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Banks are squeezing the supply of loans to European businesses and households in expectation of higher bad loans due to the impact of lockdowns, a European Central Bank report showed. The ECB's quarterly survey of banks found a growing proportion of them are tightening lending conditions, particularly in France.
Hong Kong’s unemployment rate hit a 16-year high as its economy was battered by the coronavirus epidemic. The jobless figure for October to December rose to 6.6 per cent, a 0.3 per cent increase from the previous three months. The retail, accommodation and food sectors suffered from stringent social distancing measures.
The United Arab Emirates is accelerating the rollout of its coronavirus vaccines as the Gulf federation seeks to overtake its newfound ally Israel as the world’s most inoculated nation. The UAE, which has vaccinated around 20 per cent of the population, is starting to catch up with Israel, which leads with a 29 per cent rate.
Australia’s chief medical officer has said the country will return to ‘some sort of normal’ this year following its Covid-19 vaccination programme, but international travel is still some time away. Paul Kelly said the vaccine effort would not allow Australia to reopen its borders, due to high infection levels elsewhere.
The Ring at the London Metal Exchange
The London Metal Exchange is to propose permanently shutting its Ring, where metals have been traded since its founding in 1877, a move that would mark the end of in-person trading of commodities in Europe. The exchange’s decision would come after it temporarily halted trading in the Ring last year because of the pandemic.
Halliburton, one of the world’s three biggest oilfield services companies, reported a fourth-quarter decline in income to $160m, or 18 cents per share, from $285m a year ago. That marked a 60 per cent rise from the previous three months, when oilfield activity in the company’s key US market remained depressed.
Bank of America's fourth-quarter net income rose by almost $600m, driven by the release of loan loss reserves, capital markets revenues and net interest income that climbed for the first time in more than a year. Quarterly net income rose to $5.5bn but total revenue, at $20.1bn, fell short of expectations of $20.5bn.
Travel restrictions, store closures and fewer festive gatherings dented Swiss chocolatier Lindt & Sprüngli’s business. Organic sales dropped 6.1 per cent to SFr4.02bn ($4.52bn) in 2020, which resulted in an almost 11 per cent year-on-year decline. Shares in Lindt dropped 2 per cent on Tuesday.
New Zealand to investigate saliva tests
George Russell in Hong Kong
The New Zealand Ministry of Health said it would investigate the potential role of a saliva test for coronavirus for incoming arrivals.
The Institute for Environmental Science and Research, known as ESR, said it would begin saliva testing of Air New Zealand aircrew and report back to the ministry.
“Saliva testing is considered a good additional option for those that require frequent testing, such as border workers, where saliva based testing can complement regular nasopharyngeal testing,” the ministry said in a statement.
The polymerase chain reaction test obtained by the nasopharyngeal swabbing method is considered the “gold standard” for Covid-19, the ministry said, “as it detects the virus the most effectively”.
Wetherspoon taps investors for 2nd time in pandemic
Alice Hancock in London
Pub owner Wetherspoon has become the first UK hospitality group to tap shareholders for fresh funds twice during the pandemic while it battles to survive lockdown closures.
The group said on Tuesday that it would look to raise around £93m through an accelerated share placing as it faced uncertainty over the length of the current lockdown and the restrictions that pubs would have to trade under once they reopened.
Wetherspoon said it was spending £4.1m per week while its 872 pubs, which are renowned for their cheap prices, were closed. Since March, the company has reduced its staff headcount by 6,000 to 37,700, it added.
Read more here
Wall St rises as Yellen urges Congress to ‘act big’
US stocks closed higher on Tuesday after Treasury secretary nominee Janet Yellen made the case for large-scale fiscal stimulus to cushion the economic blow from Covid-19 during her confirmation hearing in Washington.
The benchmark S&P 500 index gained 0.8 per cent, while the tech-heavy Nasdaq Composite rose 1.5 per cent.
Ms Yellen voiced strong support for US president-elect Joe Biden’s $1.9tn relief package.
“With interest rates at historic lows, the smartest thing we can do is act big,” she said, adding: “In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”
The former Federal Reserve chair told the Senate finance committee that she would support the Treasury department looking into issuing longer-dated debt in order to take advantage of historically low borrowing costs.
US government bonds edged lower on Tuesday, sending 10-year yields 0.01 percentage points higher at one point to 1.1 per cent. The yield on 30-year notes steadied at 1.8 per cent. Yields rise as prices fall.
UK hits daily record number of deaths
Harry Dempsey in London
The UK recorded its highest number of daily coronavirus deaths since the pandemic began, with a further 1,610 fatalities taking the total to more than 90,000.
