Coronavirus latest: ECB seeks to ease lending conditions with new measures


European stocks fall after the ECB
European banking stocks fell in the aftermath of the European Central Bank’s decision to strengthen the region’s financial system, driving the stock markets to their lowest levels of the day.
The Stoxx Europe 600 regional benchmark was down 1%, with the sector following the banking sector accelerating losses and falling by more than 4%.
Among individual lenders, Societe Generale fell 9%, having already been under pressure following poor results, while Crédit Agricole lost 7% and Commerzbank down 2.5%.
The central bank will inject money into the financial system by lending less than 1% to banks. It kept rates at minus 0.5% and maintained its intention to buy more than 1 billion euros in assets this year.
The euro was little changed, down 0.1% against the US dollar.

American Airlines reports loss of $ 2.2 billion
American Airlines reported a net loss of $ 2.2 billion – much worse than Wall Street expected – and said it would burn an average of $ 70 million a day in the second quarter as the pandemic hit airlines .
Analysts polled by FactSet predicted a net loss of just $ 406 million, down from first quarter net earnings of $ 185 million last year. Instead, earnings per share of $ 0.41 in the first quarter of 2019 fell to a loss per share of $ 5.26. Operating revenues fell nearly 21% to $ 7.7 billion. The airline said its cash usage is expected to drop to $ 50 million a day for the month of June.
The losses for the largest US airline come as Covid-19 hit the travel industry particularly hard, with United, Delta and Southwest airlines all reporting quarterly losses.
“Never before has our airline or industry faced such a significant challenge,” said general manager Doug Parker. “We acted quickly and aggressively to reduce our costs and strengthen our liquidity.”
Parker said in a memo that close to 39,000 employees have chosen to take early retirement, take paid leave, or reduce their work hours. The airline also plans to remove its older, less fuel-efficient aircraft this quarter.
American is expected to receive approximately $ 10.6 billion from the US Treasury, including $ 5.8 billion to support the wage bill and $ 4.8 billion in collateral-backed loans. The airline has announced that it will end the second quarter with $ 11 billion in cash.

British fashion chains Oasis and Warehouse collapse
Patricia Nilsson in London
More than 1,800 employees of the Oasis and Warehouse street chains will lose their jobs after administrators were unable to find another buyer for the company.
The fashion group that operates the brands has sold shares and intellectual property to the retail restructuring group Hilco Capital, but its 92 stores across the UK will close.
“Covid-19 presented extraordinary challenges that devastated the retail industry,” said Rob Harding, managing director at Deloitte.

It is with great sadness that we must announce that the sale of the business was not possible and that we are announcing so many layoffs today.

Oasis, which includes Warehouse, is owned by Kaupthing, the “bad bank” that trickles down assets acquired by Icelandic banks and other investors before the global financial crisis. Last year, it sold the Karen Millen and Coast brands to Boohoo, the online retailer, through a “pre-pack” administration.

ConocoPhillips Announces Second Production Drop In Less Than Two Weeks
Derek Brower in London
US oil producer ConocoPhillips announced its second production drop in less than two weeks on Thursday, saying production in June would drop 460,000 barrels a day – more than a third of the company’s production 1 , 3 MB / d and more than the amount that most OPEC countries have committed to withdraw under the historic cartel supply agreement at the beginning of the month.
The announcement came as the largest independent oil producer in the United States, by market capitalization, reported a loss of $ 1.7 billion in the first quarter of 2020, compared to $ 1.8 billion in profits. one year earlier. The drop in crude oil prices triggered by the collapse in demand for oil as economies blocked to prevent the spread of the coronavirus hit the company, notably by reducing the value of its stake by nearly 17% in Cenovus Energy , Canadian oil sands producers.
The company, present in major oil producing regions of North America, said it would voluntarily reduce 265,000 bpd in May, including 100,000 bpd from its Surmont oil sands project in Canada. In June, cuts would drop to 460,000 b / d, with 260,000 b / d of cuts to be made in the Lower 48 and the rest in Canada and Alaska. Production reductions in June are more than double the volume announced by Conoco two weeks ago.
“Future voluntary compression decisions in our areas of operations will be made on a monthly basis,” the company said, adding that it expected “some level of additional restrictions due to infrastructure constraints, actions of assets managed by partners or government mandates. “. Texas and North Dakota authorities are planning to impose cuts on state producers.
While the company’s first quarter loss exceeded analyst expectations, adjusted earnings of $ 500 million generated earnings per share of $ 0.45, more than double consensus forecasts. Operating cash flow of $ 1.6 billion was slightly below expectations. The company retained its dividend of $ 0.42 per share. Total shareholder distributions, including $ 700 million in share repurchases, totaled $ 1.2 billion.

Most Britons think government is ‘too late’ to act, poll finds
In the UK, as many as two-thirds of those polled believe the government has reacted too slowly to the coronavirus, according to a survey that was published while ministers were preparing their directives on how to safely lift the lock.
More than 65% of respondents said they thought Westminster had not progressed fast enough to implement the closure measures announced on March 23, said the Ipsos Mori survey, as the national foreclosure continued in its sixth week.
These measures included orders for individuals to stay at home, except for exercise, medical travel, essential purchases and work, forcing much of the UK economy to shut down.
Only 2% of those polled said the tough measures came too early, while 26% said the government had chosen the right time.
Prime Minister Boris Johnson told the public this week that the virus infection rate is declining, but any easing of restrictions will be gradual to avoid the health and economic risks of a second major spike.

Altria withdraws directives and suspends share buybacks
Altria, the tobacco group behind Marlboro cigarettes, has become the last company to drop its year-round profit forecast and suspend share buybacks as the coronavirus pandemic leaves no doubt about how the request will take place for the year.
The cigarette maker has withdrawn its outlook for 2020 and has also abandoned its profit growth targets for the coming years, stressing “the uncertainties surrounding the impact of the Covid-19 pandemic”.
He also said that in light of the pandemic, he would cancel a $ 1 billion share repurchase program that had a balance of $ 500 million but kept his intention to pay a dividend.
The group said its supply chain was unaffected by the closings, but would monitor economic trends likely to affect demand in the coming period, with higher unemployment levels likely to encourage people to buy cheaper brands of cigarettes.
Altria announced a 13% increase in revenues in the first quarter of the year to $ 6.3 billion, driven by higher demand and higher prices for cigarettes. Net profit increased 39% to $ 1.5 billion.


ECB seeks to ease lending conditions with new measures
Martin Arnold in Frankfurt
The European Central Bank has launched a new push to lend to banks at ultra-low rates, after data released earlier on Thursday showed that the euro area economy had contracted at the fastest rate ever recorded in the first quarter.
In order to strengthen the European banking system’s access to funds and avoid a drying up of credit, the ECB has declared that it will lend money at least 1% to banks and has launched a new series of operations unconditional buybacks to inject liquidity into the financial system.
The ECB has maintained its main deposit rate at its lowest historical level of minus 0.5% and has stood by its intention to buy more than € 1 billion in assets this year to consolidate the financial markets and keep borrowing costs low for households, businesses and governments.
The move follows a similar move by the US Federal Reserve on Wednesday, and indicates that the major central banks have decided to pause and take stock of the many ultra-loose monetary policy measures they have launched in response to the coronavirus crisis.

Coors Light owner collapses as sales drop 8.4%
Molson Coors, the brewer of Coors Light and Carling, recorded an 8.4% drop in revenues in the first quarter, as the closure of bars and pubs reduced almost a quarter of its sales to almost zero.
The company said it does not expect sales of its beverages in stores to fully compensate for the loss of on-site consumption in restaurants and bars, despite good performance, as consumers have stocked their safes eat.
The North American brewer said it had suffered a GAAP net loss of $ 117 million in the first three months of the year, adding that the board of directors was considering suspending, reducing or temporarily eliminate its dividend.
It is expected that negative trends in volume, net sales and mix will continue at least until the end of the year and that negative trends for alcohol consumption in bars will continue as long as social distancing will continue to be practiced.
Molson Coors CEO Gavin Hattersley said, “Like everyone else, the full impact and what our new normal will look like in the future is still uncertain, but the coronavirus has had, and will have, a material impact on our business. “

Kraft Heinz reports strongest sales growth since group creation in 2015
Alistair Gray in New York
Kraft Heinz posted its largest quarterly sales increase since the mega-deal that created it, after consumers who turned away from their processed foods in favor of fresher, healthier alternatives turned to their products during the pandemic.
The group behind Kraft macaroni and cheeses, Oscar Mayer meats and Heinz ketchup has long been struggling with changing customer tastes and its deteriorating finances was highlighted earlier this year when its credit rating went up. been downgraded to spam status.
However, Kraft Heinz said Thursday it had net sales of $ 6.2 billion in the quarter ended March, up 6.2% from a year ago on an organic basis. . This is the largest quarterly increase since the group was created in 2015 by the combination of Kraft and Heinz, an agreement designed by Warren Buffett and the investment company 3G. Demand accelerated in March across all categories in the United States, the company said.
Kraft Heinz said he expected net sales to increase by “low to medium single digit” in the second quarter, but cautioned that the pandemic’s impact on annual results was uncertain.
Net income fell from $ 405 million in the prior year quarter to $ 381 million, in part because the figures from a year ago were supported by a divestiture.

