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Sunday, February 2, 2020

India to Cut Taxes, Increase Spending in Bid to Revive Growth

India is cutting income taxes and increasing spending, hoping to resuscitate growth, which has tumbled to a 10-year low in Asia’s third-largest economy.
Some economists and executives, however, warned that some of the measures unveiled over the weekend could end up hurting the economy more than they help it.
In its national budget released Saturday, the government of Prime Minister Narendra Modi said it was delaying plans to rein in the fiscal deficit so it could spend more as the economy needs government help to create jobs for its 1.3 billion people.
“This is the budget to boost [Indians’] incomes and enhance their purchasing power,” Finance Minister Nirmala Sitharaman said at the start of a more than 2 1/2 -hour budget speech Saturday. “Only through higher growth we can achieve that and have our youth gainfully and meaningfully employed.”
In the past year, Mr. Modi has been implementing a series of controversial social measures long on the wish list of the country’s Hindu nationalist groups. Citizens and companies were looking to the budget for signs he has a clear plan to reverse the county’s economic slowdown.
Growth in India’s gross domestic product is likely to dip to a more than 10-year low of 5% or less for the fiscal year ending March 31, according to economists. As India’s working-age population grows by 10 million people annually, that is a disappointing performance for a popular prime minister who came to power promising to make India an economic superpower.
On Saturday the government unveiled a long list of measures to energize consumption and investment. It lowered income taxes and some corporate taxes and pledged more investment in infrastructure, rural development, education and health care.
To accommodate the spending, India decided to miss its own budget-deficit target. It had intended to drop the deficit to GDP ratio to 3.0% in the year beginning this April but now plans to let that rise to 3.5%.
The government said it would try to increase its revenue by selling stakes in state-owned companies, including one of the country’s largest insurance companies, Life Insurance Corp.
Optimists had predicted that in the face of the sudden slowdown — India has seen its GDP expansion rate fall from the fastest in the world for large countries to slower than many peers in Asia — Mr. Modi’s administration might have been more ambitious. They were hoping for even more spending and progress on long-discussed overhauls such as easing restrictions on hiring and land use.
The benchmark Sensex stock index tumbled close to 2.5% in special Saturday trading on budget day, reflecting their disappointment, said Aurodeep Nandi, a Mumbai-based economist with Nomura.
“The markets plunged because they were expecting the budget to be a game changer,” he said. “They were expecting some growth-reviving announcements like massive increase in expenditure, which didn’t happen.”
The Indian auto sector, which is in the middle of its biggest slump with car and motorcycle sales down more than 20% in recent quarters from a year earlier, was hoping for help.
The Indian automobile industry was looking forward to some direct benefits in the budget, which could have helped in reviving demand,” said Rajan Wadhera, president of industry group the Society of Indian Automobile Manufacturers. “The Budget speech was not what we were expecting.”
Some executives were also discouraged by the budget’s bias toward protecting local companies from international competition. The budget included a slew of higher import tariffs on electronics, electric vehicles, toys and other products and repeatedly mentioned the importance of combating the dumping of goods on the South Asian market.
Joining the growing global trend towards protectionism may shelter some less competitive local companies for a while, economists said. But in the long run it may mean India misses a unique opportunity to step up and become an integral part of the global supply chain as the U.S.-China trade war forces manufacturers to look for new bases. More tariffs could also further aggravate already tense trade relations with the U.S.

https://www.marketscreener.com/SENSEX-7426/news/India-to-Cut-Taxes-Increase-Spending-in-Bid-to-Revive-Growth-29929631/

China to inject $174 billion of liquidity on Monday as markets reopen

China's central bank said it will inject 1.2 trillion yuan ($174 billion) worth of liquidity into the markets via reverse repo operations on Monday as its stock markets prepare to reopen amid an outbreak of a new coronavirus.

