TheChek News Flow

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Eur$ 1.1083 CNH 7.1029 CNY 7.0929 JPY 107.75 GBP 1.2398 CHF 0.9559 RUB 76.42 TRY 6.4954 WTI $20.62 -4.14%

S&P +1.40% NAsdaq +1.30% EuroStoxx +1.95% FTSE +1.42% Dax +1.80% SMI +1.44%

Macro :

- Millennium, Citadel Cut Losses After U.S. Moves Buoy Hedge Funds

- Africa Is Two to Three Weeks Away From Height of Virus Storm

- A $42 Billion Swedish Fund Positions for Rebound With Long Bet

- Stick to Cash and Bonds With Virus Hit Unclear, JPM Asset Says

- Italy Reopening Would Be Gradual, Post-Easter: Repubblica

- Cash Is King as Capex, Dividend Slashed

Keep an eye on :

- ABBN SW : ABB Withdraws 2020 Guidance; Sees 1Q Oper. Ebita Margin Down

- ABN NA : *ABN AMRO EXPECTS TO RECORD A LOSS IN 1Q 2020

- ADS GY : Adidas under fire for holding back rent payments because of coronavirus - FT

- AIR FP : Easyjet Founder Threatens to Remove Board On Airbus Deal:Sky

- AKER NO : Aker Energy Shelves Pecan Oil Project Off Ghana Amid Crisis: E24

- ALD FP : ALD Withdraws 2020 Guidance on Coronavirus Crisis

- BGN IM ; Banca Generali Postpones Dividend Proposal Over 2019 Net Profit

- BAYN GY : Bayer’s Xarelto Study Shows Significantly Reduced Risk of VTE

- BG AV : Bawag Postpones AGM, Dividend Decision to 4Q From May 4

- BOSN SW : Bossard Proposes Reducing Original Dividend by Half

- BT/A LN : U.K. Seeks to Shield Business With Amendment to Bankruptcy Rules

- CCL LN : Passengers on ‘Death Ship’ Plead for Rescue After Virus Strikes

- CEC GY : Ceconomy Said to Seek $2.2 Billion German Aid Amid Virus Slump

- EQNR NO : Equinor’s Sverdrup to Hit Phase 1 Plateau Sooner Than Expected

- EL FP : Essilor’s Laurent Vacherot Set For Retirement: Le Figaro

- GILD US : Gilead Expands Hospital Access to Experimental Coronavirus Drug

- HOFI SS : Hoist Launches New Sustainability Strategy In Line With UN Goals

- ICP LN : Workhuman Plans to Sell 10% Stake to Intermediate Capital Group

- INGA NA : ING Suspends Dividend Payments Following ECB Recommendations

- INH GY ; Indus Holding Sees 2020 Ebit EU85 Mln To EU95 Mln

- ISP IM : Intesa: March 31 Board to Assess ECB Communication on Dividends

- JMAT LN ; Johnson Matthey Sees Earnings Below Market Expectations

- KBC BB : KBC Withdraws Final Dividend Over 2019 Profit

- LAND SW : Landis+Gyr Sees FY Net Revenue Falling ~2% From Year Ago

- MC FP : LVMH Sees 1Q Rev. Drop Between 10% & 20% From Last Year

- NOBI SS : Nobia Withdraws Dividend Proposal, Lays Off 3,000 People

- NSKOG NO : Norske Skog Stops Production at One Paper Machine at Saugbrugs

- RILBA DC : Ringkjobing Landbobank Suspends Share Buy-Back Program

- SCR FP : Scor Postpones April 17 Planned AGM to June 30

- SPM IM : Saipem Finance Intl Outlook to Negative by Moody's

- SCHP SW : Schindler Cuts Full Year Revenue Forecast

- SSABA SS : SSAB Withdraws Dividend Proposal Altogether on Virus Uncertainty

- STAN LN : StanChart Commits $1 billion to Finance Battle Against Virus

- TUI LN : TUI Gets $2 Billion Bailout After Pandemic Halts Tour Activities

- UCG IM ; UniCredit Withdraws Dividend, Buyback Proposals (1)

Lockdown could last six months, says UK government

Efforts to suppress coronavirus will be wasted if restrictions are lifted too soon

Normal life may not return to the UK for up to six months as the government warned that strict social distancing measures may continue into the summer to help the National Health Service cope with coronavirus.

Boris Johnson’s government is preparing for the number of deaths and cases of the disease to accelerate in the coming days. According to figures released on Sunday, 1,228 people have died in the UK from the virus — an increase of 209 in one day — and 19,522 have tested positive.

