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HSBC Evacuates Some London Workers; Italy Stimulus: Virus Update

2020-03-05 05:44:45

(Bloomberg) — HSBC Holdings Plc evacuated some employees from its London office after one worker tested positive for the coronavirus. Italy is preparing a stimulus package worth about $5.6 billion to counter the worst outbreak in Europe, while OPEC agreed to cut oil production.

Fatalities from the outbreak moderated in China and cases appeared to slow in South Korea. Switzerland reported its first death and infections surged again in Iran, where the virus has now spread to all provinces.

Earlier, an industry association warned the outbreak could cost airlines as much as $113 billion in lost revenue. European stocks slumped as companies from Continental AG to ITV Plc warned the epidemic would hurt results, with the banking index set to enter a bear market.

Key Developments:

Global cases at least 95,550; death toll 3,285Asian nations have pledged $38 billion in budget measuresBOJ mulls new lending program, RBI pledges “proactive” approachEconomists keep downgrading their forecasts for China’s economyWhat doctors treating Covid-19 in Wuhan say about the virus

Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts. For analysis of the impact from Bloomberg Economics, click here.

HSBC Evacuates Research Department (6:30 a.m. NY)

An employee at HSBC’s London office has tested positive for the coronavirus, prompting an evacuation at the firm’s research department, which has been deep-cleaned and sanitized, according to a person familiar with the matter. The lender’s trading floor in the Canary Wharf office has currently not been impacted, the person said.

HSBC had about 235,000 employees at the end of last year, according to its annual report.

Southwest Airlines Cuts Outlook (6:36 a.m. NY)

Southwest said it experienced a significant decline in customer demand, as well as increase in trip cancellations and expects first-quarter operating revenue to be negatively impacted.

OPEC Agrees on Output Cut, Russian Backing Is Unclear (6:26 a.m. NY)

OPEC agreed to cut oil production by 1.5 million barrels a day to offset the huge demand hit from the coronavirus epidemic, but it was unclear whether its key ally Russia was on board.

Seven & i Said to Scrap $22 Billion Bid (6:11 a.m. NY)

Seven & i Holdings Co. has scrapped plans to acquire Marathon Petroleum Corp.’s Speedway gas stations for $22 billion, ending a deal that would have been among the world’s biggest this year. The coronavirus outbreak was one of the factors that impacted negotiations.

Italy Preparing Stimulus Package of Almost 5 billion euros (6 a.m. NY)

The amount will be closer to 5 billion euros ($5.58 billion) than 3 billion euros, Luigi Marattin, a senior lawmaker with coalition Italy Alive party, told reporters on sidelines of a cabinet meeting in Rome later on Thursday.

Kim Jong Un Opens Door to South Korea Thaw (6 a.m. NY)

Kim Jong Un sent South Korean President Moon Jae-in a letter expressing condolences over the coronavirus outbreak, in the North Korean leader’s first public overture to his counterpart in more than four months.

China Gas Force Majeure Cases Add Up (6:36 p.m. HK)

China National Petroleum Corp. has issued a force majeure on all prompt natural gas imports, according to people with knowledge of the situation, the second Chinese buyer to refuse shipments in a sign that global commodity flows may face a sustained impact from the coronavirus fight.

Iran Cases Top 3,500 (6:34 p.m. HK)

Infections in Iran reached 3,513 with 107 deaths after 591 new cases were reported. A health ministry official said the outbreak has spread to all provinces and more than 23,000 people have been tested. The nation closed schools and universities until March 20, leading into a two-week holiday for the Iranian new year.

Countries Ramp Up Quarantine Measures (6:30 p.m. HK)

Japan will quarantine visitors from virus-hit China and South Korea starting next week, Prime Minister Shinzo Abe said. China and Japan had earlier agreed to delay the first state visit of a Chinese leader to Tokyo in about a decade because of coronavirus worries.

Separately, Thailand advised people arriving from countries deemed high-risk for novel coronavirus infection to self-quarantine and Malaysia expanded its ban to visitors from parts of Japan, Italy and Iran due to the rising number of confirmed cases in those countries.

University of Hong Kong Classes to Go Online (6:23 pp.m. HK)

All teaching and learning will be delivered online until the end of the teaching period on May 16, Vice-President Ian Holliday said. No in-hall exams will be conducted and all final exam components will be moved online.

European Stocks Fall After 3-Day Gain; Banks Set to Enter Bear Market (6:17 p.m.)

European stocks resumed declines on Thursday, erasing an early advance, as profit warnings kept investors on edge about risks from the virus outbreak despite policy measures.

All 19 industry groups declined, led by cyclicals. The Stoxx banking sector index was set to enter bear market after falling more than 20% since a peak in February, on concerns over potential loan losses.

