A senior European Central Bank official signaled Monday that the bank
was prepared to cut interest rates or buy assets to support the
eurozone economy against the impact of the coronavirus, a shift in tone
that suggests mounting concern in Frankfurt over the widening economic
fallout.
Speaking in London, ECB Vice President Luis de Guindos warned that
the spread of the virus could hurt the eurozone’s exports to China, a
major overseas market, while disrupting businesses’ supply chains and
curbing demand for services in Europe.
“We remain vigilant and will closely monitor all incoming data. The
Governing Council stands ready to adjust all its instruments, as
appropriate, to ensure that inflation moves towards its aim in a
sustained manner,” Mr. de Guindos said.
Investors are watching closely for how the ECB will respond to an
infection that is spreading rapidly through a region already buffeted by
trade wars, geopolitical tensions and messy negotiations around Brexit.
Stock market indexes in Italy and Germany, two of the nations most
affected, have fallen around 15% over the past two weeks, with Italy’s
blue-chip index trading more than 3% lower on Monday.
Mr. de Guindos’s comments echo Federal Reserve Chairman Jerome
Powell, who signaled on Friday that the U.S. central bank was prepared
to cut interest rates to cushion the economy against the effects of the
virus.
Unlike the Fed, the ECB has little room to cut interest rates because
its key rate is already below zero, at minus 0.5%. The ECB also
restarted a controversial bond-buying program in September in an effort
to stimulate the region’s weak economy.
The euro jumped against the dollar in recent days, partly reflecting
diminishing expectations that the ECB will follow the Federal Reserve in
cutting interest rates, analysts said.
Jens Weidmann, the head of Germany’s conservative central bank,
cautioned Friday against any immediate policy move by the ECB, even as
he warned that Germany’s economy would be hurt by the spread of the
virus.
https://www.marketscreener.com/EURO-BRITISH-POUND-EUR-4593/news/ECB-Ready-to-Cut-Rates-Purchase-Assets-to-Offset-Epidemic-Suggests-Official-Update-30094012/
Monday, March 2, 2020
Think-tank report on Uighur labor in China lists global brands
Tens of thousands of ethnic Uighurs were moved to work in conditions suggestive of “forced labor” in factories across China supplying 83 global brands, an Australian think tank said in a report released on Sunday.
The Australian Strategic Policy Institute (ASPI) report, which cited
government documents and local media reports, identified a network of at
least 27 factories in nine Chinese provinces where more than 80,000
Uighurs from the western region of Xinjiang have been transferred.
“Under conditions that strongly suggest forced labor, Uighurs are working in factories that are in the supply chains of at least 83 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen,” the think-tank said in the introduction to its report.
The ASPI report said the transfers of labor were part of a state-sponsored program.
It says the workers “lead a harsh, segregated life”, are forbidden to practice religion, and are required to participate in mandarin language classes.
It also says the Uighurs are tracked electronically and restricted from returning to Xinjiang.
China’s Foreign Ministry on Monday said reports the government had violated the Uighurs’ rights were untrue.
“This report is just following along with the U.S. anti-China forces that try to smear China’s anti-terrorism measures in Xinjiang,” spokesman Zhao Lijian at a regular press briefing on Monday.
The United Nations estimates over a million Muslim Uighurs have been detained in camps in Xinjiang over recent years as part of a wide-reaching campaign by Chinese officials to stamp out terrorism.
The mass detentions have provoked a backlash from rights groups and foreign governments, which say the arbitrary nature of the detentions violates human rights.
China has denied the camps violate the rights of Uighurs and say they are designed to stamp out terrorism and provide vocational skills.
“Those studying in vocational centers have all graduated and are employed with the help of our government,” said the Foreign Ministry’s Zhao, “They now live a happy life.”
PUBLIC SUPPLIER LISTS
The 83 global brands mentioned in ASPI’s report either work directly with the factories or source materials from the factories, it said, citing public supplier lists and the factories’ own information.
One of the factories, O-Film Technology Co Ltd, which has manufactured cameras for Apple Inc’s iPhones, received 700 Uighur laborers as part of the program in 2017, a local media article cited by the report said.
Apple referred Reuters to an earlier statement that said “Apple is dedicated to ensuring that everyone in our supply chain is treated with the dignity and respect they deserve. We have not seen this report but we work closely with all our suppliers to ensure our high standards are upheld.”
Telecoms giant Huawei Technologies Co Ltd [HWT.UL] said it has read the report and is looking into the matter.
“Huawei requires all our suppliers to comply with international labor standards and applicable laws as a condition of doing business with us,” a spokesman said.
The other companies mentioned in the introduction to ASPI’s report – BMW, Gap Inc, Nike Inc, Samsung [SAGR.UL] and Sony Corp did not respond to requests for comment on Monday.
O-Film Technology did not respond to a request for a comment either.