Speaking from Downing Street, Jenny Harries, deputy chief medical officer, warned that “all of our efforts will be wasted” if the UK ended social distancing measures too rapidly. The government will review the national lockdown, announced by Boris Johnson last Monday, within three weeks.

“Over time, probably over the next six months, we will have a three week review, we will see where we are going,” Dr Harries said, adding that she anticipated the numbers to get worse over the next one to two weeks. “We need to keep that lid on and then gradually we will be able to hopefully adjust some of the social distancing measures, and gradually get us all back to normal.”

Robert Jenrick, housing and communities secretary, said the government was not expecting the most stringent measures to be lifted in the near future. “Nobody’s pretending that this will be over in a few weeks.”

The nationwide lockdown restricts Britons from leaving their homes except for essential shopping and one period of exercise a day and is enforced by the police. All non-essential travel has been banned and only key workers are advised to use public transport.

Michael Gove, the Cabinet Office minister, said the peak of the outbreak is “not a fixed point, a date in the diary like Easter” after reports suggested the government believes the week commencing April 13 will be the UK’s peak of the outbreak. He said behaviour would influence how long the strict social distancing conditions would last.

“There are different projections as to how long the lockdown might last but it’s not the case that the length of a lockdown is something that is absolutely fixed,” he told Sky News. “It depends on all of our behaviour. If we follow the guidelines we can deal more effectively with the spread of the disease.”

Mr Gove, who is playing a central role in the government’s preparations for the coronavirus crisis, acknowledged “everyone is making a sacrifice” but told the BBC that the country should “prepare for a significant period when these measures are still in place”.

Although some senior figures in the Johnson government are eager to ease the lockdown as soon as possible, scientific experts have warned that withdrawing them too quickly risks a second wave of coronavirus cases later this summer that could overwhelm the NHS.

Neil Ferguson, a professor at Imperial College London who has worked closely with Downing Street on modelling and dealing with the coronavirus outbreak, suggested that the full lockdown restrictions should stay in place “probably until the end of May, maybe even early June”.

Mr Johnson has also left open the possibility of tougher restrictions. The prime minister has written to every household this weekend to warn that “things will get worse before they get better” with the crisis.

He hinted that tougher measures may have to be introduced to help the NHS cope. “We will not hesitate to go further if that is what the scientific and medical advice tells us we must do.”

But Dr Harries suggested that the existing measures are unlikely to be extended until the first review has occurred. “We just need to watch it carefully, hold tight for a week or two, keep doing what we’re doing . . . and hopefully we’ll be on our way down a little bit,” she said.

Meanwhile Mr Gove also apologised to a company that had offered to help supply ventilator parts to the NHS and had not received a response. “I’m very sorry if that company says that it didn’t get a reply, I’ll investigate as soon as I’ve stopped talking to you,” he told the BBC’. 

“If that company wants to get in touch directly with me, we’ll investigate, because there have been some cases where people had hoped they might be able to help, but in fact the material that they produce has not met the NHS specifications, it’s not what’s required in order to save lives, but we have been following up every single lead presented to us.”

Mr Gove said the NHS now had 8,000 ventilators, with another 8,000 due to be sourced from the UK and abroad. He also pointed out that another 10,000 may be supplied through a deal struck with several British companies, including Dyson. Ministers estimate around 30,000 ventilators will be required.

China should stand up to revive global demand

Beijing could show leadership by running current account deficits

The economic fallout from the pandemic is starting to feel like 2008 reprised. Share prices have slumped. The global economy is lurching toward recession and unemployment is swelling. Once again, policymakers, investors and others are asking a crucial question: can China revive the world’s economy?

China — where the coronavirus outbreak originated — appears on track to stage the first recovery among leading economies. Key metrics such as real estate sold, coal used in power stations and traffic congestion are all on the increase, suggesting at least a measured recuperation in demand. But the unpalatable reality is that China — and the world — find themselves in very different positions today than they did in 2008. Beijing then led the world’s return to growth by pushing out a massive $590bn stimulus package that was equivalent to 13 per cent of its 2008 GDP. By contrast, the US and Japan pumped a comparatively modest $152bn and $100bn into their larger domestic markets.