Tuesday’s daily figure was higher than the previous record of 1,564 deaths in one day reached on Wednesday last week and is far higher than the peak number of daily deaths during the first wave of coronavirus in the spring last year.
The UK recorded 599 deaths a day earlier. Britain's worst day of the pandemic so far comes as FT’s coronavirus tracker shows the country to have the highest death rate in the world at 1.7 fatalities per 100,000 people in the past seven days.
US trends encouraging despite high toll
Peter Wells in New York
The US has gone three days without a single state reporting a record level of coronavirus hospitalisations, adding to encouraging trends of declining numbers of patients and new infections.
There are 123,848 people currently in US hospitals with coronavirus, according to the most recent data on Monday from Covid Tracking Project. That is the lowest number of patients since January 2 and represents a decline of 6.5 per cent from the January 6 record of 132,474.
On Saturday, for the first time since mid-September, no state was revealed to have reported a record number of hospitalisations, according to a Financial Times analysis of CTP data.
California on Tuesday reported its smallest daily increase in cases in six weeks, putting it on the cusp of becoming the first US state to confirm 3m infections since the start of the pandemic.
An additional 23,794 positive cases were reported over the past 24 hours, down from 30,699 on Monday, the state health department revealed. That is the fewest number of cases in a single day since early December.
The most populous state is now about 3,000 cases shy of becoming the first state in the US to confirm 3m infections since the start of the pandemic.
The US coronavirus death toll topped 400,000 as the country continues to weather the effects of a weeks-long surge in cases and hospitalisations.
Since the start of the pandemic, authorities in the US have attributed 400,022 fatalities to coronavirus, according to Johns Hopkins data, more than any other country.
The most recent figures on Monday from CTP, which the FT uses for analysis, put the death toll at 390,262, although the data aggregator uses a different methodology from Johns Hopkins.
Cheap antiparasitic could cut Covid-19 deaths
Donato Paolo Mancini in London
A cheap, off-patent antiparasitic drug has been shown to have a significant effect in reducing mortality in patients with moderate to severe Covid-19.
Researchers have hailed the preliminary finding as a pivotal step towards broadening the arsenal of drugs used against the disease.
The University of Liverpool’s Andrew Hill and others carried out a meta-analytical breakdown of 18 studies that found that ivermectin was associated with reduced inflammation and a faster elimination of Sars-Cov-2, the virus that causes Covid-19.
Read more here
San Francisco allocates $6m to self-isolating
George Russell in Hong Kong
The city of San Francisco said on Tuesday it would allocate $6m in funding for about 4,600 people who need financial support to isolate after testing positive for Covid-19.
The funding brings the total budget for the city’s Right to Recover programme to $10.9m. Most of the funding comes from the city, topped up by $400,000 in private donation pledges.
Mayor London Breed said the programme, which kicked off in July 2020 and is administered by the Mayor’s Office of Economic and Workforce Development, has already helped 3,200 residents during self-isolation.
Immune system ‘remembers’ Covid-19 infection
George Russell in Hong Kong
The human immune system remembers how to make antibodies that can fend off the new coronavirus for at least six months after the initial infection, according to a report on Tuesday.
Levels of antibodies to Sars-CoV-2, the virus that causes Covid-19, often wane in the months following infection, which has raised concerns that immunity to the virus declines rapidly, the magazine Nature reported.
Michel Nussenzweig, head of the Laboratory of Molecular Immunology at Rockefeller University in New York, and his colleagues collected blood from 87 people about one month and six months after they were infected with the virus.
The team monitored levels of antibodies and immune cells that would stimulate the production of antibodies against the virus if the study participants were reinfected.
They found that levels of antibodies against the coronavirus’s spike protein declined over six months. But levels of immune cells specific for making antibodies against the spike protein remained constant.
Asia-Pacific stocks track Wall Street gains
Alice Woodhouse in Hong Kong
Asia-Pacific stocks were broadly higher on Wednesday, following gains in the US after Treasury secretary nominee Janet Yellen backed quick approval of the incoming administration’s relief package.
The Kospi in South Korea added 1 per cent and the S&P/ASX 200 rose 0.5 per cent, while Japan’s Topix dipped 0.3 per cent.
On Wall Street on Tuesday, the S&P 500 ended 0.8 per cent higher after Ms Yellen voiced support for a $1.9tn relief package proposed by president-elect Joe Biden.
Ms Yellen also took a hard line on China, adding that Mr Biden would was prepared to use the “full array of tools” to counter what she called “China’s abusive, unfair and illegal practices”.
S&P 500 futures were up 0.3 per cent.
