Japan's SBI wants to shake up regional banks. It may get a Suga boost

Japanese Prime Minister Yoshihide Suga meets the press at the prime minister's official residence in Tokyo, Japan September 20, 2020. — Kyodo pic via Reuters

TOKYO, Sept 23 — Japanese financial firm SBI Holdings Inc has ambitions to revive struggling regional banks by taking stakes and pushing them into higher-margin businesses — a strategy that may get a boost from the country's new prime minister.

Although regional lenders are dominant outside of Tokyo and other big cities, many are tied to areas where the population is ageing rapidly, and business has been hollowed out. The pandemic has deepened the pain after years of low-margin lending.

Yoshihide Suga has pledged to strengthen local economies and encourage regional banks to consolidate, a shakeup that many say is long overdue.

“If the government is going to focus on revitalising local economies, there absolutely will be a business opportunity in that,” SBI Chief Executive Yoshitaka Kitao said in an interview.

Kitao spoke to Reuters before Suga announced his intention to run as leader of the ruling party to replace Shinzo Abe.

SBI has so far invested in four regional banks, and Kitao says he wants to expand that to 10. The remaining six tie-ups should come by the end of the financial year, he told Reuters.

If Suga pushes to revive local economies, regional banks could benefit, said Natsumu Tsujino of Mitsubishi UFJ Morgan Stanley Securities.

“Under such circumstances, SBI's framework would be more attractive for regional banks, and that could be a tailwind for SBI,” she said.

Close relationship

“There are a lot of regional banks, and some of them don't seem to have changed very much,” Suga told Reuters in an interview last month, while still chief cabinet secretary.

Without prompting, Suga mentioned SBI's CEO, saying: “I hear many regional banks are going to see Mr Kitao.”

The two are close, according to one source. Suga has asked Kitao for help with regional banks, Kyodo news agency reported.

SBI declined to comment on Kitao's relationship with Suga or how the company could benefit under the new administration.

Founded in 1999, SBI was the financial unit of SoftBank Group until the tech firm exited in 2006. SBI owns an online bank, an asset manager and Japan's largest online brokerage.

Kitao says he wants to create the fourth-biggest banking force in Japan, behind “megabanks” such as Mitsubishi UFJ Financial Group Inc.

His strategy is to use regional banks to expand SBI's customer base, said Brian Waterhouse of Windamee Research, who publishes on the Smartkarma platform.

“He is not trying to rescue the banking industry or save regional banks. He sees this as an opportunity to expand his empire,” Waterhouse said.

Smaller cities have plenty of wealthy people, many of whom don't know how to invest, especially in riskier assets with potentially higher returns, Kitao said.

Small banks, big money

Combined net profits of regional banks tumbled 40 per cent in the last four years, according to the country's Financial Services Agency. Yet regional lenders still account for nearly half of all bank deposits in Japan, holding some 368 trillion yen (RM15.2 trillion) in cash deposits, according to central bank data.

For Shimane Bank, in the western part of the main island, SBI's 34 per cent stake has meant a “dramatic change” in how it invests, a spokesman said.

Profits from its securities portfolio improved after it invested with SBI Asset Management, which has connections with global fund managers such as BlackRock Inc, the spokesman said.

Chikuho Bank, on the southern island of Kyushu, has been able to tap an SBI investee company, BASE, to help build e-commerce sites for its customers, something the bank couldn't do itself, a spokesman said.

“The biggest advantage from the alliance has been SBI's connection with technology firms,” the spokesman said. SBI had a 2.9 per cent stake in Chikuho as of March, according to Refinitiv data.

Fukushima Bank, which is 19 per cent owned by SBI, has teamed up with an SBI-owned staffing company to help its customers secure workers.

The bank, a distant third in the prefecture, needs to expand beyond traditional lending, a representative said. As Japan's population falls and market shrinks, some banks may not want to merge, said Windamee's Waterhouse.