Those hoping for a repeat performance may well be disappointed. The simple truth is that China has run up so much debt in the credit-fuelled 12 years since the financial crisis that it can ill-afford another “big bazooka”. Nor does it appear as willing as it was in 2008 to identify the world’s problems as its own. Total bank assets in China have risen by 4.5 times since 2008 to $41.8tn at the end of 2019 — equivalent to about half of global GDP, according to the Rhodium Group, a consultancy. By contrast, Chinese GDP has increased by three times over the same period — meaning that much of China’s stellar decade of growth has been borrowed rather than bought.

Beijing has made it a policy priority to bring down credit growth. Thus, if Xi Jinping, China’s president, was now to decree a large credit-fuelled stimulus it would amount to tearing up a fundamental principle in the economic playbook. Statements from other officials also seem to indicate little appetite for a massive stimulus. Li Keqiang, premier, was quoted by the official media in March as saying: “variations in economic growth do not matter that much, as long as employment stabilises this year”.

Yet China should recognise that its fate is linked to that of the world. No matter how parlous its relationship with the US has become and regardless of how fiercely it resents being blamed for the initial viral outbreak, self-interest demands Beijing prepares for a key role in the world’s economic revival. Perhaps the pledges of “co-operation” made in a recent phone call between Mr Xi and Donald Trump, the US president, represent a positive sign.

If a credit bazooka is out of the question, other levers could be pulled. Beijing could budget for a much larger fiscal deficit this year, allowing it to extend tax cuts throughout the economy. It could instruct banks to hold off on calling in debts and discourage state-owned enterprises from laying off workers. It could also speed up infrastructure projects and boost housing construction, financed through bond issuance by local governments.

Such measures would be aimed primarily at shoring up domestic constituencies but they will be of limited benefit to global demand. If China wants to show real leadership as it did after 2008, it should ramp up imports while keeping the renminbi steady against the US dollar. The hefty current account deficits that should result would be proof of its contribution to the international community — and assist in rehabilitating its reputation after the early mis-steps in the spread of the virus in Wuhan.

Some received less than a third of rent on Wednesday after ministers granted moratorium

UK landlords are threatening legal action against retailers and hospitality businesses after many withheld rent to save cash during the lockdown.

The Vietnamese noodle chain Pho, Escape Hunt and Caffe Concerto are among those that have been threatened with action. “We are facing a serious problem here,” said Stefano Borjak, director of Caffe Concerto. “They are trying to wind up the company, which does £40m turnover per year. The cash flow we have at the moment we need to pay staff.”

Caffe Concerto operates 37 sites in the UK but faces a winding-up petition — a court order that forces an insolvent company into compulsory liquidation — from Criterion Capital, owner of its Haymarket site, after it did not pay a £100,000 rent bill.

According to letters seen by the Financial Times, both Pho and Escape Hunt have also been threatened with action if they do not pay full rent for the next quarter to Sykes Capital, the landowner of their Reading sites.

“We appreciate these are difficult times, however, payment of rent should be one of the highest priority business expenses,” the letter said.

Sykes did not respond to a request for comment.

Andrew Sell, head of asset management at Criterion Capital said: “The government at no time has said that commercial tenants should receive a rental holiday, yet many, but not all, are choosing to withhold rent. Such action is jeopardising our obligation to meet our commitments to lenders.”

Some landlords received less than a third of their expected rent on Wednesday after the government granted tenants a three-month moratorium against eviction for non-payment.

“Among all of the noise around withheld payments, all business tenants — including retailers — must understand that the emergency legislation rushed through by the government this week does not mean they can avoid paying any rent at all,” said Martin Edwards, property disputes partner at Shakespeare Martineau. 

Intu, the shopping centre landlord, said it had received only 29 per cent of expected rent, even after offering a deferral and cutting service charges.

“That rent is payable, that's legally enforceable,” said Matthew Roberts, Intu’s chief executive.

Chris Griggs, chief executive of British Land, said that it was allowing its smaller tenants a rent-free period but that it had its own costs to pay. “Look at a very large shopping centre with very few shops open, you have to keep all of it running,” he said.

But tenants say that rent deferrals are not enough.

Natalie Williams owns a fashion business that leases a site from the City of London Corporation, which on Wednesday offered tenants a three-month rent deferral.

“Rental payments may be delayed, but our revenues will be lost, not delayed,” Ms Williams said. “The City of London Corporation’s refusal to grant requests for rent reductions or holidays is leaving business owners with no other choice than to consider dissolving the businesses they have spent years building,” 

She added that many other company owners faced the same problem.

“We are committed to providing well-targeted support to our tenants in these difficult times and will continue to review the measures in place over the coming weeks and months, in line with the government’s package of support for businesses,” the City of London Corporation said.