A woman receives the Sputnik V vaccine at Moscow’s GUM department store
Russian capital sets up 100-plus jab sites
George Russell in Hong Kong
Moscow has set up more than 100 Covid-19 vaccination sites, the Russian capital’s mayor told state media on Tuesday.
City officials plan to inoculate 6-7m people after launching a vaccination programme on December 5 using the indigenously developed Sputnik V vaccine.
“So far, Moscow has set up about 100 in-patient and 20 mobile sites,” mayor Sergei Sobyanin said during a session of the city’s coordination council tasked with combating the spread of Covid-19.
While frontline health workers and the most vulnerable patients were given priority, now elderly residents and people with chronic diseases can now be inoculated, Tass said.
US cases and hospitalisations hit lowest levels in weeks
Peter Wells in New York
The US continues to experience easing trends in cases and hospitalisations, with trends for both metrics dropping to their lowest levels in weeks.
States reported an additional 144,047 infections, according to Tuesday data from Covid Tracking Project, which marked the smallest daily increase in cases since December 25.
Over the past week, the US has averaged 197,930 cases a day. That is the first time the rate has been below 200,000 — and the lowest it has been — since figures reported on January 1 that were up to and including December 31. About a week ago, the US averaged a record 244,707 cases a day.
Infection rates appear to have eased in a majority of states. Just four states — Virginia, South Carolina, New Hampshire and Maine — had seven-day-average case rates that were higher on Tuesday compared with a week ago, according to a Financial Times analysis of CTP data.
That is the fewest number of states with rising infections since early March 2020.
A preschooler attends class behind a Plexiglas shield in Chicago
The trend in hospital admissions is similar, data show. North Dakota, Idaho, Utah, New York and Kansas are the only states with more patients in hospital than they had seven days ago. That is the fewest number of states with rising hospitalisations since March 23.
Overall, the number of people currently in US hospitals being treated for coronavirus fell to a 17-day low of 123,820 from 123,848 on Monday. That tally is down 6.5 per cent from a January 6 peak.
Authorities attributed a further 2,141 fatalities to coronavirus, up from a five-week low on Monday of 1,395. The US has averaged 2,997 deaths a day over the past week, the first time in 11 days the rate has been below 3,000.
Since the start of the pandemic, the US has confirmed 392,428 fatalities, according to CTP, although Johns Hopkins University, which uses a different methodology, on Tuesday revealed its tally had topped 400,000.
In addition to nascent signs of the pandemic easing in the US, the latest figures are probably lower than might be expected on a typical Tuesday due to delays in reporting over the public holiday weekend.
IAG slashes Air Europa deal to €500m
Alice Woodhouse in Hong Kong
International Airlines Group, the parent company of British Airways and Spain’s Iberia, has agreed to buy Air Europa under an amended deal that slashes the price by half.
Under the new agreement, Iberia has agreed to pay €500m for the Spanish airline with payment deferred until the sixth anniversary of the deal’s completion, after originally agreeing to a €1bn cash deal in 2019.
IAG said the acquisition remained strategically important and that it will allow the group to benefit from growth opportunities once the industry emerges from the “unprecedented impact of the Covid-19 crisis”.
The deal is expected to be completed in the second half of 2021, “at a time when air travel recovery could be meaningful as the rollout of Covid-19 vaccines proceeds worldwide”, IAG said.
Pandemic-related travel restrictions have hit the airline industry hard after governments closed international borders or banned overseas trips.
“I am pleased that we have reached agreement with [Air Europa owner] Globalia to defer payment until well into the expected recovery in air travel following the end of the pandemic,” said Luis Gallego, IAG’s chief executive.
Air Europa has a fleet of 52 aircraft, down from 68 at the end of 2019. It operates domestic flights in Spain as well as European routes and long-haul destinations in the US, South America and Africa.
Hong Kong extends dining rules for a week
George Russell in Hong Kong
Hong Kong on Tuesday extended social distancing requirements for another week as new cases continued to hover around 50 to 100 daily.
Under the restrictions, restaurants are required to cease dining-in operations from 6pm, while bars and clubs remain closed. Tables can be occupied by no more than two people. Wearing a mask on public transit and in public places is mandatory.
“The Covid-19 situation in Hong Kong remains volatile,” the Food and Health Bureau said in a statement. “Silent transmission in the community is still active.”
From Saturday, passengers who have been in Brazil or Ireland for more than two hours in the preceding three weeks will not be able to board flights to Hong Kong.
Hong Kong recorded 56 additional confirmed cases on Tuesday, taking the total to 9,721. Of those, 647 cases have been recorded in the 14 days to January 18, including 608 local cases of which 205 are from unknown sources.