Bethlehem Shuts Churches and Mosques; Bars Tourists (5:42 p.m. HK)

The Palestinian Authority barred tourists and closed all mosques and churches in Bethlehem for the next two weeks after identifying suspected cases of coronavirus infections in a Bethlehem hotel.

BOJ Is Said to Mull New Lending Program (5:35 p.m. HK)

The Bank of Japan is likely to consider the introduction of a new lending program to help companies affected by the outbreak of coronavirus this month, according to people familiar with the matter. The BOJ recognizes that there is room for the central bank to mitigate the impact as private banks could become cautious about making loans to businesses that are struggling.

Separately, Reserve Bank of India Governor Shaktikanta Das said the central bank will be proactive in dealing with threats stemming from the outbreak and will have assessed the potential impact on India by the next rate decision due April 3.

Airlines See Up to $113 Billion in Lost 2020 Revenue (5:29 p.m. HK)

The novel coronavirus outbreak will cost the airline industry $63 billion to $113 billion in lost revenue from passengers this year, the International Air Transport Association said, revising a more conservative estimate issued last month.

Switzerland Reports First Death; Cases Rise in Europe (5:09 p.m. HK)

A 74-year-old woman died from a coronavirus infection in the western canton of Vaud, the local government said on its website. The woman had been hospitalized since March 3 and was at high risk because she suffered from a chronic illness.

The number of cases in neighboring Germany rose by 87 to 349, the Robert Koch Institut said. The biggest cluster is in the country’s most populous state of North Rhine-Westphalia, where 175 people are infected. Belgium detected 27 more cases, bringing the total numbers of cases to 50, the country’s health ministry said.

European Companies Warn (4:24 p.m. HK)

Norwegian Air Shuttle ASA withdrew guidance and ITV Plc slumped after saying it expects advertising sales to drop in April. Hugo Boss AG also warned of a significant impact on sales from Asia and Continental AG plunged after saying it expects earnings to decline further. Airbus is considering a cut in A330neo jet production after the wide-body’s biggest customer said a coronavirus-driven slump in travel had forced it to defer deliveries, according to people familiar with the matter.

Shares in Germany’s Merck, however, rose after the company gave its profit outlook, which was based on its experience in China.

BBVA Postpones Investor Day; More Travel Curbs (4:21 p.m. HK)

Spanish lender Banco Bilbao Vizcaya Argentaria SA postponed its investor day scheduled for March 25 because of increased travel restrictions. Since the bank is obliged by law to hold its annual general meeting and most of the attendees are domestic, it still plans to go ahead with its AGM on March 13.Banco Santander SA is advising employees to postpone meetings involving large amounts of people and to avoid non-essential travel. Earlier, HSBC Holdings Plc told its staff they can only undertake international business travel “if absolutely essential to meet commitments to our clients or regulators, even between countries with no recorded cases of COVID-19.” The moves follow similar decisions at firms including UBS Group AG, JPMorgan Chase & Co. and crop trader Cargill Inc.

Mizuho Financial Group has started splitting locations of some departments between its two Tokyo headquarters to mitigate the impact of any outbreak.

China Consumption Rebounded in Late February (4:18 p.m. HK)

Average daily sales of 1,000 retailers closely monitored by the commerce ministry resumed growth in late February, with obvious recovery in auto demands, China Commerce Ministry official Li Xingqian said.

South Korea Cases Top 6,000 (4:15 p.m. HK)

South Korea’s total tally of coronavirus cases within the nation exceeded 6,000 as of 4pm local time, according to the Health Ministry. Yonhap News reported the death toll rose to 40. The daily tally in the country, released every morning at 10am, showed a 3-day slowdown from Monday — with an increase of 438 for Wednesday, compared with 516 the previous 24 hours and 600 the day before that.

Italy Takes Radical Steps (4:08 p.m. HK)

Under a decree signed by Italian Prime Minister Giuseppe Conte late Wednesday night, sports competitions are suspended, cinemas and theaters closed, and elderly people are advised to avoid leaving home. An annex to the decree lists hygiene recommendations that include avoiding hugs and handshakes and washing hands often. The new measures come after Italy announced a nationwide closing of schools until March 15 as it tries to curb the worst coronavirus outbreak in Europe.

Chinese Shares at Two-Year High (3:53 p.m. HK)

Chinese stocks jumped to their highest in two years, erasing the last of the declines fueled by the coronavirus outbreak. The CSI 300 Index closed up 2.2% on Thursday, on pace for its best week since November 2015.

China Honors Whistle-Blowing Doctor (3:45 p.m. HK)

China honored a whistle-blowing doctor who became famous worldwide after calling attention to the coronavirus outbreak, as the government tries to mitigate public anger over its early muzzling of medical professionals. Ophthalmologist Li Wenliang died on Feb. 7 after contracting the virus.

