hong kong economy Archives

1. U.S. Index Futures Rise as Europe Stocks Drift

U.S. equity futures climbed and European stocks fluctuated as investors assessed the prospects for additional government stimulus to help economies battered by soaring coronavirus cases. S&P 500 futures pointed to green at the open, while the Stoxx Europe 600 Index erased an earlier decline, with tech and banks among the winning sectors. The gains come a day after the U.S. benchmark fell 1% as New York prepared for the possibility of school closures and Chicago urged residents to stay at home. The U.S. recorded 145,000 new cases on Thursday, roughly double the figures from just two weeks earlier. Three of the world’s top central bankers warned on Thursday that the prospect of a vaccine isn’t enough to put an end to the economic challenges created by the pandemic.

Futures on the S&P 500 Index advanced 0.7% as of early morning New York time.

The Stoxx Europe 600 Index dipped 0.1%.

The MSCI Asia Pacific Index decreased 0.1%.

The MSCI Emerging Market Index gained 0.5%.

2. China’s State Grid Makes a $3 Billion Push Into Latin America

State Grid Corp. of China will pay INR 22,300 cr for an electricity network company in Chile, its first overseas deal in almost a year and a move that resumes its expansion abroad. The Spanish natural gas and power company Naturgy Energy Group SA said it agreed to sell its 96% stake in Chilean electricity networks unit Compania General de Electricidad SA. Chinese energy companies have strengthened their presence in Latin America in the last few years with a wave of investments that extend to logistics, services and telecommunications companies. For State Grid, the world’s largest utility, it’s part of an effort to give the company a broader footprint outside China and access to natural resources in a region traditionally under U.S. commercial influence.

3. Bahrain buries world’s longest-serving prime minister Khalifa bin Salman al-Khalifa

Bahrain buried Prince Khalifa bin Salman al-Khalifa, the world’s longest-serving prime minister after his body returned from the United States where he died on Wednesday. Khalifa, 84, the uncle of King Hamad bin Isa al-Khalifa, had served as prime minister since independence from Britain in 1971. The al-Khalifa family has reigned since 1783. King Hamad on Wednesday appointed Crown Prince Salman bin Hamad Al Khalifa, 51, as the small Gulf state’s new prime minister.

4. China says will quicken special funds spending to support the economy

China will speed up the spending of special funds allocated to local governments to help support the economy, vice finance minister Xu Hongcai said on Thursday. By the end of October, local governments had spent 1.198 trillion yuan (INR 13.5 lakh cr), accounting for 70.9% of special funds actually allocated from the central government. “The move has effectively enhanced the grass-roots units’ financing capacity, strongly supported the epidemic prevention and control, economic and social development and poverty alleviation,” Xu said.

5. Vaccine alliance raises $2 billion to buy COVID shots for poor nations

A facility set up by the World Health Organization (WHO) and the GAVI vaccine group has exceeded an interim target of raising more than $2 billion (INR 15,000 cr) to buy and distribute COVID-19 shots for poorer countries but said it still needs more. The GAVI alliance said on Friday that the funds for an advance market commitment (AMC) will allow the COVAX facility to buy an initial 100 crore vaccine doses for 92 eligible countries which would not otherwise be able to afford them.

6. VW Boosts Tech Spending Within $177 Billion Investment Budget

Volkswagen will reserve a bigger slice of its 150-billion euro (INR 13.2 lakh cr) budget for electric cars and software in the next five years, stepping up technology spending to navigate a tectonic industry shift even as the Covid-19 pandemic continues to roil markets. Investments in battery-powered vehicles, autonomous driving and related future technologies will rise to about 73 billion euros, or half the company’s budget through 2025, VW said Friday.

7. Trump Silent on Virus Surge as Cases and Deaths Rise Sharply

President Donald Trump has stayed silent as the U.S. coronavirus outbreak rages anew, a leadership vacuum that leaves governors and health authorities to grapple with record numbers of new cases and hospitalizations. Trump hasn’t spoken publicly in a week, as the virus surges across the country and sets records for hospitalizations and daily new cases. He’ll receive a briefing Friday on vaccine development but has otherwise focused his public comments this week on circulating debunked allegations of voter fraud and criticizing Fox News on Twitter.

