in corn, or maize, prices in China, even as the pandemic has hammered global demand for the crop, resulting in a speculative frenzy and a problem for policymakers.

Corn futures traded in Dalian have risen about 20 per cent since Covid-19 began spreading in China in February. Over the same period, prices for US corn futures have fallen 12 per cent.

The jump has pushed food inflation in China into double-digits, and piled pressure on the country, the world’s second-largest corn consumer, to boost imports.

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‘No local infection’ in NZ traveller to Korea

New Zealand officials said they have no evidence that a resident who tested positive for coronavirus in South Korea last month acquired the infection locally.

“There continues to be no evidence of any transmission in New Zealand involving the traveller who tested positive for Covid-19 on arrival in South Korea,” according to a health ministry statement issued over the weekend.

The ministry said that although “the public health risk from this case continues to be low”, there would be further contact tracing around their travel within New Zealand.

“All domestic contacts of this case tested to date have returned negative results,” the ministry added.

The traveller visited Queenstown and Auckland before flying from Christchurch to Incheon via Singapore.

New Zealand reported three new cases on Sunday, all related to incoming travel. One case is the child of a previously reported case who arrived on July 14 from Pakistan via Dubai.

The others are a woman in her 30s who arrived in New Zealand on July 28 from Los Angeles and a woman in her 40s who arrived on August 1 from Manila via Hong Kong.

Kerala’s star status imperiled by Gulf migrants’ return

Benjamin Parkin and Jyotsna Singh in New Delhi

Kerala, a coastal Indian state of about 35m people, has been lauded internationally for its strong public health response to the coronavirus, which helped quash early outbreaks even as the virus accelerated around much of the country.

But the mass return of migrants from the Gulf nations exposes weaknesses in the star state’s economy.

Kerala is powered by remittances from abroad, which are estimated to account for as much as a third of the state economy and are now under threat as Gulf countries rethink the role of foreign workers.

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Pandemic drives small Asia businesses towards tech

The coronavirus pandemic is driving Asian small businesses to embrace technology, according to a recent survey.

A study commissioned by Cisco Systems of companies in China, Japan and ASEAN member states found that 94 per cent say they have become more reliant on technology to ensure business continuity.

Nearly 70 per cent responded that they were accelerating the digitalisation of their businesses as a result of the Covid-19 pandemic.

The study, undertaken by IDC, defined digitalisation as the transformation of business operations using cloud, mobility, social, augmented and virtual reality, Internet of Things, data analytics and artificial intelligence to engage customers, suppliers and workers.

Cisco estimated that efficiencies caused by increased use of such technology could add $2.6-31tn to Asia-Pacific gross domestic product by 2024.

Small businesses face obstacles in harnessing tech, however. “The top technology hurdles [are] a shortage of digital skills and necessary technologies to enable digital transformation,” said Bidhan Roy, Cisco’s head of Asian small business..

Singapore, Japan and New Zealand small businesses were the most likely to digitalise successfully, the survey of 1,400 small businesses found.

‘Sustainable’ funds pull ahead in 2nd quarter

Funds identified as “sustainable investment” outranked peers in the pandemic-affected second quarter of 2020, according to research by Morningstar.

Among equity strategies, 56% per cent of 212 funds identified as sustainable outranked their non-sustainable peers.

The research firm found that 18 of 26 global sustainable index tracker funds outperformed their comparable equivalents in the second quarter, and all outperformed peers in the year to date.

“Sustainable themes continue to provide favourable return potential,” said Amantia Muhedini, sustainable investment director at UBS, a bank.

“We expect this to be supported by the post-Covid-19 green recovery that increasingly looks to be supported by policymakers in many parts of the world,” she added.

Australian state looks into electronic monitoring

The Australian state of Victoria is considering introducing electronic monitoring of coronavirus-positive people who breach isolation rules, according to health officials, as a surge in cases in Melbourne continues.

“We have seen … a number of people that have breached the isolation orders,” Michael Kidd, one of the country’s deputy chief medical officers said of Melbourne, the state capital, which has seen thousands of new cases emerge in the past two weeks.

“We have received disturbing reports that some people with Covid-19 who have been told to isolate in their homes have not been at home when health personnel have called around to see how they are doing,” he added.

Prof Kidd said Victoria’s government would make any decision on electronic monitoring.

“Whether we need to move to additional measures and we have seen additional measures used in other countries to monitor people who have been diagnosed with Covid-19 is something that we will need to consider in the days ahead.”

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An increase in Covid-19 cases across the US south and west led to July being the nation’s worst month for infections since the pandemic began, hindering efforts to reopen the world’s largest economy. The US confirmed almost 1.86m cases since the end of June, representing 41 per cent of total infections since the start of the outbreak, according to Covid Tracking Project data.

An Australian study exploring treatments for Covid-19 has started convalescent plasma therapy. The first patient was recruited last week to the Australasian Covid-19 Trial and Randomised, Embedded, Multi-factorial, Adaptive Platform Trial for Community-Acquired Pneumonia. People recovering from Covid-19 develop antibodies in blood plasma, which is transfused into newly infected patients.

Three-quarters of frequent airport lounge customers plan to restart their travel as quickly as is safe, according to a study of 22,000 members of Priority Pass, a global independent lounge group. About seven in 10 travellers are willing to pay for lounge access where social distancing is maintained. The members’ biggest worry is abrupt changes in quarantine and border controls.

UK ministers have been warned that hundreds of thousands of jobs are at risk after the furlough scheme that helped pay the wages of more than 9m workers during the coronavirus lockdown begins to wind down. Since Saturday, UK employers have been encouraged to bring more staff back to their offices to boost hard-hit sectors such as high street retailing and dining.

Britons desperate to take a holiday after months of lockdown have been rushing to book what is left of the country’s holiday accommodation, especially since the government’s advice to avoid Spain. About 14m adults in Britain intend to take a holiday in the country before the end of September, in a potential shot in the arm for destinations such as Padstow in Cornwall, pictured.

Papua New Guinea is seeing a sharp surge in Covid-19 cases two months after ending a state of emergency on June 2. As of Sunday, total confirmed cases have increased to 91, with two deaths. “There is still a large number of people who are not adhering or are unable to adhere to the preventative measures and this is extremely worrying,” said Anand Das, Oxfam director in the Pacific nation of nearly 9m people.

Indonesian commercial property sales are expected to fall 40 per cent year-on-year in the second quarter, according to Fitch, the rating agency. The plunge in presales among 12 large developers follows a 19 per cent year-on-year drop in the first quarter. “We expect demand for industrial land to remain weak as investor sentiment is likely to remain soft,” analysts Bernard Kie and Hasira De Silva wrote.

With borders still closed to millions of frustrated would-be travellers, New Zealand’s tourism officials plan to launch a gamified virtual visit of the South Pacific nation. PlayNZ is billed the world’s first walkthrough of a real-world location, where users can experience New Zealand as a video game. Teenage Kiwi actor Julian Dennison of Deadpool 2 and Shopping narrates the experience.