“For these banks who are looking for more capital and rescue, Kitao is perhaps the only option at the moment.” — Reuters

Source: Malay Mail

Nike cheers return of pro sports as earnings top expectations

Nike shoes are seen on display in New York March 18, 2019. — Reuters pic

NEW YORK, Sept 23 — Nike shares rocketed higher yesterday after the company reported blowout quarterly earnings on strong digital sales and its CEO cheered the return of pro sports.

The sports giant, which suffered bruising losses in the prior quarter due to the coronavirus pandemic, notched an 82 per cent increase in digital sales in the quarter ending August 31, offsetting lower revenue in its wholesale business and declines in retail stores, where traffic is still down due to Covid-19.

The company experienced big increases among consumers working out on the Nike Training app, while the “Nike Running Club” app has been downloaded more than million times in each of the last four months, said Chief Executive John Donahoe.

“People are more engaged as sort of this movement toward health and fitness, which I think with people being confined to their homes,” Donahoe said on a conference call with analysts.

The company also gave a shout-out to the transformed sports calendar, now jammed after months without pro athletics.

“How cool is it to be able on a weekend to watch literally 10 hours, NBA, NFL, MLB, NHL, football, US Open tennis, a major golf tournament,” Donahoe said. “We are thrilled about that... We think that's good for consumers, and it's ultimately good for Nike.”

“Does that continue?” Donahoe asked. “I say my prayers every night... obviously safety is paramount, and the more you get in a... a less controlled environment, obviously the more challenging that is.”

Net income for Nike's first quarter in fiscal year 2021 was US$1.5 billion (RM6.17 billion) , up 11 per cent from the year-ago period.

Revenues dipped one per cent to US$10.6 billion. The company scored revenue increases in Greater China and Europe/Middle East/Africa, but North American sales declined modestly.

The results were a big improvement from the prior quarter, when Nike suffered a surprise loss following a 38 per cent tumble in year-over-year revenues.

Nike has invested heavily in smartphone applications and other direct-to-consumer initiatives at the expense of conventional retailers following the surge in e-commerce, a trend that has accelerated with the coronavirus.

During the quarter, Nike said its profit margins were pinched by higher promotion spending to reduce excess product inventory and higher supply chain costs.

But results benefited from lower marketing spending due to cancelations or postponement of numerous professional sports events.

The company projects full-year revenues to be up “high single digits to low double digits” compared with last year, said Chief Financial Officer Matt Friend.

It expects profit margins to improve somewhat in the second half of its fiscal year, which ends May 31.

Nike expects pricing of goods to improve in the coming months, but that will still have elevated markdown activity, Friend said.

Shares of Nike jumped 13 per cent to US$132.18 in after-hours trading. — AFP

Source: Malay Mail

US dollar holds gains as virus woes hurt euro and sterling

The greenback is likely to continue to climb higher in the short term as Covid-19 rattles sentiment in Europe. — Reuters pic

TOKYO, Sept 23 — The US dollar held onto gains against major currencies today, supported by positive US economic data and concerns about a second wave of coronavirus infections in Europe and Britain.

The New Zealand dollar is in focus before a meeting later today where the country's central bank is expected to leave its official cash rate at record lows and update its assessment of the economic outlook.

The greenback is likely to continue to grind higher in the short term as the coronavirus rattles sentiment in Europe, but uncertainty about this year's US presidential election means the dollar could be prone to more volatile swings.

“Some people are betting for more dollar strength against the euro, which looks overvalued,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

“The picture in Europe has completely changed, because the economic recovery is stalling and there is a second wave of the virus, but I'm also worried about US politics.”

The US dollar was quoted at $1.1708 per euro today in Asia, close to a two-month low hit in the previous trading session.

The pound bought US$1.2744, near the lowest since late July, after British Prime Minister Boris Johnson unveiled new restrictions on business activity to tackle a second wave of the coronavirus.

The US dollar was quoted at 0.9198 Swiss franc, holding onto a 0.6 per cent gain from Tuesday.