Cost revelation could ‘jeopardise jab order’
George Russell in Hong Kong
Revealing the cost of a Chinese-made vaccine could jeopardise an order for 148m doses, the head of the Philippines’ main anti-pandemic body told state media on Tuesday.
Carlito Galvez, who leads the country’s National Task Force against Covid-19, said breaching a confidentiality agreement could spark cancellation of the order, the Philippine News Agency reported.
The government has denied media reports that the CoronaVac vaccine made by Sinovac Biotech cost 3,600 pesos ($75) per dose, making it one of the more expensive jabs on offer.
President Rodrigo Duterte said last week that the price was closer to that of the AstraZeneca/University of Oxford vaccine, which costs about 600 pesos per dose.
Netflix signals buybacks as subscribers hit 200m
Anna Nicolaou in New York
Netflix will no longer raise debt to fund its spending spree on television shows and films and may begin returning money to shareholders through buybacks, marking a milestone in the company’s evolution as it said it had passed 200m subscribers.
The streaming entertainment service had nearly 204m subscribers at the end of 2020, it said, having added 37m new paying customers during the year.
The global pandemic that lured people stuck at home in lockdowns to Netflix’s streaming platform and kept it comfortably ahead in the race for subscribers. Its fiercest rival, Disney Plus, has 87m subscribers worldwide.
Read more here
Mexico reports record deaths as vaccinations lag
Jude Webber in Mexico City
Mexico on Tuesday notched up a new record in Covid-19 deaths, as delays threatened the country’s vaccination rollout.
There were 1,584 more confirmed fatalities compared with the previous day's toll.
Total confirmed cases were 1,668,396 and confirmed deaths hit 142,832 but excess deaths figures show those figures are seriously understated.
Mexico added 18,984 cases compared with Monday’s tally.
Mexico began vaccinating medical staff at Christmas with the BioNTech/Pfizer vaccine but has been forced to pause its programme while Pfizer boosts production at its plant in Belgium.
The country received a shipment of vaccines on Tuesday with about 200,000 doses – half the size of previous deliveries – and will not receive more until mid-February.
President Andrés Manuel López Obrador said the pause is to enable the vaccine to be rolled out to poorer countries, an interpretation sources close to the company say is not correct.
Mexico hopes soon to grant regulatory approval for China’s CanSino and Russia’s Sputnik V vaccines, on which it is pinning the hopes for a chunk of its vaccination programme.
It already has a deal with the University of Oxford/AstraZeneca vaccine, and expects to receive that in March.
Beijing to monitor recent arrivals in bid to contain outbreak
Yuan Yang in Beijing and Wang Xueqiao in Shanghai
Beijing will monitor all people who have entered the city from overseas since December 10 2020, according to state media, as authorities tighten measures to contain an outbreak in the north of the country.
The step is the latest in efforts to control a series of winter outbreaks of Covid-19 that are the largest the country has since early 2020. Authorities claim the infections are linked to overseas travellers and imported frozen food.
China reported 103 new cases of Covid-19 on Wednesday, of which 88 are locally transmitted, taking the recent tally of infections to 1,473 cases in total.
The northern province of Jilin reported 46 cases, while Hebei, around Beijing, recorded 19 Covid-19 cases. The north-east province of Heilongjiang reported 16 cases and seven were detected in the capital.
Residents in Beijing’s southern Daxing district have been urged not to travel, after a cluster of new cases was identified. Five communities in the district have been locked down, and a subway station closed.
In addition, health authorities in Beijing introduced a health management programme for all arrivals from overseas and their close contacts, involving 14-day centralised quarantine followed by seven days of home quarantine and another seven days of medical tracking.
Multiple cities in Hebei, Jilin and Heilongjiang have conducted several rounds of nucleic acid testing for all residents following the discovery of infection clusters.
Authorities in Shijiazhuang in Hebei and Tonghua in Jilin will organise a new round of nucleic acid testing in their cities.
Shijiazhuang and two other cities in Hebei were also locked down seven days ago.
S&P says Covid-19 accelerates ESG investment
George Russell in Hong Kong
The Covid-19 pandemic has accelerated a shift by investors towards embracing corporate social responsibility, according to an S&P Global Ratings report released on Wednesday.
The increase in state support for businesses during the public health crisis in many countries has made investors more aware of the linkages among government and corporate interests, the rating agency's Sustainable Finance Scientific Council said in its first report.
Michael Wilkins, a sustainable finance senior research fellow at S&P said there was increased investor interest in companies that emphasise environmental, social and governance factors.
“Recent surges in sustainable investing and increasing market scrutiny of ESG factors are calling into question the purpose of corporations and asking where their responsibilities to society begin and end,” he added.
