Middle East Business Telegraph Monitor – April 22

Middle East Business Telegraph Monitor – April 22

The top business/economic stories from the MENA region as reported in the regional and industry press – April 22

Qatar/China – “China State Shipbuilding Corporation (CSSC) and Qatar Petroleum officially signed a RMB20bn($2.86bn) contract for the construction of LNG carriers at CSSC Hudong-Zhonghua Shipbuilding. It is the largest export LNG carrier construction contract a Chinese shipyard has ever received,” Seatrade Maritime News reports.

Russia/OPEC+ – “The Kremlin said on Wednesday that it was too early to draw any conclusions about possible additional steps to stem the slump in oil prices before the global deal agreed by the OPEC+ group takes effect on May 1. Oil prices slumped to less than $16 a barrel on Wednesday, hitting their lowest level since 1999, with the market awash with excess supply as the economic fallout from the coronavirus pandemic continues to hammer demand for fuels,” Reuters/Al-Arabiya reports.

Etihad/Virgin Australia – “Abu Dhabi’s Etihad was unable to provide financial assistance to Virgin Australia as a result of having to deal with its own pressures amid the Covid-19 pandemic, the airline said in a statement. On Tuesday, Virgin Australia – a major partner of Etihad’s – said that it had entered into voluntary administration after the Covid-19 crisis forced it into insolvency,” Arabian Business reports.

Oil Price – “Brent, the international oil benchmark, fell to the lowest level in more than two decades, a day after its US counterpart collapsed into negative territory. Brent, under which two-thirds of the world’s oil is traded, continued its decline from yesterday falling 13.55 per cent to trade at $16.71 per barrel at 11.18am UAE time, however it remains less volatile than West Texas Intermediate, the US benchmark,” The National reports.

Sudan/Food Security – “Food security in Sudan faces new challenges as the government takes restrictive measures on stemming the spread of the novel coronavirus. The measures have greatly affected producers especially those working in the agriculture sector, which represents 44% of the Sudanese economy,” Asharq Al-Awsat reports.

UAE/Etisalat – “Etisalat Group on Wednesday reported a net profit of Dh2.2 billion for the first three months of 2020 (Q1) in their latest financial results, representing a two per cent decrease year on year. The company’s financial results also reported consolidated revenues of Dh13.1 billion, a one per cent increase compared to last year. The group’s revenue in the UAE was down three per cent to Dh7.6 billion, with the company attributing the fall to increased competition and slower economic activities brought on by the COVID-19 pandemic,” Gulf News reports.

Turkey Economy – “Turkey’s economy is expected to contract this year for the first time in over a decade as the coronavirus pandemic slashes output through mid-year, and it’s unlikely to grow again until 2021, a Reuters poll showed on Tuesday. The median forecast of 40 economists was for a contraction of 1.4 percent in 2020, with drops in the second and third quarters of 8.6 percent and 5.3 percent respectively,” Reuters/Arab News reports.

Bahrain – “Bahrain will slash spending by ministries and government agencies by 30% to help the country weather the coronavirus outbreak, a cabinet statement said on Monday after meeting. The Gulf island state’s government will also reschedule some construction and consulting projects in order to keep spending within the 2020 budget and make room for other spending needs emerging as a result of the disease’s spread,” Reuters/Zawya reports.

Iran/S. Korea – “Industrial Bank of Korea, one of South Korea’s largest banks, will pay $86 million to settle US and New York state criminal and civil charges it allowed an illegal transfer of more than $1 billion to Iran that violated US sanctions. Authorities said on Monday that IBK entered a two-year deferred prosecution agreement with the US Department of Justice and a non-prosecution agreement with New York Attorney General Letitia James,” Financial Tribune reports.

Emirates Airline – “Emirates airline looks to set to keep its passenger flights grounded until July at the earliest, according to the latest routes data. While the Dubai carrier is currently operating repatriation flights to select destinations, the latest update on its planned routes show that regular passenger flights have been delayed until at least the start of Q3 this year,” Arabian Business reports.

Maroc Telecom – “Morocco’s main telecommunications company, Maroc Telecom (IAM), reported a 4% growth in total revenue in the first quarter of 2020. IAM’s revenue now stands at MAD 9.3 billion ($911 million), the group said in a press release on Monday, April 20,” Morocco World News reports.

Middle East Business Telegraph Monitor – April 21

Middle East Business Telegraph Monitor – April 21

The top business/economic stories from the MENA region as reported in the regional and industry press – April 21

 

Oil Markets – “The day started like any other gloomy Monday in the oil market’s worst crisis in a generation. It ended with prices falling below zero, thrusting markets into a parallel universe where traders were willing to pay $40 a barrel just to get somebody to take crude off their hands,” Bloomberg/Gulf News reports.

Oil Markets – “US oil prices rebounded above zero Tuesday, a day after futures ended in negative territory for the first time as a coronavirus-triggered collapse in demand leaves the world awash in crude. In afternoon Asian trade, US benchmark West Texas Intermediate for May delivery was changing hands at $1.67 a barrel after closing at -$37.63 in New York,” AFP/The Peninsula reports.

Dubai Expo – “The executive committee of the Bureau International des Expositions (BIE) has unanimously agreed to propose the postponement of Expo 2020 Dubai. The 12-delegate member states agreed to the request from the UAE Government that the global showcase be moved to run from October 1 2021 to March 31 2022, in light of the challenges posed by the current coronavirus pandemic,” Arabian Business reports.

Egypt Gas – “Egypt said it began production from two deepwater gas wells in the Mediterranean with output of 390 million cubic feet of gas and 1,400 barrels of gas condensate per day. The first well, Zohr-17, began production at the mammoth Zohr gas field after the completion of the digging in the field’s southern region, the petroleum ministry said in a statement on Tuesday,” Ahram Online reports.

Egypt Economy – “Egypt has lowered its growth target for fiscal year 2020-2021 to 3.5 percent, down from its original target of 5.8 percent, as a result of the coronavirus outbreak, Minister of Planning and Economic Development Hala al-Saed announced,” Egypt Independent reports.

Iran/Covid-19 – “Iran’s tally of confirmed COVID-19 cases neared 85,000 on Tuesday, as the country continued to report double-digit numbers of deaths, health officials said. Infections from the coronavirus disease rose by 1,297 to reach 84,802 and the death toll increased to 5,297, with 88 new deaths in the past 24 hours, Health Ministry Spokesman Kianoush Jahanpour was quoted as saying by ISNA,” Financial Tribune reports.