Twitter usage increases during pandemic and income seen from above
Tim Bradshaw in London
Twitter joined Google and Facebook with resilient performance despite advertisers who cut budgets in March, with first quarter revenue increasing 3% year-over-year to $ 808 million, even as it suffered a loss narrow.
Like its Silicon Valley rivals, Twitter is enjoying increased use during the coronavirus pandemic. Twitter audience jumped 24%, with average daily monetizable active users reaching 166 million in the first quarter. Twitter has attracted more users in the United States and abroad.
Twitter said its advertising revenue fell 27% between March 11, when the closings began in the United States, and March 31, at the end of the quarter. “The recession we saw in March was particularly pronounced in the United States and the weakness of advertising in Asia began to subside as work and travel restrictions were gradually lifted,” Twitter said in a letter to shareholders on Thursday.
Nonetheless, news that Twitter has surpassed Wall Street revenue forecasts has raised its shares by 8% in pre-market trading on Thursday to around $ 33.50, even after closing 8% on Wednesday.
“We have had our strongest year-over-year growth in mDAU,” said Jack Dorsey, chief executive officer of Twitter. “In these difficult times, Twitter’s goal is more vital than ever. We help the world stay informed and provide a unique way for people to come together to help or just entertain and remember each other. “
Twitter said it saw “significant acceleration” in use in March, with an audience leveling off at the end of the month. This increase in usage helped offset the drop in advertising prices, as the cost per engagement fell 19% year-over-year.
However, Twitter also posted its first quarterly net loss in more than two years at $ 8.4 million, compared to net profit of $ 190.8 million in the same period a year ago. Fees and expenses increased 18% to $ 815 million.
Twitter said it had shifted internal resources to its advertising products while reducing recruitment.

Coronavirus hits ethnic minorities hardest, London NHS study finds
Clive Cookson in London
Another piece of evidence that black and minority ethnic groups suffer disproportionately from Covid-19 in the UK comes from the analysis of 520 coronavirus patients at three London hospitals run by the Imperial College Healthcare NHS Trust.
The Imperial Center for Infectious Disease Modeling Center study found that 52% of patients with known ethnicity were non-Caucasian. The comparable figure for pre-Covid emergency admissions last year was 45% for non-whites.
Pablo Perez-Guzman, one of the study’s authors, said:

People from the BAME groups in our population were younger and had less known co-morbidities overall than those of white ethnicity. Despite this, we have identified a trend suggesting a higher probability of hospital mortality among blacks than among whites.

Mexico’s economy contracts, signaling a potentially brutal recession ahead
Jude Webber in Mexico City
The Mexican economy contracted 1.6% in the first quarter of 2020 compared to the previous three months, and 2.4% year-on-year. This reflects the start of what analysts predict will be the most brutal recession in a century for the second Latin American economy triggered by the coronavirus pandemic.
Market analysts had predicted a 1.7% contraction from the fourth quarter of 2019. Mexico’s economic wealth is closely linked to that of the United States, where gross domestic product fell 4.8% in the course of of the first three months, more than expected. of this year.
Mexico has closed most of its economy since mid-March and, although it hopes to reopen major supply chains soon, quarantine is expected to last until the end of May for most of the country. Due to the closure and lack of demand, economists see GDP contract by up to 12% this year.
But even before the coronavirus, Mexico’s economy was in the ropes. It declined 0.1% in the first, second and fourth quarters of 2019 and in the third quarter, growth was nil. Overall, the economy contracted 0.1% last year.
The government, which is betting on social programs and small loans to help businesses and citizens overcome the slowdown in Covid-19, sees a contraction of 3.9% this year. But President Andrés Manuel López Obrador insists that Mexico has “tamed” the coronavirus and flattened the infection curve, and that the crisis will be temporary before the economy rebounds.

Private equity group Carlyle announces $ 1.2 billion investment loss
Mark Vandevelde in New York
The Carlyle Group recorded an investment loss of $ 1.2 billion and said it was withdrawing all previous financial forecasts because the fallout from the coronavirus pandemic “reduces our ability to accurately forecast financial results at short term “.
The losses were large enough to completely wipe out the “carry-over” to three funds, which means that Carlyle and its executives would receive minimum performance fees or other sweeteners if the investments were made at current valuations.
“The whole world is coping through this unprecedented period and the human toll is real,” said Carlyle co-CEOs, Kewsong Lee and Glenn Youngkin.
Investors generally pay an annual fee on their investments in private equity funds and repay part of the profits if certain performance thresholds are reached.
Carlyle generated $ 356 million in operating expenses in the first quarter, comfortably ahead of its cash costs, and said:[s] to efficiently manage and operate our business with sufficient liquidity. “
But the setbacks in its investment portfolio mean that Carlyle no longer recognizes future performance earnings from three of its funds and reduces the company’s cumulative performance earnings by 34%.
The results provide a first sign of how the $ 143 billion balance sheet of Carlyle, one of the largest in America’s rapidly growing private equity sector, could be affected by the coronavirus pandemic and an associated shutdown. Similar economic damage is likely to be caused to much of Carlyle’s investment portfolio, which is owned by its clients.
However, the reverse reflects a depreciation of assets that could still recover in value and often do not have to be sold for years.

Comcast spurred by increased internet use while people stay at home
Anna Nicolaou in New York
Comcast has benefited from a surge in demand for high-speed Internet as millions of people have started working from home, resulting in its fastest quarterly broadband growth in 12 years.
But the media sector of the Philadelphia cable giant weighed on earnings, as revenues plunged to double digits for its closed-door Universal theme parks and a film studio without a cinema to debut.
In the first three months of the year, Comcast added 477,000 high-speed Internet customers but lost 409,000 pay television customers as people continued to cancel their cable boxes in favor of online alternatives. It was triple its losses a year ago when Comcast bled 121,000 pay TV customers.
Comcast said web traffic on its broadband Internet connections jumped 33% in the quarter as more people worked from home and made video calls to Zoom. The company had $ 5 billion in sales of residential Internet subscribers, up over 9% from a year ago.
However, this was offset by heavy losses at NBCUniversal, the media group that owns the Universal movie studio and theme parks, as well as its TV and cable channels.
With cinemas closed worldwide during the quarter, Universal’s film studio revenues fell 22% from a year ago to $ 1.4 billion. Its theme parks, which were also closed due to health concerns, saw their sales plunge 32% to $ 869 million, while adjusted profit fell to $ 76 million, a small fraction of the $ 498 million dollars they earned in the same period a year ago.
Overall, Comcast recorded year-over-year decreases in both net income and revenues. The company reported $ 3.3 billion in net profit over $ 26.6 billion in revenue in the quarter ending March.

Italy’s GDP falls at the fastest rate ever
Valentina Romei in London
The Italian economy has slowed down to its fastest pace in nearly 20 years, as production has been stifled by tough government measures to contain the spread of the coronavirus.
The country’s GDP fell by 4.7% in the first quarter compared to the previous quarter, according to the Italian National Statistics Office (Istat), marking the largest contraction since the start of records in 1996. It is stronger than the contraction observed in the first months of 2009 during the financial crisis.
The drop was slightly less than the 5% forecast by Reuters and was a less severe contraction than that of Spain and France, which recorded a drop of more than 5% over the same period.
The Italian economy, the third largest in the euro zone, contracted by 0.3% in the last quarter of 2019, which means that Italy is now in a recession, defined as two consecutive quarters of contraction in production – its fourth in just over a decade.
Italy was the first western country to be hit by the pandemic and its lockdown was more stringent and introduced earlier than in most other European countries.
Last week, the cabinet approved a deficit of 10.4% of GDP this year, more than double its peak during the global financial crisis, prompting credit agency Fitch to downgrade the credit rating by Italy just above the junk.
Istat said there were risks to the quality of the data as the pandemic continued to pose “obstacles” to data collection.

Oil companies announce 1.6 million barrels / day of production shutdowns since March
Oil companies have announced 1.6 million barrels per day of production shutdowns since March, when crude prices fell from more than $ 50 a barrel, an early sign of devastation as demand fell due measures to prevent the spread of coronavirus will harm the industry.
Data from energy consultancy Wood Mackenzie arrives a day before the official start of 10 million bpd of production cuts agreed by Opec and fellow producers, including Russia, to take effect.
Voluntary production restrictions are an attempt to rebalance the oil market at 100 million barrels per day, but they are widely considered insufficient to counter the 30% drop in consumption without resumption of economic activity or massive shutdown production wells.
The 1.6 million bpd figure is conservative as it is based solely on corporate advice and excludes national oil companies that do not disclose information and small producers. Another production development activity of 0.4 million barrels per day has been postponed for this year, said Wood Mackenzie.
Capital spending in the industry has been cut by about a quarter for 2020, which has reduced the level of future supply, the group said. Its data is yet to include the latest production cuts and investments announced this week.


