Briefing
iUS faces shortage of medics
The US is facing an acute shortage of medical staff
to fight the virus and lacks a central plan to deploy
doctors and nurses to the hardest-hit states, even as
hospital beds and supplies are ramped up.— PAGE 4iItalian regions’ fortunes contrast
Dramatically lower death rates in the Italian region
of Veneto than in neighbouring Lombardy have led
to suggestions that the latter’s early hospitalisation
of patients helped spread the coronavirus.— PAGE 2iPutin tries to keep a low profile
Russian president Vladimir
Putin has tried to distance
himself from unpopular
lockdowns, leaving the Moscow
mayor and regional governors
to take the lead.— PAGE 3iTrump presses India for malaria drug
Donald Trump has called on India to loosen export
restrictions on hydroxychloroquine, an
antimalarial drug identified as a potential, though
unproven, treatment for Covid-19.— PAGE 4iVenezuela alleges coup plot
Venezuela has claimed one of its former generals
and the US were involved in a plot to overthrow the
country’s ruler, Nicolás Maduro, after a truckload of
weapons was seized in Colombia.— PAGE 4iHSBC faces storm over lost dividends
Hong Kong investors are threatening to sue HSBC
over lost dividends after UK regulators pressed the
Asia-focused bank to suspend payouts to help
conserve capital during the pandemic.— PAGE 6iFed balance sheet to hit $9tn
The US Federal Reserve will see its balance sheet
top $9tn by the end of the year, or more than 40 per
cent of US gross domestic product, because of
measures to prop up the crisis-hit economy.— PAGE 6Datawatch
EU’s last chance
Unless a true union is forged now, it
will die— LUIGI ZINGALES, PAGE 17
Food insecurity
Nations follow consumers in the
race to stockpile grain— PAGE 3
Is it game over?
Sport battles to survive worldwide
shutdown— BIG READ, PAGE 15
MONDAY 6 APRIL 2020 WORLD BUSINESS NEWSPAPER ASIA
World Markets
STOCK MARKETS
Apr 3 Mar 27 %Week
S&P 500 2488.65 2541.47 -2.
Nasdaq Composite 7373.08 7502.38 -1.
Dow Jones Ind 21052.53 21636.78 -2.
FTSEurofirst 300 1219.38 1223.66 -0.
Euro Stoxx 50 2662.99 2728.65 -2.
FTSE 100 5415.50 5510.33 -1.
FTSE All-Share 2958.40 3021.89 -2.
CAC 40 4154.58 4351.49 -4.
Xetra Dax 9525.77 9632.52 -1.
Nikkei 17820.19 18664.60 -4.
Hang Seng 23236.11 23352.34 -0.
MSCI World $ 1803.07 -
MSCI EM $ 838.53 -
MSCI ACWI $ 431.28 -CURRENCIES
Apr 3 Mar 27
$ per € 1.080 1.
$ per £ 1.226 1.
£ per € 0.881 0.
¥ per $ 108.505 108.
¥ per £ 133.016 133.
SFr per € 1.056 1.
€ per $ 0.926 0.Apr 3 Mar 27
£ per $ 0.816 0.
€ per £ 1.135 1.
¥ per € 117.170 119.
£ index 78.082 74.
SFr per £ 1.198 1.COMMODITIESApr 3 Mar 27 %Week
Oil WTI $ 28.91 21.95 31.
Oil Brent $ 34.93 25.10 39.
Gold $ 1616.80 1634.80 -1.INTEREST RATES
price yield chg
US Gov 10 yr 0.57 -0.
UK Gov 10 yr 0.31 -0.
Ger Gov 10 yr 104.35 -0.44 0.
Jpn Gov 10 yr -0.01 0.
US Gov 30 yr 134.54 1.21 -0.
Ger Gov 2 yr 105.28 -0.68 -0.price prev chg
Fed Funds Eff 1.58 1.55 0.
US 3m Bills 0.09 0.09 0.
Euro Libor 3m -0.24 -0.25 0.
UK 3m 0.64 0.57 0.
Prices are latest for edition Data provided by MorningstarDAV I D S H E P PA R D A N D
D E R E K B R OW E R— LONDON
H E N RY F OY— MOSCOWA global deal to end the oil price war
risks unravelling after the US threat-
ened tariffs on Saudi Arabia and Rus-
sia, and producers traded barbs over
responsibilityforthemarketcrash.US and Canadian officials have dis-
cussed imposing tariffs on Saudi Ara-
bian and Russian oil imports if the two
countries cannot quickly reach a deal to
cutsupplies.
The two producers launched a
market-share war last month that wors-
enedapricecollapsecausedbythecoro-
navirus pandemic, which has cut oil
consumptiongloballybyaboutathird.
Riyadh and Moscow have insisted
that other big producers, including the
US and Canada, join in any new produc-tion cuts they make, but US president
Donald Trump appeared more likely to
go on the offensive than to accept their
demands. Hopes for a deal sent oil
prices up almost 40 per cent to above
$30 a barrel at the end of last week,
though they remain less than half the
levelofearlyJanuary.
“I’ve been against Opec my whole
life,” Mr Trump said at the weekend. “I
think they’re going to settle [the dis-
pute], because they’ll be destroying
themselvesiftheydon’t.”
Mr Trump warned he would do
“whatever I have to do” including tariffs
on imports. He has also hinted US mili-
taryaidtoSaudiArabiacouldbeatrisk.
The president’s comments damped
hopes that he would back plans by some
US shale producers to cut output in col-
laborationwithOpec.
But the prospect of Saudi Arabia andRussia reaching a deal has in any event
dimmed after a war of words erupted
betweenthetwocountries.