The US currency was little changed at 105.06 yen.

Yesterday the greenback was bolstered by data showing US home sales surged to their highest level in nearly 14 years in August, but comments from a prominent Federal Reserve official sent mixed signals.

The US economy risks a longer, slower recovery and “recessionary dynamics” if Congress fails to pass an additional fiscal stimulus package, Chicago Federal Reserve President Charles Evans said yesterday.

It is possible for the Fed to raise interest rates before inflation starts to average 2 per cent, Evans also said.

The US dollar index, which pits the dollar against a basket of six major currencies, rose 0.4 per cent yesterday to 93.975.

Sentiment for the euro has slowly weakened as investors grow increasingly worried about surging coronavirus infections in countries like France and Spain, raising the risk of lockdowns.

Many euro zone countries have reintroduced travel restrictions, forcing airlines to scale back passenger services after a relatively quick run up over the summer.

Traders in the pound and the euro are also worried that Britain and the European Union will fail to agree a free trade deal, which would cause additional economic strain.

The New Zealand dollar was quoted at $0.6631 ahead of policy decision by the country's central bank today.

The Reserve Bank of New Zealand is expected to hold off on further stimulus but traders want to see how the central bank assesses the impact of the coronavirus.

The Australian dollar held steady at US$0.7172, but the tone was slightly weak after a senior central banker yesterday flagged the prospect of currency market intervention and negative interest rates.

— Reuters

Source: Malay Mail

US existing home sales approach 14-year high, prices scale record peak

A 'for sale' outside a single family house in Garden City, New York May 23, 2016. US home sales surged to their highest level in nearly 14 years in August 2020. — Reuters pic

WASHINGTON, Sept 23 — US home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market.

The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of Covid-19.

Demand for housing is being fuelled by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home.

Federal Reserve Chair Jerome Powell told a congressional panel yesterday that the economy has shown “marked improvement” since plunging into recession in February, though the path ahead remains uncertain.

“The housing market has continued its remarkable recovery amidst an otherwise fraught economy that has been battered by the pandemic,” said John Pataky, executive vice president at TIAA Bank in Jacksonville, Florida.

“However, we should continue to be paranoid about the sustainability of sales. With lack of housing supply, there is an upward pressure on home prices which threatens to detract the benefits accrued from low mortgage rates.”

Existing home sales increased 2.4 per cent to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August's increase in homes sales, which marked three straight months of gains, was in line with economists' expectations.

The median existing house price jumped 11.4 per cent from a year ago to a record US$310,600 (RM1.28 million) in August. Sales last month were concentrated in the US$250,000 to US$1 million and over price range, with transactions below the US$250,000 price band down sharply.

Existing home sales, which account for the bulk of US home sales, jumped 10.5 per cent on a year-on-year basis in August.

The PHLX housing index increased more than 1.5 per cent, outpacing a broadly firmer US stock market. The US dollar rose against a basket of currencies. US Treasury prices were down.

Tight inventory

Though the coronavirus crisis has left nearly 30 million people on unemployment benefits, joblessness has disproportionately affected low-wage workers in the services sector, who are typically young and renters.

Home sales rose in all four regions last month. Demand for housing was skewed toward single-family homes as people sought larger spaces for home offices and schooling. The NAR reckons the migration to suburbs from city centers could become permanent even if a vaccine is developed for the respiratory illness.

Single-family home sales advanced 1.7 per cent in August. While multi-family home sales increased 8.6 per cent, they accounted for 10.5 per cent of sales, down from the 12 per cent that is considered the norm for the housing market.

The 30-year fixed mortgage rate is around an average of 2.87 per cent, according to data from mortgage finance agency Freddie Mac. A persistent shortage of homes for sale and August's double-digit house price inflation growth are red flags.

The shortage is concentrated in the single-family housing segment. Though single-family builders' confidence hit a record high this month and permits for single-family home construction jumped in August to their highest level since May 2007, the supply squeeze is unlikely to ease as fires in the West have boosted lumber prices.