Britain’s largest car plant to remain closed until at least June
Peter Campbell, global automotive industry correspondent
Nissan will not reopen its Sunderland auto plant until at least June, several weeks after other British sites have restarted production.
The site is the largest automotive plant in Britain, employing around 6,000 people.
“We are currently planning a gradual resumption of production in early June,” the Japanese automaker told staff Thursday.
“During this period, the majority of factory workers will remain on leave, and we are grateful for the government’s support which enabled us to take this action,” he added.
Several British factories plan to reopen next month, Mini and Jaguar Land Rover reopening some facilities on May 18. Rolls-Royce will open its plant next Monday, while Aston Martin will restart its St Athan site on Tuesday.
Some of Europe’s largest plants – including Volkswagen’s flagship site in Wolfsberg – have already resumed production, but at levels lower than before the lockout.

20 contenders for Virgin Australia collapsed
Jamie Smyth in Sydney
Virgin Australia administrator says 20 parties have expressed interest in investing in the airline, which collapsed earlier this month when Canberra rejected its $ 1.4 billion ($ 920 million) bailout request dollars).
Deloitte a déclaré lors d’une réunion des créanciers en ligne que huit parties avaient signé des accords de confidentialité et avaient déjà accès à une note d’information et à une salle de données. Les négociations se poursuivent avec les autres parties, selon le communiqué.
Les médias locaux ont nommé le groupe de capital-investissement BGH Capital et le milliardaire australien Andrew Forrest, fondateur de Fortescue, parmi les soumissionnaires potentiels de la deuxième plus grande compagnie aérienne du pays. Virgin doit 6,8 milliards de dollars australiens à environ 12 000 créanciers.
Vaughan Strawbridge, partenaire de Deloitte, s’est dit encouragé par le niveau d’intérêt sophistiqué des parties dans la vente de Virgin. Il a dit qu’il était confiant que l’objectif de réaliser une vente d’ici la fin de juin était réalisable.
Deloitte a nommé Morgan Stanley, aux côtés de Houlihan Lokey, pour diriger le processus de vente.

Taïwan frappée par le ralentissement économique
Kathrin Hille à Taipei
La croissance de l’économie taïwanaise a fortement ralenti au premier trimestre, la pandémie de coronavirus ayant fait des ravages.
Le produit intérieur brut a augmenté de 1,54% au cours de la période de trois mois se terminant le 31 mars par rapport à la même période de l’année dernière, où il avait augmenté de 1,84%, a annoncé jeudi le gouvernement dans son estimation anticipée du PIB trimestriel. Le dernier chiffre était inférieur d’environ 0,3 point de pourcentage aux prévisions.
Les exportations ont diminué de 2,89% et les importations de 4,87%. L’agence des statistiques du cabinet a indiqué une baisse de 0,97% en glissement annuel de la consommation privée, en particulier dans le secteur des services, car les gens sortaient moins.
Taïwan a évité les interdictions strictes appliquées en Chine, aux États-Unis et dans de nombreux pays européens, car ses fermetures précoces des frontières et ses programmes élaborés de quarantaine et de recherche des contacts ont réussi à contenir l’épidémie.
Le pays compte un total de seulement 429 cas confirmés et six décès dus à la maladie, et n’a pas enregistré de nouvelles infections au cours des cinq derniers jours.

Les actifs de Janus Henderson chutent d’un cinquième alors qu’il maintient le dividende intact
Owen Walker à Londres
Les actifs de Janus Henderson ont chuté d’un cinquième au cours des trois premiers mois de l’année, alors que la pandémie de coronavirus faisait des ravages sur le gestionnaire de fonds mondial actif.
Le groupe, qui a subi une vague régulière de sorties depuis sa création par une méga-fusion il y a trois ans, a vu ses actifs sous gestion passer de 375 milliards de dollars à 294 milliards de dollars au premier trimestre en raison d’une combinaison de mouvements de marché et de retraits de clients . Cela a conduit Janus Henderson à subir une perte d’exploitation de 332 millions de livres sterling.
Mais la société, qui est cotée à New York et à Sydney et dont le siège social est à Londres, a maintenu son dividende de 0,36 $ et a procédé à des rachats d’actions de 31 millions de dollars au 31 mars.
« Nous gérons nos dépenses avec soin et l’accent que nous avons mis sur la discipline des coûts soutiendra également notre positionnement tout au long de cette période », a déclaré Dick Weil, directeur général de Janus Henderson.

Le nombre de morts par jour en Espagne tombe à son plus bas niveau en six semaines
Daniel Dombey à Madrid
L’Espagne a signalé son taux de mortalité par coronavirus le plus bas depuis près de six semaines, alors que le pays se prépare à assouplir son verrouillage sévère et à passer lentement à une «nouvelle normalité» fin juin ou mi-juillet.
Le ministère de la Santé a déclaré jeudi que 268 personnes étaient décédées au cours des 24 dernières heures après avoir contracté un coronavirus. Il s’agit du décompte le plus bas depuis le 20 mars – le bilan quotidien a culminé le 2 avril, avec 950 décès – et a porté le nombre cumulé de décès à 24 543 à 21 heures mercredi.
Le vrai chiffre est presque certainement beaucoup plus élevé, car les chiffres officiels ne contiennent que des cas de coronavirus prouvés et peu probables. Le Royaume-Uni a maintenant dépassé l’Espagne en tant que pays avec le troisième plus grand nombre de décès par coronavirus après les États-Unis et l’Italie.
La propagation du virus reste faible, avec une augmentation de 0,6% par rapport à la veille du nombre de personnes ayant obtenu des résultats positifs aux tests PCR, ce qui porte le total des cas confirmés à 213 435. Cependant, cela n’inclut pas de résultats positifs dans des tests d’anticorps moins fiables. Le ministère a indiqué que 112 050 personnes se sont maintenant rétablies – plus de la moitié de tous les cas.
Le gouvernement espagnol a décrit un système complexe basé sur des critères de référence pour éliminer progressivement le verrouillage, avec une ouverture progressive des magasins, des restaurants, des hôtels et d’autres établissements.
Cependant, les déplacements à l’extérieur des provinces d’origine ne seront autorisés qu’à la fin de la période de transition, et les gens seront invités à porter des masques dans les lieux publics et à pratiquer la distance sociale même une fois la transition terminée. Le gouvernement espère que la transition s’achèvera dans huit à 10 semaines après le début du 11 mai.

Les entreprises britanniques négocient toujours une baisse de leurs revenus
Delphine Strauss à Londres
Un quart des entreprises britanniques qui font encore du commerce ont perdu plus de la moitié de leur chiffre d’affaires depuis le début de la fermeture du coronavirus, a déclaré jeudi l’Office des statistiques nationales.
Une enquête bimensuelle, retraçant les effets de la pandémie sur le Royaume-Uni, montre à quel point il sera difficile pour le gouvernement de retirer son soutien aux entreprises, même lorsqu’il devient possible d’alléger les mesures de distanciation sociale et de rouvrir certaines parties de l’économie.
Environ un quart des entreprises ont été contraintes de fermer temporairement en raison du verrouillage. Mais même parmi ceux qui font encore des affaires, environ 14% ont déclaré que leurs ventes avaient chuté jusqu’à 20%, un sur cinq avait perdu entre 20 et 50% des ventes et un quart a déclaré que les ventes avaient baissé de plus de 50 pourcent. Un tiers seulement environ a déclaré que le chiffre d’affaires n’était pas affecté ou supérieur.
Les deux tiers de toutes les entreprises qui ont répondu à l’enquête – menée entre le 20 et le 26 avril – ont déclaré qu’elles avaient demandé un soutien pour payer les travailleurs placés en congé dans le cadre du programme gouvernemental de maintien dans l’emploi. Cette proportion est passée à 82% parmi les entreprises qui avaient suspendu leurs activités.

L’économie de la zone euro se contracte le plus
Valentina Romei à Londres
La pandémie de coronavirus a plongé l’économie de la zone euro dans la plus grande contraction jamais enregistrée alors que ses pays membres ont fermé leurs portes pour contenir le virus.
Le PIB de la zone euro a baissé de 3,8% au premier trimestre par rapport au trimestre précédent, selon les estimations préliminaires d’Eurostat. Il s’agit de la plus forte baisse depuis le début de la série, et elle est plus importante que le hit de la crise financière.
La baisse a été plus importante que celle enregistrée par l’économie américaine, qui s’est contractée de 1,2%, ou 4,8% sur un rythme annualisé.
The eurozone’s economic contraction in the first quarter “will pale in comparison with the complete collapse that will surely be recorded in the second quarter,” said Jessica Hinds, European economist at Capital Economics, as restrictions will have been in place for longer than in the first three months of the year.
National figures are available for a number of countries, including Spain and France, which both contracted by more than 5 per cent, the fastest pace on record.
Data for Germany will be released on May 15, but the German Labour Statistics Office said on Thursday that “the corona crisis is likely to lead to the worst recession in postwar history in Germany”.
Across the eurozone, joblessness rose marginally to 7.4 per cent in March, from 7.3 per cent the previous month, marking the first increase in unemployment since 2013, according to Eurostat data also released on Thursday.