Chinese authorities have pledged to use various monetary policy tools to ensure liquidity remains reasonably ample and to support firms affected by the virus epidemic, which has so far claimed 305 lives, all but one in China.
The People's Bank of China made the announcement in a statement on Sunday, adding the total liquidity in the banking system will be 900 billion yuan higher than the same period in 2019 after the injection.
According to Reuters calculations based on official central bank data, 1.05 trillion yuan worth of reverse repos are set to mature on Monday, meaning that 150 billion yuan in net cash will be injected.
Investors are bracing for a volatile session in Chinese markets when onshore trades resume on Monday after a break for the Lunar New Year which was extended by the government.
China's stock, currency and bond markets have all been closed since Jan. 23 and had been due to re-open last Friday.
There will be no further delays to the reopening, the securities market regulator said in an interview in the People's Daily newspaper on Sunday.
The China Securities Regulatory Commission (CSRC) said it had taken the decision after balancing various factors, and believed the outbreak's impact on the market would be short term.
To support firms affected by the epidemic, the CSRC said companies that had expiring stock pledge agreements could apply for extensions with securities firms, and it would urge corporate bond investors to extend the maturity dates of debt.
The CSRC is also considering launching hedging tools for the A-share market to help alleviate market panic and will suspend evening sessions of futures trading starting from Monday, it said.
"We believe that the successive introduction and implementation of policy measures will play a better role in improving market expectations and preventing irrational behavior," it told the People's Daily.
China is facing mounting isolation as other countries introduce travel curbs, airlines suspend flights and governments evacuate their citizens, risking worsening a slowdown in the world's second-largest economy.
State news agency Xinhua said on Sunday that China's economy was resilient enough to counter the shock caused by the virus, and said remarks made by a U.S. federal official - whom it did not name - that the virus could bring jobs back to the United States were "self-centered, unprofessional and unethical".
U.S. Secretary of Commerce Wilbur Ross said last week that the virus could force companies to re-evaluate their supply chains, potentially returning some jobs to the United States.
"The remarks only served to taint the U.S. image as a major global player," Xinhua said in the commentary.
"An outbreak of a disease like this could not be the basis for multinational companies to make serious and long-term investment decisions in China...If the Chinese economy slows drastically, the U.S. economy will also suffer."

https://www.marketscreener.com/BANK-OF-CHINA-LIMITED-1412661/news/China-to-inject-174-billion-of-liquidity-on-Monday-as-markets-reopen-29929087/?countview=0

NanoViricides: ‘May Be Significantly Ahead’ On Potential Virus Treatment

Shares of NanoViricides Inc NNVC 40.15%, which is engaged in the creation of special nanomaterials for antiviral therapy, has been seeing upward momentum since the outbreak of coronavirus contagion in the Wuhan province of China.
The company confirmed in a late Thursday release that it’s working on developing a treatment for the novel coronavirus 2019-nCoV aka Wuhan coronavirus.
“Our platform technology enables possibly the most rapid pathway for new drug development against viral diseases,” said Anil Diwan, President and Executive Chairman of NanoViricides.
NanoViricides sought support from governmental and international agencies such as the U.S. CDC, WHO and Chinese CDC for developing these treatments. The company said it intends to seek relevant collaboration for testing its drug candidates soon.
While noting it already has some lead candidate ligands in its chemical library, NanoViricides said it may be already significantly ahead in developing a potential treatment for the Wuhan virus. It also said it has begun preparing for testing less threatful viruses that can help screen its broad-spectrum antiviral drug candidates.
From under $3.50 a share prior to the reporting of the Wuhan virus outbreak, NanoViricide’s stock rallied to a high of $17.77 this week.
The stock surrendered some of the gains but began picking up momentum Thursday on reports of the company working on a cure for the deadly virus that has thus far claimed 213 lives in China and has left about 10,000 infected.
https://www.benzinga.com/general/biotech/20/01/15224649/nanoviricides-we-may-be-already-significantly-ahead-in-developing-potential-wuhan-coronavirus-tre

Amgen Analysts Paused After Q4 Report, Say Valuation Reflects Growth Potential

Amgen, Inc.’s AMGN 4.47% disappointing 2020 EPS guidance issued Thursday spooked investors, leading to a pullback in the stock.