Saudi Arabia has accused Russia of
“falsifying facts” in claiming Riyadh
pouredmillionsofextrabarrelsofcrude
on to the market to harm the US shale
industry. Saudi Arabia blames Russia
for refusing to cut production at a meet-
ingoftheOpec+groupamonthago.
While Russian president Vladimir
Putinhassaidadealtocut10mbarrelsa
day of supplies is possible, Moscow con-
tinued to needle Riyadh yesterday. Mr
Putin’sspokesmanhighlightedtheking-
dom’sattemptstodiscountitscrudeand
raise production by an “unprece-
dented” amount. A producer meeting
on the proposed cuts has been delayed
untilThursday.
Market Questionspage 8
Editorial Commentpage 10Saudi-Russia squabble over oil crash
prompts threat of tariffs from Trump
AnalysisiPAGE 7Son faces uphill battle to
restore faith in SoftBankAustralia A$7.00(inc GST)
China RMB
Hong Kong HK$
India Rup
Indonesia Rp45,
Japan ¥650(inc JCT)
Korea W4,
Malaysia RM11.
Pakistan Rupee 350
Philippines Peso 140
Singapore S$5.80(inc GST)
Taiwan NT$
Thailand Bht
Vietnam US$4.© THE FINANCIAL TIMES LTD 2020
No: 40,367★
Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, Doha
SubscribeIn print and online
http://www.ft.com/AsiaSubs
Tel: (852) 5803 3388
Fax: (852) 2905 5590
email: [email protected]
Coronavirus has
been recorded
across almost all
African countries,
raising fears that
stretched health
systems could be
strained further. A
ray of hope is its
youthfulness, as
the young are
typically less at
risk of dying from
infection.Africa’s youth
of the population by age in -
-
-
-
-
-
-
-
Africa EuropeSource: UNHope springs
Europe shows
positive signs
A woman wearing a protective mask
takes a selfie among the cherry blos-
somsyesterdayinBonn.
Across Europe, there were hopeful
signs over the weekend that the spread
ofthedeadlycoronaviruswasbeginning
to slow. A number of countries reported
tentative progress over the weekend,
withthenumberofdeathsperdaydrop-
ping in Spain and the Netherlands,
while the number of people needing
intensivecarefellinBelgium.
Those signs of improvement have
opened up discussion across the conti-
nent over how and when some of the
current lockdown measures, which
have now been in place for several
weeks,mightbeeased.
Coronavirus news & analysispages 2-
Sascha Steinbach/EPA-EFE/Shutterstock
M A RT I N A R N O L D— FRANKFURT
Financial regulators have freed up
about $500bn of capital for lenders
around the world to help them absorb
the impact of the Covid-19 pandemic,
according to calculations by the Finan-
cialTimes.
By relaxing capital requirements in
the past weeks, central banks have tried
to keep credit flowing to businesses and
households and mitigate the economic
turmoilcausedbymassquarantinesput
inplacetoslowthespreadofthevirus.
Data released last week show the glo-
bal economy is already on track for its
sharpest slowdown since the Great
Depression, while millions of people
aroundtheworldhavelosttheirjobs.
The FT has counted $492bn in capital
relief by central banks and regulators
from Washington to Hong Kong, which
hasmostlycomefromcuttingextracap-
ital buffers that were designed to
strengthen lenders’ balance sheets after
the 2008 crisis. The freed-up capital
provides lenders with the capacity to
makeanextra$5tnofloans.
Some regulators have ordered banks
to conserve capital by freezing divi-
dendsandreininginbonuses,whileoth-
ers have postponed the introduction of
tougher capitalisation rules or provided
temporary exemptions in the calcula-
tionofcapitalrequirements.
The moves highlight how policymak-
ers hope that banks will play a more
constructiverolethaninthe2008finan-
cial crisis, when they were blamed for
being the source of many of the prob-lems. This time they are seen as a vital
“transmission mechanism” for the tril-
lions of dollars in aid governments have
unleashedtosavetheglobaleconomy.
“In a way, the banking sector has sud-
denly been transformed from a nomi-
nally capitalist enterprise into effec-
tively a state entity,” said Nicolas Véron,
a senior fellow at Bruegel, a Brussels-
based think-tank, and the Peterson
Institute for International Economics.
“It’stemporary,butitissignificant.”
While central bankers are confident
that the banking system is in much bet-
ter shape than during the 2008 crisis,
they are worried that the economic
downturncouldbeamplifiedifthereisa
pullback from lending to companies
andindividualstoconservecapital.
Bank capital is made up of sharehold-ers’ equity and retained earnings and is
used to absorb losses while staying
solvent, making it a crucial measure of a
bank’sfinancialstrength.
By allowing banks to operate with
lower levels of capital, regulators are
boosting their firepower to absorb
higher demand for loans as well as a rise
incustomerdefaultsandadeterioration
increditqualityintheirloanbooks.
“The key dynamic for banks in this
coronavirus crisis is duration,” said
Joseph Dickerson, banking analyst at
Jefferies. “It is unlikely that any banks
will need to raise more capital from
investors if it is resolved by the summer.
But if it drags on to the autumn, that is
goingtobeabiggerproblem.”
Investors threaten HSBCpage 6
Andrew Baileypage 17Relaxation of capital rules adds
$500bn to banks’ virus armoury
3 Bid to keep credit lines flowing 3 Lending capacity raised by $5tn 3 Dividends frozen
Christine
Lagarde,
ECB president,
last month
eased capital
requirements
for banks,
freeing up
€120bn across
the eurozoneAPRIL 6 2020 Section:FrontBack Time: 5/4/2020 - 18:52 User: jeremy.wright Page Name: 1FRONT USA, Part,Page,Edition: ASI, 1, 1