He noted that the S&P 500 ESG Index outperformed, suffered fewer losses and recovered faster than the S&P 500 during the pandemic.
British Prime Minister Boris Johnson, right, meets Dipesh Sonar and Nisha Gill at Oxford Biomedica, where batches of the AstraZeneca vaccine are tested
Companies are now expected to invest more in employee health and wellbeing, safety protocols, and ensuring business continuity. But this means aligning these objectives with sometimes-contradictory shareholder interests."
Mr Wilkins, lead author of the report, Stakeholder Capitalism: Aligning Value Creation with Protection of Values, argues that corporate priorities are increasingly shifting towards long-term value creation for customers, employees, society and the environment, rather than just shareholder returns.
In the case of the Covid-19 vaccine race, the report noted, AstraZeneca created more value by pricing its vaccine more cheaply compared with the Moderna and Pfizer products. “[AstraZeneca] appeared to be prioritising wider societal needs before reverting to commercial pricing,” Mr Wilkins wrote.
He acknowledged that investors’ and societal interests cannot always merge, noting that in May 2020 when 11 major shareholders of Total proposed that the French oil and gas company adopt absolute decarbonisation targets, only 16 per cent of voters favoured the motion.
India distributes vaccines to neighbouring countries
Amy Kazmin in New Delhi
New Delhi has begun dispatching Indian-made Covid-19 vaccines to friendly South Asian neighbours as part of an effort to strengthen its strategic role in the region.
The first batches of Covishield, a version of the University of Oxford/AstraZeneca Covid vaccine produced by Serum Institute of India, will be offered as gifts to friendly neighbours to vaccinate their own healthcare workers.
The first consignment was flown to tiny Bhutan early Wednesday morning.
Dispatches to Sri Lanka, Afghanistan and Mauritius are expected to follow, once those countries’ drug regulators approve the inoculation for use in their countries.
After the grant of the initial doses - including 2m doses for Bangladesh - the vaccines will be made available to partner countries for purchase.
Medical staff leave an isolation ward at Shukraraaj Tropical & Infectious Disease Hospital in Kathmandu
Narendra Modi, India’s prime minister, wrote on Twitter that the country is “deeply honoured to be a long-trusted partner in meeting the health care needs of the global community”.
New Delhi’s move to provide vaccines to South Asian neighbours, which also include Maldives and Nepal, comes days after it launched its own ambitious vaccination drive, which aims to inoculate 300m health care workers and elderly Indians by August.
It also comes as the World Health Organisation has sounded alarms over the inequitable distribution of vaccines globally, with wealthy countries aggressively vaccinating their population and lower-income nations suffering from a dearth of vaccines.
So far, 631,417 Indian healthcare workers have received a first dose of a Covid-19 vaccine, but the drive has been hit by technical glitches, and widespread suspicion of one of the indigenously developed vaccines, produced by Bharat Biotech.
In a statement, India’s external affairs ministry said India would continue to supply additional doses of the vaccines to key partner countries in the months “keeping in view the domestic requirements.”
India is also committed to supply the Covax facility for developing countries, set up by the Global Alliance for Vaccines and Immunisations.
Covid-19 worsening Asia diets, say UN agencies
George Russell in Hong Kong
The coronavirus pandemic is undermining efforts to improve diets and nutrition of nearly 2bn people in Asia-Pacific nations who were already unable to afford healthy diets, according to a joint report by four UN agencies issued on Wednesday.
The outbreak has left millions jobless and disrupted supply chains, destabilised food systems and markets, and led to a worsening of inequality, as poorer families with dwindling incomes further alter their diets to choose cheaper, less nutritious foods, the report said.
The report, Asia and the Pacific Regional Overview of Food Security and Nutrition 2020: Maternal and Child Diets at the Heart of Improving Nutrition — published jointly by the Food and Agriculture Organization, the UN Children’s Fund, the World Food Programme and the World Health Organization — found that 1.9bn of the region’s roughly 4.5bn people were unable to afford a healthy diet.
More than 350m people in the Asia and the Pacific were undernourished in 2019, accounting for half of the global total, the agencies said.
The report calls for policies to make nutritious diets affordable and accessible.
UK minorities hit harder by job losses
Delphine Strauss in London
Black and minority ethnic workers in the UK have been far harder hit by the pandemic than their white peers, according to an analysis of official data by the Trades Union Congress that shows big disparities in job losses in the worst-affected sectors.
The latest forecasts from the Office for Budget Responsibility and Bank of England predict that UK unemployment will peak at about 7.5 per cent later this year.