There were 1.49 million previously owned homes on the market in August, down 18.6 per cent from a year ago. At August's sales pace, it would take 3.0 months to exhaust the current inventory, down from 3.1 months in July and 4.0 months a year ago.

A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

“The 11 per cent gain in prices is far above income growth and threatens overall affordability especially for first-time buyers,” said Joel Kan an economist at the Mortgage Bankers Association in Washington. “It's clear that more inventory is needed to keep home prices from rising too quickly.”

Last month, houses for sale typically stayed on the market for 22 days, matching July, but down from 31 days in August 2019. Sixty-nine per cent of homes sold in August were on the market for less than a month. According to the NAR, realtors were reporting multiple bids for houses on the market.

First-time buyers accounted for 33 per cent of sales in August, down from 34 per cent in July 2020, but up from 31 per cent in August 2019. Individual investors or second-home buyers, who account for many cash sales, bought 14 per cent of homes in August. All-cash sales accounted for 18 per cent of transactions. — Reuters

Source: Malay Mail

Libya's NOC says oil output to rise as it seeks to revive industry

A view of the Ras Lanuf Oil and Gas Company in Ras Lanuf, Libya August 18, 2020 — Reuters pic

LONDON Sept 23 — Libya's National Oil Company said it expected oil production to rise to 260,000 barrels per day (bpd) next week, as the Organisation of Petroleum Exporting Countries member looks to revive its oil industry, crippled by a blockade since January.

Oil prices fell around 5 per cent on Monday, partly due to the potential return of Libyan barrels to a market that's already grappling with the prospect of collapsing demand from rising coronavirus cases.

Libya produced around 1.2 million bpd — over 1 per cent of global production — before the blockade, which slashed the Opec member's output to around 100,000 bpd.

The NOC said yesterday it was resuming exports at Zueitina oil terminal, in addition to Marsa El Hariga and Brega terminals, after assessing the security situation at the port and connected fields.

The state-run producer said it was still evaluating other ports and fields.

Eastern Libyan commander Khalifa Haftar said last week his forces would lift their eight-month blockade of oil exports.

But the extent and sustainability of the revival is uncertain. After repeated blockades and security problems, the NOC has said it will only resume operations at facilities devoid of military presence.

Nearly a decade after Nato-backed rebels overthrew dictator Muammar Gaddafi, Libya remains in turmoil, with no central government and rival factions splitting the country between east and west since 2014. Unrest has slashed production capacity from 1.6 million bpd pre-2011.

An escalation of conflict since last year led to a military build-up, including deployment of foreign mercenaries. The NOC wants to ensure that armed groups are not within the inner perimeter of facilities, and decisions on whether to reopen could depend on the level of trust with local groups, an oil industry source in Libya said.

The lifting of the oil blockade has also triggered a political backlash in western Libya, due to concerns that terms announced by the deputy prime minister of the Tripoli-based government will cede some control over oil revenues to rivals in the east.

It is unclear how revenues will be used, pending a political deal to create a unity government.

Oil tankers are expected to begin arriving from today to load crude in storage. The Marlin Shikoku tanker is making its way to Hariga to load a cargo for trader Unipec, according to shipping data and traders.

Goldman Sachs said Libya's return should not derail the oil market's recovery, with an upside risk to production likely to be offset by higher compliance with production cuts from other Opec members.

“We see both logistical and political risks to a fast and sustainable increase in production,” the bank said. It expects a 400,000 bpd increase in Libyan production by December.

Opec and allies led by Russia, are closely watching the Libya situation, waiting to see if this time Libya's return to the oil market is sustainable, sources said. — Reuters

Source: Malay Mail

Biden would end trade war with EU but focus on fixing imbalance in agricultural trade, says adviser

US Democratic presidential nominee Joe Biden speaks during a campaign appearance in Pittsburgh, Pennsylvania August 31, 2020. — Reuters pic

WASHINGTON, Sept 23 — Democrat Joe Biden would end the “artificial trade war” that US President Donald Trump has waged against Europe, while working to address persistent imbalances in agricultural trade between the two blocs, a senior adviser said yesterday.