Qatar Airways – “Qatar Airways on Tuesday said mid-level employees and above will have their salaries halved for at least three months but that staff would be back paid when the airline could afford it. Partially deferring salaries was a temporary measure that is expected to last for three months starting April, the airline said, though cautioned it could be extended ‘depending on the economic situation,'” Reuters/Al-Arabiya reports.

Emirates Airline – Afraid to catch the coronavirus on the plane? Emirates airline announced on Tuesday that social distancing requirements will now be observed aboard its commercial passenger flights to provide peace of mind to travelers during these uncertain times. All its cabin crew will also wear personal protective equipment (PPE), which includes a safety visor, masks, gloves, and a disposable gown worn over their uniforms,” Zawya reports.

Algeria – Algerians are watching the collapse of oil prices with alarm as the energy markets on which the North African nation relies for most of its export revenues have been plunged into turmoil by the coronavirus crisis.The oil and gas producer has burnt through more than half its foreign currency reserves since 2014, when an earlier oil price rout began, while this year’s budget outlined a 9% cut in spending but was based on oil prices double today’s levels,” Asharq Al-Awsat reports.

GCC Equities – “The UAE and other Gulf equity markets plummeted on Tuesday after an unprecedented fall in the US oil price the previous day. Dubai Financial Market was down 2.3 per cent with 26 out of 28 scrips trading in the negative territory. The decline was led by Dubai Islamic Bank, Emaar Properties, Gulf Navigation, Damac Properties and Amanat,” Khaleej Times reports.

Etihad/Virgin Australia – “Etihad was unable to provide a financial lifeline to Virgin Australia because of the pressures created by the coronavirus pandemic on its own business, the Abu Dhabi-based airline has said. Virgin Australia on Tuesday said it had entered voluntary administration after the COVID-19 crisis forced it into insolvency. The airline is a major codeshare partner of Etihad and a major contributor to stopover travel through Abu Dhabi for long-haul east-west travel,” Arab News reports.

 

Martinez and Aboulafia on Air Travel, Mexico, Globalization and more…

Martinez and Aboulafia on Air Travel, Mexico, Globalization and more…

Two of the finest thinkers on matters globalization and fellow New Silk Road travelers, Andres Martinez and Richard Aboulafia, had a conversation recently about air travel, globalization, the airline industry, Mexico, Covid-19, and more.

The following are some excerpts of the column Andres wrote in Mexico Today

“There is a tendency in the middle of a crisis to yell ‘This changes everything,’” Aboulafia says, “but it very seldom does.” In the immediate aftermath of 9/11, he recalls, plenty of people warned that flying would never be the same. “If they meant we’d no longer be able to take liquids past security, they were right,” he says, but wrong in suggesting that we wouldn’t take to the skies in equal numbers again. Worldwide, 4.3 billion passengers flew in 2018, more than twice as many as 15 years earlier…

 

The Mexican government’s unusual austerity is a source of alarm. Mirroring its refusal to provide meaningful emergency support for other employers across the economy, the López Obrador administration has not rushed to support this strategically important industry (one that employed 1.4 million Mexicans in 2018 and contributed an estimated $38 billion to the economy). 

 

Even before the pandemic, Mexico’s aviation sector was vastly underdeveloped when you consider the country’s demographics, economic potential, and geography. Judging by the state of Mexico’s aviation infrastructure, you would never guess Mexico has bet heavily on trade, integration with the US economy, and tourism for its national development. 

 

“Mexico is many ways the country that aviation forgot,” Aboulafia says.

 

[Mexican President Andres Manuel Lopez Obrador’s] capricious decision to block completion of Mexico City’s desperately needed new airport is a sad case in point.  And now the very survival of some of Mexico’s airlines could be in doubt, particularly if the crisis (defined by both virus and the government’s indifference) lingers past the summer. 

For more on this excellent piece, check out Andres’ column in Mexico Today here.

Eastern Star Aviation Times Weekly – April 21

Eastern Star Aviation Times Weekly – April 21

Virgin Australia – Virgin Australia became the nation’s biggest corporate casualty of the coronavirus, calling in administrators after the outbreak deprived the debt-burdened airline of almost all income. Deloitte will take control of the company, the Brisbane-based airline said in a statement Tuesday. The administrators will be tasked with finding new investors to inject capital, reorganising borrowings or getting a buyer in an attempt to save the business,” South China Morning Post reports.

South African Airways – “Approximately a year ago at the Air Cargo Africa 2019 in Johannesburg, South African Airways’ (SAA) Group CEO Vuyani Jarana (who ended his term on July 31, 2019), shared different contours of the work in progress for saving the terminally ill company to Logistics Update Africa. But the lack of commitment to fund SAA by the government systematically undermined the implementation of the strategy, making it increasingly difficult to succeed. Now, SAA is planning to lay off its entire 4,700 employees, compelling to ground the 86-year-old national carrier,” Logistics Update Africa reports

Virgin Atlantic – “Virgin Atlantic needs government support to survive the coronavirus crisis, the airline’s founder warned today. In a 20 April blog post, Virgin Group founder Richard Branson writes: ‘Together with the team at Virgin Atlantic, we will do everything we can to keep the airline going – but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for,'” FlightGlobal reports.

United Airlines – “United Airlines on Monday reported a $2.1 billion pre-tax loss between January and March, the first U.S. carrier to place a dollar amount on first quarter carnage, a period in which demand went from strong to nearly non-existent within weeks because of a once-in-a-century global pandemic. First quarter generally is weakest for U.S airlines, but United has in recent years been making money, reporting $367 million in profit in the first three months of last year. As recently as January, executives expected another strong quarter, reporting reasonable demand in most markets, including China,” Skift reports.

Airlines Global – “Airlines have been mauled by COVID-19 and the industry has cried out for help from governments to survive a crisis that could cripple a key sector of the economy. As countries closed their borders and resorts shut down for an indefinite period, airlines grounded their planes and furloughed thousands of workers. In early April, global traffic was 80 percent below the same period a year earlier, quashing recent forecasts that the number of airline passengers would double within 20 years with annual growth of three to four percent,” AFP/Le Journal de L’Aviation reports.

