Business

LONDON — Britain's biggest retailer Tesco has recruited more than 45,000 staff in two weeks, largely to cover supermarket workers affected by the coronavirus outbreak, it said on Wednesday.

      In its annual earnings update, Tesco said costs were forecast to increase by between £650 million and £925 million ($787 million and $1.12 billion) on "significant... increases in payroll, distribution and store expenses".

      Chief executive Dave Lewis said "COVID-19 has shown how critical the food supply chain is to the UK" but he noted that "initial panic buying has subsided and service levels are returning to normal". 

      Tesco said that "more than 45,000 new colleagues" joined since March 20, including drivers helping to meet soaring demand for home deliveries.

      Sales surged by nearly one third during the short-lived panic-buying, Tesco said.

      It added that "the size and nature of our workforce means we have experienced a significant absence of colleagues". 

      However the surge in new jobs meant that Tesco has been able to increase home deliveries by more than 20 per cent, or 145,000 extra drops.

      "Whilst we have already stepped up our capacity on grocery home shopping... and will continue to increase this, there is simply not enough capacity to supply the whole market. 

      "Between 85 per cent and 90 per cent of all food bought will require a visit to a store," it noted.

      "We will continue to try and prioritise home delivery for the most vulnerable in society," Tesco added.

      Coronavirus has infected more than 55,000 people and killed almost 6,200 across the UK.

      Among those battling COVID-19 is Prime Minister Boris Johnson, who was spending a third day in intensive care at a London hospital.

      Britain has been on lockdown for almost three weeks, a situation that is expected to last a while longer. The government has urged Britons to keep supermarket visits to shopping for essential items.

      Tesco on Wednesday also announced a solid rise in underlying annual profits.

      "Tesco's financial year... ended on 29 February and does not therefore reflect the month of March when supermarkets generally were at full throttle," noted Richard Hunter, head of markets at Interactive Investor.

      Ahead, "there will of course be a boost to sales -- an uplift of 30 per cent was seen during the initial panic buying phase", he added.

GENEVA — Global trade growth is expected to plummet by up to a third in 2020 due to the coronavirus pandemic, the World Trade Organisation said on Wednesday, warning that the numbers would be "ugly".

      "World trade is expected to fall by between 13 per cent and 32 per cent in 2020 as the COVID-19 pandemic disrupts normal economic activity and life around the world," the WTO said in a statement.

      There were a wide range of possibilities for how trade would be hit by the "unprecedented" health crisis, it added.

      However, WTO chief Roberto Azevedo warned the downturn "may well be the deepest economic recession or downturn of our lifetimes".

      In its main annual forecast, the 164-member WTO pointed out that trade had already been slowing in 2019, before the emergence of the novel coronavirus.

      But the virus has now infected some 1.4 million people since late last year, killing more than 80,000 and forcing governments across the world to take radical measures.

      More than half of humanity has been asked to stay at home and economic activity has ground to a virtual standstill in many places.

      Global trade, already hit by trade tensions and uncertainties around Brexit, is expected to register "double-digit declines in trade volumes" in nearly all regions this year, the WTO said.

      "This crisis is first and foremost a health crisis which has forced governments to take unprecedented measures to protect people's lives," Azevedo said in a statement.

      "The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself," he said.

       Dramatic downturn

      Before the current crisis, trade tensions, uncertainty and slowing economic growth weighed on global merchandise trade, which registered a slight decline of 0.1 per cent in 2019 after rising 2.9 per cent a year earlier.

      The dollar value of world merchandise exports fell by three per cent to $18.89 trillion, the WTO said.

      World commercial services trade fared better last year, with exports in dollar terms rising by two per cent to $6.03 trillion, but the expansion was far slower than in 2018, when services trade increased by nine per cent, said the WTO.

      But the situation has taken a dramatic turn since the new coronavirus first emerged in China late last year.

      The WTO said that while the global shock might invite comparisons to the financial crisis of 2008-2009, the situation now was worse.

