Wish shares fall in trading debut


Ecommerce site Wish’s stock fell in its first trades on the Nasdaq exchange on Wednesday, in a contrast to a succession of blockbuster technology listings this year.

Shares in ContextLogic, which does business under the name of Wish, had dropped as much as 14 per cent from their initial public offering price of $24 by mid-afternoon. The company raised about $1.1bn at that price on Tuesday evening, giving it an implied market capitalisation of $14bn.

Wish’s offering came on the heels of Airbnb and DoorDash’s successful market debuts, which revived memories of the dotcom era and signalled the willingness of public investors to buy into fast-growing but lossmaking tech companies.

Investors showed less enthusiasm for Wish, which operates an online marketplace largely known for discounted items originating in China, catering to low and middle-income consumers. The company said its proprietary algorithms keep users engaged with a personalised feed of products, resulting in about 1.8m sales a day.

Wish chief executive Peter Szulczewski drew comparisons to the social media company Facebook, whose shares also fell on their first day of trading following a blockbuster IPO in 2012.

“I was an investor in Facebook early on. That worked out well,” Mr Szulczewski said. “I don’t think we’re any different than we were when we did our roadshow. I’m not even sure what the stock price is now, but I had gone into this with the strategy of not paying attention to short-term volatility.”

Investors should judge Wish on its long-term performance, he said.

The San Francisco-based company has faced some criticism for the quality of products on its site, which often take weeks to ship to customers. In 2014 PayPal temporarily stopped processing payments on Wish’s website “as a result of concerns related to products listed on our platform”, the company wrote in its prospectus.

The company is also largely reliant on Chinese supply chains and warned investors about risks arising from US-China trade tensions.

Wish had historically benefited from the Universal Postal Union Treaty, which allowed for low-cost shipping on items from China but was redrawn in July.

Mr Szulczewski said Wish had taken more control over getting products to its customers and now handled more than 90 per cent of shipments itself, after handling none as recently as 2016.

Wish recorded deepening net losses in the first nine months of this year, rising to $176m from $5m during the same period in 2019. It said it made more than $1.7bn in revenues in the first nine months of this year.

The company’s IPO and first trades implied a lower market capitalisation than the estimates some bankers had at one point cited, which had ranged from $25bn to $30bn. Private investors previously valued Wish at $11.2bn in a round of funding last year led by the investment firm General Atlantic.

Both Airbnb and DoorDash experienced large first-day trading “pops”, alarming some advisers and executives of companies that had been preparing for IPOs this month.

David Baszucki, chief executive of gaming company Roblox, said in an email to employees on Friday that he was kicking his company’s listing into the new year and was working with advisers to make “improvements” on the process. Roblox had been expected to list its shares before the end of the year.

Mr Szulczewski owned a stake valued at more than $2.5bn in Wish at the IPO price. He will also retain control over the company through a dual-class voting structure.

Goldman Sachs, JPMorgan and Bank of America served as the lead underwriters on Wish’s offering.

Europe struggles to free Christmas from Covid’s shackles


Europeans who were looking forward to Christmas and new year holidays free from burdensome Covid-19 lockdowns have been brought abruptly down to earth in the past week, with persistently high infection rates across the continent obliging governments from London to Athens to strengthen or maintain restrictions on free movement. 

Belgium has extended curbs through the holidays and will allow people to invite only one adult friend — known as a “cuddle contact” — to their homes, or two if they live alone. France has cancelled a reprieve for New Year’s Eve gatherings and will impose an 8pm-6am curfew from Tuesday.

Italy, which at the weekend overtook the UK to register the highest Covid-19 death toll in Europe of 64,036, has imposed some of the continent’s strictest Christmas travel restrictions that will ban Italians from moving between regions from December 20 to January 6. Greece will remain under lockdown until January 7. In the UK, infections have been rising and there is speculation that London and other regions will face a tightening of restrictions to be announced this week.

But it is Germany, which managed the first wave of the pandemic in the spring better than most of its neighbours, that faces one of the most serious threats from the second wave as governments seek to avoid a repeat of the US Thanksgiving celebrations last month that provoked a new surge of infections and deaths.