China Airlines – “Two of China’s largest airlines have warned of a ‘substantial loss’ for their first-quarter financial results. Both China Eastern and China Southern Airlines flagged the financial hit in their monthly traffic results for March, where they note that even with ‘timely measures’ taken to mitigate the coronavirus outbreak, a financial loss was inevitable,” FlightGlobal reports.

India Airlines –  “India won’t allow commercial flights to operate until it is confident that the coronavirus outbreak is under control, the aviation minister said, piling further pressure on the country’s cash-strapped airlines,” Bloomberg/Gulf News reports.

Aircraft – “The Covid-19 pandemic has emptied the skies of busy traffic, posing an additional challenge to cash-strapped airlines to find enough tarmac space and maintain grounded jets in top shape for an eventual return to service. About 64 per cent of the world’s 26,000 passenger planes are currently grounded, according to data provider Cirium, as the coronavirus devastates air travel demand and unleashes the worst peacetime crisis in the aviation industry’s history,” The National reports.

Malaysia Airways/Air Asia – “Merging money-losing state carrier Malaysia Airlines Bhd with budget airline AirAsia Group Bhd is one of the options to ‘save’ them as the Covid-19 crisis batters the industry, Malaysia’s second-most senior minister Datuk Seri Mohamed Azmin Ali told Reuters on Friday,” Reuters/Edge Markets Malaysia reports.

South African Airways – “Approximately a year ago at the Air Cargo Africa 2019 in Johannesburg, South African Airways’ (SAA) Group CEO Vuyani Jarana (who ended his term on July 31, 2019), shared different contours of the work in progress for saving the terminally ill company to Logistics Update Africa. But the lack of commitment to fund SAA by the government systematically undermined the implementation of the strategy, making it increasingly difficult to succeed. Now, SAA is planning to lay off its entire 4,700 employees, compelling to ground the 86-year-old national carrier,” Logistics Update Africa reports

South African Airways – “Regional carrier South African Airways could be one of the first victims of the storm that has hit the global airline industry as it has been denied any further funding by its government owner. The national carrier must now look for other ways to recover from the coronavirus crisis and a local form of bankruptcy protection. SAA’s external debt is guaranteed by the state in the event of the carrier’s collapse,” Business Day reports.

Etihad Airways – “Abu Dhabi’s Etihad Airways plans to start scheduled passenger services on May 1 under a reduced schedule to remain in place until June 30, subject to the status of United Arab Emirates travel restrictions, the company announced Thursday. Meanwhile, Etihad has revised the launch date of its inaugural service to Vienna from May 22 to July 1. Etihad continues to operate a growing schedule of repatriation flights and special cargo services carrying perishables, pharmaceuticals, and medical supplies. The airline has repatriated nearly 600 UAE nationals on return services,” Aviation International News reports.

Emirates/Covid-19 – “It was only a matter of time. Emirates is now officially the first airline to test passengers for the coronavirus before they board. Though most nations remain in some form of lockdown, and air travel has slowed to a near halt, the company took the reduction in traffic as an opportunity to begin its testing program this week. Beginning with a flight that left from Dubai headed for Tunisia, the first blood tests were administered by the Dubai Health Authority to passengers with results rendered in 10 minutes,” RobbReport reports.

Singapore Airlines – “Covid-19’s grounding of airlines worldwide has ensured that only the fittest and best-supported fliers will survive. With rich government backing, Singapore Airlines Group (SIA) is well-positioned to ride out the turbulence and boost its post-pandemic global market share. Singapore is now estimated to have the world’s largest number of idle aircraft after global travel restrictions forced SIA to ground 96% of its approximately 200-plane fleet on March 23. With infections sharply rising in the city-state and elsewhere, it is unclear when normal operations will resume,” Asia Times reports.

Middle East Airlines – “Middle Eastern carriers are resuming limited passenger flights, using the grounding of airplanes to perform extensive maintenance checks and introducing new airport testing and mask wearing requirements in response to travel restrictions resulting from the COVID-19 coronavirus. Both Emirates and Etihad added more cities to their flight schedules this week, as both carriers have slowly been resuming international flying since the beginning of April. Emirates first received approval from UAE civil aviation officials to start carrying passengers on flights Dubai to London Heathrow, Frankfurt, Paris, Brussels and Zurich, with four flights a week to London Heathrow Apr. 2,” Aviation Today reports.

Ethiopian Airlines – “Ethiopian Airlines on Tuesday announced it had lost $550 million in revenue since January attributable to the coronavirus pandemic. Ethiopian Airlines CEO, Tewolde Gebremariam, said the airlines were forced to suspend passenger flights to 91 international destinations due to the global pandemic,” The East African reports.

Cambodia Aviation – “Vietnam Airlines has sold its 49 per cent stake in national flag carrier airline Cambodia Angkor Air to undisclosed buyers, State Secretariat of Civil Aviation (SSCA) spokesman Sin Chansereyvutha told the Council of Ministers on Thursday. Also included in the sale were five A321 aircrafts with a total liquidation value of $37 million,” The Phnom Penh Post reports.

China Aviation – “Airlines in China reported a total loss of 33.62 billion yuan (US$4.8 billion) in the first quarter as the coronavirus pandemic hit travel demand, the country’s aviation regulator said yesterday. In February, the airlines suffered a record loss of 20.96 billion yuan as large parts of the country remained on lockdown amid efforts to curb the spread of the virus,” Shenzhen Daily reports.

ANA Holdings – “Japanese airline ANA Holdings on Monday slashed its annual net profit forecast by 71 percent over massive falls in demand and major cancellations caused by the coronavirus pandemic.For the past fiscal year to March 2020, the firm said it now expects a net profit of 27 billion yen ($194 million), down from an earlier projection of 94 billion yen,” Japan Today reports.

Garuda Indonesia – “National flag carrier Garuda Indonesia is cutting its employee salaries by 10 to 50 percent from this month to June as the company struggles to stay afloat amid pressures from a broad-based slump in traveling activities. Garuda president director Irfan Setiaputra said the company resorted to salary cuts to maintain business sustainability as the coronavirus pandemic has hit travel-related businesses hard,” The Jakarta Post reports.