8. Indigo Airline on a $10 Billion Pandemic Shopping Spree

The airlines have seen more than their share of casualties during the pandemic, as travel stopped and carriers’ finances nose-dived which forced many survivors to concentrate on cutting costs, trimming payrolls, and walking away from aircraft orders, but IndiGo, the airline operated by InterGlobe Aviation Ltd., is doing something few of its peers would risk right now: going shopping. The airline is in talks with Pratt & Whitney and CFM International, a joint venture of General Electric and France’s Safran, to provide engines to power about 150 new Airbus A320neo jets. Based on the size of IndiGo’s last engine order—a $20 billion transaction with CFM covering 280 planes that was the largest engine order ever—the agreement could be worth about $10.7 billion, including service, repair, and maintenance.

9. Hong Kong Sees GDP Contraction Near Low End of Forecast Band

Hong Kong’s economy will probably contract 6.1% this year, close to the lower end of the government’s forecast range, amid signs the city is starting to emerge from a deep recession spurred by political protests and then the coronavirus outbreak. The government’s latest projection, released in a statement Friday, compares with August’s forecast range of -6% to -8%. It also revised data for the third quarter, showing gross domestic product declined 3.5% from a year ago, slightly worse than an earlier estimate of -3.4%. Hong Kong’s economy has shown nascent signs of revival alongside recoveries across the region as virus outbreaks are brought under control and China’s rebound drives demand. The city’s exports jumped the most in two years in September, with shipments to the mainland surging 17%.

10. South Korea Sounds Alarm on Stock Market Bubble Amid Retail Boom

South Korea issued a warning over signs of a bubble in the nation’s stock market, one of the world’s top performers this year amid a record surge in retail investing spurred by easy money and pandemic free time. The Kospi benchmark equity gauge is up 13% this year, surging more than 70% from its March low, with local retail traders pouring record amounts into the $1.8 trillion stock market. Now accounting for about 65% of total daily Kospi trading value, this host of millennial investors has shown a penchant for risky trades including microcaps and preferred stock, which generally pay higher dividends than common shares but lack the latter’s voting rights.

1. U.S. Stocks Slump After Tech Earnings Underwhelm

U.S. stocks slumped after earnings from the biggest tech companies disappointed investors concerned a slowing economy will damp profit. The Nasdaq 100 led losses among major U.S. stock gauges. In Europe, equities were mixed. Tech stocks also faltered. The tech slump, coming after an unprecedented run higher this year, is adding to volatility that’s likely to remain elevated heading into next week’s U.S. election. Global equities are on course for the worst weekly decline since March as lockdown measures in some countries and the lack of an agreement on U.S. stimulus dent sentiment.

The S&P 500 Index decreased 0.7% as of early morning New York time.

The Nasdaq 100 Index dropped 1.4%.

The Stoxx Europe 600 Index was little changed.

The MSCI Asia Pacific Index sank 1.5%.

2. Eurozone GDP up 12.7% in Q3, biggest-ever quarterly rise

Eurozone output soared by 12.7% in the third quarter, its sharpest recorded increase, as the bloc bounced back from the depths of the coronavirus lockdown, the EU’s statistics agency Eurostat said Friday. But, despite the rebound, total gross domestic product in the 19-country zone is still 4.3% down on the third quarter of 2019, while unemployment numbers for September and the inflation estimate for October remained flat.

3. U.S. Tech Giants – Apple, Facebook, Amazon – beat expectations

Apple beats expectations, but shares slip after the company reported iPhone sales that missed Wall Street estimates and a slump in revenue from China. Sales of Macs and Services reached all-time highs in this quarter.

Facebook beats revenue estimates by $1.6bn. Facebook’s monthly active users rose to 2.74 billion, but the company warned of a tougher 2021.
Amazon.com on Thursday reported record profits for the second quarter in a row and forecast a jump in holiday sales, as consumers continued to shop more online during the novel coronavirus pandemic.