Volkswagen told Reuters in a statement that none of the listed companies is a direct supplier. It said the company holds “direct authority” in all parts of its business and “respects minorities, employee representation and social and labor standards”.
The report said a small number of the brands, including Abercrombie & Fitch Co [ANF.N], advised vendors to terminate their relationships with these companies in 2020, and others denied direct contractual relationships with the suppliers.
ASPI describes itself as an independent think-tank whose core aim is to provide insight for the Australian government on matters of defense, security and strategic policy.
“Under conditions that strongly suggest forced labor, Uighurs are working in factories that are in the supply chains of at least 83 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen,” the think-tank said in the introduction to its report.
The ASPI report said the transfers of labor were part of a state-sponsored program.
It says the workers “lead a harsh, segregated life”, are forbidden to practice religion, and are required to participate in mandarin language classes.
It also says the Uighurs are tracked electronically and restricted from returning to Xinjiang.
China’s Foreign Ministry on Monday said reports the government had violated the Uighurs’ rights were untrue.
“This report is just following along with the U.S. anti-China forces that try to smear China’s anti-terrorism measures in Xinjiang,” spokesman Zhao Lijian at a regular press briefing on Monday.
The United Nations estimates over a million Muslim Uighurs have been detained in camps in Xinjiang over recent years as part of a wide-reaching campaign by Chinese officials to stamp out terrorism.
The mass detentions have provoked a backlash from rights groups and foreign governments, which say the arbitrary nature of the detentions violates human rights.
China has denied the camps violate the rights of Uighurs and say they are designed to stamp out terrorism and provide vocational skills.
“Those studying in vocational centers have all graduated and are employed with the help of our government,” said the Foreign Ministry’s Zhao, “They now live a happy life.”
PUBLIC SUPPLIER LISTS
The 83 global brands mentioned in ASPI’s report either work directly with the factories or source materials from the factories, it said, citing public supplier lists and the factories’ own information.
One of the factories, O-Film Technology Co Ltd, which has manufactured cameras for Apple Inc’s iPhones, received 700 Uighur laborers as part of the program in 2017, a local media article cited by the report said.
Apple referred Reuters to an earlier statement that said “Apple is dedicated to ensuring that everyone in our supply chain is treated with the dignity and respect they deserve. We have not seen this report but we work closely with all our suppliers to ensure our high standards are upheld.”
Telecoms giant Huawei Technologies Co Ltd [HWT.UL] said it has read the report and is looking into the matter.
“Huawei requires all our suppliers to comply with international labor standards and applicable laws as a condition of doing business with us,” a spokesman said.
The other companies mentioned in the introduction to ASPI’s report – BMW, Gap Inc, Nike Inc, Samsung [SAGR.UL] and Sony Corp did not respond to requests for comment on Monday.
O-Film Technology did not respond to a request for a comment either.
Volkswagen told Reuters in a statement that none of the listed companies is a direct supplier. It said the company holds “direct authority” in all parts of its business and “respects minorities, employee representation and social and labor standards”.
The report said a small number of the brands, including Abercrombie & Fitch Co [ANF.N], advised vendors to terminate their relationships with these companies in 2020, and others denied direct contractual relationships with the suppliers.
ASPI describes itself as an independent think-tank whose core aim is to provide insight for the Australian government on matters of defense, security and strategic policy.
https://www.marketscreener.com/APPLE-INC-4849/news/Think-tank-report-on-Uighur-labor-in-China-lists-global-brands-30091938/?countview=0
China Inc thinks outside the box as coronavirus keeps consumers at home
With Chinese consumers hit by quarantine and travel restrictions as well as just wary about venturing out to the shops due to the coronavirus epidemic, companies in the world’s most populous nation are experimenting with new tricks to make sales.
Oil giant Sinopec – keen to get customers back in their cars and help
farmers unable to deliver produce due to roadblocks – launched a new
scheme last month called “zero-touch” vegetable sales at its 6,000 gas
stations in 147 Chinese cities.
Consumers place and pay for orders on the Sinopec mobile app and when they drive up, gas station attendants put the vegetables into their car trunk, eliminating any need for human-to-human contact.
“The coronavirus outbreak has made it difficult for people to shop as before,” said Li Hong, vice president of Sinopec’s convenience store sales division. “Travel demand has been falling, but demand for food is pretty rigid.”
Mengniu Dairy, China’s second largest dairy producer, is racing to add more vending machines to the 10,000 it currently has, saying the epidemic has driven unexpectedly strong demand for the sales channel.
Its system allows customers to order products like milk and yoghurt online which can then be picked up from their local vending machine.
“The virus outbreak has curbed consumption for dairy products as people are unwilling to go to the supermarket,” said Meng Fanjie, head of the company’s Communist Party committee.
The company has also introduced a ‘community wholesale’ initiative, making bulk deliveries to housing compounds and other communities so that the people living there do not need to venture too far out.
