VIRUS DISEASES – CHINA

Chinese economy takes a record hit

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Original article by Will Glasgow, Geoff Chambers
The Australian – Page: 1 & 6 : 2-Mar-20

The impact of the coronavirus on China’s manufacturing sector has been highlighted by the nation’s latest purchasing managers index data. The index fell from 50 to just 35.7 in January, and it is now below the levels recorded at the height of the global financial crisis. The virus outbreak resulted in the temporary closure of factories across China, and while some have resumed production, many remained closed. China’s economic growth slowed to 6.1 per cent in 2019.

CORPORATES

Global pandemic upon us: PM

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 28-Feb-20

The coronavirus outbreak has not yet been declared a global pandemic by the World Health Organization, but the federal government believes it is only a matter of time. Only 23 Australians have contracted the virus to date, and eight of them were on the cruise ship ‘Diamond Princess’; however, Prime Minister Scott Morrison says the nation needs to prepare for a pandemic. The government has advised that it will provide ‘targeted’ financial assistance to sectors that have been affected by the coronavirus, such as education, tourism, exporters and small business. This may further jeopardise the prospect of a Budget surplus for 2019-20.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

APRA probes bank, insurer virus plans

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Original article by Michael Roddan
The Australian – Page: 17 & 26 : 28-Feb-20

The Australian Prudential Regulation Authority has not updated its guidelines on pandemics since 2013, but the coronavirus outbreak has prompted it to activate Prudential Practice Guide CPG 233 – Pandemic Planning. APRA has asked financial institutions such as banks, insurers and superannuation funds to demonstrate that they are sufficiently prepared for a global pandemic. Westpac has responded to the outbreak by imposing a ban on employees travelling to China for business purposes, while AMP is requiring some employees in coronavirus epicentres to work from home.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP

Everyone will get the virus

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Original article by Geoff Chambers, Natasha Robinson
The Australian – Page: 1 & 6 : 28-Feb-20

The global death toll from the coronavirus outbreak has risen to 2,814, and more than 82,000 people worldwide have been diagnosed with the respiratory illness. The federal government has responded to the growing crisis by extending its ban on direct travel from mainland China for another week, while it recently activated an emergency response plan. Meanwhile, Professor Ian Mackay from the University of Queensland doubts that the coronavirus can be contained and warns that it will most likely become endemic. He adds that most people will become infected with the coronavirus at some stage, and for most people the symptoms will be no worse than a bad head cold.

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UNIVERSITY OF QUEENSLAND

Coronavirus to hit budget and income growth

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Original article by Matthew Cranston
The Australian Financial Review – Page: 5 : 28-Feb-20

Modelling by Deloitte Access Economics suggests that the coronavirus could see growth in national income fall from 6.4 per cent to just two per cent in the first half of 2020. This would have a $5.9bn impact on the domestic economy, with the tourism and education sectors being particularly hard hit. Meanwhile, economists have downgraded their GDP growth forecasts for the December quarter after data showed that there was a 2.8 per cent decline in capital expenditure during the period. Economists had expected growth of 0.5 per cent.

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DELOITTE ACCESS ECONOMICS PTY LTD

Airlines set for worst since GFC

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Original article by Lucas Baird
The Australian Financial Review – Page: 19 : 27-Feb-20

CAPA-Centre for Aviation chairman Peter Harbison says the coronavirus will have a major impact on the global aviation sector if it is not contained quickly. He warns that if the virus outbreak becomes a pandemic, it will have the biggest impact on aviation since the global financial crisis. The International Air Transport Association estimates that the coronavirus will reduce the earnings of Asia-Pacific airlines by $US27.8bn in 2020.

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CAPA – CENTRE FOR AVIATION, INTERNATIONAL AIR TRANSPORT ASSOCIATION

‘It’s coming – it’s just how long it takes to come’

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Original article by Marnie O’Neill
abc.net.au – Page: Online : 27-Feb-20

The global death toll from the coronavirus has risen to 2,770, and more than 81,000 people worldwide have been diagnosed with the respiratory illness. There have been 23 confirmed cases in Australia, but Associate Professor Ian Mackay from the University of Queensland warns that it is only a matter of time before the nation experiences a major outbreak of the coronavirus. He adds that Australians should stock up on essentials such as batteries, toilet paper and canned food, but he stresses that there is no need for panic buying. Professor Mackay believes that a pandemic is inevitable.

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UNIVERSITY OF QUEENSLAND

What’s our strategy for slump in wake of virus?

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Original article by Robert Gottliebsen
The Australian – Page: 25 : 26-Feb-20

Research by Roy Morgan shows that one-in-six Australian businesses have already been impacted by the coronavirus outbreak. This includes sectors of the economy that are among the biggest employers, such as manufacturing and education. However, small and medium enterprises are likely to be hardest hit by the economic fallout from the virus. The federal government is therefore to be commended for proposing to require large companies to pay suppliers more promptly. At present, the proposed legislation only applies to businesses with turnover of up to $10m, but it should be expanded to include medium-sized businesses.

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ROY MORGAN LIMITED

Blow to trade far larger than Trump

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Original article by Tony Boyd
The Australian Financial Review – Page: 1 & 16 : 26-Feb-20

BlackRock CEO Larry Fink says the coronavirus outbreak has highlighted the dangers of being too dependent on China for imported goods, and companies will need to diversify their supply chains. He also expects the coronavirus to have a greater impact on international trade than the tariff war that was initiated by President Donald Trump. Fink adds that rather than relying on the monetary policy measures of central banks, governments will need to pursue fiscal stimulus if the coronavirus affects global economic growth.

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BLACKROCK INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Earnings shredded as virus fears bite

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Original article by Eli Greenblat, David Rogers
The Australian – Page: 17 & 24 : 26-Feb-20

The coronavirus outbreak has become a major theme for the February reporting season, with a growing number of listed companies issuing earnings downgrades due to the impact of the virus. Treasury Wine Estates, Blackmores and Seek are among the latest companies to issue profit warnings; Treasury has downgraded its earnings expectations for the third time in 2020. Meanwhile, retail group Mosaic Brands had advised that its dividends have been put on hold until the impact of the coronavirus becomes clear.

CORPORATES
TREASURY WINE ESTATES LIMITED – ASX TWE, BLACKMORES LIMITED – ASX BKL, SEEK LIMITED – ASX SEK, MOSAIC BRANDS LIMITED – ASX MOZ