Seattle Area Schools to Close (2:43 p.m. HK Time)

All schools in the Northshore School District, north of the city of Seattle, will be closed starting March 5 for 14 days as officials monitor the health situation. The outbreak in counties near Seattle is the most concentrated of the coronavirus clusters detected so far in the U.S.

Scramble for Masks (1:32 p.m. HK)

South Korea will ban all exports of masks starting March 6 at midnight, Prime Minister Chung Sye-kyun said at a speech at the National Assembly. Alibaba Group co-founder Jack Ma will donate 1 million masks to South Korea through the Red Cross, Maeil Business Newspaper reported, citing an interview with former United Nations Secretary General Ban Ki-moon. Ma also plans to do the same for Japan to support the prevention of the further spread of the virus in the region, the paper said.

In the U.S., the federal Health and Human Services department said it plans to buy 500 million N95 respirator masks that could protect health care workers during an outbreak like the current novel coronavirus over the next 18 months. U.S. Vice President Mike Pence on Thursday plans a visit to Minneapolis to meet with 3M Co., a top maker of protective face masks, to discuss supply-chain issues and the coronavirus.

U.K. Airline Collapses After Virus Hit (12:34 p.m. HK)

British airline Flybe went into administration after the failure of last-ditch talks on a government bailout and pressure from the coronavirus outbreak left the country’s biggest domestic carrier with no alternative.

“As a result of insolvency proceedings, Flybe has ceased to trade and is no longer able to fly or accept bookings,” administrator EY said in a statement Thursday. “Unfortunately it has been necessary to make the majority of the workforce redundant.”

First Human-to-Animal Transmission (11:04 a.m. Hong Kong Time)

The pet dog of a coronavirus patient in Hong Kong has been confirmed to be infected with a “low level” of the virus, marking what’s likely the first known instance of human-to-animal transmission. Tests confirmed the virus in the pet’s nasal and oral cavities, “which indicates a low-level of infection,” Hong Kong’s agricultural and fisheries department said in statement late Wednesday.

Facebook Sees First Infection, in Seattle (10:46 a.m. HK)

Facebook Inc. said an employee in Seattle has been diagnosed with the coronavirus, the first known infection within the company as the virus continues to spread in the region. The employee, a contractor, was last in Facebook’s Stadium East office in Seattle on Feb. 21. The company alerted employees Wednesday night and said the Seattle office will be closed to all employees until March 9. Employees in Seattle are also being encouraged to work from home until the end of the month.

Separately, Microsoft Corp. became the largest employer in Washington state’s Puget Sound region to tell all workers to do their jobs from home if possible, until March 25, after King County made a similar recommendation to limit the spread of Covid-19.

Cruise Ship Gets Diverted (9:39 a.m. HK)

Carnival Corp.’s Princess Cruises diverted a ship bound for Ensenada, Mexico, after a passenger who had recently traveled on the vessel died of coronavirus, becoming California’s first such fatality. The ship was being held off the coast of California to give state officials time to test passengers and crew for the virus, Governor Gavin Newsom said at a press conference.

China Deaths Moderate (8:33 a.m. HK)

China on Wednesday reported an additional 31 coronavirus deaths by March 4, bringing the total to 3,012, with all of the newest fatalities coming from Hubei province, the original source of the outbreak. The country also reported an additional 139 confirmed cases of the virus, bringing the total to 80,409. Discharged patients climbed by 2,189 to 52045.

While doubts remain over whether the Chinese statistics show the full picture, the surging number of recovering patients has spurred optimism. Sixty-two percent of those who’ve been officially diagnosed with the disease are now better and out of hospital, according to the data from the National Health Commission on Wednesday.

California Governor Declares Emergency (8:09 a.m HK)

California Governor Gavin Newsom declared a state of emergency to make more resources available and loosen regulations. The state had its first death Wednesday from a resident in Placer County, whose case was linked to travel on a cruise ship from San Francisco to Mexico last month.

More than 50% of the roughly 2,500 people on that cruise were Californians, Newsom said. The state is sending people up and down the state to find passengers for monitoring. The ship, the Grand Princess, is now being rerouted from a separate sailing and is being held off the coast of San Francisco as the state prepares to test guests on board, Newsom said. Twenty-one passengers and crew members are showing symptoms.

–With assistance from Adveith Nair, Jillian Ward, Jihye Lee, Angus Whitley, Alfred Liu, Jonathan Levin, Sophie Jackman, John Follain, Charlie Devereux and Nikos Chrysoloras.

To contact Bloomberg News staff for this story: Adveith Nair in London at [email protected]

To contact the editors responsible for this story: Stuart Wallace at [email protected], Adveith Nair

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