      "Restrictions on movement and social distancing to slow the spread of the disease mean that labour supply, transport and travel are today directly affected in ways they were not during the financial crisis," it said.

      "Whole sectors of national economies have been shut down, including hotels, restaurants, non-essential retail trade, tourism and significant shares of manufacturing."

      Developments remained very uncertain, said the WTO.

      An optimistic outlook posits that a sharp drop in trade will be followed by a recovery starting in the second half of 2020, said the organisation.

      But the more pessimistic view is that the initial decline will be steeper and the recovery will be "prolonged and incomplete".

      "Under both scenarios, all regions will suffer double-digit declines in exports and imports in 2020", it said, adding that North America and Asia would be hardest hit.

HONG KONG — Most Asian equities retreated on Wednesday after a two-day rally as investors closely track developments in the coronavirus crisis, while the oil market continued to fluctuate ahead of a crucial producers' meeting.

      While the deadly disease continues to sweep across the planet, signs that the rate of infections is possibly leveling out and countries are preparing to ease some lockdown restrictions have instilled a semblance of optimism this week.

      However, the scale of the fight was laid bare by official data showing France's economy suffered its worst contraction during the first three months of this year since just after World War II.

      The French central bank said that in the last two weeks of March, as the coronavirus crisis deepened, economic activity plunged 32 per cent.

      "Signs that the number of new daily coronavirus cases is topping out in Western Europe... is driving expectations that social distancing measures will be lifted soon," said Stephen Innes, at AxiCorp.

      "Relaxing of social distancing rules is providing the undercurrent of positivity in the markets."

      However, uncertainty about how long the crisis will last and the damage it will inflict on the global economy was keeping traders on edge and hobbling any sustainable rally.

      Wall Street, where all three main indexes soared at least seven per cent at the start of the week, struggled to extend its rally and turned into negative territory Tuesday.

      The losses bled into Asia, with Hong Kong losing more than one per cent, Singapore two per cent, and Sydney and Seoul each 0.9 per cent.

      Shanghai ended down 0.2 per cent, while Bangkok, Manila and Jakarta also saw steep falls.

      Tokyo, however, rose more than two per cent as Japan's government unveiled details of a $1 trillion stimulus package, and Taipei piled on 1.4 per cent. Wellington also rose and Mumbai was flat.

       'Someone needs to compromise'

      Jeffrey Halley, at OANDA, offered a warning for traders to beware any false dawn.

      "A lot of good news has been built into asset markets this week on the most tenuous signs that the outbreak is peaking," he said in note. "Should that be proved premature the correction... could be very ugly indeed."

      He said a bear market rally should not be mistaken for the beginning of a V-shaped recovery, adding: "The best we can hope for is a U, with a W in a close second place."

      Oil prices rallied, but the commodity continues to swing as traders keenly await Thursday's planned meeting of the world's top producers, which will discuss a possible output cut.

      The commodity has been battered by the virus as lockdowns around the world bring the global economy to a standstill and drag on demand, while a price war between Russia and Saudi Arabia has compounded the crisis.

      With Riyadh and Moscow taking part, there are hopes they may draw a line under their dispute.

      Howie Lee, an economist at Oversea-Chinese Banking Corp. said that while a cut of 10 million barrels "would lend some support to prices", he added that US participation was key, otherwise other producers would not be likely to take part.

      Energy ministers from the Group of 20 will hold a meeting on the issue on Friday.

      Investors were also keeping tabs on talks in Europe where leaders are struggling to agree a path to supporting the region's economy, with the EU's 27 members unable to agree to a solidarity fund using "coronabonds".

      Stocks in Paris fell 1.5 per cent, London shed 1.2 per cent and Frankfurt dipped 0.6 per cent.

      In share trading, Australian banks were hammered in Sydney after Bank of Queensland said it would delay its dividend payments, having been urged to do so by regulators. The move, the first by a lender in the country, fuelled fears that others would follow.