Seafox makes takeover approach for Gulf Marine Services
Nathalie Thomas in Edinburgh
Dutch oil services company Seafox International has made a takeover approach for its London-listed rival Gulf Marine Services in one of the first potential signs of consolidation in a sector that is coming under severe strain from depressed oil prices.
Seafox, which already holds a stake of more than 13 per cent in Gulf Marine Services, said on Thursday that it had approached the board of its London-listed rival with a possible cash offer valued at $0.09 a share. Shares in Gulf Marine Services shot up more than 85 per cent after the news on Thursday morning to trade at around 6.98p ($0.08).
Its shares had fallen nearly 55 per cent since the start of the year as the energy services sector came under significant pressure from oil and gas explorers and producers reining in their activities and cutting expenditure in response to weak prices.
Gulf Marine Services owns jack-up vessels used in the offshore energy industry and was founded in the United Arab Emirates in the 1970s. It confirmed receipt of the unsolicited non-binding approach and advised shareholders on Thursday to take no action at present.

German companies put 10m workers on state subsidised leave
Martin Arnold in Frankfurt
More than 10m German workers have been registered to have part of their wages subsidised by the state while they are idled by their employers in response to the coronavirus crisis.
The figure, which was announced by the Federal Employment Agency on Thursday, means that almost a quarter of all German workers have been sent home or put on partial hours during the pandemic.
That is far higher than most forecasts and is equal to almost seven times the number of people who joined Germany’s short-term leave scheme, known as Kurzarbeit, after the 2008 financial crisis.
Despite the vast number of people being put on short-term leave by their companies, Germany still suffered a jump in the number of people losing their jobs. The German unemployed figures rose by 308,000 between March and April to reach 2.64m. That translates into a rise in the country’s unemployment rate from 5.1 per cent in March to 5.8 per cent in April.
The new figures for the number of people registered for Kurzarbeit in Germany match the figures for applicants to a similar scheme in France. They mean that in Europe’s five largest economies more than 35m people are on short-term leave programmes — over a fifth of those countries’ total workforces.
Meanwhile, in Italy, the number of people looking for work dropped 11 per cent in March compared with the previous month. La proportion de personnes n’appartenant pas à la population active italienne est passée à 35,7% en mars, contre 34,9% le mois précédent, et la part de la population active a diminué à 58,8% en mars, après un pic de 59,2 en juin.

Japan Airlines posts first loss since bankruptcy exit
Kana Inagaki in Tokyo
Japan Airlines has cancelled its year-end dividend after posting its first quarterly loss since it emerged out of bankruptcy protection and relisted its shares in 2012.
For the January to March quarter, Japan’s second largest carrier posted a net loss of ¥22.9bn ($219bn) as the coronavirus outbreak led to a shutdown of international travel. That compared with a profit of ¥44.2bn a year earlier.
In a statement on Thursday, JAL said it cancelled its fiscal second-half dividend “to secure liquidity at hand.”

The unforeseeable coronavirus effect in the new fiscal year ending March 2021 makes cash flow management based on various scenarios with continuous low demand essential.

In addition to the suspension of international routes, a collapse in domestic travel is set to continue, with the Japanese government expected to extend the state of emergency until at least the end of May.
Still, the company boasts one of the strongest balance sheets among global carriers with an equity ratio — a measure of financial strength — of 59 per cent at the end of March.

Lord Chancellor admits the UK is unlikely to meet 100,000 test target
Laura Hughes in London
Robert Buckland, the Lord Chancellor, has admitted the government expects to fail in its pledge to carry out 100,000 coronavirus tests a day by the end of April.
On Wednesday, the government was still only halfway towards meeting the target set for Thursday. Speaking on the eve of the deadline, the foreign secretary Dominic Raab said daily capacity now stood at 73,000 but just 52,429 tests were carried out.
Mr Buckland told Sky News the public would not be able to see if the government had reached its 100,000 goal until the latest numbers were published on Friday.
“Even if we don’t reach it, and we probably won’t reach it, we will reach this goal in the coming days. We are up to 52,000 people tested, the capacity increases. “

I think it was right to set an ambitious target. And you know, sometimes even if you don’t hit the target on the due date the direction of travel is the most important thing.
I believe we’re going to get there and then move beyond it, because we need more.

Russia’s death toll rises above 1,000 as it reports record new cases
Henry Foy in Moscow
Russia reported a new record daily increase in coronavirus cases on Thursday, dealing a blow to hopes that the country’s outbreak was beginning to plateau.
Moscow said 7,099 new confirmed cases had been recorded, bringing its total to 106,498. Overnight, 101 people died of the virus, taking its total death toll to 1,073.
Russia’s president Vladimir Putin this week extended a national lockdown until mid-May and warned that the country was yet to experience the worst of the pandemic, even as other major European countries such as France seek to ease lockdowns.
Moscow, the capital, accounts for roughly 50 per cent of the country’s infections, down from around 80 per cent in the initial weeks of the outbreak, as the virus has spread to almost all of Russia’s regions.

What you may have missed
The French and Spanish economies shrank by the fastest rate on record in the first quarter of 2020 as lockdown measures resulted in an unprecedented freeze in economic activity.
China’s services sector showed stronger-than-expected signs of recovery in April but demand for Chinese products abroad continued to contract.
Royal dutch shell cut its dividend for the first time since the second world war as the drop in oil prices and demand triggered by the coronavirus pandemic nearly halved its quarterly earnings.
European and Asian banks recorded hefty loan loss provisions due to coronavirus, as Lloyds Banking Group, Danske Bank, Société Générale, BBVA and Singapore’s DBS suffered a hit to earnings in the first quarter.
South Korea has reported zero new locally transmitted coronavirus cases for the first time in months, in the latest sign that Seoul’s focus on mass testing and intensive contact tracing provides a model for other governments to follow.
UK retailers are increasingly falling between the cracks of various government support schemes, with large companies facing stringent credit rating criteria and banks still reluctant to lend to smaller ones.
The coronavirus outbreak has caused a staggering drop in global energy demand, equivalent to India’s total annual consumption.

US records highest daily Covid-19 deaths, as global total nears 210,000
Steve Bernard in London
The worldwide death toll rose by 6,593 on Wednesday, bringing the total to 209,063.
The global number of newly confirmed Covid-19 cases rose by a further 81,678 yesterday, the total now stands at more than 3.1m.
The US recorded its highest ever death toll in a single day yesterday adding 2,700 fatalities. Thirteen states reported 50 or more deaths bringing the total in the country to 55,225, according to data from the Covid Tracking Project.
The UK continues to report high numbers of daily confirmed cases as a further 4,076 people were diagnosed yesterday. The death toll rose by 795 to 26,097, a figure that now includes an additional 3,811 deaths in England reported since the start of the outbreak.
Brazil continues to be firmly in the acceleration phase as it added a further 6,462 cases, the highest total outside of the US. The Brazilian death toll rose by 448 bringing the number of fatalities to 5,511.

Stocks on track for best months since 1980s
Global stock markets are on track for their best month in decades, after positive results from the trial of a possible coronavirus treatment reinforced investor optimism over the reopening of major economies.
European markets were largely flat in subdued morning trading, with London’s FTSE 100 down by less than 0.1 per cent and the regional benchmark Stoxx 600 index gaining by a similar margin.
Asian shares rose overnight, while futures tied to the S&P 500 pointed to modest gains of around 0.2 per cent later in the session.
The benchmark US index S&P 500 rallied 2.7 per cent after Gilead Sciences, the California-based biotechnology company, said that its potential Covid-19 drug remdesivir had produced positive results in a US study. The findings were tentatively endorsed by Anthony Fauci, the US government’s leading infectious disease fighter.
The burst of investor optimism caps a month that has seen traders disregard historically poor economic data and tremors in the oil markets, juiced by global stimulus the IMF puts at $14tn.
The MSCI All-World Index, a broad measure of developed and emerging market shares, is up 11.7 per cent this month and on track for its best month since records began in the late 1980s.

St James’s Place cuts dividend as assets under management fall
Madison Darbyshire in London
UK wealth manager St James’s Place cut its dividend on Thursday, as assets under management fell during the coronavirus-induced market volatility.
Preliminary results showed assets under management fell nearly 2 per cent to £101.7bn, while net investment returns were down almost 18 per cent over the quarter.
The wealth manager cited market uncertainty in its decision to slice its proposed final dividend by one-third to 20p per share, despite what it called a strong cash position.
SJP said clients had continued to pour money into the market in the first three months of the year, with net inflows of £2.3bn from the start of the year to the end of March 2020, an almost 9 per cent increase from the same time the previous year.
Chief executive Andrew Croft said:

We are not immune to how the unprecedented level of uncertainty may impact the operating environment for the business and our clients for the foreseeable future.