Lion Air – “Thai Lion Air is reducing its workforce again amid the freezing of its business due to the coronavirus outbreak in the country. The airline informed its staff in a statement last week that almost 120 employees with less than a year’s experience would be let go on the understanding that they would be the first priority for recruitment in the future if business returns to normal,” Bangkok Post reports.

Overheard in the Caravanserai…Melville’s Moby Dick and the Human Condition

Overheard in the Caravanserai…Melville’s Moby Dick and the Human Condition

The men and women of our humble Caravanserai are catching up on their reading in these Covid-19 times.

Overheard: a veteran seafarer on merchant ships across the oceans was re-reading Herman Melville’s classic, Moby Dick, that great chronicle of 19th century whaling, seafaring and the multitudes of our human condition, and he read aloud these choice quotes to approving members of our New Silk Road tribe…

“Whenever I find myself growing grim about the mouth; whenever it is a damp, drizzly November in my soul; whenever I find myself involuntarily pausing before coffin warehouses, and bringing up the rear of every funeral I meet; and especially whenever my hypos get such an upper hand of me, that it requires a strong moral principle to prevent me from deliberately stepping into the street, and methodically knocking people’s hats off–then, I account it high time to get to sea as soon as I can. This is my substitute for pistol and ball. With a philosophical flourish Cato throws himself upon his sword; I quietly take to the ship.”

“It is not down on a map. True places never are.”

“For there is no folly of the beast of the earth which is not infinitely outdone by the madness of men.”

“Heaven have mercy on us all – Presbyterians and Pagans alike – for we are all somehow dreadfully cracked about the head, and sadly need mending.”

“There are certain queer times and occasions in this strange mixed affair we call life when a man takes this whole universe for a vast practical joke, though the wit thereof he but dimly discerns, and more than suspects that the joke is at nobody’s expense but his own.”

And, after the defeat of Captain Ahab and his crew by the Great White Whale, Moby Dick, the last lines haunt the reader as the ceaseless tide of nature rolls on:

“Now small fowls flew screaming over the yet yawning gulf; a sullen white surf beat against its steep sides; then all collapsed, and the great shroud of the sea rolled on as it rolled five thousand years ago.”

 

Middle East Business Telegraph Monitor – April 18-20

Middle East Business Telegraph Monitor – April 18-20

The top business/economic stories from the MENA region as reported in the regional and industry press – April 18-20

Abu Dhabi – “Abu Dhabi’s economy is ‘well cushioned’ from external shocks such as the coronavirus pandemic and volatility in oil markets, the chairman of the Abu Dhabi Department of Finance said on Sunday. The emirate has also raised $7 billion (Dh25.7bn) through a bond offering which showed strong international demand. It was more than six times oversubscribed, with 90 per cent of orders coming from outside the Middle East, despite concerns about the global economy. Jassim Al Zaabi said this was a sign of investor confidence in the emirate,” The National reports.

Oil Markets – “With markets struggling to digest the steep declines in Brent prices, analysts say it may be time for a different approach when it comes to investing in the so-called liquid gold. And here is why. Measures to contain the virus outbreak have effectively frozen the global economy: planes have been grounded, businesses shuttered and billions of people largely confined to their homes. The need for oil products such as gasoline and jet fuel has evaporated,” Gulf News reports.

UAE/NMC – “BR Shetty, the founder of NMC Health, which was placed into administration by a UK court last week and faces criminal charges, said he flew to India in early February for personal reasons. Mr Shetty told The National when reached by phone on Friday that he left the UAE to Mangalore on February 7 to be with his brother, who had cancer and died earlier this month aged 82…Reports had suggested Mr Shetty fled to India as legal and operational challenges mounted in relation to his companies NMC Health and Finablr, both listed on the London Stock Exchange,” The National reports.

UAE/ADNOC – “An investor group backed by Global Infrastructure Partners (GIP) and Brookfield Asset Management Inc. is seeking a loan of about $8 billion to finance the potential purchase of a stake in Abu Dhabi National Oil Co.’s natural gas pipelines, according to people with knowledge of the matter. The consortium – which also includes Italian infrastructure operator Snam SpA, Ontario Teachers Pension Plan and Singapore sovereign fund GIC Pte – has reached out to banks to gauge their interest in participating, according to the people, who asked not to be identified because the information is private,” Arabian Business reports.

Egypt/Moody’s – “Ratings agency Moody’s has kept Egypt’s credit rating at B2 with a stable outlook.According to a Moody’s report published Saturday, seen by Ahram Online, the credit profile of Egypt (issuer rating B2) is supported by ‘A3’ economic strength. A3 is the seventh highest rating a debt issuer can receive, denoting that Egypt’s financial and banking system is solid with a low risk of default,” Ahram Online reports.

Lebanon Currency – “The exchange rate of the dollar for money exchanges in Lebanon reached a new record on Saturday. Money exchangers sold the dollar for 3,250 Lebanese pounds. Lebanon has never seen that price, even during its civil war in the 1980s. The official price of the dollar in banks remains 1,507 pounds,” Arab News reports.

Iran/Covid-19 – “Iran relaxed more of its restrictive measures on Monday and allowed medium-risk businesses to resume operations, but extended the closure of schools, universities, mosques and holy sites. The coronavirus taskforce, chaired by President Hassan Rouhani, announced on Sunday that medium-risk businesses such as stores can resume operations tomorrow if they respect health protocols devised by the Health Ministry, ISNA reported,” Financial Tribune reports.

Dubai/Banking – “Emirates NBD PJSC set aside about $700 million in the first quarter to cover bad loans, giving investors a glimpse at the damage the coronavirus and lower oil prices are wreaking on bank earnings in the Gulf,” Bloomberg/Al-Arabiya reports.

Saudi FinTech – “The Saudi Arabian Monetary Authority (SAMA) announced that it has permitted nine more FinTech companies to operate in the Regulatory Sandbox, raising the total to 30. The new batch serves SAMA’s effort to promote the digitization of financial services and drive towards digital transformation in the financial sector in line with the requirements and objectives of the Financial Sector Development Program, one of the Kingdom’s Vision 2030 programs,” Asharq Al-Awsat reports.