Chart showing that test positivity has soared since Thanksgiving in the US, underscoring fears that European countries may see a post-Christmas surge

Germany had initially planned to relax the partial shutdown imposed at the start of November for the festive season. It is now doing the opposite, decreeing a much more draconian lockdown that will come into force on Wednesday and last for three-and-a-half weeks. “We have been forced to act,” Angela Merkel, the chancellor, told reporters on Sunday after a meeting with the leaders of Germany’s 16 states.

The trigger has been a sudden, dramatic worsening of the coronavirus situation, with a record of almost 30,000 new infections and 598 deaths from Covid-19 on Friday.

“Corona is out of control,” said Markus Söder, prime minister of Bavaria, on Sunday. “We are at five minutes to midnight.”

Germany imposed a “lockdown-lite” in November that led to the closure of restaurants, bars, theatres and gyms, though most businesses and schools stayed open. But Ms Merkel said on Sunday that those measures had “not been enough” and infections were again growing exponentially.

The leaders decreed that, from Wednesday, most shops and schools would shut. Companies are to encourage their employees to work from home wherever possible. Curbs on private social gatherings of more than five people will remain in place, though they will be slightly relaxed between December 24 and 26 so families can spend Christmas together.

Chart showing that test positivity remains in the double digits in many European countries, and declines have stalled in some places

Public consumption of alcohol will also be proscribed from Wednesday, and big public gatherings and firework displays banned on New Year’s Eve.

The shift in the rhetoric has been striking: even just a few days ago, authorities were discussing loosening the current restrictions for Christmas and the new year. Now there is a growing realisation that all public life must be wound down over the festive season and beyond.

France was quick to impose restrictions as the second wave took hold in the autumn weather after the summer holidays, and until the beginning of December seemed on track to substantially relax the controls for Christmas. Jean Castex, prime minister, boasted last week that France’s infection rate on December 10 was lower than that of Germany, Italy and the US, having been higher than all of them six weeks earlier. 

Chart showing that Covid-19 hospital occupancy is now falling in many European countries, but levels remain high, risking crisis in the event of a winter surge

But the slowdown in the number of people testing positive for Covid-19 in France has stalled and the figure remains stubbornly high at about 14,000 a day — nearly three times the target set by President Emmanuel Macron for a relaxation. Health officials blame a combination of the cold weather and increased contact between people at home, in shops and at work. 

That prompted Mr Castex to announce the new nationwide, night-time curfew and to declare that cinemas, theatres and sports centres would not be able to reopen on Tuesday as planned — although the French will be able to travel away from their homes and will not be required to fill in government forms justifying each movement. Police have made almost 3m checks since October, and more than 285,000 people have been fined for breaking the rules. 

Health minister Olivier Véran said: “One new French person is hospitalised every minute thanks to Covid infection.” 

Even in Spain, where the infection rate has descended steadily since the country imposed curfews and travel restrictions in late October, Pedro Sánchez, prime minister, warned citizens on Friday not to let their guard down during the festive season. “Although we have a level of slightly more than 180 [infections per 100,000 people],” he said, “we should be at 25.” 

Rising infections will lead inevitably in two to three weeks to more hospitalisations and more deaths during a season when medical facilities are already under pressure, and governments are anxious that Christmas festivities will again allow the pandemic to surge out of control. 

“People should really be very, very sensible over that period and over this whole period of risk because this is a very risky period for us,” said Chris Whitty, England’s chief medical officer, last week. 

Additional reporting by Anna Gross in London, Michael Peel in Brussels, Kerin Hope in Athens, Daniel Dombey in Madrid and Miles Johnson in Rome

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Coronavirus latest: France delays easing of lockdown and imposes curfew


Alice Woodhouse

Developing economies in Asia will shrink at a slower pace than forecast this year on improved outlooks for India and China, according to the Asian Development Bank.

The ADB forecasts economies in developing Asia are expected to contract by 0.4 per cent in 2020, an improvement on the bank’s forecast in September of a 0.7 per cent year on year decline.

Its Asian Development Outlook report forecasts that the Chinese economy will recover at a faster rate than previously estimated. China’s economy is set to grow by 2.1 per cent in 2020, up from the previous estimate of 1.8 per cent on recoveries for both manufacturing and services.

The outlook for India has improved after strict lockdowns were eased. “With the pandemic possibly having peaked in mid-September, many high-frequency indicators are better than a year ago or back to pre-Covid levels, indicating accelerating economic normalisation,” the ADB said.