Swiss Re estimates $776m cost from claims and investment losses
Oliver Ralph in London
Reinsurance group Swiss Re said that the coronavirus crisis will cost it at least $776m as it counts the cost of rising claims and turbulence in the investment markets.
The company said on Thursday that it had taken a $476m charge to pay claims relating to Covid-19, mostly for event cancellations, including the Tokyo Olympics.
It also said that market volatility had wiped $300m off the value of the investments it holds to pay claims, although it added that without equity and credit hedging the loss would have been much worse. The figures came as Swiss Re reported a $225m first quarter loss.
“Swiss Re’s business remains resilient despite the financial impact of the crisis on our results,” said chief executive Christian Mumenthaler, adding that “we will weather this situation as a strong partner for our clients.”
Separately, London-listed insurer Lancashire Holdings said that it expected about $35m of claims relating to Covid-19.

Spanish economy shrinks at faster pace than during 2008-09 crisis
Valentina Romei in London
The Spanish economy shrank at the fastest rate on record in the first quarter, as the coronavirus lockdown resulted in an unprecedented blow to the economy.
Spain’s gross domestic output shrank 5.2 per cent in the first quarter compared with the previous one, according to preliminary estimates from the country’s Office for National Statistics (INE). This is the largest drop since the series started in 1995.
The contraction — which was larger than the 4.4 per cent fall forecast by economists polled by Reuters — ends more than six years of uninterrupted growth, most of which was well above the eurozone average.
Spain introduced a more stringent lockdown than many other European countries on March 14 but has now relaxed some of its restrictions. Its economy is more vulnerable to the Covid-19 pandemic because a significant proportion comes from tourism, which has been severely hit.
Spain’s economy fell more than Belgium’s, with a 3.9 per cent contraction, but slightly less than that of France, where output shrank at an unprecedented rate of 5.8 per cent.
Together with the historical plunge for France, Spain’s output contraction anticipates a large blow to the economy across the eurozone, for which data will be published later today.

Nokia knocks down full-year outlook due to supply chain issues
Richard Milne, Nordic and Baltic Correspondent
Nokia cut its full-year outlook as coronavirus causes problems in its supply chain and delivery of telecoms equipment to customers as well as pushing some operators to postpone investment in 5G networks.
The Finnish telecoms equipment maker said on Thursday that revenues in the first quarter decreased by €200m due to Covid-19, mostly due to supply chain issues in China. Revenues fell 2 per cent compared with a year earlier to €4.9bn, just below the average analyst forecast.
Nokia, which has struggled in the early days of 5G against Chinese rival Huawei and Ericsson of Sweden, said it made a small underlying profit of €0.01 per share, up from a loss a year earlier of €0.02. It now expects its full-year earnings per share to be about €0.23, down from a previous forecast of €0.25.
The Finnish group has struggled to convert the increasing scepticism towards Huawei in the US and Europe into strong business performance as telecoms operators around the world start to invest in 5G networks.
Rajeev Suri, Nokia’s chief executive who will step down in September, said the telecoms group had not seen a drop in demand for its products and services in the first quarter. But he added:

As the Covid-19 situation develops, however, an increase in supply and delivery challenges in a number of countries is possible and some customers may reassess their spending plans… We expect the majority of this Covid-19 impact to be in the second quarter and believe that our industry is fairly resilient to the crisis, although not immune.

German infections rise by 1,478
Guy Chazan in Berlin
Germany reported 1,478 new coronavirus cases on Thursday, a slight increase on the previous day’s tally.
According to official data from the Robert Koch Institute in Berlin, the number of people who died of Covid-19 over the past 24 hours rose by 191 to 6,288.
The total number of detected infections increased to 159,119, though 123,500 of them have already made a full recovery.

Danske Bank cuts annual profit forecast after heavy loan losses
Richard Milne, Nordic and Baltic Correspondent
Danske Bank slashed its profit forecast for this year as Denmark’s biggest lender plunged to a net loss in the first quarter on a 10-fold increase in loan impairments due to coronavirus and lower oil prices.
Danske said on Thursday that it made a net loss of DKr1.3bn ($190m) in the first quarter against a profit of DKr3bn a year earlier as loan impairments jumped from DKr357m to DKr4.3bn due to the economic downturn and decline in oil prices.
It added that it was aiming for a net profit this year of at least DKr3bn, down from its initial forecast in February of DKr8bn-DKr10bn.
Danske, which last week proposed no dividend would be paid for last year, said that visibility for 2020 was low due to the coronavirus pandemic but that it remained well capitalised with a core equity tier 1 ratio of 17.6 per cent, above its target of 16 per cent.
Chief executive Chris Vogelzang said Danske had performed well in the first two months before coronavirus hit the business in March. He added:

The key drivers were impairments made mainly because of the assumptions of a worsened macroeconomic scenario, the decline in oil prices and charges against exposure to certain sectors. We also saw the highly turbulent markets result in extraordinarily low trading income.

AstraZeneca and Oxford University combine on potential vaccine
Donato Paolo Mancini in London
AstraZeneca and the University of Oxford are teaming up to develop and distribute a vaccine aimed at preventing infection from coronavirus.
Under the agreement, the company would be responsible for the development and worldwide manufacturing and distribution of the vaccine, known as ChAdOx1 nCov-19, currently being developed by the University of Oxford.
Observers have repeatedly warned that the development of a vaccine alone will not be enough — there will also need to be sufficient manufacturing capacity to deliver it to billions of people around the world.
On Wednesday, GlaxoSmithKline chief executive Emma Walmsley said it would be necessary to have more than one vaccine to meet demand. The company is also developing a potential vaccine candidate with Sanofi of France.
Financial terms for the Oxford-AstraZeneca partnership were not disclosed.

European corporate news round-up
Royal dutch shell cut its dividend for the first time since the second world war as the drop in oil prices and demand triggered by the coronavirus pandemic nearly halved its quarterly earnings.
Sales growth at Reckitt Benckiser shot up in the first quarter as the pandemic pushed up demand for its products such as Dettol and Lysol disinfectants and medicines.
Lloyds Banking Group’s first-quarter profits were almost entirely wiped out by the impact of coronavirus, as it announced a 420 per cent increase in provisions for bad loans.
Société Générale’s investment bank was “penalised heavily” by volatile market conditions in the first quarter as the French lender fell to a loss and raised provisions to deal with bad loans.
BBVA, the Spanish-based bank, has recorded a €1.79bn loss in the first quarter after taking €1.43bn in provisions related to the coronavirus crisis and a €2.08bn goodwill impairment charge at its US arm.
Danske Bank slashed its profit forecast for this year as Denmark’s biggest lender plunged to a net loss in the first quarter on a 10-fold increase in loan impairments due to coronavirus and lower oil prices.
J Sainsbury said that the uncertainty around the trajectory of the coronavirus pandemic meant it would defer a decision on its dividend until later in the financial year.
Swiss-based miner Glencore has slashed its 2020 capital expenditure forecast as the pandemic forced the company to suspend production and activity at several of its mines.
Danish brewer Carlsberg said that organic sales declined 7.4 per cent in the first quarter, as it warned that continuing social-distancing requirements would impact consumer behaviour and that volumes would decline further in the next quarter.

Spanish lender BBVA reports €1.8bn loss
Daniel Dombey in Madrid
BBVA, the Spanish-based bank, has recorded a €1.79bn loss in the first quarter after taking €1.43bn in provisions related to the coronavirus crisis and a €2.08bn goodwill impairment charge at its US arm.
The goodwill charge — also due to the implications of the crisis — follows an impairment test at its US unit, BBVA Compass, which the bank has built up over years, most notably with a purchase in 2007, and which has over $80bn in assets and operates 657 branches.
BBVA said operating income for the quarter was up 14 per cent at €3.57bn, its highest for 10 years, while net interest income was up 3.6 per cent at €4.56bn.
Carlos Torres, executive chairman, said:

The recurrence of our pre-provision profit and our solid capital and liquidity position have allowed us to face this crisis from a position of strength and frontload provisions related to the pandemic in this quarter.

Glencore slashes 2020 capex forecast after temporary mine closures
Neil Hume in London
Glencore has slashed its 2020 capital expenditure forecast as the coronavirus pandemic forced the company to suspend production at several of its mines
In a quarterly production update, the Swiss-based miner and commodity trader said it planned to reduce capex to $4.0bn-$4.5bn this year, down from previous guidance of $5.5bn. Analysts had been expected a smaller reduction.
Glencore has been forced to curtail or halt production in a number of countries including Zambia, where its Mopani copper business has been temporarily closed.
It has also pushed back first production from its new Zhairem zinc mine in Kazakhstan until 2021 because of the uncertain outlook.
In Wednesday’s update, Glencore also revised down its cost guidance for its key commodities due to cheaper oil prices, the weakness of key producer currencies against the US dollar and by-product credits.
The company said “volatile and complex” markets had provided opportunities for its trading arm, which was on course to generate earnings within its $2.2bn-$3.3bn long-term guidance range.