Turkey Autos – “Most of the Turkish automotive companies are planning to reopen manufacturing plants next week after nearly a one-month-long suspension due to measures to curb the spread of the novel coronavirus. Commercial vehicle producer Anadolu Isuzu, a joint venture between Turkish conglomerate Anadolu Holding, Isuzu Motors and Itochu Corporation, resumed production at its factory in the northwestern industrial province Kocaeli’s Gebze district on April 13. It had halted production on March 30,” Hurriyet Daily News reports.

Morocco/Autos – “French automaker Renault has decided to gradually and partially resume its industrial activity, the company announced today, April 17. Renault Maroc is preparing its two plants in Tangier and Casablanca ‘to adapt and adjust production as the market recovers to meet the demand both in Morocco and abroad,'” Morocco World News reports. 

Lebanon/Bristol Hotel – “A five-star hotel in Beirut that once hosted royalty and survived the civil war has been forced to close over Lebanon’s economic crisis and coronavirus lockdown, its manager said on Saturday. Lebanon is grappling with its worst financial crunch since the 1975-1990 civil war, now compounded by a nationwide lockdown since March 15 to stem the spread of the novel coronavirus,” AFP/Jordan Times reports.

Algeria – “OPEC member Algeria’s gross domestic product grew 0.8% in 2019, down from 1.4% the previous year and far below the government’s initial forecast, the government said on Sunday, after a poor performance in the energy sector and mass public protests. The government had projected 2.6% growth for 2019. Algeria was rocked in 2019 by demonstrations in which protesters demanded political and economic changes and the removal of the ruling elite. The government has now banned such protests as part of measures to limit the spread of the new coronavirus,” Asharq Al-Awsat reports.

East Asia Business Telegraph Weekly – April 19

East Asia Business Telegraph Weekly – April 19

A weekly round-up of leading business/economic stories shaping East Asia from the pages of the regional press – April 19

Asia Growth – “Growth in Asia is expected to stall at zero percent in 2020 due to the COVID-19 pandemic — the lowest growth since the 1960s, the International Monetary Fund said on Wednesday. ‘This is a crisis like no other. It is worse than the Global Financial Crisis, and Asia is not immune,’ Chang Yong Rhee, director of the IMF’s Asia and Pacific Department, said at a virtual press conference. The region’s growth prospect for 2020 is the worst in almost 60 years, including during the Global Financial Crisis (4.7 percent) and the Asian Financial Crisis (1.3 percent), Rhee said,” Xinhua/Shangha Daily reports

South Korea Election – “The ruling bloc achieved a sweeping victory in the general election, Wednesday, winning nearly three-fifths of the 300 National Assembly seats. The landslide win has made the Democratic Party of Korea (DPK), and its ‘satellite’ offshoot Civil Together, an unprecedented political presence that will be able to pass any bill without the cooperation of other parties ― except for constitutional revisions that require a two-thirds majority ― a huge boost for the Moon Jae-in administration,” Korea Times reports

Philippines Economy – “S&P Global Ratings expects the Philippine economy to shrink by 2% this year — a sharp revision from its 4.2% growth estimate given in March — as the world comes to grips with the human and economic price of the novel coronavirus pandemic. The debt watcher had projected a baseline 6% gross domestic product (GDP) growth for the country in December, long before the coronavirus disease 2019 developed into a global health crisis,” Business World reports.

Malaysia Airways/Air Asia – “Merging money-losing state carrier Malaysia Airlines Bhd with budget airline AirAsia Group Bhd is one of the options to ‘save’ them as the Covid-19 crisis batters the industry, Malaysia’s second-most senior minister Datuk Seri Mohamed Azmin Ali told Reuters on Friday,” Reuters/Edge Markets Malaysia reports.

S. Korea Jobs – “Total job losses hit a 10-year high in March, while the number of people on leave jumped by a record in percentage terms, as Covid-19 shuttered factories and stores, forced the clearing of office buildings and laid waste to key industries. According to Statistics Korea on Friday, the number of people employed in March totaled 26.6 million, down 195,000 on year. In May 2009, in the aftermath of the global financial crisis, the number of people losing their jobs totaled 240,000,” Korea JoongAng Daily reports.

China/Sinopec – “Sinopec Oilfield Service expected it will have a net loss of 182 million yuan (HK$199 million) for the first quarter this year, compared with a net profit of 188 million a year ago amid the virus pandemic and a plunge in global oil prices,” The Standard reports.

China Aviation – “Airlines in China reported a total loss of 33.62 billion yuan (US$4.8 billion) in the first quarter as the coronavirus pandemic hit travel demand, the country’s aviation regulator said yesterday. In February, the airlines suffered a record loss of 20.96 billion yuan as large parts of the country remained on lockdown amid efforts to curb the spread of the virus,” Shenzhen Daily reports.

Japan/RCEP – “With the new coronavirus pandemic hindering the progress of talks over what would be the world’s biggest free trade pact, Japan may be forced to give up on its plans of reaching an agreement this year. Tokyo is likely to place a top priority on shoring up the nation’s virus-hit economy for an extended period, which would make it more difficult for Prime Minister Shinzo Abe to promote free trade agreements including the Regional Comprehensive Economic Partnership,” Japan Times reports.

Japan Aviation – “Japan’s top airlines are operating a majority of their domestic capacity even though the coronavirus outbreak has left seats on flights mostly empty, amid a lack of clear government directives on the functioning of transport infrastructure in the crisis. ANA Holdings Inc. and Japan Airlines Co., Ltd. (JAL), Japan’s two biggest airlines, have cut around 90 percent of international flights but left their domestic networks relatively intact, industry data showed. The two normally fly around 800 or more domestic flights daily,” Reuters/Asahi Shimbun reports.

Indonesia/Garuda – “National flag carrier Garuda Indonesia is cutting its employee salaries by 10 to 50 percent from this month to June as the company struggles to stay afloat amid pressures from a broad-based slump in traveling activities. Garuda president director Irfan Setiaputra said the company resorted to salary cuts to maintain business sustainability as the coronavirus pandemic has hit travel-related businesses hard,” The Jakarta Post reports.

Thailand/Lion Air – “Thai Lion Air is reducing its workforce again amid the freezing of its business due to the coronavirus outbreak in the country. The airline informed its staff in a statement last week that almost 120 employees with less than a year’s experience would be let go on the understanding that they would be the first priority for recruitment in the future if business returns to normal,” Bangkok Post reports.