SAN FRANCISCO — Airbnb on Monday said it was taking a billion dollars in new investment to endure and, it hopes, thrive in a travel world transformed by the coronavirus pandemic.

      Silver Lake and Sixth Street Partners will invest the money into the home-sharing platform in the form of debt and equity, according to Airbnb.

      "While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring," Silver Lake managing partner Egon Durban said in a release.

      "Airbnb's diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it."

      The fresh resources will enable the San Francisco-based company to invest in its community of "hosts" as well as local experiences provided along with stays in homes, according to Airbnb co-founder and chief Brian Chesky.

      Airbnb said it will focus particularly on long-term stays, from students needing housing to remote workers, building on a rising demand the platform has seen as people self-isolate during the pandemic.

      Terms of the investment include putting $5 million into a Superhost Relief Fund for established, highly-rated hosts who need help with rent or mortgage payments due to the coronavirus's devastating effects.

      Airbnb employees started the fund with a million dollars, and the two co-founders contributed another $9 million, according to the company.

      Airbnb is also helping hosts with financial losses after guests cancelled travel plans.

SEOUL — Samsung Electronics expects higher first-quarter profit, it said on Tuesday, as millions of people working from home in coronavirus lockdowns turn to cloud data services, pushing up demand for its chips.

      The pandemic is wreaking havoc across the global economy -- Samsung itself had operations suspended at 11 overseas assembly lines as of Tuesday -- and is widely expected to cause a recession.

      Looking forward, analysts expect the firm's smartphone and consumer electronics businesses will be buffeted by the resulting falls in consumer demand.

      But initially, changing behaviour patterns among the vast numbers of people forced to stay at home around the world have generated a silver lining for the world's biggest smartphone and memory chip maker.

      In the first three months, operating profits inched up 2.7 per cent from 2019 to around 6.4 trillion won ($5.2 billion), Samsung Electronics forecast in an earnings estimate.

      The figure was ahead of expectations, and was based on sales of 55 trillion won, up five per cent year-on-year.

      "There has been high demand for memory chips for data servers as an increasing number of people are now working from home due to the outbreak," said Tom Kang, an analyst at Hong Kong-based market researcher Counterpoint.

      "We are also seeing a hike in demand for laptops because we have many companies that are not fully ready for working digitally."

      Samsung Electronics is crucial to South Korea's economic health.

      It is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled conglomerates known as chaebols that dominate business in the world's 12th-largest economy.

      Shares in the firm closed up 1.8 per cent on Tuesday, having fallen nearly 20 per cent from a record high in January amid concerns over the coronavirus pandemic and its economic repercussions.

       Global recession

      But the wider picture for the firm is more mixed as Fitch Ratings forecast the global economy to contract 1.9 per cent this year, with a 3.3 per cent tightening in the United States, triggering layoffs and dampening consumer demand.

      Samsung had pinned its hopes for 2020 on a rollout of its new 5G and premium smartphones including its new folding Galaxy Z flip phone, hoping they would boost purchases.

      But an industry source who asked not to be named said increasing uncertainty going into the second quarter would "exacerbate troubles".

      Global smartphone sales dropped 14 per cent in February year-on-year with China seeing nearly a 40-per cent decrease, according to Counterpoint.

      "Semiconductor earnings look set to increase on the back of memory chip price hikes," Greg Roh, senior vice-president at HMC Securities, told Bloomberg News.

      But the consumer electronics and IT and mobile divisions "will likely see their earnings decline", he added.

      Samsung's key sales regions of North America, Asia and Europe are among the hardest-hit by the virus, said James Kang of Euromonitor.

      "With suspended retail businesses, reduced shipments and weak consumer sentiment, sales in those regions could plunge dramatically in the second quarter," he said.

      "A new lineup of premium products will play a key role in how successful Samsung will be in cushioning the blow." 

      Adding to Samsung Electronics' challenges, its vice chairman and de facto leader Lee Jae-yong is currently being re-tried over a sprawling corruption scandal that could see him return to prison.