The TUC analysis, based on labour market data for the third quarter of 2020, notes that the unemployment rate for black and ethnic minority workers was at 7 per cent even before the pandemic hit, and has risen well beyond it to 8.5 per cent.
Read more here
UAE vaccinations exceed 2m, says ministry
The United Arab Emirates said on Tuesday it had administered more than 2m vaccinations against coronavirus.
The Ministry of Health and Prevention said 20.88 per 100 people in the Gulf federation had received a Covid-19 vaccine, one of the world's highest rates.
Abdul Rahman bin Mohammad bin Nasser Al Owais, health minister, said the country's objective was to inoculate 50 per cent of the country's 10m population during the first quarter of this year.
Ruari McCulloch, owner of London florist Pinstripes & Peonies
Small UK businesses are ‘running out of cash’
Daniel Thomas and Alice Hancock in London
“I suppose the technical phrase is we’re screwed,” said Ruari McCulloch, owner of Pinstripes & Peonies, a high-end London florist, which counts several London department stores and the Paris Air Show among its clients.
Mr McCulloch is one of the many small business owners facing the toughest few months yet of the pandemic, starved of income for much of the past year as the UK approaches the anniversary of the first national coronavirus lockdown in March.
Cash levels are depleted and debt loads have risen fast for companies with high fixed costs but zero revenues, leading to urgent calls from business lobby groups, including CBI and the British Chambers of Commerce, for immediate and sustained government financial support.
Read more here
Covid weekly deaths hit record, WHO data show
George Russell in Hong Kong
More than 93,000 people died from coronavirus in the past week, a record high since the start of the pandemic, the World Health Organization said in its weekly bulletin on Wednesday.
The Covid-19 case tally worldwide grew by over 4.7m in the past week, WHO data showed.
There were 93,882 reported Covid-19 fatalities worldwide between January 11 and January 17, 9 per cent more than the week earlier.
Last week, a growth in fatalities was reported in all regions, the agency said. The number of infections grew in Africa, Eastern Mediterranean and Western Pacific, but declined in the Americas, Europe and south-east Asia.
Europe registered a 15 per cent decline in new cases, while the Americas and south-east Asia showed slightly fewer cases.
All regions reported increases in new deaths.
“Case incidence continues to be one of the primary drivers of mortality – where increases in the number of Covid-19-related hospitalisations and deaths follow large numbers of cases after a short time lag,” the agency said.
Denmark to receive 100,000 fewer Pfizer jabs
Richard Milne, Nordic and Baltic Correspondent
Denmark will receive 100,000 fewer Covid-19 vaccine doses from Pfizer in the first quarter and only half the promised amount this week.
The US pharmaceuticals company shocked European governments last week by unexpectedly telling them a reorganisation of its manufacturing capabilities would lead to delays in vaccine supplies, prompting Nordic and Baltic countries to warn of “severe concern about the sustainability and credibility of the Covid-19 vaccination process”.
Denmark said on Wednesday that it had "finally" been confirmed by Pfizer that it would receive 30,000-35,000 fewer doses than promised this week, half the original plan. For the first quarter as a whole, it would receive 100,000 fewer doses, about 10 per cent less than previously scheduled.
Pfizer said vaccines would be delayed in the coming weeks but that the revamp of its manufacturing would result in more capacity later in the year.
Danish health authorities, which said the reduction in supply this week would be different for each European country, said it and the EU were working to find a solution with Pfizer so that the cuts would be smaller.
UK inflation accelerates as prices for clothing and transport rise
Rising prices for clothing, transport and cultural activities pushed the UK inflation rate higher last month, as soaring rates of coronavirus set the stage for further months of lockdown.
The price of consumer goods rose at an annual rate of 0.6 per cent in December, from 0.3 per cent the previous month, the Office for National Statistics said on Wednesday.
Recreational and cultural activities were the biggest driver of the rise, and prices increased for transport and clothing, but these were partially offset by a downward contribution from falls in the price of food and non-alcoholic drinks.
The figures reflect a turbulent month in the UK, with the ordinarily crucial Christmas sales period for retailers, bars and restaurants disrupted by a new introduction of lockdown measures.
The rate of inflation was slightly higher than the consensus expected by economists, 0.5 per cent.
Burberry reports 9% drop in same-store sales as stores close
Burberry left its financial forecasts unchanged after reporting a 9 per cent decline in same-store sales during the third quarter.
The British luxury goods group, which is moving further upmarket under Italian chief executive Marco Gobbetti, said more than a third of stores worldwide are subject to reduced opening hours or other operating restrictions and 15 per cent of them are closed altogether.