Tony Blinken told an online event hosted by the US Chamber of Commerce that Biden and Trump had starkly different views regarding Europe, and the former vice president favored a much more cooperative approach on issues such as China, climate and trade.

“The EU is the largest market in the world. We need to improve our economic relations,” Blinken said. “And we need to bring to an end an artificial trade war that the Trump administration has started ... that has been poisoning economic relations, costing jobs, increasing costs for consumers.”

Since taking office, Trump has repeatedly frustrated European leaders through policy decisions such as withdrawing from the 2015 Iran nuclear deal, quitting the Paris climate treaty, and imposing a series of tariffs on EU goods.

If elected, Biden would seek to rebuild strong ties with the European Union, while still working to address problems with allies in the region, including in agricultural trade, Blinken, who served as deputy national security adviser to former President Barack Obama, told the event.

“There is an objective problem, I think, with the EU in terms of a persistent, growing imbalance in agricultural goods trade because of rules that prevent us from selling goods where we are very competitive.”

But there were many areas of common interest and shared goals, including the need to counter China's commercial practices, Blinken said.

“This really goes to the heart of Vice President Biden's thinking: reaffirming our core alliances,” Blinken said. “It means engaging the European Union instead of urging countries to leave it, and treating it like it's an enemy,” he said.

Biden also differed with Trump on the approach to Russia, Blinken said, noting that the former vice president believed in countering aggressive actions by Russia, including through coordinated sanctions, if necessary.

If elected, Biden planned to convene a meeting of democracies early in his term to discuss common domestic concerns such as societal inequities and trust in governance, as well as repairing trade and economic relations.

The goal would be to “develop a common strategic vision and a road map for countering challenges, whether it's coming from Russia, or China in different ways, or Iran,” he said. — Reuters

Source: Malay Mail

Venezuela launches London appeal in battle for US$1b in gold

Venezuela is challenging a London High Court ruling to gain control over US$1 billion of gold reserves held in the Bank of England's underground vaults. — Reuters pic

LONDON, Sept 23 — The Nicolas Maduro-backed Venezuelan central bank launched a landmark appeal in London yesterday over US$1 billion (RM4.1b) of gold reserves held in the Bank of England's underground vaults.

The Banco Central de Venezuela (BCV) board controlled by the Maduro government is challenging a High Court ruling in July that the UK government “unequivocally” recognised opposition leader Juan Guaido as the interim president, therefore giving him control over the gold.

Lawyers representing the BCV say selling the gold, which amounts to around 15 per cent of Venezuela's foreign currency reserves, would fund the response to the coronavirus and bolster a health system gutted by six years of economic crisis.

Guaido's lawyers say the bullion is his to control as the British government, along with around 60 others around the world, recognise him as leader after claims Maduro rigged Venezuela's last presidential election two years ago.

The hearing is expected to last three days and will be the first time such a tug-of-war has been conducted in the London Court of Appeal.

BCV board solicitor Sarosh Zaiwalla said in a statement the case raises a number of issues of international law, which forbids the interference by any country in the internal affairs of another.

The outcome could also present “a further threat to the international perception of English institutions as being free from political interference, as well as the Bank of England’s reputation abroad as a safe repository for sovereign assets.”

Over the past two years, Maduro's government has removed some 30 tonnes of gold from its local reserves in Venezuela to sell abroad for much-needed hard currency.

Britain in early 2019 joined dozens of nations in backing Guaido, head of Venezuela's opposition-controlled congress, after he declared an interim presidency and denounced Maduro as an usurper.

Guaido, at the time, asked the Bank of England to prevent Maduro's government from accessing the gold, which the opposition claims Maduro wants to use to pay off his foreign allies.