      He is not being held in custody during the proceedings, but a guilty verdict could deprive the firm of its top decision-maker.

      Samsung withholds net profit and sector-by-sector business performance data until it releases its final earnings report, expected later this month. 

      LG Electronics, South Korea's second largest appliance firm after Samsung, also forecast higher first-quarter operating profits Tuesday, projecting they would reach 1.09 trillion, up 21.1 per cent year-on-year.

NEW YORK — Wall Street stocks opened higher on Tuesday, surging for a second straight session amid hopes governments are making progress in combating the spread of the coronavirus.

      About 15 minutes into trading, the Dow Jones Industrial Average stood at 23,380.75, up 700 points or 3.1 per cent.

      The broad-based S&P 500 jumped 2.7 per cent to 2,735.25, while the tech-rich Nasdaq Composite Index gained 2.2 per cent to 8,084.82.

      Analysts said the gains reflected less bleak coronavirus case figures in key hotspot regions, such as New York city and Italy.

      But many analysts are taking the surge with a grain of salt.

      "It is gleeful that we could be nearing the worst of the coronavirus from a health standpoint," said Briefing.com analyst Patrick O'Hare. But he cautioned that sentiment might be "too far ahead of itself with an assumption that things will go back to normal when the stay-at-home orders are lifted."

      Analysts expect more market volatility ahead as companies announce additional cutbacks and the economic slowdown hits company profits.

      In the last day, Boeing has suspended production at a big airplane factory in South Carolina, the last in operation, and Exxon Mobil has trimmed its capital budget.

London, April 6, 2020 — Asian and European equity markets rebounded on Monday as some of the world's worst-hit countries reported falling death rates, providing much-needed hope in the battle against coronavirus.

      While deadly COVID-19 continues its deadly sweep across the planet, with more than 1.25 million now declared infected and nearly 70,000 dead, news out of Europe that the rise of fatalities was easing has lifted spirits on trading floors.

      Italy reported its lowest daily death toll in two weeks, while Spanish officials said deaths fell for the third straight day and France reported its lowest daily toll in a week.

      In early afternoon eurozone deals, Frankfurt stocks rallied 4.5 per cent, Paris won 3.7 per cent, Madrid gained 3.0 per cent and Milan added 3.2 per cent.

      'Shrugging off pessimism'

      "European markets are trading higher because investors are shrugging off the pessimism," said AvaTrade analyst Naeem Aslam.

      "They are focused on more optimistic things: the slowing death rate caused by coronavirus. Italy, Spain, France, and Germany have all seen declining numbers."

      London jumped 2.1 per cent nearing midday, with gains capped by news that British Prime Minister Boris Johnson was hospitalised for precautionary tests after suffering "persistent" coronavirus symptoms for ten days.

      The pound, however, rose as officials insisted that Johnson was "still very much in charge of the government".

      Elsewhere, South Korea saw the fewest new cases in six weeks, Australian new infections were also dropping and Donald Trump said the US was showing signs of stabilising, despite the number of cases there passing 335,000 -- the highest in the world.

      Markets also shrugged off data on Friday showing a massive drop in US jobs in March that added to news that millions of people had applied for unemployment benefits.

      Tokyo, Sydney and Manila all rose more than four per cent, while Seoul, Singapore and Jakarta gained almost four per cent. Hong Kong jumped 2.2 per cent, while Shanghai was closed for a holiday.

WASHINGTON — Boeing has said it will indefinitely extend a shutdown at its factories in Washington state because of the coronavirus pandemic.

      The aerospace giant had already halted production at its Puget Sound facility near Seattle, where the company builds the long-range 777 jet and other models, after announcing a two-week stoppage last month.

      It had also shut its other major state factory at Moses Lake because of the 737 MAX grounding.

      Boeing said on Sunday that the shutdown would continue indefinitely in an effort to protect staff from COVID-19, which has already claimed the life of one employee at the company's Everett facility.