The Amgen Analysts

Wells Fargo analyst Jim Birchenough maintained an Equal-Weight rating on Amgen with a $220 price target.
Mizuho Securities analyst Salim Sayed maintained a Neutral rating and $215 price target.
Baird analyst Brian Skorney downgraded Amgen from Neutral to Underperform and lifted the price target from $173 to $185.
Wells Fargo: Amgen Shares Fully Valued Relative To Growth
Amgen’s fourth-quarter results came in ahead of expectations, although product sales continued to remain sluggish, Birchenough said in a Thursday note.
The analyst said he continues to see headwinds for legacy products on competition and price erosion.
While commending the company on its focus on new products and pipeline, Birchenough expressed skepticism regarding the prospects for a durable response with the KRAS G12C inhibitor AMG510 and competitive positioning of bispecific T-cell engagers in cancer.
“Overall we continue to view Amgen shares as fully valued relative to growth,” the analyst said.

Mizuho Eyes Reasons For Amgen’s Disappointing Guidance

Amgen’s 2020 EPS guidance of $14.85-$15.60 is significantly lighter than the consensus estimate of $16.19 despite revenue guidance of $25 billion-$25.6 billion surrounding the consensus estimate of $25.4 billion, Sayed said in a Thursday note.
Exploring the reasons for the underwhelming guidance, the analyst said Amgen typically guides conservatively at the beginning of the year. Conservatism is the key, especially with a new CFO at the helm, he said.
Amgen said it is reshaping its product portfolio with a focus on driving volume growth, according to Mizuho.
The company may have to spend incrementally on SG&A, Sayed said.
Finally, Mizuho said it sees a disconnect between how the Street and Amgen are modeling share buybacks, especially following the Otezla purchase and the elevated stock price.

Baird: Premium Reflects Unwarranted Enthusiasm

Amgen’s strong execution even in the face of some serious headwinds has been more than reflected in the stock, Baird’s Skorney said in a Friday note.
The company’s market share for Neulasta slipped from 80% in the third quarter to 74% in the fourth quarter, reflecting the entry of several biosimilars, the analyst said.
Neulasta revenues could suffer further as additional biosimilars launch, he said.
Skorney sees AMG 510 and tezeplumab as the backbone of Amgen’s late-stage pipeline, with both programs generating readouts this year.
“While we do not deny there is potential for both of these medications to rapidly grow into multibillion-dollar products, we believe that at the current price AMGN shares reflect this expectation.”
The analyst estimates peak sales of about $2.8 billion for tezepelumab and $2.7 billion for AMG 510.
“The current premium reflects a level of enthusiasm that just isn’t warranted, in our opinion, given the company’s stage of maturity,” Skorney said.
Baird attributed the upwardly adjusted price target to the prospects for AMG 510 and tezepelumab.
https://www.benzinga.com/analyst-ratings/analyst-color/20/01/15227358/amgen-analysts-sidelined-after-q4-report-say-valuation-reflects-growth-potential

Saturday, February 1, 2020

Emerging understandings of 2019-nCoV

“There is an emergency in China, but it has not yet become a global health emergency…WHO is following this outbreak every minute of every day”, said Dr Tedros Ghebreyesus, Director-General of WHO, on Jan 23. A novel coronavirus (2019-nCoV) outbreak is emerging, but it is not yet a Public Health Emergency of International Concern (PHEIC). As we went to press, more than 500 cases have been confirmed in China, as well as in Japan, South Korea, Thailand, and the US. The virus can cause a severe respiratory illness, like SARS and MERS, and human-to-human transmission has been confirmed. These characteristics are driving China’s urgent public health actions, as well as international concern. But much remains unknown. The pieces of the puzzle that is 2019-nCoV are only now beginning to come together.

Today, we publish the first clinical data from individuals confirmed to be infected with 2019-nCoV from Wuhan, China. Chaolin Huang and colleagues provide comprehensive findings for the first 41 laboratory-confirmed cases. 27 of these 41 cases had direct exposure to the Wuhan seafood market that is thought to be the initial site of infection from an animal source. All had viral pneumonia. The severity of illness is concerning: almost a third of patients developed acute respiratory distress syndrome requiring intensive care; six patients died; five had acute cardiac injury; and four required ventilation.

Separately, Jasper Fuk-Woo Chan and colleagues report clinical and microbiological data from a family of six people who had travelled to Wuhan and later presented with pneumonia to Shenzhen Hospital in Guangdong province. Five were identified as infected with 2019-nCoV. Notably, none had been to the Wuhan market, but two had visited a Wuhan hospital. The authors suggest these findings confirm human-to-human transmission. Together, these Articles provide an important initial picture of the clinical spectrum and transmission of this new disease.