In May, BCV sued the Bank of England to recover control, saying it was depriving the BCV of funds needed to finance Venezuela's coronavirus response.

The Bank of England then asked the court to determine who Britain recognised as Venezuela's president. — Reuters

Source: Malay Mail

Malakoff to acquire land worth RM150m for renewable energy development

In a filing to Bursa Malaysia, Malakoff Corporation said it is in the process of acquiring 71.44 hectares (176.5 acres) of land in Mukim Pulau Sebang, Melaka worth RM150 million for future development of renewable energy power plants. — Bernama pic

KUALA LUMPUR, Sept 22 — Malakoff Corporation Bhd (MCB) is in the process of acquiring 71.44 hectares (176.5 acres) of land in Mukim Pulau Sebang, Melaka worth RM150 million for future development of renewable energy power plants, not limited to large scale solar, waste-to-energy, biomass and biogas power plants.

In a filing to Bursa Malaysia today, it said that presently, the land is cultivated with mature oil palm trees between the ages of 13 and 39 years.

“In the past three years, the land had produced over 710 metric tonnes of palm oil fruit bunches. Access within the site is generally via laterite and gravel road, and the site boundaries are not delineated with any form of perimeter fencing,” it said.

It added that MCB, with the recent acquisition of Alam Flora Sdn Bhd (AFSB) in December 2019, also seeks to expand its waste management footprint locally by venturing into waste-to-energy, biogas and biomass power plants.

“MCB has set itself forward in the waste management industry with the acquisition of AFSB, and with Malaysia’s vision and aim to reuse wastes as a potential fuel source, MCB aspires to be a leading renewable energy developer in Malaysia with the key projects to be undertaken,” it said.

It also said that the land is easily accessible from the North-South Expressway (NSE) which allows for major developments to be undertaken, including, if necessary, the delivery of major equipment.

It added that the most important aspect of the land acquisition will be the availability of the injection point, where given its location, there are two possible options to access the land namely via a loop in loop out arrangement by tapping into the 132kV transmission line within the site or via direct connection to the nearby substations.

“Both injection points are viable interconnection options for future project development. With the addition of the land that is relatively flat and requiring relatively low capital expenditure for land clearing as well as located near two injection points and a major highway, MCB will be well positioned for the development of renewable energy projects in the future,” it said. — Bernama

Source: Malay Mail

Palm oil-based product manufacturers asked to display MSPO logo on packaging

Deputy Primary Industries and Commodities Minister Datuk Seri Dr Wee Jeck Seng (third right) with MPOCC Chairman Mukhtar Suhaili (third left) attending the Opening Ceremony of MPOCC Headquarters at Section U1 Shah Alam, Sept 22, 2020. — Bernama pic

SHAH ALAM, Sept 22 — The Malaysian Palm Oil Certification Council (MPOCC) has asked companies producing palm-based products to display the Malaysian Sustainable Palm Oil Certification (MSPO) logo on their packaging.

MPOCC chairman Muhtar Suhaili said currently only two companies were displaying the logo on their product packaging.

“Companies, farmers and palm oil manufacturers are required to have the MSPO certificate but the use of the MSPO logo on product packaging is not mandatory.

“We encourage palm oil-based product manufacturers to display the MSPO logo if they get the supplies from palm oil companies that have MSPO certificates, and we are ready to help any interested companies,” he said after the opening of the MPOCC headquarters here, today.

The event was officiated by Deputy Primary Industries and Commodities Minister Datuk Seri Dr Wee Jeck Seng. Also present was MPOCC chief executive officer Chee Jit Seng.

Muhtar said by displaying the MSPO logo on the packaging, it will provide consumers with information on palm oil products have a recognised certificate and this enhances their confidence.

He added that as of Aug 31, 5.08 million-hectares, or 87 per cent, of the 5.9 million hectares under oil palm plantations in the country had been accredited with the MSPO certification.