Indonesia/Bonds – “The rupiah has appreciated for the last few days along with foreign capital inflow to government bonds, reflecting a return of investors’ confidence in the country’s financial stability amid the Covid-19 pandemic, Bank Indonesia Governor Perry Warjiyo said on Friday. Rupiah strengthened 1.8 percent to trade 15,503 against the US dollar on Friday, according to Jakarta Interbank Spot Dollar Rate. The currency had gained 4.5 percent so far this week and moved away from its record-low position early this month when it traded at 16,741 against the US dollar,” Jakarta Globe reports.

South Korea Election – “Did South Korea just have the first Covid-19 government referendum election? On Wednesday, South Korea’s liberal ruling party won a landslide victory in a general election, winning the kind of majority not seen inmore than three decades. Early analysis points to the high marks President Moon Jae-in received from his government’s handling of the coronavirus crisis,” The New Silk Road Monitor reports.

China Economy – “China’s economy shrank in the first three months of 2020 compared with a year earlier, the first such contraction since Beijing began reporting quarterly gross domestic product in 1992. The collapse foreshadows the pain expected in the U.S. and around the world as the coronavirus pandemic shuts borders, halts business activity and cripples global supply chains,” Wall Street Journal reports.

Thailand Contraction –  “According to IMF latest projection, Thailand could stand as the worst performer among its Asean peers with a staggering drop of 6.7% of its GDP. Singapore would be the second worst performer with a -3.5% GDP forecast for 2020,” Thailand Business news reports.

Vietnam Banks – Fitch Ratings has lowered the outlook of five banks in Vietnam due to the negative impacts of the coronavirus pandemic. It revised the outlook for Vietcombank, Vietinbank and ANZ Bank (Vietnam) from ‘positive’ to ‘stable,’ and for the ACB and MB from ‘stable’ to ‘negative.’ The revision follows the blows taken by Vietnam’s economy from the pandemic, with a decade-low growth of 3.8 percent in the first quarter, and the State Bank of Vietnam having to cut its policy rates and directing banks to extend debt relief to affected borrowers,” VN Express reports.

Cambodia Aviation – “Vietnam Airlines has sold its 49 per cent stake in national flag carrier airline Cambodia Angkor Air to undisclosed buyers, State Secretariat of Civil Aviation (SSCA) spokesman Sin Chansereyvutha told the Council of Ministers on Thursday. Also included in the sale were five A321 aircrafts with a total liquidation value of $37 million,” The Phnom Penh Post reports.

Singapore Exports – “Singapore’s non-oil domestic exports (Nodx) did the unexpected in March by jumping 17.6 per cent, albeit from a low year-ago base. Economists polled by Reuters were expecting exports to drop 8.9 per cent, with more and more countries enforcing a lockdown due to the Covid-19 outbreak and restrictions to business activity,” Singapore Straits Times reports.

Myanmar Banks – “Thailand’s Kasikornbank is planning to expand into Myanmar’s retail market with a focus on digital services. The Central Bank of Myanmar on April 9 approved the Thai bank’s acquisition of a 35 percent stake in Ayeyarwaddy Farmers Development Bank (A Bank), making it the first foreign commercial bank to take a stake in a local lender. A Bank is the second Myanmar bank to welcome foreign shareholders,” Myanmar Times reports.

Indian Ocean Business Times Weekly – April 17

Indian Ocean Business Times Weekly – April 17

Top business stories from countries across the Indian Ocean region: Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Pakistan, Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, UAE and Yemen. Collectively, they account for 35% of the world’s population and nearly 20% of global GDP.

Malaysia Airways/Air Asia – “Merging money-losing state carrier Malaysia Airlines Bhd with budget airline AirAsia Group Bhd is one of the options to ‘save’ them as the Covid-19 crisis batters the industry, Malaysia’s second-most senior minister Datuk Seri Mohamed Azmin Ali told Reuters on Friday,” Reuters/Edge Markets Malaysia reports.

Thailand Contraction –  “According to IMF latest projection, Thailand could stand as the worst performer among its Asean peers with a staggering drop of 6.7% of its GDP. Singapore would be the second worst performer with a -3.5% GDP forecast for 2020,” Thailand Business news reports.

India Economy – “The Reserve Bank Governor Shaktikanta Das expects a sharp V-shaped recovery for India as projected by the IMF in 2021-22.  Quoting IMF’s projection of 1.9% growth for India in current fiscal, Das said that India is among the handful of countries that will cling on to positive growth. This is the highest in G20 countries as is estimated by the IMF,” Economic Times of India reports.

Singapore Exports – “Singapore’s non-oil domestic exports (Nodx) did the unexpected in March by jumping 17.6 per cent, albeit from a low year-ago base. Economists polled by Reuters were expecting exports to drop 8.9 per cent, with more and more countries enforcing a lockdown due to the Covid-19 outbreak and restrictions to business activity,” Singapore Straits Times reports.

South African Airways – “Regional carrier South African Airways could be one of the first victims of the storm that has hit the global airline industry as it has been denied any further funding by its government owner. The national carrier must now look for other ways to recover from the coronavirus crisis and a local form of bankruptcy protection. SAA’s external debt is guaranteed by the state in the event of the carrier’s collapse,” Business Day reports.

South Africa Economy – “The South African Reserve Bank said on Tuesday that it expects the country’s gross domestic product (GDP) in 2020 to contract by 6.1%, compared with the -0.2% estimated just three weeks ago when the bank’s Monetary Policy Committee (MPC) last met. GDP is then expected to grow by 2.2% in 2021 and by 2.7% in 2022,” The Mail and Guardian reports.

Iran Economy – “The International Monetary Fund (IMF) expects the Islamic Republic’s net debt to reach 33.8 percent of its gross domestic product (GDP) in 2020, up 22.5 percent compared with the previous year. IMF’s report released on Wednesday, April 15, a day after the publication of its World Economic Outlook, says that Iran’s GDP will be about $ 439.2 billion this year. Last year, that figure was nearly $ 491 billion,” Radio Farda reports.

Covid-19 South Asia – “The number of people infected with the coronavirus crossed 22,000 in densely populated South Asia on Friday driven by a rise in cases in India as the tiny Indian Ocean island nation of Maldives locked down its capital. Health officials have warned that the region, home to a fifth of the world’s population, could be the new frontline against the disease because of millions living in packed slums and fragile public health systems,” The Financial Express reports.