In an accompanying Comment, Chen Wang, George Gao, and colleagues describe the early sharing of clinical data from the outbreak and emphasise the urgent need for more information about pathogenesis and viral transmission, as well as the pressing need to develop best supportive care and a vaccine. They also caution against overstating the mortality risk, as early reported case-fatality rates may be high due to bias towards detecting severe cases. As David Heymann reflects in another accompanying Comment, publication of these Articles provides peer-reviewed information urgently needed to refine the risk assessment and response, which are happening in real time.

China has quickly isolated and sequenced the virus and shared these data internationally. The lessons from the SARS epidemic—where China was insufficiently prepared to implement infection control practices—have been successfully learned. By most accounts, Chinese authorities are meeting international standards and isolating suspected cases and contacts, developing diagnostic and treatment procedures, and implementing public education campaigns. Dr Tedros has praised China for its transparency, data sharing, and quick response. Likewise, WHO has reacted fast and diligently. Despite massive attention and conjecture about the level of threat posed by 2019-nCoV, and whether WHO should declare a PHEIC, the agency’s emergency committee has not bowed to pressure to take such a decision until necessary. We commend WHO for its resilience.

There are still many gaps in our understanding. The early experiences of these patients and the response to their symptoms before cases were reported remain undocumented. The exposure and possible infection of health workers remain extremely worrying. We will not know for some time the consequences of the quarantine imposed in Wuhan on Jan 23, 2020. Chinese public health authorities are under enormous pressure to make difficult decisions with an incomplete, and rapidly changing, understanding of the epidemic. The shutdowns may seem a drastic step—whether they represent an effective control measure deserves careful investigation and much will likely depend on maintaining trust between authorities and the local population. News media that worsen fears by reporting a “killer virus“ only harm efforts to implement a succesful and safe infection control strategy.

Openness and sharing of data are paramount. There are enormous demands for rapid access to information about this new virus, the patients and communities affected, and the response. But equally crucial is the need to ensure that those data are reliable, accurate, and independently scrutinised. As for all public health emergencies, we will be making all related Lancet content fully and freely available.

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Published: January 24, 2020

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DOI: https://doi.org/10.1016/S0140-6736(20)30186-0

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https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30186-0/fulltext