“During the same period, 92 per cent or 418 oil palm mills nationwide also received the certification,” he said.

In his speech, Wee said the government would continue to support the MPOCC and Malaysian Palm Oil Board’s (MPOB) efforts to expand the acceptance and recognition of the MSPO from within and outside the country. — Bernama

Source: Malay Mail

European stocks edge higher at open

The German share price index DAX graph is pictured at the stock exchange in Frankfurt. ― Reuters pic

LONDON, Sept 22 ― Europe's stock markets clawed back ground today after a vicious sell-off the previous day, which was rooted in fears of a deadly second coronavirus wave.

In initial deals, London's benchmark FTSE 100 index of major blue-chip companies added 0.3 per cent to 5,821.94 points, compared with the closing level yesterday.

In the eurozone, the Paris CAC 40 gained 0.1 per cent to 4,796.42 points and Frankfurt's DAX 30 index was 0.6 per cent higher at 12,614.91.

Asian equity markets, however, extended losses after a dizzying global rout the day before as governments impose new containment measures in the struggle to fight off a second wave of virus infections.

“The global stock market got battered yesterday and got the week off to a terrible start,” said AvaTrade analyst Naeem Aslam.

“Stocks in both Europe and in the US had their worst day since July.

“However, the European markets are trading higher (on Tuesday) as investors begin to bag some bargains,” the analyst said.

Fading hopes for a new US stimulus had added to the downbeat mood yesterday with Capitol Hill hostilities stoked by the death of US Supreme Court Justice Ruth Bader Ginsburg, while a top White House adviser questioned whether more fiscal help was even needed. ― AFP

Source: Malay Mail

We can't guarantee no compulsory layoffs, says Airbus CEO Faury

Airbus has said it needs to shed 15,000 posts worldwide. — Reuters pic

PARIS, Sept 22 ― European planemaker Airbus will do its best to cut costs without resorting to compulsory redundancies, but it cannot guarantee they won't happen, CEO Guillaume Faury told French radio station RTL today.

With air travel at a fraction of its normal level due to restrictions and travellers' fears related to the Covid-19 pandemic, airlines have slowed deliveries of new aircraft.

Airbus has said it needs to shed 15,000 posts worldwide.

“The crisis is existential. Our life as a business is potentially at risk if we don't take the right measures. We are taking them,” Faury said.

“The situation is so serious, and we are faced with so much uncertainty, that I think no one can guarantee there won't be compulsory redundancies if we're to adapt to the situation, especially if it evolves further.”

“On the other hand, what I say clearly is that we have a lot of work to do, we will do everything we can to avoid arriving at that point,” he told the radio station.

“There are lots of measures we can take between voluntary redundancies and compulsory redundancies.”

In a letter sent to staff this month, Faury warned them the planemaker may have to carry out compulsory layoffs after air travel failed to recover from the pandemic as quickly as anticipated. ― Reuters

Source: Malay Mail

Sterling falls to two-month low ahead of new UK restrictions

Sterling fell 0.51 per cent to US$1.2751 (RM5.27) against the dollar, the lowest level since July 24. — Reuters pic

LONDON, Sept 22 ― The pound slipped to two-month lows against the dollar today ahead of a fresh set of mobility restrictions to be imposed by British Prime Minister Boris Johnson to tackle the second wave of the coronavirus outbreak.

Sterling fell 0.51 per cent to US$1.2751 (RM5.27) against the dollar, the lowest level since July 24 while the pound was down 0.25 per cent against the European common currency at 92 pence.

Johnson will tell people today to work from home and announce new curbs on pubs, bars and restaurants, stopping some way short of a full national lockdown of the sort he imposed in March.

“Assuming a full two-week lockdown ('circuit-breaker') is avoided, the markets may show signs of relief given there has for some time been a strong assumption that full lockdowns like in March-May would be avoided,” MUFG Research said in a note. ― Reuters

Source: Malay Mail