It forecasts the Indian economy will contract by 8 per cent in 2020, down from the previous estimate of a 9 per cent decline.

The bank left its growth forecast for 2021 at 6.8 per cent for developing Asia.

Taiwan’s economy is among those that have shown strength

Recovery from the pandemic varies across the region, the ADB said as parts of south-east Asia struggle to contain the virus, limiting economic activity.

Containment measures are less strict in parts of East Asia and the Pacific that have been successful in limiting the spread of the virus.

East Asia is expected to grow by between 1.3 and 1.6 per cent in 2020, the only sub-region projected to record growth, thanks to strength in China, South Korea and Taiwan.

Exports from the region have rebounded to similar levels recorded last year, the ADB said. Shipments of medical supplies, electronic and household goods have offset the fall in demand for other items caused by a second wave of infections in the US and Europe.

Tourism, a mainstay for many countries in the region, remains “abysmal” with travel restrictions in place to stem the spread of coronavirus.

Tourist arrivals are down by between 88 per cent and 100 per cent across Asia.

Macron vows to keep defence ties to Egyptian regime


President Emmanuel Macron said on Monday that France would maintain defence and commercial ties with Egypt despite the military-led regime’s human rights record because co-operation would help in the struggle against terrorism and contribute to regional stability. 

Mr Macron was speaking after hosting Egyptian president Abdel Fattah al-Sisi for talks at the Elysée Palace in defiance of sharp criticism from international human rights groups as well as liberal and leftwing French politicians. 

“I won’t condition our co-operation in defence and economic matters on these disagreements [over human rights],” Mr Macron told a joint news conference. 

“It’s better to have a demanding dialogue than a boycott policy that would reduce the effectiveness of one of our partners in the fight against terrorism . . . It [a boycott] would be ineffective on human rights and counter-productive as regards terrorism.”

French officials have said Paris will maintain its “strategic partnership” with Egypt not only because of terrorism, but also because the two countries have common interests in Libya and the eastern Mediterranean, where they are arrayed against an increasingly aggressive Turkey under President Recep Tayyip Erdogan. 

The official confirmation last week of Mr Sisi’s visit to France coincided with the release of three Egyptian rights activists.

On Friday, Egyptian prosecutors ordered the release from detention of three staff members of the Egyptian Initiative for Personal Rights, a prominent rights group and among the last remaining such organisations still functioning despite a crackdown on civil society groups.

They had been arrested in November and their release followed an international outcry with the UN, the EU and the incoming US administration of Joe Biden calling for their freedom. 

Mr Sisi sidestepped a question about the number of political prisoners in Egypt, rejecting the notion that he was a ferocious despot. “I am responsible for protecting 100m people,” he said. “We are a nation trying to create a good future for its citizens in a very unstable region.”

Activists said the arrests of the three activists were related to a meeting they hosted in their Cairo offices for 13 western diplomats including the French ambassador. The French foreign ministry issued a statement expressing its concern after the detention of the first staffer, prompting a rebuke from Cairo. 

Despite the release of the three EIPR workers, on Sunday a terrorism court froze their assets and bank accounts. The prosecution had charged them with joining a terrorist organisation and spreading false news.

A fourth EIPR staffer, Patrick Zaki, has been detained since February and faces charges that include spreading false news and inciting protests. On Monday a court renewed his detention for another 45 days. 

Egypt has bought billions of dollars’ worth of fighter jets and warships from France since Mr Sisi came to power in 2013 in a popularly backed coup in which he ousted his elected Islamist predecessor.

Mr Sisi has presided over one of the harshest crackdowns on dissent in Egypt’s modern history. Tens of thousands of Islamists have been arrested and detentions have also extended to secular critics of the regime, journalists, human rights lawyers and democracy activists.

Many face vague charges which include membership of an unspecified terrorist organisation or “sharing the aims” of a terrorist group. Rights activists are also concerned about the use of lengthy pre-trial detention which can extend to years as a form of punishment for peaceful dissenters.

Concerned about Islamist terrorism, migration and the disintegration of Libya, the west has largely stood by and said little in public about the crushing of dissent and civil society in Egypt. President Donald Trump described Mr Sisi as “my favourite dictator” and the two men appeared to enjoy a good rapport.