Bangladesh Exports – “Apparel exporters shipped goods worth only $194 million during the first half of the current month, down 83.74% from the same month of last year,” Dhaka Tribune reports.

Sri Lanka – “As per the latest findings by the World Bank, Sri Lanka’s economy could contract by as much as 3% this year. The extent to which this would impact businesses however varied from industry to industry, as did the mechanisms that needed to be put in place.
Export Development Board Chairman Prabhash Subasinghe summed up the export industry’s dilemma when he said 2020 earnings forecast for merchandise exports has been reduced by over $7 billion,” DailyFT reports.

Pakistan – “The International Monetary Fund on Thursday said its executive board had approved $1.386 billion in emergency financing to Pakistan to meet balance of payments needed stemming from the novel coronavirus pandemic. The funds, to come from the IMF’s Rapid Financing Instrument, will help Pakistan deal with a decline in international reserves and allow it to fund targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact, the IMF said,” Business Recorder reports.

Pakistan Equities – “The Pakistan Stock Exchange (PSX) on Thursday maintained its bullish trend after the market closed at 31,330 points with a gain of 87 points as compared to 31242.19 points on the last working day. A total of 11 million shares worth Rs4.76 billion exchanged hands despite the indices of PSX traded within a narrow range during an early trade. However, the market capitalisation edged up by Rs 50 billion with a total volume of 119,102,323 shares traded in the market today,” The News reports.

India Coronavirus – “Projections based on a recent analysis by researchers at the United Nations University (UNU) show that, in the worst case scenario, 104 million more people in India could fall below the World Bank-determined poverty line of $3.2 a day for lower-middle-income countries. At present, 60 per cent of India’s population, or an estimated 812 million people, live below that poverty line,” Business Standard reports.

Seychelles – “The World Bank has given Seychelles a $6.9 million line of credit that has been transferred into the country’s international reserves, an official said Friday. The governor of the Central Bank of Seychelles, Caroline Abel, told a news conference that as of Wednesday the country’s reserves stand at $488 million, amongst which $435 million can be used,” Seychelles News Agency reports.

Kenya 2021 – “Things are looking gloomy at the moment, but the good news is that Kenya’s economy is expected to rebound next year when it will grow by 6.1 per cent. However, this might be disrupted by the 2022 campaigns. In a new report, the International Monetary Fund (IMF) predicts that the ‘economic forecasts at this juncture are subject to higher-than-usual degrees of uncertainty,'” The Daily Nations reports.

Abu Dhabi Ports – “Khalifa Port’s CSP Abu Dhabi Terminal in the UAE has celebrated its first anniversary handling over 540,000 teu since its soft launch last April. The UAE – China joint venture terminal between Cosco Shipping Ports and Abu Dhabi Ports also operated for 800,000 hours without loss injury time (LTI). The terminal on a 35-year lease agreement started full operations in November last year and has a design capacity of 2.5m tea annually,” Sea Trade Maritime News reports.

UAE/Africa –  “The United Nations praised the generous support provided by the United Arab Emirates and its humanitarian efforts to transfer medical and protection supplies to the African continent. In a statement distributed in Geneva, in conjunction with the announcement of the launch of the first United Nations air solidarity flight to transport medical supplies to African countries, the World Food Programme (WFP) affirmed that the United Arab Emirates, through the WHO’s regional logistical centre in Dubai, played a major role in preparing and shipping these supplies,” Logistics Update Africa reports.

Tanzania/Covid-19 – “Tanzania has recorded 29 new Covid-19 cases, the highest single-day jump, raising the tally to 88, the health ministry has said. In a briefing on Wednesday, Health minister Ummy Mwalimu said the new patients are Tanzanians hailing from the commercial hub Dar es Salaam, Mwanza City on the shores of Lake Victoria, and  northern Kilimanjaro,” The East African reports.

Africa Jobs – “The coronavirus outbreak could affect a third of the 440 million formal and informal jobs in Africa as lockdowns across the continent deprive people in the world’s poorest continent of the means to make a living, according to McKinsey & Co. Between 9 million and 18 million of the continent’s 140 million formal jobs could be lost as a result of the crisis, McKinsey said in its Finding Africa’s Path report. A further 30 million to 35 million could see a reduction in wages and working hours. One hundred million of the 300 million informal jobs on the continent are at risk, it said,” Bloomberg/Al-Arabiya English reports.

Australia/Covid-19 – “As the coronavirus pandemic continues to spread around the world, some countries’ efforts to slow the spread of infection that have been more successful than others. Both Australia and New Zealand have reported low numbers of coronavirus infections and deaths, compared to other major industrialized countries. As of Friday local time, Australia has reported 6,462 coronavirus cases and 63 deaths, while New Zealand has recorded 1,401 cases and only nine deaths,” Business Insider reports.

GCC Oil/India – “India will divert 19 million barrels of Gulf oil from state-run firms to strategic petroleum reserves (SPRs), skipping direct purchases from producers to help refiners get rid of extra oil as their storage is full, three sources said. India’s decision to divert cargoes meant for state refiners will not soak up excess oil from the market following the demand collapse caused by the coronavirus pandemic, but it will help local companies to avoid demurrage charges at a time of expensive freight,” Reuters/Arab News reports.

Oil Price – “Oil could end the week below $20 a barrel for the first time since 2002 after a wave of gloomy demand forecasts suggested that a deal among the world’s biggest producers to curb output won’t be sufficient to sustain a price rally,” Bloomberg/Gulf News reports.

India Feature – “Each year India celebrates April 5 as National Maritime Day (NMD), when SS Loyalty, the first ship of the Scindia Steam Navigation Company, set sail from Mumbai for the United Kingdom in 1919 and thus created nautical history. The NMD recognises the maritime sector’s contribution to the national economy through the facilitation of trade across the five oceans. While the maritime sector has several stakeholders and players, it is the ‘mariner’ in his merchantman (vessel) that constitutes the cutting edge of ocean trade and provides the connectivity of a several thousand nautical miles,” Hellenic Shipping News reports.

Middle East Business Telegraph Monitor – April 17

Middle East Business Telegraph Monitor – April 17

The top business/economic stories from the MENA region as reported in the regional and industry press – April 17

Abu Dhabi Ports – Abu Dhabi Ports has zoomed into the dry bulk shipping sector, sealing its first bulk carrier acquisition with remote closing via videoconference,” Splash247 reports.