      "The health and safety of our employees, their families and our communities is our shared priority," Boeing's commercial airplanes division president Stan Deal said in a statement.

      Boeing was already facing significant headwinds prior to the coronavirus pandemic because of the crisis surrounding the 737 MAX, which has been grounded for more than a year following two fatal crashes.

      But the pandemic has further hit the company's outlook with most commercial airline travel suspended and major carriers thrust into a life-or-death fight.

      The company is seeking more than $60 billion in federal support for the US aerospace industry in the wake of the two crises.

      It announced a voluntary worker layoff plan on Thursday and said it expected "several thousand employees" to take a severance package or retire.

      Boeing currently employs around 70,000 people in Washington state.

LONDON — Volkswagen faces the threat of a hefty "dieselgate" payout in Britain after a court on Monday ruled in favour of more than 90,000 drivers whose vehicles cheated emissions tests.

      Following adverse rulings and compensation payouts elsewhere, the High Court in London ruled that the German auto giant was liable in Britain, too.

      The ruling adds pressure on Volkswagen just after the carmaker said last month it was preparing to shutter most of its European plants, joining a slew of other carmakers as the coronavirus pandemic disrupts supply chains and sends demand plummeting.

      The British judgement concerned "defeat devices" installed in about 1.2 million Volkswagen, Audi, Seat and Skoda diesel vehicles in Britain, which artificially lowered emissions.

      The court found the devices were a "fundamental subversion" of European Union tests designed to limit noxious pollutants, and will rule later on compensation to the owners.

      VW admitted in 2015 to fitting 11 million vehicles worldwide with software to make engines appear less polluting in regulatory tests than in real driving conditions.

      So far the legal fallout has cost VW more than 30 billion euros ($32.3 billion) globally in costs, fines and compensation, most of it in the United States and Germany.

      Gareth Pope, head of group litigation at Slater and Gordon, which represents around 70,000 of the British claimants, welcomed the "damning judgement".

      He said it "exposes VW's disregard for EU emissions regulations and public health in pursuit of profit and market dominance".

      Pope demanded VW end the "shameful episode" and settle with the plaintiffs. The company, however, said it would consider grounds for appeal.

      "While Volkswagen is disappointed that the outcome was not in our favour, the judgement relates only to preliminary issues," it said in a statement.

      It was still to be determined if the vehicle owners had suffered actual losses, the company insisted, adding: "We will continue to defend our position robustly."

ABU DHABI — The Central Bank of the United Arab Emirates (CBUAE) said on Sunday it has doubled to $70 billion a stimulus package to support the Gulf state's economy amid the coronavirus pandemic.

      "The aggregate value of all capital and liquidity measures adopted by the CBUAE since 14 March 2020 has reached 256 billion dirhams ($70 billion)," the central bank said in a statement.

      Last month, the UAE announced stimulus worth $35 billion that included aid to the banking system, facilities for loans and injecting funds into the bourses.

      Most of the new measures focused on easing financial and liquidity requirements for banks to free up cash for lending.

      In the new measures, the central bank reduced by half to 7.0 per cent the reserves banks are required to keep for demand deposits, which can be withdrawn by clients anytime.

      This will allow for some $16.6 billion in liquidity to be used in new bank lending, the central bank said.

      The regulator's new measures also allow banks to defer payment of loans for companies and clients until the end of 2020.

      "The additional measures announced today will effectively relieve the pressure on financial institutions ... offering the required relief and continued access to funding for businesses and households," newly-appointed governor Abdulhamid Saeed said.

      The UAE, where 1,505 coronavirus cases and 10 deaths have been reported, has introduced strict measures including halting travel and closing shopping malls and entertainment venues.

      On Saturday night, Dubai, one of the seven emirates making up the UAE, announced a two-week lockdown in which it will carry out tests in densely populated areas.

      The bourse of Dubai has led the slide of the Gulf stock markets, shedding 36 per cent in the first quarter, most of it in March. Its UAE sister bourse in Abu Dhabi dropped by 26.4 per cent.