Mr Gobbetti said the group’s new collections “resonated well with new, younger clientele as well as existing customers” and that “localised plans and digital capabilities helped drive growth in rebounding markets”.
“While the short-term outlook remains uncertain due to Covid-19, we are well placed to accelerate when the pandemic eases,” he added.
Gross margins benefited from Burberry’s increased focus on full-price sales and lower levels of markdown, but this was offset by lower tourist traffic in key world cities and the Covid-related restrictions.
UK retailers face renewed hit from second Covid wave
UK retailers pointed to bright spots for their businesses during the coronavirus pandemic, even as they reported the crippling impact of forced store closures and lower footfall due to the second wave of the deadly virus.
WHSmith said on Wednesday that trading in the build-up to Christmas was better than expected, as its high street stores returned to 92 per cent of 2019 levels in December. Most of its stores are considered newsagents, which are classified as “essential” retailers and therefore allowed to open through the pandemic.
However, sales at those stores have plummeted to 70 per cent this month compared with 2019, significantly worse than the previous four months, after the UK imposed tougher lockdown measures. It expected little change to the UK situation before the end of March.
The picture was even more dire at its travel stores located at airports, motorway stations and railway stations. Revenue was down to 37 per cent of 2019 in the 20 weeks to January 16, chopping total group revenue down to 59 per cent of the comparable period a year earlier.
Meanwhile, Dixons Carphone continued to benefit from an 11 per cent uplift in like-for-like sales of electrical products in the 10 weeks to January 9, led by large screen TVs, smart tech, food preparation, health and beauty and video games.
But store closures due to its “non-essential” status contributed to a steep fall of 40 per cent in UK and Ireland mobile sales during the peak trading period.
“Despite current store closures we expect to deliver full year profits in line with market expectations,” the group said.
IWG to close more shared offices due to virus resurgence
IWG is set to ditch millions of square feet of office space, as a resurgence of coronavirus cases around the world keeps people at home and delays a hoped-for recovery for the world’s largest flexible office company.
The company, which operates more than 3,000 workspaces globally, said on Wednesday that the return to business as usual had been pushed back by the sharp increase in cases worldwide, and that as a result it faced another round of office closures.
IWG said this round of closures would be similar in scale to cuts announced in August, when the company committed to close around 120 offices, or 4 per cent of its total 64m sq ft office portfolio.
The company has set aside £160m to cover the costs of the new office cuts, adding to the £156m the business set aside in August to deal with coronavirus-related costs.
It is due to announce its full year results on March 9, and said revenues for 2020 would be approximately £2.45bn.
Pearson warns of uncertainty over exams and lockdown measures
Alex Barker in London
Pearson, the education and publishing group, returned to sales growth for the fourth quarter but warned of the uncertainty over exams and lockdowns that has hammered its business through the coronavirus pandemic.
Thirty per cent growth in its online learning businesses helped the group to a 4 per cent increase in sales in the fourth quarter, its only positive three-month period of the year.
Andy Bird, who took over as chief executive in October, said it had been an “incredibly challenging year”.
“Uncertainty remains in the near term as a result of the ongoing pandemic, with further lockdowns, exam cancellations and reduced global mobility,” he said. “However, I am excited about our future given the shift to online learning and the huge opportunity to help more people develop the skills they need.
Full-year revenues were down 10 per cent with the company expecting adjusted operating profits in the range of £310m-315m, in line with analyst expectations.
Study shows BioNTech/Pfizer shot effective against strain found in UK
Joe Miller in Frankfurt, Hannah Kuchler in New York, Clive Cookson in London
The coronavirus vaccine developed by BioNTech and Pfizer is likely to be as effective against a rapidly spreading strain of the virus that was first discovered in the UK, a laboratory-based study run by the companies has shown.
The variant, known as B.1.1.7, has a high number of mutations, which has led to concerns that could bypass the immune defences built up by vaccines being rolled out worldwide, a large proportion of which have been made by BioNTech and Pfizer.
However, researchers at BioNTech’s headquarters in Mainz found that a test-tube version of the virus carrying all the new strain’s mutations was neutralised by antibodies in the blood of 16 patients who had received the vaccine in previous trials, half of whom were over 55-years-old.
In a paper that has yet to be peer reviewed, the companies said there was “no biologically significant difference in neutralisation activity” between the results of the lab tests on surrogate versions of the original strain of the coronavirus, sequenced in China last January, and the new variant.
But the authors warned that the “evolution of Sars-Cov-2 necessitates continuous monitoring of the significance of changes for maintained protection by currently authorised vaccines”.
The test is the first of its kind to be completed by a major vaccine maker, as companies rush to check their vaccines hold up against the new variant.