GCC/Coronavirus – “Countries in the Gulf Cooperation Council are stepping up their use of artificial intelligence tools to halt the spread of the coronavirus pandemic. Governments throughout the GCC have enacted some of world’s strictest measures, including suspending passenger flights and imposing curfews on citizens to put brakes on the number of new cases of Covid-19 that currently total over 2 million (2,064,115) globally, according to Johns Hopkins University data,” CNBC reports.

Etihad Airways – “Abu Dhabi’s Etihad Airways plans to start scheduled passenger services on May 1 under a reduced schedule to remain in place until June 30, subject to the status of United Arab Emirates travel restrictions, the company announced Thursday. Meanwhile, Etihad has revised the launch date of its inaugural service to Vienna from May 22 to July 1. Etihad continues to operate a growing schedule of repatriation flights and special cargo services carrying perishables, pharmaceuticals, and medical supplies. The airline has repatriated nearly 600 UAE nationals on return services,” Aviation International News reports.

Lebanon – “Lebanese Prime Minister Hassan Diab on Thursday said that 98 per cent of depositors will be left unscathed by an economic rescue plan that has been criticised because it proposes to use deposits to cover huge losses. A draft plan that emerged last week provided the most detailed blueprint yet on how Lebanon would try to pull itself from a financial crisis that sank its currency and led to a sovereign default,” The National reports.

Saudi/Ramadan – “Saudi Arabia’s Grand Mufti Sheikh Abdulaziz Al al-Sheikh, the highest religious authority in the country, said that Muslim prayers during Ramadan and for the subsequent Eid al-Fitr feast should be performed at home if the coronavirus outbreak continues, Saudi’s Okaz newspaper reported on Friday,” Reuters reports.

Iran Economy – “The International Monetary Fund (IMF) expects the Islamic Republic’s net debt to reach 33.8 percent of its gross domestic product (GDP) in 2020, up 22.5 percent compared with the previous year. IMF’s report released on Wednesday, April 15, a day after the publication of its World Economic Outlook, says that Iran’s GDP will be about $ 439.2 billion this year. Last year, that figure was nearly $ 491 billion,” Radio Farda reports.

Oil Price – “Oil could end the week below $20 a barrel for the first time since 2002 after a wave of gloomy demand forecasts suggested that a deal among the world’s biggest producers to curb output won’t be sufficient to sustain a price rally,” Bloomberg/Gulf News reports.

Saudi Crude/Asia – “Asian refiners have emerged as the big winners from Saudi Arabia’s latest official selling prices for its oil exports, according to energy analysts at WoodMac. Recently announces selling prices for May reflect the importance of Asian customers it said in a report released on Thursday,” AFP/Arab News reports.

OPEC+ – “Saudi Arabia and Russia are prepared to take further measures jointly with OPEC+ and other producers on oil market if deemed necessary, Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman said in a joint statement with his Russian counterpart Alexander Novak after a phone call between the two on Thursday. ‘Our two countries have worked diligently with the other OPEC+ countries and other producers to achieve a historic agreement to stabilize the oil market,’ the statement read according to Saudi state news agency SPA,” Al-Arabiya English reports.

Tunisia – “Tunisia’s foreign currency reserves have risen to 22.3 billion dinars ($7.7 billion), the equivalent of 131 days of imports, official figures showed on Thursday, benefiting from about $1 billion of recent loans and aid to counter the effects of the coronavirus. Foreign exchange reserves were 14.3 billion dinars a year ago, equal to only 83 days of imports, the central bank said,” Asharq Al-Awsat reports.

Africa Jobs – “The coronavirus outbreak could affect a third of the 440 million formal and informal jobs in Africa as lockdowns across the continent deprive people in the world’s poorest continent of the means to make a living, according to McKinsey & Co. Between 9 million and 18 million of the continent’s 140 million formal jobs could be lost as a result of the crisis, McKinsey said in its Finding Africa’s Path report. A further 30 million to 35 million could see a reduction in wages and working hours. One hundred million of the 300 million informal jobs on the continent are at risk, it said,” Bloomberg/Al-Arabiya English reports.

 

South Korea: The First Covid-19 Election?

South Korea: The First Covid-19 Election?

Did South Korea just have the first Covid-19 government referendum election?

On Wednesday, South Korea’s liberal ruling party won a landslide victory in a general election, winning the kind of majority not seen in more than three decades. Early analysis points to the high marks President Moon Jae-in received from his government’s handling of the coronavirus crisis.

As AFP reports, “South Korea’s left-leaning ruling party won a landslide victory in Wednesday’s general election, partial results showed, after the coronavirus pandemic turned the political tide in President Moon Jae-in’s favor.” (emphasis mine)

Governments around the world are facing unprecedented challenges to their institutions and leaders, and societies worldwide are asking a basic question: Is our government competent to handle such a monumental moment? The new divide, it seems to me, is not a left-right one or an authoritarian vs democratic one. Rather it might be competence vs incompetence. President Moon’s administration delivered an impressive response to the Covid-19 pandemic in one of the hardest hit countries.

Again, as AFP reports: “Just a few months ago scandals over power abuse and sluggish economic growth threatened the left-leaning president, with critics calling his dovish approach towards North Korea — despite Pyongyang’s abandonment of its nuclear and ballistic missile test moratoriums — unrealistic.” But “the relatively quick and effective handling of the epidemic — it has also exported test kits to at least 20 countries — has been a boon for Moon ahead of the parliamentary elections, largely seen as a referendum on his performance.”

The piece quoted Minseon Ku from Ohio State University lauding President Moon’s “coronavirus diplomacy,” especially his bilateral phone calls with some 20 leaders worldwide and “South Korea’s global recognition” for its handling of the virus.

Major global crises test the mettle of leaders and institutions and, it seems, South Korean voters have give President Moon and the ruling Democratic Party of Korea high marks.

As governments around the world grapple with the Covid-19 pandemic, their societies are watching and asking: is my government up to the task of handling a major global crisis? The answer to that question will reverberate across politics over the next year and likely far beyond.

For a closer look at South Korea’s elections from domestic and regional media sources, take a look at our round-up.

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