Sainsbury’s defers dividend and cancels bonuses
Jonathan Eley in London
J Sainsbury said that the uncertainty around the trajectory of the coronavirus pandemic meant it would defer a decision on its dividend until later in the financial year.
It also said it would not pay any bonuses to its executive team this year, resulting in an effective pay cut of 13 per cent.
The UK’s second-largest supermarket group said that based on a scenario that saw the UK lockdown ending by June but business disruption continuing until September, it would expect underlying pre-tax profit to be at a similar level to the £586m reported on Thursday for the year to March 7 2020.
This includes the impact of about £500m of additional costs, reduced demand for fuel and general merchandise and weaker profits from its banking arm, partially offset by the business rates holiday that lasts until March next year.
Sainsbury’s stressed that this was not a forecast but a guide based on a set of assumptions.
In the seven weeks to April 25, a period that included the ‘panic buying’ spree, Sainsbury’s said grocery sales were up 12 per cent while general merchandise sales were 3 per cent higher.

Lloyds profits collapse as it ramps up loan provisions
Nicholas Megaw in London
Lloyds Banking Group’s first-quarter profits were almost entirely wiped out by the impact of the coronavirus, as it announced a 420 per cent increase in provisions for bad loans.
Pre-tax profit fell 95 per cent year-on-year, to £74m.
The drop was mainly caused by £1.4bn of charges to cover expected credit losses, of which about £1.1bn was directly attributable to the pandemic.
Revenue, which was already under pressure before the crisis thanks to intense competition in the mortgage sector, dropped 11 per cent to £3.9bn.
The company cautioned that “the impact of lower rates, lower levels of activity and higher impairment on the group’s business will continue into the second quarter, but remains difficult to quantify”.
Investors have been braced for big increases in loan provisions across the European banking sector this week, but there has been a wide variation in results as lenders grapple with new accounting rules that require them to book expected losses further in advance than previously. Increases in impairment charges have ranged from 80 per cent at Santander to more than 1,000 per cent at Standard Chartered.

German retail sales record steepest decline in a decade
Valentina Romei in London
German retail sales fell at the fastest pace in more than a decade despite a strong performance for purchases online and food, as non-essential shops shut during the coronavirus pandemic.
The volume of Germany’s retail sales fell 5.6 per cent in March compared with the previous month, the largest decline since 2007, according to the country’s Office for National Statistics (Destatis).
Retail sales contracted despite spending for food and beverages rising 9 per cent and internet spending increasing 13.4 per cent, as shoppers stockpiled food and shifted to online purchases. Sales in pharmacies also went up sharply by 7 per cent.
“Due to the business closings in the Corona crisis, sales in individual retail sectors plummeted in March 2020,” said Destatis. “At the same time, the strong demand for everyday goods led to increased sales in other areas, such as supermarkets and pharmacies”.
Non-food retail sales contracted 10 per cent, marking the largest drop since 1994, while sales of clothing and shoes halved.

Emoticon Shell cuts dividend for first time since 1940s

Anjli Raval, Senior Energy Correspondent
Royal Dutch Shell cut its dividend for the first time since the second world war as the drop in oil prices and demand triggered by the coronavirus pandemic nearly halved its quarterly earnings.
Cost of supply adjusted net earnings – its preferred profit measure – fell to $ 2.9 billion in the three months ending March 31, compared to $ 5.3 billion in the same period the previous year. Analysts had estimated $ 2.3 billion.
Oil companies are in crisis as falling energy prices and collapsing demand for fuels and chemicals are putting intense pressure on their finances, with severe restrictions and travel bans in place for the most part of the world.
Shell, which will still be one of the FTSE 100’s biggest dividend payers, said it would reduce its quarterly payout to 16 cents per share, from 47 cents per share.
Shell was already under pressure before the coronavirus outbreak, with weaker refining and chemical margins and challenging economic conditions forcing the Anglo-Dutch company to slow shareholder distributions, and announce at the start of the year it would probably miss its debt reduction targets.
Since then, Shell has said it would suspend its share buyback programme altogether and announced that capital expenditure would fall to $20bn or less this year, from initial plans for $25bn, in response to the pandemic. It said its operating costs would also decline by $3bn to $4bn.

Reckitt Benckiser sales rise on high demand for Dettol and medicines
Judith Evans in London
Sales growth at Reckitt Benckiser shot up in the first quarter as the pandemic pushed up demand for its products such as Dettol and Lysol disinfectants, Mucinex cold medicine and Nurofen painkillers.
Like-for-like net revenue growth, a key metric for consumer goods groups, reached 13.3 per cent in the first quarter compared with 1 per cent a year earlier. Sales rose 12.3 per cent to £3.5bn, while the group said its performance for the year was set to be “better than original expectations”.
Laxman Narasimhan, chief executive of Reckitt Benckiser, said:

“The exceptional demand has resulted in some customers and consumers facing shortages for some of our products. RB has responded with its typical can-do attitude, ramping up production, streamlining our SKUs [stock-keeping units] and working with customers and suppliers to overcome significant barriers, while incurring additional cost.”

Demand for Dettol and vitamin and mineral supplements pushed up growth in the group’s wellness and health hygiene division to 17 per cent.

Société Générale falls to a loss and raises provisions for soured loans
David Keohane in Paris
Société Générale’s investment bank was “penalised heavily by” volatile market conditions in the first quarter as the French lender fell to a loss and raised provisions to deal with bad loans.
After pulling the release of its results forward by one week, SocGen fell to a net loss of €326m in the first quarter — compared with a profit of €686m in the same period last year — as revenues fell by 16.5 per cent to €5.2bn.
The bank increased its bad loan provisions to €820m, a three-fold increase over the €264m in the same quarter last year. The increase comes “in the context of the Covid-19 crisis and some specific files, including two exceptional fraud files”.
It said that revenues at its global banking and investor solutions business — which encompasses both trading and investor funding — dropped 27.3 per cent in the quarter to €1.6bn, driving the unit to a loss of €537m. It had made a profit of €140m in the same period last year.
SocGen’s equity trading business — long considered one of its strengths — was nearly completely wiped out in the quarter, with revenues down 98.7 per cent to just €9m.
“These activities performed well in January and February,” said the bank of its equity business, but “revenues from structured products activities were severely impacted by the equity markets dislocation in March.”
So far this year, SocGen’s share price has dropped by 50 per cent.

French economy shrinks at fastest rate since 1949
Valentina Romei in London
The French economy shrank by the fastest rate on record in the first quarter as measures to contain the coronavirus pandemic resulted in an unprecedented freeze in activity.
France’s gross domestic product dropped by 5.8 per cent in the first quarter compared to the previous quarter, according to preliminary estimates from the Office for National Statistics (Insee), the biggest fall since records began in 1949.

“GDP’s negative evolution in Q1 2020 is primarily linked to the shut-down of ‘non-essential’ activities in the context of the implementation of the lockdown since mid-March” said Insee.
The drop was driven by an “unprecedented” 6.1 per cent contraction in household consumption and an 11.8 per cent fall in investment. Exports and imports also contracted by about 6 per cent.
Earlier this week, Edouard Philippe, Prime Minister of France, announced his intention to reopen part of the economy from May 11 to avoid the risk of economic collapse.
The eurozone’s second-largest economy had contracted by 0.1 per cent in the last quarter of 2019, which means the French economy has already entered a recession.
The drop in French production in the first quarter is greater than the 1.6% drop recorded in the first quarter of 2009 during the global financial crisis.

War-torn Yemen reports first deaths from Covid-19
Simeon Kerr in Dubai
Yemen has reported its first two deaths from Covid-19 amid fears the virus is spreading through the war-ravaged country.
The deaths came as the authorities reported five new cases in the southern port city of Aden, bringing the national total to six, according to Yemen TV reports late on Wednesday.
The UN has described Yemen as the world’s worst humanitarian crisis, where millions rely on aid. The country is already at risk of another cholera outbreak because of flooding as the rainy season starts.
The degraded healthcare system and the population’s weak immune systems could see coronavirus spreading faster and with more deadly consequences than other countries, the UN has warned.
Aid agencies say fighting has escalated despite the Saudi-led coalition’s ceasefire in its war against Iran-allied Houthi rebels that ousted the internationally-recognised government five years ago.

Amundi’s assets fall to €1.53tn as markets tumble
Attracta Mooney in London
Amundi, Europe’s largest fund manager, showed more resilience to the crisis in the first quarter than most listed rivals, but still reported an 8 per cent fall in assets under management to €1.53tn.
Fund houses including GAM, Jupiter and Ashmore, which have also been hit hard by the coronavirus market rout, suffered asset falls of between 15 and 30 per cent during the opening quarter of 2020. BlackRock reported a 12 per cent decline to $6.5tn earlier this month, while assets fell almost 9 per cent to €700bn at Germany’s DWS.
The drop in Amundi’s assets from €1.65tn at the end of 2019 was driven by market and foreign exchange movements.
Yves Perrier, Amundi chief executive, said the company had “adapted quickly” to the crisis. But he cautioned: “The duration of the crisis and its impact on the business remain difficult to assess.”
Adjusted net revenue rose 7 per cent compared with the same quarter last year thanks to higher management fees and a doubling of performance fees.
However, net income fell 18 per cent to €193m after negative financial income of €61m arising from the mark-to-market valuation in March of Amundi’s investment portfolio and seed money.
Mr Perrier this month became the first asset management chief to announce he was giving up part of his pay to support the coronavirus relief effort, donating half of his €2m bonus for 2019 to a Covid-19 solidarity fund.

