Coronavirus: Digest of business-focussed articles from national and international media, selected by George Hamilton. Some may require a subscription to obtain the full version (paywall).
HEADLINES: Reuters says China economy to recover soon
But car makers, luxury goods, airlines, oil in difficulties
Nissan profits plunge 83 per cent
Black swan coronavirus casts its shadow over the global economy
With the coronavirus outbreak spreading far beyond its source in China, companies are braced for a hit on profits as demand slumps and production is disrupted in the world’s second largest economy and beyond.
Airlines The virus has prompted 21 airlines to cancel all flights to mainland China, including Delta, United, Qantas and Air France/KLM.
Factory shutdowns Data company Dun & Bradstreet say an estimated 5 million companies have Chinese suppliers – from Apple, whose supplier Foxconn postponed the reopening of its Shenzhen factory, to food companies Kraft Heinz and PepsiCo, which have closed Chinese factories.
The outbreak could barely have come at a worse time for struggling carmakers. Wuhan is a major centre of automotive manufacturing.
France’s Renault and Peugeot, Germany’s Volkswagen and BMW, as well as Jaguar Land Rover, Britain’s largest carmaker, have still not reopened factories run with Chinese partners. Honda on Saturday postponed the reopening of its Wuhan plant for another week, while Hyundai has shut its huge factory in Ulsan, South Korea, for lack of parts.
JCB, one of the UK’s biggest private companies, has said it would cut back production because the virus has shut down a quarter of its suppliers in China. Fiat Chrysler warned production in Europe could be threatened within a fortnight. Nissan has already paused production lines at its Japanese plants.
Banks and insurers The impact on some of the big banks operating in and around China will be made clearer this week as they unveil first-half results. Analysts at Morgan Stanley expect them to be “very weak” as a result of a rapid slowdown in loan growth and a reduction in fee income.
China accounted for more than three-quarters of growth in global demand for oil last year, according to the International Energy Agency, which expects demand to fall this quarter for the first time in more than a decade.
Observer 16 Feb
Chinese economy clobbered by coronavirus but set to recover soon: Reuters poll
However, economists were optimistic the economy would bounce back as soon as the second quarter, with growth then forecast to recover to a median 5.7%, according to the poll.
https://apple.news/A4loGmPitR-
Reuters 14 Feb
‘Nissan’s profits plunge 83% and the coronavirus threatens its turnaround plans
https://edition.cnn.com/2020/
CNN Business 13 Feb