4. Hong Kong Economy Shows First Signs of Revival Since Protests Began

Hong Kong’s economy showed the first signs of emerging from a crippling recession sparked by political unrest last year and deepened by the global pandemic. GDP declined 3.4% in the third quarter from a year earlier, which was better than the median estimate of a 5.6% contraction. On a quarter-on-quarter basis, GDP rose 3%. This marks the first time the quarter-on-quarter measure has risen since before the start of anti-government protests last year, as a third wave of virus infections subsided last month.

5. Singapore Overtakes Thailand to Become Asia’s Worst Stock Market

Singapore stocks took a beating this week amid the twin uncertainties of the U.S. election and the worsening pandemic in the West, overtaking Thailand to become Asia’s worst equity market this year, taking the 2020 decline so far to 25%, compared with a fractionally smaller loss for Thailand’s SET index. The city-state’s index, which relies heavily on exports, is down about 4.3% this week, among Asia’s worst performances. A recovery in the Southeast Asian nation’s stocks from the market plunge triggered by the pandemic has been hampered by the economy’s integration with global trade and supply chains, and a lack of technology shares in the index. More than 80% of Singapore’s benchmark is made up of cyclical equities — the most among regional peers.

6. German economy will shrink 5.5% this year

Europe’s largest economy will likely shrink by 5.5% this year, the German Economy Ministry said on Friday, before expanding by 4.4% in 2021. The German economy has taken a thrashing from the coronavirus pandemic this year and a circuit-breaker lockdown is due to come into effect nationwide on Monday in a bid to curb a surge in infections. The ministry’s new 2020 forecast would still mean Germany is in one of the worst recessions of the post-World War Two era this year but means it is not faring as badly as during the 2009 global financial crisis.

7. U.K. Accelerates Reviews of Pfizer and Astra-Oxford Vaccines

The U.K.’s drug regulator has started accelerated reviews of Covid-19 vaccines under development from Pfizer and AstraZeneca as Britain gets ready to approve the first successful shot as quickly as possible. The U.K. Medicines and Healthcare Products Regulatory Agency started a so-called rolling review of the Pfizer vaccine in recent weeks. The agency is also conducting an expedited review of Astra’s vaccine, which the company is co-developing with the University of Oxford. Rolling reviews allow regulators to see clinical data in real time and have discussions with companies about ongoing trials and manufacturing processes so that approvals can be granted more quickly.

8. Exxon Mobil to lay off 1,900 US employees

Exxon Mobil Corp said on Thursday it will lay off about 1,900 employees in the United States as the COVID-19 pandemic batters energy demand and prices. Exxon was once the largest US publicly-traded company but has been cutting costs due to a collapse in oil demand and ill-timed bets on new oil-fields and expansions. It has promised to shed more than $10bn this year in project spending and cut operating expenses by 15%. The company lost nearly $1.7bn in the first six months of the year and is expected to post another quarterly loss on Friday. Exxon said the job cuts, part of a global reorganisation, will come mainly from its Houston, Texas office and will include voluntary and involuntary cuts.

9. Air France-KLM warns of bigger losses amid lockdowns

Air France-KLM unveiled a $1.24 billion (INR 9200 cr) quarterly operating loss and warned of worse to come as a resurgent coronavirus brings new travel curbs. The Franco-Dutch airline group reported a 67% drop in Q3 revenue, as France returned to full lockdown for at least a month. New COVID-19 outbreaks pose a threat to network airlines already weakened by the crisis and long-haul travel collapse.

10. Japan Airlines forecasts over $2.3 billion annual net loss as pandemic grounds air travel

Japan Airlines said it had forecast an annual net loss of more than $2.3 billion (INR 17,100 cr) after the coronavirus pandemic grounded air travel around the world. The air carrier is Japan’s second-largest by market share. It did not issue annual forecasts when it published first-quarter earnings in August, citing deep uncertainty surrounding the pandemic. The company reported a 74% reduction in sales and plans to slash 3,500 jobs through a hiring freeze, while also deciding to stop hiring for next year.