Online classes exacerbate China’s rural-urban education gap
Qianer Liu in Shenzhen and Yuan Yang in Beijing
When China closed its schools in February, teachers were urged to move classrooms online and consider a high-tech future.
Mais dans le Guangxi, l’une des provinces les plus pauvres de Chine, l’école secondaire de Lu Canfeng a dû abandonner ses cours en ligne après que moins d’un tiers des élèves se soient connectés la première semaine. « Un mauvais signal Internet, le manque de téléphone portable ou d’autres appareils Internet, et le manque de compagnie et de supervision parentales » ont été les principales raisons de l’abandon des cours en ligne, a déclaré Mme Lu.
Mais, a reconnu Mme Lu, «même moi, je n’ai aucune idée de comment rendre la technologie et Internet vraiment liés à mon enseignement». Instead, she personally delivered textbooks to the students’ homes and hoped for the best.
As Chinese schools begin to reopen across the country, children in rural areas will be further disadvantaged by the coronavirus pandemic, warned teachers, parents and analysts.
Read the full report here.

China to exempt South Korean business people from travel restrictions
Edward White in Wellington
South Korea has secured an agreement with authorities in China to help South Korean business people gain exemptions from Beijing’s strict coronavirus travel restrictions.
The South Korean foreign ministry said five Chinese cities and provinces will start allowing fast-tracked entry for some South Korean business people from next month.
China, which initially lobbied governments to keep borders open when the Covid-19 outbreak emerged from Wuhan in January, has since implemented tough border controls blocking most foreigners from entering the country.
And despite South Korea’s success in containing the outbreak and government support to keep airlines afloat, travel restrictions imposed on Koreans by more than 100 countries have severed companies’ access to their sites around the world.
The restrictions have caused headaches for South Korean companies which have a heavy dependence on China as a supplier of intermediary electronic and industrial products used by its tech, car and shipping manufacturers. The restrictions affect both South Korean companies with manufacturing bases in China, and those companies for which China is their biggest export market.
The announcement of improved access for South Koreans comes as the country has reported zero new locally transmitted coronavirus cases for the first time in months.
All arrivals into South Korea are subject to a 14-day quarantine.
However, Ben Cowling, a professor in epidemiology at the University of Hong Kong, expected South Korea, Hong Kong and Singapore might find any relaxation of virus control measures, including some border restrictions, may have to be re-imposed.
“When we relax too quickly there is a significant risk of a resurgence … we are going to have periods of time when measures are stricter and periods that are a bit looser,” he said.

China’s Cnooc cuts output target after oil prices tumble
Christian Shepherd in Beijing
China’s main offshore oil producer Cnooc has slashed its output and spending targets for 2020, as the state-backed company attempts to stem the impact of a global price rout.
Cnooc intends to produce 505m-515m barrels of oil, 15m fewer than the previous range, and lowered capital expenditure targets by Rmb10bn ($1.4bn) to Rmb75bn-85bn, it said in a filing to the Hong Kong stock exchange on Wednesday evening.
“Under the current low oil price environment, the company has…implemented more prudent investment decision making to ensure its long-term sustainable development,” it said.
In the first quarter of 2020, as demand in China slumped due to the Covid-19 pandemic, the company produced 131.5m barrels, a 9.5 per cent year-on-year increase.
Its revenues fell by 5.5 per cent Rmb39.95bn ($5.6bn) over the same period, mainly due to the global price fall, Cnooc said.

DBS profit falls on coronavirus loan loss provisions
Stefania Palma in Singapore
DBS has reported a 29 per cent fall in net profit in the first quarter of 2020 from a year ago as south-east Asia’s largest bank set aside more than S$1bn ($708m) in loan loss provisions to help counter the fallout from coronavirus.
Net profit fell to S$1.17bn while the lender set aside a total of S$1.09bn in loan loss provisions, S$703m of which were earmarked for « risks arising from the ongoing Covid-19 pandemic ». The balance aimed to counter new non-performing exposures reported this quarter.
Piyush Gupta, DBS chief executive, said in a statement that the « economic outlook remains uncertain and credit risks have increased », but digital investments have helped strengthen the bank. « We will maintain a solid balance sheet with ample capital, liquidity and loss allowance reserves that give us strong buffers to absorb external shocks.”
DBS is the first bank to report results in the city state. Singapore faces a recession as travel restrictions, a fall in global demand and supply chain disruptions brought by the coronavirus pandemic hit the small, open south-east Asian economy.
The bank said it had a S$46bn exposure to eight sectors particularly hit by the economic slowdown, including the oil and gas industry, which accounts for S$23bn of loans.
DBS is among the more than 20 banks with exposure to Hin Leong, the Singapore-based oil trader seeking to restructure almost $4bn of debt after admitting to $800m of undisclosed losses.
Mr Gupta added that credit costs were set to rise to between S$3bn and S$5bn in the next two years, with results comparable to the recession in 2002-03 and the global financial crisis.
The bank’s total income in the first quarter grew 13 per cent from a year ago to S$4.03bn. It reported a quarterly dividend of 33 cents per share, which remained unchanged from the previous quarter. Its core tier one equity ratio sits above regulatory requirements at 13.9 per cent.

Japan’s 3.7% March industrial production decline points to delayed impact
Robin Harding in Tokyo
Japan’s industrial production fell by 3.7 per cent in March, significantly better than consensus forecasts of a 5.2 per cent decline, showing the relatively muted impact of the early stages of the coronavirus epidemic.
Japan did not impose a state of emergency until April, with the economy operating largely as usual, so the main impact in March came from the shutdown in China.
Analysts expect a much greater impact from April, with production at many automobile plants suspended.
The decline was most pronounced in Japan’s production machinery sector, down by 10.2 per cent, which sells much of its output to Chinese factories. The chemicals sector recorded an 11 per cent decline.
By contrast, sectors tied to domestic consumption were less affected, with plastic products down by 2.6 per cent and pharmaceuticals off by 0.6 per cent.

China services sector shows strength, but export outlook is bleak
Don Weinland in Beijing
China’s services sector showed stronger-than-expected signs of recovery in April but demand for Chinese products abroad continued to contract as the global economy is ravaged by the coronavirus outbreak.
The country’s non-manufacturing purchasing managers index, a gauge on service sector activity, rose to 53.2 in April, the National Bureau of Statistics said on Thursday. The reading beat analysts’ expectations of 52.5. A reading over 50 indicates expansion; below 50 is a signal of contraction.
Manufacturing PMI expanded slightly at 50.8. The composite PMI that includes manufacturing and services hit 53.4, up from 53 in March.
But the reading on new export orders was 33.5, a sign that global demand for Chinese products had been hit by the outbreak in Europe and the US.
“Global demand is likely to remain weak due to high unemployment rates in major economies,” Iris Pang at ING said in a note to investors on Thursday.
Economic activity collapsed in China during February and March, when the outbreak stopped hundreds of millions of people from leaving their homes. The stall in activity caused China’s economic growth in the first quarter of the year to contract for the first time since the 1970s.

S Korea reports no new local coronavirus cases for first time since February
Edward White in Wellington
South Korea has reported zero new locally transmitted coronavirus cases for the first time in months, in the latest sign that Seoul’s focus on mass testing and intensive contact tracing provides a model for other governments to follow.
The country reported four new cases of Covid-19 on Thursday, all of which are attributed to people who had recently arrived into the country. The number marked the lowest increase since the outbreak worsened in February and down from a peak of more than 900.
A further 137 people were classified as having recovered from the virus, taking the total tally to 9,059 out of a total caseload of 10,765.

Despite the success, health officials in Seoul continue to urge caution over the possibility of new waves of the virus. An extended public holiday, starting on Thursday, has raised concern that adherence to preventative public health measures might be increasingly lax.
Responding quickly to potential new clusters remains a central pillar of the country’s exit strategy.
Hundreds of private epidemiologists are contracted to bolster public health officials as they investigate contacts of confirmed cases. A rapid response team within the Korea Centers for Disease Control is deployed whenever there is a risk of a new cluster emerging, accelerating the tracing process to suppress new outbreaks.
And as the country moves to ease its social distancing requirements, detailed guidelines have been released to ensure continued caution in all social interactions.
Still, the country is on track to ease its social distancing requirements in early May with schools and workplaces expected to return to mostly normal.

Colombian authorities hold Venezuelan migrants in Bogotá
Gideon Long in Bogotá
Hundreds of Venezuelan migrants who are trying to leave Colombia and get back to their homeland are stuck on the outskirts of Bogotá because the Colombian authorities will not let them travel due to coronavirus.
The migrants are stranded on buses at a toll booth on the northern edge of the city. They were stopped as they tried to leave for the border city of Cúcuta, 550km away.
The Colombians say Venezuela is only allowing 300 migrants to cross back in to Venezuela each day, so authorities are holding migrants close to Bogotá to avoid a build-up of people in Cúcuta.
Hundreds of Venezuelan migrants are trying to return having lost their work due to the virus lockdown. Many say they cannot pay their rent in Colombia whereas at least in Venezuela they have family and a roof over their heads.
With flights and buses grounded, some Venezuelans are walking to the border, creating a potential health hazard in the towns and villages they pass.
In recent years, the exodus of migrants from Venezuela has been the biggest on the planet, eclipsing even the flow of Syrians through the Mediterranean, which has slowed after a decade of war. The UN and national migration agencies say 5m people have left Venezuela since 2015, dwarfing the exodus of Rohingya Muslims from Myanmar or migration from war-torn South Sudan.
Over a third – 1.8m – have come to Colombia, and 1m do not have permission to stay. Many eke out a living in the informal labour market, selling sweets and snacks on the streets or working cash-in-hand in odd jobs.