“The new retail measures…have helped to bring back some sales and given us bigger market share,” he said, adding that sales as of Feb. 27 had returned to 80% of levels seen in January.
Luckin Coffee, a domestic rival to Starbucks, now also offers deliveries of alcohol-based sterilizers and antibiotic hand soap in addition to caffeinated beverages. It is also stocking its network of vending machines, launched this year, with the sanitizer products.
Liu Xingliang, an independent retail analyst, said, however, that he thought Luckin’s strategy would have only a modest impact. “At best some users will place an order when they buy coffee but nobody is deliberately choosing the Luckin app just to buy sanitizer.”
Consumers place and pay for orders on the Sinopec mobile app and when they drive up, gas station attendants put the vegetables into their car trunk, eliminating any need for human-to-human contact.
“The coronavirus outbreak has made it difficult for people to shop as before,” said Li Hong, vice president of Sinopec’s convenience store sales division. “Travel demand has been falling, but demand for food is pretty rigid.”
Mengniu Dairy, China’s second largest dairy producer, is racing to add more vending machines to the 10,000 it currently has, saying the epidemic has driven unexpectedly strong demand for the sales channel.
Its system allows customers to order products like milk and yoghurt online which can then be picked up from their local vending machine.
“The virus outbreak has curbed consumption for dairy products as people are unwilling to go to the supermarket,” said Meng Fanjie, head of the company’s Communist Party committee.
The company has also introduced a ‘community wholesale’ initiative, making bulk deliveries to housing compounds and other communities so that the people living there do not need to venture too far out.
“The new retail measures…have helped to bring back some sales and given us bigger market share,” he said, adding that sales as of Feb. 27 had returned to 80% of levels seen in January.
Luckin Coffee, a domestic rival to Starbucks, now also offers deliveries of alcohol-based sterilizers and antibiotic hand soap in addition to caffeinated beverages. It is also stocking its network of vending machines, launched this year, with the sanitizer products.
Liu Xingliang, an independent retail analyst, said, however, that he thought Luckin’s strategy would have only a modest impact. “At best some users will place an order when they buy coffee but nobody is deliberately choosing the Luckin app just to buy sanitizer.”
https://www.marketscreener.com/CHINA-MENGNIU-DAIRY-COMPA-1847989/news/China-Inc-thinks-outside-the-box-as-coronavirus-keeps-consumers-at-home-30091996/?countview=0
ECB remaining ‘vigilant’
It’s not quite as dramatic as
the Friday statement by the Fed’s Jay Powell and last night’s similar
action from the BOJ’s Kuroda, but ECB Vice President Luis de Guindos
says Europe’s central bank “stands ready” to act as necessary to combat
any virus-linked slowdown.
It prompts only one question: “Is Lagarde on vacation?”
A quick check on rates finds them falling
throughout the West, except for Italy. The 10-year yield in Germany is
now -0.656% (not a typo), in Spain is 0.28% (not a typo), and in the
U.K. 0.40%. Italian 10-year yields are up another 5.4 basis points to
1.175%. In the U.S., the 10-year yield is threatening to fall below 1%
for the first time ever, currently at 1.06%.
There’s been plenty of chatter over the weekend
about a three-way coordinated central bank move early this week. So far,
it’s only talk.
Italy responds to coronavirus with €3.6B stimulus
The eurozone’s third-largest economy is injecting €3.6B into its economy to mitigate the largest outbreak of coronavirus in Europe.
Tax credits will be introduced for companies that
reported a 25% drop in revenues, as well as tax cuts and extra cash for
the health system.
The package will amount to 0.2% of GDP, and would
come in addition to €900M worth of measures unveiled on Friday for the
most severely hit regions.
FTSE MIB +0.4% to 22,072.
https://seekingalpha.com/news/3547281-italy-responds-to-coronavirus-3_6b-stimulusEagle Pharmaceuticals EPS misses by $0.01, misses on revenue
Eagle Pharmaceuticals (NASDAQ:EGRX): Q4 Non-GAAP EPS of $0.48 misses by $0.01; GAAP EPS of $0.07 beats by $0.14.
Revenue of $48.26M (-13.9% Y/Y) misses by $0.82M.
https://seekingalpha.com/news/3547312-eagle-pharmaceuticals-eps-misses-0_01-misses-on-revenueApplied DNA Sciences up 70% premarket on coronavirus vaccine plan
Thinly traded nano cap Applied DNA Sciences (NASDAQ:APDN) is the latest company to jump on the coronavirus bandwagon. Shares are up 70% premarket on increased volume on the heels of its announcement
that four DNA vaccine candidates will be produced for preclinical
testing using its proprietary PCR-based DNA manufacturing systems.
Majority-owned subsidiary LineaRx will develop the candidates, including one against COVID-19, with Takis Biotech.
https://seekingalpha.com/news/3547323-applied-dna-sciences-up-70-premarket-on-coronavirus-vaccine-plan
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