Chemicals group BASF beats forecasts with 32% rise in operating profit
Joe Miller in Frankfurt
The German chemicals group BASF beat analysts expectations to boost pre-tax profits by a third in the last three months of the year, the company said on Wednesday.
Earnings before interest and tax, excluding one-off charges, rose by 32 per cent in the last quarter of 2020, to €1.1bn, up from €842m the year before.
The rebound came amid a surge in global manufacturing as coronavirus-induced lockdowns have been loosened, releasing pent-up demand.
The group said that as a result earnings for the full year were expected to be €3.6bn, a drop of almost €1bn on 2019, but above analysts estimates and internal BASF forecasts.
Three of the company’s six divisions - materials, chemicals and industrial solutions - drove the recovery in the last part of the year, while BASF’s agricultural products unit suffered from negative currency effects.
Cruise company Saga makes inoculation obligatory for its passengers
Saga, the insurance and cruise company, has written to its holiday customers to tell them that they must be vaccinated against coronavirus at least 14 days before they travel.
The group, which specialises in travel and insurance for the over-50s, said on Wednesday that it had told holidaymakers to take a pre-departure Covid-19 test before embarking.
The company has delayed the start of its holiday programme to May "to allow our customers time to get vaccinated", it added.
"Our customers want the reassurance of the vaccine and to know others travelling with them will be vaccinated too," the company said.
In an attempt to encourage customers back to its ships, Saga has invested in its air conditioning on board and doubled its medical teams.
The measures come as cruise companies struggle to kickstart operations after almost a year without any bookings.
Chinese vaccine makers apply to join WHO initiative
China’s three leading vaccine makers have submitted applications to take part in the World Health Organization’s initiative to supply developing countries, the foreign ministry announced on Wednesday.
If successful, the vaccines from Sinopharm, Sinovac and CanSino will be delivered to countries as part of the Covax scheme.
“The Chinese government has actively supported Chinese vaccine companies to take part in the scheme, and has provided active assistance on this,” said foreign ministry spokesperson Hua Chunying, announcing the news at a press conference in Beijing on Wednesday.
Chinese media have criticised western-made vaccines for not being affordable enough for developing nations, as well as the newer generation of mRNA vaccines requiring more advanced cold-chain storage than many regions are able to provide.
But while China’s vaccine makers are already taking part in a domestic rollout, the companies have faced criticism over not publishing their trial data. Conflicting efficacy results in foreign trials have led to problems for Sinovac and Sinopharm.
P&G raises annual forecasts on sustained cleaning boom
Elevated demand for paper towels, washing up liquid and laundry detergent has lasted into the winter, giving Procter & Gamble another bump in sales and prompting the consumer goods bellwether to increase its annual forecasts once again.
The US-based household product group behind brands including Ariel, Bounty, Tampax, Pampers and Head & Shoulders generated $19.7bn worth of net sales in the final three months of last year, 8 per cent more than a year ago.
Wall Street analysts had forecast P&G’s rate of organic sales growth in its fiscal second quarter to cool from 9 per cent in the previous quarter to about 6 per cent, yet the group’s latest batch of forecast-beating results indicates a pandemic-induced boost to the business is showing little sign of fading.
The trend for consumers to stay inside is leading them to wash and cook at home more often than usual and visit the bathroom more frequently. The phenomenon has fuelled demand for a wide range of staples, from dishwashing tablets to toilet paper.
Concerns about the spread of coronavirus has made consumers more hygiene-conscious, further benefiting companies in the sector including Reckitt Benckiser of the UK and Kleenex maker Kimberly-Clark, as well as Procter & Gamble.
P&G shares rallied 14 per cent in 2020, although before the gain on Wednesday they had shed 3 per cent this year as Wall Street has queried how much longer the boom can continue.
Read more on this story here.
Morgan Stanley posts record profit as trading booms
Laura Noonan in New York
Morgan Stanley reported a 62 per cent earnings jump in the final three months of the year, sending profits at the US bank to a record annual high and capping a strong results season across Wall Street driven by a boom in trading and dealmaking.
The US bank, which has been investing heavily in its wealth and investment management divisions in recent years, posted net income of $4.43bn in the fourth quarter, versus $2.73bn a year earlier.
Fourth-quarter earnings per share, at $1.81, were significantly higher than the $1.25 level predicted by analysts in a Bloomberg poll, while revenues also beat expectations to hit $13.6bn. Annual profits came in at $11bn, surpassing the $9bn record set last year.
“The firm produced a very strong quarter and record full-year results, with excellent performance across all three businesses and geographies,” said James Gorman, chief executive.
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