Avian Flu in China Adds to Economic Concerns Amid Coronavirus Spread

Chinese authorities announced Saturday a recurrence of avian influenza in chickens in central China, adding fresh economic concerns for a country reeling from an outbreak of coronavirus that has sickened nearly 12,000 people since it emerged in December.
In a sign of the pressure already on China, Australia and Vietnam joined the U.S. and others in distancing their citizens from the country over the coronavirus, while Apple Inc. shut its stores on the Chinese mainland and Beijing pledged more support for embattled businesses.
The avian influenza is likely to add to the economic damage rather than pose a major immediate health risk. China’s Ministry of Agriculture and Rural Affairs said that a case of H5N1 avian influenza, last identified in China in April last year , had killed 4,500 chickens in central Hunan province, prompting authorities to cull another nearly 18,000 birds. But while avian influenza can be fatal in humans, with a mortality rate of 60%, according to the World Health Organization, it doesn’t spread easily to humans.
In addition to the coronavirus, China has been grappling with an outbreak of African swine fever that has decimated the country’s pig population over the past two years. Pork is China’s main source of protein, and swine fever last year pushed overall consumer inflation to the highest level in eight years.
Hunan province, where the avian influenza outbreak announced on Saturday took place, neighbors Hubei province, the epicenter of the coronavirus outbreak.
Australia said that it would impose new entry restrictions in an effort to contain the spread of coronavirus, banning foreign nationals who have been in mainland China in the past 14 days from entering Australia, while Qantas Airways Ltd., the country’s national carrier, said it would suspend flights to the mainland starting Feb. 9.
Vietnam’s civil aviation authority said it would halt all flights to and from Taiwan and China, including the special Chinese territories of Macau and Hong Kong, starting Saturday.
Several countries and airlines have suspended flights to China, including Pakistan, Italy and the U.S.’s American Airlines Group Inc., Delta Air Lines Inc. and United Airlines Holdings Inc.
The move by Australia, which also ordered its citizens returning from China to self-quarantine for 14 days, to tighten entry restrictions followed a U.S. tightening. A day earlier, the U.S. said it would deny entry to foreign nationals who had traveled anywhere in China within the past 14 days and imposed quarantines on Americans returning from Hubei province, whose capital is Wuhan.
The coronavirus has killed 259 people and infected nearly 12,000 in China as of late Friday, according to the official National Health Commission in Beijing. The number of infected patients in China alone now exceeds the global total for severe acute respiratory syndrome, or SARS, which killed nearly 800 people after emerging from southern China in 2002 and 2003.
Authorities in Beijing pledged more support for the economy in a bid to reassure investors before markets reopen on Monday.
Companies and industries in regions hit particularly hard by the outbreak, including those that provide medical supplies, could get reduced lending rates, the central bank said in a joint statement with other government agencies, including the Finance Ministry and the banking regulator.
China’s cabinet said separately that products imported from the U.S. to control the outbreak will be exempt from punitive tariffs through March 31. Authorities also exempted tariffs and other taxes on products donated by overseas entities, according to a joint statement by the Finance Ministry and the customs agency.
Resources are strained in Hubei province, and medical staff have been forced to turn away patients because of a lack of beds and basic medical supplies.
Local authorities in Huanggang, a city about 35 miles east of Wuhan, imposed new restrictions on residents’ movements, saying only one person per household in the city center would be allowed to go out every two days to purchase basic necessities.
Apple is closing all of its retail stores and corporate offices in mainland China until Feb. 9 “out of an abundance of caution and based on the latest advice from leading health experts,” it said. The company operates more than 40 stores in China.
North Korea said through its state media that it would send an aid fund to Chinese authorities, a rare extension of aid from Pyongyang.
North Korean leader Kim Jong Un, in a letter to Chinese President Xi Jinping, “expressed deep consolation for the families who lost their blood relatives due to the infectious disease,” according to a report in Pyongyang’s official Korean Central News Agency.
North Korea — a close ally of China that has long been dependent on China’s largess — was among the first countries to adopt stringent measures to keep the coronavirus outside its borders, and vowed to redouble its efforts.
“The novel coronavirus throws the world into uneasiness and horror, but the advantages and might of our state system…will be fully demonstrated to the whole world once again, when we ensure that the virus does not reach our country and that no one suffers from the infections,” it read.

https://www.marketscreener.com/APPLE-INC-4849/news/Avian-Influenza-in-China-Adds-to-Economic-Concerns-Amid-Coronavirus-Spread-29928965/

China central bank sees temp economic impact from virus, pledges support

China’s central bank said it will use various monetary policy tools to ensure liquidity remains reasonably ample, and added that the broader economic impact from a fast-spreading coronavirus outbreak in the country should be temporary.

In multiple statements issued on Saturday afternoon, the People’s Bank of China (PBOC) said that it will appropriately lower lending rates to support firms affected by virus outbreak.
It added that the impact from the epidemic on the broad economy should be temporary. So far, the virus has claimed the lives of nearly 260 people.
Investors are bracing for a volatile session in Chinese markets when onshore trades resume on Monday after a break for the Lunar New Year which was extended by the government due to the virus outbreak.
The statements from the PBOC were jointly issued with banking and insurance, securities, foreign exchange regulators and the finance ministry.
The virus outbreak will have a short-term and temporary impact on the country’s financial markets, said Cao Yu, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC), in a separate statement made on Saturday.
He also called on banking sector to offer comprehensive credit support to listed companies that might have reasonable funding needs in the wake of disruptions caused by the epidemic.
The efforts to contain the virus have caused major disruptions and threaten to knock growth in China and globally, just when it looked like some relief was in store following the recent preliminary Sino-U.S. trade deal to defuse their protracted tariff war.
Authorities in China had already stepped up support measures last year when growth in the world’s second-biggest economy slumped to a near three-decade low, as demand at home and abroad shriveled.

https://www.marketscreener.com/BANK-OF-CHINA-LIMITED-1412661/news/China-central-bank-sees-temporary-economic-impact-from-virus-pledges-support-measures-29928455/?countview=0

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