News you might have missed
the Federal Reserve kept its main interest rate close to zero on Wednesday, as officials weighed up the impact of the heavy dose of liquidity and stimulus already delivered to the US economy in the past two months.
Twitter has said it is allowing developers and researchers to study conversations on the social media platform around disinformation about the coronavirus, the spread of the disease and emergency response to the pandemic.
The World Health Organization has defended Sweden’s approach to tackling Covid-19, saying it had implemented “strong measures” to tackle the virus. The Swedish government has been criticised for not imposing a formal lockdown, unlike the majority of countries in Europe.
the UK has become the country with the highest coronavirus death toll after the US and Italy as it records in its daily national figures those who have died in care homes and the wider community.
The IMF has approved Costa Rica’s request for $504m in assistance to deal with health expenses and staunch balance of payments needs amid the coronavirus crisis.
Floride will allow restaurants and stores in all but three counties to reopen next week, as the state begins the process of restarting its economy.

Corporate round up
You’re here eked out an unexpected after-tax profit in the first quarter of the year despite a hit to its production and vehicle deliveries from the coronavirus crisis, lifting its shares 8 per cent in after-market trading on Wednesday.
Facebook said it had seen “signs of stability” in its business this month following a sharp fall in advertising revenues in March because of the coronavirus crisis, in unexpectedly upbeat news that boosted shares by more than 10 per cent.
Microsoft shrugged off the effects of the coronavirus crisis with surprisingly strong results in the latest quarter, as a jump in cloud-related business more than offset a hit to some of its traditional software sales.
Coronavirus shelter-in-place measures had been good news for eBay’s marketplace, the company said, but lockdowns have been a drag on other areas of its business. eBay reported first quarter revenues of $2.4bn, a 2 per cent decline on the same period last year, though above Wall Street estimates.
Boeing’s credit rating has been downgraded by S&P Global Ratings on lower earnings and cash flow. The largest global ratings agency dropped the aerospace manufacturer one notch to BBB-/A-3 from BBB/A-2, which remains investment grade.

ANZ suspends dividend as profit falls
Jamie Smyth in Sydney
ANZ Bank suspended its dividend and reported a 51 per cent fall in interim profit to A$1.55bn ($1bn) on Thursday as the coronavirus crisis caused a rise in credit impairment charges.
The bank said it would incur credit impairment charges of A$1.67bn for the six months to the end of March, of which A$1bn were provisions related to the impact of Covid-19. ANZ depreciated the value of its Asian partners by 815 million Australian dollars, largely due to the damage caused by the virus in these markets.
ANZ said 14 per cent of mortgage holders with A$36bn in loans had so far requested assistance under a scheme that provides up to six months’ suspension on repayments.
David Gonski, chairman of ANZ, said the bank would postpone its decision on the 2020 interim dividend until there is more clarity regarding the economic impact of Covid-19.
“This decision is not about our current financial position and ANZ has not received any concerns from APRA [Australia’s banking supervisor] regarding our level of capital,” he said.
“The board agrees with the regulator’s guidance that deferring a decision on the 2020 interim dividend is prudent given the present economic uncertainty and that making a decision at this time would not have been appropriate.”
ANZ paid an interim dividend of 80 cents per share over the same period last year.
The Australian prudential regulator this month asked lenders to limit payments and preserve capital to support their clients during the recession, but left the final decision to the banks. However, this week, the National Australia Bank paid a dividend of 30 cents per share, even though it raised new capital, arguing that many shareholders were counting on the dividends to generate income.
ANZ’s capital buffers were lower than analysts had expected with a Tier 1 capital ratio of 10.8%, just above the “unquestionably solid” benchmark set by regulators.
UBS said the market would probably focus on the weaker than expected capital numbers.
“The deferral of the dividend seems prudent until there is more certainty about the outlook for the economy and asset quality,” said Jonathan Mott, analyst at UBS.

China reports 4 new coronavirus cases, no new deaths
Chinese health authorities reported four new coronavirus cases to the end of Wednesday, all of which were found in people who had returned from overseas.
Authorities in China have sought to limit a potential second wave of Covid-19 cases in citizens returning to the country from abroad by introducing travel restrictions and tightening checks at land borders.
The new cases take the total tally to 82,862 in mainland China, with 4,633 reported deaths linked to Covid-19.
There were 33 new cases of people found to be infected with coronavirus but not showing any symptoms.

Mexico’s Interjet suspends membership of IATA clearing house
Jude Webber in Mexico City
Mexican airline Interjet said it had “temporarily suspended” its membership of IATA’s clearing house, which provides settlement services for the airline industry, because of a cash crunch, but added that did not mean it had been grounded.
The airline’s troubles began before the coronavirus crisis but the collapse of air travel has intensified pressure.
Interjet has 65 aircraft in total but it was not immediately clear how many were leased.
“Because of the need to meet payments to a supplier who was seeking to make payments through the IATA Clearing House (ICH), Interjet took the decision to temporarily suspend its participation in that clearing house,” the airline said in a statement. It said it remained a member of IATA.
A source close to the company said Interjet was suffering “because of the coronavirus contingency”, which was also affecting its peers, and that faced with the abrupt decline in tourism and travel, it had decided to return leased planes to avoid continuing to pay for them while they were grounded.
It was not immediately possible to verify this information nor to ascertain how big a cash crunch Interjet was facing. An Interjet spokesman declined to comment.
Interjet, which was founded in 2005, said in the statement that for its first 10 years it had operated without being an IATA member without any problems.
“The company is continuing national operations,” it added.

UK car plant production falls by a third in March
Peter Campbell in London
Production at Britain’s car plants fell by more than a third in March as shutdowns halted output at every major site.
In response to the figures, the Society of Motor Manufacturers and Traders on Thursday called for a “package of measures”, including stimulating demand, to help plants restart.
So far Aston Martin, BMW and Jaguar Land Rover have announced limited re-openings during May, but most of the UK’s plants have not announced a restart date.
Output in March fell 37.6 per cent compared with a year earlier to 78,767 vehicles, according to SMMT figures published on Thursday.
Shipments to China rose by 2.3 per cent as the world’s largest car market re-opened, but exports to all other regions, as well as production for sales at home, fell sharply.
The SMMT calculates the industry will have lost £8.2bn in revenues if factories remain closed until the middle of May. Some plants across Europe, including Volkswagen’s flagship facility at Wolfsberg, have already reopened.
SMMT chief executive Mike Hawes called for a “package of measures” including a “demand-side measure to help encourage customers back into the market”.

Asia-Pacific stocks gain as coronavirus drug trial stokes optimism
Asia-Pacific stock markets climbed on Thursday following Wall Street gains on optimism over a potential drug treatment for coronavirus, even as the US revealed its worst economic decline since 2008.
Japan’s benchmark Topix was up 2 per cent and Australia’s S&P/ASX 200 added 0.8 per cent.
The S&P 500 rallied 2.7 per cent after Gilead Sciences said it had been notified of “positive” data from a trial of its potential coronavirus treatment drug, remdesivir. Anthony Fauci, a leading member of the White House coronavirus task force praised the findings.
S&P 500 futures pointed to a 0.1 per cent gain later on Thursday.
Figures released on Wednesday showed the US economy shrank at a 4.8 per cent annualised rate in the first three months of the year, its sharpest drop since the global financial crisis and a larger contraction than forecast by economists, as the coronavirus pandemic stalled growth.
The Federal Reserve warned of lasting “medium-term” economic damage from the pandemic as it said it was prepared to take additional steps to support the US economy, but left its main interest rate unchanged.
West Texas Intermediate, the US crude benchmark, which has been hit by wild swings as the pandemic curbs demand, was up 6.3 per cent at $16.01 a barrel in Asia trading.

Record daily increase takes US death toll above 55,000
Peter Wells in New York
A record number of people died from coronavirus in the US over the past 24 hours, taking the nation’s death toll over 55,000.
The daily death rate was 2,700, according to data compiled by the Covid Tracking Project on Wednesday afternoon.
That represents a relatively quick increase in recent days. The daily increase of 1,095 on Sunday was the lowest since April 2.
Deaths in New York, the hardest-hit state overall, increased by 377 over the past day to 18,015 overall. That has brought its daily rate close to New Jersey’s, which increased by 328 over the past 24 hours, from a record 398 on Tuesday, and to 6,770 overall.
A total of 55,225 people in the US have died since the outbreak began. Covid Tracking Project does not count so-called presumptive deaths in New York City, which is why its overall tally is lower than the often-cited data from Johns Hopkins University.


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